| Table 3 | HP Enterprise Servers & Storage | Aug-05 | ||||||||
| (Fiscal year end: Oct 31) | ||||||||||
| 2005e | % of | Change | 2004 | % of | Change | 2003 | % of | |||
| ($ Mill) | Rev | 05/04 | ($ Mill) | Rev | 04/03 | ($ Mill) | Rev | |||
| _ | _ | _ | _ | _ | _ | _ | _ | _ | _ | _ |
| Revenue | 19% | 19% | 20% | |||||||
| Business Segments (est) | ||||||||||
| Industry Standard Servers | $9,620 | 59.0% | 12.5% | $8,550 | 55.0% | 2.8% | $8,320 | 57.0% | ||
| Bus Critical Serv | $3,360 | 20.6% | 2.8% | $3,270 | 21.0% | 1.9% | $3,210 | 22.0% | ||
| Network Storage | $3,320 | 20.4% | -11.0% | $3,732 | 24.0% | 21.8% | $3,063 | 21.0% | ||
| Total Revenue | $16,300 | 100.0% | 4.8% | $15,552 | 100.0% | 6.6% | $14,593 | 100.0% | ||
| 3Q05 Actual | $3,999 | 20.0% | $3,333 | |||||||
| Costs | ||||||||||
| Cost of Revenue | $10,430 | 64.0% | 3.2% | $10,110 | 65.0% | 6.5% | $9,490 | 65.0% | ||
| One-time Charges | ||||||||||
| Total Costs | $10,430 | 64.0% | 3.2% | $10,110 | 65.0% | 6.5% | $9,490 | 65.0% | ||
| Gross Profit/Margin | $5,870 | 36.0% | 7.9% | $5,442 | 35.0% | 6.6% | $5,103 | 35.0% | ||
| Expenses | ||||||||||
| Sales, General & Marketing | $3,750 | 23.0% | 1.6% | $3,690 | 23.7% | 10.8% | $3,330 | 22.8% | ||
| Restructuring Charges (apportioned to ESS) | $22 | $160 | ||||||||
| Research & Development | $1,630 | 10.0% | 4.5% | $1,560 | 10.0% | 6.8% | $1,460 | 10.0% | ||
| Total Expenses | $5,380 | 33.0% | 2.0% | $5,272 | 33.9% | 6.5% | $4,950 | 33.9% | ||
| Operating Profit (Loss) | $490 | 3.0% | 188.6% | $170 | 1.1% | 10.8% | $153 | 1.0% | ||
| as reported | $173 | 1.1% | 21.8% | $142 | 1.0% | |||||
| 3Q05 Actual | $150 | 3.8% | -171.1% | ($211) | -6.3% | |||||
| Other Income (Loss) | ($5) | -0.0% | -17.1% | ($6) | -0.0% | 277.6% | ($2) | -0.0% | ||
| Income (Loss) Before Tax | $485 | 3.0% | 196.1% | $164 | 1.1% | 8.0% | $152 | 1.0% | ||
| Income Tax (Benefit) | $81 | 16.7% | 196.1% | $27 | 16.7% | 48.9% | $18 | 12.1% | ||
| Net Income (Loss) | $404 | 2.5% | 196.1% | $136 | 0.9% | 2.4% | $133 | 0.9% | ||
| Earnings per share (basic) | 2.91 | 0.14 | 0.05 | 0.05 | ||||||
| Pro Forma Valuation | ||||||||||
| P/E Ratio | Rev Ratio | Market Cap (est.) | Spin-off | Actual | ||||||
| P/E | Rev | Combined | Benefit | (8/16/05) | ||||||
| Industry Segment Avg | 20.00 | 2.70 | $8.08 | $44.01 | $26.05 | |||||
| HP Corporate | 19.67 | 0.83 | $96.67 | $74.87 | $12.98 | $68.46 | ||||
| HP Servers&Storage | 10.00 | 1.30 | $4.04 | $21.19 | $12.62 | ($0.36) | ||||
| Source: Annex Research | ||||||||||
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