HP 2013 Annual Report Download - page 168

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 18: Segment Information (Continued)
Enterprise Services provides technology consulting, outsourcing and support services across
infrastructure, applications and business process domains. ES is divided into Infrastructure Technology
Outsourcing and Application and Business Services.
•Infrastructure Technology Outsourcing delivers comprehensive services that encompass the
management of data centers, IT security, cloud computing, workplace technology, network,
unified communications, and enterprise service management.
•Application and Business Services helps clients develop, revitalize and manage their applications
and information assets. The portfolio also includes intellectual property-based industry solutions,
services and technologies to help clients better manage critical business processes and services
for customer relationship management, finance and administration, human resources, payroll and
document processing.
Software provides IT management big data and security solutions for businesses and enterprises of
all sizes. HP’s IT management solutions help customers deliver applications and services that perform
to defined standards and automate and assure the underlying infrastructure, be it traditional, cloud or
hybrid. HP’s big data solutions include the HP HAVEn Big Data platform, which, together with the
Autonomy and Vertica products, is designed to help customers with their structured and unstructured
information. HP’s security solutions provide security from the infrastructure through applications and
information. HP’s Software offerings include licenses, support, professional services and SaaS.
HP Financial Services acts as a strategic enabler for HP by providing financing for customers to
purchase complete IT solutions, including hardware, software and services from HP. HPFS offers
financial solutions to customers to manage to the lowest total cost of ownership—from planning and
acquiring technology all the way to replacing or retiring it. HPFS offers leasing, financing, utility
programs and asset management services for large enterprise customers. HPFS also helps customers to
manage the risks of dealing with older or surplus IT equipment, which helps provide full life cycle
coverage to HPFS customers.
Corporate Investments includes HP Labs, the webOS business and certain business incubation
projects.
Segment Data
HP derives the results of the business segments directly from its internal management reporting
system. The accounting policies HP uses to derive business segment results are substantially the same
as those the consolidated company uses. Management measures the performance of each business
segment based on several metrics, including earnings from operations. Management uses these results,
in part, to evaluate the performance of, and to assign resources to, each of the business segments. HP
does not allocate to its business segments certain operating expenses, which it manages separately at
the corporate level. These unallocated costs include restructuring charges, amortization of intangible
assets, impairment of goodwill and intangible assets, certain stock-based compensation expense and
acquisition-related charges, as well as certain corporate governance costs.
Segment revenue includes revenues from sales to external customers and intersegment revenues
that reflect transactions between the segments that are carried out at an arm’s-length transfer price.
Intersegment revenues primarily consist of sales of hardware and software that are sourced internally
and, in the majority of the cases, are classified as operating leases within HPFS. HP’s Consolidated Net
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