HP 2007 Annual Report Download - page 117

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7: Goodwill and Purchased Intangible Assets (Continued)
Estimated future amortization expense related to finite-lived purchased intangible assets at October 31, 2007 was as
follows:
Fiscal year: In millions
2008 ...................................................................................................................................................................... $ 779
2009 ...................................................................................................................................................................... 692
2010 ...................................................................................................................................................................... 585
2011 ...................................................................................................................................................................... 337
2012 ...................................................................................................................................................................... 166
Thereafter.............................................................................................................................................................. 98
Total...................................................................................................................................................................... $2,657
Note 8: Restructuring Charges
Fiscal 2007 U.S. Enhanced Early Retirement Program
In the second quarter of fiscal 2007, HP announced that it was offering eligible employees an option to participate in the
2007 EER. The 2007 EER was open to employees who satisfied defined eligibility criteria based on combined age and years
of service as well as to otherwise eligible employees who had been included in previous restructuring programs or who
voluntarily left the company since November 30, 2006. A total of 3,080 employees participated in the 2007 EER, including
595 persons who had been included in previous restructuring programs or who had voluntarily left the company since
November 30, 2006. All participating employees left the company by May 31, 2007. HP recorded a net restructuring charge
of $354 million in fiscal 2007 in connection with the 2007 EER. This charge reflected $367 million of severance and benefits
cost for the participating employees, $29 million of stock-based compensation expense for accelerating the vesting of options
held by participating employees and $2 million of outplacement costs. These charges were partially offset by a $28 million
settlement gain from HP’ s U.S. pension plan and a $16 million curtailment gain from its U.S. post-retirement benefit plans.
The net restructuring charge of $354 million for the 2007 EER program was subsequently offset by a $542 million
curtailment gain that HP recognized in fiscal 2007, resulting from changes in the U.S. defined benefit pension and post-
retirement plans that HP also announced in the second quarter of 2007. HP funded the cash expenditures associated with the
2007 EER primarily by using available U.S. pension plan assets. For more information, see Note 15, which is incorporated
herein by reference.
Fiscal 2007 Mercury Plan
In connection with the acquisition of Mercury, HP’ s management approved and initiated plans to restructure the
operations of Mercury to eliminate certain duplicative activities, reduce the cost structure and better align product and
operating expenses with existing general economic conditions. During fiscal 2007, HP recorded $45 million in
severance-related costs associated with the initial estimate of the elimination of approximately 370 positions primarily in the
United States and in Europe. HP eliminated substantially all of these positions and paid the majority of the related severance
payments in fiscal 2007.
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