HP 2005 Annual Report Download - page 135

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Segment Information (Continued)
•HP Financial Services supports and enhances HP’s global product and services solutions,
providing a broad range of value-added financial life cycle management services. HPFS enables
HP’s worldwide customers to acquire complete IT solutions, including hardware, software and
services. HPFS offers leasing, financing, utility programs, and asset recovery services, as well as
financial asset management services, for large global and enterprise customers. HPFS also
provides an array of specialized financial services to SMBs and educational and governmental
entities. HPFS offers innovative, customized and flexible alternatives to balance unique customer
cash flow, technology obsolescence and capacity needs.
•Corporate Investments is managed by the Office of Strategy and Technology and includes HP
Labs and certain business incubation projects. Revenue in this segment is attributable to the sale
of certain network infrastructure products that enhance computing and enterprise solutions, as
well as the licensing of specific HP technology to third parties.
Segment Data
HP derives the results of the business segments directly from its internal management reporting
system. The accounting policies HP uses to derive business segment results are substantially the same
as those the consolidated company uses. Management measures the performance of each business
segment based on several metrics, including earnings from operations. Management uses these results,
in part, to evaluate the performance of, and to assign resources to, each of the business segments. HP
does not allocate to its business segments certain operating expenses, which it manages separately at
the corporate level. These unallocated costs include primarily amortization of purchased intangible
assets, certain acquisition-related charges and charges for purchased in-process research and
development, as well as certain corporate governance costs.
HP does not allocate to its business segments restructuring charges and any associated adjustments
related to restructuring actions. Workforce rebalancing charges, which include involuntary workforce
reductions and voluntary severance incentives, recorded in the six months ended April 30, 2005 have
been included in business segment results.
Selected operating results information for each business segment was as follows for the following
fiscal years ended October 31:
Earnings (Loss) from
Total Net Revenue Operations
2005 2004 2003 2005 2004 2003
In millions
Enterprise Storage and Servers ........... $16,701 $15,074 $14,540 $ 810 $ 161 $ 146
HP Services ......................... 15,536 13,848 12,402 1,151 1,282 1,369
Software ........................... 1,077 933 781 (59) (156) (206)
Technology Solutions Group ............ 33,314 29,855 27,723 1,902 1,287 1,309
Personal Systems Group ................ 26,741 24,622 21,210 657 205 18
Imaging and Printing Group ............. 25,155 24,199 22,569 3,413 3,843 3,591
HP Financial Services .................. 2,102 1,895 1,921 213 125 79
Corporate Investments ................. 523 449 345 (174) (179) (161)
Segment total ........................ $87,835 $81,020 $73,768 $6,011 $5,281 $4,836
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