HP_and_Compaq_Combined__In_Search_of_Scale_and_Scope

Hewlett revocable trust on the proposed merger of

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Unformatted text preview: t quarter of 2001 Source: Gartner Dataquest This document is authorized for use by Xiaolei Cong, from 11/30/2012 to 2/28/2013, in the course: MGMT 237: 001 Management of Technology - Chaudhuri (Spring 2013), University of Pennsylvania. Any unauthorized use or reproduction of this document is strictly prohibited. HP and Compaq Combined: In Search of Scale and Scope, SM-130 p. 29 Exhibit 2 Estimated Change in Portfolio and Revenue Mix in 2001 Resulting From Merger (Data cited by Walter Hewlett in opposition to merger) REVENUES – CY 2001E Enterprise (20%) Imaging & Printing (43%) PC/Access (20%) Enterprise (32%) Services (17%) Services (24%) PC/Access (44%) Imaging & Enterprise Printing (25%) (25%) (43%) PC/Access (30%) Services (20%) Hewlett-Packard Hewlett-Packard1 Compaq2 Combined3 Total = $45B Total = $33B Total = $78B Notes: 1 Based on Morgan Stanley research dated 10/2/01 2 Banc of America Securities research dated 10/11/01 3 Before potential revenue losses Source: Report to Trustees of the William R. Hewlett Revocable Trust on the Proposed Merger of Hewlett-Packard and Compaq This document is authorized for use by Xiaolei Cong, from 11/30/2012 to 2/28/2013, in the course: MGMT 237: 001 Management of Technology - Chaudhuri (Spring 2013), University of Pennsylvania. Any unauthorized use or reproduction of this document is strictly prohibited. HP and Compaq Combined: In Search of Scale and Scope, SM-130 p. 30 Exhibit 2 (continued) Estimated Effect of Merger on Operating Margins of Combined Company (Data cited by HP in support of merger) Enterprise Operating Margins (1,2) Access Operating Margins (1,2) 9.2% 3.0% -3.2% FY2001 HP Standalone FY2003 New HP (Pro Forma) -4.2% FY2001 HP Standalone FY2003 New HP (Pro Forma) 13.7% Services Operating Margins (1,2) 4.50% FY2001 HP Standalone FY2003 New HP (Pro Forma) Notes: 1. FY01 EBIT numbers represent HP published segments, adjusted for reclassifications modeled between segments (Business & Home PCs and Workstations to Access from CS/Enterprise, Verifone to other). Segment data is pro forma, excluding acquisition-related charges and assuming profit-sharing and bonuses at modeled levels for FY01 plan. Also excludes eliminations and other. 2. Segment revenues and operating income per management estimates as of 12/5/01 and exclude eliminations/other. Pro forma FY03E financials adjusted for management projected pre-tax synergies of $2.054mm, re...
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