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<SEC-DOCUMENT>/in/edgar/work/20000918/0000912057-00-041708/0000912057-00-041708.txt : 20000923
<SEC-HEADER>0000912057-00-041708.hdr.sgml : 20000923
ACCESSION NUMBER:		0000912057-00-041708
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20000918
ITEM INFORMATION:		
ITEM INFORMATION:		
FILED AS OF DATE:		20000918

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HEWLETT PACKARD CO
		CENTRAL INDEX KEY:			0000047217
		STANDARD INDUSTRIAL CLASSIFICATION:	 [3570
]		IRS NUMBER:				941081436
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		8-K
			SEC ACT:		
			SEC FILE NUMBER:	001-04423
			FILM NUMBER:		724565
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		3000 HANOVER ST
				CITY:			PALO ALTO
				STATE:			CA
				ZIP:			94304
				BUSINESS PHONE:		4158571501
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		3000 HANOVER ST
					STREET 2:		MS 20BL
					CITY:			PALO ALTO
					STATE:			CA
					ZIP:			94304
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<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>a2025976z8-k.txt
<DESCRIPTION>8-K
<TEXT>

<PAGE>

===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                                  SEPTEMBER 18, 2000
                Date of Report (Date of Earliest Event Reported)


                             HEWLETT-PACKARD COMPANY
- -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


        DELAWARE                    1-4423                   94-1081436
- -------------------------------------------------------------------------------
(State or other jurisdiction      (Commission             (I.R.S. Employer
      of incorporation)           File Number)           Identification No.)


                    3000 HANOVER STREET, PALO ALTO, CA 94304
              (Address of principal executive offices) (Zip code)


                                 (650) 857-1501
              ----------------------------------------------------
              (Registrant's telephone number, including area code)

===============================================================================

<PAGE>

ITEM 5.  OTHER EVENTS.

         On September 18, 2000, the President and Chief Executive Officer of
Hewlett-Packard Company ("HP"), Carly Fiorina, spoke at the SG Cowen Fall
Investor Conference regarding HP's recent initiatives. A copy of the speech
prepared for her use is attached hereto as Exhibit 99.1 and incorporated
herein by reference. Portions of the speech concern HP's proposed acquisition
of PricewaterhouseCoopers ("PwC"). HP previously announced in a Current
Report on Form 8-K filed September 12, 2000 that HP is in discussions with
PwC with respect to a possible acquisition of PwC's global management and
information technology consulting practice and that terms of the transaction
have not been agreed upon, and significant issues remain to be resolved.

         This report and the speech attached hereto as Exhibit 99.1 contain
forward-looking statements that involve risks, uncertainties and assumptions
that, if they never materialize or prove incorrect, could cause the results
of HP and its consolidated subsidiaries to differ materially from those
expressed or implied by such forward-looking statements. All statements other
than statements of historical fact are forward-looking statements, including
any projections of earnings, revenues, or other financial items; any
statements of the plans, strategies, and objectives of management for future
operations; any statements concerning proposed new products, services, or
developments; any statements regarding future economic conditions or
performance; statements of belief; and any statement of assumptions
underlying any of the foregoing. The risks, uncertainties and assumptions
referred to above include the ability of HP to retain and motivate key
employees; the timely development, production and acceptance of new products
and services and their feature sets; the challenge of managing asset levels,
including inventory; the flow of products into third-party distribution
channels; the difficulty of keeping expense growth at modest levels while
increasing revenue; and other risks, assumptions and uncertainties that are
described from time to time in HP's Securities and Exchange Commission
filings, including but not limited to the Annual Report on Form 10-K for the
year ended October 31, 1999 and other subsequently filed reports. Moreover,
the potential acquisition by HP of PwCs' global management and information
technology consulting practice described in HP's most recent Quarterly Report
on form 10-Q, as amended, for the quarterly period ended July 31, 2000 and
our Current Report on Form 8-K filed on September 12, 2000 presents
additional risks, uncertainties and assumptions, including the possibility
that HP and PwC may not consummate the acquisition; the challenge of
integrating the PwC and HP consulting businesses; the possibility that the
combined businesses may fail to achieve desired synergies and that, after the
acquisition, HP as a whole and the consulting business on its own may fail to
achieve revenue and profit expectations; and the difficulty for HP of
transitioning to new independent accountants. HP does not intend to update
these forward-looking statements.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.

         Exhibit 99.1      Speech delivered by Carly Fiorina on September 18,
                           2000 to the SG Cowen Fall Investor Conference.


<PAGE>

                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                       HEWLETT-PACKARD COMPANY

Date: September 18, 2000               By:  /s/ Charles N. Charnas
                                            -----------------------------------
                                       Name:  Charles N. Charnas
                                       Title: Assistant Secretary


<PAGE>

                          INDEX TO EXHIBITS FILED WITH
                THE CURRENT REPORT ON FORM 8-K DATED SEPTEMBER 18, 2000

  Exhibit                              Description
- -----------   ----------------------------------------------------------------

    99.1        Speech delivered by Carly Fiorina on September 18, 2000 to the
                SG Cowen Fall Investor Conference.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>a2025976zex-99_1.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

<PAGE>

                                                                   EXHIBIT 99.1

Thank you, good afternoon.

At the request of my IR and legal team, I need to remind you that I will be
making some forward-looking statements in my comments today. Naturally, there
are risks that may cause our results to be materially different from the results
expressed or implied by such statements. Those risks are described in the
reports we've filed with the SEC.

OK ... with that behind us ... for those of you who may not be totally familiar
with HP, I'd like to provide a brief overview of the company.

HP is a company with a unique set of assets.

We're a $20 billion imaging and printing systems business that leads in
virtually every category we compete in. In this business, we're seeing
consistent profitability and we're posting double-digit revenue growth. The
supplies business is a crown jewel for us and is driven by the Internet.

Clearly, the Internet is driving more pages to the printer at the same time that
it's fueling innovative applications -- newspapers, tickets, stamps, and photos
delivered to your printer via the Net. This is a trend that is here to stay, and
unlike many of our competitors, we are not only surviving this macro-shift,
we're thriving on it. We predicted it. We're prepared for it. And we're
lengthening our lead because of it.

We're also a $15 billion computing systems and Internet infrastructure business,
delivering enterprise servers, storage, software, and PCs to business customers.
We're seeing double-digit revenue growth in this business. Last quarter, profits
doubled over the prior quarter.

We have a growing $7 billion IT and professional services business. In Q3, our
consulting revenues were up 46% and we added 600 new consultants to our
practice.

And we are the largest consumer IT company in the world, occupying 10% of the
world's retail shelf space. Our consumer offerings include: PDA's, Pocket PC's,
DeskJet printers, home PCs, scanners, digital cameras and photo printers ...
representing the world's largest array of Internet-enabled devices. This
business has grown at a healthy 30%+ clip all year.

Overall, revenue for our third quarter grew 15% to $11.8 billion, earnings were
$1.01 billion, all of which translates into earnings per share growth of 37%.

It's important to note that our global presence is a competitive advantage. We
have deep roots and established relationships across the major geographies ...
and we're seeing balanced performance across all regions of the world.

Revenue from outside the United States rose 16 percent (19 percent in local
currency) to $6.5 billion. In Europe, revenue was $3.8 billion, an increase of 8
percent (17 percent in local currency). In Asia

<PAGE>

Pacific, revenue increased 36 percent to $1.8 billion. In Latin America, revenue
increased 27 percent to $0.6 billion.

So ... we're delivering 15% sustainable top line growth, we're accelerating
growth on the bottom line, we're lowering expenses -- taking more than $1
billion in infrastructure costs out of the business through discipline and
focus, and we're using our e-services strategy to drive new growth opportunities
that leverage our core franchises.

Which brings me to my next point ... strategy.

Taken separately, our businesses are strong in their own right. Working
together, they give us a unique, powerful and sustainable advantage in the
marketplace.

Many of you have heard us talk about HP's overarching business strategy ... it's
to invent useful customer solutions at the intersection of e-services,
information appliances, and an always-on Internet infrastructure.

We believe the real promise and power for businesses and consumers lie in the
linkages ... the connections ... the intersection ... of these three emerging
forces. It is by understanding the interplay between them - and leveraging our
entire portfolio -- that we have the opportunity to use technology to
fundamentally transform the customer experience ... to transform the value
creation process ... and to transform entire industries.

Last week was a very important week for HP. It was a strategically significant
week for us. The announcements we made are illustrative of the new hp in action
 ... and it's precisely because of the underlying strength in our existing
business that we're in a position to make bold moves that position us for
accelerated growth.

And so I'd like to spend a few minutes putting the events of last week in
perspective - specifically as they relate to our strategy.

Last Monday, we confirmed we're in discussions with PwC to acquire their
management consulting services practice, which would significantly accelerate
our move into the IT consulting business.

On Tuesday, we launched the latest addition to our Unix server line-up,
Superdome, our new high-end server ... that combines world-class technology with
world-class service, support, and financing. In fact, Superdome represents an
entirely new approach to delivering value in this market ... so different ...
that we believe it changes the rules of the game.

And on Thursday, we announced a broad strategic alliance with Indigo ... a
leader in high-end digital commercial printing. This alliance, which includes an
equity stake, OEM agreement, and co-development initiatives ... is aimed at
transforming the $500 billion commercial printing industry by bringing it into
the digital age.

                                      -2-

<PAGE>

All in all, it was a heck of a week for us.

Let's start with the PwC announcement ...

Overall, our story in the IT Services space is a good one ... last quarter, IT
services revenue grew by 17%, due in large part to HP Consulting, which, as I
mentioned earlier, posted healthy revenue gains of 46%, well ahead of the
consulting industry average. And we've already exceeded our stated goal of
hiring 1,000 new consultants into HPC by the end of this fiscal year.

The reason for the aggressive build-out of this business is that we see a
fundamental shift in the business landscape ... and the role of technology in
this new era.

We believe the days of talking to one company about business strategy and
another company about technology implementation ... are, frankly, over. The
linkage between business transformation and IT implementation is inextricable
 ... and this places new demands on Internet infrastructure providers.

This is a view of the market we've developed based on discussions with our
customers, and it's been validated by a recent study we commissioned with Boston
Consulting Group.

BCG conducted a blind survey of more than 100 CIOs around the world.

Here's what the study confirmed:

     - CIOs are, in fact, looking for consulting and technology partners who are
       experienced at working together.

     - While CIOs once valued neutrality regarding technology implementation,
       today they value a point-of-view on HOW and WHAT technology can speed
       business transformation. A point of view that keeps the client's best
       interest in the center of the engagement.

     - And time-to-solution ... time to revenue ... the speed of implementation
       ... matters. That's why they value the linkages between consultants and
       technology players.

And that's why you're seeing a sea change in how systems vendors and consulting
practices go to market. Bounty relationships between consultants, systems
integrators and technology providers are now common place and involve every name
in the industry that you know. The Cisco's, Sun's, Microsoft's, Andersen's and
KPMG's have all been involved in recent link-ups.

While we've been growing our consulting business organically through aggressive
hiring and strategic partnerships - and we've made great strides in doing so -
we believe the best way to accelerate our growth to address this market shift is
through an acquisition of a premier consultancy.

                                      -3-

<PAGE>

The criteria that we've established to evaluate potential acquisition partners
include ... cultural fit ... a shared strategic vision ... a complementary
customer mix ... leadership in the e-space... and a global footprint.

Based on these criteria, we believe that the management consulting services
practice of PricewaterhouseCoopers is an excellent strategic fit.

PwC has a global IT management consulting practice with 35,000 employees around
the world.

In their fiscal year 2000, which ended in June, they posted approximately $7
billion in consulting revenues. Given current growth rates, projected revenues
for the current fiscal year, ending in June 2001, should well exceed $8 billion.

They've historically grown at a compound rate of 20% annually and are expected
to sustain this growth rate going forward. And PwC's profitability is at least
competitive with its peers.

They are focused on delivering high-end strategic consulting services in the
areas of business transformation and IT consulting. And specific focus areas
include: Customer Relationship Management, Supply Chain Management, Data
Warehousing, Enterprise Application Integration, IT infrastructure and
Application Outsourcing - all areas that are strategically important to our
customers.

All of this is important in the context of determining PwC's valuation, which,
over the past week, I've seen calculated and analyzed a variety of different
ways.

Let me be clear, in arriving at a valuation, we strived to develop a value that
worked both for our shareowners and PwC's stakeholders.

First, from their perspective, an acquisition alternative had to be
competitive with an IPO alternative. In the public markets, companies are
valued at a multiple of projected earnings. Valuation multiples are a
function of sustainable long-term growth rates. And value is a function of
valuation multiples and earnings.

We are valuing PwC based on a multiplier that is in line with those applied to
management consulting firms as opposed to traditional IT outsourcing firms,
which have lower growth rates and are less profitable. Outsourcing businesses
have a lower multiple on lower earnings.

On this basis, a better compare for the PWC transaction is the Ernst & Young/
CapGemini acquisition.

From our perspective, we set ourselves the constraint that the transaction would
need to be cash EPS beak-even in the first full fiscal year of operations, which
is fiscal year 2002. And equally important, a significant portion of the value
would need to go to the very people who would be creating value for us going
forward. We are still in the process of working out the details related to this
distribution.

                                      -4-

<PAGE>

In terms of PwC's credentials ...

A recent issue of The Global IT Consulting Report said that PwC has quietly
established itself as the leading technology consultancy.

They're also a leader in the build-out of trading exchanges ... with more than
125 engagements in this space ... including the highly publicized Covisint auto
exchange ... featuring Ford, GM, Daimler Chrysler, and Renault/Nissan.

And PwC is the biggest services partner for SAP, i2, Broadvision, and Ariba -
all important software players in the areas our customers care about.

Obviously, in pursuing a transaction of this magnitude we have thought long and
hard about the complexities - and we're addressing the tough issues head-on.

We've learned a lot from our experiences and missteps in integrating Apollo and
Verifone.

There are some fundamental differences between those acquisitions, however, and
the one we're now proposing. With PwC, the strategic rationale is clear and the
executive committee and I are directly involved -- and will continue to be
involved -- on an ongoing basis.

We also recognize that the assets we're acquiring are people. Therefore, as I
said, we intend to ensure that appropriate value is delivered to the consulting
talent that we plan to acquire and we will use all the mechanisms typical of a
services acquisition to retain them.

It's also important to note that we sit in Silicon Valley, one of the most
competitive job markets in the world, and we manage our own consulting practice,
which, as I've said, we're expanding aggressively, so we're familiar with how to
attract and retain world-class talent.

In addition to the people assets, PwC has developed proven methodologies
designed to capture and manage the best practices and intellectual property they
glean through their consulting engagements, as well as processes for attracting,
retaining and training professionals. These methodologies and processes are
fully scalable, an important differentiator and competitive advantage for
successful IT consultancies.

While we are excited by the possibility of adding this talented group of
individuals to our team, we will only pursue this transaction - or another one
like it -- if we believe we can do so under terms that are in the best interests
of our customers and our shareowners.

A final point I'd like to make around the PwC deal surrounds press and analyst
reports I've seen that characterize this deal as an attempt to mimic IBM's
Global Services business.

Actually, the strategic rationale is quite different.

                                      -5-

<PAGE>

We're not building a services business to make up for a declining hardware
business. We have a very healthy product and technology business that can and
will compete on its own merits. And we have no plans to sacrifice hardware
revenues at the expense of services revenues.

In the consulting services business, PwC has a broader set of capabilities and
operates in spaces that IBM does not, particularly in the management consulting
and business transformation arena. Meanwhile, a significant portion of IBM's
services revenue is the slower growing mainframe outsourcing business.

Finally, it's worth noting that the acquisition of PwC is expected to be
additive to HP's current 15% projected growth rates.

Fundamentally, this acquisition is about combining world-class technology
solutions with world-class consulting services to help customers transform their
business.

Now, let's shift the conversation to Superdome.

Superdome is strategic to HP for a number of reasons:

First ... with Superdome we're now delivering the industry's most powerful Unix
server line-up ... top to bottom ... bar none.

On a pure technology basis ... we're leapfrogging our competitors in terms of
processing performance and compute power ... both in terms of the number of CPUs
customers can order as well as in the performance of the processors themselves.

Second ... Superdome represents a radically different approach to working with
customers AND leveraging ALL of hp's resources to develop total solutions.

For the past two years we've had discussions with our customers about their
computing needs and what they want in a technology partner ... both in terms of
systems performance (i.e. the server) ... but also in terms of the "thinking"
 ... the solutions and support ... beyond the box.

We took this feedback and fed it into virtually every aspect of our product
development cycle and go-to-market processes ... from how we develop the server
 ... to how we support the product ... and everything in between.

Third ... With Superdome we're introducing a completely new go-to-market,
pricing and implementation process for customers. In fact, we're raising the bar
on what it means to be a leader in the high-end Unix market.


                                      -6-
<PAGE>

We're providing up-front planning and integration services to assure customers
this is the right system for their business and it will easily slip into their
existing IT environments when it's installed. Or we won't ship it.

We're delivering a utility-based pricing model where customers pay for the
server capacity they need ... exactly what they need, when they need it - just
like they pay for electricity or phone services.

We're automatically assigning a dedicated support team the moment the customer
makes a purchase ... to support and monitor the system - without the hassle of
negotiating additional service and support contracts.

And finally, Superdome is engineered to support the key computing and technology
shifts that lie ahead ... things like IA-64 and multiple operating systems such
as Unix, NT and Linux ... providing customers with the ultimate flexibility and
investment protection for the future.

Superdome is more than just world-class technology it's a world-class customer
experience.

Finally, let's talk about our announcement with Indigo.

This year, we've spent a lot of time talking about the growth opportunities in
the printer business.

Last spring we announced our printing e-services strategy - printers are
becoming first-class citizens of the Net, smart Internet appliances ... capable
of simplifying our daily lives. We announced a whole slew of new Internet-based
services for printers ... e-services that transform your printer into your local
post office, ticket office, shipping station, and even your local print shop. We
also announced plans to make a whole new set of devices ... cellphones, pagers,
PDAs... print capable.

Of course, all of these new services increase the number of pages printed, which
in turn fuels the profitability of our printing supplies business.

We've also talked about extending HP's lead in the consumer and networked
printing space into the high-end commercial printing arena.

We believe that more than 96% of all printed pages are produced by commercial
printers ... and this is a $500 billion market that has yet to reap the
transformational benefits of the digital era.

The alliance we announced with Indigo will enable HP to accelerate its growth in
the digital offset printing and publishing marketplace, and extend HP's market
leadership beyond inkjet and laser printing into high-production digital color
printing.

As part of this strategic alliance, HP and Indigo will co-develop a family of
high-end, digital color printing systems and HP will OEM Indigo's digital color
printing products.

                                      -7-

<PAGE>

This joint development effort combines Indigo's leadership in the production of
Digital Offset Color printing technology ... and the collective power of the HP
printing and imaging franchise, HP Labs, and HP's manufacturing, marketing and
distribution capabilities.

Three major strategic announcements in one week ... all because we see the
transformational capabilities of technology. We're anticipating the shifts in
customer needs and the new requirements these place on technology providers.

A new game is emerging ... it's a different game ... and the rules of
competition are changing.

Now, it's time for me to stop talking and give you a chance to ask questions ...
starting with you Richard.

                                      -8-
</TEXT>
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