HP 2014 Annual Report Download - page 63
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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 fiscal years ended October 31
2014 2013 2012
Dollars in millions
Net revenue ......................... $111,454 100.0% $112,298 100.0% $120,357 100.0%
Cost of sales(1) ....................... 84,839 76.1% 86,380 76.9% 92,385 76.8%
Gross profit ....................... 26,615 23.9% 25,918 23.1% 27,972 23.2%
Research and development .............. 3,447 3.1% 3,135 2.8% 3,399 2.8%
Selling, general and administrative ......... 13,353 12.0% 13,267 11.8% 13,500 11.2%
Amortization of intangible assets .......... 1,000 0.9% 1,373 1.2% 1,784 1.5%
Impairment of goodwill and intangible
assets(2) ........................... — — — — 18,035 15.0%
Restructuring charges .................. 1,619 1.5% 990 0.9% 2,266 1.9%
Acquisition-related charges .............. 11 — 22 — 45 —
Earnings (loss) from operations ....... 7,185 6.4% 7,131 6.4% (11,057) (9.2)%
Interest and other, net ................. (628) (0.6)% (621) (0.6)% (876) (0.8)%
Earnings (loss) before taxes .......... 6,557 5.8% 6,510 5.8% (11,933) (10.0)%
Provision for taxes .................... (1,544) (1.3)% (1,397) (1.2)% (717) (0.5)%
Net earnings (loss) ............... $ 5,013 4.5% $ 5,113 4.6% $(12,650) (10.5)%
(1) Cost of products, cost of services and financing interest.
(2) Fiscal 2012, includes an $8.8 billion goodwill and intangible asset impairment charge associated
with the Autonomy reporting unit within the Software segment, an $8.0 billion goodwill
impairment within the ES segment and a $1.2 billion intangible asset impairment associated with
the ‘‘Compaq’’ trade name within the Personal Systems segment.
Net Revenue
The components of the weighted net revenue change were as follows:
For the fiscal
years ended
October 31
2014 2013
Percentage Points
Enterprise Services ................................................. (1.5) (1.7)
Printing .......................................................... (0.8) (0.5)
Enterprise Group .................................................. (0.2) (1.3)
Software ......................................................... (0.1) (0.1)
HP Financial Services ............................................... (0.1) (0.2)
Corporate Investments/Other .......................................... 0.1 0.1
Personal Systems ................................................... 1.8 (3.0)
Total HP ....................................................... (0.8) (6.7)
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