-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C9YHhk5feqNm/Wznx8RW2ZRuW4Xc1/SUjhDxupM5DAinp2Cw9yUsEbwb5ahIM3fn FBi+UNkdt+EbqK1QUFA5mg== 0000047217-08-000052.txt : 20080219 0000047217-08-000052.hdr.sgml : 20080218 20080219161214 ACCESSION NUMBER: 0000047217-08-000052 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20080219 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080219 DATE AS OF CHANGE: 20080219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEWLETT PACKARD CO CENTRAL INDEX KEY: 0000047217 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER & OFFICE EQUIPMENT [3570] IRS NUMBER: 941081436 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-04423 FILM NUMBER: 08626704 BUSINESS ADDRESS: STREET 1: 3000 HANOVER ST STREET 2: MS 1050 CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 6508571501 MAIL ADDRESS: STREET 1: 3000 HANOVER ST STREET 2: MS 1050 CITY: PALO ALTO STATE: CA ZIP: 94304 8-K 1 q108form8-k_0208.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

 

February 19, 2008
Date of Report (Date of Earliest Event Reported)

 

 

HEWLETT-PACKARD COMPANY

(Exact name of registrant as specified in its charter)

 

DELAWARE

1-4423

94-1081436

(State or other jurisdiction
of incorporation)

(Commission File Number)
 

(I.R.S. Employer
Identification No.)

 

3000 HANOVER STREET, PALO ALTO, CA

94304

(Address of principal executive offices)

(Zip code)

 

(650) 857-1501

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 2.02

Results of Operations and Financial Condition.

 
 

On February 19, 2008, Hewlett-Packard Company (“HP”) issued a press release relating to its fiscal quarter ended January 31, 2008 entitled “HP Reports First Quarter 2008 Results.” The text of this press release, with the related GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets, adjustments to certain GAAP financial information, GAAP consolidated condensed statements of cash flows, certain segment and business unit information, and certain additional financial information, is furnished herewith as Exhibit 99.1. The information in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”) solely as a result of being included in Exhibit 99.1.

HP’s GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets and certain segment information for the fiscal quarter ended January 31, 2008 also are filed herewith as Exhibit 99.2. The information in Exhibit 99.2 is filed for purposes of Section 18 of the Exchange Act and therefore may be incorporated by reference into filings under the Securities Act.

To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for HP’s fiscal quarter ended January 31, 2008 and prior periods is included in the tables that are a part of Exhibit 99.1. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Information” in Exhibit 99.1. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.
 
At the beginning of each fiscal year, HP conducts a review of its financial reporting structure and determines whether changes should be made to align its financial reporting more closely with its business structure. As a result of HP’s fiscal 2008 review, HP has implemented certain fiscal 2008 organizational reclassifications. To provide improved visibility and comparability, HP has reflected these reclassifications in prior periods on an as-if basis. The changes reflect the movement of certain businesses into the HP Software segment from the Enterprise Storage and Servers and HP Services segments and revenue shifts among the business units within the Personal Systems Group and the Imaging and Printing Group segments. None of these changes impacts HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share. Supplemental financial tables illustrating the impact by segment and by business unit of these organizational reclassifications are attached hereto as Exhibit 99.3. Exhibit 99.3 is furnished herewith and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be deemed incorporated by reference into any filing under the Securities Act.

 

 

Item 9.01

Financial Statements and Exhibits.

 

Exhibit Number

Description

 

Exhibit 99.1

Text of HP’s press release relating to its fiscal quarter ended January 31, 2008, entitled “HP Reports First Quarter 2008 Results,” with the related GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets, adjustments to certain GAAP financial information, GAAP consolidated condensed statements of cash flows, certain segment and business unit information, and certain additional financial information (furnished herewith).

 

Exhibit 99.2

HP’s GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets, and segment information for its fiscal quarter ended January 31, 2008 (filed herewith).
   

Exhibit 99.3

HP’s revised segment revenue and earnings from operations and revised business unit revenue for fiscal 2006 and 2007 (furnished herewith).


SIGNATURE

        Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

HEWLETT-PACKARD COMPANY

  

 

 
 DATE: February 19, 2008 By:

/s/ Michael J. Holston

  

Name:

Michael J. Holston

  

Title:

Executive Vice President, General Counsel and Secretary 

  


EXHIBIT INDEX
   

Exhibit
Number

Description

Exhibit 99.1

Text of HP’s press release relating to its fiscal quarter ended January 31, 2008 entitled “HP Reports First Quarter 2008 Results,” with the related GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets, adjustments to certain GAAP financial information, GAAP consolidated condensed statements of cash flows, certain segment and business unit information, and certain additional financial information (furnished herewith).

 

Exhibit 99.2

HP’s GAAP consolidated condensed statements of earnings, GAAP consolidated condensed balance sheets, and segment information for its fiscal quarter ended January 31, 2008 (filed herewith).

 

Exhibit 99.3

HP’s revised segment revenue and earnings from operations and revised business unit revenue for fiscal 2006 and 2007 (furnished herewith).


GRAPHIC 2 ballot.jpg GRAPHIC begin 644 ballot.jpg M_]C_X``02D9)1@`!`0$!+`$L``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+ M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$! M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$" M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#U."#5-9UW M7U'B/4K&"SO4MX8+6*V*A3;0R$DR0LQ):1N_I6KX5OKC4_!^B7]W()+FZL() MI7``W.T:EC@<#DGI3+GPKI=S>W5V6U"&:Z=9)C;:G EX-99.I 3 q108ex99-1_0208.htm

EXHIBIT 99.1    

News release   
HP Reports First Quarter 2008 Results

Editorial Contacts:

Bob Sherbin, HP
+1 650 857 2381
robert.sherbin@hp.com


•
First quarter net revenue up 13%, or $3.4 billion, from a year earlier to $28.5 billion 

 
Ryan J. Donovan, HP
+1 650 857 8410
ryan.j.donovan@hp.com
 •

First quarter GAAP operating profit up 42% to $2.6 billion; $0.80 earnings per share, up from $0.55 a year earlier
HP Media Hotline  
+1 866 266 7272
pr@hp.com
www.hp.com/go/newsroom		 •

First quarter non-GAAP operating profit up 31% to $2.8 billion; $0.86 earnings per share, up from $0.65 a year earlier
Hewlett-Packard Company
3000 Hanover Street
Palo Alto, CA 94304
www.hp.com
•

•
  
Cash flow from operations of $3.2 billion

$3.3 billion of share repurchases

PALO ALTO, Calif., Feb. 19, 2008 – HP today announced financial results for its first fiscal quarter ended Jan. 31, 2008, with net revenue of $28.5 billion, up 13% from a year earlier and up 8% when adjusted for the effects of currency.

In the first quarter, GAAP operating profit was $2.6 billion and GAAP diluted earnings per share (EPS) was $0.80, up from $0.55 in the prior-year period. Non-GAAP operating profit was $2.8 billion, with non-GAAP diluted EPS of $0.86 up from $0.65 in the prior-year period. Non-GAAP financial information excludes $158 million of adjustments on an after-tax basis, or $0.06 per diluted share, related primarily to amortization of purchased intangibles.

“We are raising our guidance yet again, reflecting our confidence in anticipated cost reductions and share gains in key markets,” said Mark Hurd, HP chairman and chief executive officer. “We added more than 2,000 sales positions in the past year through acquisitions and hiring. HP remains well positioned for profitable growth as we continue to focus on our numerous cost initiatives and improve our market coverage.”

Q1 FY08 Q1 FY07 Y/Y
Net revenue ($B)

$          28.5

$          25.1

13%
GAAP operating margin

9.2%

7.3%

 1.9 pts
GAAP net earnings ($B)

$            2.1

$            1.5

 38%
GAAP diluted EPS

$          0.80

$          0.55

45%
Non-GAAP operating margin

9.9%

8.6%

1.3 pts
Non-GAAP net earnings ($B)

$            2.3

$            1.8

25%
Non-GAAP diluted EPS

$          0.86

$          0.65

32%

Information about HP’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.
 

Revenue in the Americas grew 8% on a year-over-year basis to $11.2 billion. Revenue grew 15% in Europe, the Middle East and Africa to $12.3 billion. Revenue grew 22% in Asia Pacific to $4.9 billion. When adjusted for the effects of currency, revenue in the Americas grew 7%, revenue in Europe, the Middle East and Africa grew 7%, and revenue in Asia Pacific grew 16%.  Revenue from outside of the United States in the first quarter was 69%, with revenue in the BRIC countries (Brazil, Russia, India and China) growing 35% over the prior-year period and accounting for 9% of total revenue.

Personal Systems Group

Personal Systems Group (PSG) revenue grew 24% year over year to $10.8 billion, with unit shipments up 27% on a year-over-year basis. Notebook revenue for the quarter grew 37% over the prior-year period, while desktop revenue grew 15%. Commercial client revenue grew 22% year over year, while Consumer client revenue increased 29%.  Operating profit was $628 million, or 5.8% of revenue, up from $414 million, or 4.7% of revenue, in the prior-year period.

Imaging and Printing Group

Imaging and Printing Group (IPG) revenue grew 4% year over year to $7.3 billion. On a year-over-year basis, supplies revenue grew 6%, Commercial hardware revenue grew 7% and Consumer hardware revenue declined 5%. Printer unit shipments increased 1% year over year, with Consumer printer hardware units down 2% and Commercial printer hardware units up 13%. Momentum in key growth initiatives continued, with solid growth in both the Graphic Arts and the Enterprise businesses. Operating profit was $1.2 billion, or 15.7% of revenue, up from $1.1 billion, or 15.3% of revenue, in the prior-year period.

Enterprise Storage and Servers

Enterprise Storage and Servers (ESS) reported revenue of $4.8 billion, up 9% over the prior-year period fueled by ESS blades, which grew 81%. On a year-over-year basis, industry-standard server revenue increased 11%. Storage revenue grew 10%, with revenue growth of 14% in the midrange EVA line. Business critical systems revenue increased 1%, with Integrity systems growth of 37% offset by declines in PA-RISC and Alpha. Operating profit was $673 million, or 14.0% of revenue, up from $453 million, or 10.2% of revenue, in the prior-year period.

HP Services

HP Services (HPS) revenue increased 11% year over year to $4.4 billion. Revenue in Outsourcing Services grew 15%,  followed by Consulting and Integration and Technology Services, which grew 13% and 9%, respectively, over the prior-year period. Operating profit was $489 million, or 11.2% of revenue, up from $406 million, or 10.3% of revenue, in the prior-year period.

HP Software

HP Software revenue grew 11% over the prior-year period to $666 million, led by 19% growth in the Business Technology Optimization portfolio. Operating profit was $51 million, or 7.7% of revenue, up from $18 million, or 3.0% of revenue, in the prior-year period.

Financial Services

HP Financial Services (HPFS) reported revenue of $642 million, an increase of 17% year over year. Financing volume and net portfolio assets increased 5% and 14%, respectively, over the prior-year period. Operating margin was 6.7% of revenue, up from 5.9% in the comparable period last year.

Asset management

HP generated $3.2 billion in cash flow from operations for the quarter. Inventory ended the quarter at $7.9 billion, down 6 days over the prior year. Accounts receivable of $12.4 billion were up 2 days over the prior-year period. Accounts payable ended the quarter at $11.2 billion down 6 days from the prior-year period. HP’s dividend payment of $0.08 per share in the first quarter resulted in cash usage of $206 million. HP utilized $3.3 billion of cash during the first quarter to repurchase approximately 72 million shares of common stock from the open market. HP exited the quarter with $10.1 billion in gross cash, which includes cash and cash equivalents of $9.9 billion, short-term investments of $73 million, and certain long-term investments of $116 million.

Outlook

HP estimates Q2 FY08 revenue will be approximately $27.7 billion to $27.9 billion.

Second quarter FY08 GAAP diluted EPS is expected to be approximately $0.77 to $0.78 and non-GAAP diluted EPS is expected to be approximately $0.83 to $0.84. Second quarter FY08 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.06 per share, related primarily to the amortization of purchased intangibles.

HP estimates FY08 revenue will be approximately $113.5 billion to $114.0 billion.

FY08 GAAP diluted EPS is expected to be in the range of $3.26 to $3.30, and FY08 non-GAAP diluted EPS is expected to be in the range of $3.50 to $3.54. FY08 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.24 per share, related primarily to the amortization of purchased intangibles.

More information on HP’s quarterly earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.
 

More detailed information about the reclassification of HP’s Business Intelligence and Information Management businesses from HP Services and ESS to HP Software and the reclassification of revenue among business units within PSG and IPG is included in the tables that follow this release. These reclassifications do not impact HP’s previously reported consolidated net revenue, earnings from operations, net earnings or EPS.

HP’s Q1 FY08 earnings conference call is accessible via an audio webcast at www.hp.com/investor/q12008webcast.

About HP

HP focuses on simplifying technology experiences for all of its customers – from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world’s largest IT companies, with revenue totaling $107.7 billion for the four fiscal quarters ended Jan. 31, 2008. More information about HP (NYSE: HPQ) is available at www.hp.com.

Use of non-GAAP financial information

To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.

Forward-looking statements

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases or other financial items; any statements of the plans, strategies, and objectives of management for future operations, including execution of cost reduction programs and restructuring plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and geopolitical trends and events; execution and performance of contracts by suppliers, customers and partners; the challenge of managing asset levels, including inventory; the difficulty of aligning expense levels with revenue changes; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2007 and HP’s other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2008. In particular, determining HP’s actual tax balances and provisions as of January 31, 2008 requires extensive internal and external

review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP’s Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

 

Note to editors: More news from HP, including links to RSS feeds, is available at www.hp.com/hpinfo/newsroom/.

© 2008 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.

2/2008

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)

Three months ended
January 31,
2008
October 31,
2007
January 31,
2007
Net revenue    

$

 28,467  

$

 28,293  

$

 25,082  
     
Costs and expenses(a):    
Cost of sales       21,499     21,304     19,136  
Research and development       898     914     877  
Selling, general and administrative       3,241     3,272     2,908  
Amortization of purchased intangible assets       206     187     201  
In-process research and development charges       --     4     167  
Restructuring       10     (20 )   (41 )
Pension curtailments and pension settlements, net       --     --     (9 )
          Total costs and expenses       25,854     25,661     23,239  
     
Earnings from operations       2,613     2,632     1,843  
     
Interest and other, net       72     67     121  
     
Earnings before taxes       2,685     2,699     1,964  
     
Provision for taxes(b)       552     535     417  
     
Net earnings    

$

 2,133  

$

 2,164  

$

 1,547  
     
Net earnings per share:    
     Basic    

$

 0.83  

$

 0.84  

$

 0.57  
     Diluted    

$

 0.80  

$

 0.81  

$

 0.55  
     
Cash dividends declared per share    

$

 0.16  

$

 --  

$

 0.16  
     
Weighted-average shares used to compute net earnings per share:    
     Basic       2,560     2,576     2,705  
     Diluted       2,655     2,678     2,801  
     
(a) Stock-based compensation expense included under SFAS 123(R) was as follows:   
      Cost of sales    

$

 36  

$

 40  

$

 45  
      Research and development       20     18     19  
      Selling, general and administrative       101     110     99  
          Total costs and expenses    

$

 157  

$

 168  

$

 163  
     
(b) Tax benefit from stock-based compensation    

$

 (47 )

$

 (54 )

$

 (48 )

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)

Three Three Three
months Diluted months Diluted months Diluted
ended earnings ended earnings ended earnings
January 31, per October 31, per January 31, per
2008 share 2007 share 2007 share
GAAP net earnings     $ 2,133  

$      0.80

     $ 2,164  

$      0.81

     $ 1,547  

$      0.55

    
                             
Non-GAAP adjustments:                            
      
  Amortization of purchased intangible assets       206  

0.08

       187  

0.07

       201  

0.07

    
  In-process research and development charges       --  

--

       4  

--

       167  

0.06

    
  Restructuring       10  

--

       (20 )

(0.01

 )      (41 )

(0.02

 )   
  Pension curtailments and pension settlements, net       --  

--

       --  

--

       (9 )

--

    
  Adjustments for taxes       (58 )

(0.02

 )      (39 )

(0.01

 )      (39 )

(0.01

 )   
     
Non-GAAP net earnings     $ 2,291  

$      0.86

     $ 2,296  

$      0.86

     $ 1,826  

$      0.65

    
                             
                             
GAAP earnings from operations     $ 2,613  

 

    

$

 2,632       $ 1,843  

 

    
                             
Non-GAAP adjustments:                            
  Amortization of purchased intangible assets      206         187         201      
  In-process research and development charges       --         4         167      
  Restructuring       10         (20 )       (41 )    
  Pension curtailments andpension settlements, net      --         --         (9 )    
                             
Non-GAAP earnings from operations     $ 2,829         $ 2,803       $ 2,161      
                             
GAAP operating margin       9 %       9 %       7 %    
Non-GAAP adjustments       1 %       1 %       2 %    
                             
Non-GAAP operating margin       10 %       10 %       9 %    

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED
BALANCE SHEETS
(In millions)

January 31,
2008
October 31,
2007
(unaudited)
ASSETS            
     
Current assets:    
     Cash and cash equivalents     $ 9,903   $ 11,293  
     Short-term investments       73     152  
     Accounts receivable       12,384     13,420  
     Financing receivables       2,561     2,507  
     Inventory       7,938     8,033  
     Other current assets       11,767     11,997  
     
        Total current assets       44,626     47,402  
     
Property, plant and equipment       7,804     7,798  
     
Long-term financing receivables and other assets       10,325     7,647  
     
Goodwill and purchased intangible assets       25,817     25,852  
     
Total assets     $ 88,572   $ 88,699  
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
     Notes payable and short-term borrowings     $ 2,212   $ 3,186  
     Accounts payable       11,162     11,787  
     Employee compensation and benefits       2,657     3,465  
     Taxes on earnings       420     1,891  
     Deferred revenue       5,314     5,025  
     Accrued restructuring       95     123  
     Other accrued liabilities       14,798     13,783  
     
        Total current liabilities       36,658     39,260  
     
Long-term debt       5,099     4,997  
Other liabilities       8,871     5,916  
     
Stockholders' equity       37,944     38,526  
     
Total liabilities and stockholders' equity     $ 88,572   $ 88,699  

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)

Three months ended
January 31,
2008
January 31,
2007
Cash flows from operating activities:            
   Net earnings     $ 2,133   $ 1,547  
   Adjustments to reconcile net earnings to    
     net cash provided by (used in) operating activities:    
     Depreciation and amortization       749     643  
     Stock-based compensation expense       157     163  
     Provision for bad debt and inventory       78     77  
     In-process research and development charges       --     167  
     Restructuring       10     (41 )
     Pension curtailments and pension settlements, net       --     (9 )
     Deferred taxes on earnings       361     91  
     Excess tax benefit from stock-based compensation       (88 )   (100 )
     Other, net       6     (13 )
     
     Changes in assets and liabilities:    
       Accounts and financing receivables       1,007     548  
       Inventory       54     (698 )
       Accounts payable       (659 )   (759 )
       Taxes on earnings       (92 )   131  
       Restructuring       (31 )   (281 )
       Other assets and liabilities       (498 )   (1,488 )
         Net cash provided by (used in) operating activities       3,187     (22 )
     
Cash flows from investing activities:    
     Investment in property, plant and equipment       (611 )   (718 )
     Proceeds from sale of property, plant and equipment       88     139  
     Purchases of available-for-sale securities and other investments       (20 )   (13 )
     Maturities and sales of available-for-sale securities and other investments    106     92  
     Payments made in connection with business acquisitions, net       (264 )   (4,464 )
           
        Net cash used in investing activities       (701 )   (4,964 )
     
Cash flows from financing activities:    
     Issuance of commercial paper and notes payable, net       (899 )   1,263  
     Issuance of debt       16     69  
     Payment of debt       (105 )   (1,056 )
     Issuance of common stock under employee stock plans       554     797  
     Repurchase of common stock       (3,324 )   (2,312 )
     Excess tax benefit from stock-based compensation       88     100  
     Dividends       (206 )   (218 )
        Net cash used in financing activities       (3,876 )   (1,357 )
     
Decrease in cash and cash equivalents       (1,390 )   (6,343 )
Cash and cash equivalents at beginning of period       11,293     16,400  
Cash and cash equivalents at end of period     $ 9,903   $ 10,057  

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)

Three months ended
January 31, October 31, January 31,
2008
(2007)(a)
(2007)(a)
Net revenue:                
     
             Enterprise Storage and Servers    

$

 4,820  

$

 5,108  

$

 4,421  
             HP Services       4,378     4,348     3,932  
             HP Software       666     759     598  
      Technology Solutions Group       9,864     10,215     8,951  
      Personal Systems Group       10,791     10,133     8,719  
      Imaging and Printing Group       7,312     7,554     6,999  
      HP Financial Services       642     657     547  
      Corporate Investments       218     210     157  
             Total Segments       28,827     28,769     25,373  
      Eliminations of intersegment net revenue and other       (360 )   (476 )   (291 )
     
Total HP Consolidated    

$

 28,467  

$

 28,293  

$

 25,082  
     
Earnings (Loss) from operations:    
     
             Enterprise Storage and Servers    

$

 673  

$

 736  

$

 453  
             HP Services       489     515     406  
             HP Software       51     145     18  
      Technology Solutions Group       1,213     1,396     877  
      Personal Systems Group       628     589     414  
      Imaging and Printing Group       1,150     1,094     1,073  
      HP Financial Services       43     48     32  
      Corporate Investments       8     (5 )   (29 )
             Total Segments       3,042     3,122     2,367  
     
      Corporate and unallocated costs and eliminations       (89 )   (197 )   (66 )
      Unallocated costs related to stock-based compensation expense      (124 )   (122 )   (140 )
      Amortization of purchased intangible assets       (206 )   (187 )   (201 )
      In-process research and development charges       --     (4 )   (167 )
      Restructuring       (10 )   20     41  
      Pension curtailments and pension settlements, net       --     --     9  
      Interest and other, net       72     67     121  
     
Total HP Consolidated Earnings Before Taxes    

$

 2,685  

$

 2,699  

$

 1,964  

(a) Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2007, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. There was no impact on the previously reported financial results for the other segments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)

Three months ended
January 31, October 31, January 31,
2008
2007(a)
(2007)(a)
Net revenue:                
     
              Industry standard servers    

$

 2,988  

$

 3,059  

$

 2,689  
              Business critical systems       855     1,034     846  
              Storage       977     1,015     886  
        Enterprise Storage and Servers       4,820     5,108     4,421  
              Technology services       2,241     2,229     2,062  
              Outsourcing services       1,303     1,271     1,129  
              Consulting and integration       834     848     741  
        HP Services       4,378     4,348     3,932  
              Business technology optimization(b)       548     620     460  
              Other(b)       118     139     138  
        HP Software       666     759     598  
     Technology Solutions Group       9,864     10,215     8,951  
              Notebooks       5,664     5,164     4,146  
              Desktops       4,401     4,222     3,821  
              Workstations       467     473     405  
              Handhelds       89     108     191  
              Other       170     166     156  
     Personal Systems Group       10,791     10,133     8,719  
              Commercial Hardware       1,726     1,880     1,616  
              Consumer Hardware       1,180     1,251     1,241  
              Supplies       4,399     4,423     4,142  
              Other       7     --     --  
     Imaging and Printing Group       7,312     7,554     6,999  
     HP Financial Services       642     657     547  
     Corporate Investments       218     210     157  
              Total Segments       28,827     28,769     25,373  
     
     Eliminations of intersegment net revenue and other       (360 )   (476 )   (291 )
     
Total HP Consolidated    

$

 28,467  

$

 28,293  

$

 25,082  

(a) Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2007, the reclassifications resulted in the transfer of revenue among Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. In addition, revenue was transferred among the business units within the Imaging and Printing Group and among the business units within the Personal Systems Group, but there was no change to the previously reported revenue for either segment as a whole. There was no impact on the previously reported financial results for the HP Financial Services and Corporate Investments segments.

(b) The OpenView business unit was renamed as “Business Technology Optimization” and the OpenCall and Other business unit was renamed as “Other” effective in fiscal 2008. The renamed “Other” business unit includes primarily the OpenCall and Business Information Optimization products.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)

Three months ended
January 31,
2008
October 31,
2007
January 31,
2007
Numerator:                
  Net earnings    

$

 2,133  

$

 2,164  

$

 1,547  
     
  Adjustment for interest expense on zero-coupon subordinated
       convertible notes, net of taxes		       2     2     2  
          
  Net earnings, adjusted    

$

 2,135  

$

 2,166  

$

 1,549  
     
Denominator:    
  Weighted-average shares used to compute basic EPS       2,560     2,576     2,705  
  Effect of dilutive securities:    
    Dilution from employee stock plans       87     94     88  
    Zero-coupon subordinated convertible notes       8     8     8  
  Dilutive potential common shares       95     102     96  
     
  Weighted-average shares used to compute diluted EPS       2,655     2,678     2,801  
     
Net earnings per share:    
  Basic(a)    

$

 0.83  

$

 0.84  

$

 0.57  
  Diluted(b)    

$

 0.80  

$

 0.81  

$

 0.55  

(a) HP's basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period.

(b) The diluted earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options and conversion of debt, except when such issuances would be antidilutive.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NON-GAAP NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)

Three months ended
January 31,
2008
October 31,
2007
January 31,
2007
Numerator:                
  Non-GAAP net earnings    

$

 2,291  

$

 2,296  

$

 1,826  
      
  Adjustment for interest expense on zero-coupon subordinated
       convertible notes, net of taxes		       2     2     2  
     
  Non-GAAP net earnings, adjusted    

$

 2,293  

$

 2,298  

$

 1,828  
     
Denominator:    
  Weighted-average shares used to compute basic EPS       2,560     2,576     2,705  
  Effect of dilutive securities:    
    Dilution from employee stock plans       87     94     88  
    Zero-coupon subordinated convertible notes       8     8     8  
  Dilutive potential common shares       95     102     96  
     
  Weighted-average shares used to compute diluted EPS       2,655     2,678     2,801  
     
Non-GAAP net earnings per share:    
  Basic(a)    

$

 0.89  

$

 0.89  

$

 0.68  
  Diluted(b)    

$

 0.86  

$

 0.86  

$

 0.65  

(a) HP’s basic non-GAAP earnings per share was calculated based on non-GAAP net earnings and the weighted-average number of shares outstanding during the reporting period.

(b) HP’s diluted non-GAAP earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options and conversion of debt, except when such issuances would be antidilutive.

Use of Non-GAAP Financial Measures


To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to non-GAAP operating profit is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating margin is operating margin. The GAAP measure most directly comparable to non-GAAP net earnings is net earnings. The GAAP measure most directly comparable to non-GAAP diluted earnings per share is diluted net earnings per share. The GAAP measure most directly comparable to gross cash is cash and cash equivalents. Reconciliations of each of these non-GAAP financial measures to GAAP information are included in the tables above.
 

Use and Economic Substance of Non-GAAP Financial Measures Used by HP

Non-GAAP operating profit and non-GAAP operating margin are defined to exclude the effects of any restructuring charges, charges relating to the amortization of purchased intangible assets, pension curtailment and settlement gains and losses, and in-process research and development charges recorded during the relevant period. Non-GAAP net earnings and non-GAAP diluted earnings per share consist of net earnings or diluted net earnings per share excluding those same charges. In addition, non-GAAP net earnings and non-GAAP diluted earnings per share are adjusted by the amount of additional taxes or tax benefit associated with each non-GAAP item. HP’s management uses these non-GAAP financial measures for purposes of evaluating HP’s historical and prospective financial performance, as well as HP’s performance relative to its competitors. HP’s management also uses these non-GAAP measures to further its own understanding of HP’s segment operating performance. HP believes that excluding those items mentioned above from these non-GAAP financial measures allows HP management to better understand HP’s consolidated financial performance in relationship to the operating results of HP’s segments, as management does not believe that the excluded items are reflective of ongoing operating results. More specifically, HP’s management excludes each of those items mentioned above for the following reasons: 

·     

Restructuring charges consist of costs primarily related to severance and benefits for employees terminated pursuant to a formal restructuring plan, including strategic reallocations or workforce reductions and early retirement programs. HP excludes these restructuring costs (and any reversals of charges recorded in prior periods) for purposes of calculating these non-GAAP measures because it believes that these historical costs do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of HP’s current operating performance or comparisons to HP’s past operating performance.

·     

Purchased intangible assets consist primarily of customer contracts, customer lists, distribution agreements, technology patents, and products, trademarks and trade names purchased in connection with acquisitions. HP incurs charges relating to the amortization of these intangibles, and those charges are included in HP’s GAAP presentation of earnings from operations, operating margin, net earnings and net earnings per share. Amortization charges for HP’s purchased intangible assets are inconsistent in amount and frequency and are significantly impacted by the timing and magnitude of HP’s acquisitions. Consequently, HP excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of HP’s current operating performance and comparisons to HP’s past operating performance.

·     

In the first quarter of fiscal 2007, HP recognized a net curtailment gain for its non-U.S. pension plans. The net gain primarily reflects a plan design change in Mexico where HP ceased pension accruals for current employees who did not meet defined criteria based on age and years of service (calculated as of December 31, 2006). In the second quarter of fiscal 2007, HP recorded a pension curtailment gain primarily resulting from the decision to cease pension accruals under its U.S. defined benefit pension plan for all employees who were still accruing benefits under that plan. The curtailment gain was partially offset primarily by a settlement expense associated with the distribution and subsequent transfer of accrued pension benefits from HP’s U.S. Excess Benefit Plan to HP’s U.S. Executive Deferred Compensation Plan for the terminated vested plan participants. Because pension curtailment gains and pension settlement losses are inconsistent in amount and frequency, HP believes that eliminating these gains and losses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of HP’s current operating performance and comparisons to HP’s past operating performance.

·     

In-process research and development charges relate to amounts assigned to tangible and intangible assets to be used in research and development projects that have no alternative future use and therefore are charged to expense at the acquisition date. Charges for in-process research and development in connection with HP’s acquisitions are reflected in HP’s GAAP presentation of earnings from operations, operating margin, net earnings and net earnings per share. In-process research and development expenses are not indicative of HP’s ongoing operating costs and are generally unpredictable. Accordingly, HP believes that eliminating these expenses for purposes of calculating these non-GAAP measures contributes to a meaningful evaluation of HP’s current operating performance and comparisons to HP’s past operating performance.

Gross cash is a non-GAAP measure that is defined as cash and cash equivalents plus short-term investments and certain long-term investments that may be liquidated within 90 days pursuant to the terms of existing put options or similar rights. HP’s management uses gross cash for the purpose of determining the amount of cash available for investment in HP’s businesses, funding strategic acquisitions, repurchasing stock and other purposes. HP’s management also uses gross cash for the purposes of evaluating HP’s historical and prospective liquidity, as well as to further its own understanding of HP’s segment operating results. Because gross cash includes liquid assets that are not included in GAAP cash and cash equivalents, HP believes that gross cash provides a more accurate and complete assessment of HP’s liquidity and segment operating results.

Material Limitations Associated with Use of Non-GAAP Financial Measures

These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP’s results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are: 

·     

Items such as amortization of purchased intangible assets, though not directly affecting HP’s cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted earnings per share and therefore does not reflect the full economic effect of the loss in value of those intangible assets.

·     

Items such as restructuring charges that are excluded from non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted earnings per share can have a material impact on cash flows and earnings per share.

·     

HP may not be able to liquidate immediately the long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure.

·     

Other companies may calculate non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash differently than HP does, limiting the usefulness of those measures for comparative purposes.

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures

HP compensates for the limitations on its use of non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HP also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this press release and in other written materials that include these non-GAAP financial measures, and HP encourages investors to review carefully those reconciliations.
 

Usefulness of Non-GAAP Financial Measures to Investors

HP believes that providing non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash to investors in addition to the related GAAP measures provides investors with greater transparency to the information used by HP’s management in its financial and operational decision-making and allows investors to see HP’s results “through the eyes” of management. HP further believes that providing this information better enables HP’s investors to understand HP’s operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of HP’s operating performance with the performance of other companies in HP’s industry that supplement their GAAP results with non-GAAP financial measures that are calculated in a similar manner.
 

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)

Three months ended
January 31,
2008
October 31,
2007
January 31,
2007
Net revenue    

$

 28,467  

$

 28,293  

$

 25,082  
     
Costs and expenses(a):    
Cost of sales       21,499     21,304     19,136  
Research and development       898     914     877  
Selling, general and administrative       3,241     3,272     2,908  
Amortization of purchased intangible assets       206     187     201  
In-process research and development charges       --     4     167  
Restructuring       10     (20 )   (41 )
Pension curtailments and pension settlements, net       --     --     (9 )
          Total costs and expenses       25,854     25,661     23,239  
     
Earnings from operations       2,613     2,632     1,843  
     
Interest and other, net       72     67     121  
     
Earnings before taxes       2,685     2,699     1,964  
     
Provision for taxes(b)       552     535     417  
     
Net earnings    

$

 2,133  

$

 2,164  

$

 1,547  
     
Net earnings per share:    
     Basic    

$

 0.83  

$

 0.84  

$

 0.57  
     Diluted    

$

 0.80  

$

 0.81  

$

 0.55  
     
Cash dividends declared per share    

$

 0.16  

$

 --  

$

 0.16  
     
Weighted-average shares used to compute net earnings per share:    
     Basic       2,560     2,576     2,705  
     Diluted       2,655     2,678     2,801  
     
(a) Stock-based compensation expense included under SFAS 123(R) was as follows:   
      Cost of sales    

$

 36  

$

 40  

$

 45  
      Research and development       20     18     19  
      Selling, general and administrative       101     110     99  
          Total costs and expenses    

$

 157  

$

 168  

$

 163  
     
(b) Tax benefit from stock-based compensation    

$

 (47 )

$

 (54 )

$

 (48 )

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED
BALANCE SHEETS
(In millions)

January 31,
2008
October 31,
2007
(unaudited)
ASSETS            
     
Current assets:    
     Cash and cash equivalents     $ 9,903   $ 11,293  
     Short-term investments       73     152  
     Accounts receivable       12,384     13,420  
     Financing receivables       2,561     2,507  
     Inventory       7,938     8,033  
     Other current assets       11,767     11,997  
     
        Total current assets       44,626     47,402  
     
Property, plant and equipment       7,804     7,798  
     
Long-term financing receivables and other assets       10,325     7,647  
     
Goodwill and purchased intangible assets       25,817     25,852  
     
Total assets     $ 88,572   $ 88,699  
     
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
     Notes payable and short-term borrowings     $ 2,212   $ 3,186  
     Accounts payable       11,162     11,787  
     Employee compensation and benefits       2,657     3,465  
     Taxes on earnings       420     1,891  
     Deferred revenue       5,314     5,025  
     Accrued restructuring       95     123  
     Other accrued liabilities       14,798     13,783  
     
        Total current liabilities       36,658     39,260  
     
Long-term debt       5,099     4,997  
Other liabilities       8,871     5,916  
     
Stockholders' equity       37,944     38,526  
     
Total liabilities and stockholders' equity     $ 88,572   $ 88,699  

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)

Three months ended
January 31, October 31, January 31,
2008
(2007)(a)
(2007)(a)
Net revenue:                
     
             Enterprise Storage and Servers    

$

 4,820  

$

 5,108  

$

 4,421  
             HP Services       4,378     4,348     3,932  
             HP Software       666     759     598  
      Technology Solutions Group       9,864     10,215     8,951  
      Personal Systems Group       10,791     10,133     8,719  
      Imaging and Printing Group       7,312     7,554     6,999  
      HP Financial Services       642     657     547  
      Corporate Investments       218     210     157  
             Total Segments       28,827     28,769     25,373  
      Eliminations of intersegment net revenue and other       (360 )   (476 )   (291 )
     
Total HP Consolidated    

$

 28,467  

$

 28,293  

$

 25,082  
     
Earnings (Loss) from operations:    
     
             Enterprise Storage and Servers    

$

 673  

$

 736  

$

 453  
             HP Services       489     515     406  
             HP Software       51     145     18  
      Technology Solutions Group       1,213     1,396     877  
      Personal Systems Group       628     589     414  
      Imaging and Printing Group       1,150     1,094     1,073  
      HP Financial Services       43     48     32  
      Corporate Investments       8     (5 )   (29 )
             Total Segments       3,042     3,122     2,367  
     
      Corporate and unallocated costs and eliminations       (89 )   (197 )   (66 )
      Unallocated costs related to stock-based compensation expense      (124 )   (122 )   (140 )
      Amortization of purchased intangible assets       (206 )   (187 )   (201 )
      In-process research and development charges       --     (4 )   (167 )
      Restructuring       (10 )   20     41  
      Pension curtailments and pension settlements, net       --     --     9  
      Interest and other, net       72     67     121  
     
Total HP Consolidated Earnings Before Taxes    

$

 2,685  

$

 2,699  

$

 1,964  

(a) Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2007, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. There was no impact on the previously reported financial results for the other segments.
EX-99.3 6 q1ex99-3.htm

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
FISCAL 2006 SEGMENT INFORMATION (Revised)
(Unaudited)
(In millions)

REVISED AMOUNTS
Three months ended Twelve months
ended
Jan. 31,
2006		 Apr. 30,
2006		 Jul. 31,
2006		 Oct. 31,
2006		 Oct. 31,
2006
                                             
Net revenue: (a)                                            
    Enterprise Storage and Servers     $ 4,217       $ 4,242       $ 4,108       $ 4,644       $ 17,211      
    HP Services       3,752         3,881         3,878         4,067         15,578      
    HP Software       332         364         353         388         1,437      
        Technology Solutions Group       8,301         8,487         8,339         9,099         34,226      
    Personal Systems Group       7,449         6,977         6,917         7,823         29,166      
    Imaging and Printing Group       6,545         6,724         6,234         7,283         26,786      
    HP Financial Services       496         518         519         545         2,078      
    Corporate Investments       129         122         155         160         566      
        Total segments       22,920         22,828         22,164         24,910         92,822      
    Eliminations of intersegment net revenue and other       (261 )       (274 )       (274 )       (355 )       (1,164 )    
        Total HP Consolidated     $ 22,659       $ 22,554       $ 21,890       $ 24,555       $ 91,658      
                                             
Earnings (Loss) from operations: (a)        

Op

 %       

Op

 %       

Op

 %       

Op

 %       

Op

 %   
    Enterprise Storage and Servers     $ 338  

8.0

 %   $ 350  

8.3

 %   $ 328  

8.0

 %   $ 541  

11.6

 %   $ 1,557  

9.0

 %  
    HP Services       295  

7.9

 %     341  

8.8

 %     361  

9.3

 %     501  

12.3

 %     1,498  

9.6

 %  
    HP Software       (5 )

-1.5

 %      (21 )

-5.8

 %      (16 )

-4.5

 %     25  

6.4

 %     (17 )

-1.2

 %  
        Technology Solutions Group       628  

7.6

 %     670  

7.9

 %     673  

8.1

 %     1,067  

11.7

 %     3,038  

8.9

 %  
    Personal Systems Group       293  

3.9

 %     248  

3.6

 %     275  

4.0

 %     336  

4.3

 %   $ 1,152  

3.9

 %  
    Imaging and Printing Group       973  

14.9

 %     1,041  

15.5

 %     884  

14.2

 %      1,080  

14.8

 %     3,978  

14.9

 %  
    HP Financial Services       38  

7.7

 %      39  

7.5

 %     35  

6.7

 %     35  

6.4

 %      147  

7.1

 %  
    Corporate Investments       (33 )

-25.6

 %     (49 )

-40.2

 %      (33 )

-21.3

 %      (36 )

-22.5

 %     (151 )

-26.7

 %  
        Total segments       1,899         1,949         1,834         2,482         8,164      
    Corporate and unallocated costs and eliminations       (72 )       (50 )       (53 )       (156 )       (331 )    
    Unallocated costs related to certain stock-based
       compensation expense		 (123 )       (103 )       (113 )       (120 )       (459 )    
    Amortization of purchased intangible assets       (147 )       (151 )       (153 )       (153 )       (604 )    
    In-process research and development charges       (50 )       (2 )       --         --         (52 )    
    Restructuring       (15 )       14         (5 )       (152 )       (158 )    
    Interest and other, net       36         163         228         204         631      
        Total HP Consolidated Earnings Before Taxes     $ 1,528       $ 1,820       $ 1,738       $ 2,105       $ 7,191      


AMOUNTS AS PREVIOUSLY REPORTED
Three months ended Twelve months ended
Jan. 31,
2006		 Apr. 30,
2006		 Jul. 31,
2006		 Oct. 31,
2006		 Oct.31,
2006
                                             
Net revenue:                                            
    Enterprise Storage and Servers     $ 4,240       $ 4,265       $ 4,133       $ 4,670       $ 17,308      
    HP Services       3,757         3,892         3,888         4,080         15,617      
    HP Software       304         330         318         349         1,301      
        Technology Solutions Group       8,301         8,487         8,339         9,099         34,226      
    Personal Systems Group       7,449         6,977         6,917         7,823         29,166      
    Imaging and Printing Group       6,545         6,724         6,234         7,283         26,786      
    HP Financial Services       496         518         519         545         2,078      
    Corporate Investments       129         122         155         160         566      
        Total segments       22,920         22,828         22,164         24,910         92,822      
    Elimination of intersegment net revenue and other       (261 )       (274 )       (274 )       (355 )       (1,164 )    
        Total HP Consolidated net revenue     $ 22,659       $ 22,554       $ 21,890       $ 24,555       $ 91,658      
Earnings (Loss) from operations:        

Op

 %       

Op

 %       

Op

% 

      

Op

% 

      

Op

% 

  
    Enterprise Storage and Servers     $ 326  

7.7

 %    $ 322  

7.5

 %   $ 296  

7.2

 %    $ 502  

10.7

 %    $ 1,446  

8.4

 %  
    HP Services       293  

7.8

 %      345  

8.9

 %     364  

9.4

 %     505  

12.4

 %     1,507  

9.6

 %  
    HP Software       9  

3.0

 %      3  

0.9

 %     13  

4.1

 %     60  

17.2

 %     85  

6.5

 %  
        Technology Solutions Group       628  

7.6

 %     670  

7.9

 %     673  

8.1

 %      1,067  

11.7

 %      3,038  

8.9

 %  
    Personal Systems Group       293  

3.9

 %     248  

3.6

 %     275  

4.0

 %     336  

4.3

 %    $ 1,152  

3.9

 %  
    Imaging and Printing Group       973  

14.9

 %     1,041  

15.5

 %     884  

14.2

 %      1,080  

14.8

 %     3,978  

14.9

 %   
    HP Financial Services       38  

7.7

 %     39  

7.5

 %     35  

6.7

 %     35  

6.4

 %     147  

7.1

 %  
    Corporate Investments       (33 )

-25.6

 %     (49 )

-40.2

 %      (33 )

-21.3

 %     (36 )

-22.5

 %     (151 )

-26.7

 %  
         Total segments       1,899         1,949         1,834         2,482         8,164      
                                              
    Corporate and unallocated costs and eliminations       (72 )       (50 )       (53 )       (156 )       (331 )    
                                              

    Unallocated costs related to certain stock-based
        compensation expense

       (123 )       (103 )       (113 )       (120 )       (459 )    
    Amortization of purchased intangible assets       (147 )       (151 )       (153 )       (153 )       (604 )    
    In-process research and development charges       (50 )       (2 )       --         --         (52 )    
    Restructuring       (15 )       14         (5 )       (152 )       (158 )    
    Interest and other, net       36         163         228         204         631      
        Total HP Consolidated Earnings Before Taxes     $ 1,528       $ 1,820       $ 1,738       $ 2,105       $ 7,191      


VARIANCE
Three months ended Twelve months ended
Jan. 31,
2006		 Apr. 30,
2006		 Jul. 31,
2006		 Oct.31,
2006		 Oct.31,
2006
                                             
Net revenue:                                            
    Enterprise Storage and Servers $

(23

 ) $

(23

 ) $

(25

 ) $

(26

 ) $

(97

 )
    HP Services    

  (5

 )     

 (11

 )     

(10

 )     

  (13

 )     

 (39

 )     
   HP  Software

 

28

 

34

 

35

 

39

 

136
        Technology Solutions Group    

 

  --

      

 

 --

      

 

  --

 

 

  --

 

 

  --

      
    Personal Systems Group    

  --

      

  --

      

  --

 

 

  --

 

 

  --

      
    Imaging and Printing Group    

  --

      

  --

      

  --

 

 

  --

 

 

  --

      
    HP Financial Services    

  --

      

  --

      

  --

 

 

  --

 

 

  --

      
    Corporate Investments    

 

  --

      

  --

      

 

  --

 

 

  --

 

 

  --

      
         Total segments    

  --

      

  --

      

  --

 

 

  --

 

 

  --

      
    Eliminations of intersegment net revenue and other    

 

  --

      

 

  --

      

 

  --

 

 

 

  --

 

 

  --

      
        Total HP Consolidated     $

  --

       $

  --

       $

  --

 

$

  --

 

$

  --

      
Earnings (Loss) from operations:        

Op

 %       

Op

  %      

Op

 %       

Op

 %         

Op

 %
    Enterprise Storage and Servers     $

12

  

0.3

 %    $

28

  

0.8

 %    $

32

  

0.8

 %    $

39

  

0.9

 %    $

  111

  

0.6

 %  
    HP Services    

2

  

0.1

%

  

  (4

 )

-0.1

 %  

  (3

 )

-0.1

 %  

  (4

 )

-0.1

 %   

  (9

 )

--

    
    HP Software    

 

(14

 ) 

-4.5

 %  

 

(24

 )

-6.7

 %  

 

(29

 )

-8.6

 %  

 

(35

 )

-10.8

 %  

 

(102

) 

-7.7

 %  
        Technology Solutions Group    

 

  --

  

--

    

 

    

--

    

 

  --

  

--

    

 

  --

  

--

    

 

  --

  

--

    
    Personal Systems Group    

  --

  

--

        

--

    

  --

  

--

    

  --

  

--

    

  --

  

--

    
    Imaging and Printing Group    

  --

  

--

     

--

    

  --

  

--

    

  --

  

--

    

  --

  

--

    
    HP Financial Services    

  --

  

--

        

--

    

  --

  

--

    

  --

  

--

    

  --

  

--

    
    Corporate Investments    

 

  --

  

--

    

 

-- 

  

--

    

 

  --

  

--

    

 

  --

  

--

    

 

  --

  

--

    
         Total segments    

  --

      

  --

  

 

    

  --

  

 

    

  --

  

 

    

  --

  

 

    
    Corporate and unallocated costs and eliminations    

  --

      

  --

      

  --

      

  --

      

  --

      
    Unallocated costs related to certain stock-based
         compensation expense

  --

 

 

  --

 

 

  --

 

 

  --

 

 

  --

      
    Amortization of purchased intangible assets    

  --

 

 

  --

 

 

  --

 

 

  --

 

 

  --

      
    In-process research and development charges    

  --

 

 

  --

 

 

  --

 

 

  --

 

 

  --

      
    Restructuring    

  --

 

 

  --

 

 

  --

 

 

  --

      

  --

      
    Interest and other, net

 

--

 

--

 

--

 

 

  --

      

 

  --

      
        Total HP Consolidated Earnings Before Taxes     $

  --

       $

 --

       $

  --

       $

  --

       $

  --

      

(a)     Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2006, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. There was no impact on the previously reported financial results for the other segments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
FISCAL 2007 SEGMENT INFORMATION (Revised)
(Unaudited)
(In millions)

REVISED AMOUNTS
Three months ended Twelve months ended
Jan. 31,
2007		 Apr. 30,
2007		 Jul. 31,
2007		 Oct. 31,
2007		 Oct. 31,
2007
                                             
Net revenue: (a)                                            
                                             
    Enterprise Storage and Servers     $ 4,421       $ 4,594       $ 4,516       $ 5,108       $ 18,639      
    HP Services       3,932         4,125         4,165         4,348         16,570      
    HP Software       598         568         606         759         2,531      
        Technology Solutions Group       8,951         9,287         9,287         10,215         37,740      
    Personal Systems Group       8,719         8,663         8,894         10,133         36,409      
    Imaging and Printing Group       6,999         7,161         6,751         7,554         28,465      
    HP Financial Services       547         550         582         657         2,336      
    Corporate Investments       157         175         220         210         762      
         Total segments       25,373         25,836         25,734         28,769         105,712      
    Eliminations of intersegment net revenue and other       (291 )       (302 )       (357 )       (476 )       (1,426 )    
        Total HP Consolidated     $ 25,082       $ 25,534       $ 25,377       $ 28,293       $ 104,286      
     
Earnings (Loss) from operations: (a)        

Op

 %      

Op

 %      

Op

 %      

Op

 %      

Op

 %  
    Enterprise Storage and Servers     $ 453  

10.2

 %    $ 452  

9.8

 %   $ 507  

11.2

 %   $ 736  

14.4

 %   $ 2,148  

11.5

 %  
    HP Services       406  

10.3

 %     449  

10.9

 %     417  

10.0

 %     515  

11.8

 %     1,787  

10.8

 %  
    HP Software       18  

3.0

 %      7  

1.2

 %      51  

8.4

 %     145  

19.1

 %     221  

8.7

 %  
        Technology Solutions Group       877  

9.8

 %     908  

9.8

 %     975  

10.5

 %     1,396  

13.7

 %     4,156  

11.0

 %  
    Personal Systems Group       414  

4.7

 %     417  

4.8

 %     519  

5.8

 %     589  

5.8

 %   $ 1,939  

5.3

 %  
    Imaging and Printing Group       1,073  

15.3

 %     1,167  

16.3

 %     981  

14.5

 %     1,094  

14.5

 %     4,315  

15.2

 %  
    HP Financial Services       32  

5.9

 %     36  

6.5

 %     39  

6.7

 %     48  

7.3

 %     155  

6.6

 %  
    Corporate Investments       (29 )

-18.5

 %     (18 )

-10.3

 %     (5 )

-2.3

 %     (5 )

-2.4

 %     (57 )

-7.5

 %  
         Total segments       2,367         2,510         2,509         3,122         10,508      
    Corporate and unallocated costs and eliminations       (66 )       (75 )       (101 )       (197 )       (439 )    
    Unallocated costs related to certain stock-based
        compensation expense		 (140 )        (131 )        (114 )        (122 )       (507 )    
    Amortization of purchased intangible assets       (201 )        (212 )       (183 )       (187 )       (783 )    
    In-process research and development charges       (167

)

       (19 )       --         (4 )       (190 )    
    Restructuring       41       (453 )       5         20         (387 )    
    Pension curtailments and pension settlements, net       9       508         --         --         517      
    Interest and other, net       121         100         170         67         458      
        Total HP Consolidated Earnings Before Taxes     $ 1,964       $ 2,228       $ 2,286       $ 2,699       $ 9,177      


AMOUNTS AS PREVIOUSLY REPORTED
Three months ended Twelve months ended
Jan. 31,
2007		 Apr. 30,
2007		 Jul. 31,
2007		 Oct. 31,
2007		 Oct. 31,
2007
                                             
Net revenue:                                            
                                                    
    Enterprise Storage and Servers     $ 4,453       $ 4,619       $ 4,547       $ 5,150       $ 18,769      
    HP Services       3,948         4,145         4,186         4,367         16,646      
    HP Software       550         523         554         698         2,325      
        Technology Solutions Group       8,951         9,287         9,287         10,215         37,740      
    Personal Systems Group       8,719         8,663         8,894         10,133         36,409      
    Imaging and Printing Group       6,999         7,161         6,751         7,554         28,465      
    HP Financial Services       547         550         582         657         2,336      
    Corporate Investments       157         175         220         210         762      
         Total segments       25,373         25,836         25,734         28,769         105,712      
    Eliminations of intersegment net revenue and other       (291 )       (302 )       (357 )       (476 )       (1,426 )    
        Total HP Consolidated net revenue     $ 25,082       $ 25,534       $ 25,377       $ 28,293       $ 104,286      
                                             
Earnings (Loss) from operations:        

    Op

 %          Op %      

  Op

 %      

  Op

 %      

   Op

 %  
    Enterprise Storage and Servers     $ 416  

9.3

 %    $ 407  

8.8

 %   $ 464  

10.2

 %   $ 693  

13.5

 %   $ 1,980  

10.5

 %  
    HP Services       414  

10.5

 %     459  

11.1

 %     430  

10.3

 %     526  

12.0

 %     1,829  

11.0

 %   
    HP Software       47  

8.5

 %     42  

8.0

 %     81  

14.6

 %     177  

25.4

 %     347  

14.9

 %  
        Technology Solutions Group       877  

9.8

 %     908  

9.8

 %     975  

10.5

 %     1,396  

13.7

 %     4,156  

11.0

 %  
    Personal Systems Group       414  

4.7

 %     417  

4.8

 %      519  

5.8

 %     589  

5.8

 %   $ 1,939  

5.3

 %  
    Imaging and Printing Group       1,073  

15.3

 %     1,167  

16.3

 %      981  

14.5

 %     1,094  

14.5

 %     4,315  

15.2

 %  
    HP Financial Services       32  

5.9

 %     36  

6.5

 %     39  

6.7

 %      48  

7.3

 %      155  

6.6

 %  
    Corporate Investments       (29 )

-18.5

 %     (18 )

-10.3

 %     (5 )

-2.3

 %     (5 )

-2.4

 %     (57 )

-7.5

 %  
         Total segments       2,367         2,510         2,509         3,122         10,508      
    Corporate and unallocated costs and eliminations       (66 )       (75 )       (101 )       (197 )       (439 )    
    Unallocated costs related to certain stock-based
        compensation expense		 (140 )       (131 )       (114 )       (122 )       (507 )    
    Amortization of purchased intangible assets       (201 )       (212 )       (183 )       (187 )       (783 )    
    In-process research and development charges       (167 )       (19 )       --         (4 )       (190 )    
    Restructuring       41         (453 )       5         20         (387 )    
    Pension curtailments and pension settlements, net       9         508         --         --         517      
    Interest and other, net       121         100         170         67         458      
        Total HP Consolidated Earnings Before Taxes     $ 1,964       $ 2,228       $ 2,286       $ 2,699       $ 9,177      


VARIANCE
Three months ended Twelve months ended
Jan. 31,
2007		 Apr. 30,
2007		 Jul. 31,
2007		 Oct. 31,
2007		 Oct. 31,
2007
                                             
Net revenue:                                            
   
    Enterprise Storage and Servers    

$

 (32 )     $ (25 )     $ (31 )     $ (42 )     $ (130 )    
    HP Services       (16 )       (20 )       (21 )       (19 )       (76 )    
    HP Software       48         45         52         61         206      
        Technology Solutions Group       --         --         --         --         --      
    Personal Systems Group       --         --         --         --         --      
    Imaging and Printing Group       --         --         --         --         --      
    HP Financial Services       --         --         --         --         --      
    Corporate Investments       --         --         --         --         --      
         Total segments       --         --         --         --         --      
    Eliminations of intersegment net revenue and other       --         --         --         --         --      
        Total HP Consolidated     $ --       $ --       $ --       $ --       $ --      
                                             
Earnings (Loss) from operations:        

  Op

 %      

  Op

 %      

  Op

 %      

  Op

 %         Op %   
    Enterprise Storage and Servers    

$

 37  

0.9

  %   $ 45  

1.0

  %   $ 43  

1.0

  %   $ 43  

0.9

  %   $ 168  

1.0

 %  
    HP Services       (8 )

-0.2

  %     (10 )

-0.2

  %     (13 )

-0.3

  %     (11 )

-0.2

  %     (42 )

-0.2

 %  
    HP Software       (29 )

-5.5

  %     (35 )

-6.8

  %     (30 )

-6.2

  %     (32 )

-6.3

  %     (126 )

-6.2

 %  
        Technology Solutions Group       --  

--

       --  

--

       --  

--

       --  

--

       --  

--

    
    Personal Systems Group       --  

--

       --  

--

       --  

--

       --  

--

       --  

--

    
    Imaging and Printing Group       --  

--

       --  

--

       --  

--

       --  

--

       --  

--

    
    HP Financial Services       --  

--

       --  

--

       --  

--

       --  

--

       --  

--

    
    Corporate Investments       --  

--

       --  

--

       --  

--

       --  

--

       --  

--

    
         Total segments       --         --         --         --         --      
    Corporate and unallocated costs and eliminations       --         --         --         --         --      
    Unallocated costs related to certain stock-based
        compensation expense		 --         --         --         --         --      
    Amortization of purchased intangible assets       --         --         --         --         --      
    In-process research and development charges       --         --         --         --         --      
    Restructuring       --         --         --         --         --      
    Pension curtailments and pension settlements, net       --         --         --         --         --      
    Interest and other, net       --         --         --         --         --      
        Total HP Consolidated Earnings Before Taxes    

$

 --       $ --       $ --       $ --       $ --      

(a)     Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2007, the reclassifications resulted in the transfer of revenue and operating profit among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. There was no impact on the previously reported financial results for the other segments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
FISCAL 2006 SEGMENT / BUSINESS UNIT INFORMATION (Revised)
(Unaudited)
(In millions)


REVISED AMOUNTS AMOUNTS AS PREVIOUSLY REPORTED VARIANCE
Three months ended
Twelve
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ended
Three months ended
Twelve
months
ended
Three months ended
Twelve
months
ended
Jan. 31,
2006
Apr. 30,
2006
Jul. 31,
2006
Oct. 31,
2006
Oct. 31,
2006
Jan. 31,
2006
Apr. 30,
2006
Jul. 31,
2006
Oct. 31,
2006
Oct. 31,
2006
Jan. 31,
2006
Apr. 30,
2006
Jul. 31,
2006
Oct. 31,
2006
Oct.31,
2006
Net revenue:(a)                                                                
     
     Industry Standard Servers     $ 2,448   $ 2,413   $ 2,427   $ 2,694   $ 9,982   $ 2,448   $ 2,413   $ 2,427   $ 2,694   $ 9,982   $ --   $ --   $ --   $ --   $  --  
     Business Critical Systems       906     920     831     997     3,654     906     920     833     997     3,656     --     --     (2 )   --    

(2

 )
     Storage       863     909     850     953     3,575     886     932     873     979     3,670     (23 )   (23 )   (23 )   (26 )   (95 )
    Enterprise Storage and Servers 4,217     4,242     4,108     4,644     17,211     4,240     4,265     4,133     4,670     17,308     (23 )   (23 )   (25 )   (26 )   (97 )
     Technology Services       2,059     2,059     2,039     2,089     8,246     2,081     2,086     2,064     2,117     8,348     (22 )   (27 )   (25 )   (28 )   (102 )
     Outsourcing Services       1,015     1,075     1,120     1,189     4,399     1,011     1,070     1,116     1,185     4,382     4     5     4     4     17  
     Consulting & Integration       678     747     719     789     2,933     665     736     708     778     2,887     13     11     11     11     46  
    HP Services       3,752     3,881     3,878     4,067     15,578     3,757     3,892     3,888     4,080     15,617     (5 )   (11 )   (10 )   (13 )   (39 )
     Business technology
        optimization(b) 		201     226     213     249     889     205     228     215     251     899     (4 )   (2 )   (2 )   (2 )   (10 )
     Other(b)       131     138     140     139     548     99     102     103     98     402     32     36     37     41     146  
    HP Software       332     364     353     388     1,437     304     330     318     349     1,301     28     34     35     39     136  
  Technology Solutions Group       8,301     8,487     8,339     9,099     34,226     8,301     8,487     8,339     9,099     34,226     --     --     --     --     --  
     Notebooks       2,955     2,816     2,769     3,465     12,005     2,954     2,815     2,768     3,463     12,000     1     1     1     2     5  
     Desktops       3,859     3,577     3,522     3,683     14,641     3,854     3,569     3,515     3,675     14,613     5     8     7     8     28  
     Workstations       329     338     339     362     1,368     329     338     339     362     1,368     --     --     --     --     --  
     Handhelds       221     136     147     146     650     216     129     136     139     620     5     7     11     7     30  
     Other       85     110     140     167     502     96     126     159     184     565     (11 )   (16 )   (19 )   (17 )   (63 )
  Personal Systems Group       7,449     6,977     6,917     7,823     29,166     7,449     6,977     6,917     7,823     29,166     --     --     --     --     --  
     Commercial hardware       1,614     1,701     1,598     1,804     6,717     1,655     1,739     1,632     1,873     6,899     (41 )    (38 )   (34 )   (69 )   (182 ) 
     Consumer hardware       1,238     1,028     909     1,310     4,485     1,223     1,015     893     1,296     4,427     15     13     16     14     58  
     Supplies       3,693     3,995     3,727     4,169     15,584     3,652     3,957     3,693     4,100     15,402     41     38     34     69     182  
     Other       --     --     --     --     --     15     13     16     14     58     (15 )   (13 )   (16 )   (14 )    (58 )
  Imaging and Printing Group       6,545     6,724     6,234     7,283     26,786     6,545     6,724     6,234     7,283     26,786     --     --     --     --     --  
  HP Financial Services       496     518     519     545     2,078     496     518     519     545     2,078     --     --     --     --  

--
  Corporate Investments       129     122     155     160     566     129     122     155     160     566     --     --     --     --     --  
     Total segments       22,920     22,828     22,164     24,910     92,822     22,920     22,828     22,164     24,910     92,822     --     --     --     --     --  
  Eliminations of intersegment
    net revenue and other		       (261 )   (274 )   (274 )   (355 )   (1,164 )   (261 )   (274 )   (274 )   (355 )   (1,164 )   --     --     --     --     --  
 Total HP Consolidated net revenue    $ 22,659   $ 22,554   $ 21,890   $ 24,555   $ 91,658   $ 22,659   $ 22,554   $ 21,890   $ 24,555   $ 91,658   $ --   $ --   $ --   $ --   $ --  


(a)     Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2006, the reclassifications resulted in the transfer of revenue among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. In addition, revenue was transferred among the business units within the Imaging and Printing Group and among the business units within the Personal Systems Group, but there was no change to the previously reported revenue for either segment as a whole. There was no impact on the previously reported financial results for the HP Financial Services and Corporate Investments segments.

(b)     The OpenView business unit was renamed as “Business Technology Optimization” and the OpenCall and Other business unit was renamed as “Other” effective in fiscal 2008. The renamed “Other” business unit includes primarily the OpenCall and Business Information Optimization products.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
FISCAL 2007 SEGMENT / BUSINESS UNIT INFORMATION (Revised)
(Unaudited)
(In millions)

REVISED AMOUNTS AMOUNTS AS PREVIOUSLY REPORTED VARIANCE
Twelve Twelve Twelve
months months months
Three months ended
ended
Three months ended
ended
Three months ended
ended
Jan. 31,
2007
Apr. 30,
2007
Jul. 31,
2007
Oct. 31,
2007
Oct. 31,
2007
Jan. 31,
2007
Apr. 30,
2007
Jul. 31,
2007
Oct. 31,
2007
Oct. 31,
2007
Jan. 31,
2007
Apr. 30,
2007
Jul. 31,
2007
Oct. 31,
2007
Oct. 31,
2007
Net revenue:(a)                                                                
     
     Industry standard servers     $ 2,689   $ 2,818   $ 2,814   $ 3,059   $ 11,380   $ 2,689   $ 2,818   $ 2,814   $ 3,059   $ 11,380   $ --   $ --   $ --   $ --   $ --  
     Business critical systems       846     862     811     1,034     3,553     848     862     811     1,043     3,564     (2 )   --     --     (9 )   (11 )
     Storage       886     914     891     1,015     3,706     916     939     922     1,048     3,825     (30 )   (25 )   (31 )   (33 )   (119 )
    Enterprise Storage and Servers    4,421     4,594     4,516     5,108     18,639     4,453     4,619     4,547     5,150     18,769     (32 )   (25 )   (31 )   (42 )   (130 )
     Technology services       2,062     2,120     2,128     2,229     8,539     2,093     2,155     2,164     2,266     8,678     (31 )   (35 )   (36 )   (37 )   (139 )
     Outsourcing services       1,129     1,200     1,239     1,271     4,839     1,125     1,195     1,234     1,267     4,821     4     5     5     4     18  
     Consulting and integration       741     805     798     848     3,192     730     795     788     834     3,147     11     10     10     14     45  
    HP Services       3,932     4,125     4,165     4,348     16,570     3,948     4,145     4,186     4,367     16,646     (16 )   (20 )   (21 )   (19 )   (76 )
     Business technology
        optimization(b) 		      460     437     487     620     2,004     457     434     481     616     1,988     3     3     6     4     16  
     Other(b)       138     131     119     139     527     93     89     73     82     337     45     42     46     57     190  
    HP Software       598     568     606     759     2,531     550     523     554     698     2,325     48     45     52     61     206  
  Technology Solutions Group       8,951     9,287     9,287     10,215     37,740     8,951     9,287     9,287     10,215     37,740     --     --     --     --     --  
     Notebooks       4,146     4,086     4,254     5,164     17,650     4,144     4,084     4,253     5,161     17,642     2     2     1     3     8  
     Desktops       3,821     3,913     3,933     4,222     15,889     3,812     3,904     3,924     4,210     15,850     9     9     9     12     39  
     Workstations       405     402     441     473     1,721     405     402     441     473     1,721     --     --     --     --     --  
     Handhelds       191     116     116     108     531     183     105     105     97     490     8     11     11     11     41  
     Other       156     146     150     166     618     175     168     171     192     706     (19 )   (22 )   (21 )   (26 )   (88 )
  Personal Systems Group       8,719     8,663     8,894     10,133     36,409     8,719     8,663     8,894     10,133     36,409     --     --     --     --     --  
     Commercial hardware       1,616     1,709     1,658     1,880     6,863     1,689     1,786     1,738     1,968     7,181     (73 )    (77 )    (80 )    (88 )    (318 ) 
     Consumer hardware       1,241     1,008     996     1,251     4,496     1,227     996     982     1,237     4,442     14     12     14     14     54  
     Supplies       4,142     4,444     4,097     4,423     17,106     4,069     4,367     4,017     4,335     16,788     73     77     80     88     318  
     Other       --     --     --     --     --     14     12     14     14     54     (14 )   (12 )   (14 )   (14 )   (54 )
  Imaging and Printing Group       6,999     7,161     6,751     7,554     28,465     6,999     7,161     6,751     7,554     28,465     --     --     --     --     --  
  HP Financial Services       547     550     582     657     2,336     547     550     582     657     2,336     --     --     --     --     --  
  Corporate Investments       157     175     220     210     762     157     175     220     210     762     --     --     --     --     --  
     Total segments       25,373     25,836     25,734     28,769     105,712     25,373     25,836     25,734     28,769     105,712     --     --     --     --     --  
     Eliminations of intersegment
       net revenue and other		       (291 )   (302 )   (357 )   (476 )   (1,426 )   (291 )   (302 )   (357 )   (476 )   (1,426 )   --     --     --     --     --  
Total HP Consolidated net revenue    $ 25,082   $ 25,534   $ 25,377   $ 28,293   $ 104,286   $ 25,082   $ 25,534   $ 25,377   $ 28,293   $ 104,286   $ --   $ --   $ --   $ --   $ --  

(a)     Certain fiscal 2008 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2007, the reclassifications resulted in the transfer of revenue among the Enterprise Storage and Servers, HP Services and HP Software segments within the Technology Solutions Group. In addition, revenue was transferred among the business units within the Imaging and Printing Group and among the business units within the Personal Systems Group, but there was no change to the previously reported revenue for either segment as a whole. There was no impact on the previously reported financial results for the HP Financial Services and Corporate Investments segments.

(b)     The OpenView business unit was renamed as “Business Technology Optimization” and the OpenCall and Other business unit was renamed as “Other” effective in fiscal 2008. The renamed “Other” business unit includes primarily the OpenCall and Business Information Optimization products.

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