HP's Q1 FY13 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2013Q1webcast.
About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world's largest technology company, HP brings together a portfolio that spans
printing,
personal computing,
software,
services and
IT infrastructure to solve customer problems. More information about HP is available at
http://www.hp.com.
Use of non-GAAP financial information
To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, cash and cash equivalents, cash flow from operations or total company debt prepared in accordance with GAAP.
Forward-looking statements
This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, earnings per share, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, including the execution of restructuring plans and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the need to address the many challenges facing HP's businesses; the competitive pressures faced by HP's businesses; risks associated with executing HP's strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of HP's products and services effectively; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; risks associated with HP's international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the execution, timing and results of restructuring plans, including estimates and assumptions related to the cost and the anticipated benefits of implementing those plans; the resolution of pending investigations, claims and; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2012 and HP's other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP's Form 10-Q for the fiscal quarter ended January 31, 2013. In particular, determining HP's actual tax balances and provisions as of January 31, 2013 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP's Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
Three months ended
-------------------------------------
January 31, October 31, January 31,
2013 2012 2012
----------- ----------- -----------
Net revenue $ 28,359 $ 29,959 $ 30,036
Costs and expenses:
Cost of sales 22,029 22,711 23,313
Research and development 794 909 786
Selling, general and administrative 3,300 3,227 3,367
Amortization of purchased
intangible assets 350 372 466
Impairment of goodwill and
purchased intangible assets - 8,847 -
Restructuring charges 130 378 40
Acquisition-related charges 4 3 22
----------- ----------- -----------
Total costs and expenses 26,607 36,447 27,994
----------- ----------- -----------
Earnings (loss) from operations 1,752 (6,488) 2,042
Interest and other, net (179) (188) (221)
----------- ----------- -----------
Earnings (loss) before taxes 1,573 (6,676) 1,821
Provision for taxes (341) (178) (353)
----------- ----------- -----------
Net earnings (loss) $ 1,232 $ (6,854) $ 1,468
=========== =========== ===========
Net earnings (loss) per share:
Basic $ 0.63 $ (3.49) $ 0.74
Diluted $ 0.63 $ (3.49) $ 0.73
Cash dividends declared per share $ 0.26 $ - $ 0.24
Weighted-average shares used to
compute net earnings (loss) per
share:
Basic 1,953 1,964 1,981
Diluted 1,956 1,964 1,998
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
Three Three Three
months months months
ended Diluted ended Diluted ended Diluted
January earnings October earnings January earnings
31, per 31, per 31, per
2013 share 2012 share 2012 share
------- -------- ------- -------- ------- --------
GAAP net earnings
(loss) $ 1,232 $ 0.63 $(6,854) $ (3.49) $ 1,468 $ 0.73
Non-GAAP
adjustments:
Amortization of
purchased
intangible
assets 350 0.18 372 0.19 466 0.24
Impairment of
goodwill and
purchased
intangible
assets(a) - - 8,847 4.51 - -
Restructuring
charges 130 0.07 378 0.19 40 0.02
Acquisition-
related charges
in earnings
from operations 4 - 3 - 22 0.01
Adjustments for
taxes(b) (111) (0.06) (465) (0.24) (164) (0.08)
------- -------- ------- -------- ------- --------
Non-GAAP net
earnings $ 1,605 $ 0.82 $ 2,281 $ 1.16 $ 1,832 $ 0.92
======= ======== ======= ======== ======= ========
GAAP earnings
(loss) from
operations $ 1,752 $(6,488) $ 2,042
Non-GAAP
adjustments:
Amortization of
purchased
intangible
assets 350 372 466
Impairment of
goodwill and
purchased
intangible
assets(a) - 8,847 -
Restructuring
charges 130 378 40
Acquisition-
related charges
in earnings
from operations 4 3 22
------- ------- -------
Non-GAAP earnings
from operations $ 2,236 $ 3,112 $ 2,570
======= ======= =======
GAAP operating
margin 6% (22%) 7%
Non-GAAP
adjustments 2% 32% 2%
------- ------- -------
Non-GAAP operating
margin 8% 10% 9%
======= ======= =======
(a) For the period ended October 31, 2012, represents a goodwill and
intangible asset impairment charge of $8.8 billion associated with the
Autonomy reporting unit within the Software segment.
(b) For the period ended October 31, 2012, the adjustment for taxes is net
of valuation allowances of $0.5 billion provided for certain deferred tax
assets.
