HP 2014 Annual Report Download - page 114
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 3: Restructuring
Summary of Restructuring Plans
HP’s restructuring activities in fiscal 2014 summarized by plan were as follows:
As of October 31,
Fiscal 2014 2014
Other Total Total
Balance, Adjustments Balance, Costs Expected
October 31, Cash and Non-Cash October 31, Incurred Costs to Be
2013 Charges Payments Settlements 2014 to Date Incurred
In millions
Fiscal 2012 Plan
Severance and EER ........ $ 945 $1,357 $(1,233) $(114) $ 955 $4,393 $5,000
Infrastructure and other ...... 40 268 (208) (2) 98 515 540
Total 2012 Plan ............ 985 1,625 (1,441) (116) 1,053 4,908 5,540
Other Plans:
Severance ................ 10 — (3) — 7 2,629 2,629
Infrastructure ............. 122 (6) (62) — 54 1,433 1,437
Total Other Plans .......... 132 (6) (65) — 61 4,062 4,066
Total restructuring plans ....... $1,117 $1,619 $(1,506) $(116) $1,114 $8,970 $9,606
Reflected in Consolidated
Balance Sheets:
Accrued restructuring ....... $ 901 $ 898
Other liabilities ............ $ 216 $ 216
Fiscal 2012 Restructuring Plan
On May 23, 2012, HP adopted a multi-year restructuring plan (the ‘‘2012 Plan’’) designed to
simplify business processes, accelerate innovation and deliver better results for customers, employees
and stockholders. As of October 31, 2013, HP estimated that it would eliminate approximately 34,000
positions in connection with the 2012 Plan through fiscal 2014, with a portion of those employees
exiting the company as part of voluntary enhanced early retirement (‘‘EER’’) programs in the U.S. and
in certain other countries. As of October 31, 2013, HP estimated that it would recognize approximately
$4.1 billion in aggregate charges in connection with the 2012 Plan.
In fiscal 2014, HP increased the expected number of positions to be eliminated to 55,000 as HP
continued to optimize the workforce and reengineer business processes to be more competitive and
meet its objectives. As a result, as of October 31, 2014, HP estimates that it will recognize
approximately $5.5 billion in aggregate charges in connection with the 2012 Plan. As of October 31,
2014, HP had recorded $4.9 billion in aggregate charges of which $4.4 billion related to workforce
reductions and $515 million related to infrastructure, including data center and real estate
consolidation, and other items. As of October 31, 2014, HP had eliminated approximately 40,900
positions for which a severance payment has been or will be made as part of the 2012 Plan. The
severance- and infrastructure-related cash payments associated with the 2012 Plan are expected to be
paid out through fiscal 2021.
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