HP 2011 Annual Report Download - page 112

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 8: Restructuring Charges (Continued)
on the actual costs incurred. The remaining costs are primarily associated with HP and will be recorded
as a restructuring charge.
The restructuring plan includes severance costs related to eliminating approximately 25,000
positions. As of October 31, 2011, all planned eliminations had occurred and the vast majority of the
associated severance costs had been paid out. The infrastructure charges in the restructuring plan
include facility closure and consolidation costs and the costs associated with early termination of certain
contractual obligations. HP has recorded the majority of these costs based upon the execution of site
closure and consolidation plans. The associated cash payments are expected to be paid out through
fiscal 2016.
Summary of Restructuring Plans
The adjustments to the accrued restructuring expenses related to all of HP’s restructuring plans
described above for the twelve months ended October 31, 2011 were as follows:
As of October 31, 2011
Non-cash Total costs Total
Balance, Fiscal settlements Balance, and expected
October 31, year 2011 Cash and other October 31, adjustments costs and
2010 charges payments adjustments 2011 to date adjustments
In millions
Fiscal 2010 acquisitions . . . $ 44 $ 51 $ (36) $ — $ 59 $ 114 $ 121
Fiscal 2010 ES Plan:
Severance .......... $ 620 $93 $ (229) $ 9 $493 $ 723 $ 724
Infrastructure ....... 4 173 (170) (4) 3 193 268
Total ES Plan ....... $ 624 $266 $ (399) $ 5 $496 $ 916 $ 992
Fiscal 2009 Plan ....... $ 57 $ 2 $ (54) $(5) $— $ 294 $ 294
Fiscal 2008 HP/EDS Plan:
Severance .......... $ 75 $45 $ (110) $(10) $ — $2,190 $2,190
Infrastructure ....... 408 281 (404) (27) 258 974 1,167
Total HP/EDS Plan .... $ 483 $326 $ (514) $(37) $258 $3,164 $3,357
Total restructuring plans . . $1,208 $645 $(1,003) $(37) $813 $4,488 $4,764
At October 31, 2011 and October 31, 2010, HP included the long-term portion of the restructuring
liability of $159 million and $297 million, respectively, in Other liabilities, and the short-term portion of
$654 million and $911 million, respectively, in Accrued restructuring in the accompanying Consolidated
Balance Sheets.
Note 9: Fair Value
HP determines fair value based on the exchange price that would be received for an asset or paid
to transfer a liability (an exit price) in the principal or most advantageous market for the asset or
liability in an orderly transaction between market participants.
Valuation techniques used by HP are based upon observable and unobservable inputs. Observable
or market inputs reflect market data obtained from independent sources, while unobservable inputs
reflect HP’s assumptions about market participant assumptions based on the best information available.
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