HP 2012 Annual Report Download - page 63

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Impairment of Goodwill and Purchased Intangible Assets
In fiscal 2012, we recorded goodwill impairment charges of $8.0 billion and $5.7 billion associated
with the Services segment and the acquisition of Autonomy, respectively. In addition, we recorded
intangible asset impairment charges of $3.1 billion and $1.2 billion associated with the acquisition of
Autonomy and the ‘‘Compaq’’ trade name, respectively.
In fiscal 2011, we recorded $885 million impairment charges to goodwill and purchased intangible
assets associated with the acquisition of Palm, Inc. on July 1, 2010 as a result of the decision
announced on August 18, 2011 to wind down the webOS device business.
For more information on our impairment charges, see Note 7 to the Consolidated Financial
Statements in Item 8, which is incorporated herein by reference.
Restructuring Charges
The increase in restructuring costs for fiscal 2012 was due primarily to charges of $2.1 billion for
the restructuring plan announced in May 2012 (the ‘‘2012 Plan’’), the effect of which was partially
offset by lower charges in the fiscal 2008 and fiscal 2010 ES restructuring plans. Restructuring charges
for fiscal 2012 were $2.3 billion. These charges included $2.1 billion costs related to the 2012 Plan,
$106 million costs related to our fiscal 2008 restructuring plan and $75 million costs related to our
fiscal 2010 ES restructuring plan.
The decrease in restructuring costs for fiscal 2011 was due primarily to lower charges in the fiscal
2008 and fiscal 2010 ES restructuring plans. Restructuring charges for fiscal 2011 were $645 million.
These charges included $326 million of severance and facility costs related to our fiscal 2008
restructuring plan, $266 million of severance and facility costs related to our fiscal 2010 ES
restructuring plan and $33 million related to the decision to wind down the webOS device business.
Restructuring charges for fiscal 2010 were $1.1 billion. These charges included $650 million of
severance and facility costs related to our fiscal 2010 ES restructuring plan, $429 million of severance
and facility costs related to our fiscal 2008 restructuring plan, $46 million and $18 million associated
with the Palm and 3Com restructuring plans, respectively, and an increase of $1 million related to
adjustments to other restructuring plans.
For more information on our restructuring charges, see Note 8 to the Consolidated Financial
Statements in Item 8, which is incorporated herein by reference.
As part of our ongoing business operations, we incurred workforce rebalancing charges for
severance and related costs within certain business segments. Workforce rebalancing activities are
considered part of normal operations as we continue to optimize our cost structure. Workforce
rebalancing costs are included in our business segment results, and we expect to incur additional
workforce rebalancing costs in the future.
Amortization of Purchased Intangible Assets
The increase in amortization expense in fiscal 2012 was due primarily to amortization expenses
related to the intangible assets purchased as part of the Autonomy acquisition. This increase was
partially offset by decreased amortization expenses related to certain intangible assets associated with
prior acquisitions reaching the end of their amortization periods.
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