HP 2007 Annual Report Download - page 12

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CEO Letter
Conclusion
We made solid progress in 2007—demonstrating that
HP can cut costs and increase revenue at the same
time. However, we are not complacent about our
success, nor do we underestimate the strength of our
competitors.
We see significant opportunities to take advantage of
the explosion of digital content and address our $1.2
trillion market opportunity. We believe that we have a
portfolio and a set of capabilities unmatched in the
industry. We are investing in the right people and
infrastructure, and we are continuing to leverage our
scale and reduce our costs to improve our operating
performance.
Our goal is simple: to make HP the partner of choice for
our customers, the investment of choice for our stock-
holders and the employer of choice for our employees.
Thank you for your investment in HP.
Sincerely,
Mark V. Hurd
Chairman, Chief Executive Officer and President
Executive Team
Mark V. Hurd
Chairman, Chief Executive Officer and President
R. Todd Bradley
Executive Vice President, Personal Systems Group
Jon E. Flaxman
Executive Vice President and Chief Administrative Officer
Michael J. Holston
Executive Vice President, General Counsel and Secretary
Vyomesh I. Joshi
Executive Vice President, Imaging and Printing Group
Catherine A. Lesjak
Executive Vice President and Chief Financial Officer
Ann M. Livermore
Executive Vice President, Technology Solutions Group
Randall D. Mott
Executive Vice President and Chief Information Officer
Marcela Perez de Alonso
Executive Vice President, Human Resources
Shane V. Robison
Executive Vice President and Chief Strategy and Technology Officer
¹ Fiscal year 2007 non-GAAP operating profit was $9.6 billion compared to $7.4 billion in fiscal
year 2006. Fiscal year 2007 non-GAAP operating profit of $9.6 billion equals GAAP operating
profit of $8.7 billion plus the sum of $783 million relating to charges associated with the
amortization of purchased intangible assets, $190 million relating to in-process research and
development charges and $387 million in restructuring charges less a $517 million net pension
curtailment gain. Fiscal year 2006 non-GAAP operating profit of $7.4 billion equals GAAP
operating profit of $6.6 billion plus the sum of $604 million relating to charges associated with the
amortization of purchased intangible assets, $52 million relating to in-process research and
development charges and $158 million in restructuring charges. HP’s management uses non-
GAAP operating profit to evaluate and forecast HP’ s performance before gains, losses or other
charges that are considered by HP’s management to be outside of HP’s core business segment
operating results. HP believes that presenting non-GAAP operating profit in addition to GAAP
operating profit provides investors with greater transparency to the information used by HP’s
management in its financial and operational decision making. HP further believes that providing
this additional non-GAAP information helps investors understand HP’s operating performance and
evaluate the efficacy of the methodology and information used by management to evaluate and
measure such performance. This additional non-GAAP information is not intended to be considered
in isolation or as a substitute for GAAP operating profit.
² Forrester Research, “Data, Data Everywhere!”, Boris Evelson, July 23, 2007.
³ HP internal analysis.
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