-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ptZ1UbAbQgaHlUEwwbLtB8oLh3bGZd2HGgtgkis6kDizp6D66AnOy8i2dze58xw7 kSbW1TX7YUP8Lv1CUBKzww== 0000899243-94-000006.txt : 19940131 0000899243-94-000006.hdr.sgml : 19940131 ACCESSION NUMBER: 0000899243-94-000006 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19931031 FILED AS OF DATE: 19940128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HEWLETT PACKARD CO CENTRAL INDEX KEY: 0000047217 STANDARD INDUSTRIAL CLASSIFICATION: 3570 IRS NUMBER: 941081436 STATE OF INCORPORATION: CA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-04423 FILM NUMBER: 94503496 BUSINESS ADDRESS: STREET 1: 3000 HANOVER ST CITY: PALO ALTO STATE: CA ZIP: 94304 BUSINESS PHONE: 4158571501 10-K 1 FORM 10-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended October 31, 1993 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the Transition period from to Commission File Number: 1-4423 Exact name of registrant as specified in its charter: HEWLETT-PACKARD COMPANY STATE OR OTHER JURISDICTION OF IRS EMPLOYER INCORPORATION OR ORGANIZATION: IDENTIFICATION NO.: California 94-1081436 ADDRESS OF PRINCIPAL EXECUTIVE OFFICES: 3000 Hanover Street, Palo Alto, California 94304 TELEPHONE NO.: (415) 857-1501 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED Common Stock, New York Stock Exchange, Inc. par value $1 London Stock Exchange per share Paris Bourse Tokyo Stock Exchange German (Frankfurt and Stuttgart) Stock Exchange Swiss (Zurich, Basel, Geneva and Lausanne) Stock Exchange Pacific Stock Exchange, Inc. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [_] The aggregate market value of the registrant's common stock held by nonaffiliates as of December 27, 1993 was $14,839,273,031. Indicate the number of shares outstanding of each of the issuer's classes of common stock as of December 27, 1993: 253,091,591 shares of $1 par value common stock. DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENT DESCRIPTION 10-K PART -------------------- --------- Pages 23-45 and 48 and the inside back cover (excluding order data) of the Registrant's 1993 Annual Report to Shareholders I, II, IV Pages 2-17 and 23-24 of the Registrant's Notice of Annual Meeting of Shareholders and Proxy Statement dated January 20, 1994 III
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I ITEM 1. BUSINESS. PRODUCTS AND SERVICES Hewlett-Packard Company was incorporated in 1947 under the laws of the State of California as the successor to a partnership founded in 1939 by William R. Hewlett and David Packard. Hewlett-Packard Company, together with its consolidated subsidiaries (the "Company"), is engaged worldwide in the design, manufacture and service of electronic equipment and systems for measurement, computation and communications. The Company offers a wide variety of systems and standalone products, including electronic test equipment, computer systems and peripheral products, medical electronic equipment, calculators and other personal information products, solid state components and instrumentation for chemical analysis. These products are used in industry, business, engineering, science, education and medicine. A summary of the Company's net revenue as contributed by its major classes of products and services is found on page 44 of the Company's 1993 Annual Report to Shareholders, which page (excluding order data) is incorporated herein by reference. The Company's computers, computer systems, personal information products, personal peripheral products and other peripherals are used in a variety of applications, including scientific and engineering computation and analysis, instrument control and business information management. The Company's core computing products and technologies include its PA-RISC architecture for systems and workstations and software infrastructure for open systems. The Company's general-purpose computers and computer systems include scalable families of systems and servers for use in small workgroups, larger departments and entire data centers. Key products include the HP 9000 series, which runs HP-UX, HP's implementation of the UNIX(R)(/1/) operating system, and comprises both workstations with powerful computational and graphics capabilities and multiuser computers for both technical and commercial applications; and the HP Vectra series of IBM-compatible personal computers for use in business, engineering, manufacturing and chemical analysis. The Company offers software programming services, network services, distributed system services and data management services. Customers of the Company's computers, computer systems and software infrastructure products include original equipment manufacturers, dealers and value-added resellers, as well as end users for a variety of applications. In the field of computing during fiscal 1993, the Company expanded its Corporate Business Systems product line, a family of multiuser systems and servers that spans products in both the HP 9000 and the HP 3000 series. Other introductions included models 715, 725 and 735 of the Series 700 family of workstations, which incorporates the Company's PA-RISC architecture; the HP ENVIZEX family of X stations; HP Vectra personal computers based on the Intel486(/2/) DX and DX2 microprocessors; and a series of HP Vectra PC servers. Software introductions included a portfolio of new applications that expand the capabilities of HP OpenView, the Company's network- and systems-management platform; Release 2.0 of Dashboard for Windows, an upgrade of the Company's push-button utility panel for Windows; and Earth Data System, developed jointly by the Company and Ellery Systems Inc., which facilitates global environmental research. The Company's peripheral products include a variety of system and desktop printers, such as the HP LaserJet family; the HP DeskJet family, which is based on the Company's thermal inkjet technology; a family of graphic plotters and page scanners; video display terminals; disk (magnetic and optical) and tape drives and related autochangers. In fiscal 1993 the Company introduced the HP LaserJet 4Si and 4Si/MX printers, which are 600-dots-per-inch laser printers that can work concurrently with PCs, Macintosh computers, UNIX system-based workstations and multiple networks; the HP 4L and 4ML printers, the Company's - -------- (/1/)UNIX is a registered trademark of UNIX System Laboratories Inc. in the U.S.A. and other countries. (/2/)Intel486 is a U.S. trademark of Intel Corp. lowest-priced HP LaserJet printers for individual users; the HP DeskJet 1200C and 1200C/PS color printers, which offer laser-printer speed and functionality; and the HP DeskJet 310 and 310M portable printers. Other fiscal 1993 introductions included the HP Kittyhawk Personal Storage Module II, a 1.3-inch disk drive that stores 42.8 megabytes of text, and the HP FAX-900 and 950, both plain-paper fax machines based on the Company's thermal inkjet technology. The Company also produces measurement systems for use in electronics, medicine and analytical chemistry. Test and measurement instruments include voltmeters and multimeters that measure voltage, current and resistance; counters that measure the frequency of an electrical signal; oscilloscopes and logic analyzers that measure electrical changes in relation to time; signal generators that provide the electrical stimulus for the testing of systems and components; specialized communications test equipment; and atomic frequency standards, which are used in accurate time-interval and timekeeping applications. Instruments for medical applications include continuous monitoring systems for critical-care patients, medical data-management systems, fetal monitors, electrocardiographs, cardiac catheterization laboratory systems, blood gas measuring instruments, diagnostic ultrasonic imaging systems and cardiac defibrillators. Instruments for analytical applications include gas and liquid chromatographs, mass spectrometers, laboratory data systems and spectrophotometers. Key product introductions for measurement systems in fiscal 1993 included a network-monitoring system that gives telecom providers enhanced analytical and problem-solving capabilities; and the HP 3D Capillary Electrophoresis system, which offers bioscientists leading-edge separation capabilities. The Company continues to demonstrate its ability to combine measurement and computation. The Company's Unified Laboratory strategy is designed to improve a user's productivity by allowing computers in the analytical laboratory to serve as adjuncts to analytical instrumentation while broadening the user's ability to communicate with other parts of the organization. The Office of the Chemist is a subset of the Unified Laboratory in which an office-based workstation or PC, with business software such as spreadsheets, is combined with analytical equipment and data to allow a chemist to work more efficiently. The Company's Clinical Information System combines patient data from monitoring instruments with other information to assist nurses in providing health care. The Company also manufactures electronic component products consisting principally of microwave semiconductor, fiber-optic and optoelectronic devices (including light-emitting diodes). The products primarily are sold to other manufacturers for incorporation into their electronic products but also are used in many of the Company's products. In fiscal 1993 the Company introduced fiber-optic transceivers that reduce the costs of high-speed, multimedia networks; and a greenish-yellow, high-brightness light-emitting diode designed for use in highway signs, traffic signals and illuminated displays. During 1993 the Company's acquisition of BT&D Technologies, Ltd., a joint venture between British Telecommunications plc and DuPont, helped round out the Company's offering of components for the communications market. BT&D's products include fiber optic couplers, transmitters and receivers that go directly into the communications network for very high-speed, long-wavelength, laser-driven voice and data applications. The Company provides service for its equipment, systems and peripherals, including support and maintenance services, parts and supplies for design and manufacturing systems, office and information systems, general-purpose instruments, computers and computer systems, peripherals and network products. During fiscal 1993, the Company derived 24 percent of its net revenue from such services. The Company strives, in all its businesses, to promote industry standards that recognize customer preferences for open systems in which different vendors' products can work together. The Company often bases its product innovations on such standards and seeks to make its technology innovations into industry standards through licensing to other companies and standards-setting groups. For example, during fiscal 1993 the Company worked to make its serial infrared technology and its standard instrument control library into industry standards. 2 MARKETING Customers. The Company has approximately 600 sales and support offices and distributorships in 110 countries. Sales are made to industrial and commercial customers, educational and scientific institutions, healthcare providers (including individual doctors, hospitals, clinics and research laboratories) and, in the case of its calculators and other personal information products, computer peripherals and PCs, to individuals for personal use. Sales Organization. More than half of the Company's orders are derived through value-added resale channels, including dealers and original equipment manufacturers. The remaining product revenue results from the efforts of its own sales organization selling to end users. In fiscal 1993 a higher proportion of the Company's net revenue than in fiscal 1992 was generated from products such as personal peripherals, which are primarily sold through dealers and other value-added resellers. Sales operations are supported by approximately 35,000 individuals, including field service engineers, sales representatives, service personnel and administrative support staff. International. The Company's total orders originating outside of the United States as a percentage of total Company orders were approximately 54 percent in fiscal 1993, 55 percent in fiscal 1992 and 56 percent in fiscal 1991. The majority of these international orders were from customers other than foreign governments. Approximately two-thirds of the Company's international orders in each of the last three fiscal years were derived from Europe, with most of the balance coming from Japan, other countries in Asia Pacific, Latin America and Canada. Most of the Company's sales in international markets are made by foreign sales subsidiaries. In countries with low sales volume, sales are made through various representative and distributorship arrangements. Certain sales in international markets, however, are made directly by the parent Company from the United States. The Company believes that its overall net profit margins on international sales are comparable to those obtained on sales made in the United States. The Company's international business is subject to risks customarily encountered in foreign operations, including fluctuations in monetary exchange rates, import and export controls and the economic, political and regulatory policies of foreign governments. The Company believes that its international diversification provides stability to its worldwide operations and reduces the impact on the Company of adverse economic changes in any single country. A summary of the Company's net revenue, earnings from operations and identifiable assets by geographic area is found on page 42 of the Company's Annual Report to Shareholders, which page is incorporated herein by reference. COMPETITION The Company encounters aggressive competition in all areas of its business activity. Its competitors are numerous, ranging from some of the world's largest corporations to many relatively small and highly specialized firms. The Company competes primarily on the basis of technology, performance, price, quality, reliability, distribution and customer service and support. The Company's reputation, the ease of use of its products and the ready availability of customer training are also important competitive factors. The computer market is characterized by vigorous competition among major corporations with long-established positions and a large number of new and rapidly growing firms. While the absence of reliable statistics makes it difficult to state the Company's relative position, the Company believes that it is the second-largest U.S.-based manufacturer of general-purpose computers, personal peripherals such as desktop printers, and calculators and other personal information products, all for industrial, scientific and business applications. The markets for test and measurement instruments are influenced by specialized manufacturers which often have great strength in narrow market segments. In general, however, the Company believes that it is one of the principal suppliers in these markets. BACKLOG The Company believes that backlog is not a meaningful indicator of future business prospects due to the volume of products delivered from shelf inventories, the shortening of product delivery schedules, and the portion of revenue that relates to its service business. Therefore, the Company believes that backlog information is not material to an understanding of its business. 3 PATENTS The Company's general policy has been to seek patent protection for those inventions and improvements likely to be incorporated into its products or to give the Company a competitive advantage. While the Company believes that its patents and applications have value, in general no single patent is in itself essential. The Company believes that its technological position depends primarily on the technical competence and creative ability of its research and development personnel. MATERIALS The Company's manufacturing operations employ a wide variety of semiconductors, electro-mechanical components and assemblies, and raw materials such as plastic resins and sheet metal. The Company believes that the materials and supplies necessary for its manufacturing operations are presently available in the quantities required. The Company purchases materials, supplies and product sub-assemblies from a substantial number of vendors. For many of its products, the Company has existing alternate sources of supply, or such sources are readily available. A portion of the Company's manufacturing operations is dependent on the ability of significant suppliers to deliver integral sub- assemblies and components in time to meet critical manufacturing schedules. The failure of suppliers to deliver these subassemblies and components in a timely manner may adversely affect the Company's operating results until alternate sourcing could be developed. The Company believes that alternate suppliers or design solutions could be arranged within a reasonable time so that material long-term adverse impacts would be unlikely. RESEARCH AND DEVELOPMENT The process of developing new high technology products is complex and uncertain and requires innovative designs that anticipate customer needs and technological trends. After the products are developed, the Company must quickly manufacture products in sufficient volumes at acceptable costs to meet demand. Expenditures for research and development amounted to $1.8 billion in fiscal 1993, $1.6 billion in fiscal 1992 and $1.5 billion in fiscal 1991. In fiscal 1993, research and development expenditures were 8.7 percent of net revenue. This work is Company-sponsored, except for minor research and development done in the Company's laboratories pursuant to government-sponsored projects. ENVIRONMENT The operations of the Company involve the use of substances regulated under various federal, state and international laws governing the environment. It is the Company's policy to apply strict standards for environmental protection to sites inside and outside the U.S., even if not subject to regulations imposed by local governments. Liability for environmental remediation is accrued when it is considered probable and costs can be estimated. Environmental expenditures are presently not material to HP's operations or financial position. EMPLOYEES The Company had approximately 96,200 employees worldwide at October 31, 1993. ITEM 2. PROPERTIES. The principal executive offices of the Company are located at 3000 Hanover Street, Palo Alto, California 94304. As of October 31, 1993, the Company owned or leased a total of approximately 40.9 million square feet of space worldwide. The Company believes that its existing properties are in good condition and suitable for the conduct of its business. The Company's plants are equipped with machinery, most of which is owned by the Company and is in part developed by it to meet the special requirements for manufacturing precision electronic instruments and systems. At the end of fiscal year 1993 the Company was productively utilizing the vast majority of the space in its facilities, while actively disposing of space determined to be excess. 4 The Company anticipates that most of the capital necessary for expansion will continue to be obtained from internally generated funds. Investment in new property, plant and equipment amounted to $1.4 billion in fiscal 1993, $1.0 billion in fiscal 1992 and $862 million in fiscal 1991. The locations of the Company's major sales, marketing, product development and manufacturing facilities are listed on page 48 of the Company's 1993 Annual Report to Shareholders, which page is incorporated herein by reference. As of October 31, 1993, the Company's marketing operations occupied approximately 11 million square feet, of which 3.9 million square feet are located within the United States. The Company owns 56% of the space used for marketing activities and leases the remaining 44%. The Company's manufacturing plants, research and development facilities and warehouse and administrative facilities occupied 29.9 million square feet, of which 22.8 million square feet are located within the United States. The Company owns 79% of its manufacturing, research and development, warehouse and administrative space and leases the remaining 21%. None of the property owned by the Company is held subject to any major encumbrances. ITEM 3. LEGAL PROCEEDINGS. There are presently pending no legal proceedings, other than routine litigation incidental to the Company's business, to which the Company is a party or to which any of its property is subject. The Company is a party to, or otherwise involved in, proceedings brought by federal or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or state laws similar to CERCLA. The Company is also conducting environmental investigation or remediation at several of its current or former operating sites pursuant to administrative orders or consent agreements with state environmental agencies. Liability for environmental remediation is accrued when it is considered probable and costs can be estimated. Environmental expenditures are presently not material to HP's operations or financial position. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS. Information regarding the market prices of the Company's common stock and the markets for that stock may be found on pages 45 and the inside back cover, respectively, of the Company's 1993 Annual Report to Shareholders. The number of shareholders and information concerning the Company's current dividend rate are set forth in the section entitled "Common Stock, Dividend Policy" found on the inside back cover of that report. Additional information concerning dividends may be found on pages 23, 30, 31 and 45 of the Company's 1993 Annual Report to Shareholders. Such pages (excluding order data) are incorporated herein by reference. ITEM 6. SELECTED FINANCIAL DATA. Selected financial data for the Company is set forth on page 23 of the Company's 1993 Annual Report to Shareholders, which page (excluding order data) is incorporated herein by reference. 5 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. A discussion of the Company's financial condition, changes in financial condition and results of operations appears in the "Financial Review" found on pages 25-27 and 29 of the Company's 1993 Annual Report to Shareholders. Such pages are incorporated herein by reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The consolidated financial statements of the Company, together with the report thereon of Price Waterhouse, independent accountants, and the unaudited "Quarterly Summary" are set forth on pages 24, 28, 30-43 and 45 of the Company's 1993 Annual Report to Shareholders, which pages (excluding order data) are incorporated herein by reference. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. Not applicable. With the exception of the information incorporated by reference in Parts I, II and IV of this Form 10-K, the Company's 1993 Annual Report to Shareholders is not to be deemed filed as part of this report. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. Information regarding directors of the Company is set forth under "Election of Directors" on pages 4-11 of the Company's Notice of Annual Meeting of Shareholders and Proxy Statement, dated January 20, 1994 (the "Notice and Proxy Statement"), which pages are incorporated herein by reference. The names of the executive officers of the Company, their ages, titles and biographies as of December 27, 1993, are set forth below. All officers are elected for a one-year term. EXECUTIVE OFFICERS: JAMES L. ARTHUR; AGE 59; SENIOR VICE PRESIDENT AND GENERAL MANAGER, WORLDWIDE CUSTOMER SUPPORT OPERATIONS. Mr. Arthur assumed his current position as General Manager of the Company's Worldwide Customer Support Operations in 1989. He served as Director of the U.S. Field Operations from 1984 to 1989. He became a Vice President of the Company in 1982 and a Senior Vice President in 1987. EDWARD W. BARNHOLT; AGE 50; SENIOR VICE PRESIDENT AND GENERAL MANAGER, TEST AND MEASUREMENT ORGANIZATION. Mr. Barnholt was elected a Senior Vice President in 1993. He became Vice President and General Manager, Test and Measurement Organization, with responsibility for the Company's Electronic Instrument and Microwave and Communications Groups, along with the Communications Test Business Unit, in 1990. Prior to 1990, he had been General Manager of the Electronic Instrument Group since 1984. Mr. Barnholt was elected a Vice President of the Company in 1988. RICHARD E. BELLUZZO; AGE 40; VICE PRESIDENT AND GENERAL MANAGER, COMPUTER PRODUCTS ORGANIZATION. Mr. Belluzzo was named General Manager of the Computer Products Organization in 1993. Earlier in 1993 he became General Manager of the newly formed Hardcopy Products Group. He was elected a Vice President in 1992. He was named operations manager for the Boise Printer Operation when it was formed in 1987 and became General Manager of that operation when it became a division in 1988. ALAN D. BICKELL; AGE 57; SENIOR VICE PRESIDENT AND MANAGING DIRECTOR, GEOGRAPHIC OPERATIONS. Mr. Bickell was elected a Vice President in 1984. He was Managing Director of Intercontinental Operations from 1974 until 1992, when he was elected to his current position. 6 JOEL S. BIRNBAUM; AGE 56; SENIOR VICE PRESIDENT, RESEARCH AND DEVELOPMENT. Mr. Birnbaum was elected a Senior Vice President in 1993. He became Vice President, Research and Development and Director, HP Laboratories in September 1991. Additionally, he served as General Manager, Information Architecture Group from 1988 until 1991 and General Manager, Information Technology Group from 1986 to 1988. He was elected a Vice President in 1984. He is a director of Corporation for National Research Infrastructure. S.T. JACK BRIGHAM III; AGE 54; VICE PRESIDENT, CORPORATE AFFAIRS AND GENERAL COUNSEL. Mr. Brigham was elected a Vice President in 1982 and became Vice President, Corporate Affairs in 1992. He has served as General Counsel since 1976. DOUGLAS K. CARNAHAN; AGE 52; VICE PRESIDENT AND GENERAL MANAGER, MEASUREMENT SYSTEMS ORGANIZATION. Mr. Carnahan was elected a Vice President in 1992. He was General Manager of the Publishing Products Business Unit from 1988 to 1991, when he was promoted to General Manager of the Printing Systems Group. In June 1993 he was named General Manager of Component Products, and in October 1993 he assumed his current post as General Manager of the Measurement Systems Organization. RAYMOND W. COOKINGHAM; AGE 50; VICE PRESIDENT AND CONTROLLER. Mr. Cookingham was elected a Vice President in 1993. In 1984, he was named controller for the Company's product groups and was promoted to Controller of the Company in 1986. F. E. (PETE) PETERSON; AGE 52; VICE PRESIDENT, PERSONNEL. Mr. Peterson was elected to his current position in 1992. In 1985, he was named Corporate Personnel Operations Manager with responsibility for integrating personnel policies and programs with the worldwide business strategies of the Company. In 1990, he assumed additional responsibility as Director of Corporate Personnel. LEWIS E. PLATT; AGE 52; CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AND CHAIRMAN OF THE EXECUTIVE COMMITTEE. Mr. Platt has served as a director of the Company, President and Chief Executive Officer since November 1, 1992. The Board elected Mr. Platt to succeed David Packard as Chairman on September 17, 1993. He was an Executive Vice President from 1987 to 1992. Mr. Platt held a number of management positions in the Company prior to becoming its President, including managing the Computer Systems Organization from 1990 to 1992 and the Computer Products Sector from 1988 to 1990. He is a director of Molex Inc. He also serves on the Cornell University Council and the Wharton School Board of Overseers. WILLEM P. ROELANDTS; AGE 48; SENIOR VICE PRESIDENT AND GENERAL MANAGER, COMPUTER SYSTEMS ORGANIZATION. Mr. Roelandts was elected a Senior Vice President in 1993. He served as General Manager of the Computer Systems Group from 1988 until he became General Manager of the Networked Systems Group in the Computer Systems Organization in 1990. He was elected a Vice President and General Manager, Computer Systems Organization in 1992. ROBERT P. WAYMAN; AGE 48; EXECUTIVE VICE PRESIDENT, FINANCE AND ADMINISTRATION AND CHIEF FINANCIAL OFFICER. Mr. Wayman was elected a director of the Company effective December 1, 1993. He has been an Executive Vice President since 1992, at which time he assumed responsibility for administration. He has held a number of financial management positions in the Company and was elected a Vice President and Chief Financial Officer in 1984. He serves as a member of the Board of the Private Sector Council and of the Kellogg Advisory Board, Northwestern University. 7 Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth on page 11 of the Notice and Proxy Statement, which page is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION. Information regarding the Company's compensation of its executive officers is set forth on pages 12-17 and 23 of the Notice and Proxy Statement, which pages are incorporated herein by reference. Information regarding the Company's compensation of its directors is set forth on pages 2-4 of the Notice and Proxy Statement, which pages are incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. Information regarding security ownership of certain beneficial owners and management is set forth on pages 8-11 of the Notice and Proxy Statement, which pages are incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Information regarding transactions with the Company's executive officers and directors is set forth on pages 23-24 of the Notice and Proxy Statement, which pages are incorporated herein by reference. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) The following documents are filed as part of this report: 1. Financial Statements:
PAGE IN ANNUAL REPORT TO SHAREHOLDERS* ------------- Report of Independent Accountants.......................... 43 Consolidated Statement of Earnings for the three years ended October 31, 1993.................................... 24 Consolidated Balance Sheet at October 31, 1993 and 1992.... 28 Consolidated Statement of Cash Flows for the three years ended October 31, 1993.................................... 30 Consolidated Statement of Shareholders' Equity for the three years ended October 31, 1993........................ 31 Notes to Consolidated Financial Statements................. 32-42
- -------- *Incorporated by reference from the indicated pages of the 1993 Annual Report to Shareholders. 2. Financial Statement Schedules: Report of Independent Accountants on Financial Statement Schedules. Amounts Receivable from Directors, Officers and Schedule II -- Employees Schedule V -- Property, Plant and Equipment Schedule VI -- Accumulated Depreciation and Amortization of Property, Plant and Equipment Schedule IX -- Short-Term Borrowings Schedule X -- Supplementary Income Statement Information
The financial statement schedules should be read in conjunction with the financial statements in the 1993 Annual Report to Shareholders. Schedules not included in these financial statement schedules have been omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. 8 3. Exhibits: 1-2. Not applicable. 3(a). Registrant's Amended Articles of Incorporation, which appear as Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1988, which Exhibit is incorporated herein by reference. 3(b). Registrant's Amended By-Laws, which appear as Exhibit 3(b) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1992, which Exhibit is incorporated herein by reference. 4. None. 5-8. Not applicable. 9. None. 10(a). Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(a) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1983, which Exhibit is incorporated herein by reference.* 10(b). Registrant's 1979 Incentive Stock Option Plan Agreements, which appear as Exhibit 10(b) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1983, which Exhibit is incorporated herein by reference.* 10(c). Letter dated September 24, 1984 to optionees advising them of amendment to 1979 Incentive Stock Option Plan Agreement (Exhibit 10(b) above), which appears as Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(d). Registrant's 1983 Officers Early Retirement Plan, amended and restated as of January 1, 1990 which appears as Exhibit 10(d) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(e). Registrant's 1985 Incentive Compensation Plan, which appears as Exhibit 10(e) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(f). Registrant's 1985 Incentive Compensation Plan Stock Option Agreements, which appear as Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(g). Registrant's Excess Benefit Retirement Plan, amended and restated as of November 1, 1989, which appears as Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(h). Registrant's 1985 Incentive Compensation Plan restricted stock agreements, which appear as Exhibit 10(h) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1985, which Exhibit is incorporated herein by reference.* 10(i). Registrant's 1987 Director Option Plan, which appears as Appendix A to Registrant's Proxy Statement dated January 16, 1987, which Appendix is incorporated herein by reference.* 10(j). Registrant's 1989 Independent Director Deferred Compensation Program, which appears as Exhibit 10(j) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1989, which Exhibit is incorporated herein by reference.* 10(k). Registrant's 1990 Incentive Stock Plan, which appears as Appendix A to Registrant's Proxy Statement dated January 11, 1990, which Appendix is incorporated herein by reference.*
9 10(l). Registrant's 1990 Incentive Stock Plan stock option and restricted stock agreements, which appear as Exhibit 10(l) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(m). Resolution dated July 17, 1991 adopting amendment to Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(m) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(n). Resolution dated July 17, 1991 adopting amendment to Registrant's 1985 Incentive Compensation Plan, which appears as Exhibit 10(n) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(o). Resolution dated July 17, 1991 adopting amendment to Registrant's 1987 Director Option Plan, which appears as Exhibit 10(o) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(p). Resolution dated July 17, 1991 adopting amendment to Registrant's 1990 Incentive Stock Plan, which appears as Exhibit 10(p) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 11-12. None. 13. Pages 23-45 and 48 and the inside back cover (excluding order data) of Registrant's 1993 Annual Report to Shareholders. 14-17. Not applicable. 18. None. 19-20. Not applicable. 21. Subsidiaries of Registrant as of January 20, 1994. 22. None. 23. Consent of Independent Accountants. 24. Powers of Attorney. Contained in page 11 of this Annual Report on Form 10-K and incorporated herein by reference. 25-26. Not applicable. 27. Not applicable. 28. None. 99. 1993 Employee Stock Purchase Plan Annual Report on Form 11-K.
- -------- *Indicates management contract or compensatory plan or arrangement. Exhibit numbers may not correspond in all cases to those numbers in Item 601 of Regulation S-K because of special requirements applicable to EDGAR filers. (b) Reports on Form 8-K None. 10 SIGNATURES PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED. HEWLETT-PACKARD COMPANY D. CRAIG NORDLUND Date: January 28, 1994 By: _________________________________ D. CRAIG NORDLUND ASSOCIATE GENERAL COUNSEL AND SECRETARY POWER OF ATTORNEY Know All Persons By These Presents, that each person whose signature appears below constitutes and appoints D. Craig Nordlund and Ann O. Baskins, or either of them, his attorneys-in-fact, for him in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys- in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof. PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE --------- ----- ---- RAYMOND W. COOKINGHAM - ------------------------------------ RAYMOND W. COOKINGHAM Vice President and Corporate Controller (Principal Accounting Officer) January 19, 1994 THOMAS E. EVERHART - ------------------------------------ THOMAS E. EVERHART Director January 19, 1994 JOHN B. FERY - ------------------------------------ JOHN B. FERY Director January 17, 1994 JEAN-PAUL G. GIMON - ------------------------------------ JEAN-PAUL G. GIMON Director January 19, 1994 RICHARD A. HACKBORN - ------------------------------------ RICHARD A. HACKBORN Director January 25, 1994 HAROLD J. HAYNES - ------------------------------------ HAROLD J. HAYNES Director January 19, 1994 WALTER B. HEWLETT - ------------------------------------ WALTER B. HEWLETT Director January 20, 1994 SHIRLEY M. HUFSTEDLER - ------------------------------------ SHIRLEY M. HUFSTEDLER Director January 24, 1994
11 - ------------------------------------ GEORGE A. KEYWORTH II Director PAUL F. MILLER, JR. - ------------------------------------ PAUL F. MILLER, JR. Director January 19, 1994 SUSAN P. ORR - ------------------------------------ SUSAN P. ORR Director January 19, 1994 DAVID W. PACKARD - ------------------------------------ DAVID W. PACKARD Director January 19, 1994 DONALD E. PETERSEN - ------------------------------------ DONALD E. PETERSEN Director January 19, 1994 LEWIS E. PLATT - ------------------------------------ LEWIS E. PLATT Chairman, President, Chief Executive Officer, and Chairman of the Executive Committee (Principal Executive Officer) January 19, 1994 HICKS B. WALDRON - ------------------------------------ HICKS B. WALDRON Director January 19, 1994 ROBERT P. WAYMAN - ------------------------------------ ROBERT P. WAYMAN Executive Vice President, Finance and Administration and Director (Chief Financial Officer) January 26, 1994 - ------------------------------------ T. A. WILSON Director
12 REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULES To the Shareholders and the Board of Directors of Hewlett-Packard Company Our audits of the consolidated financial statements referred to in our report dated November 22, 1993 appearing on page 43 of the 1993 Annual Report to Shareholders of Hewlett-Packard Company (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the Financial Statement Schedules listed in Item 14(a)2 of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statments. PRICE WATERHOUSE San Francisco, California November 22, 1993 13 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES ---------------- SCHEDULE II AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS AND EMPLOYEES (THOUSANDS)
BALANCE RECEIVABLE BALANCE RECEIVABLE AT AT CLOSE OF PERIOD BEGINNING ------------------- OF PERIOD ADDITIONS COLLECTIONS CURRENT NON-CURRENT ---------- --------- ----------- ------- ----------- Year ended October 31, 1993: Amounts receivable from officers(a)............ $ 205 $261 $ 205 $261 $-- Amounts receivable from employees(b)........... 140 118 155 -- 103 ------ ---- ------ ---- ---- $ 345 $379 $ 360 $261 $103 ====== ==== ====== ==== ==== Year ended October 31, 1992: Amounts receivable from officers(c)............ $ -- $205 $ -- $205 $-- Amounts receivable from employees(d)........... 130 140 130 140 -- ------ ---- ------ ---- ---- $ 130 $345 $ 130 $345 $-- ====== ==== ====== ==== ==== Year ended October 31, 1991: Amounts receivable from officers(e)............ $1,030 $-- $1,030 $-- $-- Amounts receivable from employees(f)........... 1,600 -- 1,470 130 -- ------ ---- ------ ---- ---- $2,630 $-- $2,500 $130 $-- ====== ==== ====== ==== ====
- -------- (a) The year-end balance represents loans granted to two officers of the Company. The loan amounts are $150,000 and $111,000. Both loans carry an interest rate of 4.03% and mature in 1994. (b) The year-end balance represents a U.S. housing loan granted to one employee, who is not an officer or director of the Company. The loan carries an interest rate of 3.69% and matures in 1998. (c) The year-end balance represents a loan granted to one officer of the Company. The loan carried an interest rate of 4.6% and matured in 1993. (d) The year-end balance represents a U.S. housing loan granted to one employee, who was not an officer or director of the Company. The loan carried an interest rate of 0% and matured in 1993. (e) During the year ended October 31, 1991, all U.S. housing loans to officers were repaid. (f) The year-end balance represents a U.S. housing loan granted to one employee, who was not an officer or director of the Company. The loan carried an interest rate of 0% and matured in 1992. S-1 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES ---------------- SCHEDULE V PROPERTY, PLANT AND EQUIPMENT (MILLIONS)
BALANCE AT TRANSFERS BALANCE AT BEGINNING ADDITIONS RETIREMENTS BETWEEN CLOSE OF CLASSIFICATION OF PERIOD AT COST(a) OR SALES CLASSIFICATIONS PERIOD -------------- ---------- ---------- ----------- --------------- ---------- Year ended October 31, 1993: Land.................. $ 402 $ 114 $ 2 $-- $ 514 Buildings and lease- hold improvements.... 2,994 319 60 1 3,254 Machinery and equip- ment................. 3,196 1,056 492 (1) 3,759 ------ ------ ---- ---- ------ $6,592 $1,489 $554 $-- $7,527 ====== ====== ==== ==== ====== Year ended October 31, 1992: Land.................. $ 390 $ 16 $ 4 $-- $ 402 Buildings and lease- hold improvements.... 2,779 260 45 -- 2,994 Machinery and equip- ment................. 2,792 807 403 -- 3,196 ------ ------ ---- ---- ------ $5,961 $1,083 $452 $-- $6,592 ====== ====== ==== ==== ====== Year ended October 31, 1991: Land.................. $ 385 $ 7 $ 2 $-- $ 390 Buildings and lease- hold improvements.... 2,567 243 29 (2) 2,779 Machinery and equip- ment................. 2,613 612 435 2 2,792 ------ ------ ---- ---- ------ $5,565 $ 862 $466 $-- $5,961 ====== ====== ==== ==== ======
- -------- (a) Included in "Additions at Cost" for the year ended October 31, 1993 are $3 million of land, $31 million of buildings and leasehold improvements and $50 million of machinery and equipment acquired in connection with the acquisition of several companies, none of which were significant to the financial position of the Company. Included in "Additions at Cost" for the year ended October 31, 1992 are $2 million of land, $10 million of buildings and leasehold improvements and $39 million of machinery and equipment acquired in connection with the acquisition of Avantek, Inc., Colorado Memory Systems, Inc. and Texas Instruments Incorporated's family of commercial UNIX-system based multiuser computers and related systems. S-2 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES ---------------- SCHEDULE VI ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT (MILLIONS)
BALANCE AT ADDITIONS BALANCE AT BEGINNING CHARGED TO RETIREMENTS CLOSE OF CLASSIFICATION OF PERIOD EXPENSE OR SALES PERIOD -------------- ---------- ---------- ----------- ---------- Year ended October 31, 1993: Buildings and leasehold improve- ments.......................... $1,081 $185 $ 33 $1,233 Machinery and equipment......... 1,862 558 306 2,114 ------ ---- ---- ------ $2,943 $743 $339 $3,347 ====== ==== ==== ====== Year ended October 31, 1992: Buildings and leasehold improve- ments.......................... $ 963 $142 $ 24 $1,081 Machinery and equipment......... 1,653 454 245 1,862 ------ ---- ---- ------ $2,616 $596 $269 $2,943 ====== ==== ==== ====== Year ended October 31, 1991: Buildings and leasehold improve- ments.......................... $ 834 $144 $ 15 $ 963 Machinery and equipment......... 1,530 411 288 1,653 ------ ---- ---- ------ $2,364 $555 $303 $2,616 ====== ==== ==== ======
S-3 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES ---------------- SCHEDULE IX SHORT-TERM BORROWINGS (MILLIONS, EXCEPT INTEREST RATES)
AT YEAR-END DURING THE YEAR ---------------- ---------------------------- WEIGHTED AVERAGE WEIGHTED AVERAGE HIGHEST OF AVERAGE INTEREST MONTH-END MONTH-END INTEREST TYPE OF SHORT-TERM BORROWING(a) BALANCE RATE BALANCE BALANCES RATE(b) ------------------------------- ------- -------- --------- --------- -------- 1993: Notes payable to banks......... $ 820 4.2% $ 820 $ 581 5.0% Commercial paper............... $1,174 3.1% $1,278 $1,155 3.2% Other short-term borrowings.... $ 176 3.2% $ 176 $ 71 3.1% 1992: Notes payable to banks......... $ 261 7.5% $ 333 $ 251 8.9% Commercial paper............... $ 937 3.2% $ 937 $ 478 3.7% Other short-term borrowings.... $ 150 3.0% $ 435 $ 251 4.1% 1991: Notes payable to banks......... $ 264 8.7% $ 390 $ 285 10.4% Commercial paper............... $ 477 5.3% $1,165 $ 557 6.8% Other short-term borrowings.... $ 436 7.0% $ 436 $ 234 7.1%
- -------- (a) "Notes payable and short-term borrowings" in the Company's consolidated balance sheet includes the balances shown above and also the current portion of long-term debt, amounting to $20 million at October 31, 1993, $36 million at October 31, 1992 and $24 million at October 31, 1991. (b) The computation of the weighted average interest rate during the year is based on month-end balances and interest rates. ---------------- SCHEDULE X SUPPLEMENTARY INCOME STATEMENT INFORMATION (MILLIONS)
FOR THE YEARS ENDED OCTOBER 31, -------------- 1993 1992 1991 ---- ---- ---- Charged to costs and expenses: Maintenance and repairs....................................... $307 $286 $264 Advertising costs............................................. $657 $541 $504
S-4 EXHIBIT INDEX
SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE ------- ------- ------------ 1-2. Not applicable. 3(a). Registrant's Amended Articles of Incorporation, which appear as Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1988, which Exhibit is incorporated herein by reference. 3(b). Registrant's Amended By-Laws, which appear as Exhibit 3(b) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1992, which Exhibit is incorporated herein by reference. 4. None. 5-8. Not applicable. 9. None. 10(a). Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(a) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1983, which Exhibit is incorporated herein by reference.* 10(b). Registrant's 1979 Incentive Stock Option Plan Agreements, which appear as Exhibit 10(b) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1983, which Exhibit is incorporated herein by reference.* 10(c). Letter dated September 24, 1984 to optionees advising them of amendment to 1979 Incentive Stock Option Plan Agreement (Exhibit 10(b) above), which appears as Exhibit 10(c) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(d). Registrant's 1983 Officers Early Retirement Plan, amended and restated as of January 1, 1990 which appears as Exhibit 10(d) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(e). Registrant's 1985 Incentive Compensation Plan, which appears as Exhibit 10(e) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(f). Registrant's 1985 Incentive Compensation Plan Stock Option Agreements, which appear as Exhibit 10(f) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1984, which Exhibit is incorporated herein by reference.* 10(g). Registrant's Excess Benefit Retirement Plan, amended and restated as of November 1, 1989, which appears as Exhibit 10(g) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(h). Registrant's 1985 Incentive Compensation Plan restricted stock agreements, which appear as Exhibit 10(h) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1985, which Exhibit is incorporated herein by reference.* 10(i). Registrant's 1987 Director Option Plan, which appears as Appendix A to Registrant's Proxy Statement dated January 16, 1987, which Appendix is incorporated herein by reference.* 10(j). Registrant's 1989 Independent Director Deferred Compensation Program, which appears as Exhibit 10(j) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1989, which Exhibit is incorporated herein by reference.*
SEQUENTIALLY EXHIBIT NUMBERED NUMBER EXHIBIT PAGE ------- ------- ------------ 10(k). Registrant's 1990 Incentive Stock Plan, which appears as Appendix A to Registrant's Proxy Statement dated January 11, 1990, which Appendix is incorporated herein by reference.* 10(l). Registrant's 1990 Incentive Stock Plan stock option and restricted stock agreements, which appear as Exhibit 10(l) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1990, which Exhibit is incorporated herein by reference.* 10(m). Resolution dated July 17, 1991 adopting amendment to Registrant's 1979 Incentive Stock Option Plan, which appears as Exhibit 10(m) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(n). Resolution dated July 17, 1991 adopting amendment to Registrant's 1985 Incentive Compensation Plan, which appears as Exhibit 10(n) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(o). Resolution dated July 17, 1991 adopting amendment to Registrant's 1987 Director Option Plan, which appears as Exhibit 10(o) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 10(p). Resolution dated July 17, 1991 adopting amendment to Registrant's 1990 Incentive Stock Plan, which appears as Exhibit 10(p) to Registrant's Annual Report on Form 10-K for the fiscal year ended October 31, 1991, which Exhibit is incorporated herein by reference.* 11-12. None. 13. Pages 23-45 and 48 and the inside back cover (excluding order data) of Registrant's 1993 Annual Report to Shareholders. 14-17. Not applicable. 18. None. 19-20. Not applicable. 21. Subsidiaries of Registrant as of January 20, 1994. 22. None. 23. Consent of Independent Accountants. 24. Powers of Attorney. Contained in page 11 of this Annual Report on Form 10-K and incorporated herein by reference. 25-26. Not applicable. 27. Not applicable. 28. None. 99. 1993 Employee Stock Purchase Plan Annual Report on Form 11-K.
- -------- *Indicates management contract or compensatory plan or arrangement. Exhibit numbers may not correspond in all cases to those numbers in Item 601 of Regulation S-K because of special requirements applicable to EDGAR filers. (b) Reports on Form 8-K None. EX-13 2 ANNUAL REPORT EXHIBIT 13 Selected Financial Data Hewlett-Packard Company and Subsidiaries Unaudited
For the years ended October 31 In millions except per share amounts and employees 1993 1992 1991 1990 1989 1988 - ------------------------------------------------------------------------------------ U.S. orders $ 9,462 $ 7,569 $ 6,484 $ 6,143 $ 5,677 $ 4,780 International orders 11,310 9,192 8,192 7,342 6,483 5,290 ---------------------------------------------------- Total orders $20,772 $16,761 $14,676 $13,485 $12,160 $10,070 ---------------------------------------------------- (BAR Net revenue $20,317 $16,410 $14,494 $13,233 $11,899 $ 9,831 CHART OMITTED) Earnings from operations $ 1,879 $ 1,404 $ 1,210 $ 1,162 $ 1,212 $ 1,084 Earnings before effect of 1992 accounting change $ 1,177 $ 881 $ 755 $ 739 $ 829 $ 816 Net earnings $ 1,177 $ 549 $ 755 $ 739 $ 829 $ 816 Per share: Earnings before effect of 1992 accounting change $ 4.65 $ 3.49 $ 3.02 $ 3.06 $ 3.52 $ 3.36 Net earnings $ 4.65 $ 2.18 $ 3.02 $ 3.06 $ 3.52 $ 3.36 Cash dividend paid $ .90 $ .725 $ .48 $ .42 $ .36 $ .28 At year-end: Total assets $16,736 $13,700 $11,973 $11,395 $10,075 $ 7,858 (BAR Employees 96,200 92,600 89,000 92,200 94,900 86,600 CHART ---------------------------------------------------- OMITTED)
See discussion of the 1992 change in accounting for retiree medical benefits on page 39 of this report. ------ 23 Consolidated Statement of Earnings Hewlett-Packard Company and Subsidiaries
For the years ended October 31 In millions except per share amounts 1993 1992 1991 - ---------------------------------------------------------------------------------------------- Net revenue: Equipment $15,533 $12,354 $11,019 Services 4,784 4,056 3,475 ------------------------- 20,317 16,410 14,494 ------------------------- Costs and expenses: Cost of equipment sold 8,929 6,625 5,634 Cost of services 3,194 2,533 2,224 Research and development 1,761 1,620 1,463 Selling, general and administrative 4,554 4,228 3,963 ------------------------- 18,438 15,006 13,284 ------------------------- Earnings from operations 1,879 1,404 1,210 Interest income and other income (expense) 25 17 47 Interest expense 121 96 130 ------------------------- Earnings before taxes and effect of 1992 accounting change 1,783 1,325 1,127 Provision for taxes 606 444 372 ------------------------- Earnings before effect of 1992 accounting change 1,177 881 755 Transition effect of 1992 accounting change, net of taxes -- 332 -- ------------------------- Net earnings $ 1,177 $ 549 $ 755 ========================= Earnings per share before effect of 1992 accounting change $ 4.65 $ 3.49 $ 3.02 Transition effect per share of 1992 accounting change, net of taxes -- 1.31 -- ------------------------- Net earnings per share $ 4.65 $ 2.18 $ 3.02 =========================
The accompanying notes are an integral part of these financial statements. See discussion of the 1992 change in accounting for retiree medical benefits on page 39 of this report. - ------ 24 Financial Review Hewlett-Packard Company and Subsidiaries Unaudited Results of Operations In 1993, HP saw excellent overall market acceptance of new products and achieved 24 percent growth in net revenue, despite continuing economic weakness around the world. Moreover, favorable impacts from ongoing efforts to improve operating expense structures offset rising costs of sales, resulting in increased earnings from operations of 24 percent, after adjusting 1992 for the effects of special charges. HP's orders increased 24 percent over 1992, totaling $20.8 billion, compared to a 14 percent increase in 1992. Domestic and international orders grew 25 and 23 percent, respectively, reflecting HP's well- balanced position across a variety of geographic markets. Net revenue from U.S. operations grew 30 percent to $9.3 billion while net revenue from international operations grew 19 percent to $11.0 billion, following increases of 13 percent in 1992 for both U.S. and (GRAPH international operations. New acquisitions added approximately 3 OMITTED) percentage points to the order and revenue growth. The U.S. dollar strengthened slightly during 1993 relative to most major foreign currencies while it weakened relative to the Yen. The changing value of the U.S. dollar had only a minor impact on HP's international net revenue. Net revenue from equipment sales increased 26 percent in 1993 compared to 12 percent in 1992. Demand for the company's peripheral products, such as the HP LaserJet and HP DeskJet families of printers, workstations and multiuser computer systems based on the UNIX operating system and 486-based Vectra PCs continued to be excellent in 1993. A major milestone was reached during the year with the shipment of the 10 millionth HP LaserJet printer. Service revenue grew 18 percent and 17 percent in 1993 and 1992, respectively. Sales of consumable supplies for the company's printer products were excellent and fueled the growth in service revenue in both 1993 and 1992. Detailed information on orders and net revenue by groupings of similar products and services is presented on page 44 of this report. New products introduced during the year demonstrate HP's commitment to innovative technology and continuous product improvements. Among the many new products receiving strong acceptance in the marketplace during 1993 were the HP LaserJet 4Si and HP DeskJet 1200 printers, HP 9000 Series 700 workstations, HP Vectra PCs, and HP 9000 multiuser (GRAPH systems and servers. Other key products introduced in 1993 include the OMITTED) HP OmniBook 300 superportable PC, broadcast encoders for digital high- definition TV, the HP 5890 Series II Plus gas chromatograph offering precise digital control and a network-monitoring system for telecommunications providing real-time data for troubleshooting. Costs and expenses as a percentage of net revenue were as follows:
For the years ended October 31: 1993 1992 1991 - --------------------------------------------------------------------- Cost of equipment sold and services 59.7% 55.8% 54.2% Research and development 8.7% 9.9% 10.1% Selling, general and administrative 22.4% 25.7% 27.4% - ---------------------------------------------------------------------
------ 25 Financial Review Hewlett-Packard Company and Subsidiaries Unaudited During 1993, cost of equipment sold and services increased 3.9 percentage points following a 1.6 percentage point increase in 1992. Pricing and other competitive pressures increased in 1993 and had a significant impact on cost of sales. Changes in the mix of products sold also continued to put upward pressure on cost of sales as a percentage of net revenue. In 1993, a higher portion of the company's net revenue was generated by peripheral products, which are primarily sold through dealers and other indirect channels. Products sold through these channels generally carry higher discounts, thereby increasing cost of sales as a percentage of net revenue. These factors are likely to continue to put some upward pressure on cost of sales. Research and development expenditures as a percentage of net revenue decreased 1.2 percentage points compared with a .2 percentage point decrease in 1992. Total expenditures increased 9 percent to $1.8 billion in 1993 versus $1.6 billion in 1992. The increased investment in research and development reflects the company's belief that continued success in a global marketplace requires a continuing flow (GRAPH of innovative, high-quality products. OMITTED) Selling, general and administrative expense as a percentage of net revenue decreased 3.3 percentage points to 22.4 percent of net revenue, following a 1.7 percentage point decrease in 1992. This decrease reflects ongoing efforts to adjust expense structures, the effects of the change in the mix of products sold as mentioned above, and benefits of the company's 1992 and 1991 special charges for employment reductions and facilities consolidations. The reduction of operating expense ratios and optimization of manufacturing processes in order to improve profitability remain major focuses of the company. Interest income and other income (expense) was $25 million in 1993 compared to $17 million in 1992 and $47 million in 1991. During the year, write-downs of real estate assets in geographic areas with weak real estate markets were about offset by gains on sales of certain stock investments. The increase in 1993 is largely due to special charges and balance sheet translation losses in 1992 that did not recur. These factors also contributed to the decrease from 1991 to 1992. Interest expense was $121 million in 1993 compared to $96 million in 1992 and $130 million in 1991. The changes in interest expense reflect changes in the levels of notes payable and short-term borrowings and long-term debt outstanding, as well as interest rate changes during (GRAPH the respective periods. OMITTED) The company's effective tax rate increased slightly to 34 percent in 1993 compared with 33.5 percent in 1992 and 33 percent in 1991. A combination of factors led to the increase, including an increase in the U.S. corporate federal income tax rate, changes in the geographic mix of the company's earnings and resolution of certain issues related to tax returns filed in prior years. In 1992, HP incurred special charges of approximately $137 million before taxes, or $0.36 per share, to cover the costs related to voluntary severance programs, employee redeployment and related facilities consolidations. Approximately 2,000 employees left the company during 1993 under voluntary severance programs. The company incurred a similar charge in 1991 of about $150 million before taxes, or approximately $0.40 per share. - ------ 26 Financial Review Hewlett-Packard Company and Subsidiaries Unaudited Net earnings increased 21 percent to $1.2 billion in 1993, excluding the 1992 effects of special charges described above and a one-time charge of $332 million after income taxes for a change in accounting for retiree medical benefits. This compares to a 14 percent increase in 1992, excluding the accounting change and special charges in both 1992 and 1991. As a percentage of net revenue, net earnings without the special charges and accounting change were 5.8 percent in 1993 compared with 5.9 percent in 1992 and 5.9 percent in 1991. Including the special charges and accounting change, net earnings in 1992 and 1991 were 3.3 and 5.2 percent of net revenue. (BAR Average shares outstanding used to compute earnings per share were CHART 253.2 million in 1993, 252.6 million in 1992 and 250.1 million in 1991. OMITTED) The increases in shares outstanding resulted from issuances of common stock to employees under various stock plans, partially offset by stock acquired by the company under its ongoing share repurchase program. Financial Condition and Liquidity HP's financial position remains strong, with cash and cash equivalents and short-term investments of $1.6 billion at October 31, 1993, compared to $1.0 billion at October 31, 1992, and $1.1 billion at October 31, 1991. Operating activities generated $1.1 billion in cash in 1993, compared to $1.3 billion and $1.6 billion in 1992 and 1991, respectively. The decrease in cash generated from operations in 1993 compared to 1992 is primarily attributable to a substantial increase in inventory levels, partially offset by higher net earnings. The inventory buildup is due to several factors including new product ramp-ups, short time- to-market introduction cycles and increased usage of retail channels, which require higher inventory levels to meet the immediate needs of retailers' customers. One of the company's major objectives is to enhance processes, with a focus on improving inventory turnover, to accommodate business changes such as shorter product life cycles and rapid product ramp-ups. The company invests excess cash in short-term and long-term investments depending on its projected needs for cash for operations, capital expenditures and other business purposes. The company from time to time supplements its internally generated cash flow with a combination of short-term and long-term borrowings as required by developments in its businesses. 1993 capital expenditures were $1.4 billion compared to $1.0 billion and $862 million in 1992 and 1991, respectively. The increase in capital expenditures in 1993 relates mainly to expansion of production capacity for computer products, (BAR including printers and printer supplies. CHART OMITTED) Cash flow from changes in long-term debt, notes payable and short-term borrowings was a net borrowing of $966 million in 1993 compared to net borrowings of $416 million in 1992 and net payments of $647 million in 1991. At October 31, 1993, the company had unused credit lines and authorized but unissued commercial paper totaling $1.3 billion. Shares are repurchased periodically to meet employee stock plan requirements. Approximately 4.3 million shares were purchased in 1993 at an aggregate price of $314 million. In 1992, 7.7 million shares were purchased at an aggregate price of $530 million; and in 1991, 1.6 million shares were purchased for an aggregate price of $79 million. Additional stock purchase expenditures, based on certain price and volume criteria, are authorized by the Board of Directors. At October 31, 1993, the remaining authorization was $79 million. In November 1993, the Board authorized an additional $500 million. ------ 27 Consolidated Balance Sheet Hewlett-Packard Company and Subsidiaries
October 31 In millions except par value and number of shares 1993 1992 - -------------------------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 889 $ 641 Short-term investments 755 394 Accounts and notes receivable 4,208 3,497 Inventories: Finished goods 2,121 1,271 Purchased parts and fabricated assemblies 1,570 1,334 Other current assets 693 542 ------------------ Total current assets 10,236 7,679 ------------------ Property, plant and equipment: Land 514 402 Buildings and leasehold improvements 3,254 2,994 Machinery and equipment 3,759 3,196 ------------------ 7,527 6,592 Accumulated depreciation (3,347) (2,943) ------------------ 4,180 3,649 Long-term receivables and other assets 2,320 2,372 ------------------ $16,736 $13,700 ================== Liabilities and shareholders' equity Current liabilities: Notes payable and short-term borrowings $ 2,190 $ 1,384 Accounts payable 1,223 925 Employee compensation and benefits 1,048 913 Taxes on earnings 922 490 Deferred revenues 507 449 Other accrued liabilities 978 933 ------------------ Total current liabilities 6,868 5,094 ------------------ Long-term debt 667 425 Other liabilities 659 633 Deferred taxes on earnings 31 49 Shareholders' equity: Preferred stock, $1 par value (authorized: 300,000,000 shares; issued: none) -- -- Common stock and capital in excess of $1 par value (authorized: 600,000,000 shares; issued and outstanding: 252,713,000 in 1993 and 250,824,000 in 1992) 937 874 Retained earnings 7,574 6,625 ------------------ Total shareholders' equity 8,511 7,499 ------------------ $16,736 $13,700 ==================
The accompanying notes are an integral part of these financial statements. - ------ 28 Financial Review Hewlett-Packard Company and Subsidiaries Unaudited Factors That May Affect Future Results The company's future operating results are dependent on the company's ability to rapidly develop, manufacture and market technologically innovative products that meet customers' needs. Inherent in this process are a number of risks that the company must successfully manage in order to achieve favorable operating results. The process of developing new high technology products is complex and uncertain and requires innovative designs that anticipate customer needs and technological trends. After the products are developed, the company must quickly manufacture products in sufficient volumes at acceptable costs to meet demand. In addition, a portion of the company's manufacturing operations is dependent on the ability of significant suppliers to deliver integral sub-assemblies and components in time to meet critical manufacturing (GRAPH schedules. The failure of suppliers to deliver these subassemblies and OMITTED) components in a timely manner may adversely affect the company's operating results until alternate sourcing could be developed. The company believes that alternate suppliers or design solutions could be arranged within a reasonable time so that material long-term adverse impacts would be unlikely. Changing industry practices and customer preferences require the company to expand into new distribution channels. As more of HP's products are distributed through dealer and other indirect channels, these channels become more critical to the company's success. Financial results could be adversely affected in the event that the financial condition of these sellers weakens. The operations of the company involve the use of substances regulated under various federal, state and international laws governing the environment. It is the company's policy to apply strict standards for environmental protection to sites inside and outside the U.S., even if not subject to regulations imposed by local governments. Liability for environmental remediation is accrued when it is considered probable and costs can be estimated. Environmental expenditures are presently not material to HP's operations or financial position. A portion of the company's research and development activities, its corporate headquarters and other critical business operations are located near major earthquake faults. The ultimate impact on the company, significant suppliers and the general infrastructure is unknown, but operating results could be materially affected in the (GRAPH event of a major earthquake. The company is predominantly self-insured OMITTED) for losses and interruptions caused by earthquakes. Although HP believes that it has the product offerings and resources needed for continued success, future revenue and margin trends cannot be reliably predicted. Factors external to the company can result in volatility of the company's common stock price. Because of the foregoing factors, recent trends should not be considered reliable indicators of future stock prices or financial results. ------ 29 Consolidated Statement of Cash Flows Hewlett-Packard Company and Subsidiaries
For the years ended October 31 In millions 1993 1992 1991 - --------------------------------------------------------------------------------------------- Cash flows from operating activities: Net earnings $ 1,177 $ 549 $ 755 Adjustments to reconcile net earnings to cash provided by operating activities: Transition effect of 1992 accounting change -- 332 -- Depreciation and amortization 846 673 624 Deferred taxes on earnings (137) (35) (46) Changes in assets and liabilities: Accounts and notes receivable (709) (480) (117) Inventories (1,056) (267) (181) Accounts payable 283 226 26 Taxes on earnings 452 31 124 Other current assets and liabilities 200 328 314 Other, net 86 (69) 53 ------------------------- 1,142 1,288 1,552 ------------------------- Cash flows from investing activities: Investment in property, plant and equipment (1,405) (1,032) (862) Disposition of property, plant and equipment 215 183 163 Purchase of short-term investments (1,634) (782) (512) Maturities of short-term investments 1,283 883 46 Purchase of long-term investments (22) (53) (394) Maturities of long-term investments 22 4 145 Acquisitions, net of cash acquired (86) (411) -- Other, net 23 (58) -- ------------------------- (1,604) (1,266) (1,414) ------------------------- Cash flows from financing activities: Increase (decrease) in notes payable and short-term borrowings 807 186 (350) Issuance of long-term debt 387 309 131 Payment of current maturities of long-term debt (228) (79) (428) Issuance of common stock under employee stock plans 308 293 251 Repurchase of common stock (314) (530) (79) Dividends (228) (183) (120) Other, net (22) (2) 5 ------------------------- 710 (6) (590) ------------------------- Increase (decrease) in cash and cash equivalents 248 16 (452) Cash and cash equivalents at beginning of year 641 625 1,077 ------------------------- Cash and cash equivalents at end of year $ 889 $ 641 $ 625 =========================
The accompanying notes are an integral part of these financial statements. - ------ 30 Consolidated Statement of Shareholders' Equity Hewlett-Packard Company and Subsidiaries
Common stock --------------------------- Par value Number of and capital in Retained In millions except number of shares in thousands shares excess of par earnings Total - ----------------------------------------------------------------------------------------------------- Balance October 31, 1990 244,085 $ 739 $5,624 $6,363 Employee stock plans: Shares issued 9,081 350 -- 350 Shares purchased (1,619) (79) -- (79) Dividends -- -- (120) (120) Net earnings -- -- 755 755 ------------------------------------------------- Balance October 31, 1991 251,547 1,010 6,259 7,269 Employee stock plans: Shares issued 6,960 394 -- 394 Shares purchased (7,683) (530) -- (530) Dividends -- -- (183) (183) Net earnings -- -- 549 549 ------------------------------------------------- Balance October 31, 1992 250,824 874 6,625 7,499 Employee stock plans: Shares issued 6,234 377 -- 377 Shares purchased (4,345) (314) -- (314) Dividends -- -- (228) (228) Net earnings -- -- 1,177 1,177 ------------------------------------------------- Balance October 31, 1993 252,713 $ 937 $7,574 $8,511 =================================================
The accompanying notes are an integral part of these financial statements. ------ 31 Notes to Consolidated Financial Statements Hewlett-Packard Company and Subsidiaries Summary of Significant Accounting Policies - -------------------------------------------------------------------------------- Principles of consolidation The consolidated financial statements include the accounts of Hewlett-Packard Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. Revenue recognition Revenue from equipment sales is generally recognized at the time the equipment is shipped. Services revenue is recognized over the contractual period or as services are performed. Taxes on earnings Income tax expense is based on pretax financial accounting income. Deferred tax assets and liabilities are recognized for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Net earnings per share Net earnings per share is computed based on a method that approximates the use of weighted-average shares outstanding during the year. Shares used in the computation were 253,230,000 in 1993, 252,600,000 in 1992 and 250,143,000 in 1991. Outstanding stock options considered to be common stock equivalents have not been included because the effect would be immaterial. Short-term investments Short-term investments principally comprise cash invested in certificates of deposit, temporary money-market instruments and repurchase agreements and are stated at cost, which approximates market. Inventories Inventories are valued at standard costs that approximate actual costs computed on a first-in, first-out basis, not in excess of market values. Property, plant and equipment Property, plant and equipment are stated at cost. Additions, improvements and major renewals are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. Depreciation is provided using accelerated methods, principally over the following useful lives: buildings and improvements, 15 to 40 years; machinery and equipment, 3 to 10 years. Depreciation of leasehold improvements is provided using the straight-line method over the life of the lease or the asset, whichever is shorter. Foreign currency translation The company uses the U.S. dollar as its functional currency. Foreign currency assets and liabilities are translated into U.S. dollars at end-of-period exchange rates except for inventories, prepaid expenses, and property, plant and equipment, which are translated at historical exchange rates. Revenues and expenses are translated at average exchange rates in effect during each period except for those expenses related to balance sheet amounts that are translated at historical exchange rates. Gains or losses from foreign currency translation are included in net earnings. Statement of cash flows The company has classified investments as cash equivalents if the original maturity of such investments is three months or less. - ------ 32 The company paid income taxes of $293 million in 1993, $459 million in 1992 and $335 million in 1991. For the same periods, the company paid interest of $109 million, $84 million and $137 million, respectively. The effect of foreign currency exchange rate fluctuations on cash balances denominated in foreign currencies was not material. Information about non-cash investing activities is included in the Acquisitions note below. Acquisitions - -------------------------------------------------------------------------------- The company acquired several companies during 1993 for a total purchase price of $91 million, obtaining assets of $113 million and assuming liabilities of $22 million. These acquisitions were not significant to the financial position or results of operations of the company. In 1992, the company acquired Avantek, Inc., Colorado Memory Systems, Inc. and Texas Instruments' family of commercial UNIX-system based multiuser computers and related services for an aggregate purchase price of $423 million. In the aggregate, the company acquired assets and liabilities of $529 million and $106 million, respectively. All of these acquisitions were accounted for using the purchase method. Under the purchase method, the results of operations of acquired companies are included prospectively from the date of acquisition, and the acquisition cost is allocated to the acquirees' assets and liabilities based upon their fair market value at the date of the acquisition. The excess of the acquisition cost over the fair market value of net assets acquired represents goodwill and amounted to $71 million and $334 million for the 1993 and 1992 acquisitions, respectively. At the end of fiscal year 1993, the net book value of goodwill associated with current and prior year acquisitions was $623 million and is being amortized on a straight-line basis over 3 to 10 years. Financial Instruments - -------------------------------------------------------------------------------- Off-balance-sheet risk The company enters into foreign exchange contracts to hedge against changes in foreign currency exchange rates. Such exposures are a result of the portion of the company's operations as well as assets and liabilities that are denominated in currencies other than the U.S. dollar. When the company's foreign exchange contracts hedge operational exposure, the effects of movements in currency exchange rates on these instruments are recognized when the related revenue and expenses are recognized. When foreign exchange contracts hedge balance sheet exposure, such effects are recognized when the exchange rate changes. Because the impact of movements in currency exchange rates on foreign exchange contracts offsets the related impact on the underlying items being hedged, these instruments do not subject the company to risk that would otherwise result from changes in currency exchange rates. The company had foreign exchange contracts of $3.0 billion and $2.5 billion outstanding at October 31, 1993 and 1992, respectively. The foreign exchange contracts require the company to exchange foreign currencies for U.S. dollars and generally mature within six months. The company enters into interest rate swap agreements to manage its exposure to interest rate changes. The transactions generally involve the exchange of fixed and floating interest payment obligations without the exchange of the underlying principal amounts. At October 31, 1993 and 1992, off-balance-sheet exposures under interest rate swap agreements were not material. Concentrations of credit risk Financial instruments that potentially subject the company to significant concentrations of credit risk consist principally of cash investments and trade accounts receivable. ------ 33 The company maintains cash and cash equivalents, short- and long-term investments and certain other financial instruments with various financial institutions. These financial institutions are located in many different geographies throughout the world, and company policy is designed to limit exposure with any one institution. As part of its cash management process, the company performs periodic evaluations of the relative credit standing of these financial institutions. Credit risk with respect to trade accounts receivable is generally diversified due to the large number of entities comprising the company's customer base and their dispersion across many different industries and geographies. The company performs ongoing credit evaluations of its customers' financial condition, utilizes flooring arrangements with third-party financing companies and requires collateral, such as letters of credit and bank guarantees, in certain circumstances. The company sells a significant portion of its products through third-party distributors and, as a result, maintains individually significant receivable balances with major distributors. If the financial condition and operations of these distributors deteriorate below critical levels, the company's operating results could be adversely affected. The ten largest distributor receivable balances collectively represented 9% and 8% of total accounts and notes receivable at October 31, 1993 and 1992, respectively. Fair value of financial instruments For certain of the company's financial instruments, including cash and cash equivalents, short-term investments, accounts and notes receivable, notes payable and short-term borrowings, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Long-term floating rate notes and certificates of deposit are carried at amounts that approximate fair value. Consequently, such instruments are not included in the following table, which provides information regarding the estimated fair values of other financial instruments, both on and off the balance sheet, at October 31:
1993 -------------------- Carrying Estimated In millions Amount Fair Value - -------------------------------------------------------------------------------- Long-term stock investments $ 88 $106 Long-term debt (including amounts due within one year) $687 $712 Foreign exchange contracts, including options $ 32 $ 66 Interest rate swap agreements $ -- $ 26 - --------------------------------------------------------------------------------
For long-term stock investments the estimated fair value is based on quoted market prices. The estimated fair value for long-term debt is primarily based on quoted market prices, as well as borrowing rates currently available to the company for bank loans with similar terms and maturities. For foreign exchange contracts, including options, and interest rate swaps, the estimated fair value is primarily based on quoted market prices for the same or similar instruments, adjusted where necessary for maturity differences. The estimated fair values may not be representative of actual values of the financial instruments that could have been realized as of year end or that will be realized in the future. - ------ 34 Taxes on Earnings - -------------------------------------------------------------------------------- Effective as of the beginning of the company's 1992 fiscal year, the company adopted Statement of Financial Accounting Standards No. 109 (SFAS No. 109), ``Accounting for Income Taxes.'' The effects of adopting SFAS No. 109 were not material. The provision for income taxes comprises the following:
In millions 1993 1992 1991 - ----------------------------------------------------------------------------- U.S. federal taxes: Current $330 $248 $169 Deferred (46) (93) (41) Non-U.S. taxes: Current 381 199 228 Deferred (91) 58 (5) State taxes 32 32 21 ---------------------------- $606 $444 $372 ============================
The significant components of deferred tax assets and liabilities included on the balance sheet at October 31:
1993 1992 --------------------- --------------------- Deferred Deferred Deferred Deferred tax tax tax tax In millions assets liabilities assets liabilities - -------------------------------------------------------------------------------- Inventory $283 $ 28 $188 $ 30 Fixed assets 56 6 51 26 Retiree medical benefits 234 -- 220 -- Other retirement benefits -- 116 -- 108 Employee benefits, other than retirement 22 31 32 9 Leasing activities -- 83 -- 85 Other 193 163 135 138 -------------------------------------------- $788 $427 $626 $396 ============================================
No valuation allowance was necessary in 1993 and 1992. In 1991, there were no individually significant temporary differences. Tax benefits of $35 million and $28 million associated with the exercise of employee stock options were allocated to equity in 1993 and 1992, respectively. The U.S. statutory tax rate was increased to 34.8% from 34% as a result of legislation enacted in August 1993, effective January 1, 1993. The effect on the company's deferred tax assets and liabilities was not material. ------ 35 The differences between the U.S. federal statutory income tax rate and the company's effective rate are as follows:
1993 1992 1991 - ------------------------------------------------------------------------------- U.S. federal statutory income tax rate 34.8% 34.0% 34.0% State income taxes, net of federal tax benefit 1.1 1.6 1.3 FSC tax benefit 0.6 (0.7) (2.4) Lower rates in other jurisdictions, net (3.1) (4.1) (2.4) Other, net 0.6 2.7 2.5 -------------------- 34.0% 33.5% 33.0% ====================
After allocating eliminations and corporate items, earnings before taxes are as follows:
In millions 1993 1992 1991 - -------------------------------------------------------------------------------- U.S. operations including Puerto Rico $ 818 $ 734 $ 653 Non-U.S. 965 591 474 -------------------------- $1,783 $1,325 $1,127 ==========================
The company has not provided for U.S. federal income and foreign withholding taxes on $1.7 billion of non-U.S. subsidiaries' undistributed earnings as of October 31, 1993, because such earnings are intended to be reinvested indefinitely. If these earnings were distributed, foreign tax credits should become available under current law to reduce or eliminate the resulting U.S. income tax liability. Where excess cash has accumulated in the company's non-U.S. subsidiaries and it is advantageous for tax or foreign exchange reasons, subsidiary earnings are remitted. As a result of certain employment and capital investment actions undertaken by the company, income from manufacturing activities in certain countries is subject to reduced tax rates, and in some cases is wholly exempt from taxes, for years through 2002. The income tax benefits attributable to the tax status of these subsidiaries are estimated to be $128 million, $123 million and $118 million for 1993, 1992 and 1991, respectively. The Internal Revenue Service (IRS) has completed its examination of the company's federal income tax returns filed through 1983. The IRS has not commenced its examination of returns for years subsequent to 1989. The company believes that adequate accruals have been provided for all years. Borrowings - -------------------------------------------------------------------------------- Notes payable and short-term borrowings comprise the following:
1993 1992 -------------- -------------- Interest Interest In millions rate rate - -------------------------------------------------------------------------------- Commercial paper $1,174 3.1% $ 937 3.2% Notes payable to banks 820 4.2% 261 7.5% Other short-term borrowings 196 3.2% 186 3.0% ------ ------ $2,190 $1,384 ====== ======
- ------ 36 The interest rates represent rates in effect at October 31, 1993 and 1992. Long-term debt consists of corporate bonds placed with various financial institutions with interest rates ranging from 3.4% to 8.0%. The aggregate payments for the next five years of long-term debt outstanding at October 31, 1993 are $52 million in 1995, $200 million in 1996, and $415 million in 1999 and thereafter. At October 31, 1993, the company had unused lines of credit of $1.1 billion and authorized but unissued commercial paper of about $150 million. The credit lines provide for borrowings on a worldwide basis and generally do not require commitment fees. Shareholders' Equity - -------------------------------------------------------------------------------- Employee Stock Purchase Plan Eligible company employees may generally contribute up to 10 percent of their base compensation to the quarterly purchase of company stock under the Employee Stock Purchase Plan. Under this plan, employee contributions are partially matched with company contributions on a quarterly basis to purchase HP stock. At October 31, 1993, 82,000 employees were eligible to participate and 40,000 employees were participants in the plan. Incentive compensation plans The company has three principal stock option plans, adopted in 1979, 1985 and 1990. All plans permit options granted to qualify as ``Incentive Stock Options'' under the Internal Revenue Code. The exercise price of a stock option is generally equal to the fair market value of the company's common stock on the date the option is granted. Under the 1990 Incentive Stock Plan, however, the Executive Compensation and Stock Option Committee, in certain cases, may choose to establish a discounted exercise price at no less than 75 percent of fair market value on the grant date. In 1993 and 1992, discounted options totaling 741,000 shares and 916,000 shares, respectively, were granted at 75 percent of fair market value on the grant date. Options generally vest at a rate of 25 percent per year over a period of four years from the date of grant except for discounted options, which may not be exercised before the fifth anniversary of the option grant date, at which time such options become 100 percent vested. The plans provide for the granting of stock appreciation rights with respect to options granted to officers. The company has not included stock appreciation rights with options granted to officers since October 31, 1991. The following table summarizes option activity during 1993:
Price Thousands except price per share amounts Options per share - ------------------------------------------------------------------------------- Outstanding at October 31, 1992 14,814 $27-81 Granted 2,460 44-80 Exercised (3,126) 27-81 Cancelled (236) 27-81 ------------------ Outstanding at October 31, 1993 13,912 $27-81 ==================
At October 31, 1993, options to purchase 7,479,000 shares were exercisable at prices ranging from $27 to $81 per share. Shares available for option grants at October 31, 1993 and 1992 were 7,406,000 and 9,694,000, respectively. Approximately 45,000 employees were considered eligible to receive stock options in fiscal 1993. There were approximately 20,000 employees holding options under one or more of the option plans as of October 31, 1993. ------ 37 Under the 1985 Incentive Compensation Plan and the 1990 Incentive Stock Plan, certain key employees may be granted cash or restricted stock awards. Cash and restricted stock awards are independent of option grants and are subject to restrictions considered appropriate by the company's Executive Compensation and Stock Option Committee. The majority of the shares of restricted stock outstanding at October 31, 1993, are subject to forfeiture if employment terminates prior to five years from the date of grant. During that period, ownership of the shares cannot be transferred. Restricted stock has the same dividend and voting rights as other common stock and is considered to be currently issued and outstanding. The cost of the awards, determined as the fair market value of the shares at the date of grant, is expensed ratably over the period the restrictions lapse. Such expense amounted to $8 million, $11 million and $12 million in 1993, 1992 and 1991, respectively. At October 31, 1993 and 1992, the company had 276,000 and 925,000 shares, respectively, of restricted stock outstanding. Beginning in 1992, discounted stock options are generally granted in place of restricted stock. Shares reserved The company has reserved shares for future issuance under the employee stock plans. At October 31, 1993 and 1992, 35,797,000 and 31,836,000 shares, respectively, were reserved. Stock repurchase program Under the company's stock repurchase program, shares of HP common stock are periodically purchased to meet future employee stock plan requirements. In 1993, 1992 and 1991, 4,345,000, 7,683,000 and 1,619,000 shares were repurchased for an aggregate purchase price of $314 million, $530 million and $79 million, respectively. At October 31, 1993, HP had authorization for an aggregate of $79 million in future repurchases under this program based on certain price and volume criteria. In November 1993, the Board authorized an additional $500 million in future repurchases. Retirement Plans and Retiree Medical Benefits - -------------------------------------------------------------------------------- Pension and profit-sharing plans Substantially all of the company's employees are covered under various pension and deferred profit-sharing retirement plans. The worldwide pension and deferred profit-sharing costs were $159 million in 1993, $138 million in 1992 and $134 million in 1991. U.S. employees are provided retirement benefits by the U.S. Deferred Profit- Sharing Plan (DPS) and the U.S. Supplemental Pension Plan (SPP). The DPS is a defined contribution plan that provides the vast majority of retirement benefits. The plan is funded solely by the company through an annual contribution based upon the company's adjusted U.S. net income, as defined in the plan agreement. Assets of the plan are held in trust for the sole benefit of employees. The company's expense for the DPS was $88 million in 1993, $69 million in 1992 and $45 million in 1991. The SPP is a defined benefit plan that provides for any excess of defined minimum benefits over the benefits available from the DPS. The amount of the benefit is computed based upon the employee's highest average pay rate and length of service, reduced by the annuity value to which the employee is entitled under the DPS. The DPS and SPP were substantially amended effective October 29, 1993, such that all accrued pension benefits under these plans were immediately 100% vested. This amendment resulted in prior service cost of $69 million. The accumulated benefit obligation and benefit obligation increased by $3.4 million and $69 million, respectively, as a result of this amendment. - ------ 38 Effective November 1, 1993, the DPS and SPP will be replaced by a new Retirement Plan. Benefits under this new defined benefit plan will be based on highest average pay rate and years of service. Employees will retain benefits earned through October 31, 1993 under the DPS and SPP with benefits under the SPP adjusted for future salary increases. Future benefits will be earned under the new Retirement Plan using the new formula. The combined status of the U.S. Deferred Profit-Sharing and U.S. Supplemental Pension plans is as follows:
In millions 1993 1992 - -------------------------------------------------------------------------------- Fair value of plan assets $2,096 $1,801 Retirement benefit obligation $1,872 $1,572 - --------------------------------------------------------------------------------
Employees outside of the U.S. generally receive retirement benefits under various defined benefit and defined contribution plans based upon factors such as years of service and employee compensation levels. Retiree medical plan In addition to providing pension and deferred profit-sharing benefits, the company also has a medical plan that provides defined benefits to U.S. retired employees. Substantially all of the company's U.S. employees could become eligible for these benefits. The company adopted, effective as of the beginning of the 1992 fiscal year, Statement of Financial Accounting Standards No. 106, ``Employers' Accounting for Postretirement Benefits Other than Pensions'' (SFAS No. 106). SFAS No. 106 requires that postretirement benefits other than pensions be accounted for using the accrual method. Previously, the company expensed retiree medical costs as claims were paid. The adoption of SFAS No. 106 in 1992 resulted in a one-time charge to net earnings of $332 million in the first quarter, after a reduction for income taxes of $212 million. The one-time charge represents the transition effect of adopting SFAS No. 106 as of the beginning of 1992. Accrual basis retiree medical expenses were $33 million in 1993 and $32 million in 1992, excluding the one-time charge. The cost under the cash basis approach was $10 million in 1991. 401(k) Plan U.S. employees of the company may participate in the Tax Saving Capital Accumulation Plan (TAXCAP), which was established as a supplemental retirement program. Under the TAXCAP program, the company partially matches contributions by employees up to a maximum of 4% of an employee's annual compensation. Currently, combined Employee Stock Purchase Plan and TAXCAP contributions by an employee cannot exceed 12 percent of an employee's annual base compensation. Effective November 1, 1993, the maximum combined contribution to these two plans will be 17% of an employee's annual base compensation subject to certain regulatory and plan limitations. At October 31, 1993, 43,000 employees were participating in TAXCAP out of the 54,000 who were eligible. ------ 39 Funded status and net periodic cost The funded status of the defined benefit and retiree medical plans is as follows:
U.S. supplemental Non-U.S. U.S. defined benefit defined benefit retiree medical plan plans plan --------------- --------------- --------------- In millions 1993 1992 1993 1992 1993 1992 - -------------------------------------------------------------------------------- Fair value of plan assets $ 307 $ 267 $ 798 $ 663 $ 251 $ 211 Benefit obligation (83) (38) (851) (747) (444) (412) ----------------------------------------------- Excess of plan assets over benefit obligation 224 229 (53) (84) (193) (201) Unrecognized net experience (gain) loss (77) (32) 97 75 (57) (17) Unrecognized service cost related to plan changes 69 -- -- -- (181) (190) Unrecognized net transition asset* (54) (62) (7) (13) -- -- ----------------------------------------------- Prepaid (accrued) costs $ 162 $ 135 $ 37 $ (22) $(431) $(408) =============================================== Vested benefit obligation $ (19) $ (9) $(529) $(474) Accumulated benefit obligation $ (19) $ (13) $(576) $(506) ==============================
*Amortized over 15 years for the U.S. plan and over periods ranging from 12 to 20 years for non-U.S. plans. Plan assets consist primarily of listed stocks and bonds for the U.S. plans and listed stocks, bonds and cash surrender value of life insurance policies for the non-U.S. plans. It is the company's practice to fund these costs to the extent they are tax-deductible. The company's net pension, deferred profit-sharing and retiree medical costs comprise the following:
Pension and deferred profit-sharing U.S. ----------------------------------- retiree medical U.S. plans Non-U.S. plans plan ----------------- ---------------- --------------- In millions 1993 1992 1991 1993 1992 1991 1993 1992 - -------------------------------------------------------------------------------- Service cost--benefits earned during the period $ 4 $ 3 $ 4 $ 61 $ 52 $ 47 $ 28 $ 26 Interest cost on benefit obligation 3 3 4 49 45 37 35 33 Actual investment return on plan assets (45) (19) (57) (107) 5 (65) (40) (14) Net amortization and deferral 11 (14) 27 59 (53) 24 10 (13) Early retirement program costs -- -- 24 -- -- -- -- -- ------------------------------------------------- Net plan cost (credit) (27) (27) 2 62 49 43 33 32 Pension and deferred profit- sharing costs for other plans 88 69 45 36 47 44 -- -- ------------------------------------------------- $ 61 $ 42 $ 47 $ 98 $ 96 $ 87 $ 33 $ 32 =================================================
- ------ 40 The assumptions used to measure the benefit obligations and to compute the expected long-term return on assets for the company's defined benefit and retiree medical plans are as follows:
1993 1992 1991 - ------------------------------------------------------------------------------- U.S. supplemental defined benefit plan: Discount rate 7.0% 8.0% 8.5% Average increase in compensation levels 5.5% 6.5% 7.0% Expected long-term return on assets 9.0% 9.0% 9.0% Non-U.S. defined benefit plans: Discount rate 5.0% to 9.0% 5.0% to 9.0% 5.0% to 10.0% Average increase in compensation levels 4.5% to 6.3% 4.5% to 6.3% 5.0% to 7.5% Expected long-term return on assets 7.0% to 10.0% 7.0% to 11.0% 6.5% to 12.0% Retiree medical plan: Discount rate 7.0% 8.0% -- Expected long-term return on assets 9.0% 9.0% -- Current medical cost trend rate 11.2% 13.0% -- Ultimate medical cost trend rate 6.0% 7.0% -- Medical cost trend rate decreases to ultimate rate in year 2007 2007 -- Effect of a 1% increase in the medical cost trend rate (millions): Increase in benefit obligation $97 $88 -- Increase in the annual retiree medical cost $18 $17 -- - -------------------------------------------------------------------------------
Commitments - ------------------------------------------------------------------------------- The company leases certain real and personal property. Minimum commitments under these operating leases are $179 million for 1994, $157 million for 1995, $132 million for 1996, $89 million for 1997, $74 million for 1998 and $155 million for 1999 through 2061. Certain leases require the company to pay property taxes, insurance and routine maintenance and include escalation clauses. Rent expense was $269 million in 1993, $257 million in 1992 and $237 million in 1991. Geographic Area Information - -------------------------------------------------------------------------------- The company operates in a single industry segment: the design, manufacture and service of measurement, computation and communications products and systems. Net revenue, earnings from operations and identifiable assets, classified by the major geographic areas in which the company operates, are as follows: ------ 41
In millions 1993 1992 1991 - ------------------------------------------------------------------------------- Net revenue United States: Unaffiliated customer sales $ 9,346 $ 7,212 $ 6,390 Interarea transfers 4,738 3,720 3,223 ------------------------- 14,084 10,932 9,613 ------------------------- Europe: Unaffiliated customer sales 7,177 6,083 5,378 Interarea transfers 899 649 411 ------------------------- 8,076 6,732 5,789 ------------------------- Asia Pacific, Canada, Latin America: Unaffiliated customer sales 3,794 3,115 2,726 Interarea transfers 2,165 1,120 731 ------------------------- 5,959 4,235 3,457 ------------------------- Eliminations (7,802) (5,489) (4,365) ------------------------- $20,317 $16,410 $14,494 ========================= Earnings from operations United States $ 1,543 $ 1,220 $ 1,191 Europe 447 308 292 Asia Pacific, Canada, Latin America 630 372 224 Eliminations and corporate (741) (496) (497) ------------------------- $ 1,879 $ 1,404 $ 1,210 ========================= Identifiable assets United States $ 8,984 $ 7,309 $ 6,487 Europe 4,452 3,869 3,314 Asia Pacific, Canada, Latin America 3,056 2,026 1,711 Eliminations and corporate 244 496 461 ------------------------- $16,736 $13,700 $11,973 =========================
Net revenue from sales to unaffiliated customers is based on the location of the customer. Interarea transfers are sales among HP affiliates principally made at market price, less an allowance primarily for subsequent manufacturing and/or marketing costs. Earnings from operations and identifiable assets are classified based on the location of the company's facilities. Identifiable corporate assets, which are net of eliminations, comprise primarily cash, property, plant and equipment, and other assets, and aggregate $3,148 million in 1993, $2,889 million in 1992 and $2,252 million in 1991. - ------ 42 Statement of Management Responsibility Hewlett-Packard Company and Subsidiaries The company's management is responsible for the preparation, integrity and objectivity of the consolidated financial statements and other financial information presented in this report. The accompanying financial statements have been prepared in conformity with generally accepted accounting principles and reflect the effects of certain estimates and judgments made by management. The company's management maintains an effective system of internal control that is designed to provide reasonable assurance that assets are safeguarded and transactions are properly recorded and executed in accordance with management's authorization. The system is continuously monitored by direct management review and by internal auditors who conduct an extensive program of audits throughout the company. The company selects and trains qualified people who are provided with and expected to adhere to the company's standards of business conduct. These standards, which set forth the highest principles of business ethics and conduct, are a key element of the company's control system. The company's consolidated financial statements have been audited by Price Waterhouse, independent accountants. Their audits were conducted in accordance with generally accepted auditing standards, and included a review of financial controls and tests of accounting records and procedures as they considered necessary in the circumstances. The Audit Committee of the Board of Directors, which consists of four outside directors, meets regularly with management, the internal auditors and the independent accountants to review accounting, reporting, auditing and internal control matters. The committee has direct and private access to both internal and external auditors. (SIGNATURE OF LEW PLATT OMITTED) (SIGNATURE OF BOB WAYMAN OMITTED) Lew Platt Bob Wayman Chairman of the Board, President Executive Vice President and Chief Executive Officer Finance and Administration Chief Financial Officer Report of Independent Accountants Hewlett-Packard Company and Subsidiaries To the Shareholders and Board of Directors of Hewlett-Packard Company In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of earnings, of cash flows and of shareholders' equity present fairly, in all material respects, the financial position of Hewlett-Packard Company and its subsidiaries at October 31, 1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended October 31, 1993, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in the Retirement Plans and Retiree Medical Benefits note to the financial statements, the company changed its method of accounting for retiree medical benefits in the year ended October 31, 1992. We concur with this change in accounting. (SIGNATURE OF PRICE WATERHOUSE OMITTED) San Francisco, California November 22, 1993 ------ 43 Orders and Net Revenue by Groupings of Similar Products and Services Hewlett-Packard Company and Subsidiaries Unaudited
For the years ended October 31 In millions 1993 1992 1991 - ------------------------------------------------------------------------------- Orders Computer products, service and support $15,903 $12,293 $10,463 Electronic test and measurement instrumentation, systems and service 2,335 2,257 2,301 Medical electronic equipment and service 1,196 1,004 906 Analytical instrumentation and service 721 678 672 Electronic components 617 529 334 ------------------------- $20,772 $16,761 $14,676 ========================= Net revenue Computer products, service and support $15,572 $12,028 $10,217 Electronic test and measurement instrumentation, systems and service 2,318 2,207 2,377 Medical electronic equipment and service 1,149 1,010 924 Analytical instrumentation and service 704 693 667 Electronic components 574 472 309 ------------------------- $20,317 $16,410 $14,494 =========================
The table above provides supplemental information showing orders and net revenue by groupings of similar products and services. The groupings are as follows: Computer products, service and support Computer equipment and systems (hardware and software), networking products, printers, plotters, scanners, disk and tape drives, terminals and handheld calculators; support and maintenance services, parts and supplies. Products are used for business, scientific and industrial applications. Electronic test and measurement instrumentation, systems and service Instruments and measurement systems used for design, production and maintenance of electronic equipment; support and maintenance services. Medical electronic equipment and service Products that perform patient monitoring, diagnostic, therapeutic and data- management functions; application software; support and maintenance services; hospital supplies. Analytical instrumentation and service Gas and liquid chromatographs, mass spectrometers and spectrophotometers used to analyze chemical compounds; laboratory data and information management systems; support, supplies and maintenance services. Electronic components Microwave semiconductor and optoelectronic devices that are sold primarily to manufacturers for incorporation into electronic products. - ------ 44 Quarterly Summary Hewlett-Packard Company and Subsidiaries Unaudited
For the three months ended In millions except per share amounts January 31 April 30 July 31 October 31+ 1993 U.S. orders $2,093 $2,341 $2,237 $2,791 International orders 3,108 3,026 2,466 2,710 --------------------------------------------------- Total orders $5,201 $5,367 $4,703 $5,501 --------------------------------------------------- Net revenue $4,573 $5,096 $4,961 $5,687 Cost of equipment sold and services $2,664 $2,997 $2,968 $3,494 (BAR Earnings from CHART operations $ 421 $ 554 $ 427 $ 477 OMITTED) Net earnings $ 261 $ 347 $ 271 $ 298 Net earnings per share $ 1.03 $ 1.38 $ 1.06 $ 1.18 Cash dividend paid per share $ .200 $ .200 $ .250 $ .250 Range of stock prices per share $553/8-741/8 $673/8-781/4 $71-871/2 $65-755/8 =================================================== 1992* U.S. orders $1,773 $1,823 $1,800 $2,173 International orders 2,420 2,360 2,166 2,246 --------------------------------------------------- (BAR Total orders $4,193 $4,183 $3,966 $4,419 CHART --------------------------------------------------- OMITTED) Net revenue $3,863 $4,183 $4,040 $4,324 Cost of equipment sold and services $2,056 $2,242 $2,306 $2,554 Earnings from operations $ 469 $ 481 $ 299 $ 155 Earnings before effect of accounting change $ 302 $ 323 $ 188 $ 68 Net earnings (loss) $ (30) $ 323 $ 188 $ 68 Earnings per share before effect of accounting change $ 1.19 $ 1.27 $ .75 $ .28 Net earnings (loss) per share $ (.12) $ 1.27 $ .75 $ .28 Cash dividend paid per share $ .125 $ .200 $ .200 $ .200 Range of stock prices per share $631/4-461/8 $833/4-601/8 $813/4-637/8 $741/4-515/8 ===================================================
*See discussion of the 1992 change in accounting for retiree medical benefits on page 39 of this report. +The fourth quarter of 1992 includes special charges of approximately $137 million before taxes ($0.36 per share) for voluntary severance programs, employee redeployment and facilities consolidations. ------ 45 Corporate Information Headquarters Everett, Spokane and Vancouver, Dublin, Ireland 3000 Hanover Street Washington Cernusco, Italy Palo Alto, California 94304 Amsterdam, The Netherlands Telephone: (415) 857-1501 Edmonton, Calgary, Montreal Oslo, Norway and Waterloo, Canada Warsaw, Poland Geographic Operations Lisbon, Portugal Americas Guadalajara, Mexico Moscow, Russia 5301 Stevens Creek Boulevard Madrid, Spain Santa Clara, California 95052 Europe Kista, Sweden Telephone: (408) 246-4300 Grenoble and L'Isle d'Abeau, Urdorf, Switzerland France Istanbul, Turkey Europe, Africa, Middle East Bracknell, United Kingdom Route du Nant-d'Avril 150 Boblingen and Waldbronn, CH-1217 Meyrin 2 Germany Asia Pacific Geneva, Switzerland Melbourne, Australia Telephone: (41/22) 780-8111 Bergamo, Italy Beijing, China Hong Kong Asia Pacific Amersfoort, The Netherlands New Delhi, India 17-21/F Shell Tower Tokyo, Japan Times Square, 1 Matheson Street Barcelona, Spain Seoul, Korea Causeway Bay, Hong Kong Kuala Lumpur, Malaysia Telephone: (852) 599-7777 Bristol, Ipswich and South Wellington, New Zealand Queensferry, United Kingdom Singapore Product Development Taipei, Taiwan and Manufacturing Asia Pacific Bangkok, Thailand Americas Melbourne, Australia Cupertino, Folsom, Mountain View, Beijing and Shenzhen, China Hewlett-Packard Laboratories Newark, Palo Alto, Rohnert Park, Bangalore, India Palo Alto, California Roseville, San Diego, San Jose, Hachioji and Kobe, Japan Tokyo, Japan Santa Clara, Santa Rosa, Sunnyvale Seoul, Korea Bristol, United Kingdom and Westlake Village, California Penang, Malaysia Singapore HP Sales And Support Offices Colorado Springs, Fort Collins, and Distributorships Greeley and Loveland, Colorado Country Headquarters Offices Approximately 600 in 110 Americas countries** Wilmington, Delaware Buenos Aires, Argentina Sao Paulo, Brazil *Headquarters of Latin American Boise, Idaho Miami, Florida* region Mexico City, Mexico **A directory of sales and support Andover, Chelmsford and Waltham, Toronto, Canada locations can be obtained from the Massachusetts Caracas, Venezuela Corporate Communications Department at HP's offices in Palo Alto. Exeter, New Hampshire Europe Vienna, Austria Rockaway, New Jersey Brussels, Belgium Prague, Czech Republic Corvallis and McMinnville, Oregon Birkerod, Denmark Helsinki, Finland Aguadilla, Puerto Rico Paris, France Boblingen, Germany Athens, Greece Budapest, Hungary
48 UNIX is a registered trademark of UNIX System Laboratories Inc. in the U.S.A. and other countries. HP-UX is based on and is compatible with USL's UNIX operating system. It also complies with X/Open's XPG4 POSIX 1003.1, 1003.2, 1003.2a; FIPS 151-1 and SVID2 interface specifications. XOpen is a trademark of X/Open Company Limited in the UK and other countries. Intel is a U.S. trademark of Intel Corp. Microsoft is a U.S. registered trademark of Microsoft Corp. Photo credits: cover, pp. 5, 9, 13 by Jim Karageorge p. 6 by Lech Alesky Charewicz p. 10 by Philip Jones-Griffith/Magnum p. 14 by Theo Hess/Skyfast Aerial Photography Designed and produced by Ted Williams and Partners, San Francisco Shareholder Information Annual Meeting of Shareholders The annual meeting will be held Tuesday, February 22, 1994, at 2 p.m. at Hewlett-Packard's Cupertino site located at 19447 Pruneridge Avenue, Cupertino, California. Annual Report/10-K Report Publications of interest to current and potential HP investors are available upon request. These include annual and quarterly reports and the Form 10-K filed with the Securities and Exchange Commission. As a service to those with impaired vision, the HP 1993 Annual Report is available on audio cassette. This material can be obtained at no cost by contacting the Corporate Communications Department, Hewlett-Packard Company corporate offices. Transfer Agent and Registrar Harris Trust and Savings Bank Corporate Trust Operations Division, P.O. Box 755 Chicago, Illinois 60690 Telephone: (312) 461-4061 Common Stock, Dividend Policy The company's stock is traded on the New York Stock Exchange and the Pacific, Tokyo, London, Frankfurt, Zurich and Paris exchanges. Cash dividends have been paid each year since 1965. The current rate is $.25 per share per quarter. At November 30, 1993, there were 72,598 shareholders of record. (Symbol omitted) Printed on recycled paper GRAPHICS APPENDIX LIST* * In this Appendix, the following descriptions of certain bar charts and graphs in the Company's 1993 Annual Report to Shareholders that are omitted from the EDGAR Version are more specific with respect to the actual numbers, amounts and percentages than is determinable from the bar charts and graphs themselves. The Company submits such more specific descriptions only for the purpose of complying with the requirements for transmitting this Annual Report on Form 10-K electronically via EDGAR; such more specific descriptions are not intended in any way to provide information that is additional to the information otherwise provided in the Annual Report. EDGAR Version - Page 23 A bar chart entitled "Net Earnings Per Share (In dollars)" at the top right of page 23 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1988, 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had net earnings per share (shown on the y-axis) in the respective amounts provided in the table entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries (Unaudited)" on page 23 of the Annual Report. In addition, the bar chart shows that in fiscal 1992, after the effect of a change in accounting for retiree medical benefits described on page 39 of the Annual Report, the Company had net earnings per share in an amount shown in such table. A bar chart entitled "Return on Average Shareholders' Equity (Percent)" at the bottom right of page 23 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1988, 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had a return on average shareholders' equity (shown on the y-axis) of 17.1%, 16.6%, 12.5%, 11.1%, 11.7% and 14.7%, respectively. In addition, the bar chart shows that in fiscal 1992 the Company had a return on average shareholders' equity of 7.4% after the effect of a change in accounting for retiree medical benefits described on page 39 of the Annual Report. EDGAR Version - Page 25 A graph entitled "Net Revenue (In millions)" at the top right of page 25 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had (shown on the y-axis) total net revenue in the respective amounts provided in the table entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries" on page 23 of the Annual Report; and international net revenue of $6,338 million, $7,208 million, $8,104 million, $9,198 million and $10,971 million, respectively. In addition, the graph shows that for the fiscal years 1989 and 1990 (shown on the x-axis) the Company had U.S. revenue (shown on the y-axis) of $5,561 million and $6,025 million, respectively; and U.S. net revenue for the fiscal years 1991, 1992 and 1993 (shown on the x-axis) in the respective amounts (shown on the y-axis) provided in the section entitled "Geographic Area Information" in the notes on pages 41-42 of the Annual Report. A graph entitled "U.S. Dollar Relative to Major Foreign Currencies (Fiscal 1980 equals 1.00)" at the bottom right of page 25 of the 1993 Annual Report to Shareholders shows that in the months running consecutively from October 1988 through October 1993 (shown on the x-axis) the U.S. Dollar was equal to (shown on the y-axis) 1.19, 1.18, 1.14, 1.12, 1.11, 1.13, 1.12, 1.10, 1.10, 1.07, 1.03, 1.03, .99, .98, 1.00, 1.00, .98, 1.06, 1.10, 1.11, 1.15, 1.15, 1.12, 1.10, 1.09, 1.06, 1.04, 1.04, 1.06, 1.09, 1.08, 1.06, 1.04, .99, .98, .99, 1.04, 1.11, 1.11, 1.14, 1.17, 1.17, 1.13, 1.13, 1.15, 1.19, 1.20, 1.16 and 1.18, respectively, multiplied by the currencies of the following foreign countries, with varying weights assigned to each of such currencies: Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom. EDGAR Version - Page 26 A graph entitled "Costs and Expenses (As a percentage of net revenue)" at the top left of page 26 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on the y-axis) cost of equipment sold and services of 51.2% and 52.8%, respectively, of net revenue; selling, general and administrative expenses of 27.9% and 28.1%, respectively, of net revenue; and research and development expenses of 10.7% and 10.3%, respectively, of net revenue. In addition, the graph shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis) the Company had, as a percentage of net revenue (shown on the y-axis), cost of equipment sold and services, selling, general and administrative expenses and research and development expenses in the respective amounts provided in the table at the bottom of page 25 of the Annual Report. A graph entitled "Interest and Other Income (Expense) (In millions)" at the bottom left of page 26 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on the y-axis) interest income and other income (expense) of $65 million and $66 million, respectively; and interest expense of $126 million and $172 million, respectively. In addition, the graph shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis) the Company had (shown on the y-axis) interest income and other income (expense) and interest expense in the respective amounts provided in the table entitled "Consolidated Statement of Earnings, Hewlett- Packard Company and Subsidiaries" on page 24 of the Annual Report. EDGAR Version - Page 27 A bar chart entitled "Net Earnings (In millions)" at the top right of page 27 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had net earnings (shown on the y-axis) in the respective amounts provided in the table entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries (Unaudited)" on page 23 of the Annual Report. In addition, the bar chart shows that in fiscal 1992, after the effect of a change in accounting for retiree medical benefits described on page 39 of the Annual Report, the Company had net earnings in an amount provided in such table. A bar chart entitled "Selected Cash Flows (In Millions)" at the bottom right of page 27 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on the y-axis) cash flows from operating activities of $496 million and $799 million, respectively; capital expenditures of $857 million and $955 million, respectively; and dividends paid of $85 million and $102 million, respectively. In addition, the bar chart shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis) the Company had (shown on the y-axis) cash flows from operating activities and dividends paid in the respective amounts provided in the table entitled "Consolidated Statement of Cash Flows, Hewlett-Packard Company and Subsidiaries" on page 30 of the Annual Report. Finally, the bar chart shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis) the Company had capital expenditures (shown on the y-axis) in the respective amounts shown as "Investment in property, plant and equipment" provided in the table entitled "Consolidated Statement of Cash Flows, Hewlett-Packard Company and Subsidiaries" on page 30 of the Annual Report. EDGAR Version - Page 29 A graph entitled "Asset Management (As a percentage of net revenue)" at the top right of page 29 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had (shown on the y-axis) net property, plant and equipment of 24.3%, 24.2%, 23.1%, 22.2% and 20.6%, respectively, of net revenue; accounts and notes receivable of 21.0%, 21.8%, 20.5%, 21.3% and 20.7%, respectively, of net revenue; and inventories of 16.4%, 15.8%, 15.7%, 15.9% and 18.2%, respectively. A graph entitled "Employees and Net Revenue Per Employee (In thousands)" at the bottom right of page 29 of the 1993 Annual Report to Shareholders shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had employees in the respective amounts (shown on the y-axis) provided in the table entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries (Unaudited)" on page 23 of the Annual Report. In addition, the graph shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had net revenue per employee (shown on the y-axis) of $131,100, $141,500, $160,000, $180,800 and $215,200, respectively. EX-21 3 SUBSIDIARIES EXHIBIT 21 SUBSIDIARIES AND AFFILIATES OF HEWLETT-PACKARD COMPANY
ORGANIZED UNDER LAWS OF ----------------- DOMESTIC SUBSIDIARIES OF HEWLETT-PACKARD COMPANY Hewlett-Packard Delaware, Inc. Delaware Hewlett-Packard Delaware Capital, Inc. Delaware Hewlett-Packard Delaware Funding, Inc. Delaware Hewlett-Packard Delaware Holding, Inc. Delaware Hewlett-Packard Delaware Investment, Inc. Delaware Hewlett-Packard European Distribution Operations Nether- lands, Inc. Delaware Hewlett-Packard Finance Company California Hewlett-Packard Global Trading, Inc. California Hewlett-Packard Hellas California Hewlett-Packard Inter-Americas California Hewlett-Packard Laboratories Japan, Inc. Delaware Hewlett-Packard Pipeline Company Colorado Hewlett-Packard Puerto Rico California Hewlett-Packard World Trade, Inc. Delaware Apollo World Trade, Inc. Delaware Avantek, Inc. California Cerjac, Inc. Delaware Colorado Memory Systems, Inc. Delaware EEsof Incorporated California Fleet Systems, Inc. California Four Pi Systems Corporation California HiNoon Project Corporation Delaware Metrix Network Systems, Inc. Delaware The Tall Tree Insurance Company Vermont DOMESTIC SUBSIDIARY OF HEWLETT-PACKARD WORLD TRADE, INC. Hewlett-Packard Export Trade Co. California DOMESTIC SUBSIDIARIES OF AVANTEK, INC. Avantek Digital Radio, Inc. California Avantek International California DOMESTIC SUBSIDIARY OF HINOON PROJECT CORPORATION Video Products Group Inc. Delaware FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD COMPANY China Hewlett-Packard Limited People's Republic of China Grupo Hewlett-Packard Latin America S.A. de C.V. Mexico Hewlett-Packard Asia Pacific Limited Hong Kong Hewlett-Packard Australia Ltd. Australia Hewlett-Packard Bilgisayar Ve Olcum Sistemleri Anonim Sirketi Turkey Hewlett-Packard Hong Kong Ltd. Hong Kong Hewlett-Packard Ireland Ltd. Ireland Hewlett-Packard Penang Sdn. Bhd. Malaysia Hewlett-Packard Portugal-Sistemas De Informatica E De Medida SA Portugal Hewlett-Packard Sales (Malaysia) Sdn. Bhd. Malaysia
E-21-1
ORGANIZED UNDER LAWS OF ----------------- Hewlett-Packard Taiwan, Ltd. Republic of China Samsung Hewlett-Packard Ltd. Korea FOREIGN SUBSIDIARY OF CHINA HEWLETT-PACKARD COMPANY LIMITED China Hewlett-Packard (Shenzhen) Company, Ltd. People's Republic of China FOREIGN SUBSIDIARIES OF GRUPO HEWLETT-PACKARD LATIN AMERICA S.A. DE C.V. Arrendadora Hewlett-Packard S.A de C.V Mexico Hewlett-Packard de Mexico S.A. de C.V. Mexico FOREIGN SUBSIDIARY OF HEWLETT-PACKARD ASIA PACIFIC LTD. Hewlett-Packard Australia Finance Ltd. Australia FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD AUSTRALIA LTD. Hewlett-Packard New Zealand Ltd. New Zealand Telecom Hewlett-Packard Pty., Ltd. Australia Moriya Pty. Inc. Australia FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD BENELUX B.V. Hewlett-Packard Belgium S.A.N.V. Belgium Hewlett-Packard Nederland B.V. Netherlands FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DELAWARE CAPITAL, INC. HCL Hewlett-Packard Limited India FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DELAWARE HOLDING, INC. Hewlett-Packard (India) Software Operation Private Ltd. India FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD DELAWARE, INC. Hewlett-Packard Chile, S.A. Chile Hewlett-Packard de Venezuela, C.A. Venezuela Hewlett-Packard do Brasil, S.A. Brazil Hewlett-Packard Malaysia Technology, Sdn. Bhd. Malaysia Hewlett-Packard (Thailand) Limited Thailand FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DO BRASIL, S.A. E. I. Industria e Comercio S.A. Brazil FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD GMBH Hewlett-Packard CADE AG Switzerland Hewlett-Packard CADE GmbH Germany Hewlett-Packard Inter-Services GmbH Germany IDACOM Electronics GmbH Germany CAP debis Sfi-Systemhaus fuer Informationsverarbeitung GmbH Germany FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD INTERNATIONAL B.V. Hewlett-Packard (Canada) Ltd. Canada Hewlett-Packard Far East Pte. Ltd. Hong Kong Hewlett-Packard GmbH Germany Hewlett-Packard Holding B.V. Netherlands Hewlett-Packard Italiana S.p.A. Italy Hewlett-Packard Ltd. Great Britain Hewlett-Packard S.A. Switzerland Hewlett-Packard Singapore Sales Pte. Ltd. Singapore Yokogawa Hewlett-Packard, Ltd. Japan Technologies et Participations France
E-21-2
ORGANIZED UNDER LAWS OF --------------- FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD LTD. Hewlett-Packard Equipment Leasing Ltd. Great Britain Hewlett-Packard Finance Ltd. Great Britain Hewlett-Packard Leasing Ltd. Great Britain Hewlett-Packard Product Leasing Ltd. Great Britain Avantek Ltd. Great Britain Colorado Memory Systems Europe Ltd. Great Britain FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD S.A. Hewlett-Packard Argentina S.A. Argentina Hewlett-Packard A/S Denmark Hewlett-Packard (Austria) Ges.m.b.H Austria Hewlett-Packard Benelux B.V. Netherlands Hewlett-Packard Espanola, S.A. Spain Hewlett-Packard (Malaysia) SND.BHD Malaysia Hewlett-Packard Norge A/S Norway Hewlett-Packard OY Finland Hewlett-Packard (Schweiz) A.G. Switzerland Hewlett-Packard Singapore Private Ltd. Singapore Hewlett-Packard Sverige AB. Sweden Hewlett-Packard Technical B.V. Netherlands Hewlett-Packard Trading S.A. Switzerland FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD SINGAPORE PRIVATE LTD. Hewlett-Packard Investment Ltd. Liberia Geneva Investments N.V. Netherlands Antilles FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD WORLD TRADE, INC. Hewlett-Packard Chile, S.A. Chile Hewlett-Packard Czech Republic Czech Republic Hewlett-Packard (HP) RE Ltd. Ireland Hewlett-Packard International B.V. Netherlands Hewlett-Packard Magyarorszag Kft. Hungary Hewlett-Packard Polska Spol.Z Poland Apollo Domain Computer GmbH Germany Belgian Coordination Center Belgium Leasametric GmbH Germany Yokogawa Analytical Systems, Inc. Japan FOREIGN SUBSIDIARY OF YOKOGAWA HEWLETT-PACKARD, LTD. Yokogawa Hewlett-Packard Design Systems Laboratory, Ltd. Japan FOREIGN SUBSIDIARIES OF AVANTEK, INC. AVAK International, Inc. Barbados FOREIGN SUBSIDIARY OF DELAWARE INVESTMENT, INC. Hewlett-Packard India Ltd. India FOREIGN SUBSIDIARY OF LEASAMETRIC GMBH Leasametric S.A. France FOREIGN SUBSIDIARY OF TECHNOLOGIES ET PARTICIPATIONS Hewlett-Packard France France
E-21-3 EX-23 4 CONSENT EXHIBIT 23 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement the following Registration Statements on Form S-8 of our report dated November 22, 1993 appearing on page 43 of the 1993 Annual Report to Shareholders of Hewlett-Packard Company which is incorporated in this Annual Report on Form 10-K. Registration No. 2-66780 through Post-Effective Amendment No. 6 Registration No. 2-90239 Registration No. 2-92331 through Post-Effective Amendment No. 3 Registration No. 2-96361 through Post-Effective Amendment No. 1 Registration No. 33-30769 Registration No. 33-31496 Registration No. 33-31500 Registration No. 33-38579 Registration No. 33-50699 We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appears on page 13 of this Form 10-K. PRICE WATERHOUSE San Francisco, California January 28, 1994 E-23-1 EX-99 5 STOCK PURCHASE PLAN EXHIBIT 99 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended October 31, 1993 OR [_] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the Transition period from to Commission File Number: 1-4423 A. Full title of the plan and address of the plan, if different from that of the issuer named below: HEWLETT-PACKARD COMPANY EMPLOYEE STOCK PURCHASE PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: HEWLETT-PACKARD COMPANY 3000 HANOVER STREET PALO ALTO, CALIFORNIA 94304 REQUIRED INFORMATION Not applicable. SIGNATURES PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE ADMINISTRATOR OF THE PLAN HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED. HEWLETT-PACKARD COMPANY EMPLOYEE STOCK PURCHASE PLAN D. Craig Nordlund By: _________________________________ D. Craig Nordlund Associate General Counsel and Secretary Date: January 28, 1994 E-99-1 -----END PRIVACY-ENHANCED MESSAGE-----