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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended October 31, 1993
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
Commission File Number: 1-4423
Exact name of registrant as specified in its charter:
HEWLETT-PACKARD COMPANY
STATE OR OTHER JURISDICTION OF IRS EMPLOYER
INCORPORATION OR ORGANIZATION: IDENTIFICATION NO.:
California 94-1081436
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:
3000 Hanover Street, Palo Alto, California 94304
TELEPHONE NO.:
(415) 857-1501
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, New York Stock Exchange, Inc.
par value $1 London Stock Exchange
per share Paris Bourse
Tokyo Stock Exchange
German (Frankfurt and Stuttgart) Stock
Exchange
Swiss (Zurich, Basel, Geneva and Lausanne)
Stock Exchange
Pacific Stock Exchange, Inc.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the registrant's common stock held by
nonaffiliates as of December 27, 1993 was $14,839,273,031.
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of December 27, 1993: 253,091,591 shares of $1 par value common
stock.
DOCUMENTS INCORPORATED BY REFERENCE
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DOCUMENT DESCRIPTION 10-K PART
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Pages 23-45 and 48 and the inside back cover (excluding order
data) of the Registrant's 1993 Annual Report to Shareholders I, II, IV
Pages 2-17 and 23-24 of the Registrant's Notice of Annual
Meeting of Shareholders and Proxy Statement dated January
20, 1994 III
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PART I
ITEM 1. BUSINESS.
PRODUCTS AND SERVICES
Hewlett-Packard Company was incorporated in 1947 under the laws of the State
of California as the successor to a partnership founded in 1939 by William R.
Hewlett and David Packard.
Hewlett-Packard Company, together with its consolidated subsidiaries (the
"Company"), is engaged worldwide in the design, manufacture and service of
electronic equipment and systems for measurement, computation and
communications. The Company offers a wide variety of systems and standalone
products, including electronic test equipment, computer systems and peripheral
products, medical electronic equipment, calculators and other personal
information products, solid state components and instrumentation for chemical
analysis. These products are used in industry, business, engineering, science,
education and medicine. A summary of the Company's net revenue as contributed
by its major classes of products and services is found on page 44 of the
Company's 1993 Annual Report to Shareholders, which page (excluding order data)
is incorporated herein by reference.
The Company's computers, computer systems, personal information products,
personal peripheral products and other peripherals are used in a variety of
applications, including scientific and engineering computation and analysis,
instrument control and business information management. The Company's core
computing products and technologies include its PA-RISC architecture for
systems and workstations and software infrastructure for open systems. The
Company's general-purpose computers and computer systems include scalable
families of systems and servers for use in small workgroups, larger departments
and entire data centers. Key products include the HP 9000 series, which runs
HP-UX, HP's implementation of the UNIX(R)(/1/) operating system, and comprises
both workstations with powerful computational and graphics capabilities and
multiuser computers for both technical and commercial applications; and the HP
Vectra series of IBM-compatible personal computers for use in business,
engineering, manufacturing and chemical analysis. The Company offers software
programming services, network services, distributed system services and data
management services. Customers of the Company's computers, computer systems and
software infrastructure products include original equipment manufacturers,
dealers and value-added resellers, as well as end users for a variety of
applications.
In the field of computing during fiscal 1993, the Company expanded its
Corporate Business Systems product line, a family of multiuser systems and
servers that spans products in both the HP 9000 and the HP 3000 series. Other
introductions included models 715, 725 and 735 of the Series 700 family of
workstations, which incorporates the Company's PA-RISC architecture; the HP
ENVIZEX family of X stations; HP Vectra personal computers based on the
Intel486(/2/) DX and DX2 microprocessors; and a series of HP Vectra PC servers.
Software introductions included a portfolio of new applications that expand
the capabilities of HP OpenView, the Company's network- and systems-management
platform; Release 2.0 of Dashboard for Windows, an upgrade of the Company's
push-button utility panel for Windows; and Earth Data System, developed jointly
by the Company and Ellery Systems Inc., which facilitates global environmental
research.
The Company's peripheral products include a variety of system and desktop
printers, such as the HP LaserJet family; the HP DeskJet family, which is based
on the Company's thermal inkjet technology; a family of graphic plotters and
page scanners; video display terminals; disk (magnetic and optical) and tape
drives and related autochangers. In fiscal 1993 the Company introduced the HP
LaserJet 4Si and 4Si/MX printers, which are 600-dots-per-inch laser printers
that can work concurrently with PCs, Macintosh computers, UNIX system-based
workstations and multiple networks; the HP 4L and 4ML printers, the Company's
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(/1/)UNIX is a registered trademark of UNIX System Laboratories Inc. in the
U.S.A. and other countries.
(/2/)Intel486 is a U.S. trademark of Intel Corp.
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lowest-priced HP LaserJet printers for individual users; the HP DeskJet 1200C
and 1200C/PS color printers, which offer laser-printer speed and functionality;
and the HP DeskJet 310 and 310M portable printers. Other fiscal 1993
introductions included the HP Kittyhawk Personal Storage Module II, a 1.3-inch
disk drive that stores 42.8 megabytes of text, and the HP FAX-900 and 950, both
plain-paper fax machines based on the Company's thermal inkjet technology.
The Company also produces measurement systems for use in electronics,
medicine and analytical chemistry. Test and measurement instruments include
voltmeters and multimeters that measure voltage, current and resistance;
counters that measure the frequency of an electrical signal; oscilloscopes and
logic analyzers that measure electrical changes in relation to time; signal
generators that provide the electrical stimulus for the testing of systems and
components; specialized communications test equipment; and atomic frequency
standards, which are used in accurate time-interval and timekeeping
applications. Instruments for medical applications include continuous
monitoring systems for critical-care patients, medical data-management systems,
fetal monitors, electrocardiographs, cardiac catheterization laboratory
systems, blood gas measuring instruments, diagnostic ultrasonic imaging systems
and cardiac defibrillators. Instruments for analytical applications include gas
and liquid chromatographs, mass spectrometers, laboratory data systems and
spectrophotometers. Key product introductions for measurement systems in fiscal
1993 included a network-monitoring system that gives telecom providers enhanced
analytical and problem-solving capabilities; and the HP 3D Capillary
Electrophoresis system, which offers bioscientists leading-edge separation
capabilities.
The Company continues to demonstrate its ability to combine measurement and
computation. The Company's Unified Laboratory strategy is designed to improve a
user's productivity by allowing computers in the analytical laboratory to serve
as adjuncts to analytical instrumentation while broadening the user's ability
to communicate with other parts of the organization. The Office of the Chemist
is a subset of the Unified Laboratory in which an office-based workstation or
PC, with business software such as spreadsheets, is combined with analytical
equipment and data to allow a chemist to work more efficiently. The Company's
Clinical Information System combines patient data from monitoring instruments
with other information to assist nurses in providing health care.
The Company also manufactures electronic component products consisting
principally of microwave semiconductor, fiber-optic and optoelectronic devices
(including light-emitting diodes). The products primarily are sold to other
manufacturers for incorporation into their electronic products but also are
used in many of the Company's products. In fiscal 1993 the Company introduced
fiber-optic transceivers that reduce the costs of high-speed, multimedia
networks; and a greenish-yellow, high-brightness light-emitting diode designed
for use in highway signs, traffic signals and illuminated displays. During 1993
the Company's acquisition of BT&D Technologies, Ltd., a joint venture between
British Telecommunications plc and DuPont, helped round out the Company's
offering of components for the communications market. BT&D's products include
fiber optic couplers, transmitters and receivers that go directly into the
communications network for very high-speed, long-wavelength, laser-driven voice
and data applications.
The Company provides service for its equipment, systems and peripherals,
including support and maintenance services, parts and supplies for design and
manufacturing systems, office and information systems, general-purpose
instruments, computers and computer systems, peripherals and network products.
During fiscal 1993, the Company derived 24 percent of its net revenue from such
services.
The Company strives, in all its businesses, to promote industry standards
that recognize customer preferences for open systems in which different
vendors' products can work together. The Company often bases its product
innovations on such standards and seeks to make its technology innovations into
industry standards through licensing to other companies and standards-setting
groups. For example, during fiscal 1993 the Company worked to make its serial
infrared technology and its standard instrument control library into industry
standards.
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MARKETING
Customers. The Company has approximately 600 sales and support offices and
distributorships in 110 countries. Sales are made to industrial and commercial
customers, educational and scientific institutions, healthcare providers
(including individual doctors, hospitals, clinics and research laboratories)
and, in the case of its calculators and other personal information products,
computer peripherals and PCs, to individuals for personal use.
Sales Organization. More than half of the Company's orders are derived
through value-added resale channels, including dealers and original equipment
manufacturers. The remaining product revenue results from the efforts of its
own sales organization selling to end users. In fiscal 1993 a higher proportion
of the Company's net revenue than in fiscal 1992 was generated from products
such as personal peripherals, which are primarily sold through dealers and
other value-added resellers. Sales operations are supported by approximately
35,000 individuals, including field service engineers, sales representatives,
service personnel and administrative support staff.
International. The Company's total orders originating outside of the United
States as a percentage of total Company orders were approximately 54 percent in
fiscal 1993, 55 percent in fiscal 1992 and 56 percent in fiscal 1991. The
majority of these international orders were from customers other than foreign
governments. Approximately two-thirds of the Company's international orders in
each of the last three fiscal years were derived from Europe, with most of the
balance coming from Japan, other countries in Asia Pacific, Latin America and
Canada.
Most of the Company's sales in international markets are made by foreign
sales subsidiaries. In countries with low sales volume, sales are made through
various representative and distributorship arrangements. Certain sales in
international markets, however, are made directly by the parent Company from
the United States.
The Company believes that its overall net profit margins on international
sales are comparable to those obtained on sales made in the United States. The
Company's international business is subject to risks customarily encountered in
foreign operations, including fluctuations in monetary exchange rates, import
and export controls and the economic, political and regulatory policies of
foreign governments. The Company believes that its international
diversification provides stability to its worldwide operations and reduces the
impact on the Company of adverse economic changes in any single country. A
summary of the Company's net revenue, earnings from operations and identifiable
assets by geographic area is found on page 42 of the Company's Annual Report to
Shareholders, which page is incorporated herein by reference.
COMPETITION
The Company encounters aggressive competition in all areas of its business
activity. Its competitors are numerous, ranging from some of the world's
largest corporations to many relatively small and highly specialized firms. The
Company competes primarily on the basis of technology, performance, price,
quality, reliability, distribution and customer service and support. The
Company's reputation, the ease of use of its products and the ready
availability of customer training are also important competitive factors.
The computer market is characterized by vigorous competition among major
corporations with long-established positions and a large number of new and
rapidly growing firms. While the absence of reliable statistics makes it
difficult to state the Company's relative position, the Company believes that
it is the second-largest U.S.-based manufacturer of general-purpose computers,
personal peripherals such as desktop printers, and calculators and other
personal information products, all for industrial, scientific and business
applications. The markets for test and measurement instruments are influenced
by specialized manufacturers which often have great strength in narrow market
segments. In general, however, the Company believes that it is one of the
principal suppliers in these markets.
BACKLOG
The Company believes that backlog is not a meaningful indicator of future
business prospects due to the volume of products delivered from shelf
inventories, the shortening of product delivery schedules, and the portion of
revenue that relates to its service business. Therefore, the Company believes
that backlog information is not material to an understanding of its business.
3
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PATENTS
The Company's general policy has been to seek patent protection for those
inventions and improvements likely to be incorporated into its products or to
give the Company a competitive advantage. While the Company believes that its
patents and applications have value, in general no single patent is in itself
essential. The Company believes that its technological position depends
primarily on the technical competence and creative ability of its research and
development personnel.
MATERIALS
The Company's manufacturing operations employ a wide variety of
semiconductors, electro-mechanical components and assemblies, and raw materials
such as plastic resins and sheet metal. The Company believes that the materials
and supplies necessary for its manufacturing operations are presently available
in the quantities required. The Company purchases materials, supplies and
product sub-assemblies from a substantial number of vendors. For many of its
products, the Company has existing alternate sources of supply, or such sources
are readily available. A portion of the Company's manufacturing operations is
dependent on the ability of significant suppliers to deliver integral sub-
assemblies and components in time to meet critical manufacturing schedules. The
failure of suppliers to deliver these subassemblies and components in a timely
manner may adversely affect the Company's operating results until alternate
sourcing could be developed. The Company believes that alternate suppliers or
design solutions could be arranged within a reasonable time so that material
long-term adverse impacts would be unlikely.
RESEARCH AND DEVELOPMENT
The process of developing new high technology products is complex and
uncertain and requires innovative designs that anticipate customer needs and
technological trends. After the products are developed, the Company must
quickly manufacture products in sufficient volumes at acceptable costs to meet
demand.
Expenditures for research and development amounted to $1.8 billion in fiscal
1993, $1.6 billion in fiscal 1992 and $1.5 billion in fiscal 1991. In fiscal
1993, research and development expenditures were 8.7 percent of net revenue.
This work is Company-sponsored, except for minor research and development done
in the Company's laboratories pursuant to government-sponsored projects.
ENVIRONMENT
The operations of the Company involve the use of substances regulated under
various federal, state and international laws governing the environment. It is
the Company's policy to apply strict standards for environmental protection to
sites inside and outside the U.S., even if not subject to regulations imposed
by local governments. Liability for environmental remediation is accrued when
it is considered probable and costs can be estimated. Environmental
expenditures are presently not material to HP's operations or financial
position.
EMPLOYEES
The Company had approximately 96,200 employees worldwide at October 31, 1993.
ITEM 2. PROPERTIES.
The principal executive offices of the Company are located at 3000 Hanover
Street, Palo Alto, California 94304. As of October 31, 1993, the Company owned
or leased a total of approximately 40.9 million square feet of space worldwide.
The Company believes that its existing properties are in good condition and
suitable for the conduct of its business.
The Company's plants are equipped with machinery, most of which is owned by
the Company and is in part developed by it to meet the special requirements for
manufacturing precision electronic instruments and systems. At the end of
fiscal year 1993 the Company was productively utilizing the vast majority of
the space in its facilities, while actively disposing of space determined to be
excess.
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The Company anticipates that most of the capital necessary for expansion will
continue to be obtained from internally generated funds. Investment in new
property, plant and equipment amounted to $1.4 billion in fiscal 1993, $1.0
billion in fiscal 1992 and $862 million in fiscal 1991.
The locations of the Company's major sales, marketing, product development
and manufacturing facilities are listed on page 48 of the Company's 1993 Annual
Report to Shareholders, which page is incorporated herein by reference.
As of October 31, 1993, the Company's marketing operations occupied
approximately 11 million square feet, of which 3.9 million square feet are
located within the United States. The Company owns 56% of the space used for
marketing activities and leases the remaining 44%.
The Company's manufacturing plants, research and development facilities and
warehouse and administrative facilities occupied 29.9 million square feet, of
which 22.8 million square feet are located within the United States. The
Company owns 79% of its manufacturing, research and development, warehouse and
administrative space and leases the remaining 21%. None of the property owned
by the Company is held subject to any major encumbrances.
ITEM 3. LEGAL PROCEEDINGS.
There are presently pending no legal proceedings, other than routine
litigation incidental to the Company's business, to which the Company is a
party or to which any of its property is subject.
The Company is a party to, or otherwise involved in, proceedings brought by
federal or state environmental agencies under the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or
state laws similar to CERCLA. The Company is also conducting environmental
investigation or remediation at several of its current or former operating
sites pursuant to administrative orders or consent agreements with state
environmental agencies.
Liability for environmental remediation is accrued when it is considered
probable and costs can be estimated. Environmental expenditures are presently
not material to HP's operations or financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS.
Information regarding the market prices of the Company's common stock and the
markets for that stock may be found on pages 45 and the inside back cover,
respectively, of the Company's 1993 Annual Report to Shareholders. The number
of shareholders and information concerning the Company's current dividend rate
are set forth in the section entitled "Common Stock, Dividend Policy" found on
the inside back cover of that report. Additional information concerning
dividends may be found on pages 23, 30, 31 and 45 of the Company's 1993 Annual
Report to Shareholders. Such pages (excluding order data) are incorporated
herein by reference.
ITEM 6. SELECTED FINANCIAL DATA.
Selected financial data for the Company is set forth on page 23 of the
Company's 1993 Annual Report to Shareholders, which page (excluding order data)
is incorporated herein by reference.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
A discussion of the Company's financial condition, changes in financial
condition and results of operations appears in the "Financial Review" found on
pages 25-27 and 29 of the Company's 1993 Annual Report to Shareholders. Such
pages are incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The consolidated financial statements of the Company, together with the
report thereon of Price Waterhouse, independent accountants, and the unaudited
"Quarterly Summary" are set forth on pages 24, 28, 30-43 and 45 of the
Company's 1993 Annual Report to Shareholders, which pages (excluding order
data) are incorporated herein by reference.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
With the exception of the information incorporated by reference in Parts I,
II and IV of this Form 10-K, the Company's 1993 Annual Report to Shareholders
is not to be deemed filed as part of this report.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Information regarding directors of the Company is set forth under "Election
of Directors" on pages 4-11 of the Company's Notice of Annual Meeting of
Shareholders and Proxy Statement, dated January 20, 1994 (the "Notice and Proxy
Statement"), which pages are incorporated herein by reference.
The names of the executive officers of the Company, their ages, titles and
biographies as of December 27, 1993, are set forth below. All officers are
elected for a one-year term.
EXECUTIVE OFFICERS:
JAMES L. ARTHUR; AGE 59; SENIOR VICE PRESIDENT AND GENERAL MANAGER, WORLDWIDE
CUSTOMER SUPPORT OPERATIONS.
Mr. Arthur assumed his current position as General Manager of the Company's
Worldwide Customer Support Operations in 1989. He served as Director of the
U.S. Field Operations from 1984 to 1989. He became a Vice President of the
Company in 1982 and a Senior Vice President in 1987.
EDWARD W. BARNHOLT; AGE 50; SENIOR VICE PRESIDENT AND GENERAL MANAGER, TEST AND
MEASUREMENT ORGANIZATION.
Mr. Barnholt was elected a Senior Vice President in 1993. He became Vice
President and General Manager, Test and Measurement Organization, with
responsibility for the Company's Electronic Instrument and Microwave and
Communications Groups, along with the Communications Test Business Unit, in
1990. Prior to 1990, he had been General Manager of the Electronic Instrument
Group since 1984. Mr. Barnholt was elected a Vice President of the Company in
1988.
RICHARD E. BELLUZZO; AGE 40; VICE PRESIDENT AND GENERAL MANAGER, COMPUTER
PRODUCTS ORGANIZATION.
Mr. Belluzzo was named General Manager of the Computer Products Organization
in 1993. Earlier in 1993 he became General Manager of the newly formed Hardcopy
Products Group. He was elected a Vice President in 1992. He was named
operations manager for the Boise Printer Operation when it was formed in 1987
and became General Manager of that operation when it became a division in 1988.
ALAN D. BICKELL; AGE 57; SENIOR VICE PRESIDENT AND MANAGING DIRECTOR,
GEOGRAPHIC OPERATIONS.
Mr. Bickell was elected a Vice President in 1984. He was Managing Director of
Intercontinental Operations from 1974 until 1992, when he was elected to his
current position.
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JOEL S. BIRNBAUM; AGE 56; SENIOR VICE PRESIDENT, RESEARCH AND DEVELOPMENT.
Mr. Birnbaum was elected a Senior Vice President in 1993. He became Vice
President, Research and Development and Director, HP Laboratories in September
1991. Additionally, he served as General Manager, Information Architecture
Group from 1988 until 1991 and General Manager, Information Technology Group
from 1986 to 1988. He was elected a Vice President in 1984. He is a director of
Corporation for National Research Infrastructure.
S.T. JACK BRIGHAM III; AGE 54; VICE PRESIDENT, CORPORATE AFFAIRS AND GENERAL
COUNSEL.
Mr. Brigham was elected a Vice President in 1982 and became Vice President,
Corporate Affairs in 1992. He has served as General Counsel since 1976.
DOUGLAS K. CARNAHAN; AGE 52; VICE PRESIDENT AND GENERAL MANAGER, MEASUREMENT
SYSTEMS ORGANIZATION.
Mr. Carnahan was elected a Vice President in 1992. He was General Manager of
the Publishing Products Business Unit from 1988 to 1991, when he was promoted
to General Manager of the Printing Systems Group. In June 1993 he was named
General Manager of Component Products, and in October 1993 he assumed his
current post as General Manager of the Measurement Systems Organization.
RAYMOND W. COOKINGHAM; AGE 50; VICE PRESIDENT AND CONTROLLER.
Mr. Cookingham was elected a Vice President in 1993. In 1984, he was named
controller for the Company's product groups and was promoted to Controller of
the Company in 1986.
F. E. (PETE) PETERSON; AGE 52; VICE PRESIDENT, PERSONNEL.
Mr. Peterson was elected to his current position in 1992. In 1985, he was
named Corporate Personnel Operations Manager with responsibility for
integrating personnel policies and programs with the worldwide business
strategies of the Company. In 1990, he assumed additional responsibility as
Director of Corporate Personnel.
LEWIS E. PLATT; AGE 52; CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AND CHAIRMAN OF THE EXECUTIVE COMMITTEE.
Mr. Platt has served as a director of the Company, President and Chief
Executive Officer since November 1, 1992. The Board elected Mr. Platt to
succeed David Packard as Chairman on September 17, 1993. He was an Executive
Vice President from 1987 to 1992. Mr. Platt held a number of management
positions in the Company prior to becoming its President, including managing
the Computer Systems Organization from 1990 to 1992 and the Computer Products
Sector from 1988 to 1990. He is a director of Molex Inc. He also serves on the
Cornell University Council and the Wharton School Board of Overseers.
WILLEM P. ROELANDTS; AGE 48; SENIOR VICE PRESIDENT AND GENERAL MANAGER,
COMPUTER SYSTEMS ORGANIZATION.
Mr. Roelandts was elected a Senior Vice President in 1993. He served as
General Manager of the Computer Systems Group from 1988 until he became General
Manager of the Networked Systems Group in the Computer Systems Organization in
1990. He was elected a Vice President and General Manager, Computer Systems
Organization in 1992.
ROBERT P. WAYMAN; AGE 48; EXECUTIVE VICE PRESIDENT, FINANCE AND ADMINISTRATION
AND CHIEF FINANCIAL OFFICER.
Mr. Wayman was elected a director of the Company effective December 1, 1993.
He has been an Executive Vice President since 1992, at which time he assumed
responsibility for administration. He has held a number of financial management
positions in the Company and was elected a Vice President and Chief Financial
Officer in 1984. He serves as a member of the Board of the Private Sector
Council and of the Kellogg Advisory Board, Northwestern University.
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Information regarding compliance with Section 16(a) of the Securities
Exchange Act of 1934 is set forth on page 11 of the Notice and Proxy Statement,
which page is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION.
Information regarding the Company's compensation of its executive officers is
set forth on pages 12-17 and 23 of the Notice and Proxy Statement, which pages
are incorporated herein by reference. Information regarding the Company's
compensation of its directors is set forth on pages 2-4 of the Notice and Proxy
Statement, which pages are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Information regarding security ownership of certain beneficial owners and
management is set forth on pages 8-11 of the Notice and Proxy Statement, which
pages are incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Information regarding transactions with the Company's executive officers and
directors is set forth on pages 23-24 of the Notice and Proxy Statement, which
pages are incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) The following documents are filed as part of this report:
1. Financial Statements:
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PAGE IN
ANNUAL REPORT
TO
SHAREHOLDERS*
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Report of Independent Accountants.......................... 43
Consolidated Statement of Earnings for the three years
ended October 31, 1993.................................... 24
Consolidated Balance Sheet at October 31, 1993 and 1992.... 28
Consolidated Statement of Cash Flows for the three years
ended October 31, 1993.................................... 30
Consolidated Statement of Shareholders' Equity for the
three years ended October 31, 1993........................ 31
Notes to Consolidated Financial Statements................. 32-42
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*Incorporated by reference from the indicated pages of the 1993 Annual
Report to Shareholders.
2. Financial Statement Schedules:
Report of Independent Accountants on Financial Statement Schedules.
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Amounts Receivable from Directors, Officers and
Schedule II -- Employees
Schedule V -- Property, Plant and Equipment
Schedule VI -- Accumulated Depreciation and Amortization of Property,
Plant and Equipment
Schedule IX -- Short-Term Borrowings
Schedule X -- Supplementary Income Statement Information
</TABLE>
The financial statement schedules should be read in conjunction with the
financial statements in the 1993 Annual Report to Shareholders. Schedules not
included in these financial statement schedules have been omitted because they
are not applicable or the required information is shown in the financial
statements or notes thereto.
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3. Exhibits:
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1-2. Not applicable.
3(a). Registrant's Amended Articles of Incorporation, which appear as
Exhibit 3(a) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1988, which Exhibit is
incorporated herein by reference.
3(b). Registrant's Amended By-Laws, which appear as Exhibit 3(b) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1992, which Exhibit is incorporated herein by
reference.
4. None.
5-8. Not applicable.
9. None.
10(a). Registrant's 1979 Incentive Stock Option Plan, which appears as
Exhibit 10(a) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1983, which Exhibit is
incorporated herein by reference.*
10(b). Registrant's 1979 Incentive Stock Option Plan Agreements, which
appear as Exhibit 10(b) to Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1983, which Exhibit
is incorporated herein by reference.*
10(c). Letter dated September 24, 1984 to optionees advising them of
amendment to 1979 Incentive Stock Option Plan Agreement (Exhibit
10(b) above), which appears as Exhibit 10(c) to Registrant's
Annual Report on Form 10-K for the fiscal year ended October 31,
1984, which Exhibit is incorporated herein by reference.*
10(d). Registrant's 1983 Officers Early Retirement Plan, amended and
restated as of January 1, 1990 which appears as Exhibit 10(d) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1990, which Exhibit is incorporated herein by
reference.*
10(e). Registrant's 1985 Incentive Compensation Plan, which appears as
Exhibit 10(e) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1984, which Exhibit is
incorporated herein by reference.*
10(f). Registrant's 1985 Incentive Compensation Plan Stock Option
Agreements, which appear as Exhibit 10(f) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1984,
which Exhibit is incorporated herein by reference.*
10(g). Registrant's Excess Benefit Retirement Plan, amended and
restated as of November 1, 1989, which appears as Exhibit 10(g)
to Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1990, which Exhibit is incorporated herein by
reference.*
10(h). Registrant's 1985 Incentive Compensation Plan restricted stock
agreements, which appear as Exhibit 10(h) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1985,
which Exhibit is incorporated herein by reference.*
10(i). Registrant's 1987 Director Option Plan, which appears as
Appendix A to Registrant's Proxy Statement dated January 16,
1987, which Appendix is incorporated herein by reference.*
10(j). Registrant's 1989 Independent Director Deferred Compensation
Program, which appears as Exhibit 10(j) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October 31, 1989,
which Exhibit is incorporated herein by reference.*
10(k). Registrant's 1990 Incentive Stock Plan, which appears as
Appendix A to Registrant's Proxy Statement dated January 11,
1990, which Appendix is incorporated herein by reference.*
</TABLE>
9
<PAGE>
<TABLE>
<C> <S>
10(l). Registrant's 1990 Incentive Stock Plan stock option and
restricted stock agreements, which appear as Exhibit 10(l) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended October 31, 1990, which Exhibit is incorporated herein by
reference.*
10(m). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1979 Incentive Stock Option Plan, which appears as
Exhibit 10(m) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1991, which Exhibit is
incorporated herein by reference.*
10(n). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1985 Incentive Compensation Plan, which appears as
Exhibit 10(n) to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1991, which Exhibit is
incorporated herein by reference.*
10(o). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1987 Director Option Plan, which appears as Exhibit
10(o) to Registrant's Annual Report on Form 10-K for the fiscal
year ended October 31, 1991, which Exhibit is incorporated
herein by reference.*
10(p). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1990 Incentive Stock Plan, which appears as Exhibit
10(p) to Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1991, which Exhibit
is incorporated herein by reference.*
11-12. None.
13. Pages 23-45 and 48 and the inside back cover (excluding order
data) of Registrant's 1993 Annual Report to Shareholders.
14-17. Not applicable.
18. None.
19-20. Not applicable.
21. Subsidiaries of Registrant as of January 20, 1994.
22. None.
23. Consent of Independent Accountants.
24. Powers of Attorney. Contained in page 11 of this Annual Report
on Form 10-K and incorporated herein by reference.
25-26. Not applicable.
27. Not applicable.
28. None.
99. 1993 Employee Stock Purchase Plan Annual Report on Form 11-K.
</TABLE>
- --------
*Indicates management contract or compensatory plan or arrangement.
Exhibit numbers may not correspond in all cases to those numbers in Item 601
of Regulation S-K because of special requirements applicable to EDGAR filers.
(b) Reports on Form 8-K
None.
10
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
HEWLETT-PACKARD COMPANY
D. CRAIG NORDLUND
Date: January 28, 1994 By: _________________________________
D. CRAIG NORDLUND
ASSOCIATE GENERAL COUNSEL AND
SECRETARY
POWER OF ATTORNEY
Know All Persons By These Presents, that each person whose signature appears
below constitutes and appoints D. Craig Nordlund and Ann O. Baskins, or either
of them, his attorneys-in-fact, for him in any and all capacities, to sign any
amendments to this report and to file the same, with exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that either of said attorneys-
in-fact, or substitute or substitutes, may do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
RAYMOND W. COOKINGHAM
- ------------------------------------
RAYMOND W. COOKINGHAM Vice President and Corporate
Controller (Principal
Accounting Officer) January 19, 1994
THOMAS E. EVERHART
- ------------------------------------
THOMAS E. EVERHART Director January 19, 1994
JOHN B. FERY
- ------------------------------------
JOHN B. FERY Director January 17, 1994
JEAN-PAUL G. GIMON
- ------------------------------------
JEAN-PAUL G. GIMON Director January 19, 1994
RICHARD A. HACKBORN
- ------------------------------------
RICHARD A. HACKBORN Director January 25, 1994
HAROLD J. HAYNES
- ------------------------------------
HAROLD J. HAYNES Director January 19, 1994
WALTER B. HEWLETT
- ------------------------------------
WALTER B. HEWLETT Director January 20, 1994
SHIRLEY M. HUFSTEDLER
- ------------------------------------
SHIRLEY M. HUFSTEDLER Director January 24, 1994
</TABLE>
11
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------
GEORGE A. KEYWORTH II Director
PAUL F. MILLER, JR.
- ------------------------------------
PAUL F. MILLER, JR. Director January 19, 1994
SUSAN P. ORR
- ------------------------------------
SUSAN P. ORR Director January 19, 1994
DAVID W. PACKARD
- ------------------------------------
DAVID W. PACKARD Director January 19, 1994
DONALD E. PETERSEN
- ------------------------------------
DONALD E. PETERSEN Director January 19, 1994
LEWIS E. PLATT
- ------------------------------------
LEWIS E. PLATT Chairman, President, Chief
Executive Officer, and
Chairman of the Executive
Committee (Principal
Executive Officer) January 19, 1994
HICKS B. WALDRON
- ------------------------------------
HICKS B. WALDRON Director January 19, 1994
ROBERT P. WAYMAN
- ------------------------------------
ROBERT P. WAYMAN Executive Vice President,
Finance and Administration
and Director (Chief
Financial Officer) January 26, 1994
- ------------------------------------
T. A. WILSON Director
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Shareholders and the Board of Directors
of Hewlett-Packard Company
Our audits of the consolidated financial statements referred to in our report
dated November 22, 1993 appearing on page 43 of the 1993 Annual Report to
Shareholders of Hewlett-Packard Company (which report and consolidated
financial statements are incorporated by reference in this Annual Report on
Form 10-K) also included an audit of the Financial Statement Schedules listed
in Item 14(a)2 of this Form 10-K. In our opinion, these Financial Statement
Schedules present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statments.
PRICE WATERHOUSE
San Francisco, California
November 22, 1993
13
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
----------------
SCHEDULE II
AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS AND EMPLOYEES
(THOUSANDS)
<TABLE>
<CAPTION>
BALANCE
RECEIVABLE BALANCE RECEIVABLE
AT AT CLOSE OF PERIOD
BEGINNING -------------------
OF PERIOD ADDITIONS COLLECTIONS CURRENT NON-CURRENT
---------- --------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C>
Year ended October 31,
1993:
Amounts receivable from
officers(a)............ $ 205 $261 $ 205 $261 $--
Amounts receivable from
employees(b)........... 140 118 155 -- 103
------ ---- ------ ---- ----
$ 345 $379 $ 360 $261 $103
====== ==== ====== ==== ====
Year ended October 31,
1992:
Amounts receivable from
officers(c)............ $ -- $205 $ -- $205 $--
Amounts receivable from
employees(d)........... 130 140 130 140 --
------ ---- ------ ---- ----
$ 130 $345 $ 130 $345 $--
====== ==== ====== ==== ====
Year ended October 31,
1991:
Amounts receivable from
officers(e)............ $1,030 $-- $1,030 $-- $--
Amounts receivable from
employees(f)........... 1,600 -- 1,470 130 --
------ ---- ------ ---- ----
$2,630 $-- $2,500 $130 $--
====== ==== ====== ==== ====
</TABLE>
- --------
(a) The year-end balance represents loans granted to two officers of the
Company. The loan amounts are $150,000 and $111,000. Both loans carry an
interest rate of 4.03% and mature in 1994.
(b) The year-end balance represents a U.S. housing loan granted to one
employee, who is not an officer or director of the Company. The loan
carries an interest rate of 3.69% and matures in 1998.
(c) The year-end balance represents a loan granted to one officer of the
Company. The loan carried an interest rate of 4.6% and matured in 1993.
(d) The year-end balance represents a U.S. housing loan granted to one
employee, who was not an officer or director of the Company. The loan
carried an interest rate of 0% and matured in 1993.
(e) During the year ended October 31, 1991, all U.S. housing loans to officers
were repaid.
(f) The year-end balance represents a U.S. housing loan granted to one
employee, who was not an officer or director of the Company. The loan
carried an interest rate of 0% and matured in 1992.
S-1
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
----------------
SCHEDULE V
PROPERTY, PLANT AND EQUIPMENT
(MILLIONS)
<TABLE>
<CAPTION>
BALANCE AT TRANSFERS BALANCE AT
BEGINNING ADDITIONS RETIREMENTS BETWEEN CLOSE OF
CLASSIFICATION OF PERIOD AT COST(a) OR SALES CLASSIFICATIONS PERIOD
-------------- ---------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Year ended October 31,
1993:
Land.................. $ 402 $ 114 $ 2 $-- $ 514
Buildings and lease-
hold improvements.... 2,994 319 60 1 3,254
Machinery and equip-
ment................. 3,196 1,056 492 (1) 3,759
------ ------ ---- ---- ------
$6,592 $1,489 $554 $-- $7,527
====== ====== ==== ==== ======
Year ended October 31,
1992:
Land.................. $ 390 $ 16 $ 4 $-- $ 402
Buildings and lease-
hold improvements.... 2,779 260 45 -- 2,994
Machinery and equip-
ment................. 2,792 807 403 -- 3,196
------ ------ ---- ---- ------
$5,961 $1,083 $452 $-- $6,592
====== ====== ==== ==== ======
Year ended October 31,
1991:
Land.................. $ 385 $ 7 $ 2 $-- $ 390
Buildings and lease-
hold improvements.... 2,567 243 29 (2) 2,779
Machinery and equip-
ment................. 2,613 612 435 2 2,792
------ ------ ---- ---- ------
$5,565 $ 862 $466 $-- $5,961
====== ====== ==== ==== ======
</TABLE>
- --------
(a) Included in "Additions at Cost" for the year ended October 31, 1993 are $3
million of land, $31 million of buildings and leasehold improvements and
$50 million of machinery and equipment acquired in connection with the
acquisition of several companies, none of which were significant to the
financial position of the Company.
Included in "Additions at Cost" for the year ended October 31, 1992 are $2
million of land, $10 million of buildings and leasehold improvements and $39
million of machinery and equipment acquired in connection with the
acquisition of Avantek, Inc., Colorado Memory Systems, Inc. and Texas
Instruments Incorporated's family of commercial UNIX-system based multiuser
computers and related systems.
S-2
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
----------------
SCHEDULE VI
ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
(MILLIONS)
<TABLE>
<CAPTION>
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO RETIREMENTS CLOSE OF
CLASSIFICATION OF PERIOD EXPENSE OR SALES PERIOD
-------------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Year ended October 31, 1993:
Buildings and leasehold improve-
ments.......................... $1,081 $185 $ 33 $1,233
Machinery and equipment......... 1,862 558 306 2,114
------ ---- ---- ------
$2,943 $743 $339 $3,347
====== ==== ==== ======
Year ended October 31, 1992:
Buildings and leasehold improve-
ments.......................... $ 963 $142 $ 24 $1,081
Machinery and equipment......... 1,653 454 245 1,862
------ ---- ---- ------
$2,616 $596 $269 $2,943
====== ==== ==== ======
Year ended October 31, 1991:
Buildings and leasehold improve-
ments.......................... $ 834 $144 $ 15 $ 963
Machinery and equipment......... 1,530 411 288 1,653
------ ---- ---- ------
$2,364 $555 $303 $2,616
====== ==== ==== ======
</TABLE>
S-3
<PAGE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
----------------
SCHEDULE IX
SHORT-TERM BORROWINGS
(MILLIONS, EXCEPT INTEREST RATES)
<TABLE>
<CAPTION>
AT YEAR-END DURING THE YEAR
---------------- ----------------------------
WEIGHTED AVERAGE WEIGHTED
AVERAGE HIGHEST OF AVERAGE
INTEREST MONTH-END MONTH-END INTEREST
TYPE OF SHORT-TERM BORROWING(a) BALANCE RATE BALANCE BALANCES RATE(b)
------------------------------- ------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
1993:
Notes payable to banks......... $ 820 4.2% $ 820 $ 581 5.0%
Commercial paper............... $1,174 3.1% $1,278 $1,155 3.2%
Other short-term borrowings.... $ 176 3.2% $ 176 $ 71 3.1%
1992:
Notes payable to banks......... $ 261 7.5% $ 333 $ 251 8.9%
Commercial paper............... $ 937 3.2% $ 937 $ 478 3.7%
Other short-term borrowings.... $ 150 3.0% $ 435 $ 251 4.1%
1991:
Notes payable to banks......... $ 264 8.7% $ 390 $ 285 10.4%
Commercial paper............... $ 477 5.3% $1,165 $ 557 6.8%
Other short-term borrowings.... $ 436 7.0% $ 436 $ 234 7.1%
</TABLE>
- --------
(a) "Notes payable and short-term borrowings" in the Company's consolidated
balance sheet includes the balances shown above and also the current
portion of long-term debt, amounting to $20 million at October 31, 1993,
$36 million at October 31, 1992 and $24 million at October 31, 1991.
(b) The computation of the weighted average interest rate during the year is
based on month-end balances and interest rates.
----------------
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(MILLIONS)
<TABLE>
<CAPTION>
FOR THE YEARS
ENDED OCTOBER
31,
--------------
1993 1992 1991
---- ---- ----
<S> <C> <C> <C>
Charged to costs and expenses:
Maintenance and repairs....................................... $307 $286 $264
Advertising costs............................................. $657 $541 $504
</TABLE>
S-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
1-2. Not applicable.
3(a). Registrant's Amended Articles of Incorporation, which
appear as Exhibit 3(a) to Registrant's Annual Report
on Form 10-K for the fiscal year ended October 31,
1988, which Exhibit is incorporated herein by
reference.
3(b). Registrant's Amended By-Laws, which appear as Exhibit
3(b) to Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1992, which Exhibit
is incorporated herein by reference.
4. None.
5-8. Not applicable.
9. None.
10(a). Registrant's 1979 Incentive Stock Option Plan, which
appears as Exhibit 10(a) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October
31, 1983, which Exhibit is incorporated herein by
reference.*
10(b). Registrant's 1979 Incentive Stock Option Plan
Agreements, which appear as Exhibit 10(b) to
Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1983, which Exhibit is
incorporated herein by reference.*
10(c). Letter dated September 24, 1984 to optionees advising
them of amendment to 1979 Incentive Stock Option Plan
Agreement (Exhibit 10(b) above), which appears as
Exhibit 10(c) to Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1984,
which Exhibit is incorporated herein by reference.*
10(d). Registrant's 1983 Officers Early Retirement Plan,
amended and restated as of January 1, 1990 which
appears as Exhibit 10(d) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October
31, 1990, which Exhibit is incorporated herein by
reference.*
10(e). Registrant's 1985 Incentive Compensation Plan, which
appears as Exhibit 10(e) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October
31, 1984, which Exhibit is incorporated herein by
reference.*
10(f). Registrant's 1985 Incentive Compensation Plan Stock
Option Agreements, which appear as Exhibit 10(f) to
Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1984, which Exhibit is
incorporated herein by reference.*
10(g). Registrant's Excess Benefit Retirement Plan, amended
and restated as of November 1, 1989, which appears as
Exhibit 10(g) to Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1990,
which Exhibit is incorporated herein by reference.*
10(h). Registrant's 1985 Incentive Compensation Plan
restricted stock agreements, which appear as Exhibit
10(h) to Registrant's Annual Report on Form 10-K for
the fiscal year ended October 31, 1985, which Exhibit
is incorporated herein by reference.*
10(i). Registrant's 1987 Director Option Plan, which appears
as Appendix A to Registrant's Proxy Statement dated
January 16, 1987, which Appendix is incorporated
herein by reference.*
10(j). Registrant's 1989 Independent Director Deferred
Compensation Program, which appears as Exhibit 10(j)
to Registrant's Annual Report on Form 10-K for the
fiscal year ended October 31, 1989, which Exhibit is
incorporated herein by reference.*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT PAGE
------- ------- ------------
<C> <S> <C>
10(k). Registrant's 1990 Incentive Stock Plan, which appears
as Appendix A to Registrant's Proxy Statement dated
January 11, 1990, which Appendix is incorporated
herein by reference.*
10(l). Registrant's 1990 Incentive Stock Plan stock option
and restricted stock agreements, which appear as
Exhibit 10(l) to Registrant's Annual Report on Form
10-K for the fiscal year ended October 31, 1990,
which Exhibit is incorporated herein by reference.*
10(m). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1979 Incentive Stock Option Plan, which
appears as Exhibit 10(m) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October
31, 1991, which Exhibit is incorporated herein by
reference.*
10(n). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1985 Incentive Compensation Plan, which
appears as Exhibit 10(n) to Registrant's Annual
Report on Form 10-K for the fiscal year ended October
31, 1991, which Exhibit is incorporated herein by
reference.*
10(o). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1987 Director Option Plan, which appears
as Exhibit 10(o) to Registrant's Annual Report on
Form 10-K for the fiscal year ended October 31, 1991,
which Exhibit is incorporated herein by reference.*
10(p). Resolution dated July 17, 1991 adopting amendment to
Registrant's 1990 Incentive Stock Plan, which appears
as Exhibit 10(p) to Registrant's Annual Report on
Form
10-K for the fiscal year ended October 31, 1991,
which Exhibit is incorporated herein by reference.*
11-12. None.
13. Pages 23-45 and 48 and the inside back cover
(excluding order data) of Registrant's 1993 Annual
Report to Shareholders.
14-17. Not applicable.
18. None.
19-20. Not applicable.
21. Subsidiaries of Registrant as of January 20, 1994.
22. None.
23. Consent of Independent Accountants.
24. Powers of Attorney. Contained in page 11 of this
Annual Report on Form 10-K and incorporated herein by
reference.
25-26. Not applicable.
27. Not applicable.
28. None.
99. 1993 Employee Stock Purchase Plan Annual Report on
Form 11-K.
</TABLE>
- --------
*Indicates management contract or compensatory plan or arrangement.
Exhibit numbers may not correspond in all cases to those numbers in Item 601
of Regulation S-K because of special requirements applicable to EDGAR filers.
(b) Reports on Form 8-K
None.
<PAGE>
EXHIBIT 13
Selected Financial Data
Hewlett-Packard Company and Subsidiaries
Unaudited
<TABLE>
<CAPTION>
For the years ended October 31
In millions except per share
amounts and employees 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. orders $ 9,462 $ 7,569 $ 6,484 $ 6,143 $ 5,677 $ 4,780
International orders 11,310 9,192 8,192 7,342 6,483 5,290
----------------------------------------------------
Total orders $20,772 $16,761 $14,676 $13,485 $12,160 $10,070
----------------------------------------------------
(BAR
Net revenue $20,317 $16,410 $14,494 $13,233 $11,899 $ 9,831 CHART
OMITTED)
Earnings from operations $ 1,879 $ 1,404 $ 1,210 $ 1,162 $ 1,212 $ 1,084
Earnings before effect of
1992 accounting change $ 1,177 $ 881 $ 755 $ 739 $ 829 $ 816
Net earnings $ 1,177 $ 549 $ 755 $ 739 $ 829 $ 816
Per share:
Earnings before
effect of 1992
accounting change $ 4.65 $ 3.49 $ 3.02 $ 3.06 $ 3.52 $ 3.36
Net earnings $ 4.65 $ 2.18 $ 3.02 $ 3.06 $ 3.52 $ 3.36
Cash dividend paid $ .90 $ .725 $ .48 $ .42 $ .36 $ .28
At year-end:
Total assets $16,736 $13,700 $11,973 $11,395 $10,075 $ 7,858
(BAR
Employees 96,200 92,600 89,000 92,200 94,900 86,600 CHART
---------------------------------------------------- OMITTED)
</TABLE>
See discussion of the 1992 change in accounting for retiree medical benefits on
page 39 of this report.
------
23
<PAGE>
Consolidated Statement of Earnings
Hewlett-Packard Company and Subsidiaries
<TABLE>
<CAPTION>
For the years ended October 31
In millions except per share amounts 1993 1992 1991
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenue:
Equipment $15,533 $12,354 $11,019
Services 4,784 4,056 3,475
-------------------------
20,317 16,410 14,494
-------------------------
Costs and expenses:
Cost of equipment sold 8,929 6,625 5,634
Cost of services 3,194 2,533 2,224
Research and development 1,761 1,620 1,463
Selling, general and administrative 4,554 4,228 3,963
-------------------------
18,438 15,006 13,284
-------------------------
Earnings from operations 1,879 1,404 1,210
Interest income and other income (expense) 25 17 47
Interest expense 121 96 130
-------------------------
Earnings before taxes and effect of 1992 accounting change 1,783 1,325 1,127
Provision for taxes 606 444 372
-------------------------
Earnings before effect of 1992 accounting change 1,177 881 755
Transition effect of 1992 accounting change, net of taxes -- 332 --
-------------------------
Net earnings $ 1,177 $ 549 $ 755
=========================
Earnings per share before effect of 1992 accounting change $ 4.65 $ 3.49 $ 3.02
Transition effect per share of 1992 accounting change, net of taxes -- 1.31 --
-------------------------
Net earnings per share $ 4.65 $ 2.18 $ 3.02
=========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
See discussion of the 1992 change in accounting for retiree medical benefits on
page 39 of this report.
- ------
24
<PAGE>
Financial Review
Hewlett-Packard Company and Subsidiaries
Unaudited
Results of Operations
In 1993, HP saw excellent overall market acceptance of new products
and achieved 24 percent growth in net revenue, despite continuing
economic weakness around the world. Moreover, favorable impacts from
ongoing efforts to improve operating expense structures offset rising
costs of sales, resulting in increased earnings from operations of 24
percent, after adjusting 1992 for the effects of special charges.
HP's orders increased 24 percent over 1992, totaling $20.8 billion,
compared to a 14 percent increase in 1992. Domestic and international
orders grew 25 and 23 percent, respectively, reflecting HP's well-
balanced position across a variety of geographic markets. Net revenue
from U.S. operations grew 30 percent to $9.3 billion while net revenue
from international operations grew 19 percent to $11.0 billion,
following increases of 13 percent in 1992 for both U.S. and (GRAPH
international operations. New acquisitions added approximately 3 OMITTED)
percentage points to the order and revenue growth. The U.S. dollar
strengthened slightly during 1993 relative to most major foreign
currencies while it weakened relative to the Yen. The changing value
of the U.S. dollar had only a minor impact on HP's international net
revenue.
Net revenue from equipment sales increased 26 percent in 1993 compared
to 12 percent in 1992. Demand for the company's peripheral products,
such as the HP LaserJet and HP DeskJet families of printers,
workstations and multiuser computer systems based on the UNIX operating
system and 486-based Vectra PCs continued to be excellent in 1993. A
major milestone was reached during the year with the shipment of the 10
millionth HP LaserJet printer. Service revenue grew 18 percent and 17
percent in 1993 and 1992, respectively. Sales of consumable supplies
for the company's printer products were excellent and fueled the growth
in service revenue in both 1993 and 1992. Detailed information on
orders and net revenue by groupings of similar products and services is
presented on page 44 of this report.
New products introduced during the year demonstrate HP's commitment to
innovative technology and continuous product improvements. Among the
many new products receiving strong acceptance in the marketplace
during 1993 were the HP LaserJet 4Si and HP DeskJet 1200 printers, HP
9000 Series 700 workstations, HP Vectra PCs, and HP 9000 multiuser (GRAPH
systems and servers. Other key products introduced in 1993 include the OMITTED)
HP OmniBook 300 superportable PC, broadcast encoders for digital high-
definition TV, the HP 5890 Series II Plus gas chromatograph offering
precise digital control and a network-monitoring system for
telecommunications providing real-time data for troubleshooting.
Costs and expenses as a percentage of net revenue were as follows:
<TABLE>
<CAPTION>
For the years ended October 31: 1993 1992 1991
- ---------------------------------------------------------------------
<S> <C> <C> <C>
Cost of equipment sold and services 59.7% 55.8% 54.2%
Research and development 8.7% 9.9% 10.1%
Selling, general and administrative 22.4% 25.7% 27.4%
- ---------------------------------------------------------------------
</TABLE>
------
25
<PAGE>
Financial Review
Hewlett-Packard Company and Subsidiaries
Unaudited
During 1993, cost of equipment sold and services increased 3.9
percentage points following a 1.6 percentage point increase in 1992.
Pricing and other competitive pressures increased in 1993 and had a
significant impact on cost of sales. Changes in the mix of products
sold also continued to put upward pressure on cost of sales as a
percentage of net revenue. In 1993, a higher portion of the company's
net revenue was generated by peripheral products, which are primarily
sold through dealers and other indirect channels. Products sold
through these channels generally carry higher discounts, thereby
increasing cost of sales as a percentage of net revenue. These factors
are likely to continue to put some upward pressure on cost of sales.
Research and development expenditures as a percentage of net revenue
decreased 1.2 percentage points compared with a .2 percentage point
decrease in 1992. Total expenditures increased 9 percent to $1.8
billion in 1993 versus $1.6 billion in 1992. The increased investment
in research and development reflects the company's belief that
continued success in a global marketplace requires a continuing flow
(GRAPH of innovative, high-quality products.
OMITTED)
Selling, general and administrative expense as a percentage of net
revenue decreased 3.3 percentage points to 22.4 percent of net
revenue, following a 1.7 percentage point decrease in 1992. This
decrease reflects ongoing efforts to adjust expense structures, the
effects of the change in the mix of products sold as mentioned above,
and benefits of the company's 1992 and 1991 special charges for
employment reductions and facilities consolidations.
The reduction of operating expense ratios and optimization of
manufacturing processes in order to improve profitability remain major
focuses of the company.
Interest income and other income (expense) was $25 million in 1993
compared to $17 million in 1992 and $47 million in 1991. During the
year, write-downs of real estate assets in geographic areas with weak
real estate markets were about offset by gains on sales of certain
stock investments. The increase in 1993 is largely due to special
charges and balance sheet translation losses in 1992 that did not
recur. These factors also contributed to the decrease from 1991 to
1992.
Interest expense was $121 million in 1993 compared to $96 million in
1992 and $130 million in 1991. The changes in interest expense reflect
changes in the levels of notes payable and short-term borrowings and
long-term debt outstanding, as well as interest rate changes during
(GRAPH the respective periods.
OMITTED)
The company's effective tax rate increased slightly to 34 percent in
1993 compared with 33.5 percent in 1992 and 33 percent in 1991. A
combination of factors led to the increase, including an increase in
the U.S. corporate federal income tax rate, changes in the geographic
mix of the company's earnings and resolution of certain issues related
to tax returns filed in prior years.
In 1992, HP incurred special charges of approximately $137 million
before taxes, or $0.36 per share, to cover the costs related to
voluntary severance programs, employee redeployment and related
facilities consolidations. Approximately 2,000 employees left the
company during 1993 under voluntary severance programs. The company
incurred a similar charge in 1991 of about $150 million before taxes,
or approximately $0.40 per share.
- ------
26
<PAGE>
Financial Review
Hewlett-Packard Company and Subsidiaries
Unaudited
Net earnings increased 21 percent to $1.2 billion in 1993, excluding
the 1992 effects of special charges described above and a one-time
charge of $332 million after income taxes for a change in accounting
for retiree medical benefits. This compares to a 14 percent increase
in 1992, excluding the accounting change and special charges in both
1992 and 1991. As a percentage of net revenue, net earnings without
the special charges and accounting change were 5.8 percent in 1993
compared with 5.9 percent in 1992 and 5.9 percent in 1991. Including
the special charges and accounting change, net earnings in 1992 and
1991 were 3.3 and 5.2 percent of net revenue.
(BAR
Average shares outstanding used to compute earnings per share were CHART
253.2 million in 1993, 252.6 million in 1992 and 250.1 million in 1991. OMITTED)
The increases in shares outstanding resulted from issuances of common
stock to employees under various stock plans, partially offset
by stock acquired by the company under its ongoing share repurchase
program.
Financial Condition and Liquidity
HP's financial position remains strong, with cash and cash equivalents
and short-term investments of $1.6 billion at October 31, 1993,
compared to $1.0 billion at October 31, 1992, and $1.1 billion at
October 31, 1991.
Operating activities generated $1.1 billion in cash in 1993, compared
to $1.3 billion and $1.6 billion in 1992 and 1991, respectively. The
decrease in cash generated from operations in 1993 compared to 1992
is primarily attributable to a substantial increase in inventory
levels, partially offset by higher net earnings. The inventory buildup
is due to several factors including new product ramp-ups, short time-
to-market introduction cycles and increased usage of retail channels,
which require higher inventory levels to meet the immediate needs of
retailers' customers. One of the company's major objectives is to
enhance processes, with a focus on improving inventory turnover, to
accommodate business changes such as shorter product life cycles and
rapid product ramp-ups.
The company invests excess cash in short-term and long-term
investments depending on its projected needs for cash for operations,
capital expenditures and other business purposes. The company from
time to time supplements its internally generated cash flow with a
combination of short-term and long-term borrowings as required by
developments in its businesses. 1993 capital expenditures were $1.4
billion compared to $1.0 billion and $862 million in 1992 and 1991,
respectively. The increase in capital expenditures in 1993 relates
mainly to expansion of production capacity for computer products, (BAR
including printers and printer supplies. CHART
OMITTED)
Cash flow from changes in long-term debt, notes payable and short-term
borrowings was a net borrowing of $966 million in 1993 compared to net
borrowings of $416 million in 1992 and net payments of $647 million in
1991. At October 31, 1993, the company had unused credit lines and
authorized but unissued commercial paper totaling $1.3 billion.
Shares are repurchased periodically to meet employee stock plan
requirements. Approximately 4.3 million shares were purchased in 1993
at an aggregate price of $314 million. In 1992, 7.7 million shares were
purchased at an aggregate price of $530 million; and in 1991, 1.6
million shares were purchased for an aggregate price of $79 million.
Additional stock purchase expenditures, based on certain price and
volume criteria, are authorized by the Board of Directors. At October 31,
1993, the remaining authorization was $79 million. In November 1993, the
Board authorized an additional $500 million.
------
27
<PAGE>
Consolidated Balance Sheet
Hewlett-Packard Company and Subsidiaries
<TABLE>
<CAPTION>
October 31
In millions except par value and number of shares 1993 1992
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 889 $ 641
Short-term investments 755 394
Accounts and notes receivable 4,208 3,497
Inventories:
Finished goods 2,121 1,271
Purchased parts and fabricated assemblies 1,570 1,334
Other current assets 693 542
------------------
Total current assets 10,236 7,679
------------------
Property, plant and equipment:
Land 514 402
Buildings and leasehold improvements 3,254 2,994
Machinery and equipment 3,759 3,196
------------------
7,527 6,592
Accumulated depreciation (3,347) (2,943)
------------------
4,180 3,649
Long-term receivables and other assets 2,320 2,372
------------------
$16,736 $13,700
==================
Liabilities and shareholders' equity
Current liabilities:
Notes payable and short-term borrowings $ 2,190 $ 1,384
Accounts payable 1,223 925
Employee compensation and benefits 1,048 913
Taxes on earnings 922 490
Deferred revenues 507 449
Other accrued liabilities 978 933
------------------
Total current liabilities 6,868 5,094
------------------
Long-term debt 667 425
Other liabilities 659 633
Deferred taxes on earnings 31 49
Shareholders' equity:
Preferred stock, $1 par value (authorized: 300,000,000 shares; issued: none) -- --
Common stock and capital in excess of $1 par value (authorized: 600,000,000
shares; issued and outstanding: 252,713,000 in 1993 and 250,824,000 in 1992) 937 874
Retained earnings 7,574 6,625
------------------
Total shareholders' equity 8,511 7,499
------------------
$16,736 $13,700
==================
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------
28
<PAGE>
Financial Review
Hewlett-Packard Company and Subsidiaries
Unaudited
Factors That May Affect Future Results
The company's future operating results are dependent on the company's
ability to rapidly develop, manufacture and market technologically
innovative products that meet customers' needs. Inherent in this
process are a number of risks that the company must successfully
manage in order to achieve favorable operating results.
The process of developing new high technology products is complex and
uncertain and requires innovative designs that anticipate customer
needs and technological trends. After the products are developed, the
company must quickly manufacture products in sufficient volumes at
acceptable costs to meet demand.
In addition, a portion of the company's manufacturing operations is
dependent on the ability of significant suppliers to deliver integral
sub-assemblies and components in time to meet critical manufacturing (GRAPH
schedules. The failure of suppliers to deliver these subassemblies and OMITTED)
components in a timely manner may adversely affect the company's
operating results until alternate sourcing could be developed. The
company believes that alternate suppliers or design solutions could be
arranged within a reasonable time so that material long-term adverse
impacts would be unlikely.
Changing industry practices and customer preferences require the
company to expand into new distribution channels. As more of HP's
products are distributed through dealer and other indirect channels,
these channels become more critical to the company's success. Financial
results could be adversely affected in the event that the financial
condition of these sellers weakens.
The operations of the company involve the use of substances regulated
under various federal, state and international laws governing the
environment. It is the company's policy to apply strict standards for
environmental protection to sites inside and outside the U.S., even if
not subject to regulations imposed by local governments. Liability for
environmental remediation is accrued when it is considered probable and
costs can be estimated. Environmental expenditures are presently not
material to HP's operations or financial position.
A portion of the company's research and development activities, its
corporate headquarters and other critical business operations are
located near major earthquake faults. The ultimate impact on the
company, significant suppliers and the general infrastructure is
unknown, but operating results could be materially affected in the (GRAPH
event of a major earthquake. The company is predominantly self-insured OMITTED)
for losses and interruptions caused by earthquakes.
Although HP believes that it has the product offerings and resources
needed for continued success, future revenue and margin trends cannot
be reliably predicted. Factors external to the company can result in
volatility of the company's common stock price. Because of the
foregoing factors, recent trends should not be considered reliable
indicators of future stock prices or financial results.
------
29
<PAGE>
Consolidated Statement of Cash Flows
Hewlett-Packard Company and Subsidiaries
<TABLE>
<CAPTION>
For the years ended October 31
In millions 1993 1992 1991
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,177 $ 549 $ 755
Adjustments to reconcile net earnings to
cash provided by operating activities:
Transition effect of 1992 accounting change -- 332 --
Depreciation and amortization 846 673 624
Deferred taxes on earnings (137) (35) (46)
Changes in assets and liabilities:
Accounts and notes receivable (709) (480) (117)
Inventories (1,056) (267) (181)
Accounts payable 283 226 26
Taxes on earnings 452 31 124
Other current assets and liabilities 200 328 314
Other, net 86 (69) 53
-------------------------
1,142 1,288 1,552
-------------------------
Cash flows from investing activities:
Investment in property, plant and equipment (1,405) (1,032) (862)
Disposition of property, plant and equipment 215 183 163
Purchase of short-term investments (1,634) (782) (512)
Maturities of short-term investments 1,283 883 46
Purchase of long-term investments (22) (53) (394)
Maturities of long-term investments 22 4 145
Acquisitions, net of cash acquired (86) (411) --
Other, net 23 (58) --
-------------------------
(1,604) (1,266) (1,414)
-------------------------
Cash flows from financing activities:
Increase (decrease) in notes payable and short-term borrowings 807 186 (350)
Issuance of long-term debt 387 309 131
Payment of current maturities of long-term debt (228) (79) (428)
Issuance of common stock under employee stock plans 308 293 251
Repurchase of common stock (314) (530) (79)
Dividends (228) (183) (120)
Other, net (22) (2) 5
-------------------------
710 (6) (590)
-------------------------
Increase (decrease) in cash and cash equivalents 248 16 (452)
Cash and cash equivalents at beginning of year 641 625 1,077
-------------------------
Cash and cash equivalents at end of year $ 889 $ 641 $ 625
=========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
- ------
30
<PAGE>
Consolidated Statement of Shareholders' Equity
Hewlett-Packard Company and Subsidiaries
<TABLE>
<CAPTION>
Common stock
---------------------------
Par value
Number of and capital in Retained
In millions except number of shares in thousands shares excess of par earnings Total
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance October 31, 1990 244,085 $ 739 $5,624 $6,363
Employee stock plans:
Shares issued 9,081 350 -- 350
Shares purchased (1,619) (79) -- (79)
Dividends -- -- (120) (120)
Net earnings -- -- 755 755
-------------------------------------------------
Balance October 31, 1991 251,547 1,010 6,259 7,269
Employee stock plans:
Shares issued 6,960 394 -- 394
Shares purchased (7,683) (530) -- (530)
Dividends -- -- (183) (183)
Net earnings -- -- 549 549
-------------------------------------------------
Balance October 31, 1992 250,824 874 6,625 7,499
Employee stock plans:
Shares issued 6,234 377 -- 377
Shares purchased (4,345) (314) -- (314)
Dividends -- -- (228) (228)
Net earnings -- -- 1,177 1,177
-------------------------------------------------
Balance October 31, 1993 252,713 $ 937 $7,574 $8,511
=================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
------
31
<PAGE>
Notes to Consolidated Financial Statements
Hewlett-Packard Company and Subsidiaries
Summary of Significant Accounting Policies
- --------------------------------------------------------------------------------
Principles of consolidation
The consolidated financial statements include the accounts of Hewlett-Packard
Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
Revenue recognition
Revenue from equipment sales is generally recognized at the time the equipment
is shipped. Services revenue is recognized over the contractual period or as
services are performed.
Taxes on earnings
Income tax expense is based on pretax financial accounting income. Deferred tax
assets and liabilities are recognized for the expected tax consequences of
temporary differences between the tax bases of assets and liabilities and their
reported amounts.
Net earnings per share
Net earnings per share is computed based on a method that approximates the use
of weighted-average shares outstanding during the year. Shares used in the
computation were 253,230,000 in 1993, 252,600,000 in 1992 and 250,143,000 in
1991. Outstanding stock options considered to be common stock equivalents have
not been included because the effect would be immaterial.
Short-term investments
Short-term investments principally comprise cash invested in certificates of
deposit, temporary money-market instruments and repurchase agreements and are
stated at cost, which approximates market.
Inventories
Inventories are valued at standard costs that approximate actual costs computed
on a first-in, first-out basis, not in excess of market values.
Property, plant and equipment
Property, plant and equipment are stated at cost. Additions, improvements and
major renewals are capitalized. Maintenance, repairs and minor renewals are
expensed as incurred. Depreciation is provided using accelerated methods,
principally over the following useful lives: buildings and improvements, 15 to
40 years; machinery and equipment, 3 to 10 years. Depreciation of leasehold
improvements is provided using the straight-line method over the life of the
lease or the asset, whichever is shorter.
Foreign currency translation
The company uses the U.S. dollar as its functional currency. Foreign currency
assets and liabilities are translated into U.S. dollars at end-of-period
exchange rates except for inventories, prepaid expenses, and property, plant and
equipment, which are translated at historical exchange rates. Revenues and
expenses are translated at average exchange rates in effect during each period
except for those expenses related to balance sheet amounts that are translated
at historical exchange rates. Gains or losses from foreign currency translation
are included in net earnings.
Statement of cash flows
The company has classified investments as cash equivalents if the original
maturity of such investments is three months or less.
- ------
32
<PAGE>
The company paid income taxes of $293 million in 1993, $459 million in 1992 and
$335 million in 1991. For the same periods, the company paid interest of $109
million, $84 million and $137 million, respectively. The effect of foreign
currency exchange rate fluctuations on cash balances denominated in foreign
currencies was not material. Information about non-cash investing activities is
included in the Acquisitions note below.
Acquisitions
- --------------------------------------------------------------------------------
The company acquired several companies during 1993 for a total purchase price of
$91 million, obtaining assets of $113 million and assuming liabilities of $22
million. These acquisitions were not significant to the financial position or
results of operations of the company.
In 1992, the company acquired Avantek, Inc., Colorado Memory Systems, Inc. and
Texas Instruments' family of commercial UNIX-system based multiuser computers
and related services for an aggregate purchase price of $423 million. In the
aggregate, the company acquired assets and liabilities of $529 million and $106
million, respectively.
All of these acquisitions were accounted for using the purchase method. Under
the purchase method, the results of operations of acquired companies are
included prospectively from the date of acquisition, and the acquisition cost is
allocated to the acquirees' assets and liabilities based upon their fair market
value at the date of the acquisition. The excess of the acquisition cost over
the fair market value of net assets acquired represents goodwill and amounted to
$71 million and $334 million for the 1993 and 1992 acquisitions, respectively.
At the end of fiscal year 1993, the net book value of goodwill associated with
current and prior year acquisitions was $623 million and is being amortized on a
straight-line basis over 3 to 10 years.
Financial Instruments
- --------------------------------------------------------------------------------
Off-balance-sheet risk
The company enters into foreign exchange contracts to hedge against changes in
foreign currency exchange rates. Such exposures are a result of the portion of
the company's operations as well as assets and liabilities that are denominated
in currencies other than the U.S. dollar. When the company's foreign exchange
contracts hedge operational exposure, the effects of movements in currency
exchange rates on these instruments are recognized when the related revenue and
expenses are recognized. When foreign exchange contracts hedge balance sheet
exposure, such effects are recognized when the exchange rate changes. Because
the impact of movements in currency exchange rates on foreign exchange contracts
offsets the related impact on the underlying items being hedged, these
instruments do not subject the company to risk that would otherwise result from
changes in currency exchange rates. The company had foreign exchange contracts
of $3.0 billion and $2.5 billion outstanding at October 31, 1993 and 1992,
respectively. The foreign exchange contracts require the company to exchange
foreign currencies for U.S. dollars and generally mature within six months.
The company enters into interest rate swap agreements to manage its exposure to
interest rate changes. The transactions generally involve the exchange of fixed
and floating interest payment obligations without the exchange of the underlying
principal amounts. At October 31, 1993 and 1992, off-balance-sheet exposures
under interest rate swap agreements were not material.
Concentrations of credit risk
Financial instruments that potentially subject the company to significant
concentrations of credit risk consist principally of cash investments and trade
accounts receivable.
------
33
<PAGE>
The company maintains cash and cash equivalents, short- and long-term
investments and certain other financial instruments with various financial
institutions. These financial institutions are located in many different
geographies throughout the world, and company policy is designed to limit
exposure with any one institution. As part of its cash management process, the
company performs periodic evaluations of the relative credit standing of these
financial institutions.
Credit risk with respect to trade accounts receivable is generally diversified
due to the large number of entities comprising the company's customer base and
their dispersion across many different industries and geographies. The company
performs ongoing credit evaluations of its customers' financial condition,
utilizes flooring arrangements with third-party financing companies and requires
collateral, such as letters of credit and bank guarantees, in certain
circumstances.
The company sells a significant portion of its products through third-party
distributors and, as a result, maintains individually significant receivable
balances with major distributors. If the financial condition and operations of
these distributors deteriorate below critical levels, the company's operating
results could be adversely affected. The ten largest distributor receivable
balances collectively represented 9% and 8% of total accounts and notes
receivable at October 31, 1993 and 1992, respectively.
Fair value of financial instruments
For certain of the company's financial instruments, including cash and cash
equivalents, short-term investments, accounts and notes receivable, notes
payable and short-term borrowings, accounts payable and other accrued
liabilities, the carrying amounts approximate fair value due to their short
maturities. Long-term floating rate notes and certificates of deposit are
carried at amounts that approximate fair value. Consequently, such instruments
are not included in the following table, which provides information regarding
the estimated fair values of other financial instruments, both on and off the
balance sheet, at October 31:
<TABLE>
<CAPTION>
1993
--------------------
Carrying Estimated
In millions Amount Fair Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Long-term stock investments $ 88 $106
Long-term debt (including amounts due within one year) $687 $712
Foreign exchange contracts, including options $ 32 $ 66
Interest rate swap agreements $ -- $ 26
- --------------------------------------------------------------------------------
</TABLE>
For long-term stock investments the estimated fair value is based on quoted
market prices. The estimated fair value for long-term debt is primarily based on
quoted market prices, as well as borrowing rates currently available to the
company for bank loans with similar terms and maturities. For foreign exchange
contracts, including options, and interest rate swaps, the estimated fair value
is primarily based on quoted market prices for the same or similar instruments,
adjusted where necessary for maturity differences.
The estimated fair values may not be representative of actual values of the
financial instruments that could have been realized as of year end or that will
be realized in the future.
- ------
34
<PAGE>
Taxes on Earnings
- --------------------------------------------------------------------------------
Effective as of the beginning of the company's 1992 fiscal year, the company
adopted Statement of Financial Accounting Standards No. 109 (SFAS No. 109),
``Accounting for Income Taxes.'' The effects of adopting SFAS No. 109 were not
material.
The provision for income taxes comprises the following:
<TABLE>
<CAPTION>
In millions 1993 1992 1991
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal taxes:
Current $330 $248 $169
Deferred (46) (93) (41)
Non-U.S. taxes:
Current 381 199 228
Deferred (91) 58 (5)
State taxes 32 32 21
----------------------------
$606 $444 $372
============================
</TABLE>
The significant components of deferred tax assets and liabilities included on
the balance sheet at October 31:
<TABLE>
<CAPTION>
1993 1992
--------------------- ---------------------
Deferred Deferred Deferred Deferred
tax tax tax tax
In millions assets liabilities assets liabilities
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Inventory $283 $ 28 $188 $ 30
Fixed assets 56 6 51 26
Retiree medical benefits 234 -- 220 --
Other retirement benefits -- 116 -- 108
Employee benefits, other than
retirement 22 31 32 9
Leasing activities -- 83 -- 85
Other 193 163 135 138
--------------------------------------------
$788 $427 $626 $396
============================================
</TABLE>
No valuation allowance was necessary in 1993 and 1992.
In 1991, there were no individually significant temporary differences. Tax
benefits of $35 million and $28 million associated with the exercise of employee
stock options were allocated to equity in 1993 and 1992, respectively. The U.S.
statutory tax rate was increased to 34.8% from 34% as a result of legislation
enacted in August 1993, effective January 1, 1993. The effect on the company's
deferred tax assets and liabilities was not material.
------
35
<PAGE>
The differences between the U.S. federal statutory income tax rate and the
company's effective rate are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. federal statutory income tax rate 34.8% 34.0% 34.0%
State income taxes, net of federal tax benefit 1.1 1.6 1.3
FSC tax benefit 0.6 (0.7) (2.4)
Lower rates in other jurisdictions, net (3.1) (4.1) (2.4)
Other, net 0.6 2.7 2.5
--------------------
34.0% 33.5% 33.0%
====================
</TABLE>
After allocating eliminations and corporate items, earnings before taxes are as
follows:
<TABLE>
<CAPTION>
In millions 1993 1992 1991
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. operations including Puerto Rico $ 818 $ 734 $ 653
Non-U.S. 965 591 474
--------------------------
$1,783 $1,325 $1,127
==========================
</TABLE>
The company has not provided for U.S. federal income and foreign withholding
taxes on $1.7 billion of non-U.S. subsidiaries' undistributed earnings as of
October 31, 1993, because such earnings are intended to be reinvested
indefinitely. If these earnings were distributed, foreign tax credits should
become available under current law to reduce or eliminate the resulting U.S.
income tax liability. Where excess cash has accumulated in the company's
non-U.S. subsidiaries and it is advantageous for tax or foreign exchange
reasons, subsidiary earnings are remitted.
As a result of certain employment and capital investment actions undertaken by
the company, income from manufacturing activities in certain countries is
subject to reduced tax rates, and in some cases is wholly exempt from taxes, for
years through 2002. The income tax benefits attributable to the tax status of
these subsidiaries are estimated to be $128 million, $123 million and $118
million for 1993, 1992 and 1991, respectively.
The Internal Revenue Service (IRS) has completed its examination of the
company's federal income tax returns filed through 1983. The IRS has not
commenced its examination of returns for years subsequent to 1989. The company
believes that adequate accruals have been provided for all years.
Borrowings
- --------------------------------------------------------------------------------
Notes payable and short-term borrowings comprise the following:
<TABLE>
<CAPTION>
1993 1992
-------------- --------------
Interest Interest
In millions rate rate
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Commercial paper $1,174 3.1% $ 937 3.2%
Notes payable to banks 820 4.2% 261 7.5%
Other short-term borrowings 196 3.2% 186 3.0%
------ ------
$2,190 $1,384
====== ======
</TABLE>
- ------
36
<PAGE>
The interest rates represent rates in effect at October 31, 1993 and 1992.
Long-term debt consists of corporate bonds placed with various financial
institutions with interest rates ranging from 3.4% to 8.0%. The aggregate
payments for the next five years of long-term debt outstanding at October 31,
1993 are $52 million in 1995, $200 million in 1996, and $415 million in 1999 and
thereafter.
At October 31, 1993, the company had unused lines of credit of $1.1 billion and
authorized but unissued commercial paper of about $150 million. The credit lines
provide for borrowings on a worldwide basis and generally do not require
commitment fees.
Shareholders' Equity
- --------------------------------------------------------------------------------
Employee Stock Purchase Plan
Eligible company employees may generally contribute up to 10 percent of their
base compensation to the quarterly purchase of company stock under the Employee
Stock Purchase Plan. Under this plan, employee contributions are partially
matched with company contributions on a quarterly basis to purchase HP stock. At
October 31, 1993, 82,000 employees were eligible to participate and 40,000
employees were participants in the plan.
Incentive compensation plans
The company has three principal stock option plans, adopted in 1979, 1985 and
1990. All plans permit options granted to qualify as ``Incentive Stock Options''
under the Internal Revenue Code. The exercise price of a stock option is
generally equal to the fair market value of the company's common stock on the
date the option is granted. Under the 1990 Incentive Stock Plan, however, the
Executive Compensation and Stock Option Committee, in certain cases, may choose
to establish a discounted exercise price at no less than 75 percent of fair
market value on the grant date. In 1993 and 1992, discounted options totaling
741,000 shares and 916,000 shares, respectively, were granted at 75 percent
of fair market value on the grant date. Options generally vest at a rate of 25
percent per year over a period of four years from the date of grant except for
discounted options, which may not be exercised before the fifth anniversary of
the option grant date, at which time such options become 100 percent vested. The
plans provide for the granting of stock appreciation rights with respect to
options granted to officers. The company has not included stock appreciation
rights with options granted to officers since October 31, 1991.
The following table summarizes option activity during 1993:
<TABLE>
<CAPTION>
Price
Thousands except price per share amounts Options per share
- -------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at October 31, 1992 14,814 $27-81
Granted 2,460 44-80
Exercised (3,126) 27-81
Cancelled (236) 27-81
------------------
Outstanding at October 31, 1993 13,912 $27-81
==================
</TABLE>
At October 31, 1993, options to purchase 7,479,000 shares were exercisable at
prices ranging from $27 to $81 per share. Shares available for option grants at
October 31, 1993 and 1992 were 7,406,000 and 9,694,000, respectively.
Approximately 45,000 employees were considered eligible to receive stock options
in fiscal 1993. There were approximately 20,000 employees holding options under
one or more of the option plans as of October 31, 1993.
------
37
<PAGE>
Under the 1985 Incentive Compensation Plan and the 1990 Incentive Stock Plan,
certain key employees may be granted cash or restricted stock awards. Cash and
restricted stock awards are independent of option grants and are subject to
restrictions considered appropriate by the company's Executive Compensation and
Stock Option Committee. The majority of the shares of restricted stock
outstanding at October 31, 1993, are subject to forfeiture if employment
terminates prior to five years from the date of grant. During that period,
ownership of the shares cannot be transferred. Restricted stock has the same
dividend and voting rights as other common stock and is considered to be
currently issued and outstanding. The cost of the awards, determined as the fair
market value of the shares at the date of grant, is expensed ratably over the
period the restrictions lapse. Such expense amounted to $8 million, $11 million
and $12 million in 1993, 1992 and 1991, respectively. At October 31, 1993 and
1992, the company had 276,000 and 925,000 shares, respectively, of restricted
stock outstanding. Beginning in 1992, discounted stock options are generally
granted in place of restricted stock.
Shares reserved
The company has reserved shares for future issuance under the employee stock
plans. At October 31, 1993 and 1992, 35,797,000 and 31,836,000 shares,
respectively, were reserved.
Stock repurchase program
Under the company's stock repurchase program, shares of HP common stock are
periodically purchased to meet future employee stock plan requirements. In 1993,
1992 and 1991, 4,345,000, 7,683,000 and 1,619,000 shares were repurchased for an
aggregate purchase price of $314 million, $530 million and $79 million,
respectively. At October 31, 1993, HP had authorization for an aggregate of $79
million in future repurchases under this program based on certain price and
volume criteria. In November 1993, the Board authorized an additional $500
million in future repurchases.
Retirement Plans and Retiree Medical Benefits
- --------------------------------------------------------------------------------
Pension and profit-sharing plans
Substantially all of the company's employees are covered under various pension
and deferred profit-sharing retirement plans. The worldwide pension and deferred
profit-sharing costs were $159 million in 1993, $138 million in 1992 and $134
million in 1991.
U.S. employees are provided retirement benefits by the U.S. Deferred Profit-
Sharing Plan (DPS) and the U.S. Supplemental Pension Plan (SPP). The DPS is a
defined contribution plan that provides the vast majority of retirement
benefits. The plan is funded solely by the company through an annual
contribution based upon the company's adjusted U.S. net income, as defined in
the plan agreement. Assets of the plan are held in trust for the sole benefit of
employees. The company's expense for the DPS was $88 million in 1993, $69
million in 1992 and $45 million in 1991. The SPP is a defined benefit plan that
provides for any excess of defined minimum benefits over the benefits available
from the DPS. The amount of the benefit is computed based upon the employee's
highest average pay rate and length of service, reduced by the annuity value to
which the employee is entitled under the DPS. The DPS and SPP were substantially
amended effective October 29, 1993, such that all accrued pension benefits under
these plans were immediately 100% vested. This amendment resulted in prior
service cost of $69 million. The accumulated benefit obligation and benefit
obligation increased by $3.4 million and $69 million, respectively, as a result
of this amendment.
- ------
38
<PAGE>
Effective November 1, 1993, the DPS and SPP will be replaced by a new Retirement
Plan. Benefits under this new defined benefit plan will be based on highest
average pay rate and years of service. Employees will retain benefits earned
through October 31, 1993 under the DPS and SPP with benefits under the SPP
adjusted for future salary increases. Future benefits will be earned under the
new Retirement Plan using the new formula.
The combined status of the U.S. Deferred Profit-Sharing and U.S. Supplemental
Pension plans is as follows:
<TABLE>
<CAPTION>
In millions 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C>
Fair value of plan assets $2,096 $1,801
Retirement benefit obligation $1,872 $1,572
- --------------------------------------------------------------------------------
</TABLE>
Employees outside of the U.S. generally receive retirement benefits under
various defined benefit and defined contribution plans based upon factors such
as years of service and employee compensation levels.
Retiree medical plan
In addition to providing pension and deferred profit-sharing benefits, the
company also has a medical plan that provides defined benefits to U.S. retired
employees. Substantially all of the company's U.S. employees could become
eligible for these benefits.
The company adopted, effective as of the beginning of the 1992 fiscal year,
Statement of Financial Accounting Standards No. 106, ``Employers' Accounting for
Postretirement Benefits Other than Pensions'' (SFAS No. 106). SFAS No. 106
requires that postretirement benefits other than pensions be accounted for using
the accrual method. Previously, the company expensed retiree medical costs as
claims were paid.
The adoption of SFAS No. 106 in 1992 resulted in a one-time charge to net
earnings of $332 million in the first quarter, after a reduction for income
taxes of $212 million. The one-time charge represents the transition effect of
adopting SFAS No. 106 as of the beginning of 1992. Accrual basis retiree medical
expenses were $33 million in 1993 and $32 million in 1992, excluding the
one-time charge. The cost under the cash basis approach was $10 million in 1991.
401(k) Plan
U.S. employees of the company may participate in the Tax Saving Capital
Accumulation Plan (TAXCAP), which was established as a supplemental retirement
program. Under the TAXCAP program, the company partially matches contributions
by employees up to a maximum of 4% of an employee's annual compensation.
Currently, combined Employee Stock Purchase Plan and TAXCAP contributions by an
employee cannot exceed 12 percent of an employee's annual base compensation.
Effective November 1, 1993, the maximum combined contribution to these two plans
will be 17% of an employee's annual base compensation subject to certain
regulatory and plan limitations. At October 31, 1993, 43,000 employees were
participating in TAXCAP out of the 54,000 who were eligible.
------
39
<PAGE>
Funded status and net periodic cost
The funded status of the defined benefit and retiree medical plans is as
follows:
<TABLE>
<CAPTION>
U.S.
supplemental Non-U.S. U.S.
defined benefit defined benefit retiree medical
plan plans plan
--------------- --------------- ---------------
In millions 1993 1992 1993 1992 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fair value of plan assets $ 307 $ 267 $ 798 $ 663 $ 251 $ 211
Benefit obligation (83) (38) (851) (747) (444) (412)
-----------------------------------------------
Excess of plan assets over
benefit obligation 224 229 (53) (84) (193) (201)
Unrecognized net experience
(gain) loss (77) (32) 97 75 (57) (17)
Unrecognized service cost
related to plan changes 69 -- -- -- (181) (190)
Unrecognized net transition
asset* (54) (62) (7) (13) -- --
-----------------------------------------------
Prepaid (accrued) costs $ 162 $ 135 $ 37 $ (22) $(431) $(408)
===============================================
Vested benefit obligation $ (19) $ (9) $(529) $(474)
Accumulated benefit obligation $ (19) $ (13) $(576) $(506)
==============================
</TABLE>
*Amortized over 15 years for the U.S. plan and over periods ranging from 12 to
20 years for non-U.S. plans.
Plan assets consist primarily of listed stocks and bonds for the U.S. plans and
listed stocks, bonds and cash surrender value of life insurance policies for the
non-U.S. plans. It is the company's practice to fund these costs to the extent
they are tax-deductible.
The company's net pension, deferred profit-sharing and retiree medical costs
comprise the following:
<TABLE>
<CAPTION>
Pension and deferred profit-sharing U.S.
----------------------------------- retiree medical
U.S. plans Non-U.S. plans plan
----------------- ---------------- ---------------
In millions 1993 1992 1991 1993 1992 1991 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Service cost--benefits earned
during the period $ 4 $ 3 $ 4 $ 61 $ 52 $ 47 $ 28 $ 26
Interest cost on benefit
obligation 3 3 4 49 45 37 35 33
Actual investment return on
plan assets (45) (19) (57) (107) 5 (65) (40) (14)
Net amortization and deferral 11 (14) 27 59 (53) 24 10 (13)
Early retirement program costs -- -- 24 -- -- -- -- --
-------------------------------------------------
Net plan cost (credit) (27) (27) 2 62 49 43 33 32
Pension and deferred profit-
sharing costs for other plans 88 69 45 36 47 44 -- --
-------------------------------------------------
$ 61 $ 42 $ 47 $ 98 $ 96 $ 87 $ 33 $ 32
=================================================
</TABLE>
- ------
40
<PAGE>
The assumptions used to measure the benefit obligations and to compute the
expected long-term return on assets for the company's defined benefit and
retiree medical plans are as follows:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. supplemental defined
benefit plan:
Discount rate 7.0% 8.0% 8.5%
Average increase in
compensation levels 5.5% 6.5% 7.0%
Expected long-term
return on assets 9.0% 9.0% 9.0%
Non-U.S. defined benefit plans:
Discount rate 5.0% to 9.0% 5.0% to 9.0% 5.0% to 10.0%
Average increase in
compensation levels 4.5% to 6.3% 4.5% to 6.3% 5.0% to 7.5%
Expected long-term
return on assets 7.0% to 10.0% 7.0% to 11.0% 6.5% to 12.0%
Retiree medical plan:
Discount rate 7.0% 8.0% --
Expected long-term
return on assets 9.0% 9.0% --
Current medical cost trend rate 11.2% 13.0% --
Ultimate medical cost trend rate 6.0% 7.0% --
Medical cost trend rate decreases
to ultimate rate in year 2007 2007 --
Effect of a 1% increase in the
medical cost trend rate
(millions):
Increase in benefit obligation $97 $88 --
Increase in the annual retiree
medical cost $18 $17 --
- -------------------------------------------------------------------------------
</TABLE>
Commitments
- -------------------------------------------------------------------------------
The company leases certain real and personal property. Minimum commitments under
these operating leases are $179 million for 1994, $157 million for 1995, $132
million for 1996, $89 million for 1997, $74 million for 1998 and $155 million
for 1999 through 2061. Certain leases require the company to pay property taxes,
insurance and routine maintenance and include escalation clauses. Rent expense
was $269 million in 1993, $257 million in 1992 and $237 million in 1991.
Geographic Area Information
- --------------------------------------------------------------------------------
The company operates in a single industry segment: the design, manufacture and
service of measurement, computation and communications products and systems.
Net revenue, earnings from operations and identifiable assets, classified by the
major geographic areas in which the company operates, are as follows:
------
41
<PAGE>
<TABLE>
<CAPTION>
In millions 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Net revenue
United States:
Unaffiliated customer sales $ 9,346 $ 7,212 $ 6,390
Interarea transfers 4,738 3,720 3,223
-------------------------
14,084 10,932 9,613
-------------------------
Europe:
Unaffiliated customer sales 7,177 6,083 5,378
Interarea transfers 899 649 411
-------------------------
8,076 6,732 5,789
-------------------------
Asia Pacific, Canada, Latin America:
Unaffiliated customer sales 3,794 3,115 2,726
Interarea transfers 2,165 1,120 731
-------------------------
5,959 4,235 3,457
-------------------------
Eliminations (7,802) (5,489) (4,365)
-------------------------
$20,317 $16,410 $14,494
=========================
Earnings from operations
United States $ 1,543 $ 1,220 $ 1,191
Europe 447 308 292
Asia Pacific, Canada, Latin America 630 372 224
Eliminations and corporate (741) (496) (497)
-------------------------
$ 1,879 $ 1,404 $ 1,210
=========================
Identifiable assets
United States $ 8,984 $ 7,309 $ 6,487
Europe 4,452 3,869 3,314
Asia Pacific, Canada, Latin America 3,056 2,026 1,711
Eliminations and corporate 244 496 461
-------------------------
$16,736 $13,700 $11,973
=========================
</TABLE>
Net revenue from sales to unaffiliated customers is based on the location of the
customer. Interarea transfers are sales among HP affiliates principally made at
market price, less an allowance primarily for subsequent manufacturing and/or
marketing costs. Earnings from operations and identifiable assets are classified
based on the location of the company's facilities.
Identifiable corporate assets, which are net of eliminations, comprise primarily
cash, property, plant and equipment, and other assets, and aggregate $3,148
million in 1993, $2,889 million in 1992 and $2,252 million in 1991.
- ------
42
<PAGE>
Statement of Management Responsibility
Hewlett-Packard Company and Subsidiaries
The company's management is responsible for the preparation, integrity and
objectivity of the consolidated financial statements and other financial
information presented in this report. The accompanying financial statements have
been prepared in conformity with generally accepted accounting principles and
reflect the effects of certain estimates and judgments made by management.
The company's management maintains an effective system of internal control that
is designed to provide reasonable assurance that assets are safeguarded and
transactions are properly recorded and executed in accordance with management's
authorization. The system is continuously monitored by direct management review
and by internal auditors who conduct an extensive program of audits throughout
the company. The company selects and trains qualified people who are provided
with and expected to adhere to the company's standards of business conduct.
These standards, which set forth the highest principles of business ethics and
conduct, are a key element of the company's control system.
The company's consolidated financial statements have been audited by Price
Waterhouse, independent accountants. Their audits were conducted in accordance
with generally accepted auditing standards, and included a review of financial
controls and tests of accounting records and procedures as they considered
necessary in the circumstances.
The Audit Committee of the Board of Directors, which consists of four outside
directors, meets regularly with management, the internal auditors and the
independent accountants to review accounting, reporting, auditing and internal
control matters. The committee has direct and private access to both internal
and external auditors.
(SIGNATURE OF LEW PLATT OMITTED) (SIGNATURE OF BOB WAYMAN OMITTED)
Lew Platt Bob Wayman
Chairman of the Board, President Executive Vice President
and Chief Executive Officer Finance and Administration
Chief Financial Officer
Report of Independent Accountants
Hewlett-Packard Company and Subsidiaries
To the Shareholders and Board of Directors of Hewlett-Packard Company
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of earnings, of cash flows and of shareholders' equity
present fairly, in all material respects, the financial position of
Hewlett-Packard Company and its subsidiaries at October 31, 1993 and 1992, and
the results of their operations and their cash flows for each of the three years
in the period ended October 31, 1993, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
As discussed in the Retirement Plans and Retiree Medical Benefits note to the
financial statements, the company changed its method of accounting for retiree
medical benefits in the year ended October 31, 1992. We concur with this change
in accounting.
(SIGNATURE OF PRICE WATERHOUSE OMITTED)
San Francisco, California
November 22, 1993
------
43
<PAGE>
Orders and Net Revenue by Groupings
of Similar Products and Services
Hewlett-Packard Company and Subsidiaries
Unaudited
<TABLE>
<CAPTION>
For the years ended October 31
In millions 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Orders
Computer products, service and support $15,903 $12,293 $10,463
Electronic test and measurement
instrumentation, systems and service 2,335 2,257 2,301
Medical electronic equipment and service 1,196 1,004 906
Analytical instrumentation and service 721 678 672
Electronic components 617 529 334
-------------------------
$20,772 $16,761 $14,676
=========================
Net revenue
Computer products, service and support $15,572 $12,028 $10,217
Electronic test and measurement
instrumentation, systems and service 2,318 2,207 2,377
Medical electronic equipment and service 1,149 1,010 924
Analytical instrumentation and service 704 693 667
Electronic components 574 472 309
-------------------------
$20,317 $16,410 $14,494
=========================
</TABLE>
The table above provides supplemental information showing orders and net revenue
by groupings of similar products and services. The groupings are as follows:
Computer products, service and support
Computer equipment and systems (hardware and software), networking products,
printers, plotters, scanners, disk and tape drives, terminals and handheld
calculators; support and maintenance services, parts and supplies. Products are
used for business, scientific and industrial applications.
Electronic test and measurement instrumentation, systems and service
Instruments and measurement systems used for design, production and maintenance
of electronic equipment; support and maintenance services.
Medical electronic equipment and service
Products that perform patient monitoring, diagnostic, therapeutic and data-
management functions; application software; support and maintenance services;
hospital supplies.
Analytical instrumentation and service
Gas and liquid chromatographs, mass spectrometers and spectrophotometers used to
analyze chemical compounds; laboratory data and information management systems;
support, supplies and maintenance services.
Electronic components
Microwave semiconductor and optoelectronic devices that are sold primarily to
manufacturers for incorporation into electronic products.
- ------
44
<PAGE>
Quarterly Summary
Hewlett-Packard Company and Subsidiaries
Unaudited
<TABLE>
<CAPTION>
For the three months ended
In millions except
per share amounts January 31 April 30 July 31 October 31+
<S> <C> <C> <C> <C>
1993
U.S. orders $2,093 $2,341 $2,237 $2,791
International orders 3,108 3,026 2,466 2,710
---------------------------------------------------
Total orders $5,201 $5,367 $4,703 $5,501
---------------------------------------------------
Net revenue $4,573 $5,096 $4,961 $5,687
Cost of equipment
sold and services $2,664 $2,997 $2,968 $3,494 (BAR
Earnings from CHART
operations $ 421 $ 554 $ 427 $ 477 OMITTED)
Net earnings $ 261 $ 347 $ 271 $ 298
Net earnings per
share $ 1.03 $ 1.38 $ 1.06 $ 1.18
Cash dividend paid
per share $ .200 $ .200 $ .250 $ .250
Range of stock
prices per share $553/8-741/8 $673/8-781/4 $71-871/2 $65-755/8
===================================================
1992*
U.S. orders $1,773 $1,823 $1,800 $2,173
International
orders 2,420 2,360 2,166 2,246
--------------------------------------------------- (BAR
Total orders $4,193 $4,183 $3,966 $4,419 CHART
--------------------------------------------------- OMITTED)
Net revenue $3,863 $4,183 $4,040 $4,324
Cost of equipment
sold and services $2,056 $2,242 $2,306 $2,554
Earnings from
operations $ 469 $ 481 $ 299 $ 155
Earnings before
effect of accounting
change $ 302 $ 323 $ 188 $ 68
Net earnings (loss) $ (30) $ 323 $ 188 $ 68
Earnings per share
before effect of
accounting change $ 1.19 $ 1.27 $ .75 $ .28
Net earnings (loss)
per share $ (.12) $ 1.27 $ .75 $ .28
Cash dividend paid
per share $ .125 $ .200 $ .200 $ .200
Range of stock
prices per share $631/4-461/8 $833/4-601/8 $813/4-637/8 $741/4-515/8
===================================================
</TABLE>
*See discussion of the 1992 change in accounting for retiree medical
benefits on page 39 of this report.
+The fourth quarter of 1992 includes special charges of approximately
$137 million before taxes ($0.36 per share) for voluntary severance
programs, employee redeployment and facilities consolidations.
------
45
<PAGE>
<TABLE>
<C> <C> <C>
Corporate Information
Headquarters Everett, Spokane and Vancouver, Dublin, Ireland
3000 Hanover Street Washington Cernusco, Italy
Palo Alto, California 94304 Amsterdam, The Netherlands
Telephone: (415) 857-1501 Edmonton, Calgary, Montreal Oslo, Norway
and Waterloo, Canada Warsaw, Poland
Geographic Operations Lisbon, Portugal
Americas Guadalajara, Mexico Moscow, Russia
5301 Stevens Creek Boulevard Madrid, Spain
Santa Clara, California 95052 Europe Kista, Sweden
Telephone: (408) 246-4300 Grenoble and L'Isle d'Abeau, Urdorf, Switzerland
France Istanbul, Turkey
Europe, Africa, Middle East Bracknell, United Kingdom
Route du Nant-d'Avril 150 Boblingen and Waldbronn,
CH-1217 Meyrin 2 Germany Asia Pacific
Geneva, Switzerland Melbourne, Australia
Telephone: (41/22) 780-8111 Bergamo, Italy Beijing, China
Hong Kong
Asia Pacific Amersfoort, The Netherlands New Delhi, India
17-21/F Shell Tower Tokyo, Japan
Times Square, 1 Matheson Street Barcelona, Spain Seoul, Korea
Causeway Bay, Hong Kong Kuala Lumpur, Malaysia
Telephone: (852) 599-7777 Bristol, Ipswich and South Wellington, New Zealand
Queensferry, United Kingdom Singapore
Product Development Taipei, Taiwan
and Manufacturing Asia Pacific Bangkok, Thailand
Americas Melbourne, Australia
Cupertino, Folsom, Mountain View, Beijing and Shenzhen, China Hewlett-Packard Laboratories
Newark, Palo Alto, Rohnert Park, Bangalore, India Palo Alto, California
Roseville, San Diego, San Jose, Hachioji and Kobe, Japan Tokyo, Japan
Santa Clara, Santa Rosa, Sunnyvale Seoul, Korea Bristol, United Kingdom
and Westlake Village, California Penang, Malaysia
Singapore HP Sales And Support Offices
Colorado Springs, Fort Collins, and Distributorships
Greeley and Loveland, Colorado Country Headquarters Offices Approximately 600 in 110
Americas countries**
Wilmington, Delaware Buenos Aires, Argentina
Sao Paulo, Brazil *Headquarters of Latin American
Boise, Idaho Miami, Florida* region
Mexico City, Mexico **A directory of sales and support
Andover, Chelmsford and Waltham, Toronto, Canada locations can be obtained from the
Massachusetts Caracas, Venezuela Corporate Communications Department
at HP's offices in Palo Alto.
Exeter, New Hampshire Europe
Vienna, Austria
Rockaway, New Jersey Brussels, Belgium
Prague, Czech Republic
Corvallis and McMinnville, Oregon Birkerod, Denmark
Helsinki, Finland
Aguadilla, Puerto Rico Paris, France
Boblingen, Germany
Athens, Greece
Budapest, Hungary
</TABLE>
48
<PAGE>
UNIX is a registered trademark of UNIX System Laboratories Inc. in the U.S.A.
and other countries.
HP-UX is based on and is compatible with USL's UNIX operating system. It also
complies with X/Open's XPG4 POSIX 1003.1, 1003.2, 1003.2a; FIPS 151-1 and SVID2
interface specifications.
XOpen is a trademark of X/Open Company Limited in the UK and other countries.
Intel is a U.S. trademark of Intel Corp.
Microsoft is a U.S. registered trademark of Microsoft Corp.
Photo credits:
cover, pp. 5, 9, 13 by Jim Karageorge
p. 6 by Lech Alesky Charewicz
p. 10 by Philip Jones-Griffith/Magnum
p. 14 by Theo Hess/Skyfast Aerial Photography
Designed and produced by Ted Williams and Partners, San Francisco
Shareholder Information
Annual Meeting of Shareholders
The annual meeting will be held Tuesday, February 22, 1994, at 2 p.m. at
Hewlett-Packard's Cupertino site located at 19447 Pruneridge Avenue, Cupertino,
California.
Annual Report/10-K Report
Publications of interest to current and potential HP investors are available
upon request. These include annual and quarterly reports and the Form 10-K filed
with the Securities and Exchange Commission. As a service to those with impaired
vision, the HP 1993 Annual Report is available on audio cassette. This material
can be obtained at no cost by contacting the Corporate Communications
Department, Hewlett-Packard Company corporate offices.
Transfer Agent and Registrar
Harris Trust and Savings Bank
Corporate Trust Operations
Division, P.O. Box 755
Chicago, Illinois 60690
Telephone: (312) 461-4061
Common Stock, Dividend Policy
The company's stock is traded on the New York Stock Exchange and the Pacific,
Tokyo, London, Frankfurt, Zurich and Paris exchanges. Cash dividends have been
paid each year since 1965. The current rate is $.25 per share per quarter. At
November 30, 1993, there were 72,598 shareholders of record.
(Symbol omitted) Printed on recycled paper
<PAGE>
GRAPHICS APPENDIX LIST*
* In this Appendix, the following descriptions of certain bar charts and
graphs in the Company's 1993 Annual Report to Shareholders that are omitted from
the EDGAR Version are more specific with respect to the actual numbers, amounts
and percentages than is determinable from the bar charts and graphs themselves.
The Company submits such more specific descriptions only for the purpose of
complying with the requirements for transmitting this Annual Report on Form 10-K
electronically via EDGAR; such more specific descriptions are not intended in
any way to provide information that is additional to the information otherwise
provided in the Annual Report.
EDGAR Version - Page 23
A bar chart entitled "Net Earnings Per Share (In dollars)" at the top right
of page 23 of the 1993 Annual Report to Shareholders shows that for the fiscal
years 1988, 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company
had net earnings per share (shown on the y-axis) in the respective amounts
provided in the table entitled "Selected Financial Data, Hewlett-Packard Company
and Subsidiaries (Unaudited)" on page 23 of the Annual Report. In addition, the
bar chart shows that in fiscal 1992, after the effect of a change in accounting
for retiree medical benefits described on page 39 of the Annual Report, the
Company had net earnings per share in an amount shown in such table.
A bar chart entitled "Return on Average Shareholders' Equity (Percent)" at
the bottom right of page 23 of the 1993 Annual Report to Shareholders shows that
for the fiscal years 1988, 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis)
the Company had a return on average shareholders' equity (shown on the y-axis)
of 17.1%, 16.6%, 12.5%, 11.1%, 11.7% and 14.7%, respectively. In addition, the
bar chart shows that in fiscal 1992 the Company had a return on average
shareholders' equity of 7.4% after the effect of a change in accounting for
retiree medical benefits described on page 39 of the Annual Report.
EDGAR Version - Page 25
A graph entitled "Net Revenue (In millions)" at the top right of page 25 of
the 1993 Annual Report to Shareholders shows that for the fiscal years 1989,
1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had (shown on the
y-axis) total net revenue in the respective amounts provided in the table
entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries" on
page 23 of the Annual Report; and international net revenue of $6,338 million,
<PAGE>
$7,208 million, $8,104 million, $9,198 million and $10,971 million,
respectively. In addition, the graph shows that for the fiscal years 1989 and
1990 (shown on the x-axis) the Company had U.S. revenue (shown on the y-axis) of
$5,561 million and $6,025 million, respectively; and U.S. net revenue for the
fiscal years 1991, 1992 and 1993 (shown on the x-axis) in the respective amounts
(shown on the y-axis) provided in the section entitled "Geographic Area
Information" in the notes on pages 41-42 of the Annual Report.
A graph entitled "U.S. Dollar Relative to Major Foreign Currencies (Fiscal
1980 equals 1.00)" at the bottom right of page 25 of the 1993 Annual Report to
Shareholders shows that in the months running consecutively from October 1988
through October 1993 (shown on the x-axis) the U.S. Dollar was equal to (shown
on the y-axis) 1.19, 1.18, 1.14, 1.12, 1.11, 1.13, 1.12, 1.10, 1.10, 1.07, 1.03,
1.03, .99, .98, 1.00, 1.00, .98, 1.06, 1.10, 1.11, 1.15, 1.15, 1.12, 1.10,
1.09, 1.06, 1.04, 1.04, 1.06, 1.09, 1.08, 1.06, 1.04, .99, .98, .99, 1.04, 1.11,
1.11, 1.14, 1.17, 1.17, 1.13, 1.13, 1.15, 1.19, 1.20, 1.16 and 1.18,
respectively, multiplied by the currencies of the following foreign countries,
with varying weights assigned to each of such currencies: Austria, Belgium,
Canada, Denmark, Finland, France, Germany, Italy, Japan, Netherlands, Norway,
Spain, Sweden, Switzerland and United Kingdom.
EDGAR Version - Page 26
A graph entitled "Costs and Expenses (As a percentage of net revenue)" at
the top left of page 26 of the 1993 Annual Report to Shareholders shows that for
the fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on
the y-axis) cost of equipment sold and services of 51.2% and 52.8%,
respectively, of net revenue; selling, general and administrative expenses of
27.9% and 28.1%, respectively, of net revenue; and research and development
expenses of 10.7% and 10.3%, respectively, of net revenue. In addition, the
graph shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis)
the Company had, as a percentage of net revenue (shown on the y-axis), cost of
equipment sold and services, selling, general and administrative expenses and
research and development expenses in the respective amounts provided in the
table at the bottom of page 25 of the Annual Report.
A graph entitled "Interest and Other Income (Expense) (In millions)" at the
bottom left of page 26 of the 1993 Annual Report to Shareholders shows that for
the fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on
the y-axis) interest income and other income (expense) of $65 million and $66
million, respectively; and interest expense of $126 million and $172 million,
respectively. In addition, the graph shows that for the fiscal years 1991, 1992
and 1993 (shown on the x-axis) the Company had (shown on the y-axis) interest
income and other income (expense) and interest expense in the respective amounts
provided in the table entitled "Consolidated Statement of Earnings, Hewlett-
Packard Company and Subsidiaries" on page 24 of the Annual Report.
<PAGE>
EDGAR Version - Page 27
A bar chart entitled "Net Earnings (In millions)" at the top right of page
27 of the 1993 Annual Report to Shareholders shows that for the fiscal years
1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the Company had net
earnings (shown on the y-axis) in the respective amounts provided in the table
entitled "Selected Financial Data, Hewlett-Packard Company and Subsidiaries
(Unaudited)" on page 23 of the Annual Report. In addition, the bar chart shows
that in fiscal 1992, after the effect of a change in accounting for retiree
medical benefits described on page 39 of the Annual Report, the Company had net
earnings in an amount provided in such table.
A bar chart entitled "Selected Cash Flows (In Millions)" at the bottom
right of page 27 of the 1993 Annual Report to Shareholders shows that for the
fiscal years 1989 and 1990 (shown on the x-axis) the Company had (shown on the
y-axis) cash flows from operating activities of $496 million and $799 million,
respectively; capital expenditures of $857 million and $955 million,
respectively; and dividends paid of $85 million and $102 million, respectively.
In addition, the bar chart shows that for the fiscal years 1991, 1992 and 1993
(shown on the x-axis) the Company had (shown on the y-axis) cash flows from
operating activities and dividends paid in the respective amounts provided in
the table entitled "Consolidated Statement of Cash Flows, Hewlett-Packard
Company and Subsidiaries" on page 30 of the Annual Report. Finally, the bar
chart shows that for the fiscal years 1991, 1992 and 1993 (shown on the x-axis)
the Company had capital expenditures (shown on the y-axis) in the respective
amounts shown as "Investment in property, plant and equipment" provided in the
table entitled "Consolidated Statement of Cash Flows, Hewlett-Packard Company
and Subsidiaries" on page 30 of the Annual Report.
EDGAR Version - Page 29
A graph entitled "Asset Management (As a percentage of net revenue)" at the
top right of page 29 of the 1993 Annual Report to Shareholders shows that for
the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the
Company had (shown on the y-axis) net property, plant and equipment of 24.3%,
24.2%, 23.1%, 22.2% and 20.6%, respectively, of net revenue; accounts and notes
receivable of 21.0%, 21.8%, 20.5%, 21.3% and 20.7%, respectively, of net
revenue; and inventories of 16.4%, 15.8%, 15.7%, 15.9% and 18.2%, respectively.
A graph entitled "Employees and Net Revenue Per Employee (In thousands)" at
the bottom right of page 29 of the 1993 Annual Report to Shareholders shows that
for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on the x-axis) the
Company had employees in the respective amounts (shown on the y-axis) provided
in the table entitled "Selected Financial Data, Hewlett-Packard Company and
Subsidiaries (Unaudited)" on page 23 of the Annual Report. In addition, the
graph shows that for the fiscal years 1989, 1990, 1991, 1992 and 1993 (shown on
the x-axis) the Company had net revenue per employee (shown on the y-axis) of
$131,100, $141,500, $160,000, $180,800 and $215,200, respectively.
<PAGE>
EXHIBIT 21
SUBSIDIARIES AND AFFILIATES
OF HEWLETT-PACKARD COMPANY
<TABLE>
<CAPTION>
ORGANIZED UNDER
LAWS OF
-----------------
<S> <C>
DOMESTIC SUBSIDIARIES OF HEWLETT-PACKARD COMPANY
Hewlett-Packard Delaware, Inc. Delaware
Hewlett-Packard Delaware Capital, Inc. Delaware
Hewlett-Packard Delaware Funding, Inc. Delaware
Hewlett-Packard Delaware Holding, Inc. Delaware
Hewlett-Packard Delaware Investment, Inc. Delaware
Hewlett-Packard European Distribution Operations Nether-
lands, Inc. Delaware
Hewlett-Packard Finance Company California
Hewlett-Packard Global Trading, Inc. California
Hewlett-Packard Hellas California
Hewlett-Packard Inter-Americas California
Hewlett-Packard Laboratories Japan, Inc. Delaware
Hewlett-Packard Pipeline Company Colorado
Hewlett-Packard Puerto Rico California
Hewlett-Packard World Trade, Inc. Delaware
Apollo World Trade, Inc. Delaware
Avantek, Inc. California
Cerjac, Inc. Delaware
Colorado Memory Systems, Inc. Delaware
EEsof Incorporated California
Fleet Systems, Inc. California
Four Pi Systems Corporation California
HiNoon Project Corporation Delaware
Metrix Network Systems, Inc. Delaware
The Tall Tree Insurance Company Vermont
DOMESTIC SUBSIDIARY OF HEWLETT-PACKARD WORLD TRADE, INC.
Hewlett-Packard Export Trade Co. California
DOMESTIC SUBSIDIARIES OF AVANTEK, INC.
Avantek Digital Radio, Inc. California
Avantek International California
DOMESTIC SUBSIDIARY OF HINOON PROJECT CORPORATION
Video Products Group Inc. Delaware
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD COMPANY
China Hewlett-Packard Limited People's Republic
of China
Grupo Hewlett-Packard Latin America S.A. de C.V. Mexico
Hewlett-Packard Asia Pacific Limited Hong Kong
Hewlett-Packard Australia Ltd. Australia
Hewlett-Packard Bilgisayar Ve Olcum Sistemleri Anonim
Sirketi Turkey
Hewlett-Packard Hong Kong Ltd. Hong Kong
Hewlett-Packard Ireland Ltd. Ireland
Hewlett-Packard Penang Sdn. Bhd. Malaysia
Hewlett-Packard Portugal-Sistemas De Informatica E De Medida
SA Portugal
Hewlett-Packard Sales (Malaysia) Sdn. Bhd. Malaysia
</TABLE>
E-21-1
<PAGE>
<TABLE>
<CAPTION>
ORGANIZED UNDER
LAWS OF
-----------------
<S> <C>
Hewlett-Packard Taiwan, Ltd. Republic of China
Samsung Hewlett-Packard Ltd. Korea
FOREIGN SUBSIDIARY OF CHINA HEWLETT-PACKARD COMPANY LIMITED
China Hewlett-Packard (Shenzhen) Company, Ltd. People's Republic
of China
FOREIGN SUBSIDIARIES OF GRUPO HEWLETT-PACKARD LATIN AMERICA
S.A. DE C.V.
Arrendadora Hewlett-Packard S.A de C.V Mexico
Hewlett-Packard de Mexico S.A. de C.V. Mexico
FOREIGN SUBSIDIARY OF HEWLETT-PACKARD ASIA PACIFIC LTD.
Hewlett-Packard Australia Finance Ltd. Australia
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD AUSTRALIA LTD.
Hewlett-Packard New Zealand Ltd. New Zealand
Telecom Hewlett-Packard Pty., Ltd. Australia
Moriya Pty. Inc. Australia
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD BENELUX B.V.
Hewlett-Packard Belgium S.A.N.V. Belgium
Hewlett-Packard Nederland B.V. Netherlands
FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DELAWARE CAPITAL, INC.
HCL Hewlett-Packard Limited India
FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DELAWARE HOLDING, INC.
Hewlett-Packard (India) Software Operation Private Ltd. India
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD DELAWARE, INC.
Hewlett-Packard Chile, S.A. Chile
Hewlett-Packard de Venezuela, C.A. Venezuela
Hewlett-Packard do Brasil, S.A. Brazil
Hewlett-Packard Malaysia Technology, Sdn. Bhd. Malaysia
Hewlett-Packard (Thailand) Limited Thailand
FOREIGN SUBSIDIARY OF HEWLETT-PACKARD DO BRASIL, S.A.
E. I. Industria e Comercio S.A. Brazil
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD GMBH
Hewlett-Packard CADE AG Switzerland
Hewlett-Packard CADE GmbH Germany
Hewlett-Packard Inter-Services GmbH Germany
IDACOM Electronics GmbH Germany
CAP debis Sfi-Systemhaus fuer Informationsverarbeitung GmbH Germany
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD INTERNATIONAL B.V.
Hewlett-Packard (Canada) Ltd. Canada
Hewlett-Packard Far East Pte. Ltd. Hong Kong
Hewlett-Packard GmbH Germany
Hewlett-Packard Holding B.V. Netherlands
Hewlett-Packard Italiana S.p.A. Italy
Hewlett-Packard Ltd. Great Britain
Hewlett-Packard S.A. Switzerland
Hewlett-Packard Singapore Sales Pte. Ltd. Singapore
Yokogawa Hewlett-Packard, Ltd. Japan
Technologies et Participations France
</TABLE>
E-21-2
<PAGE>
<TABLE>
<CAPTION>
ORGANIZED UNDER
LAWS OF
---------------
<S> <C>
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD LTD.
Hewlett-Packard Equipment Leasing Ltd. Great Britain
Hewlett-Packard Finance Ltd. Great Britain
Hewlett-Packard Leasing Ltd. Great Britain
Hewlett-Packard Product Leasing Ltd. Great Britain
Avantek Ltd. Great Britain
Colorado Memory Systems Europe Ltd. Great Britain
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD S.A.
Hewlett-Packard Argentina S.A. Argentina
Hewlett-Packard A/S Denmark
Hewlett-Packard (Austria) Ges.m.b.H Austria
Hewlett-Packard Benelux B.V. Netherlands
Hewlett-Packard Espanola, S.A. Spain
Hewlett-Packard (Malaysia) SND.BHD Malaysia
Hewlett-Packard Norge A/S Norway
Hewlett-Packard OY Finland
Hewlett-Packard (Schweiz) A.G. Switzerland
Hewlett-Packard Singapore Private Ltd. Singapore
Hewlett-Packard Sverige AB. Sweden
Hewlett-Packard Technical B.V. Netherlands
Hewlett-Packard Trading S.A. Switzerland
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD SINGAPORE PRIVATE LTD.
Hewlett-Packard Investment Ltd. Liberia
Geneva Investments N.V. Netherlands
Antilles
FOREIGN SUBSIDIARIES OF HEWLETT-PACKARD WORLD TRADE, INC.
Hewlett-Packard Chile, S.A. Chile
Hewlett-Packard Czech Republic Czech Republic
Hewlett-Packard (HP) RE Ltd. Ireland
Hewlett-Packard International B.V. Netherlands
Hewlett-Packard Magyarorszag Kft. Hungary
Hewlett-Packard Polska Spol.Z Poland
Apollo Domain Computer GmbH Germany
Belgian Coordination Center Belgium
Leasametric GmbH Germany
Yokogawa Analytical Systems, Inc. Japan
FOREIGN SUBSIDIARY OF YOKOGAWA HEWLETT-PACKARD, LTD.
Yokogawa Hewlett-Packard Design Systems Laboratory, Ltd. Japan
FOREIGN SUBSIDIARIES OF AVANTEK, INC.
AVAK International, Inc. Barbados
FOREIGN SUBSIDIARY OF DELAWARE INVESTMENT, INC.
Hewlett-Packard India Ltd. India
FOREIGN SUBSIDIARY OF LEASAMETRIC GMBH
Leasametric S.A. France
FOREIGN SUBSIDIARY OF TECHNOLOGIES ET PARTICIPATIONS
Hewlett-Packard France France
</TABLE>
E-21-3
<PAGE>
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement the following Registration Statements on Form S-8 of our report dated
November 22, 1993 appearing on page 43 of the 1993 Annual Report to
Shareholders of Hewlett-Packard Company which is incorporated in this Annual
Report on Form 10-K.
Registration No. 2-66780 through Post-Effective Amendment No. 6
Registration No. 2-90239
Registration No. 2-92331 through Post-Effective Amendment No. 3
Registration No. 2-96361 through Post-Effective Amendment No. 1
Registration No. 33-30769
Registration No. 33-31496
Registration No. 33-31500
Registration No. 33-38579
Registration No. 33-50699
We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on page 13 of this Form 10-K.
PRICE WATERHOUSE
San Francisco, California
January 28, 1994
E-23-1
<PAGE>
EXHIBIT 99
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended October 31, 1993
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the Transition period from to
Commission File Number: 1-4423
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
HEWLETT-PACKARD COMPANY
EMPLOYEE STOCK PURCHASE PLAN
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
HEWLETT-PACKARD COMPANY
3000 HANOVER STREET
PALO ALTO, CALIFORNIA 94304
REQUIRED INFORMATION
Not applicable.
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
ADMINISTRATOR OF THE PLAN HAS DULY CAUSED THIS ANNUAL REPORT TO BE SIGNED BY
THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
HEWLETT-PACKARD COMPANY
EMPLOYEE STOCK PURCHASE PLAN
D. Craig Nordlund
By: _________________________________
D. Craig Nordlund
Associate General Counsel and
Secretary
Date: January 28, 1994
E-99-1
