EX-99.2 3 q2ex99-2.htm EXHIBIT 99.2
EXHIBIT 99.2
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)
 
             
   
Three months ended
   
April 30,
2015
 
January 31,
2015
 
April 30,
2014
             
Net revenue
 
$
25,453
   
$
26,839
   
$
27,309
 
                         
Costs and expenses:
                       
        Cost of sales
   
19,345
     
20,571
     
20,704
 
        Research and development
   
850
     
825
     
873
 
        Selling, general and administrative
   
3,063
     
3,071
     
3,391
 
        Amortization of intangible assets
   
221
     
222
     
264
 
        Restructuring charges
   
255
     
146
     
252
 
        Acquisition-related charges
   
19
     
4
     
3
 
        Separation costs
   
269
     
80
     
-
 
                Total costs and expenses
   
24,022
     
24,919
     
25,487
 
                         
Earnings from operations
   
1,431
     
1,920
     
1,822
 
                         
Interest and other, net
   
(139
)
   
(174
)
   
(174
)
                         
Earnings before taxes
   
1,292
     
1,746
     
1,648
 
                         
Provision for taxes
   
(281
)
   
(380
)
   
(375
)
                         
Net earnings
 
$
1,011
   
$
1,366
   
$
1,273
 
                         
Net earnings per share:
                       
        Basic
 
$
0.56
   
$
0.75
   
$
0.67
 
        Diluted
 
$
0.55
   
$
0.73
   
$
0.66
 
                         
Cash dividends declared per share
 
$
-
   
$
0.32
   
$
-
 
                         
                         
Weighted-average shares used to compute net earnings per share:
                       
        Basic
   
1,814
     
1,833
     
1,890
 
        Diluted
   
1,836
     
1,861
     
1,916
 
 
 
 
Page 1 of 5

 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES 
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)
 
         
   
Six months ended April 30,
   
2015
 
2014 
         
Net revenue
 
$
52,292
   
$
55,463
 
                 
Costs and expenses:
               
        Cost of sales
   
39,916
     
42,440
 
        Research and development
   
1,675
     
1,684
 
        Selling, general and administrative
   
6,134
     
6,601
 
        Amortization of intangible assets
   
443
     
547
 
        Restructuring charges
   
401
     
366
 
        Acquisition-related charges
   
23
     
6
 
        Separation costs
   
349
     
-
 
                Total costs and expenses
   
48,941
     
51,644
 
                 
Earnings from operations
   
3,351
     
3,819
 
                 
Interest and other, net
   
(313
)
   
(337
)
                 
Earnings before taxes
   
3,038
     
3,482
 
                 
Provision for taxes
   
(661
)
   
(784
)
                 
Net earnings
 
$
2,377
   
$
2,698
 
                 
Net earnings per share:
               
        Basic
 
$
1.30
   
$
1.42
 
        Diluted
 
$
1.29
   
$
1.40
 
                 
Cash dividends declared per share
 
$
0.32
   
$
0.29
 
                 
                 
Weighted-average shares used to compute net earnings per share:
               
        Basic
   
1,824
     
1,898
 
        Diluted
   
1,848
     
1,922
 
 
 
 
Page 2 of 5

 
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
 
    
   
As of   
   
April 30, 2015 
 
October 31, 2014 
   
(Unaudited) 
   
ASSETS
       
         
Current assets:
       
        Cash and cash equivalents
 
$
14,768
   
$
15,133
 
        Accounts receivable
   
12,320
     
13,832
 
        Financing receivables
   
2,842
     
2,946
 
        Inventory
   
6,227
     
6,415
 
        Other current assets
   
12,726
     
11,819
 
                 
            Total current assets
   
48,883
     
50,145
 
                 
Property, plant and equipment
   
11,014
     
11,340
 
                 
Long-term financing receivables and other assets
   
8,552
     
8,454
 
                 
Goodwill and intangible assets
   
32,947
     
33,267
 
                 
Total assets
 
$
101,396
   
$
103,206
 
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
                 
Current liabilities:
               
        Notes payable and short-term borrowings
 
$
5,594
   
$
3,486
 
        Accounts payable
   
14,923
     
15,903
 
        Employee compensation and benefits
   
3,145
     
4,209
 
        Taxes on earnings
   
1,144
     
1,017
 
        Deferred revenue
   
6,055
     
6,143
 
        Other accrued liabilities
   
12,325
     
12,977
 
                 
            Total current liabilities
   
43,186
     
43,735
 
                 
Long-term debt
   
15,464
     
16,039
 
                 
Other liabilities
   
15,577
     
16,305
 
                 
Stockholders' equity:
               
        HP stockholders' equity
   
26,768
     
26,731
 
        Non-controlling interests
   
401
     
396
 
                 
            Total stockholders' equity
   
27,169
     
27,127
 
                 
Total liabilities and stockholders' equity
 
$
101,396
   
$
103,206
 
                 
 
 
 
Page 3 of 5

 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
 
             
   
Three months ended   
   
April 30,
2015 
 
January 31,
2015
 
April 30,
2014 
Net revenue:(a)
           
             
   Personal Systems
 
$
7,740
   
$
8,544
   
$
8,176
 
   Printing
   
5,453
     
5,543
     
5,834
 
      Total Printing and Personal Systems Group
   
13,193
     
14,087
     
14,010
 
   Enterprise Group
   
6,561
     
6,981
     
6,633
 
   Enterprise Services
   
4,817
     
4,993
     
5,702
 
   Software
   
892
     
871
     
971
 
   HP Financial Services
   
805
     
803
     
867
 
   Corporate Investments
   
2
     
16
     
6
 
          Total segments
   
26,270
     
27,751
     
28,189
 
   Elimination of intersegment net revenue and other
   
(817
)
   
(912
)
   
(880
)
                         
          Total HP consolidated net revenue
 
$
25,453
   
$
26,839
   
$
27,309
 
                         
Earnings before taxes:(a)
                       
                         
   Personal Systems
 
$
235
   
$
313
   
$
290
 
   Printing
   
996
     
1,067
     
1,140
 
      Total Printing and Personal Systems Group
   
1,231
     
1,380
     
1,430
 
   Enterprise Group
   
950
     
1,090
     
957
 
   Enterprise Services
   
194
     
148
     
148
 
   Software
   
160
     
157
     
186
 
   HP Financial Services
   
85
     
90
     
99
 
   Corporate Investments
   
(144
)
   
(124
)
   
(98
)
          Total segment earnings from operations
   
2,476
     
2,741
     
2,722
 
                         
   Corporate and unallocated costs and eliminations
   
(152
)
   
(182
)
   
(251
)
   Stock-based compensation expense
   
(129
)
   
(187
)
   
(130
)
   Amortization of intangible assets
   
(221
)
   
(222
)
   
(264
)
   Restructuring charges
   
(255
)
   
(146
)
   
(252
)
   Acquisition-related charges
   
(19
)
   
(4
)
   
(3
)
   Separation costs
   
(269
)
   
(80
)
   
-
 
   Interest and other, net
   
(139
)
   
(174
)
   
(174
)
                         
          Total HP consolidated earnings before taxes
 
$
1,292
   
$
1,746
   
$
1,648
 
 
(a)
Effective at the beginning of its first quarter of fiscal 2015, HP implemented an organizational change to align its segment financial reporting more closely with its current business structure. This organizational change resulted in the transfer of third party multi-vendor support arrangements from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the removal of intersegment revenue from the Technology Services business unit within the Enterprise Group segment and the related corporate intersegment revenue eliminations, and the transfer of operating profit from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.  
 
 
 
Page 4 of 5

 
 
 
 
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
 
         
   
Six months ended April 30,
   
2015
 
2014
Net revenue:(a)
       
         
  Personal Systems
 
$
16,284
   
$
16,706
 
  Printing
   
10,996
     
11,649
 
     Total Printing and Personal Systems Group
   
27,280
     
28,355
 
  Enterprise Group
   
13,542
     
13,603
 
  Enterprise Services
   
9,810
     
11,297
 
  Software
   
1,763
     
1,887
 
  HP Financial Services
   
1,608
     
1,737
 
  Corporate Investments
   
18
     
294
 
        Total segments
   
54,021
     
57,173
 
  Elimination of intersegment net revenue and other
   
(1,729
)
   
(1,710
)
                 
         Total HP consolidated net revenue
 
$
52,292
   
$
55,463
 
                 
Earnings before taxes:(a)
               
                 
  Personal Systems
 
$
548
   
$
569
 
  Printing
   
2,063
     
2,119
 
     Total Printing and Personal Systems Group
   
2,611
     
2,688
 
  Enterprise Group
   
2,040
     
1,960
 
  Enterprise Services
   
342
     
208
 
  Software
   
317
     
331
 
  HP Financial Services
   
175
     
200
 
  Corporate Investments
   
(268
)
   
23
 
         Total segment earnings from operations
   
5,217
     
5,410
 
                 
  Corporate and unallocated costs and eliminations
   
(334
)
   
(372
)
  Stock-based compensation expense
   
(316
)
   
(300
)
  Amortization of intangible assets
   
(443
)
   
(547
)
  Restructuring charges
   
(401
)
   
(366
)
  Acquisition-related charges
   
(23
)
   
(6
)
  Separation costs
   
(349
)
   
-
 
  Interest and other, net
   
(313
)
   
(337
)
                 
         Total HP consolidated earnings before taxes
 
$
3,038
   
$
3,482
 
 
(a)
Effective at the beginning of its first quarter of fiscal 2015, HP implemented an organizational change to align its segment financial reporting more closely with its current business structure. This organizational change resulted in the transfer of third party multi-vendor support arrangements from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the removal of intersegment revenue from the Technology Services business unit within the Enterprise Group segment and the related corporate intersegment revenue eliminations, and the transfer of operating profit from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.   
 
Page 5 of 5