All you should know about the HP Split

Created: August 2015Gathered by: Prayukth K VGraphics: Prabahar Chitraikani

• Dividing up or retooling 2800 Apps and 75000 APIs

• 50,000 servers in six data centers

• 3,00,000 employees

• Splitting or dividing 750 legal entities in 166 nations

• HP’s already said it expects the tab for the split to run to some $2.75 billion--$1.8 billion in restructuring costs and $950 million in taxes

• Another $400 million to $450 million will be spent in “dis-synergy” costs resulting from duplicating corporate jobs

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The Scale

HP Enterprise will be home to the company’s data centerproducts, including servers, storage, network gear and software, as well as its enterprises services division. HP

Inc. will sell its PCs and printers.

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The result will be 2 $55bn Fortune 50 companies

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Hewlett-Packard Enterprise and HP Inc. will not compete against each other for three years

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The two companies also will not go after each other's employees. Neither will be able to pitch jobs to any of the

other's employees for 12 months, or to hire employees from the other company for six months. However, there are exceptions. For example, if one company terminates

an employee, the other company can hire that employee.

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HP buildings that house employees of both companies must have two separate entrances for each of the independent entities.

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The enterprise unit is only walking away with $.5B of the debt, leaving the massive majority of existing and new debt (about $22B) to the

PC/Printing company

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The PC group, is doing well, with 6.6 percent growth year over year and $1.2B in earnings on $34B in revenue, or

nearly 4 percent profit. Unfortunately, this is offset by the Printing group, which is losing revenue at the rate of

nearly 4 percent per year but making a whopping $4B+ in earnings on $23B in revenue, or around 16 percent profit.

In terms of cash generation, both in total and as a percentage of revenue, the Printing unit is a like a money machine. Now in debt, HP shows a massive $20B, down

$2B from 2013, and added to this will be much of the $3B separation cost, and the Enterprise half of the firm is just taking $.5B. That leaves the PC/Printer company with a

whopping $22B (approximately) to pay off.

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The new HP Enterprise company won't be able to sell itself for two years. This restriction is part of the tax-free

status that the separation will get.

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Gathered by: Prayukth K VGraphics: Prabahar Chitraikani