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PALO ALTO, CA -- (Marketwire) -- 02/21/13 -- HP (NYSE: HPQ)

• First quarter non-GAAP diluted earnings per share of $0.82, down 11% from the prior year, above previously provided outlook of $0.68 to $0.71
• First quarter GAAP diluted earnings per share of $0.63, down 14% from the prior year, above previously provided outlook of $0.34 to $0.37 per share
• First quarter net revenue of $28.4 billion, down 6% year over year and down 4% when adjusted for the effects of currency
• Cash flow from operations of $2.6 billion, up 115% from the prior year
• Returned $511 million in cash to shareholders in the form of dividends and share repurchases
• Improved company net debt position for the fourth consecutive quarter by over $1 billion

HP first quarter fiscal 2013 financial performance

                                            Q1 FY13     Q1 FY12        Y/Y
GAAP net revenue ($B)                    $     28.4  $     30.0         (6%)
GAAP operating margin                           6.2%        6.8% (0.6 pts.)
GAAP net earnings ($B)                   $      1.2  $      1.5        (16%)
GAAP diluted EPS                         $     0.63  $     0.73        (14%)
Non-GAAP operating margin                       7.9%        8.6% (0.7 pts.)
Non-GAAP net earnings ($B)               $      1.6  $      1.8        (12%)
Non-GAAP diluted EPS                     $     0.82  $     0.92        (11%)

Information about HP's use of non-GAAP financial information is provided under "Use of non-GAAP financial information" below.

HP today announced financial results for its first fiscal quarter ended Jan. 31, 2013. First quarter GAAP diluted earnings per share (EPS) was $0.63, down from $0.73 in the prior-year period and above its previously provided outlook of $0.34 to $0.37 per share. First quarter non-GAAP diluted EPS was $0.82, down from $0.92 in the prior-year period and above its previously provided outlook of $0.68 to $0.71 per share. First quarter non-GAAP earnings information excludes after-tax costs of $373 million, or $0.19 per diluted share, related to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges. For the first quarter, net revenue of $28.4 billion was down 6% year over year and down 4% when adjusted for the effects of currency.

"We beat our non-GAAP diluted EPS outlook for the quarter by $0.11 per share, driven by improved execution, improvement in our channel and go-to-market efforts and the impact of the restructuring program we announced in May 2012," said Meg Whitman, HP president and chief executive officer. "While there's still a lot of work to do to generate the kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP's future."

Outlook
For the second quarter of fiscal 2013, HP estimates non-GAAP diluted EPS to be in the range of $0.80 to $0.82 and GAAP diluted EPS to be in the range of $0.38 to $0.40. Second quarter fiscal 2013 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.42 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

For the full year fiscal 2013, HP estimates a non-GAAP diluted EPS to be in the range of $3.40 to $3.60 and GAAP diluted EPS to be in the range of $2.30 to $2.50, in line with HP's previously communicated outlook. Full year fiscal 2013 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.10 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

"Our primary focus is to deliver on the full year outlook, and I feel good about the rest of the year," added Whitman. "We'll be bringing a number of new programs and disruptive innovations to market in the coming quarters, and we expect the benefits from our restructuring will accelerate through fiscal 2013."

Asset Management
HP generated $2.6 billion in cash flow from operations in the first quarter, up 115% from the prior-year period. Inventory ended the quarter at $6.4 billion, with days of inventory down 2 days year over year to 26 days. Accounts receivable of $14.2 billion was down 3 days year over year to 45 days. Accounts payable ended the quarter at $11.7 billion, flat from the prior-year period at 48 days. HP's dividend payment of $0.132 per share in the first quarter resulted in cash usage of $258 million. HP also utilized $253 million of cash during the quarter to repurchase approximately 19.2 million shares of common stock in the open market. HP exited the quarter with $13.1 billion in gross cash.

"After returning more than half a billion dollars to shareholders through share repurchases and dividends in the quarter, we improved our operating company net debt position for the fourth successive quarter by more than $1 billion to $4.7 billion," said Whitman. "We'll continue to take this approach and focus on rebuilding our balance sheet."

First Quarter Fiscal 2013 Segment Results

• Personal Systems revenue was down 8% year over year with a 2.7% operating margin. Commercial revenue decreased 4%, and Consumer revenue declined 13%. Total units were down 5% with Desktops units up 10% and Notebooks units down 14%.
• Printing revenue declined 5% year over year with a strong operating margin of 16.1%. Total hardware units were down 11% year over year. Commercial hardware units were down 6% year over year, and Consumer hardware units were down 13% year over year.
• Enterprise Group revenue declined 4% year over year with a 15.5% operating margin. Networking revenue was up 4%, Industry Standard Servers revenue was down 3%, Business Critical Systems revenue was down 24%, Storage revenue was down 13% and Technology Services revenue was down 1% year over year.
• Enterprise Services revenue declined 7% year over year with a 1.3% operating margin. Application and Business Services revenue was down 9% year over year, and IT Outsourcing revenue declined 6% year over year.
• Software revenue was down 2% year over year with a 17.0% operating margin. Support revenue was up 11% while license revenue was down 16% and services revenue was down 8% year over year.
• HP Financial Services revenue grew 1% year over year as a 1% increase in net portfolio assets was offset by a 25% decrease in financing volume. The business delivered a 10.6% operating margin.

More information on HP's earnings, including additional financial analysis and an earnings overview presentation, is available on HP's Investor Relations website at www.hp.com/investor/home.

HP's Q1 FY13 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2013Q1webcast.

About HP
HP creates new possibilities for technology to have a meaningful impact on people, businesses, governments and society. The world's largest technology company, HP brings together a portfolio that spans printing, personal computing, software, services and IT infrastructure to solve customer problems. More information about HP is available at http://www.hp.com.

Use of non-GAAP financial information
To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below or elsewhere in the materials accompanying this news release. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management's decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under "Use of Non-GAAP Financial Measures" after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, cash and cash equivalents, cash flow from operations or total company debt prepared in accordance with GAAP.

Forward-looking statements
This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, earnings per share, tax provisions, cash flows, benefit obligations, share repurchases, currency exchange rates or other financial items; any projections of the amount, timing or impact of cost savings or restructuring charges; any statements of the plans, strategies and objectives of management for future operations, including the execution of restructuring plans and any resulting cost savings or revenue or profitability improvements; any statements concerning the expected development, performance, market share or competitive performance relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the need to address the many challenges facing HP's businesses; the competitive pressures faced by HP's businesses; risks associated with executing HP's strategy; the impact of macroeconomic and geopolitical trends and events; the need to manage third-party suppliers and the distribution of HP's products and services effectively; the protection of HP's intellectual property assets, including intellectual property licensed from third parties; risks associated with HP's international operations; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs and respond to emerging technological trends; the execution and performance of contracts by HP and its suppliers, customers and partners; the hiring and retention of key employees; integration and other risks associated with business combination and investment transactions; the execution, timing and results of restructuring plans, including estimates and assumptions related to the cost and the anticipated benefits of implementing those plans; the resolution of pending investigations, claims and; and other risks that are described in HP's Annual Report on Form 10-K for the fiscal year ended October 31, 2012 and HP's other filings with the Securities and Exchange Commission. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP's Form 10-Q for the fiscal quarter ended January 31, 2013. In particular, determining HP's actual tax balances and provisions as of January 31, 2013 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP's Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
               CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
                                (Unaudited)
                   (In millions except per share amounts)

                                                Three months ended
                                      -------------------------------------
                                      January 31,  October 31,  January 31,
                                          2013         2012         2012
                                      -----------  -----------  -----------

Net revenue                           $    28,359  $    29,959  $    30,036

Costs and expenses:
  Cost of sales                            22,029       22,711       23,313
  Research and development                    794          909          786
  Selling, general and administrative       3,300        3,227        3,367
  Amortization of purchased
   intangible assets                          350          372          466
  Impairment of goodwill and
   purchased intangible assets                  -        8,847            -
  Restructuring charges                       130          378           40
  Acquisition-related charges                   4            3           22
                                      -----------  -----------  -----------
    Total costs and expenses               26,607       36,447       27,994
                                      -----------  -----------  -----------

Earnings (loss) from operations             1,752       (6,488)       2,042

Interest and other, net                      (179)        (188)        (221)
                                      -----------  -----------  -----------

Earnings (loss) before taxes                1,573       (6,676)       1,821

Provision for taxes                          (341)        (178)        (353)
                                      -----------  -----------  -----------

Net earnings (loss)                   $     1,232  $    (6,854) $     1,468
                                      ===========  ===========  ===========

Net earnings (loss) per share:
  Basic                               $      0.63  $     (3.49) $      0.74
  Diluted                             $      0.63  $     (3.49) $      0.73

Cash dividends declared per share     $      0.26  $         -  $      0.24

Weighted-average shares used to
 compute net earnings (loss) per
 share:
  Basic                                     1,953        1,964        1,981
  Diluted                                   1,956        1,964        1,998


                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
        ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
                  OPERATING MARGIN AND EARNINGS PER SHARE
                                (Unaudited)
                   (In millions except per share amounts)

                    Three              Three               Three
                    months             months              months
                    ended    Diluted   ended     Diluted   ended    Diluted
                   January  earnings  October   earnings  January  earnings
                     31,       per      31,        per      31,       per
                     2013     share     2012      share     2012     share
                   -------  --------  -------   --------  -------  --------

GAAP net earnings
 (loss)            $ 1,232  $   0.63  $(6,854)  $  (3.49) $ 1,468  $   0.73

Non-GAAP
 adjustments:
  Amortization of
   purchased
   intangible
   assets              350      0.18      372       0.19      466      0.24
  Impairment of
   goodwill and
   purchased
   intangible
   assets(a)             -         -    8,847       4.51        -         -
  Restructuring
   charges             130      0.07      378       0.19       40      0.02
  Acquisition-
   related charges
   in earnings
   from operations       4         -        3          -       22      0.01
  Adjustments for
   taxes(b)           (111)    (0.06)    (465)     (0.24)    (164)    (0.08)
                   -------  --------  -------   --------  -------  --------
Non-GAAP net
 earnings          $ 1,605  $   0.82  $ 2,281   $   1.16  $ 1,832  $   0.92
                   =======  ========  =======   ========  =======  ========


GAAP earnings
 (loss) from
 operations        $ 1,752            $(6,488)            $ 2,042

Non-GAAP
 adjustments:
  Amortization of
   purchased
   intangible
   assets              350                372                 466
  Impairment of
   goodwill and
   purchased
   intangible
   assets(a)             -              8,847                   -
  Restructuring
   charges             130                378                  40
  Acquisition-
   related charges
   in earnings
   from operations       4                  3                  22
                   -------            -------             -------
Non-GAAP earnings
 from operations   $ 2,236            $ 3,112             $ 2,570
                   =======            =======             =======

GAAP operating
 margin                  6%               (22%)                 7%
Non-GAAP
 adjustments             2%                32%                  2%
                   -------            -------             -------
Non-GAAP operating
 margin                  8%                10%                  9%
                   =======            =======             =======


(a) For the period ended October 31, 2012, represents a goodwill and
 intangible asset impairment charge of $8.8 billion associated with the
 Autonomy reporting unit within the Software segment.

(b) For the period ended October 31, 2012, the adjustment for taxes is net
 of valuation allowances of $0.5 billion provided for certain deferred tax
 assets.

                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                    CONSOLIDATED CONDENSED BALANCE SHEETS
                                (In millions)

                                                    January 31,  October 31,
                                                       2013         2012
                                                   ------------ ------------
                                                    (Unaudited)
ASSETS

Current assets:
  Cash and cash equivalents                        $     12,589 $     11,301
  Accounts receivable                                    14,236       16,407
  Financing receivables                                   3,316        3,252
  Inventory                                               6,374        6,317
  Other current assets                                   13,037       13,360
                                                   ------------ ------------

    Total current assets                                 49,552       50,637
                                                   ------------ ------------

Property, plant and equipment                            11,686       11,954

Long-term financing receivables and other assets         10,249       10,593

Goodwill and purchased intangible assets                 35,214       35,584
                                                   ------------ ------------

Total assets                                       $    106,701 $    108,768
                                                   ============ ============


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Notes payable and short-term borrowings          $      6,475 $      6,647
  Accounts payable                                       11,660       13,350
  Employee compensation and benefits                      3,520        4,058
  Taxes on earnings                                         851          846
  Deferred revenue                                        7,603        7,494
  Other accrued liabilities                              14,277       14,271
                                                   ------------ ------------

    Total current liabilities                            44,386       46,666
                                                   ------------ ------------

Long-term debt                                           21,752       21,789

Other liabilities                                        17,273       17,480

Stockholders' equity:
  HP stockholders' equity                                22,895       22,436
  Non-controlling interests                                 395          397
                                                   ------------ ------------

    Total stockholders' equity                           23,290       22,833
                                                   ------------ ------------

Total liabilities and stockholders' equity         $    106,701 $    108,768
                                                   ============ ============


                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
              CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                               (In millions)

                                                     Three months ended
                                                 --------------------------
                                                  January 31,   January 31,
                                                     2013          2012
                                                 ------------  ------------

Cash flows from operating activities:
  Net earnings                                   $      1,232  $      1,468
  Adjustments to reconcile net earnings to net
   cash provided by operating activities:
    Depreciation and amortization                       1,163         1,303
    Stock-based compensation expense                      184           175
    Provision for bad debt and inventory                  124            52
    Restructuring charges                                 130            40
    Deferred taxes on earnings                            500          (110)
    Excess tax benefit from stock-based
     compensation                                           -           (11)
    Other, net                                            167            44

    Changes in operating assets and liabilities:
      Accounts and financing receivables                2,246         2,311
      Inventory                                          (149)          180
      Accounts payable                                 (1,690)       (2,376)
      Taxes on earnings                                  (423)          (12)
      Restructuring                                      (237)         (174)
      Other assets and liabilities                       (685)       (1,697)
                                                 ------------  ------------
        Net cash provided by operating
         activities                                     2,562         1,193
                                                 ------------  ------------

Cash flows from investing activities:
    Investment in property, plant and equipment          (633)         (883)
    Proceeds from sale of property, plant and
     equipment                                            127            96
    Purchases of available-for-sale securities
     and other investments                               (299)            -
    Maturities and sales of available-for-sale
     securities and other investments                     161            96
    Payments made in connection with business
     acquisitions, net of cash acquired                     -          (141)
    Proceeds from business divestiture, net                 -            81
                                                 ------------  ------------
        Net cash used in investing activities            (644)         (751)
                                                 ------------  ------------

Cash flows from financing activities:
    Repayment of commercial paper and notes
     payable, net                                        (105)       (2,607)
    Issuance of debt                                       45         3,035
    Payment of debt                                      (114)         (100)
    Issuance of common stock under employee
     stock plans                                           55           313
    Repurchase of common stock                           (253)         (780)
    Excess tax benefit from stock-based
     compensation                                           -            11
    Cash dividends paid                                  (258)         (244)
                                                 ------------  ------------
      Net cash used in financing activities              (630)         (372)
                                                 ------------  ------------

Increase in cash and cash equivalents                   1,288            70
Cash and cash equivalents at beginning of period       11,301         8,043
                                                 ------------  ------------
Cash and cash equivalents at end of period       $     12,589  $      8,113
                                                 ============  ============


                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                            SEGMENT INFORMATION
                                (Unaudited)
                               (In millions)

                                              Three months ended
                                   ----------------------------------------
                                    January 31,   October 31,   January 31,
                                       2013          2012          2012
                                   ------------  ------------  ------------

Net revenue:(a)

  Personal Systems                 $      8,204  $      8,727  $      8,892
  Printing                                5,926         6,080         6,258
                                   ------------  ------------  ------------
    Total Printing and Personal
     Systems Group(b)                    14,130        14,807        15,150
  Enterprise Group                        6,984         7,459         7,282
  Enterprise Services                     5,919         6,352         6,371
  Software                                  926         1,171           946
  HP Financial Services                     957           966           950
  Corporate Investments                       4            10            30
                                   ------------  ------------  ------------
      Total segments                     28,920        30,765        30,729
  Elimination of intersegment net
   revenue and other                       (561)         (806)         (693)
                                   ------------  ------------  ------------

      Total HP consolidated net
       revenue                     $     28,359  $     29,959  $     30,036
                                   ============  ============  ============

Earnings before taxes:(a)

  Personal Systems                 $        223  $        309  $        459
  Printing                                  953         1,067           761
                                   ------------  ------------  ------------
    Total Printing and Personal
     Systems Group(b)                     1,176         1,376         1,220
  Enterprise Group                        1,084         1,229         1,329
  Enterprise Services                        76           423           145
  Software                                  157           318           162
  HP Financial Services                     101           104            91
  Corporate Investments                     (65)          (78)          (50)
                                   ------------  ------------  ------------
      Total segment earnings from
       operations                         2,529         3,372         2,897

  Corporate and unallocated costs
   and eliminations                        (109)         (120)         (153)
  Unallocated costs related to
   stock-based compensation
   expense                                 (184)         (140)         (174)
  Amortization of purchased
   intangible assets                       (350)         (372)         (466)
  Impairment of goodwill and
   purchased intangible assets                -        (8,847)            -
  Restructuring charges                    (130)         (378)          (40)
  Acquisition-related charges                (4)           (3)          (22)
  Interest and other, net                  (179)         (188)         (221)
                                   ------------  ------------  ------------

      Total HP consolidated
       earnings (loss) before
       taxes                       $      1,573  $     (6,676) $      1,821
                                   ============  ============  ============

(a) HP has implemented certain organizational realignments. As a result of
 these realignments, HP has re-evaluated its segment financial reporting
 structure and, effective in the first quarter of fiscal 2013, created two
 new financial reporting segments, the Enterprise Group segment and the
 Enterprise Services segment, and eliminated two other financial reporting
 segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
 and the Services segment. The Enterprise Group segment consists of the
 business units within the former ESSN segment and most of the services
 offerings of the Technology Services ("TS") business unit, which was
 previously a part of the former Services segment. The Enterprise Services
 segment consists of the Applications and Business Services ("ABS") and
 Infrastructure Technology Outsourcing ("ITO") business units from the
 former Services segment, along with the end-user workplace support
 services business that was previously a part of the TS business unit.
 Taking into account these changes, HP has the following seven financial
 reporting segments: Personal Systems, Printing, the Enterprise Group,
 Enterprise Services, Software, HP Financial Services and Corporate
 Investments.

Also as a result of these realignments, the financial results of the
 Personal Systems commercial products support business, which were
 previously reported as part of the TS business unit, will now be reported
 as part of the Other business unit within the Personal Systems segment,
 and the financial results of the portion of the business intelligence
 services business that had continued to be reported as part of the
 Corporate Investments segment following the implementation of prior
 realignment actions will now be reported as part of the ABS business unit.
 In addition, the end-user workplace support services business, which, as
 noted above, was previously a part of the TS business unit and will now
 become a part of the Enterprise Services segment, will be reported as part
 of the ITO business unit within that segment.

To provide improved visibility and comparability, HP has reflected these
 changes to its reporting structure in prior financial reporting periods on
 an as-if basis, which has resulted in the transfer of revenue and
 operating profit among the Personal Systems, the Enterprise Group,
 Enterprise Services and Corporate Investments segments. These changes had
 no impact on the previously reported financial results for the Printing,
 Software or HP Financial Services segments. In addition, none of these
 changes impacted HP's previously reported consolidated net revenue,
 earnings from operations, net earnings or net earnings per share.

(b) The Personal Systems segment and the Printing segment are structured
 beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
 is not a financial reporting segment, HP provides financial data
 aggregating the segments within it in order to provide a supplementary
 view of its business.


                 HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                    SEGMENT / BUSINESS UNIT INFORMATION
                                (Unaudited)
                               (In millions)

                                  Three months ended       Growth rate (%)
                             ----------------------------  ---------------
                              January   October   January
                                31,       31,       31,
                               2013      2012      2012      Q/Q      Y/Y
                             --------  --------  --------  ------   ------
Net revenue:(a)

  Printing and Personal
   Systems Group(b)
    Personal Systems
      Notebooks              $  4,128  $  4,572  $  4,942     (10%)    (16%)
      Desktops                  3,321     3,369     3,206      (1%)      4%
      Workstations                535       550       535      (3%)      0%
      Other                       220       236       209      (7%)      5%
                             --------  --------  --------
        Total Personal
         Systems                8,204     8,727     8,892      (6%)     (8%)
                             --------  --------  --------

    Printing
      Supplies                  3,893     4,007     4,079      (3%)     (5%)
      Commercial Hardware       1,354     1,482     1,489      (9%)     (9%)
      Consumer Hardware           679       591       690      15%      (2%)
                             --------  --------  --------
        Total Printing          5,926     6,080     6,258      (3%)     (5%)
                             --------  --------  --------
          Total Printing and
           Personal Systems
           Group               14,130    14,807    15,150      (5%)     (7%)
                             --------  --------  --------

    Enterprise Group
      Industry Standard
       Servers                  2,994     3,137     3,072      (5%)     (3%)
      Technology Services       2,243     2,340     2,264      (4%)     (1%)
      Storage                     833       946       955     (12%)    (13%)
      Networking                  608       635       586      (4%)      4%
      Business Critical
       Systems                    306       401       405     (24%)    (24%)
                             --------  --------  --------
        Total Enterprise
         Group                  6,984     7,459     7,282      (6%)     (4%)
                             --------  --------  --------

    Enterprise Services
      Infrastructure
       Technology
       Outsourcing              3,736     3,924     3,980      (5%)     (6%)
      Application and
       Business Services        2,183     2,428     2,391     (10%)     (9%)
                             --------  --------  --------
        Total Enterprise
         Services               5,919     6,352     6,371      (7%)     (7%)
                             --------  --------  --------

    Software                      926     1,171       946     (21%)     (2%)
                             --------  --------  --------

    HP Financial Services         957       966       950      (1%)      1%
                             --------  --------  --------

    Corporate Investments           4        10        30     (60%)    (87%)
                             --------  --------  --------
      Total segments           28,920    30,765    30,729      (6%)     (6%)
                             --------  --------  --------

    Elimination of
     intersegment net
     revenue and other           (561)     (806)     (693)    (30%)    (19%)
                             --------  --------  --------

      Total HP consolidated
       net revenue           $ 28,359  $ 29,959  $ 30,036      (5%)     (6%)
                             ========  ========  ========

(a) HP has implemented certain organizational realignments. As a result of
 these realignments, HP has re-evaluated its segment financial reporting
 structure and, effective in the first quarter of fiscal 2013, created two
 new financial reporting segments, the Enterprise Group segment and the
 Enterprise Services segment, and eliminated two other financial reporting
 segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
 and the Services segment. The Enterprise Group segment consists of the
 business units within the former ESSN segment and most of the services
 offerings of the Technology Services ("TS") business unit, which was
 previously a part of the former Services segment. The Enterprise Services
 segment consists of the Applications and Business Services ("ABS") and
 Infrastructure Technology Outsourcing ("ITO") business units from the
 former Services segment, along with the end-user workplace support
 services business that was previously a part of the TS business unit.
 Taking into account these changes, HP has the following seven financial
 reporting segments: Personal Systems, Printing, the Enterprise Group,
 Enterprise Services, Software, HP Financial Services and Corporate
 Investments.

Also as a result of these realignments, the financial results of the
 Personal Systems commercial products support business, which were
 previously reported as part of the TS business unit, will now be reported
 as part of the Other business unit within the Personal Systems segment,
 and the financial results of the portion of the business intelligence
 services business that had continued to be reported as part of the
 Corporate Investments segment following the implementation of prior
 realignment actions will now be reported as part of the ABS business
 unit. In addition, the end-user workplace support services business,
 which, as noted above, was previously a part of the TS business unit and
 will now become a part of the Enterprise Services segment, will be
 reported as part of the ITO business unit within that segment.

To provide improved visibility and comparability, HP has reflected these
 changes to its reporting structure in prior financial reporting periods
 on an as-if basis, which has resulted in the transfer of revenue and
 operating profit among the Personal Systems, the Enterprise Group,
 Enterprise Services and Corporate Investments segments. These changes had
 no impact on the previously reported financial results for the Printing,
 Software or HP Financial Services segments. In addition, none of these
 changes impacted HP's previously reported consolidated net revenue,
 earnings from operations, net earnings or net earnings per share.

(b) The Personal Systems segment and the Printing segment are structured
 beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
 is not a financial reporting segment, HP provides financial data
 aggregating the segments within it in order to provide a supplementary
 view of its business.


                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
               SEGMENT NON-GAAP OPERATING MARGIN SUMMARY DATA
                                (Unaudited)

                                       Three months    Change in Operating
                                           ended          Margin (pts)
                                       ------------  ----------------------
                                       January 31,
                                           2013          Q/Q         Y/Y
                                       ------------  ----------  ----------

Non-GAAP operating margin:(a)
  Personal Systems                              2.7%   (0.8 pts)   (2.5 pts)
  Printing                                     16.1%   (1.4 pts)    3.9 pts
    Printing and Personal Systems
     Group(b)                                   8.3%   (1.0 pts)    0.2 pts

  Enterprise Group                             15.5%   (1.0 pts)   (2.8 pts)
  Enterprise Services                           1.3%   (5.4 pts)   (1.0 pts)
  Software                                     17.0%  (10.2 pts)   (0.1 pts)
  HP Financial Services                        10.6%   (0.2 pts)    1.0 pts
  Corporate Investments                          NM          NM          NM
      Total segments                            8.7%   (2.3 pts)   (0.7 pts)

      Total HP consolidated non-GAAP
       operating margin                         7.9%   (2.5 pts)   (0.7 pts)


(a) HP has implemented certain organizational realignments. As a result of
 these realignments, HP has re-evaluated its segment financial reporting
 structure and, effective in the first quarter of fiscal 2013, created two
 new financial reporting segments, the Enterprise Group segment and the
 Enterprise Services segment, and eliminated two other financial reporting
 segments, the Enterprise Servers, Storage and Networking ("ESSN") segment
 and the Services segment. The Enterprise Group segment consists of the
 business units within the former ESSN segment and most of the services
 offerings of the Technology Services ("TS") business unit, which was
 previously a part of the former Services segment. The Enterprise Services
 segment consists of the Applications and Business Services ("ABS") and
 Infrastructure Technology Outsourcing ("ITO") business units from the
 former Services segment, along with the end-user workplace support
 services business that was previously a part of the TS business unit.
 Taking into account these changes, HP has the following seven financial
 reporting segments: Personal Systems, Printing, the Enterprise Group,
 Enterprise Services, Software, HP Financial Services and Corporate
 Investments.

Also as a result of these realignments, the financial results of the
 Personal Systems commercial products support business, which were
 previously reported as part of the TS business unit, will now be reported
 as part of the Other business unit within the Personal Systems segment,
 and the financial results of the portion of the business intelligence
 services business that had continued to be reported as part of the
 Corporate Investments segment following the implementation of prior
 realignment actions will now be reported as part of the ABS business unit.
 In addition, the end-user workplace support services business, which, as
 noted above, was previously a part of the TS business unit and will now
 become a part of the Enterprise Services segment, will be reported as part
 of the ITO business unit within that segment.

To provide improved visibility and comparability, HP has reflected these
 changes to its reporting structure in prior financial reporting periods on
 an as-if basis, which has resulted in the transfer of revenue and
 operating profit among the Personal Systems, the Enterprise Group,
 Enterprise Services and Corporate Investments segments. These changes had
 no impact on the previously reported financial results for the Printing,
 Software or HP Financial Services segments. In addition, none of these
 changes impacted HP's previously reported consolidated net revenue,
 earnings from operations, net earnings or net earnings per share.

(b) The Personal Systems segment and the Printing segment are structured
 beneath a broader Printing and Personal Systems Group ("PPS"). While PPS
 is not a financial reporting segment, HP provides financial data
 aggregating the segments within it in order to provide a supplementary
 view of its business.


                  HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
                    CALCULATION OF NET EARNINGS PER SHARE
                                 (Unaudited)
                   (In millions except per share amounts)

                                                Three months ended
                                     ---------------------------------------
                                      January 31,  October 31,   January 31,
                                         2013         2012          2012
                                     ------------ ------------  ------------

Numerator:
  GAAP net earnings (loss)           $      1,232 $     (6,854) $      1,468
                                     ============ ============  ============
  Non-GAAP net earnings              $      1,605 $      2,281  $      1,832
                                     ============ ============  ============

Denominator:
  Weighted-average shares used to
   compute basic net earnings (loss)
   per share and diluted net (loss)
   per share                                1,953        1,964         1,981
  Dilutive effect of employee stock
   plans                                        3            3            17
                                     ------------ ------------  ------------
    Weighted-average shares used to
     compute diluted net earnings
     per share                              1,956        1,967         1,998
                                     ============ ============  ============

GAAP net earnings (loss) per share:
  Basic                              $       0.63 $      (3.49) $       0.74
  Diluted(a)                         $       0.63 $      (3.49) $       0.73

Non-GAAP net earnings per share:
  Basic                              $       0.82 $       1.16  $       0.92
  Diluted(b)                         $       0.82 $       1.16  $       0.92

(a) GAAP diluted net earnings per share reflects any dilutive effect of
 outstanding stock options, performance-based restricted units, restricted
 stock units and restricted stock, but that effect is excluded when
 calculating GAAP diluted net (loss) per share because it would be anti-
 dilutive.

(b) Non-GAAP diluted net earnings per share reflects any dilutive effect of
 outstanding stock options, performance-based restricted units, restricted
 stock units and restricted stock.

Use of Non-GAAP Financial Measures
To supplement HP's consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt. HP also provides forecasts of non-GAAP diluted earnings per share. These non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States. The GAAP measure most directly comparable to non-GAAP operating profit is earnings from operations. The GAAP measure most directly comparable to non-GAAP operating margin is operating margin. The GAAP measure most directly comparable to non-GAAP net earnings is net earnings. The GAAP measure most directly comparable to non-GAAP diluted earnings per share is diluted net earnings per share. The GAAP measure most directly comparable to gross cash is cash and cash equivalents. The GAAP measure most directly comparable to free cash flow is cash flow from operations. The GAAP measure most directly comparable to net debt and operating company net debt is total company debt. Reconciliations of each of these non-GAAP financial measures to GAAP information are included in the tables above or elsewhere in the materials accompanying this news release.

Use and Economic Substance of Non-GAAP Financial Measures Used by HP
Non-GAAP operating profit and non-GAAP operating margin are defined to exclude the effects of any restructuring charges, charges relating to the impairment of goodwill and purchased intangible assets, charges relating to the amortization of purchased intangible assets, and acquisition-related charges recorded during the relevant period. Non-GAAP net earnings and non-GAAP diluted earnings per share consist of net earnings or diluted net earnings per share excluding those same charges. In addition, non-GAAP net earnings and non-GAAP diluted earnings per share are adjusted by the amount of additional taxes or tax benefit associated with each non-GAAP item. HP's management uses these non-GAAP financial measures for purposes of evaluating HP's historical and prospective financial performance, as well as HP's performance relative to its competitors. HP's management also uses these non-GAAP measures to further its own understanding of HP's segment operating performance. HP believes that excluding those items mentioned above from these non-GAAP financial measures allows HP management to better understand HP's consolidated financial performance in relationship to the operating results of HP's segments, as management does not believe that the excluded items are reflective of ongoing operating results. More specifically, HP's management excludes each of those items mentioned above for the following reasons:

• In the third quarter of fiscal 2012, HP decided to wind down certain retail publishing business activities. Non-GAAP operating profit reported in the third quarter of fiscal 2012 reflects the elimination of certain contract-related charges, including inventory write-downs, in connection with the wind down of that business. Because the winding down of HP businesses is inconsistent in amount and frequency, HP believes that eliminating these amounts for purposes of calculating non-GAAP operating profit facilitates a more meaningful evaluation of HP's current operating performance and comparisons to HP's past and future operating performance.
  
  
• Goodwill is the excess of the purchase price of acquired companies over the estimated fair value of the tangible and intangible assets acquired and liabilities assumed. Purchased intangible assets consist primarily of customer contracts, customer lists, distribution agreements, technology patents, and products, trademarks and trade names purchased in connection with acquisitions. In the fourth quarter of fiscal 2012, HP recorded a non-cash charge for the impairment of goodwill and intangible assets associated with the acquisition of Autonomy Corporation plc. In the third quarter of fiscal 2012, HP recorded an impairment charge for the goodwill associated with its Services segment following an impairment review. In addition, in that same quarter, HP recorded an impairment charge related to the intangible asset associated with the "Compaq" trade name acquired in 2002 in conjunction with a change in branding strategy. HP excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of HP's current operating performance and comparisons to HP's past and future operating performance.
  
  
• HP incurs charges relating to the amortization of purchased intangibles. HP also incurs charges relating to the amortization of amounts assigned to intangible assets to be used in research and development projects. All of those charges are included in HP's GAAP presentation of earnings from operations, operating margin, net earnings and net earnings per share. Such charges are inconsistent in amount and frequency and are significantly impacted by the timing and magnitude of HP's acquisitions. Consequently, HP excludes these charges for purposes of calculating these non-GAAP measures to facilitate a more meaningful evaluation of HP's current operating performance and comparisons to HP's past and future operating performance.
  
  
• Restructuring charges consist of costs associated with a formal restructuring plan and are primarily related to (i) employee termination costs and benefits, and (ii) costs to vacate duplicative facilities. HP excludes these restructuring costs (and any reversals of charges recorded in prior periods) for purposes of calculating these non-GAAP measures because it believes that these historical costs do not reflect expected future operating expenses and do not contribute to a meaningful evaluation of HP's current operating performance or comparisons to HP's past and future operating performance.
  
  
• HP incurs costs related to its acquisitions, most of which are treated as non-capitalized expenses. Because non-capitalized, acquisition-related expenses are inconsistent in amount and frequency and are significantly impacted by the timing and nature of HP's acquisitions, HP believes that eliminating the non-capitalized expenses for purposes of calculating these non-GAAP measures facilitates a more meaningful evaluation of HP's current operating performance and comparisons to HP's past and future operating performance.
  
  

Gross cash is a non-GAAP measure that is defined as cash and cash equivalents plus short-term investments and certain long-term investments that may be liquidated within 90 days pursuant to the terms of existing put options or similar rights. Free cash flow is defined as cash flow from operations less net capital expenditures. HP's management uses gross cash and free cash flow for the purpose of determining the amount of cash available for investment in HP's businesses, funding strategic acquisitions, repurchasing stock and other purposes. HP's management also uses gross cash and free cash flow for the purposes of evaluating HP's historical and prospective liquidity, as well as to further its own understanding of HP's segment operating results. Because gross cash includes liquid assets that are not included in GAAP cash and cash equivalents, HP believes that gross cash provides a more accurate and complete assessment of HP's liquidity and segment operating results. Because free cash flow includes the effect of capital expenditures that are not reflected in GAAP cash flow from operations, HP believes that free cash flow provides a more accurate and complete assessment of HP's liquidity and capital resources.

Operating company net debt is a non-GAAP measure that is defined as total company net debt less HP Financial Services ("HPFS") net debt. Total company net debt consists of total debt (including the effect of hedging) less gross cash, which includes cash and cash equivalents, short-term investments, and certain liquid long-term investments. HPFS net debt consists of HPFS debt, which includes primarily intercompany equity that is treated as debt for segment reporting purposes, intercompany debt and debt issued directly by HPFS, less HPFS cash. Total company net debt provides useful information to management about the state of HP's consolidated balance sheet. Operating company net debt provides additional useful information to management about the state of HP's consolidated balance sheet by providing more transparency into the financial components of the operating company separate from HP's financing business, which has different capital structure requirements and requires much greater leverage to run effectively.

Material Limitations Associated with Use of Non-GAAP Financial Measures
These non-GAAP financial measures may have limitations as analytical tools, and these measures should not be considered in isolation or as a substitute for analysis of HP's results as reported under GAAP. Some of the limitations in relying on these non-GAAP financial measures are:

• Items such as amortization of purchased intangible assets, though not directly affecting HP's cash position, represent the loss in value of intangible assets over time. The expense associated with this loss in value is not included in non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted earnings per share and therefore does not reflect the full economic effect of the loss in value of those intangible assets.
  
  
• Items such as restructuring charges that are excluded from non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings and non-GAAP diluted earnings per share can have a material impact on cash flows and earnings per share.
  
  
• HP may not be able to liquidate immediately the long-term investments included in gross cash, which may limit the usefulness of gross cash as a liquidity measure.
  
  
• Other companies may calculate non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt differently than HP does, limiting the usefulness of those measures for comparative purposes.
  
  

Compensation for Limitations Associated with Use of Non-GAAP Financial Measures
HP compensates for the limitations on its use of non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt by relying primarily on its GAAP results and using non-GAAP financial measures only supplementally. HP also provides robust and detailed reconciliations of each non-GAAP financial measure to its most directly comparable GAAP measure within this press release and in other written materials that include these non-GAAP financial measures, and HP encourages investors to review carefully those reconciliations.

Usefulness of Non-GAAP Financial Measures to Investors
HP believes that providing non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share, gross cash, free cash flow, net debt and operating company net debt to investors in addition to the related GAAP measures provides investors with greater transparency to the information used by HP's management in its financial and operational decision-making and allows investors to see HP's results "through the eyes" of management. HP further believes that providing this information better enables HP's investors to understand HP's operating performance and to evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. Disclosure of these non-GAAP financial measures also facilitates comparisons of HP's operating performance with the performance of other companies in HP's industry that supplement their GAAP results with non-GAAP financial measures that are calculated in a similar manner.

© 2013 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.

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