The purpose is to critically evaluate the use of Non-GAAP disclosures and their relation to GAAP disclosures. Refer first to Hewlett Packard 2009 Non-GAAP Income Statement and answer the following questions.

1. Why do firms provide Non-GAAP information? At HP, were GAAP or Non-GAAP net earnings for the fiscal year 2013 larger in value?

2. Which items did HP decide to exclude from 2013 full-year GAAP net earnings to arrive at Non-GAAP net income?

3. Refer now to Exhibit A below and focus solely on the entire fiscal year 2013 results reported. Were year-over-year percentage changes in operating margin, net earnings, and diluted EPS more favorable on a GAAP basis or a non-GAAP basis? Provide evidence to support your conclusion.

(a) For the period ended 0ctober 31,2012 , represents a goodwill and intangible asset impairment charge of $8,8 billion associated with the Autonomy reporting enit within the 5ortware segment, a goodwill impaiment charge of 58.0 binion associated with the Enterprise Services segment and an intangible asset impairment charge of $1.2 bilion associated with the "Compac" trade name within the Personal 5y stems segment. (b) For the periad ended October 31, 2012, represents pilmarlily contract-related charges, including inventery wite-downs, related to winding down certain retail poblishing business activities within the Printing segment, net of acjustments to expenses for supplier-telated obligations related to winding down the web05 device business. (c) For the period ended 0ctober 31,2012 , adjustments for taxes is net of valsation allowances of 51.3 billion provided for certain deferred tax assets. HP Reports Fourth Quarter and Fiscal 2013 Results - Fourth quarter non-GAAP diluted net eamings per share of $1.01, down 13% from the prior-year period - Fourth quarter GAAP diluted net earnings per share of $0.73, up from GAAP diluted net loss per share of $3.49 in the prior-year period - Fourth quarter net revenue of $29.1 billion, down 3% from the prior-year period and down 1% when adjusted for the effects of currency - Fourth quarter cash flow from operations of $2.8 billion, down 31% from the prior-year period - Returned $763 million to shareholders in the form of dividends and share repurchases in the fourth quarter - Improved operating company net debt position by $1.3 billion to an operating company net cash position in the fourth quarter, the seventh consecutive quarterly improvement of over $1 billion - Fiscal 2013 non-GAAP diluted net earnings per share of $3.56, within the previously provided outlook of $3.53 to $3.57 - Fiscal 2013 GAAP diluted net earnings per share of $2.62, below the previously provided outlook of $2.67 to $2.71 - Fiscal 2013 net revenue of $112.3 billion, down 7% from the prior year and down 5% when adjusted for the effects of currency PALO ALTO, CA, 11/26/13 - HP (NYSE: HPQ) today announced financial results for its fiscal fourth quarter and fiscal year ended Oct. 31, 2013. Fourth quarter GAAP diluted net earnings per share (EPS) was $0.73, up from a GAAP diluted net loss per share of $3.49 in the prior-year period. Fourth quarter non-GAAP diluted net EPS was $1.01, down from $1.16 in the prior-year period. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $545 million and $0.28 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges. Fourth quarter net revenue of $29.1 billion was down 3% from the prior-year period and down 1% when adjusted for the effects of currency. Fiscal 2013 GAAP diluted net EPS was $2.62, up from a GAAP diluted net loss per share of $6.41 in the prior-year period and below the previously provided outlook of $2.67 to $2.71 per share. Fiscal 2013 non-GAAP diluted net EPS was $3.56, down from $4.05 in the prior-year period and within the previously provided outlook of $3.53 to $3.57 per share. Fiscal 2013 non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $1.8 billion and $0.94 per diluted share, respectively, related to the amortization of intangible assets, restructuring charges and acquisition-related charges. Fiscal 2013 net revenue of $112.3 billion was down 7% from the prior year and down 5% when adjusted for the effects of currency. News release (continued) "Through improved execution, strong cost management, and with the support of our customers and partners, HP ended fiscal 2013 on a high note," said Meg Whitman, HP president and chief executive officer. "Our Q4 results demonstrate that HP's turnaround remains on track heading into fiscal 2014. While we still have much more work to do, our business units and their core assets are delivering on HP's strategy to heip customers thrive by providing solutions for the New Style of IT." (a) For the period ended 0ctober 31,2012 , represents a goodwill and intangible asset impairment charge of $8,8 billion associated with the Autonomy reporting enit within the 5ortware segment, a goodwill impaiment charge of 58.0 binion associated with the Enterprise Services segment and an intangible asset impairment charge of $1.2 bilion associated with the "Compac" trade name within the Personal 5y stems segment. (b) For the periad ended October 31, 2012, represents pilmarlily contract-related charges, including inventery wite-downs, related to winding down certain retail poblishing business activities within the Printing segment, net of acjustments to expenses for supplier-telated obligations related to winding down the web05 device business. (c) For the period ended 0ctober 31,2012 , adjustments for taxes is net of valsation allowances of 51.3 billion provided for certain deferred tax assets. HP Reports Fourth Quarter and Fiscal 2013 Results - Fourth quarter non-GAAP diluted net eamings per share of $1.01, down 13% from the prior-year period - Fourth quarter GAAP diluted net earnings per share of $0.73, up from GAAP diluted net loss per share of $3.49 in the prior-year period - Fourth quarter net revenue of $29.1 billion, down 3% from the prior-year period and down 1% when adjusted for the effects of currency - Fourth quarter cash flow from operations of $2.8 billion, down 31% from the prior-year period - Returned $763 million to shareholders in the form of dividends and share repurchases in the fourth quarter - Improved operating company net debt position by $1.3 billion to an operating company net cash position in the fourth quarter, the seventh consecutive quarterly improvement of over $1 billion - Fiscal 2013 non-GAAP diluted net earnings per share of $3.56, within the previously provided outlook of $3.53 to $3.57 - Fiscal 2013 GAAP diluted net earnings per share of $2.62, below the previously provided outlook of $2.67 to $2.71 - Fiscal 2013 net revenue of $112.3 billion, down 7% from the prior year and down 5% when adjusted for the effects of currency PALO ALTO, CA, 11/26/13 - HP (NYSE: HPQ) today announced financial results for its fiscal fourth quarter and fiscal year ended Oct. 31, 2013. Fourth quarter GAAP diluted net earnings per share (EPS) was $0.73, up from a GAAP diluted net loss per share of $3.49 in the prior-year period. Fourth quarter non-GAAP diluted net EPS was $1.01, down from $1.16 in the prior-year period. Fourth quarter non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $545 million and $0.28 per diluted share, respectively, related to restructuring charges, the amortization of intangible assets and acquisition-related charges. Fourth quarter net revenue of $29.1 billion was down 3% from the prior-year period and down 1% when adjusted for the effects of currency. Fiscal 2013 GAAP diluted net EPS was $2.62, up from a GAAP diluted net loss per share of $6.41 in the prior-year period and below the previously provided outlook of $2.67 to $2.71 per share. Fiscal 2013 non-GAAP diluted net EPS was $3.56, down from $4.05 in the prior-year period and within the previously provided outlook of $3.53 to $3.57 per share. Fiscal 2013 non-GAAP net earnings and non-GAAP diluted net EPS exclude after-tax costs of $1.8 billion and $0.94 per diluted share, respectively, related to the amortization of intangible assets, restructuring charges and acquisition-related charges. Fiscal 2013 net revenue of $112.3 billion was down 7% from the prior year and down 5% when adjusted for the effects of currency. News release (continued) "Through improved execution, strong cost management, and with the support of our customers and partners, HP ended fiscal 2013 on a high note," said Meg Whitman, HP president and chief executive officer. "Our Q4 results demonstrate that HP's turnaround remains on track heading into fiscal 2014. While we still have much more work to do, our business units and their core assets are delivering on HP's strategy to heip customers thrive by providing solutions for the New Style of IT