HP Q1 FY12 Earnings Announcement

February 22, 2012 http://www.hp.com/investor/home

1 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Forward-looking statements
This presentation may contain forward-looking statements that involve risks, uncertainties 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, the impact of acquisitions or other financial items; any statements of the plans, strategies and objectives of management for future operations, including the execution of cost reduction programs and restructuring and integration plans; any statements concerning the expected development, performance or market share 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 impact of macroeconomic and geopolitical trends and events; the competitive pressures faced by HPs businesses; 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 protection of HPs intellectual property assets, including intellectual property licensed from third parties; integration and other risks associated with business combination and investment transactions; the hiring and retention of key employees; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring and integration plans; the resolution of pending investigations, claims and disputes; and other risks that are described in HPs Annual Report on Form 10-K for the fiscal year ended October 31, 2011 and HPs 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 HPs Form 10-Q for the fiscal quarter ended January 31, 2012. In particular, determining HPs actual tax balances and provisions as of January 31, 2012 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 HPs Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

2 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Use of non-GAAP financial information

HP has included non-GAAP financial measures in this presentation to supplement HPs consolidated condensed financial statements presented on a GAAP basis. Definitions of these non-GAAP financial measures and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included elsewhere in this presentation. HPs management uses non-GAAP net revenue, non-GAAP operating expense, non-GAAP OI&E, non-GAAP operating profit, non-GAAP net earnings, non-GAAP diluted earnings per share, and HPs non-GAAP tax rate to evaluate and forecast HPs performance before gains, losses or other charges that are considered by HPs management to be outside of HPs core business segment operating results. Gross cash, net cash and free cash flow are liquidity measures that provide useful information to management about the amount of cash available for investment in HPs businesses, funding strategic acquisitions, repurchasing stock and other purposes. These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HPs results as reported under GAAP. Items such as impairment of goodwill and purchased intangible assets and amortization of purchased intangible assets, though not directly affecting HPs cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in nonGAAP operating profit, non-GAAP net earnings, non-GAAP diluted earnings per share and HPs non-GAAP tax rate and therefore does not reflect the full economic effect of the loss in value of those intangible assets. In addition, items such as restructuring charges that are excluded from non-GAAP operating expense, non-GAAP operating profit, non-GAAP net earnings, non-GAAP diluted earnings per share and HPs non-GAAP tax rate can have a material impact on cash flows and earnings per share. HP may not be able to liquidate the long-term investments included in gross cash immediately, which may limit the usefulness of gross cash as a liquidity measure. In addition, free cash flow does not represent the total increase or decrease in the cash balance for the period. The non-GAAP financial information that we provide also may differ from the non-GAAP information provided by other companies. We compensate for the limitations on our use of these non-GAAP financial measures by relying primarily on our GAAP financial statements and using non-GAAP financial measures only supplementally. We also provide robust and detailed reconciliations of each non-GAAP financial measure to the most directly comparable GAAP measure, and we encourage investors to review carefully those reconciliations. We believe that providing these non-GAAP financial measures in addition to the related GAAP measures provides investors with greater transparency to the information used by HPs management in its financial and operational decision-making and allows investors to see HPs results through the eyes of management. We further believe that providing this information better enables investors to understand HPs operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance.
3 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY12 results overview

Financial Summary
Net revenue of $30.0B, down 7% Y/Y, down 8% Y/Y in constant currency Non-GAAP(1) diluted EPS of $0.92, down 32% Y/Y GAAP diluted EPS of $0.73, down 38% Y/Y Cash flow from operations of $1.2B, down 61% Y/Y $0.8B in share repurchases and $244M in dividends
Non-GAAP $ in millions
Personal Systems Group

Non-GAAP OP % of rev

Non-GAAP OP $ Y/Y
($208)

Non-GAAP OP % Y/Y
(1.2) pts

Q1 Net Revenue
$8,873

Growth Y/Y%
(15%)

OP $
$464

5.2%

Services
Imaging and Printing Group Enterprise Servers, Storage and Networking Software HP Financial Services Total HP
1. 2.
(1) (2)

$8,626
$6,258

1%
(7%)

$905
$761

10.5%
12.2%

($476)
($358)

(5.7) pts
(4.4) pts

$5,018 $946 $950

(10%) 30% 15%

$562 $162 $91

11.2% 17.1% 9.6%

($268) $42 $12

(3.6) pts 0.5 pts 0.0 pts (3.8) pts

$30,036

(7%)

$2,570

8.6%

($1,436)

All non-GAAP numbers have been adjusted to exclude certain items. A reconciliation of specific adjustments to GAAP results for this quarter and prior periods is included on slide 16 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HPs use of non-GAAP information is provided on slide 3 under Use of non-GAAP Financial Information. Includes Corporate Investments & Eliminations.

4 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY12 revenue
By segment(1)
Imaging & Printing Group 21%

By region
U.S. 34%

Services 28%

Americas 44%, down 9% Y/Y

Personal Systems Group 29% Enterprise Servers, Storage & Networking 16% Canada/ Latin America 10%

EMEA 39%, down 4% Y/Y

Asia Pacific 17%, down 10% Y/Y

Software 3%
1.

HP Financial Services & Corp. Investments 3%

Revenue mix calculated based on total segments, which excludes eliminations and other items not included in segment results.

5 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Revenue & EPS performance

$36 $34 $32 $30 $28 $26 $24 $22 $1.50 $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00

$20 $18 $16 $14 $12

Revenue (in billions)(1)(2) Non-GAAP EPS (2)
1. 2.

1Q09 $28.8 $0.93

2Q09 $27.4 $0.86

3Q09 $27.6 $0.92

4Q09 $30.8 $1.14

1Q10 $31.2 $1.07

2Q10 $30.8 $1.09

3Q10 $30.7 $1.08

4Q10 $33.3 $1.33

1Q11 $32.3 $1.36

2Q11 $31.6 $1.24

3Q11 $31.2 $1.10

4Q11 $32.3 $1.17

1Q12 $30.0 $0.92

Q4 FY2011 amount shown is for non-GAAP net revenue. All other revenue amounts shown are GAAP net revenue. All non-GAAP numbers have been adjusted to exclude certain items. A reconciliation of specific adjustments to GAAP results for this quarter and prior periods is included on slide 16 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HPs use of non-GAAP information is provided on slide 3 under Use of non-GAAP Financial Information.

6 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Regional revenue trends

Americas
(including U.S.) $14 $ in billions 15% Y/Y revenue growth % $10 $ in billions $8 15% 10% 5% 0% (5%) $4 $2 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 (10%) (15%) Y/Y revenue growth % Y/Y revenue growth % $16 20% $12 20%

United States

10% $12
$10 $8 $6 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 5%

0%
(5%) (10%) (15%)

$6

EMEA
$14 20% Y/Y revenue growth % 15% 10% $ in billions $10 $8 $6 $4 4Q10
7

Asia Pacific
$7 $6 $5 $ in billions $4 $3 $2 $1 $0 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 20% 15% 10% 5% 0% (5%) (10%) (15%)

$12

5% 0% (5%) (10%) (15%) 1Q11 2Q11 3Q11 4Q11 1Q12

Y/Y revenue growth % Y/Y constant currency revenue growth %

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Revenue growth
15%

Y/Y revenue growth (%)

10%

5%

0%

(5%)

(10%) Constant currency (1)(2) As reported (1)(2)

1. 2.

1Q09 4.2% 1.2%

2Q09 2.9% -3.1%

3Q09 4.0% -1.6%

4Q09 -5.0% -8.4%

1Q10 5.4% 8.2%

2Q10 8.4% 12.7%

3Q10 10.6% 11.4%

4Q10 8.8% 8.1%

1Q11 4.3% 3.6%

2Q11 1.3% 2.5%

3Q11 -2.3% 1.5%

4Q11 -6.1% -3.0%

1Q12 -7.9% -7.0%

Q4 FY2011 percentage shown is for non-GAAP net revenue. All other percentages shown are for GAAP net revenue. All non-GAAP numbers have been adjusted to exclude certain items. A reconciliation of specific adjustments to GAAP results for this quarter and prior periods is included on slide 16 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HPs use of non-GAAP information is provided on slide 3 under Use of non-GAAP Financial Information.

8 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Personal systems group (PSG)

In billions
$12.0 $10.0 $8.0

Revenue

In millions
$700 $600 $500 $400 $300

Operating profit
7% 6% 5% 4% 3% 2% 1% 0%

$6.0
$4.0 $2.0 $0.0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

$200 $100 $0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Q1 FY12 revenue by business

2%

6%

56%

Notebooks Desktops Workstations Other

36%
9

PSG revenue of $8.9B, down 15% Y/Y Operating profit of $464M, 5.2% of revenue Total units down 18% Y/Y Notebook revenue down 15%, units down 18% Y/Y Desktop revenue down 18%, units down 19% Y/Y Consumer client revenue down 25% Y/Y, Commercial client revenue down 7% Y/Y

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP % revenue

Services
In billions
$10.0 $8.0 $6.0 $4.0 $2.0 $0.0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Revenue

In millions
$1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0

Operating profit
18% 16% 14% 12% 10% 8% 6% 4% 2% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Q1 FY12 revenue by business Services revenue of $8.6B, up 1% Y/Y

27% 43%
ITO Technology Services Application and Business Services

Operating profit of $0.9B, 10.5% of revenue ITO revenue up 2% Y/Y Technology Services revenue up 2% Y/Y Application and Business Services revenue flat Y/Y

30%
10

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP % revenue

Imaging & printing group (IPG)

In billions
$8.0 $6.0 $4.0

Revenue

In millions
$1,300 $1,100 $900 $700 $500

Operating profit
20% 16% 12% 8% 4% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

$2.0
$0.0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Q1 FY12 revenue by business

11%

24%

Supplies Commercial Consumer

65%

IPG revenue of $6.3B, down 7% Y/Y Operating profit of $761M, 12.2% of revenue Supplies revenue down 6% Y/Y Total printer hardware units down 13% Y/Y Consumer printer hardware units down 15% Y/Y Commercial printer hardware units down 10% Y/Y

11 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP % of revenue

Enterprise servers, storage and networking (ESSN)

In billions
$6.0 $5.0 $4.0 $3.0 $2.0 $1.0 $0.0

Revenue

In millions
$1,000 $900 $800 $700 $600 $500 $400 $300 $200 $100 $0

Operating profit
16% 14% 12% 10% 8% 6% 4% 2% 0%

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Q1 FY12 revenue by business

ESSN revenue of $5.0B, down 10% Y/Y
12% 19%
Industry Standard Servers (ISS) Business Critical Systems (BCS)

Operating profit of $562M, 11.2% of revenue ISS revenue down 11% Y/Y BCS revenue down 27% Y/Y Storage revenue down 6% Y/Y Networking revenue flat Y/Y

8%
12

61%

Storage Works Division (SWD) Networking

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP % revenue

Software
In millions
$1,200 $1,000 $800 $600 $400 $200 $0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Revenue

In millions
$300 $250 $200 $150 $100 $50 $0

Operating profit
35% 30% 25% 20% 15% 10% 5%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Q1 FY12 revenue by type Software revenue of $946M, up 30% Y/Y

23% 31%

Licenses Support Services

Operating profit of $162M, 17.1% of revenue Licenses revenue up 12% Y/Y Support revenue up 22% Y/Y Services revenue up 108% Y/Y

46%
13

Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP %revenue

HP financial services (HPFS)

In millions
$1,000 $800 $600 $400 $200 $0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12

Revenue

In millions
$105

Operating profit
12%

$75 $60

8% 6%

$45 $30 $15 $0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 4%

2%
0%

Q1 FY12 revenue by region

12%

Americas EMEA Asia Pacific

59%

HPFS revenue of $950M, up 15% Y/Y

Operating profit of $91M, 9.6% of revenue Financing volume flat Y/Y Net portfolio assets of $12.4B, up 8% Y/Y

29%

14 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

OP %revenue

$90

10%

Non-GAAP(1) financial information

In millions except per share amounts

Q1 FY12
$30,036
23,313 4,153 2,570 (221) 2,349 517 1,832 $0.92 6.1% 7.8%

Q4 FY11
100% $32,264
24,756 4,369 3,139 (125) 3,014 664 2,350 $1.17 7.3% 9.3%

Q1 FY11
100% $32,302
24,381 3,915 4,006 (97) 3,909 879 12.1%

Revenue
Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Net earnings EPS
1.

100%
75.5% 12.1% 12.4%

77.6% 13.8% 8.6%

76.7% 13.6% 9.7%

3,030
$1.36

9.4%

All non-GAAP numbers have been adjusted to exclude certain items. A reconciliation of specific adjustments to GAAP results for this quarter and prior periods is included on slide 16 and in the GAAP to non-GAAP slides that appear as part of the supplemental slides of this presentation. A description of HPs use of non-GAAP information is provided on slide 3 under Use of non-GAAP Financial Information.

15 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY12 GAAP to non-GAAP bridge

In millions except per share amounts
GAAP Amortization of purchased intangibles Restructuring charges Acquisition related charges Non-GAAP

Revenue

$30,036
23,313 4,681 2,042 (221) 1,821 353 19.4% $1,468 $0.73 (466) 466 (40) 40 (22) 22

$30,036
23,313 4,153 2,570 (221)

Cost of sales
Total OpEx Operating profit Interest & other, net

Pre-tax earnings
Income tax Tax rate Net earnings EPS

466
136

40
22

22
6

2,349 517 22.0% $1,832 $0.92

16 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Gross cash & net cash

In billions $15.0 $10.0 $5.0 $0.0 -$5.0 -$10.0 -$15.0 -$20.0 -$25.0 Gross cash(1) Net cash (2) Net cash excl. HPFS Debt (3)
1. 2. 3.

1Q10 $13.7 ($1.8) $6.6

2Q10 $14.3 ($3.0) $5.6

3Q10 $14.8 ($4.7) $4.0

4Q10 $11.0 ($10.6) ($1.5)

1Q11 $10.0 ($9.9) ($0.4)

2Q11 $12.8 ($9.7) $0.2

3Q11 $13.0 ($12.2) ($2.1)

4Q11 $8.1 ($22.0) ($11.7)

1Q12 $8.2 ($22.2) ($11.8)

Includes cash and cash equivalents, short-term investments, and certain liquid long-term investments Net cash is defined as gross cash less total company debt including the effect of hedging Net cash excl HPFS debt = HP net cash plus HPFS net debt

17 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Cash flow
In billions
$16.0 $14.0

$14.6 $13.4 $12.0 $11.9 $12.6

$12.0

$10.2
$10.0

$9.1 $8.4

$8.0 $6.0 $4.0 $2.0 $0.0

$3.1

$2.7
$1.2 $0.4

FY08

FY09

FY10

FY11

Q1 FY11
(1)

Q1 FY12

Cash flow from operations

1. Free cash flow = cash flow from operations less net capital expenditures

Free cash flow

18 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Stock repurchase
Quarterly trends
In billions
$5.0 $4.5 $4.0 $3.5 $3.0 $2.5 $6 150 $10.0B remaining in stock repurchase authorization at the end of Q1 FY12

FY08 FY12
In billions
$12

In millions
300

$10

250

$8

200

$2.0
$1.5 $1.0 $0.5

$4

100

$2

50

$0 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Stock repurchase $2.7 $1.8 $2.6 $4.0 $2.3 $2.7 $4.6 $0.5 $0.8 $0.0 FY08 FY09 $5.1 132 FY10 $11.0 240 FY11 $10.1 262

Stock repurchase
Shares received

$9.6 216

FY12 YTD $0.8 29

19 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY12 reclassification
FY10
In millions
Net revenue Cost of sales R&D SG&A Amortization of purchased intangibles Restructuring charges Acquisition related charges Impairment of goodwill and purchased intangible assets Total cost Earnings from operations Interest and other, net Earnings before tax Provision for taxes Net earnings
114,554 11,479 (505) 10,974 2,213 $8,761 114,554 11,479 (505) 10,974 2,213 $8,761 $-

FY11
Variance
$(104) 104

Revised Amount
$126,033 95,852 2,959 12,822

Previously Reported
$126,033 95,956 2,959 12,718

In millions
Net revenue Cost of sales R&D SG&A Amortization of purchased intangibles Restructuring charges Acquisition related charges Impairment of goodwill and purchased intangible assets Total cost Earnings from operations Interest and other, net Earnings before tax Provision for taxes Net earnings

Revised Amount
$127,245 97,418 3,254 13,577

Previously Reported
$127,245 97,529 3,254 13,466

Variance
$(111) 111

1,484

1,484

1,607

1,607

1,144 293

1,144 293

645 182

645 182

885

885

117,568 9,677 (695) 8,982 1,908 $7,074

117,568 9,677 (695) 8,982 1,908 $7,074

$-

In connection with organizational realignments implemented in the first quarter of fiscal 2012, certain costs previously reported as Cost of Sales have been reclassified as selling, General and Administrative expenses to better align those costs with the functional areas that benefit from those expenditures.

20 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY12 inter-segment reclassification

FY10
In millions
Net Revenue

FY11
Previously Reported
$35,529 25,764 20,356

Segment
Services IPG ESSN

Revised Amount
$35,276 26,176 20,246

Variance
$(253) 412 (110)

Segment
Services IPG ESSN

Revised Amount
$35,702 26,176 22,064

Previously Reported
$35,954 25,783 22,241

Variance
$(252) 393 (177)

Software Corporate Investments

2,812

2,729

83

Software Corporate Investments

3,367

3,217

150

214

346

(132)

208

322

(114)

Total

84,724
5,714 4,357 2,814 787

84,724
5,661 4,412 2,825 782

53 (55) (11) 5

Total
Services IPG ESSN Software Corporate Investments Total

87,517
5,203 3,927 2,997 722

87,517
5,149 3,973 3,026 698

54 (46) (29) 24

Operating Profit

Services IPG ESSN Software Corporate Investments Total

(358) $13,314

(366) $13,314

8 $-

(1,619) $11,230

(1,616) $11,230

(3) $-

HP has reflected fiscal 2012 organizational realignments on a backward-looking basis to provide improved visibility and comparability.

21 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY12 intra-segment reclassification

FY10
In millions
Net Revenue

FY11
Previously Reported
$14,942

Business Unit
Infrastructure Technology Outsourcing Technology Services Application & Business Services Application Services Business Process Outsourcing

Revised Amount
$14,974

Variance
$32

Business Unit
Infrastructure Technology Outsourcing Technology Services Application & Business Services Application Services Business Process Outsourcing

Revised Amount
$15,224

Previously Reported
$15,189

Variance
$35

10,270 10,032

10,627 -

(357) 10,032

10,542 9,936

10,879 -

(337) 9,936

6,792

(6,792)

6,852

(6,852)

2,872

(2,872)

2,672

(2,672)

Other Services
IPG Commercial Hardware Networking Software

5,981 1,595 2,812

296
5,569 1,705 2,729

(296)
412 (110) 83

Other Services
IPG Commercial Hardware Networking Software

6,183 2,392 3,367

362
5,790 2,569 3,217

(362)
393 (177) 150

Corp Investments

214

346

(132)

Corp Investments

208

322

(114)

Total

$45,878

$45,878

$-

Total

$47,852

$47,852

$-

HP has reflected fiscal 2012 organizational realignments on a backward-looking basis to provide improved visibility and comparability.

22 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Outlook
Q2 FY12 guidance
GAAP EPS Non-GAAP EPS(1) $0.68 $0.71 $0.88 $0.91

Full year FY12 guidance

GAAP EPS Non-GAAP EPS(2) At least $3.20 At least $4.00

1. 2.

Second quarter fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.20 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges. Full year fiscal 2012 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.80 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

23 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Supplemental slides

24 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Inventory & accounts receivable

Inventory
In billions
$9.0 $8.0 $7.2 $7.0 $6.0 $5.0 $4.0 $3.0 $2.0
Inventory

Accounts receivable
In billions
11.0% 10.0% $16.0 $14.5 $14.8 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% $14.0 $12.0 $10.0 $8.0 $6.0 $4.0 $2.0 $0.0
1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 12.4% 12.3% 12.6% 14.7% 13.0% 14.6% 14.1% 14.3% 12.7%

$20.0 $18.0

$18.5 $16.6 $15.6

$18.6

20.0% $18.1 $18.2 18.0% $15.9 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%

$7.4 $7.5 $7.3 $6.7 $6.5 $6.8

$6.6

$6.4

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 $6.6 $6.4 $7.2 $6.5 $6.7 $6.8 $7.4 $7.5 $7.3

Receivables $14.5 $14.8 $15.6 $18.5 $16.6 $18.6 $18.1 $18.2 $15.9
% of Rev

% of Rev 5.7% 5.4% 5.8% 5.1% 5.3% 5.3% 5.8% 5.9% 5.8%

25 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

PP&E & accounts payable

Net PP&E
In billions
$13.0
$11.5 $11.8 $11.6 $12.3 $12.1 $11.9 $12.0

Accounts payable
In billions
12%
$15.0 $14.9 $14.4 $14.2 $13.5 $12.4 $14.5 $14.8

$13.6 $13.4
10% $13.0

$11.2 $11.2 $11.0

$11.0 $9.0 8% $9.0 $7.0 6% $7.0 $5.0

PP&E % of Rev

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 $11.2 $11.2 $11.5 $11.8 $11.6 $11.9 $12.0 $12.3 $12.1 9.5% 9.3% 9.3% 9.3% 9.1% 9.3% 9.3% 9.7% 9.7%

4% $5.0
Payables 1Q10 $13.6 2Q10 $13.4 3Q10 $14.9 4Q10 $14.4 1Q11 $13.5 2Q11 $14.2 3Q11 $14.5 4Q11 $14.8 1Q12 $12.4

26 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Working capital metrics

Days
60 50 40

30
20
Days receivables Days inventory Days payable

1Q10 42 25 51

2Q10 43 25 51

3Q10 46 28 57

4Q10 50 23 52

1Q11 46 25 50

2Q11 53 26 54

3Q11 52 28 54

4Q11 51 27 52

1Q12 48 28 48

27 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

HPFS supplemental data

In millions
Depreciation
(1)

Q1 FY12 $457

Q1 FY11 $404

Q4 FY11 $448

Net capital expenditures

(1)

$430

$465

$585

Sequential increase in net financing receivables

$7

$143

$63

1.

Depreciation and net capital expenditures are shown net of inter-company eliminations.

28 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY11 GAAP to non-GAAP bridge

In millions except per share amounts
GAAP webOS hardware wind down Impair. of goodwill and purchased intangible assets Amort. of purchased intangibles Restructuring charges Acquisition related charges Non-GAAP

Revenue

$127,245
97,418 20,150 9,677 (695) 8,982 1,908 21.2% $7,074 $3.32

142

$127,387
96,870 (885) 885 (1,607) 1,607 (645) 645 (182) 182 276 16,766 13,751 (419) 13,332 2,953 22.1% $10,379 $4.88

Cost of sales
Total OpEx Operating profit Interest & other, net

(548)
(65) 755

Pre-tax earnings
Income tax Tax rate Net earnings EPS

755
198

885
25

1,607
489

645
198

458
135

29 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q4 FY11 GAAP to non-GAAP bridge

In millions except per share amounts
GAAP webOS hardware wind down Impair. of goodwill and purchased intangible assets Amort. of purchased intangibles Restructuring charges Acquisition related charges Non-GAAP

Revenue

$32,122
25,304 6,023 795 (401) 394 155 39.3% $239 $0.12

142

$32,264
24,756 (885) 885 (411) 411 (179) 179 (114) 114 276 4,369 3,139 (125) 3,014 664 22.0% $2,350 $1.17

Cost of sales
Total OpEx Operating profit Interest & other, net

(548)
(65) 755

Pre-tax earnings
Income tax Tax rate Net earnings EPS

755
198

885
25

411
127

179
47

390
112

30 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q3 FY11 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$31,189 23,901 4,768 2,520 (121) (358) 358 (150) 150 (18) 18

$31,189 23,901 4,242 3,046 (121) 358 108 150 56 18 6

2,399
473 19.7% $1,926 $0.93

2,925
643 22.0% $2,282 $1.10

31 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q2 FY11 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$31,632 23,832 4,832 2,968 (76) (413) 413 (158) 158 (21) 21

$31,632 23,832 4,240 3,560 (76) 413 126 158 46 21 7

2,892
588 20.3% $2,304 $1.05

3,484
767 22.0% $2,717 $1.24

32 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY11 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx

$32,302 24,381 4,527 (425) (158) (29)

$32,302 24,381 3,915

Operating profit
Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

3,394
(97) 3,297 692 21.0% 2,605 $1.17

425

158

29

4,006
(97)

425 129

158 48

29 10

3,909 879 22.5% 3,030 $1.36

33 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY10 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$126,033 95,852 18,702 11,479 (505) 10,974 2,213 20.2% 8,761 $3.69 1,484 391 1,144 342 293 83 (1,484) 1,484 (1,144) 1,144 (293) 293

$126,033 95,852 15,781 14,400 (505) 13,895 3,029 21.8% 10,866 $4.58

34 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q4 FY10 GAAP to non-GAAP bridge

In millions except per share amounts
GAAP

Amort. of Purchased Intangibles

Restructuring

Acquisition related charges

Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$33,278 24,968 5,015 3,295 (81) 3,214 676 21.0% 2,538 $1.10 424 98 235 68 51 18 (424) 424 (235) 235 (51) 51

$33,278 24,968 4,305 4,005 (81) 3,924 860 21.9% 3,064 $1.33

35 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q3 FY10 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue

$30,729

$30,729

Cost of sales Total OpEx

Operating profit Interest & other, net

23,340 5,066
2,323 (134)

23,340 (383)
383

(598)
598

(127)
127

3,958
3,431 (134)

Pre-tax earnings
Income tax Tax rate Net earnings EPS

2,189
416 19.0% 1,773 $0.75

383
100

598
175

127
31

3,297
722 21.9% 2,575 $1.08

36 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q2 FY10 GAAP to non-GAAP bridge

In millions except per share amounts GAAP

Amort. of Purchased Intangibles

Restructuring

Acquisition related charges

Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax

$30,849 23,542 4,449 2,858 (91) 2,767 567 347 92 180 57 77 22 (347) 347 (180) 180 (77) 77

$30,849 23,542 3,845 3,462 (91) 3,371 738

Tax rate
Net earnings EPS

20.5%
2,200 $0.91

21.9%
2,633 $1.09

37 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY10 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$31,177 24,002 4,172 3,003 (199) 2,804 554 19.8% 2,250 $0.93 330 101 131 42 38 12 (330) 330 (131) 131 (38) 38

$31,177 24,002 3,673 3,502 (199) 3,303 709 21.5% 2,594 $1.07

38 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

FY09 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$114,552 87,489 16,927 10,136 (721) 9,415 1,755 18.6% 7,660 $3.14 1,578 451 640 197 242 79 (1,578) 1,578 (640) 640 (242) 242

$114,552 87,489 14,467 12,596 (721) 11,875 2,482 20.9% 9,393 $3.85

39 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q4 FY09 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$30,777 23,466 4,178 3,133 (132) 3,001 589 19.6% 2,412 $0.99 401 117 38 11 60 19 (401) 401 (38) 38 (60) 60

$30,777 23,466 3,679 3,632 (132) 3,500 736 21.0% 2,764 $1.14

40 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q3 FY09 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue

$27,585

$27,585

Cost of sales
Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

21,022
4,350 2,213 (177) 2,036 365 17.9% 1,671 $0.69 379 105 362 108 59 19 (379) 379 (362) 362 (59) 59

21,022
3,550 3,013 (177) 2,836 597 21.1% 2,239 $0.92

41 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q2 FY09 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx Operating profit Interest & other, net Pre-tax earnings Income tax Tax rate Net earnings EPS

$27,383 20,937 4,153 2,293 (180) 2,113 392 18.6% 1,721 $0.71 380 112 94 31 75 24 (380) 380 (94) 94 (75) 75

$27,383 20,937 3,604 2,842 (180) 2,662 559 21.0% 2,103 $0.86

42 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.

Q1 FY09 GAAP to non-GAAP bridge

In millions except per share amounts GAAP Amort. of Purchased Intangibles Restructuring Acquisition related charges Non-GAAP

Revenue Cost of sales Total OpEx

$28,807 22,064 4,246 (418) (146) (48)

$28,807 22,064 3,634

Operating profit
Interest & other, net Pre-tax earnings Income tax Tax rate

2,497
(232) 2,265 409 18.1%

418

146

48

3,109
(232)

418 117

146 47

48 17

2,877 590 20.5%

Net earnings
EPS

1,856
$0.75

2,287
$0.93

43 Copyright 2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice.