June 25, 2002
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Hewlett-Packard Company
Commission File No. 1-4423
Annual Report on Form 11-K for
The Tax Saving Capital Accumulation Plan
Ladies and Gentlemen:
Pursuant to Section 15(d) of the Securities Exchange Act of 1934, as amended, I
am transmitting on behalf of Hewlett-Packard Company its Annual Report on Form
11-K for the Tax Saving Capital Accumulation Plan for the fiscal year January 1,
2001 to December 31, 2001
Very truly yours,
/s/ Charles N. Charnas
---------------------------
CHARLES N. CHARNAS
Assistant Secretary
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 2001
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission File Number: 1-4423
A. Full title of the plan and address of the plan, if different from that of
the issuer named below:
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
HEWLETT-PACKARD COMPANY
3000 HANOVER STREET
PALO ALTO, CALIFORNIA 94304
REQUIRED INFORMATION
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
DECEMBER 31, 2001 AND 2000 AND FOR THE YEAR ENDED DECEMBER 31, 2001
-------------------------------------------------------------------------------
Page
----
Report of Independent Auditors - Ernst & Young, LLP..........................1
Independent Accountants' Report - Mohler, Nixon & Williams...................2
AUDITED FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits..............................3
Statement of Changes in Net Assets Available for Benefits....................4
Notes to Financial Statements................................................5
SUPPLEMENTAL SCHEDULE AS OF DECEMBER 31, 2001:
Schedule H, Line 4i--Schedule of Assets (Held at End of Year)...............10
Exhibit No. 23.1 Consent of Ernst & Young LLP, Independent Auditors........12
Exhibit No. 23.2 Consent of Mohler, Nixon & Williams, Independent
Accountants...............................................................13
REPORT OF INDEPENDENT AUDITORS
Plan Administrator
Hewlett-Packard Company Tax Saving Capital Accumulation Plan
We have audited the accompanying statement of net assets available for benefits
of Hewlett-Packard Company Tax Saving Capital Accumulation Plan as of December
31, 2001, and the related statement of changes in net assets available for
benefits for the year then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001, and the changes in its net assets available for benefits for
the year then ended, in conformity with accounting principles generally accepted
in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedule of assets
(held at end of year) as of December 31, 2001, is presented for purposes of
additional analysis and is not a required part of the financial statements but
is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in our audit of the financial statements and, in our opinion,
is fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
San Jose, California
April 26, 2002
-1-
INDEPENDENT ACCOUNTANTS' REPORT
To the Participants and Administrator of
The Hewlett-Packard Company
Tax Saving Capital Accumulation Plan
We have audited the statement of net assets available for benefits of the
Hewlett-Packard Company Tax Saving Capital Accumulation Plan (the Plan) as of
December 31, 2000, as listed in the accompanying table of contents. This
financial statement is the responsibility of the Plan's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statement is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Plan's management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2000, in conformity with accounting principles generally accepted
in the United States of America.
/s/ MOHLER, NIXON & WILLIAMS
-----------------------------
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
May 11, 2001
-2-
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
-------------------------------------------------------------------------------
DECEMBER 31,
------------
2001 2000
---- ----
ASSETS
Investments ................................... $ 3,321,195,594 $ 3,748,712,000
Receivables:
Company contribution receivable ............ 12,200,403 12,781,000
Amount due from brokers for securities sold 226,056 671,000
Interest and dividends receivable .......... 2,044,072 2,148,000
------------- -------------
Total receivables ............................. 14,470,531 15,600,000
------------- -------------
Total assets .................................. 3,335,666,125 3,764,312,000
------------- -------------
LIABILITIES
Amounts due to brokers for securities purchased 149,356 850,000
------------- -------------
Total liabilities ............................. 149,356 850,000
------------- -------------
Net assets available for benefits ............. $ 3,335,516,769 $ 3,763,462,000
=============== ===============
See accompanying notes.
-3-
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
-------------------------------------------------------------------------------
FOR THE YEAR
ENDED
ADDITIONS DECEMBER 31, 2001
-----------------
Interest and dividends $ 62,332,103
Contributions:
Cash:
Participant 231,384,260
Company 109,080,563
Rollover 41,130,678
---------------
381,595,501
Noncash:
Participant 19,663,872
Company 9,069,690
Rollover 26,520
---------------
28,760,082
---------------
Total additions 472,748,976
DEDUCTIONS
Benefits paid directly to participants 197,590,627
Net realized and unrealized depreciation in fair
value of investments 702,318,299
Administrative expenses 99,614
Transfer to other plan 624,377
---------------
Total deductions 900,632,917
Net decrease (427,945,231)
Net assets available for benefits:
Beginning of year 3,763,462,000
---------------
End of year $ 3,335,516,769
===============
See accompanying notes.
-4-
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
-------------------------------------------------------------------------------
NOTE 1 DESCRIPTION OF THE PLAN
--------------------------------
The following brief description of the Hewlett-Packard Company Tax Saving
Capital Accumulation Plan (the Plan) provides only general information.
Participants should refer to the plan document for a more complete description
of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan covering employees of Hewlett-Packard
Company (the Company) and designated domestic subsidiaries who are on the U.S.
payroll and who are employed as regular full-time or regular part-time
employees. The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
During 2001, participants of the Plan who have become participants of the
Verifone, Inc. 401(k) Retirement Savings and Investments Plan (Verifone Plan)
were allowed to transfer their outstanding participant loan balances to the
Verifone Plan, resulting in a transfer of $624,377 of the Plan's net assets.
CONTRIBUTIONS
All employees who were hired on or after February 1, 1998 are deemed to have
elected a three percent deferral effective on the first day of their employment,
unless the employee makes a change to that election in the manner prescribed by
the Company.
Participating employees may contribute, on a pretax basis, up to 20% of their
eligible compensation as defined by the plan document. Subsequent to the June 2,
2000 spin off of Agilent Technologies, Inc. (Agilent) from the Company,
participants may no longer direct their contributions to be invested in the
Agilent Stock Fund. Contributions are subject to annual deductibility limits
specified under the Internal Revenue Code (the Code). Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contributions plans.
The Company contributes 100% of the first 3% and 50% of the next 2% of
contributions that the participant contributed to the Plan. The Company matching
contribution is deposited into each participants account after the end of each
of the Company's fiscal quarters, which are January 31, April 30, July 31 and
October 31, provided that the participant is an employee on the last day of the
quarter.
Participant and Company contributions are made in cash for all funds except the
Hewlett-Packard Company Stock Fund (Company Stock Fund). Contributions to the
Company Stock Fund are made in either cash or the Company's common stock. Stock
contributions attributable to employee deferrals totaled $19,663,872 in 2001.
Stock contributions attributable to Company contributions totaled $9,069,690 in
2001. Stock contributions attributable to participant rollovers from other
qualified plans totaled $26,520 in 2001. Contributions of the Company's common
stock are valued at their fair market value at the closing price, as quoted on
the New York Stock Exchange, on the date of contribution
-5-
The Company may guarantee a minimum total amount of participant and Company
contributions that will be made to the Plan in a plan year. The amount, if any,
that this minimum exceeds the actual total participant and Company contributions
as determined above will be allocated to non-highly compensated employees (as
defined in the Code) in the manner prescribed by the plan document. Minimum
contributions of $275,000,000 were guaranteed for the 2001 plan year.
VESTING
Participants are one hundred percent vested in the Plan at all times.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (i) Company contributions, and (ii) Plan earnings and losses.
Allocations are determined in accordance with the provisions of the plan
document. The benefit to which a participant is entitled is the benefit that can
be provided from the vested portion of the participant's account. All amounts in
participant accounts, including amounts invested in the Agilent Stock Fund prior
to the June 2, 2000 spin off of Agilent, are participant-directed.
PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000 up to a
maximum equal to the lesser of $50,000 or 50% of their vested account balance.
Loan terms range from one to four years. Loans are secured by the participant's
account and bear interest at a rate equal to the prevailing prime rate plus
one-half of 1% (0.5%). Principal and interest is paid ratably through payroll
deductions.
PAYMENT OF BENEFITS
Upon termination of service, death, disability, and retirement, participants may
receive a lump-sum amount equal to the value of their account. Effective January
1, 2001, participants with account balances exceeding $5,000 may elect to
receive a series of cash installment payments. Lump-sum payments may be made in
cash or shares of stock for distribution from both the Company Stock Fund and
the Agilent Stock Fund.
ADMINISTRATIVE EXPENSES
Fees and expenses of the Plan for legal, accounting, and other administrative
services are paid directly by the Company on behalf of the Plan. Loan fees and
overnight postage fees are charged to individual participant's accounts.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right to
discontinue its contributions at any time and to terminate the Plan subject to
the provisions of ERISA.
-6-
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------
INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value. The shares of registered
investment companies are valued at quoted market prices which represent the net
asset values of shares held by the Plan at year-end. The shares of the common
collective trust fund is valued at the quoted redemption value on the last
business day of the plan year. The money market fund is valued at cost plus
accrued interest, which approximates fair value. The Company's and Agilent's
common stock is traded on a national securities exchange and is valued at the
last reported sales price on the last day of the plan year. Participant loans
are valued at their outstanding balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
USE OF ESTIMATES
The preparation of the financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE 3 INVESTMENTS
--------------------
The following investments represent 5% or more of the fair value of the Plan's
net assets:
DECEMBER 31,
2001 2000
---- ----
Hewlett-Packard Company common stock $ 523,368,587 $ 815,759,000
Fidelity Magellan Fund 810,777,087 905,759,000
Fidelity Contrafund 289,215,736 328,069,000
Fidelity Institutional Money Market Fund 324,112,255 252,956,000
Fidelity Growth & Income Portfolio 239,897,782 247,151,000
Vanguard Institutional Plus Shares Index Fund 222,582,710 237,406,000
Agilent Technologies, Inc. common stock * 198,452,000
* Fair value of the investment was less than 5% of net assets at December 31,
2001.
-7-
During 2001, the Plan's investments (including investments purchased, sold, as
well as held during the year) depreciated in fair value as determined by quoted
market prices as follows:
NET REALIZED AND
UNREALIZED
DEPRECIATION IN FAIR
VALUE OF
INVESTMENTS
--------------------
Registered investment companies $ (338,677,409)
Common collective trust fund (2,386,165)
Common stock (361,254,725)
---------------
$ (702,318,299)
===============
NOTE 4. INCOME TAX STATUS
--------------------------
The Plan has received a determination letter from the Internal Revenue Service
dated August 22, 2000, stating that the Plan is qualified under Section 401(a)
of the Code and, therefore, the related trust is exempt from taxation.
Subsequent to the issuance of the determination letter, the Plan was amended.
Once qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The Plan administrator believes that the Plan is
being operated in compliance with the applicable requirements of the Code and
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
NOTE 5. RELATED PARTY TRANSACTIONS
-----------------------------------
Transactions in shares of the Company's common stock qualify as
party-in-interest transactions under the provisions of ERISA. During 2001, the
Plan made purchases of approximately $457,188,007 and sales of approximately
$484,226,692 of the Company's common stock.
NOTE 6. SUBSEQUENT EVENT
-------------------------
During 2002, the Company's shareholders approved a merger with Compaq
Corporation. The effect on the Plan has not yet been determined.
-8-
SUPPLEMENTAL SCHEDULE
-9-
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
EIN 94-1081436, PLAN #004
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
-------------------------------------------------------------------------------
(A) (B) (C) (E)
IDENTITY OF ISSUE, BORROWER, LESSOR, DESCRIPTION OF CURRENT
OR SIMILAR PARTY INVESTMENTS VALUE
---------------- ----------- -----
Registered investment companies:
Harbor Capital Appreciation Fund 4,121,235 shares $ 120,463,686
ICAP Equity Portfolio 729,035 shares 31,355,782
Templeton Foreign Index Fund 6,006,970 shares 55,564,468
Janus Aspen Series Worldwide Growth Portfolio 3,965,412 shares 113,172,871
Mas Mid Cap Growth Portfolio 7,534,813 shares 131,482,490
Pimco Total Return Fund 5,714,379 shares 59,772,409
Domini Social Equity Fund 800,436 shares 21,907,931
Vanguard Institutional Plus Shares Index Fund 2,122,058 shares 222,582,710
* Fidelity Magellan Fund 7,779,477 shares 810,777,087
* Fidelity Contrafund 6,762,117 shares 289,215,736
* Fidelity Growth & Income Portfolio 6,417,811 shares 239,897,782
* Fidelity Intermediate Bond Fund 11,096,711 shares 114,518,063
* Fidelity Low-Priced Stock Fund 3,325,740 shares 91,191,793
--------------
2,301,902,808
Common collective trust fund:
Spartan Extended Market Index Fund 983,150 shares 23,300,655
Money market fund:
* Fidelity Institutional Money Market Fund 324,112,255 shares 324,112,255
Interest rates from
5.5%-10.48%,
maturing through
* Participant loans December 2005 55,760,903
Common stock:
* Hewlett-Packard Company 25,480,457 shares 523,368,587
Agilent Technologies, Inc. 3,253,258 shares 92,750,386
--------------
Total investments $3,321,195,594
==============
*Indicates a party-in-interest to the Plan
Column (d) cost, has been omitted, as investments are all participant-directed.
-10-
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934. The trustees (or other persons who administer the employee benefits plan)
have duly caused this annual report to be signed by the undersigned thereunto
duly authorized.
Date: June 25, 2002
HEWLETT-PACKARD COMPANY
TAX SAVING CAPITAL ACCUMULATION PLAN
/s/ Charles N. Charnas
--------------------------
CHARLES N. CHARNAS
Assistant Secretary
-11-
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8 No. 2-92331) pertaining to the Hewlett-Packard Company Tax Saving Capital
Accumulation Plan of our report dated April 26, 2002, with respect to the
financial statements and schedule of the Hewlett-Packard Company Tax Saving
Capital Accumulation Plan included in this Annual Report (Form 11-K) for the
year ended December 31, 2001.
/s/ Ernst & Young LLP
----------------------
ERNST & YOUNG LLP
San Jose, California
June 20, 2002
-12-
EXHIBIT 23.2
CONSENT OF MOHLER, NIXON & WILLIAMS, INDEPENDNT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 (No 2-92331) of Hewlett-Packard Company of our report dated May 11,
2001, with respect to the statement of net assets available for benefits of the
Hewlett-Packard Company Tax Saving Capital Accumulation Plan as of December 31,
2000 included in this Annual Report on Form 11-K.
/s/ Mohler, Nixon & Williams
-----------------------------
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 20, 2002
-13-