HP 2010 Annual Report Download - page 110

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 7: Goodwill and Purchased Intangible Assets (Continued)
Estimated future amortization expense related to finite-lived purchased intangible assets at
October 31, 2010 is as follows:
Fiscal year: In millions
2011 ................................................................ $1,513
2012 ................................................................ 1,296
2013 ................................................................ 1,142
2014 ................................................................ 803
2015 ................................................................ 681
Thereafter ............................................................ 690
Total ................................................................ $6,125
Note 8: Restructuring Charges
HP records restructuring charges associated with management approved restructuring plans to
either reorganize one or more of HP’s business segments, or to remove duplicative headcount and
infrastructure associated with one or more business acquisitions. Restructuring charges can include
severance costs to eliminate a specified number of employees, infrastructure charges to vacate facilities
and consolidate operations, and contract cancellation cost. Restructuring charges are recorded based
upon planned employee termination dates and site closure and consolidation plans. The timing of
associated cash payments is dependent upon the type of restructuring charge and can extend over a
multi-year period. HP records the short-term portion of the restructuring liability in Accrued
restructuring and the long-term portion in Other liabilities in the Consolidated Balance Sheets.
Fiscal 2010 Acquisitions
On July 1, 2010, HP completed the acquisition of Palm. In connection with the acquisition, HP’s
management approved and initiated a plan to restructure the operations of Palm, including severance
for Palm employees, contract cancellation costs and other items. The total expected cost of the plan is
$46 million. In fiscal 2010, HP recorded restructuring charges of approximately $46 million. No further
restructuring charges are anticipated, subject to changes in the Palm integration plan. The majority of
these costs are expected to be paid out by the second quarter of fiscal 2011.
On April 12, 2010, HP completed the acquisition of 3Com. In connection with the acquisition,
HP’s management approved and initiated a plan to restructure the operation of 3Com, including
severance costs and costs to vacate duplicative facilities. The total expected cost of the plan is
$42 million. In fiscal 2010, HP recorded restructuring charges of approximately $18 million. HP expects
to record the majority of the cost of this restructuring plan by the second quarter of fiscal 2011 based
upon the timing of planned terminations and facility closure dates. These costs are expected to be paid
out through fiscal 2016.
Fiscal 2010 ES Restructuring Plan
On June 1, 2010, HP’s management announced a plan to restructure its enterprise services
business, which includes its infrastructure technology outsourcing, business process outsourcing and
application services business units. The multi-year restructuring program includes plans to consolidate
commercial data centers, tools and applications. The total expected cost of the plan that will be
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