HP 2009 Annual Report Download - page 118

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8: Restructuring Charges (Continued)
All restructuring costs associated with pre-acquisition EDS are reflected in the purchase price of
EDS. These costs are subject to change based on the actual costs incurred. Changes to these estimates
could decrease the amount of the purchase price allocated to goodwill.
Prior Fiscal Year Plans
Restructuring plans initiated prior to 2008 are substantially complete and HP expects to record
only minor revisions to these plans as necessary.
Summary of Restructuring Plans
The adjustments to the accrued restructuring expenses related to all of HP’s restructuring plans
described above for the twelve months ended October 31, 2009 were as follows:
As of October 31, 2009
Fiscal Non-cash Total costs Total
Balance, year 2009 settlements Balance, and expected
October 31, charges Goodwill Cash and other October 31, adjustments costs and
2008 (reversals) adjustments payments adjustments 2009 to date adjustments
Fiscal 2009 Plan .................. $ — $297 $— $ (59) $10 $ 248 $ 297 $ 303
Fiscal 2008 HP/EDS Plan:
Severance .................... $1,444 $279 $ 96 $(1,106) $ 34 $ 747 $1,910 $1,940
Infrastructure .................. 248 67 180 (47) (29) 419 500 935
Total severance and other restructuring
activities .................... $1,692 $346 $276 $(1,153) $ 5 $1,166 $2,410 $2,875
Prior fiscal year plans ............... 77 (3) (2) (25) 4 51 6,343 6,343
Total restructuring plans ............. $1,769 $640 $274 $(1,237) $ 19 $1,465 $9,050 $9,521
At October 31, 2009 and October 31, 2008, HP included the long-term portion of the restructuring
liability of $356 million and $670 million, respectively, in Other liabilities, and the short-term portion in
Accrued restructuring in the accompanying Consolidated Balance Sheets.
Workforce Rebalancing
As part of HP’s ongoing business operations, HP incurred workforce rebalancing charges for
severance and related costs within certain business segments during fiscal 2009. Workforce rebalancing
activities are considered part of normal operations as HP continues to optimize its cost structure.
Workforce rebalancing costs are included in HP’s business segment results, and HP expects to incur
additional workforce rebalancing costs in the future.
Note 9: Fair Value
HP adopted certain provisions of the new accounting standard related to fair value in the first and
fourth quarters of fiscal 2009. The adoption did not have a material impact on HP’s financial
statements and did not result in any changes to the opening balance of retained earnings as of
November 1, 2008. HP will adopt the remaining provisions related to the fair value of nonfinancial
assets and nonfinancial liabilities in the first quarter of fiscal 2010 for the following major categories of
nonfinancial assets and liabilities from the Consolidated Balance Sheet: Property, plant and equipment,
Goodwill, Purchased intangible assets, and the asset retirement obligations within Other accrued
liabilities and Other liabilities.
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