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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
This Management’s Discussion and Analysis of Financial Condition and Results of Operations
(‘‘MD&A’’) is organized as follows:
•Overview. A discussion of our business and overall analysis of financial and other highlights
affecting the company to provide context for the remainder of MD&A. The overview analysis
compares fiscal 2014 to fiscal 2013.
•Critical Accounting Policies and Estimates. A discussion of accounting policies and estimates that
we believe are important to understanding the assumptions and judgments incorporated in our
reported financial results.
•Results of Operations. An analysis of our financial results comparing fiscal 2014 and fiscal 2013
to the prior years. A discussion of the results of operations at the consolidated level is followed
by a more detailed discussion of the results of operations by segment.
•Liquidity and Capital Resources. An analysis of changes in our cash flows and a discussion of our
financial condition and liquidity.
•Contractual and Other Obligations. An overview of contractual obligations, retirement and
post-retirement benefit plan funding, restructuring plans, uncertain tax positions and off-balance
sheet arrangements.
We intend the discussion of our financial condition and results of operations that follows to
provide information that will assist the reader in understanding our Consolidated Financial Statements,
the changes in certain key items in those financial statements from year to year, and the primary
factors that accounted for those changes, as well as how certain accounting principles, policies and
estimates affect our Consolidated Financial Statements. This discussion should be read in conjunction
with our Consolidated Financial Statements and the related notes that appear elsewhere in this
document.
October 2014 Announcement of HP Separation Transaction
On October 6, 2014, we announced plans to separate into two independent publicly-traded
companies: one comprising our enterprise technology infrastructure, software, services and financing
businesses, which will conduct business as Hewlett-Packard Enterprise and one that will comprise our
printing and personal systems businesses, which will conduct business as HP Inc. The separation is
subject to certain conditions, including, among others, obtaining final approval from HP’s Board of
Directors, receipt of a favorable opinion and/or rulings with respect to the tax-free nature of the
transaction for federal income tax purposes and the effectiveness of a Form 10 filing with the SEC. The
separation is expected to be completed by the end of fiscal 2015. Under the separation plan, HP
shareholders will own shares of both Hewlett-Packard Enterprise and HP Inc. The following chart
provides an overview of the planned separation and segment revenues of the respective businesses
based on HP’s fiscal 2014 results, excluding Corporate Investments and intercompany eliminations.
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