As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be reasonable, these amounts could differ materially from reported amounts in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2015. HP assumes no obligation and does not intend to update these forward-looking statements.
HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions, except per share amounts)
Three months ended
-------------------------------------
October 31, July 31, October 31,
2015 2015 2014
----------- ----------- -----------
Net revenue $ 25,714 $ 25,349 $ 28,406
Costs and expenses:
Cost of sales 19,363 19,317 21,425
Research and development 934 893 876
Selling, general and administrative 3,089 2,962 3,364
Amortization of intangible assets 246 242 226
Restructuring charges 591 25 604
Acquisition and other related
charges 20 47 3
Separation costs 509 401 -
Defined benefit plan settlement
charges 54 114 -
Impairment of data center assets - 136 -
----------- ----------- -----------
Total costs and expenses 24,806 24,137 26,498
----------- ----------- -----------
Earnings from operations 908 1,212 1,908
Interest and other, net (318) (108) (146)
Earnings before taxes 590 1,104 1,762
Valuation allowances, net, and
separation taxes 803 - -
Provision for taxes (70) (250) (432)
----------- ----------- -----------
Net earnings $ 1,323 $ 854 $ 1,330
=========== =========== ===========
Net earnings per share:
Basic $ 0.73 $ 0.47 $ 0.71
Diluted $ 0.73 $ 0.47 $ 0.70
Cash dividends declared per share $ - $ 0.35 $ -
Weighted-average shares used to
compute net earnings per share:
Basic 1,802 1,805 1,862
Diluted 1,821 1,828 1,896
HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(In millions, except per share amounts)
Twelve months ended
October 31,
------------------------
2015 2014
----------- -----------
(Unaudited)
Net revenue $ 103,355 $ 111,454
Costs and expenses:
Cost of sales 78,596 84,839
Research and development 3,502 3,447
Selling, general and administrative 12,185 13,353
Amortization of intangible assets 931 1,000
Restructuring charges 1,017 1,619
Acquisition and other related charges 90 11
Separation costs 1,259 -
Defined benefit plan settlement charges 168 -
Impairment of data center assets 136 -
----------- -----------
Total costs and expenses 97,884 104,269
----------- -----------
Earnings from operations 5,471 7,185
Interest and other, net (739) (628)
Earnings before taxes 4,732 6,557
Valuation allowances, net, and separation taxes 803 -
Provision for taxes (981) (1,544)
----------- -----------
Net earnings $ 4,554 $ 5,013
=========== ===========
Net earnings per share:
Basic $ 2.51 $ 2.66
Diluted $ 2.48 $ 2.62
Cash dividends declared per share $ 0.67 $ 0.61
Weighted-average shares used to compute net
earnings per share:
Basic 1,814 1,882
Diluted 1,836 1,912
HP INC. AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except per share amounts)
Three Diluted Three Diluted Three Diluted
months net months net months net
ended earnings ended earnings ended earnings
October per July 31, per October per
31, 2015 share 2015 share 31, 2014 share
-------- -------- -------- -------- -------- --------
GAAP net
earnings $ 1,323 $ 0.73 $ 854 $ 0.47 $ 1,330 $ 0.70
Non-GAAP
adjustments:
Amortization
of intangible
assets 246 0.14 242 0.13 226 0.12
Restructuring
charges 591 0.33 25 0.01 604 0.32
Acquisition
and other
related
charges 20 0.01 47 0.03 3 -
Separation
costs 509 0.28 401 0.22 - -
Defined
benefit plan
settlement
charges 54 0.03 114 0.06 - -
Impairment of
data center
assets - - 136 0.07 - -
Separation
costs in
interest and
other, net(a) 167 0.09 - - - -
Adjustments
for taxes (420) (0.23) (215) (0.11) (149) (0.08)
Valuation
allowances,
net, and
separation
taxes (803) (0.45) - - - -
-------- -------- -------- -------- -------- --------
Non-GAAP net
earnings $ 1,687 $ 0.93 $ 1,604 $ 0.88 $ 2,014 $ 1.06
======== ======== ======== ======== ======== ========
GAAP earnings
from operations $ 908 $ 1,212 $ 1,908
Non-GAAP
adjustments:
Amortization
of intangible
assets 246 242 226
Restructuring
charges 591 25 604
Acquisition
and other
related
charges 20 47 3
Separation
costs 509 401 -
Defined
benefit plan
settlement
charges 54 114 -
Impairment of
data center
assets - 136 -
-------- -------- --------
Non-GAAP
earnings from
operations $ 2,328 $ 2,177 $ 2,741
======== ======== ========
GAAP operating
margin 4% 5% 7%
Non-GAAP
adjustments 5% 4% 3%
-------- -------- --------
Non-GAAP
operating
margin 9% 9% 10%
======== ======== ========
(a) Includes costs related to early debt settlement
HP INC. AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except per share amounts)
Twelve Twelve
months Diluted months Diluted
ended net ended net
October 31, earnings October 31, earnings
2015 per share 2014 per share
----------- ----------- ----------- -----------
GAAP net earnings $ 4,554 $ 2.48 $ 5,013 $ 2.62
Non-GAAP adjustments:
Amortization of
intangible assets 931 0.51 1,000 0.52
Restructuring charges 1,017 0.55 1,619 0.85
Acquisition and other
related charges 90 0.05 11 0.01
Separation costs 1,259 0.69 - -
Defined benefit plan
settlement charges 168 0.09 - -
Impairment of data
center assets 136 0.07 - -
Separation costs in
interest and other,
net(a) 167 0.09 - -
Valuation allowances,
net, and separation
taxes (803) (0.44) - -
Adjustments for taxes (927) (0.50) (498) (0.26)
----------- ----------- ----------- -----------
Non-GAAP net earnings $ 6,592 $ 3.59 $ 7,145 $ 3.74
=========== =========== =========== ===========
GAAP earnings from
operations $ 5,471 $ 7,185
Non-GAAP adjustments:
Amortization of
intangible assets 931 1,000
Restructuring charges 1,017 1,619
Acquisition and other
related charges 90 11
Separation costs 1,259 -
Defined benefit plan
settlement charges 168 -
Impairment of data
center assets 136 -
----------- -----------
Non-GAAP earnings from
operations $ 9,072 $ 9,815
=========== ===========
GAAP operating margin 5% 6%
Non-GAAP adjustments 4% 3%
----------- -----------
Non-GAAP operating
margin 9% 9%
=========== ===========
(a) Includes costs related to early debt settlement
HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
As of October 31,
-------------------------
2015 2014
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 17,433 $ 15,133
Accounts receivable 13,363 13,832
Financing receivables 2,918 2,946
Inventory 6,485 6,415
Other current assets 11,588 11,819
------------ ------------
Total current assets 51,787 50,145
------------ ------------
Property, plant and equipment 11,090 11,340
Long-term financing receivables and other assets 9,050 8,454
Goodwill and intangible assets 34,955 33,267
------------ ------------
Total assets $ 106,882 $ 103,206
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings $ 2,885 $ 3,486
Accounts payable 15,956 15,903
Employee compensation and benefits 3,608 4,209
Taxes on earnings 830 1,017
Deferred revenue 6,199 6,143
Other accrued liabilities 12,713 12,977
------------ ------------
Total current liabilities 42,191 43,735
------------ ------------
Long-term debt 21,780 16,039
Other liabilities 14,760 16,305
Stockholders' equity:
HP stockholders' equity 27,768 26,731
Non-controlling interests 383 396
------------ ------------
Total stockholders' equity 28,151 27,127
------------ ------------
Total liabilities and stockholders' equity $ 106,882 $ 103,206
============ ============
HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
Three months ended
October 31,
------------------------
2015 2014
----------- -----------
Cash flows from operating activities:
Net earnings $ 1,323 $ 1,330
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 1,007 1,075
Stock-based compensation expense 234 128
Provision for doubtful accounts and inventory 111 62
Restructuring charges 591 604
Deferred taxes on earnings (1,598) 95
Excess tax benefit from stock-based
compensation (21) (9)
Other, net 355 16
Changes in operating assets and liabilities
(net of acquisitions):
Accounts receivable (627) 355
Financing receivables (257) 80
Inventory 137 (211)
Accounts payable 389 716
Taxes on earnings 938 18
Restructuring (237) (456)
Other assets and liabilities 264 (1,102)
----------- -----------
Net cash provided by operating activities 2,609 2,701
----------- -----------
Cash flows from investing activities:
Investment in property, plant and equipment (961) (956)
Proceeds from sale of property, plant and
equipment 114 141
Purchases of available-for-sale securities and
other investments (79) (79)
Maturities and sales of available-for-sale
securities and other investments 56 123
Payments made in connection with business
acquisitions, net of cash acquired (27) (29)
Proceeds from business divestitures, net 90 6
----------- -----------
Net cash used in investing activities (807) (794)
----------- -----------
Cash flows from financing activities:
Short-term borrowings with original maturities
less than 90 days, net (2,559) 59
Proceeds from debt, net of issuance costs 14,765 272
Payment of debt (13,225) (583)
Settlement of cash flow hedge 28 -
Issuance of common stock under employee stock
plans 68 54
Repurchase of common stock (301) (750)
Excess tax benefit from stock-based
compensation 21 9
Cash dividends paid (337) (309)
----------- -----------
Net cash used in financing activities (1,540) (1,248)
----------- -----------
Increase in cash and cash equivalents 262 659
Cash and cash equivalents at beginning of period 17,171 14,474
----------- -----------
Cash and cash equivalents at end of period $ 17,433 $ 15,133
=========== ===========
HP INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
Twelve months ended
October 31,
------------------------
2015 2014
----------- -----------
Cash flows from operating activities: (Unaudited)
Net earnings $ 4,554 $ 5,013
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 4,061 4,334
Stock-based compensation expense 709 560
Provision for doubtful accounts and inventory 376 266
Restructuring charges 1,017 1,619
Deferred taxes on earnings (700) (34)
Excess tax benefit from stock-based
compensation (145) (58)
Other, net 1,031 81
Changes in operating assets and liabilities
(net of acquisitions):
Accounts receivable 572 2,017
Financing receivables (65) 420
Inventory (330) (580)
Accounts payable 31 1,912
Taxes on earnings (137) 310
Restructuring (1,243) (1,506)
Other assets and liabilities (3,241) (2,021)
----------- -----------
Net cash provided by operating activities 6,490 12,333
----------- -----------
Cash flows from investing activities:
Investment in property, plant and equipment (3,603) (3,853)
Proceeds from sale of property, plant and
equipment 424 843
Purchases of available-for-sale securities and
other investments (259) (1,086)
Maturities and sales of available-for-sale
securities and other investments 302 1,347
Payments made in connection with business
acquisitions, net of cash acquired (2,644) (49)
Proceeds from business divestitures, net 246 6
----------- -----------
Net cash used in investing activities (5,534) (2,792)
----------- -----------
Cash flows from financing activities:
Short-term borrowings with original maturities
less than 90 days, net 74 148
Proceeds from debt, net of issuance costs 20,758 2,875
Payment of debt (15,867) (6,037)
Settlement of cash flow hedge (4) -
Issuance of common stock under employee stock
plans 371 297
Repurchase of common stock (2,883) (2,728)
Excess tax benefit from stock-based
compensation 145 58
Cash dividends paid (1,250) (1,184)
----------- -----------
Net cash provided by (used in) financing
activities 1,344 (6,571)
----------- -----------
Increase in cash and cash equivalents 2,300 2,970
Cash and cash equivalents at beginning of period 15,133 12,163
----------- -----------
Cash and cash equivalents at end of period $ 17,433 $ 15,133
=========== ===========
HP INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Three months ended
-------------------------------------
October 31, July 31, October 31,
2015 2015 2014
----------- ----------- -----------
Net revenue:(a)(b)
Personal Systems $ 7,694 $ 7,491 $ 8,948
Printing 4,965 5,163 5,801
----------- ----------- -----------
Total Printing and Personal
Systems Group 12,659 12,654 14,749
Enterprise Group 7,358 7,007 7,248
Enterprise Services 5,020 4,976 5,511
Software 958 845 1,026
HP Financial Services 802 806 906
Corporate Investments 5 4 5
----------- ----------- -----------
Total segments 26,802 26,292 29,445
Elimination of intersegment net
revenue and other (1,088) (943) (1,039)
----------- ----------- -----------
Total HP consolidated net
revenue $ 25,714 $ 25,349 $ 28,406
=========== =========== ===========
Earnings before taxes:(a)(b)
Personal Systems $ 294 $ 222 $ 355
Printing 862 921 1,056
----------- ----------- -----------
Total Printing and Personal
Systems Group 1,156 1,143 1,411
Enterprise Group 1,029 912 1,072
Enterprise Services 412 297 377
Software 288 174 322
HP Financial Services 87 87 110
Corporate Investments (149) (148) (107)
----------- ----------- -----------
Total segment earnings from
operations 2,823 2,465 3,185
Corporate and unallocated costs and
eliminations (261) (129) (316)
Stock-based compensation expense (234) (159) (128)
Amortization of intangible assets (246) (242) (226)
Restructuring charges (591) (25) (604)
Acquisition and other related
charges (20) (47) (3)
Separation costs (509) (401) -
Defined benefit plan settlement
charges (54) (114) -
Impairment of data center assets - (136) -
Interest and other, net (151) (108) (146)
Separation costs - early debt
settlement (167) - -
----------- ----------- -----------
Total HP consolidated earnings
before taxes $ 590 $ 1,104 $ 1,762
=========== =========== ===========
(a) Effective at the beginning of its first quarter of fiscal 2015, HP
implemented an organizational change to align its segment financial
reporting more closely with its current business structure. This
organizational change resulted in the transfer of third party multi-
vendor support arrangements from the Technology Services business unit
within the Enterprise Group segment to the Infrastructure Technology
Outsourcing business unit within the Enterprise Services segment. HP
reflected this change to its segment information in prior reporting
periods on an as-if basis, which resulted in the removal of intersegment
revenue from the Technology Services business unit within the Enterprise
Group segment and the related corporate intersegment revenue
eliminations, and the transfer of operating profit from the Technology
Services business unit within the Enterprise Group segment to the
Infrastructure Technology Outsourcing business unit within the
Enterprise Services segment. This change had no impact on HP's
previously reported consolidated net revenue, earnings from operations,
net earnings or net earnings per share.
(b) In connection with the separation, effective at the beginning of its
fourth quarter of fiscal 2015, HP implemented an organizational change
which resulted in the transfer of marketing optimization solutions
business from the Software segment to the Commercial Hardware business
unit within the Commercial Hardware business unit within the Printing
segment. HP reflected this change to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer of
net revenue from the Software segment to the Commercial Hardware
business unit within the Printing segment. This change also resulted in
the transfer of operating profit from the Software segment to the
Printing segment. This change had no impact on HP's previously reported
consolidated net revenue, earnings from operations, net earnings or net
earnings per share.
HP INC. AND SUBSIDIARIES
SEGMENT INFORMATION
(Unaudited)
(In millions)
Twelve months ended
October 31,
------------------------
2015 2014
----------- -----------
Net revenue:(a)(b)
Personal Systems $ 31,469 $ 34,303
Printing 21,232 23,211
----------- -----------
Total Printing and Personal Systems Group 52,701 57,514
Enterprise Group 27,907 27,723
Enterprise Services 19,806 22,398
Software 3,458 3,701
HP Financial Services 3,216 3,498
Corporate Investments 27 302
----------- -----------
Total segments 107,115 115,136
Elimination of intersegment net revenue and
other (3,760) (3,682)
----------- -----------
Total HP consolidated net revenue $ 103,355 $ 111,454
=========== ===========
Earnings before taxes:(a)(b)
Personal Systems $ 1,064 $ 1,270
Printing 3,865 4,229
----------- -----------
Total Printing and Personal Systems Group 4,929 5,499
Enterprise Group 3,981 3,995
Enterprise Services 1,051 816
Software 760 828
HP Financial Services 349 389
Corporate Investments (565) (199)
----------- -----------
Total segment earnings from operations 10,505 11,328
Corporate and unallocated costs and eliminations (724) (953)
Stock-based compensation expense (709) (560)
Amortization of intangible assets (931) (1,000)
Restructuring charges (1,017) (1,619)
Acquisition and other related charges (90) (11)
Separation costs (1,259) -
Defined benefit plan settlement charges (168) -
Impairment of data center assets (136) -
Interest and other, net (572) (628)
Separation costs - early debt settlement (167) -
----------- -----------
Total HP consolidated earnings before taxes $ 4,732 $ 6,557
=========== ===========
(a) Effective at the beginning of its first quarter of fiscal 2015, HP
implemented an organizational change to align its segment financial
reporting more closely with its current business structure. This
organizational change resulted in the transfer of third party multi-
vendor support arrangements from the Technology Services business unit
within the Enterprise Group segment to the Infrastructure Technology
Outsourcing business unit within the Enterprise Services segment. HP
reflected this change to its segment information in prior reporting
periods on an as-if basis, which resulted in the removal of intersegment
revenue from the Technology Services business unit within the Enterprise
Group segment and the related corporate intersegment revenue
eliminations, and the transfer of operating profit from the Technology
Services business unit within the Enterprise Group segment to the
Infrastructure Technology Outsourcing business unit within the
Enterprise Services segment. This change had no impact on HP's
previously reported consolidated net revenue, earnings from operations,
net earnings or net earnings per share.
(b) In connection with the separation, effective at the beginning of its
fourth quarter of fiscal 2015, HP implemented an organizational change
which resulted in the transfer of marketing optimization solutions
business from the Software segment to the Commercial Hardware business
unit within the Commercial Hardware business unit within the Printing
segment. HP reflected this change to its segment information in prior
reporting periods on an as-if basis, which resulted in the transfer of
net revenue from the Software segment to the Commercial Hardware
business unit within the Printing segment. This change also resulted in
the transfer of operating profit from the Software segment to the
Printing segment. This change had no impact on HP's previously reported
consolidated net revenue, earnings from operations, net earnings or net
earnings per share.
HP INC. AND SUBSIDIARIES
SEGMENT/BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
Three months ended Change (%)
------------------------------------- -----------
October 31, July 31, October 31,
2015 2015 2014 Q/Q Y/Y
----------- ----------- ----------- ---- ----
Net revenue:(a)(b)
Printing and Personal
Systems Group
Personal Systems
Notebooks $ 4,384 $ 3,993 $ 4,869 10% (10%)
Desktops 2,530 2,700 3,185 (6%) (21%)
Workstations 472 507 558 (7%) (15%)
Other 308 291 336 6% (8%)
----------- ----------- -----------
Total Personal
Systems 7,694 7,491 8,948 3% (14%)
----------- ----------- -----------
Printing
Supplies 3,239 3,455 3,596 (6%) (10%)
Commercial
Hardware 1,345 1,305 1,628 3% (17%)
Consumer Hardware 381 403 577 (5%) (34%)
----------- ----------- -----------
Total Printing 4,965 5,163 5,801 (4%) (14%)
----------- ----------- -----------
Total
Printing and
Personal
Systems
Group 12,659 12,654 14,749 0% (14%)
----------- ----------- -----------
Enterprise Group
Industry Standard
Servers 3,552 3,335 3,370 7% 5%
Technology
Services 1,862 1,881 2,093 (1%) (11%)
Storage 819 784 878 4% (7%)
Networking 905 823 669 10% 35%
Business Critical
Systems 220 184 238 20% (8%)
----------- ----------- -----------
Total
Enterprise
Group 7,358 7,007 7,248 5% 2%
----------- ----------- -----------
Enterprise Services
Infrastructure
Technology
Outsourcing 3,068 3,036 3,446 1% (11%)
Application and
Business
Services 1,952 1,940 2,065 1% (5%)
----------- ----------- -----------
Total
Enterprise
Services 5,020 4,976 5,511 1% (9%)
----------- ----------- -----------
Software 958 845 1,026 13% (7%)
----------- ----------- -----------
HP Financial
Services 802 806 906 0% (11%)
----------- ----------- -----------
Corporate
Investments 5 4 5 25% 0%
----------- ----------- -----------
Total segments 26,802 26,292 29,445 2% (9%)
----------- ----------- -----------
Elimination of
intersegment net
revenue and other (1,088) (943) (1,039) 15% 5%
----------- ----------- -----------
Total HP
consolidated net
revenue $ 25,714 $ 25,349 $ 28,406 1% (9%)
=========== =========== ===========
(a) Effective at the beginning of its first quarter of fiscal 2015, HP
implemented an organizational change to align its segment financial
reporting more closely with its current business structure. This
organizational change resulted in the transfer of third party multi-
vendor support arrangements from the Technology Services business unit
within the Enterprise Group segment to the Infrastructure Technology
Outsourcing business unit within the Enterprise Services segment. HP
reflected this change to its segment information in prior reporting
periods on an as-if basis, which resulted in the removal of intersegment
revenue from the Technology Services business unit within the Enterprise
Group segment and the related corporate intersegment revenue
eliminations. This change had no impact on HP's previously reported
consolidated net revenue, earnings from operations, net earnings or net
earnings per share.
(b) In connection with the separation, effective at the beginning of its
fourth quarter of fiscal 2015, HP implemented an organizational change
which resulted in the transfer of marketing optimization solutions
business from the Software segment to the Commercial Hardware business
unit within the Printing segment. HP reflected this change to its
segment information in prior reporting periods on an as-if basis, which
resulted in the transfer of net revenue from the Software segment to the
Commercial Hardware business unit within the Printing segment. This
change had no impact on HP's previously reported consolidated net
revenue, earnings from operations, net earnings or net earnings per
share.
HP INC. AND SUBSIDIARIES
SEGMENT/BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
Twelve months ended
October 31,
------------------------
2015 2014
----------- -----------
Net revenue:(a)(b)
Printing and Personal Systems Group
Personal Systems
Notebooks $ 17,271 $ 17,540
Desktops 10,941 13,197
Workstations 2,018 2,218
Other 1,239 1,348
----------- -----------
Total Personal Systems 31,469 34,303
----------- -----------
Printing
Supplies 13,979 14,917
Commercial Hardware 5,378 5,949
Consumer Hardware 1,875 2,345
----------- -----------
Total Printing 21,232 23,211
----------- -----------
Total Printing and Personal Systems
Group 52,701 57,514
----------- -----------
Enterprise Group
Industry Standard Servers 13,412 12,474
Technology Services 7,662 8,375
Storage 3,180 3,316
Networking 2,846 2,629
Business Critical Systems 807 929
----------- -----------
Total Enterprise Group 27,907 27,723
----------- -----------
Enterprise Services
Infrastructure Technology Outsourcing 12,107 14,038
Application and Business Services 7,699 8,360
----------- -----------
Total Enterprise Services 19,806 22,398
----------- -----------
Software 3,458 3,701
----------- -----------
HP Financial Services 3,216 3,498
----------- -----------
Corporate Investments 27 302
----------- -----------
Total segments 107,115 115,136
----------- -----------
Elimination of intersegment net revenue and
other (3,760) (3,682)
----------- -----------
Total HP consolidated net revenue $ 103,355 $ 111,454
=========== ===========
(a) Effective at the beginning of its first quarter of fiscal 2015, HP
implemented an organizational change to align its segment financial
reporting more closely with its current business structure. This
organizational change resulted in the transfer of third party multi-
vendor support arrangements from the Technology Services business unit
within the Enterprise Group segment to the Infrastructure Technology
Outsourcing business unit within the Enterprise Services segment. HP
reflected this change to its segment information in prior reporting
periods on an as-if basis, which resulted in the removal of intersegment
revenue from the Technology Services business unit within the Enterprise
Group segment and the related corporate intersegment revenue
eliminations. This change had no impact on HP's previously reported
consolidated net revenue, earnings from operations, net earnings or net
earnings per share.
(b) In connection with the separation, effective at the beginning of its
fourth quarter of fiscal 2015, HP implemented an organizational change
which resulted in the transfer of marketing optimization solutions
business from the Software segment to the Commercial Hardware business
unit within the Printing segment. HP reflected this change to its
segment information in prior reporting periods on an as-if basis, which
resulted in the transfer of net revenue from the Software segment to the
Commerical Hardware business unit within the Printing segment. This
change had no impact on HP's previously reported consolidated net
revenue, earnings from operations, net earnings or net earnings per
share.
HP INC. AND SUBSIDIARIES
SEGMENT OPERATING MARGIN SUMMARY DATA
(Unaudited)
Three
months Change in Operating
ended Margin (pts)
----------- -----------------------
October 31,
2015 Q/Q Y/Y
----------- ----------- -----------
Segment operating margin:(a)(b)
Personal Systems 3.8% 0.8 pts (0.2 pts)
Printing 17.4% (0.4 pts) (0.8 pts)
Total Printing & Personal Systems
Group 9.1% 0.1 pts (0.4 pts)
Enterprise Group 14.0% 1.0 pts (0.8 pts)
Enterprise Services 8.2% 2.2 pts 1.4 pts
Software 30.1% 9.5 pts (1.3 pts)
HP Financial Services 10.8% 0.0 pts (1.3 pts)
Corporate Investments(c) NM NM NM
Total segments 10.5% 1.1 pts (0.3 pts)
(a) Effective at the beginning of its first quarter of fiscal 2015, HP
implemented an organizational change to align its segment financial
reporting more closely with its current business structure. This
organizational change resulted in the transfer of third party multi-
vendor support arrangements from the Technology Services business unit
within the Enterprise Group segment to the Infrastructure Technology
Outsourcing business unit within the Enterprise Services segment. HP
reflected this change to its segment information in prior reporting
periods on an as-if basis, which resulted in the removal of intersegment
revenue from the Technology Services business unit within the Enterprise
Group segment and the related corporate intersegment revenue
eliminations, and the transfer of operating profit from the Technology
Services business unit within the Enterprise Group segment to the
Infrastructure Technology Outsourcing business unit within the
Enterprise Services segment. This change had no impact on HP's
previously reported consolidated net revenue, earnings from operations,
net earnings or net earnings per share.
(b) In connection with the separation, effective at the beginning of its
fourth quarter of fiscal 2015, HP also implemented an organizational
change which resulted in the transfer of marketing optimization
solutions business from the Software segment to the Commercial Hardware
business unit within the Printing segment. HP reflected this change to
its segment information in prior reporting periods on an as-if basis,
which resulted in the transfer of net revenue from the Software segment
to the Printing segment. This change also resulted in the transfer of
operating profit from the Software segment to the Printing segment. This
change had no impact on HP's previously reported consolidated net
revenue, earnings from operations, net earnings or net earnings per
share.
(c) "NM" represents not meaningful.
HP INC. AND SUBSIDIARIES
CALCULATION OF DILUTED NET EARNINGS PER SHARE
(Unaudited)
(In millions, except per share amounts)
Three months ended
-----------------------------------
October 31, July 31, October 31,
2015 2015 2014
----------- ----------- -----------
Numerator:
GAAP net earnings $ 1,323 $ 854 $ 1,330
=========== =========== ===========
Non-GAAP net earnings $ 1,687 $ 1,604 $ 2,014
=========== =========== ===========
Denominator:
Weighted-average shares outstanding
during the reporting period 1,802 1,805 1,862
Dilutive effect of employee stock
plans(a) 19 23 34
----------- ----------- -----------
Weighted-average shares used to
compute diluted net earnings per
share 1,821 1,828 1,896
=========== =========== ===========
GAAP diluted net earnings per share $ 0.73 $ 0.47 $ 0.70
=========== =========== ===========
Non-GAAP diluted net earnings per share $ 0.93 $ 0.88 $ 1.06
=========== =========== ===========
(a) Includes any dilutive effect of restricted stock units, restricted
stock, stock options and performance-based awards.
HP INC. AND SUBSIDIARIES
CALCULATION OF DILUTED NET EARNINGS PER SHARE
(In millions, except per share amounts)
Twelve months ended
October 31,
-----------------------
2015 2014
----------- -----------
(Unaudited)
Numerator:
GAAP net earnings $ 4,554 $ 5,013
=========== ===========
Non-GAAP net earnings $ 6,592 $ 7,145
=========== ===========
Denominator:
Weighted-average shares outstanding during the
reporting period 1,814 1,882
Dilutive effect of employee stock plans(a) 22 30
----------- -----------
Weighted-average shares used to compute diluted
net earnings per share 1,836 1,912
=========== ===========
GAAP diluted net earnings per share $ 2.48 $ 2.62
=========== ===========
Non-GAAP diluted net earnings per share $ 3.59 $ 3.74
=========== ===========
(a) Includes any dilutive effect of restricted stock units, restricted
stock, stock options and performance-based restricted stock awards.
