HP 2010 Annual Report Download - page 55
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Results of operations in dollars and as a percentage of net revenue were as follows for the
following fiscal years ended October 31:
2010 2009 2008
In millions
Net revenue ......................... $126,033 100.0% $114,552 100.0% $118,364 100.0%
Cost of sales(1) ....................... 96,089 76.2% 87,524 76.4% 89,699 75.8%
Gross profit ......................... 29,944 23.8% 27,028 23.6% 28,665 24.2%
Research and development .............. 2,959 2.3% 2,819 2.5% 3,543 3.0%
Selling, general and administrative ......... 12,585 10.1% 11,613 10.1% 13,326 11.3%
Amortization of purchased intangible assets . . 1,484 1.1% 1,578 1.4% 1,012 0.9%
Restructuring charges .................. 1,144 1.0% 640 0.6% 270 0.2%
Acquisition-related charges .............. 293 0.2% 242 0.2% 41 —
Earnings from operations ............... 11,479 9.1% 10,136 8.8% 10,473 8.8%
Interest and other, net ................. (505) (0.4)% (721) (0.6)% — —
Earnings before taxes .................. 10,974 8.7% 9,415 8.2% 10,473 8.8%
Provision for taxes .................... 2,213 1.7% 1,755 1.5% 2,144 1.8%
Net earnings ......................... $ 8,761 7.0% $ 7,660 6.7% $ 8,329 7.0%
(1) Cost of products, cost of services and financing interest.
Net Revenue
The components of the weighted net revenue change were as follows for the following fiscal years
ended October 31:
2010 2009
Percentage
Points
Personal Systems Group ................................................ 4.8 (5.9)
Enterprise Storage and Servers ........................................... 2.9 (3.4)
Imaging and Printing Group ............................................. 1.5 (4.7)
HP Financial Services .................................................. 0.3 —
Corporate Investments/Other ............................................. 0.3 (0.2)
Services ............................................................ 0.2 11.6
HP Software ......................................................... — (0.6)
Total HP ........................................................... 10.0 (3.2)
Fiscal 2010
In fiscal 2010, total HP net revenue increased 10% (8.3% on a constant currency basis). U.S. net
revenue increased 7.8% to $44.5 billion, while net revenue from outside of the United States increased
11.3% to $81.5 billion. As reflected in the table above, the PSG segment was the largest contributor to
HP net revenue growth as a result of balanced growth across the regions. An analysis of the change in
net revenue for each business segment is included under ‘‘Segment Information’’ below.
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