HP (HPQ) 10-Q/A 8 Sep 09 2009 Q3 Quarterly report (amended) Financial data

Consolidated Condensed Statemen

Consolidated Condensed Statements of Earnings (USD $)
In Millions, except Per Share data	3 Months Ended Jul. 31, 2009	3 Months Ended Jul. 31, 2008		9 Months Ended Jul. 31, 2009	9 Months Ended Jul. 31, 2008
Net revenue:
Products	$17,606	$22,180		$53,627	$67,866
Services	9,749	5,757		29,700	16,619
Financing income	96	95		275	276
Total net revenue	27,451	28,032		83,602	84,761
Costs and expenses:
Cost of products	13,538	16,821		41,047	51,091
Cost of services	7,317	4,297	[1]	22,626	12,511	[1]
Financing interest	81	79		251	244
Research and development	667	895		2,115	2,701
Selling, general and administrative	2,874	3,193	[1]	8,647	9,820	[1]
Amortization of purchased intangible assets	379	213		1,171	630
In-process research and development charges	0	0		6	13
Restructuring charges	362	5		602	19
Acquisition-related charges	59	0		182	0
Total operating expenses	25,277	25,503		76,647	77,029
Earnings from operations	2,174	2,529		6,955	7,732
Interest and other, net	(177)	23		(589)	98
Earnings before taxes	1,997	2,552		6,366	7,830
Provision for taxes	355	525		1,154	1,613
Net earnings	$1,642	$2,027		$5,212	$6,217
Net earnings per share:
Basic (in dollars per share)	0.69	0.82		2.18	2.49
Diluted (in dollars per share)	0.67	0.8		2.13	2.41
Cash dividends declared per share (in dollars per share)	0.16	0.16		0.32	0.32
Weighted-average shares used to compute net earnings per share:
Basic (in shares)	2,382	2,459		2,395	2,497
Diluted (in shares)	2,436	2,533		2,442	2,577
[1]For the prior year reporting periods presented, certain pursuit-related costs previously reported as Cost of services have been realigned retroactively to Selling, general and administrative expenses due to organizational realignments.

Consolidated Condensed Balance

Consolidated Condensed Balance Sheets (USD $)
In Millions	Jul. 31, 2009	Oct. 31, 2008
Current assets:
Cash and cash equivalents	$13,521	$10,153
Short-term investments	66	93
Accounts receivable	14,735	16,928
Financing receivables	2,532	2,314
Inventory	5,850	7,879
Other current assets	12,138	14,361
Total current assets	48,842	51,728
Property, plant and equipment	11,194	10,838
Long-term financing receivables and other assets	10,857	10,468
Goodwill	33,277	32,335
Purchased intangible assets	6,902	7,962
Total assets	111,072	113,331
Current liabilities:
Notes payable and short-term borrowings	3,288	10,176
Accounts payable	12,778	14,917
Employee compensation and benefits	3,596	4,159
Taxes on earnings	786	869
Deferred revenue	6,458	6,287
Accrued restructuring	1,421	1,099
Other accrued liabilities	13,483	15,432
Total current liabilities	41,810	52,939
Long-term debt	13,892	7,676
Other liabilities	13,835	13,774
Stockholders' equity:
Preferred stock, $0.01 par value ( 300 shares authorized; none issued)	0	0
Common stock, $0.01 par value ( 9,600 shares authorized; 2,382 and 2,415 shares issued and outstanding, respectively)	24	24
Additional paid-in capital	13,798	14,012
Retained earnings	28,509	24,971
Accumulated other comprehensive loss	(796)	(65)
Total stockholders' equity	41,535	38,942
Total liabilities and stockholders' equity	$111,072	$113,331

1_Consolidated Condensed Balanc

Consolidated Condensed Balance Sheets (Parenthetical) (USD $)
Share data in Millions, except Per Share data	Jul. 31, 2009	Oct. 31, 2008
Consolidated Condensed Balance Sheets
Preferred stock, par value (in dollars per share)	0.01	0.01
Preferred stock, shares authorized (in shares)	300	300
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	0.01	0.01
Common stock, shares authorized (in shares)	9,600	9,600
Common stock, shares issued (in shares)	2,382	2,415
Common stock, shares outstanding (in shares)	2,382	2,415

2_Consolidated Condensed Statem

Consolidated Condensed Statements of Cash Flows (USD $)
In Millions	9 Months Ended Jul. 31, 2009	9 Months Ended Jul. 31, 2008
Cash flows from operating activities:
Net earnings	$5,212	$6,217
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	3,546	2,268
Stock-based compensation expense	501	449
Provision for bad debt and inventory	462	296
In-process research and development charges	6	13
Restructuring charges	602	19
Deferred taxes on earnings	272	1,163
Excess tax benefit from stock-based compensation	(67)	(213)
Other, net	(1)	(25)
Changes in operating assets and liabilities:
Accounts and financing receivables	1,635	(437)
Inventory	1,843	(255)
Accounts payable	(2,228)	2,171
Taxes on earnings	691	(269)
Restructuring	(844)	(69)
Other assets and liabilities	(1,684)	(13)
Net cash provided by operating activities	9,946	11,315
Cash flows from investing activities:
Investment in property, plant and equipment	(2,749)	(1,966)
Proceeds from sale of property, plant, and equipment	401	271
Purchases of available-for-sale securities and other investments	(105)	(86)
Maturities and sales of available-for-sale securities and other investments	103	212
Payments made in connection with business acquisitions, net	(348)	(1,478)
Net cash used in investing activities	(2,698)	(3,047)
Cash flows from financing activities:
Repayment of commercial paper and notes payable, net	(6,866)	(21)
Issuance of debt	6,778	3,054
Payment of debt	(1,181)	(1,051)
Issuance of common stock under employee stock plans	936	1,347
Repurchase of common stock	(3,038)	(7,720)
Excess tax benefit from stock-based compensation	67	213
Dividends	(576)	(600)
Net cash used in financing activities	(3,880)	(4,778)
Increase in cash and cash equivalents	3,368	3,490
Cash and cash equivalents at beginning of period	10,153	11,293
Cash and cash equivalents at end of period	13,521	14,783
Supplemental schedule of non-cash investing and financing activities:
Issuance of common stock and stock awards assumed in business acquisitions	(3)	(4)
Purchase of assets under financing arrangement	283	0
Purchase of assets under capital lease	$74	$0

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Basis of Presentation and Significant Accounting Policies	Note1: Basis of Presentation and Significant Accounting Policies In the opinion of management, the accompanying Consolidated Condensed Financial Statements of Hewlett-Packard Company and its consolidated subsidiaries ("HP") contain all adjustments, including normal recurring adjustments, necessary to present fairly HP's financial position as of July31, 2009, its results of operations for the three and nine months ended July31, 2009 and 2008 and its cash flows for the nine months ended July31, 2009 and 2008. The Consolidated Condensed Balance Sheet as of October31, 2008 is derived from the October31, 2008 audited consolidated financial statements. Certain reclassifications have been made to prior-year amounts in order to conform to the current year presentation. The results of operations for the three and nine months ended July31, 2009 are not necessarily indicative of the results to be expected for the full year. The information included in this Quarterly Report on Form10-Q should be read in conjunction with "Risk Factors," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Quantitative and Qualitative Disclosures About Market Risk" and the Consolidated Financial Statements and notes thereto included in Items1A, 3, 7, 7A and 8, respectively, of the Hewlett-Packard Company Annual Report on Form10-K for the fiscal year ended October31, 2008. The preparation of financial statements in accordance with U.S. generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in HP's Consolidated Condensed Financial Statements and accompanying notes. Actual results could differ materially from those estimates. HP is involved in various lawsuits, claims, investigations and proceedings that arise in the ordinary course of business. In accordance with Statement of Financial Accounting Standards ("SFAS") No.5, "Accounting for Contingencies," HP records a provision for a liability when it believes it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. HP reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond HP's control. HP evaluated all subsequent events that occurred after the balance sheet date and through the date and time its financial statements were issued on September4, 2009. Accounting Pronouncements As previously reported in HP's 2008 Annual Report on Form10-K, HP recognized the funded status of its benefit plans at October31, 2007 in accordance with the recognition provisions of SFAS No.158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement PlansAn Amendment of Financial Accounting Standards Board ("FASB") Statements No.87, 88, 106 and 132(R)" ("SFAS158"). In addition to the recognition provisions, S

Stock-Based Compensation

Stock-Based Compensation
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Stock-Based Compensation	Note2: Stock-Based Compensation HP's stock-based compensation plans include incentive compensation plans and an employee stock purchase plan. Incentive compensation plans include principal option plans as well as various stock option plans assumed through acquisitions. Principal option plans include performance-based restricted units ("PRU"), stock options and restricted stock awards. HP accounts for its stock-based compensation plans under SFAS No.123(R), "Share-Based Payment." Total stock-based compensation expense for the three and nine months ended July31, 2009 and 2008 was as follows: Three months ended July31 Nine months ended July31 2009 2008 2009 2008 Inmillions Inmillions Cost of sales $ 41 $ 34 $ 141 $ 106 Research and development 12 16 47 55 Selling, general and administrative 94 90 288 288 Acquisition-related charges 3 25 Stock-based compensation expense before income taxes 150 140 501 449 Income tax benefit (51 ) (38 ) (158 ) (130 ) Total stock-based compensation expense after income taxes $ 99 $ 102 $ 343 $ 319 Performance-based Restricted Units In fiscal 2008, HP implemented a program that provides for the issuance of PRUs representing hypothetical shares of HP common stock that may be issued under the Hewlett-Packard Company 2004 Stock Incentive Plan. Under the PRU program, a target number of units are awarded at the beginning of each three-year performance period. The number of shares released at the end of the performance period will range from zero to two times the target number depending on performance during the period. The performance metrics of the PRU program are (a)annual targets based on cash flow from operations as a percentage of revenue, and (b)an overall "modifier" based on Total Shareholder Return ("TSR") relative to the SP500 over the three-year performance period. TSR is calculated using the quarterly average performance of the SP500 during the three-year performance period. As the cash flow goals are considered performance conditions, the expense for these awards, net of estimated forfeitures, will be recorded over the three-year performance period based on the number of shares that are expected to be earned based on the achievement of the cash flow goals during the performance period. HP estimates the fair value of a target PRU share using the Monte Carlo simulation model, as the TSR modifier contains a market condition. The following weighted-average assumptions were used to determine the weighted-average fair value of the PRU awards: Three months ended July31 Nine months ended July31 2009 2008 2009 2008 Weighted-average fair value of grants per share $ 35.47 (1) $ 40.56 (2) $ 40.21 Expected volatility(3) 38 % 35 % 26 % Risk-free interest rate 1.15 % 1.34 % 3.13 % Dividend yield 0.94 % 0.88 % 0.70 % Expected life in months 30 30 33

Net Earnings Per Share

Net Earnings Per Share
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Net Earnings Per Share	Note3: Net Earnings Per Share HP calculates basic earnings per share using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes any dilutive effect of outstanding stock options, PRUs, restricted stock units, restricted stock and convertible debt. The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows: Three months ended July31 Nine months ended July31 2009 2008 2009 2008 In millions, except per share amounts Numerator: Net earnings $ 1,642 $ 2,027 $ 5,212 $ 6,217 Adjustment for interest expense on zero-coupon subordinated convertible notes, net of taxes 3 Net earnings, adjusted $ 1,642 $ 2,027 $ 5,212 $ 6,220 Denominator: Weighted-average shares used to compute basic EPS 2,382 2,459 2,395 2,497 Effect of dilutive securities: Dilution from employee stock plans 54 74 47 76 Zero-coupon subordinated convertible notes 4 Dilutive potential common shares 54 74 47 80 Weighted-average shares used to compute diluted EPS 2,436 2,533 2,442 2,577 Net earnings per share: Basic $ 0.69 $ 0.82 $ 2.18 $ 2.49 Diluted $ 0.67 $ 0.80 $ 2.13 $ 2.41 HP excludes options with exercise prices that are greater than the average market price from the calculation of diluted EPS because their effect would be anti-dilutive. For the three and nine months ended July31, 2009, HP excluded from the calculation of diluted EPS options to purchase 96million shares and 100million shares, respectively, as compared to 57million shares and 55million shares, respectively, in the prior-year comparable periods. Also, in accordance with SFAS123R, HP excluded from the calculation of diluted EPS options to purchase an additional 2million shares in the third quarter and the first nine months of fiscal 2009 compared to an additional 28million shares and 29million shares, respectively, in the prior-year comparable periods whose combined exercise price, unamortized fair value and excess tax benefits were greater in each of those periods than the average market price for HP's common stock because their effect would be anti-dilutive. As disclosed in Note2, during the nine months ended July31, 2009 and July31, 2008, HP granted PRU awards representing at target approximately 14million shares and 9million shares, respectively. HP includes the shares underlying PRU awards in the calculation of diluted EPS when they become contingently issuable per SFAS No.128, "Earnings per Share," and excludes such shares when they are not contingently issuable. Accordingly, for the three and nine months ended July31, 2009, HP has included 4million shares and 3million shares, respectively, underlying the PRU awards granted in fiscal 2008 when calculating diluted EPS as those shares becam

Balance Sheet Details

Balance Sheet Details
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Balance Sheet Details	Note4: Balance Sheet Details Balance sheet details were as follows: Accounts and Financing Receivables July31, 2009 October31, 2008 In millions Accounts receivable $ 15,376 $ 17,481 Allowance for doubtful accounts (641 ) (553 ) $ 14,735 $ 16,928 Financing receivables $ 2,580 $ 2,355 Allowance for doubtful accounts (48 ) (41 ) $ 2,532 $ 2,314 HP has revolving trade receivables-based facilities permitting it to sell certain trade receivables to third parties on a non-recourse basis. The aggregate maximum capacity under these programs was $586million as of July31, 2009. HP sold $1,321million of trade receivables during the first nine months of fiscal 2009. As of July31, 2009, HP had $342million available under these programs. Inventory July31, 2009 October31, 2008 In millions Finished goods $ 3,809 $ 5,219 Purchased parts and fabricated assemblies 2,041 2,660 $ 5,850 $ 7,879 Property, Plant and Equipment July31, 2009 October31, 2008 In millions Land $ 514 $ 526 Buildings and leasehold improvements 7,383 7,238 Machinery and equipment 12,232 11,121 20,129 18,885 Accumulated Depreciation (8,935 ) (8,047 ) $ 11,194 $ 10,838

Acquisitions

Acquisitions
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Acquisitions	Note5: Acquisitions In the first nine months of fiscal 2009, HP completed its acquisition of Lefthand Networks,Inc., a leading provider of storage virtualization and solutions for $347million in cash including direct transaction costs and the assumption of certain liabilities in connection with the transaction. HP recorded $273million to goodwill, $95million to purchased intangibles and $6million to in-process research and development ("IPRD") charges related to this acquisition. Lefthand Networks is being integrated into HP's Enterprise Storage and Servers segment within the Technology Solutions Group. HP does not expect goodwill recorded with respect to this acquisition to be deductible for tax purposes. HP has not presented pro forma results of operations because this acquisition is not material to HP's consolidated financial statements. Subsequent Acquisition In August 2009, HP completed its acquisition of IBRIX, Inc. a leading provider of enterprise-class file serving software. IBRIX will be integrated into the Enterprise Storageand Servers segment. This acquisition is not material to HP's consolidated financial statements. Acquisition of Electronic Data Systems Corporation ("EDS") As previously disclosed in its Consolidated Financial Statements for the fiscal year ended October31, 2008, HP completed its acquisition of EDS on August26, 2008. The purchase price for EDS was $13.0billion, comprised of $12.7billion cash paid for outstanding common stock, $328million for the estimated fair value of stock options and restricted stock units assumed, and $36million for direct transaction costs. Of the total purchase price, a preliminary estimate of $10.5billion has been allocated to goodwill, $4.5billion has been allocated to amortizable intangible assets acquired and $2.0billion has been allocated to net tangible liabilities assumed in connection with the acquisition. HP also expensed $30million for IPRD charges. The purchase price allocation as of the date of the acquisition reflects various preliminary estimates and analyses, including preliminary work performed by third-party valuation specialists, and is subject to change during the purchase price allocation period (generally one year from the acquisition date) as valuations are finalized. HP has evaluated and continues to evaluate certain pre-acquisition contingencies related to EDS that existed as of the acquisition date. Additional information, which existed as of the acquisition date but was at that time unknown to HP, may become known to HP during the remainder of the purchase price allocation period, and may result in goodwill adjustments. If these pre-acquisition contingencies become probable in nature and estimable after the end of the purchase price allocation period, amounts would be recorded for such matters in HP's results of operations. Pro forma results for EDS acquisition The following table presents the unaudited results of HP (including EDS) for the three and nine months ended July31, 2009 and the unaudited pro forma results for the three and nine months ended July31, 2008. The unaudited pro forma financial information for the three and ni

Goodwill and Purchased Intangib

Goodwill and Purchased Intangible Assets
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Goodwill and Purchased Intangible Assets	Note6: Goodwill and Purchased Intangible Assets Goodwill Goodwill allocated to HP's business segments as of July31, 2009 and changes in the carrying amount of goodwill for the nine months ended July31, 2009 are as follows: Services Enterprise Storage and Servers HP Software Personal Systems Group Imaging and Printing Group HP Financial Services Corporate Investments Total In millions Balance at October31, 2008 $ 16,284 $ 4,745 $ 6,162 $ 2,493 $ 2,463 $ 144 $ 44 $ 32,335 Goodwill acquired during the period 273 273 Goodwill adjustments 680 (2 ) (8 ) (1 ) 669 Balance at July31, 2009 $ 16,964 $ 5,016 $ 6,154 $ 2,493 $ 2,462 $ 144 $ 44 $ 33,277 During the nine months ended July31, 2009, HP recorded adjustments of approximately $500million to the estimated fair values of EDS's intangible assets and net liabilities acquired resulting in an increase to EDS's goodwill, which is allocated to the Services segment. These changes in the estimated fair values relate primarily to restructuring liabilities, fixed assets, intangible assets and net deferred tax liabilities. In addition, goodwill increased approximately $180million as a result of currency translation related to certain of EDS's foreign subsidiaries whose functional currency is not the U.S. dollar. Purchased Intangible Assets HP's purchased intangible assets associated with completed acquisitions are composed of: July31, 2009 October31, 2008 Gross Accumulated Amortization Net Gross Accumulated Amortization Net In millions Customer contracts, customer lists and distribution agreements $ 6,685 $ (2,806 ) $ 3,879 $ 6,530 $ (2,176 ) $ 4,354 Developed and core technology and patents 4,151 (2,627 ) 1,524 4,189 (2,147 ) 2,042 Product trademarks 247 (170 ) 77 253 (109 ) 144 Total amortizable purchased intangible assets 11,083 (5,603 ) 5,480 10,972 (4,432 ) 6,540 Compaq trade name 1,422 1,422 1,422 1,422 Total purchased intangible assets $ 12,505 $ (5,603 ) $ 6,902 $ 12,394 $ (4,432 ) $ 7,962 For the nine months ended July31, 2009, HP recorded an increase of $51million to purchased intangibles as a result of currency translation related to certain of EDS's foreign subsidiaries whose financial currency is not the U.S. dollar. HP also recorded a reduction of $35million to the estimated fair value of EDS's intangible assets acquired. Estimated future amortization expense related to finite lived purchased intangible assets at July31, 2009 is as follows: Fiscal year: In millions 2009 (remaining 3months) $ 354 2010 1,320 2011 1,035 2012 844 2013 707 Thereafter 1,220 Total $ 5,480

Restructuring Charges

Restructuring Charges
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Restructuring Charges	Note7: Restructuring Charges Fiscal 2009 Restructuring Plan In May 2009, HP's management approved and initiated a restructuring plan to structurally change and improve the effectiveness of IPG, PSG and ESS. In the third quarter of fiscal 2009, HP recorded a net charge of $295million in severance-related costs associated with the planned elimination of approximately 5,000 positions. As of July31, 2009, approximately 1,200 positions have been eliminated. HP expects the majority of the restructuring costs to be paid out by the fourth quarter of fiscal 2010. In future quarters, HP expects to record an additional charge of approximately $8million related to severance costs associated with this plan. Fiscal 2008 Restructuring Plan In connection with the acquisition of EDS on August26, 2008, HP's management approved and initiated a restructuring plan to streamline the combined company's services business and to better align the structure and efficiency of that business with HP's operating model. The restructuring plan is expected to be implemented over four years from the acquisition date and includes changes to the combined company's workforce as well as changes to corporate overhead functions such as real estate and IT. In the fourth quarter of fiscal 2008, HP recorded a liability of approximately $1.8billion related to this restructuring plan. Approximately $1.5billion of the liability was associated with pre-acquisition EDS and was recorded to goodwill, and the remaining approximately $0.3billion was associated with HP and was recorded as a restructuring charge. The liability consisted mainly of severance costs to eliminate approximately 25,000 positions, costs to vacate duplicative facilities and costs associated with early termination of certain contractual obligations. HP recorded net charges for severance and facilities costs of $67million and $310million, for the three and nine months ended July31, 2009, respectively, along with year-to-date adjustments to goodwill of $276million. As of July31, 2009, over 16,000 positions have been eliminated. HP expects the majority of the restructuring costs to be paid out by the second quarter of fiscal 2010. In future quarters, HP expects to record an additional charge of approximately $497million related to the cost to vacate duplicative facilities and severance costs. All restructuring costs associated with pre-acquisition EDS are reflected in the purchase price of EDS in accordance with EITF95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." These costs are subject to change based on the actual costs incurred. Changes to these estimates could increase or decrease the amount of the purchase price allocated to goodwill. Prior Fiscal Year Plans Restructuring plans initiated prior to 2008 are substantially complete and HP expects to record only minor revisions to these plans as necessary. Summary of Restructuring Plans The adjustments to the accrued restructuring expenses related to all of HP's restructuring plans described above for the three and nine months ended July31, 2009 were as follows:

Fair Value

Fair Value
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Fair Value	Note8: Fair Value Effective November1, 2008, HP adopted the applicable portions of SFAS157 as referenced in Note1. Pursuant to the provisions of SFAS157-2, HP will not apply the provisions of SFAS157 until the first quarter of fiscal 2010 for the following major categories of nonfinancial assets and liabilities from the Consolidated Condensed Balance Sheet: Property, plant and equipment, Goodwill, Purchased intangible assets and the Asset retirement obligations within Other accrued liabilities and Other liabilities. The adoption did not have a material impact on HP's financial statements and did not result in any changes to the opening balance of retained earnings as of November1, 2008. SFAS157 establishes a new framework for measuring fair value and expands related disclosures. The SFAS157 framework requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques required by SFAS157 are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect HP's assumptions about market participant assumptions based on best information available. Observable inputs are the preferred source of values. In accordance with SFAS157, these two types of inputs create the following fair value hierarchy: Level1Quoted prices (unadjusted) for identical instruments in active markets. Level2Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level3Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable. The following section describes the valuation methodologies HP uses to measure its financial assets and liabilities at fair value. Cash Equivalents: HP holds money market funds investing mainly in treasury bills, which are classified under level1. HP also invests in time deposits and commercial paper, which are classified under level2. Investments: HP holds time deposits, corporate and foreign government notes and bonds, commercial paper, and common stock and equivalents. In general, and where applicable, HP uses quoted prices in active markets for identical assets or liabilities to determine fair value. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, HP uses quoted prices for similar assets and liabilities or inputs that are observable either directly or indirectly. If quoted prices for identical or similar assets are not available, HP uses internally developed valuation models, whose inputs include bid prices, and third party valuations utilizing underlying assets assumpt

Financial Instruments

Financial Instruments
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Financial Instruments	Note9: Financial Instruments Investments in Debt and Equity Securities Investments in short-term and long-term available-for-sale debt and equity securities at fair value as of July31, 2009 and October31, 2008 were as follows: As of July31, 2009 As of October31, 2008 Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value In millions Available-for-Sale Securities Debt securities: Time deposits $ 66 $ $ $ 66 $ 103 $ $ $ 103 Commercial paper 79 (30 ) 49 83 (20 ) 63 Other debt securities 25 25 21 1 22 Total debt securities 170 (30 ) 140 207 1 (20 ) 188 Equity securities in public companies 3 3 6 3 2 5 $ 173 $ 3 $ (30 ) $ 146 $ 210 $ 3 $ (20 ) $ 193 Time deposits consist of certificate of deposits with maturity dates greater than three months. Other debt securities consist primarily of fixed-interest securities invested for early retirement purposes and also a fixed income fund. Equity securities in public companies are primarily common stock. As discussed in Note8, HP estimated the fair values based on quoted market prices or pricing models using current market rates. These estimated fair values may not be representative of actual values that could have been realized as of the reporting period or that will be realized in the future. The gross unrealized loss as of July31, 2009 was due primarily to declines in commercial paper that had been in a continuous loss position for less than twelve months. HP intends to hold the commercial paper and believes that it is unlikely that HP will be required to sell the commercial paper before recovery of the amortized cost. In the three months ended July31, 2009, HP did not recognize any impairment charge associated with the commercial paper. In the nine months ended July31, 2009, HP recognized an impairment charge of $2million associated with its commercial paper. Contractual maturities of available-for-sale debt securities at July31, 2009 were as follows: Available-for-Sale Securities Cost Estimated Fair Value In millions Due in less than one year $ 66 $ 66 Due in 1-5years 25 25 Due in more than five years 79 49 $ 170 $ 140 There were no sales or maturities of available-for-sale and other securities for the three months ended July31, 2009. Proceeds from sales or maturities of available-for-sale and other securities were $103million for the nine months ended July31, 2009. There were no realized gains or losses on available-for-sale and other securities for the three and nine months ended July31, 2009. The specific identification method is used to account for gains and losses on availabl

Financing Receivables and Opera

Financing Receivables and Operating Leases
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Financing Receivables and Operating Leases	Note10: Financing Receivables and Operating Leases Financing receivables represent sales-type and direct-financing leases resulting from the marketing of HP's and third-party products. These receivables typically have terms from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The components of net financing receivables, which are included in financing receivables and long-term financing receivables and other assets, were as follows: July31, 2009 October31, 2008 In millions Minimum lease payments receivable $ 6,033 $ 5,338 Allowance for doubtful accounts (108 ) (90 ) Unguaranteed residual value 245 254 Unearned income (552 ) (466 ) Financing receivables, net 5,618 5,036 Less current portion (2,532 ) (2,314 ) Amounts due after one year, net $ 3,086 $ 2,722 Equipment leased to customers under operating leases was $3.0billion at July31, 2009 and $2.3billion at October31, 2008 and is included in Property, plant and equipment in the Consolidated Condensed Balance Sheets. Accumulated depreciation on these operating leases was $0.9billion at July31, 2009 and $0.5billion at October31, 2008.

Guarantees

Guarantees
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Guarantees	Note11: Guarantees Guarantees and Indemnifications In the ordinary course of business, HP may provide certain clients, principally governmental entities, with subsidiary performance guarantees and/or financial performance guarantees, which may be backed by standby letters of credit or surety bonds. In general, HP would be liable for the amounts of these guarantees in the event HP or HP's subsidiaries' nonperformance permits termination of the related contract by the client, the likelihood of which HP believes is remote. HP believes that the company is in compliance with the performance obligations under all material service contracts for which there is a performance guarantee. As a result of the acquisition of EDS, HP acquired certain service contracts supported by client financing or securitization arrangements. Under specific circumstances involving non-performance resulting in service contract termination or failure to comply with terms under the financing arrangement, HP would be required to acquire certain assets. HP considers the possibility of its failure to comply to be remote and the asset amounts involved to be immaterial. In the ordinary course of business, HP enters into contractual arrangements under which HP may agree to indemnify the third party to such arrangement from any losses incurred relating to the services they perform on behalf of HP or for losses arising from certain events as defined within the particular contract, which may include, for example, litigation or claims relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. Historically, payments made related to these indemnifications have been immaterial. Warranty HP provides for the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers; however, product warranty terms offered to customers, ongoing product failure rates, material usage and service delivery costs incurred in correcting a product failure, as well as specific product class failures outside of HP's baseline experience, affect the estimated warranty obligation. If actual product failure rates, repair rates or any other post sales support costs differ from these estimates, revisions to the estimated warranty liability would be required. The changes in HP's aggregate product warranty liabilities for the nine months ended July31, 2009 were as follows: In millions Product warranty liability at October31, 2008 $ 2,614 Accruals for warranties issued 1,915 Adjustments related to pre-existing warranties (including changes in estimates) (193 ) Settlements made (in cash or in kind) (2,003 ) Product warranty liability at July31, 2009 $ 2,333

Borrowings

Borrowings
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Borrowings	Note12: Borrowings Notes Payable and Short-Term Borrowings Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows: July31, 2009 October31, 2008 Amount Outstanding Weighted- Average Interest Rate Amount Outstanding Weighted- Average Interest Rate In millions Commercial paper $ 275 1.4 % $ 7,146 2.7 % Current portion of long-term debt 2,610 2.8 % 2,674 4.3 % Notes payable to banks, lines of credit and other 403 2.2 % 356 5.3 % $ 3,288 $ 10,176 Notes payable to banks, lines of credit and other includes deposits associated with HP's banking-related activities of approximately $311million and $262million at July31, 2009 and October31, 2008, respectively. Long-Term Debt Long-term debt was as follows: July31, 2009 October31, 2008 In millions U.S. Dollar Global Notes 2002 Shelf Registration Statement: $500 issued at discount to par of 99.505% in June 2002 at 6.5%, due July 2012 $ 499 $ 499 2006 Shelf Registration Statement: $600 issued at par in February 2007 at three-month USD LIBOR plus 0.11%, due March 2012 600 600 $900 issued at discount to par of 99.938% in February 2007 at 5.25%, due March 2012 900 900 $500 issued at discount to par of 99.694% in February 2007 at 5.4%, due March 2017 499 499 $1,000 issued at par in June 2007 at three-month USD LIBOR plus 0.01%, due June 2009 1,000 $1,000 issued at par in June 2007 at three-month USD LIBOR plus 0.06%, due June 2010 1,000 1,000 $750 issued at par in March 2008 at three-month USD LIBOR plus 0.40%, due September 2009 750 750 $1,500 issued at discount to par of 99.921% in March 2008 at 4.5%, due March 2013 1,499 1,499 $750 issued at discount to par of 99.932% in March 2008 at 5.5%, due March 2018 750 750 $2,000 issued at discount to par of 99.561% in December 2008 at 6.125%, due March 2014 1,992 $275 issued at par in February 2009 at three-month USD LIBOR plus 1.75%, due February 2011 275 $1,000 issued at discount to par of 99.956% in February 2009 at 4.25%, due February 2012 1,000 $1,500 issued at discount to par of 99.993% in February 2009 at 4.75%, due June 2014 1,500 2009 Shelf Registration Statement: $750 issued at par in May 2009 at three-month USD LIBOR plus 1.05%, due May 2011 750 $1,000 issued at discount to par of 99.967% in May 2009 at 2.25%, due May 2011 1,000 $250 issued at discount to par of 99.984% in May 2009 at 2.95%, due August 2012 250 13,264 7,497 July31, 2009 October31, 2008 In millions EDS Senior Notes $700 issued October 1999 at 7.125%, due October 2009 702 712 $1,100 issued June 2003 at 6.0%, due August 2013 1,143 1,150 $300 issued O

Income Taxes

Income Taxes
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Income Taxes	Note13: Income Taxes Provision for Taxes HP's effective tax rate was 17.8% and 20.6% for the three months ended July31, 2009 and July31, 2008, respectively, and 18.1% and 20.6% for the nine months ended July31, 2009 and July31, 2008, respectively. HP's effective tax rate generally differs from the U.S. federal statutory rate of 35% due to favorable tax rates associated with certain earnings from HP's operations in lower-tax jurisdictions throughout the world. HP has not provided U.S. taxes for all of such earnings because HP plans to reinvest some of those earnings indefinitely outside the United States. In the three and nine months ended July31, 2009, HP recorded discrete items with a net tax benefit of $145million and $163million, respectively, decreasing the effective tax rate. These amounts include a net tax benefit of $141million for the adjustment to estimated fiscal 2008 tax accruals upon filing the 2008 U.S. federal income tax return and other miscellaneous discrete items that resulted in a net tax benefit of $4million and $22million for the three and nine months ended July31, 2009, respectively. In the three and nine months ended July31, 2008, HP recorded discrete items with a net tax benefit of $5million and $52million, respectively, decreasing the effective tax rate. These amounts include reductions to net income tax accruals of $72million and $296million for the three and nine months ended July31, 2008, respectively, as a result of settlements with tax authorities regarding certain transfer pricing issues for fiscal years 1993 through 2005. These favorable adjustments in the three and nine months ended July31, 2008 were offset in part by a tax charge of $44million for the adjustment to estimated fiscal 2007 tax accruals upon filing the 2007 U.S. federal income tax return, and by net increases of $30million and $235million, respectively, to deferred tax liabilities related to earnings outside the United States. HP recorded other miscellaneous discrete items that resulted in a net tax benefit of $7million and $35million for the three and nine months ended July31, 2008, respectively. During the third quarter of fiscal 2009, the amounts of gross unrecognized tax benefits determined in accordance with Financial Interpretation No.48, "Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No.109" ("FIN48") decreased by $160million to $2.1billion as of July31, 2009, of which up to $775million would affect HP's effective tax rate if realized. HP recognizes interest expense and penalties on unrecognized tax benefits and interest income from favorable settlements and income tax receivables within income tax expense. As of July31, 2009 HP had accrued a net $158million income tax payable for interest and penalties. There were no material amounts of net interest income on tax overpayments recorded during the three and nine months ended July31, 2009. HP engages in continuous discussion and negotiation with tax authorities regarding tax matters in the various jurisdictions. HP does not expect complete resolution of any Internal Revenue Service ("IRS") audit cycle within the next 12months. However

Shareholders Equity

Shareholders Equity
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Stockholders' Equity	Note14: Stockholders' Equity Share Repurchase Program HP's share repurchase program authorizes both open market and private repurchase transactions. In the three and nine months ended July31, 2009, HP executed share repurchases of 29million shares and 74million shares, respectively. For the three months ended July31, 2009, repurchases of 28million shares were settled for $1.0billion. For the nine months ended July31, 2009, repurchases of approximately 85million shares were settled for $3.0billion, which included 14million shares repurchased in transactions that were executed in fiscal 2008 but settled in the first nine months of fiscal 2009. HP had approximately 3million shares repurchased in the third quarter of fiscal 2009 that will be settled in the fourth quarter of fiscal 2009. HP paid approximately $1.6billion and $7.7billion in connection with repurchases of approximately 34million shares and 171million shares in the three and nine months ended July31, 2008, respectively. As of July31, 2009, HP had remaining authorization of $6.1billion for future share repurchases under the $8.0billion repurchase authorization approved by HP's Board of Directors on September19, 2008. Comprehensive Income The changes in the components of other comprehensive income ("OCI"), net of taxes, were as follows: Three months ended July31 2009 2008 In millions Net earnings $ 1,642 $ 2,027 Net change in unrealized gains/losses on available-for-sale securities: Change in net unrealized gains, net of tax of $1million in 2009 and with no tax effect in 2008 2 1 2 1 Net change in unrealized gains/losses on cash flow hedges: Change in net unrealized (losses) gains, net of tax benefit of $112million in 2009 and net of tax of $1million in 2008 (193 ) 2 Net unrealized (gains) losses reclassified into earnings, net of tax of $48million in 2009 and net of tax benefit of $5million in 2008 (82 ) 9 (275 ) 11 Net change in cumulative translation adjustment, net of tax of $189million in 2009 and $6million in 2008 423 7 Net change in unrealized components of defined benefit plans, net of tax benefit of $30million in 2009 and $7million in 2008 (20 ) (6 ) Comprehensive income $ 1,772 $ 2,040 Nine months ended July31 2009 2008 In millions Net earnings $ 5,212 $ 6,217 Net change in unrealized gains/losses on available-for-sale securities: Change in net unrealized gains (losses), net of tax of $1million in 2009 and with no tax effect in 2008 6 (2 ) Net unrealized gains reclassified into earnings, with no tax effect in 2009 and 2008 (1 ) 5 (2 ) Net change in unrealized gains/losses on cash flow hedges: Change in net unrealized (losses) gains, net of tax benefit of $138million in 2009 and net of tax of $6million in 2008 (238 ) 11 Net unrealized (gains) losses reclassified into earnings, net of tax of $418million in 2009 and net o

Retirement and Post-Retirement

Retirement and Post-Retirement Benefit Plans
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Retirement and Post-Retirement Benefit Plans	Note15: Retirement and Post-Retirement Benefit Plans Modifications to Defined Contribution Plans HP offers various defined contribution plans for U.S. and non-U.S. employees. As disclosed in our Consolidated Financial Statements for the fiscal year ended October31, 2008, HP matches employee contributions to the U.S. HP 401(k) Plan with cash contributions up to a maximum of 6% of eligible compensation for U.S. employees hired prior to August1, 2008 and up to a maximum of 4% of eligible compensation for U.S. employees hired on or after August1, 2008. Further, effective January1, 2009, U.S. employees participating in the EDS 401(k) Plan became eligible for a 4% HP matching contribution on eligible compensation. Effective April1, 2009, HP matching contributions under both the U.S. HP 401(k) Plan and the EDS 401(k) Plan were changed to a quarterly, discretionary, performance-based match of up to a maximum of 4% of eligible compensation for all U.S. employees, which will be determined each fiscal quarter based on business results. HP matching contributions will vary from 0% to 100% of the maximum 4% match, based on factors such as quarterly earnings, market share growth, and performance relative to market and economic conditions. HP's matching contributions for the extended period of April1, 2009 through July31, 2009 was 100% of the maximum 4% match. HP's net pension and post-retirement benefit costs were as follows: Three months ended July31 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post- Retirement Benefit Plans 2009 2008 2009 2008 2009 2008 In millions Service cost $ 7 $ 8 $ 79 $ 66 $ 3 $ 7 Interest cost 148 59 159 109 18 20 Expected return on plan assets (133 ) (63 ) (170 ) (171 ) (8 ) (10 ) Amortization and deferrals: Actuarial (gain) loss (19 ) (9 ) 18 1 2 5 Prior service benefit (2 ) (2 ) (20 ) (14 ) Net periodic benefit cost (gain) $ 3 $ (5 ) $ 84 $ 3 $ (5 ) $ 8 Special termination benefits 1 Net benefit cost (gain) $ 3 $ (5 ) $ 85 $ 3 $ (5 ) $ 8 Nine months ended July31 U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post- Retirement Benefit Plans 2009 2008 2009 2008 2009 2008 In millions Service cost $ 20 $ 24 $ 231 $ 193 $ 10 $ 21 Interest cost 444 177 458 323 53 59 Expected return on plan assets (399 ) (190 ) (493 ) (506 ) (24 ) (30 ) Amortization and deferrals: Actuarial (gain) loss (53 ) (27 ) 52 1 5 15 Prior service benefit (6 ) (6 ) (59 ) (42 ) Net periodic benefit cost (gain) $ 12 $ (16 ) $ 242 $ 5 $ (15 ) $ 23 Settlement gain (1 ) Curtailme

Litigation and Contingencies

Litigation and Contingencies
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Litigation and Contingencies	Note16: Litigation and Contingencies HP is involved in lawsuits, claims, investigations and proceedings, including those identified below, consisting of intellectual property, commercial, securities, employment, employee benefits and environmental matters that arise in the ordinary course of business. In accordance with SFAS No.5, "Accounting for Contingencies," HP records a provision for a liability when management believes that it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. HP believes it has adequate provisions for any such matters. HP reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Based on its experience, HP believes that any damage amounts claimed in the specific matters discussed below are not a meaningful indicator of HP's potential liability. Litigation is inherently unpredictable. However, HP believes that it has valid defenses with respect to legal matters pending against it. Nevertheless, it is possible that cash flows or results of operations could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies or because of the diversion of management's attention and the creation of significant expenses. Pending Litigation, Proceedings and Investigations Copyright levies. As described below, proceedings are ongoing against HP in certain European Union ("EU") member countries, including litigation in Germany, seeking to impose levies upon equipment (such as multifunction devices ("MFDs"), personal computers ("PCs") and printers) and alleging that these devices enable producing private copies of copyrighted materials. The total levies due, if imposed, would be based upon the number of products sold and the per-product amounts of the levies, which vary. Some EU member countries that do not yet have levies on digital devices are expected to implement similar legislation to enable them to extend existing levy schemes, while some other EU member countries are expected to limit the scope of levy schemes and applicability in the digital hardware environment. HP, other companies and various industry associations are opposing the extension of levies to the digital environment and advocating alternative models of compensation to rights holders. VerwertungsGesellschaft Wort ("VG Wort"), a collection agency representing certain copyright holders, instituted non-binding arbitration proceedings against HP in June 2001 in Germany before the arbitration board of the Patent and Trademark Office. The proceedings relate to whether and to what extent copyright levies for photocopiers should be imposed in accordance with copyright laws implemented in Germany on MFDs that allegedly enable the production of copies by private persons. Following unsuccessful arbitration, VG Wort filed a lawsuit against HP in May 2004 in the Stuttgart Civil Court in Stuttgart, Germany seeking levies on certain MFDs sold from 1997 to 2001. On December22, 2004, the cour

Segment Information

Segment Information
	9 Months Ended Jul. 31, 2009 USD / shares
Notes to Consolidated Condensed Financial Statements
Segment Information	Note17: Segment Information Description of Segments HP is a leading global provider of products, technologies, software, solutions and services to individual consumers, small and medium sized businesses ("SMBs"), and large enterprises including the public and education sectors. HP's offerings span personal computing and other access devices; imaging and printing-related products and services; enterprise information technology ("IT") infrastructure, including enterprise storage and server technology; software that optimizes business technology investments; financial services including leasing; and multi-vendor customer services, including technology support and maintenance, consulting and integration, information technology and business process outsourcing services and application services. HP and its operations are organized into seven business segments for financial reporting purposes: Services, Enterprise Storage and Servers ("ESS"), HP Software, the Personal Systems Group ("PSG"), the Imaging and Printing Group ("IPG"), HP Financial Services ("HPFS"), and Corporate Investments. HP's organizational structure is based on a number of factors that management uses to evaluate, view and run its business operations, which include, but are not limited to, customer base, homogeneity of products and technology. The business segments disclosed in the accompanying Consolidated Condensed Financial Statements are based on this organizational structure and information reviewed by HP's management to evaluate the business segment results. Services, ESS and HP Software are reported collectively as a broader Technology Solutions Group ("TSG"). In order to provide a supplementary view of HP's business, aggregated financial data for TSG is presented herein. HP has reclassified segment operating results for fiscal 2008 to conform to certain fiscal 2009 organizational realignments. None of the changes impacts HP's previously reported consolidated net revenue, earnings from operations, net earnings or net earnings per share. Future changes to this organizational structure may result in changes to the business segments disclosed. A description of the types of products and services provided by each business segment follows. Technology Solutions Group. Each of the business segments within TSG is described in detail below. Services, formerly HP Services, was renamed after the reorganization of the business units subsequent to the acquisition of EDS. Services provides consulting, outsourcing, and technology services across infrastructure, applications, and business process domains. Services delivers to its clients by leveraging investments in consulting and support professionals, infrastructure technology, applications, standardized methodologies, and global supply and delivery. It is divided into four main business units: applications services ("AS"), infrastructure technology outsourcing ("ITO"), business process outsourcing ("BPO") and technology services ("TS"). AS provides a full lifecycle of service offerings to support diverse client requirements, including transformation and modernization services, applications development and appl

Document And Entity Information

Document And Entity Information (USD $)
	9 Months Ended Jul. 31, 2009	Aug. 31, 2009	Apr. 30, 2008
Document and Entity Information
Entity Registrant Name	HEWLETT-PACKARD COMPANY
Entity Central Index Key	0000047217
Document Type	10-Q
Document Period End Date	2009-07-31
Amendment Flag	false
Current Fiscal Year End Date	--10-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$114,540,461,000
Entity Common Stock, Shares Outstanding		2,371,067,899