HP (HPQ) 8-K HP Inc. Reports Hewlett-Packard

EXHIBIT 99.2

HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (Unaudited) (In millions, except per share amounts)

	Three months ended
	October 31, 2015			July 31, 2015			October 31, 2014
Net revenue	$	25,714		$	25,349		$	28,406
Costs and expenses:
Cost of sales		19,363			19,317			21,425
Research and development		934			893			876
Selling, general and administrative		3,089			2,962			3,364
Amortization of intangible assets		246			242			226
Restructuring charges		591			25			604
Acquisition and other related charges		20			47			3
Separation costs		509			401			-
Defined benefit plan settlement charges		54			114			-
Impairment of data center assets		-			136			-
Total costs and expenses		24,806			24,137			26,498
Earnings from operations		908			1,212			1,908
Interest and other, net		(318	)		(108	)		(146	)
Earnings before taxes		590			1,104			1,762
Valuation allowances, net, and separation taxes		803			-			-
Provision for taxes		(70	)		(250	)		(432	)
Net earnings	$	1,323		$	854		$	1,330
Net earnings per share:
Basic	$	0.73		$	0.47		$	0.71
Diluted	$	0.73		$	0.47		$	0.70
Cash dividends declared per share	$	-		$	0.35		$	-
Weighted-average shares used to compute net earnings per share:
Basic		1,802			1,805			1,862
Diluted		1,821			1,828			1,896

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HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (In millions, except per share amounts)

	Twelve months ended October 31,
	2015			2014
	(Unaudited)
Net revenue	$	103,355		$	111,454
Costs and expenses:
Cost of sales		78,596			84,839
Research and development		3,502			3,447
Selling, general and administrative		12,185			13,353
Amortization of intangible assets		931			1,000
Restructuring charges		1,017			1,619
Acquisition and other related charges		90			11
Separation costs		1,259			-
Defined benefit plan settlement charges		168			-
Impairment of data center assets		136			-
Total costs and expenses		97,884			104,269
Earnings from operations		5,471			7,185
Interest and other, net		(739	)		(628	)
Earnings before taxes		4,732			6,557
Valuation allowances, net, and separation taxes		803			-
Provision for taxes		(981	)		(1,544	)
Net earnings	$	4,554		$	5,013
Net earnings per share:
Basic	$	2.51		$	2.66
Diluted	$	2.48		$	2.62
Cash dividends declared per share	$	0.67		$	0.61
Weighted-average shares used to compute net earnings per share:
Basic		1,814			1,882
Diluted		1,836			1,912

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HP INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In millions)

	As of October 31,
	2015		2014
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	17,433	$	15,133
Accounts receivable		13,363		13,832
Financing receivables		2,918		2,946
Inventory		6,485		6,415
Other current assets		11,588		11,819
Total current assets		51,787		50,145
Property, plant and equipment		11,090		11,340
Long-term financing receivables and other assets		9,050		8,454
Goodwill and intangible assets		34,955		33,267
Total assets	$	106,882	$	103,206
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings	$	2,885	$	3,486
Accounts payable		15,956		15,903
Employee compensation and benefits		3,608		4,209
Taxes on earnings		830		1,017
Deferred revenue		6,199		6,143
Other accrued liabilities		12,713		12,977
Total current liabilities		42,191		43,735
Long-term debt		21,780		16,039
Other liabilities		14,760		16,305
Stockholders' equity:
HP stockholders' equity		27,768		26,731
Non-controlling interests		383		396
Total stockholders' equity		28,151		27,127
Total liabilities and stockholders' equity	$	106,882	$	103,206

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HP INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) (In millions)

	Three months ended
	October 31, 2015			July 31, 2015			October 31, 2014
Net revenue:(a)(b)
Personal Systems	$	7,694		$	7,491		$	8,948
Printing		4,965			5,163			5,801
Total Printing and Personal Systems Group		12,659			12,654			14,749
Enterprise Group		7,358			7,007			7,248
Enterprise Services		5,020			4,976			5,511
Software		958			845			1,026
HP Financial Services		802			806			906
Corporate Investments		5			4			5
Total segments		26,802			26,292			29,445
Elimination of intersegment net revenue and other		(1,088	)		(943	)		(1,039	)
Total HP consolidated net revenue	$	25,714		$	25,349		$	28,406
Earnings before taxes:(a)(b)
Personal Systems	$	294		$	222		$	355
Printing		862			921			1,056
Total Printing and Personal Systems Group		1,156			1,143			1,411
Enterprise Group		1,029			912			1,072
Enterprise Services		412			297			377
Software		288			174			322
HP Financial Services		87			87			110
Corporate Investments		(149	)		(148	)		(107	)
Total segment earnings from operations		2,823			2,465			3,185
Corporate and unallocated costs and eliminations		(261	)		(129	)		(316	)
Stock-based compensation expense		(234	)		(159	)		(128	)
Amortization of intangible assets		(246	)		(242	)		(226	)
Restructuring charges		(591	)		(25	)		(604	)
Acquisition and other related charges		(20	)		(47	)		(3	)
Separation costs		(509	)		(401	)		-
Defined benefit plan settlement charges		(54	)		(114	)		-
Impairment of data center assets		-			(136	)		-
Interest and other, net		(151	)		(108	)		(146	)
Separation costs – early debt settlement		(167	)		-			-
Total HP consolidated earnings before taxes	$	590		$	1,104		$	1,762

(a)

Effective at the beginning of its first quarter of fiscal 2015, HP implemented an organizational change to align its segment financial reporting more closely with its current business structure. This organizational change resulted in the transfer of third party multi-vendor support arrangements from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the removal of intersegment revenue from the Technology Services business unit within the Enterprise Group segment and the related corporate intersegment revenue eliminations,  and the transfer of operating profit from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.

(b)

In connection with the separation, effective at the beginning of its fourth quarter of fiscal 2015, HP implemented an organizational change which resulted in the transfer of marketing optimization solutions business from the Software segment to the Commercial Hardware business unit within the Printing segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the transfer of net revenue from the Software segment to the Commercial Hardware business unit within the Printing segment. This change also resulted in the transfer of operating profit from the Software segment to the Commercial Hardware business unit within the Printing segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.

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HP INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) (In millions)

	Twelve months ended October 31,
	2015			2014
Net revenue:(a)(b)
Personal Systems	$	31,469		$	34,303
Printing		21,232			23,211
Total Printing and Personal Systems Group		52,701			57,514
Enterprise Group		27,907			27,723
Enterprise Services		19,806			22,398
Software		3,458			3,701
HP Financial Services		3,216			3,498
Corporate Investments		27			302
Total segments		107,115			115,136
Elimination of intersegment net revenue and other		(3,760	)		(3,682	)
Total HP consolidated net revenue	$	103,355		$	111,454
Earnings before taxes:(a)(b)
Personal Systems	$	1,064		$	1,270
Printing		3,865			4,229
Total Printing and Personal Systems Group		4,929			5,499
Enterprise Group		3,981			3,995
Enterprise Services		1,051			816
Software		760			828
HP Financial Services		349			389
Corporate Investments		(565	)		(199	)
Total segment earnings from operations		10,505			11,328
Corporate and unallocated costs and eliminations		(724	)		(953	)
Stock-based compensation expense		(709	)		(560	)
Amortization of intangible assets		(931	)		(1,000	)
Restructuring charges		(1,017	)		(1,619	)
Acquisition and other related charges		(90	)		(11	)
Separation costs		(1,259	)		-
Defined benefit plan settlement charges		(168	)		-
Impairment of data center assets		(136	)		-
Interest and other, net		(572	)		(628	)
Separation costs – early debt settlement		(167	)		-
Total HP consolidated earnings before taxes	$	4,732		$	6,557

(a)

Effective at the beginning of its first quarter of fiscal 2015, HP implemented an organizational change to align its segment financial reporting more closely with its current business structure. This organizational change resulted in the transfer of third party multi-vendor support arrangements from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the removal of intersegment revenue from the Technology Services business unit within the Enterprise Group segment and the related corporate intersegment revenue eliminations,  and the transfer of operating profit from the Technology Services business unit within the Enterprise Group segment to the Infrastructure Technology Outsourcing business unit within the Enterprise Services segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.

(b)

In connection with the separation, effective at the beginning of its fourth quarter of fiscal 2015, HP implemented an organizational change which resulted in the transfer of marketing optimization solutions business from the Software segment to the Commercial Hardware business unit within the Printing segment. HP reflected this change to its segment information in prior reporting periods on an as-if basis, which resulted in the transfer of net revenue from the Software segment to the Commercial Hardware business unit within the Printing segment. This change also resulted in the transfer of operating profit from the Software segment to the Commercial Hardware business unit within the Printing segment. This change had no impact on HP’s previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share.

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