Economic impacts

Like all companies, many aspects of HP’s day-to-day business affect our stakeholders financially. We have a direct impact through our financial transactions with various groups, such as:

• Suppliers through our purchase of goods and services
• Employees through wages paid
• Customers through sales
• Governments through tax payments
• Communities through social investment
• Investors through dividends and our financial performance

A healthy, efficient business has the financial strength and flexibility to capitalize on opportunities and create value for all these groups.

Our transactions with stakeholders can also indirectly affect individuals and businesses, as well as local and wider economies. As the money we spend circulates through the economy, our activities continue to have an impact. In addition, HP products and services increase productivity, potentially boosting companies’ profitability and strengthening the wider economy.

Although financial transactions have been regulated for centuries, there is little guidance for measuring overall economic contribution. We quantify some aspects and describe others more generally. The table outlines our direct and indirect economic impacts on each group. (See also the data dashboard and our financial statements.)

HP’s economic impacts

Group	Direct economic impacts	Indirect economic impacts
Suppliers	HP spends money on products, materials, components and services from suppliers around the world.	Our spending creates jobs in supplier companies. Suppliers and their workers pay taxes and support their local economies. Suppliers may also pay dividends to their investors.
Employees	Compensation and benefits are a significant proportion of HP’s expenses. We invest in training and development, which expands employees’ opportunities.	Employees pay taxes and generate further economic activity by spending the money they earn.
Customers	HP’s net revenue was $114.6 billion in fiscal year 2009.	Offering reliable, high-quality products benefits our customers. Our products and services also improve productivity, which may increase customers’ contribution to society through business expansion and increased taxes paid.
Local, state and national governments	Local, state and national governments benefit from taxes paid by HP and our employees.	Taxes paid enable government spending and programs.
Local, regional and national communities	Social investment ($52.2 million in 2009), support for nongovernmental organizations and employee giving all benefit communities.	These activities in turn support further economic activity by, for example, improving education and therefore employment opportunities.
Investors	Shareholders receive dividends, and the value of their shares may grow. (See the link to chart in Performance.)	Investors may pay taxes on dividends and on stock gains.

The socioeconomic value of IT

The information technology (IT) sector provides more people greater access to more—and better—information than ever before, wherever, however and whenever they need it. This is creating important new ways of providing services for a sustainable society, and has wide-ranging benefits for all. For example:

• Although the IT industry is responsible for about 2 percent of the world’s greenhouse gas (GHG) emissions, our products and services also have the potential to help significantly reduce the other 98 percent of emissions. (See Enabling a low-carbon economy.)
• Healthcare administration is often based on outdated, inefficient systems. Bringing the full benefits of IT to these systems will dramatically improve healthcare provision, making it more affordable, improving the quality of care and enabling wider use of advanced technologies.
• Economic prosperity is directly linked to educational opportunity, which many people lack. Technology can make learning far more relevant and exciting to children, extend educational opportunities to more people in more places, and harness the collective intelligence of the brightest thinkers, wherever they are.
• IT improves access to communications, especially in the developing world. This makes it easier to find, use and share valuable information, which can improve health, welfare and economic prosperity.
• IT enables people to work from different locations and join meetings by video or conference calls. This can reduce the cost and environmental impacts of travel and help employees balance their work and personal lives.
• The Internet and mobile technologies support democracy and expression by giving voice to people who could not easily publicize their views and experiences otherwise.

Many of these services require personal data to be entered and transmitted online and stored digitally. This requires robust procedures to keep data secure. Read more about how HP protects customer privacy.

We also consider and work to reduce the energy costs and environmental impacts of the infrastructure required to provide these services. See Climate and energy – Products, services and software for more information.

Performance

The data dashboard summarizes HP’s economic performance. (See our financial statements for more detail.)

Compared with FY08, HP’s revenue decreased by 3 percent in FY09 to $114.6 billion. Non- Generally Accepted Accounting Principles (GAAP) diluted earnings per share (EPS) increased 6 percent to $3.85.¹ On a GAAP basis, diluted EPS decreased 3 percent to $3.14.

HP’s interactive stock chart includes information about the company’s share performance.

Please visit our annual report and 10K to view HP revenue by business segment and by region.

1. ¹ Fiscal year 2009 non-GAAP diluted EPS excludes $0.71 per diluted share of adjustments on an after-tax basis related primarily to the amortization of purchased intangible assets, restructuring charges, acquisition-related charges, and in-process research and development charges. HP’s management uses non-GAAP EPS to evaluate and forecast HP’s performance before gains, losses or other charges that are considered by HP’s management to be outside of HP’s core business segment operating results. HP believes that presenting non-GAAP diluted EPS, in addition to GAAP diluted EPS, provides investors with greater transparency to the information used by HP’s management in its financial and operational decision making. HP further believes that providing this additional non-GAAP information helps investors understand HP’s operating performance and evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP diluted EPS.