HP 2010 Annual Report Download - page 58

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
management, the impact of which was partially offset by additional expenses related to the EDS
acquisition. In fiscal 2009, SG&A expense as a percentage of net revenue decreased for each of our
segments, except for Corporate Investments.
Amortization of Purchased Intangible Assets
The decrease in amortization expense in fiscal 2010 was due primarily to certain intangible assets
associated with prior acquisitions reaching the end of their amortization periods, the effect of which
was partially offset by increased amortization of purchased intangible assets from acquisitions
completed during fiscal 2010.
The increase in amortization expense in fiscal 2009 was due primarily to amortization expenses
related to the intangible assets purchased as part of the EDS acquisition.
For more information on our amortization of purchased intangibles assets, see Note 7 to the
Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
Restructuring
Restructuring charges for fiscal 2010 were $1.1 billion. These charges included $650 million of
severance and facility costs related to our fiscal 2010 enterprise services restructuring plan, $429 million
of severance and facility costs related to our fiscal 2008 restructuring plan, $46 million and $18 million
associated with the Palm and 3Com restructuring plans, respectively, and an increase of $1 million
related to adjustments to other restructuring plans.
Restructuring charges for fiscal 2009 were $640 million. These charges included $346 million of
severance and facility costs related to our fiscal 2008 restructuring plan, $297 million of severance costs
associated with our fiscal 2009 restructuring plan, and a reduction of $3 million related to adjustments
to other restructuring plans.
Restructuring charges for fiscal 2008 were $270 million, which included $246 million of charges due
primarily to severance and facility costs related to the EDS acquisition and a net charge of $24 million
relating to adjustments for existing restructuring programs.
For more information on our restructuring charges, see Note 8 to the Consolidated Financial
Statements in Item 8, which is incorporated herein by reference.
As part of our ongoing business operations, we incurred workforce rebalancing charges for
severance and related costs within certain business segments in fiscal 2010. Workforce rebalancing
activities are considered part of normal operations as we continue to optimize our cost structure.
Workforce rebalancing costs are included in our business segment results, and we expect to incur
additional workforce rebalancing costs in the future.
Acquisition-Related Charges
In fiscal 2010, we recorded acquisition-related charges of $293 million primarily for consulting and
integration costs, acquisition costs and retention bonuses associated with the EDS, 3Com, Palm, 3PAR
and ArcSight acquisitions.
In fiscal 2009, we recorded acquisition-related charges of $242 million primarily for consulting and
integration costs as well as retention bonuses associated with the EDS acquisition.
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