HP 2005 Annual Report Download - page 89
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 2: Net Earnings Per Share (‘‘EPS’’) (Continued)
The reconciliation of the numerators and denominators of the basic and diluted EPS calculations
was as follows for the following fiscal years ended October 31:
2005 2004 2003
In millions, except per share
amounts
Numerator:
Net earnings ............................................. $2,398 $3,497 $2,539
Adjustment for interest expense on zero-coupon subordinated convertible
notes, net of taxes ....................................... — 8 —
Net earnings, adjusted ...................................... $2,398 $3,505 $2,539
Denominator:
Weighted-average shares used to compute basic EPS ................ 2,879 3,024 3,047
Effect of dilutive securities:
Dilution from employee stock plans ........................... 30 23 16
Zero-coupon subordinated convertible notes .................... — 8 —
Dilutive potential common shares .............................. 30 31 16
Weighted-average shares used to compute diluted EPS ............... 2,909 3,055 3,063
Net earnings per share:
Basic ................................................... $ 0.83 $ 1.16 $ 0.83
Diluted ................................................. $ 0.82 $ 1.15 $ 0.83
In fiscal 2005, 2004 and 2003, HP excluded from the calculation of diluted EPS approximately
255 million, 408 million and 362 million, respectively, shares of HP stock issuable upon the exercise of
options because the effect was antidilutive. Stock options are antidilutive when the exercise price of the
options is greater than the average market price of the common shares for the period. In addition, HP
excluded approximately 8 million shares of HP stock issuable upon the assumed conversion of
zero-coupon subordinated notes from the calculation of diluted EPS in fiscal 2005 and fiscal 2003
because the effect was antidilutive.
Note 3: Balance Sheet Details
Balance sheet details were as follows for the following fiscal years ended October 31:
Accounts and Financing Receivables
2005 2004
In millions
Accounts receivable ............................................... $10,130 $10,512
Allowance for doubtful accounts ..................................... (227) (286)
$ 9,903 $10,226
Financing receivables ............................................. $ 2,608 $ 3,066
Allowance for doubtful accounts ..................................... (57) (121)
$ 2,551 $ 2,945
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