HP Global Partner Conference, Las Vegas – HP CEO Meg Whitman spoke publicly for the first time about the billion dollar write-downs of acquisitions EDS and Autonomy during a Q&A session after her keynote at the company’s annual partner conference yesterday.
Quizzed by a partner on the financial health of HP following the write-downs – $5-billion in the case of Autonomy – Whitman says that the organisation’s debt situation is well under control.
“Most of our overall debt, almost two-thirds, is due to our leasing business,” Whitman explains. “When you finance your purchases using a leasing option, like all big leasing companies, you do take on some debt and the operating company has taken on some debt.
“But our nett debt at the moment is around $5,6-billion and, by the end of 2015, we see this being reduced to a low single digit figure,” she adds.
Whitman says the write-offs against EDS and Autonomy are totally different.
“They are two quite different situations,” she says. “In the case of EDS, it is pretty complicated to explain, but it is around market cap reconciliation.
“Autonomy was a little different,” Whitman says, stating that alleged misrepresentations on the $10,2-billion acquisition had led to the decision by HP to take the write-down.
“We took a non-cash charge on that and have turned the matter over to the relevant authorities in the US and the UK,” she says. “It was a very difficult decision for HP and it is now in the hands of the authorities.”
Whitman adds that the company is still committed to Autonomy technology it has acquired and that product sets based on this will continue to be released.
“It’s got a great set of technologies,” she says. “It’s just a bit smaller company than we anticipated. IDOL is magical, for example, and we’re building that business for the long-haul.”