Business Overview and Performance

HP Inc. is comprised of the following business segments: Personal Systems, Printing, and Corporate Investments. In fiscal 2015, we executed the largest corporate separation in history without customer or partner disruption, creating two market-leading, independent, publicly-traded companies with strong financial foundations, compelling innovation roadmaps, sharp strategic focus, and experienced leadership teams. In fiscal 2016, our objective was to achieve a successful transition following the separation, while continuing to focus on providing value to our stockholders.

Our continued efforts resulted in the following accomplishments:

  • Executed our strategy in the core business with a strong portfolio and profitable share gains through detailed customer segmentation, in growth areas including graphics and commercial mobility, and in future categories with the launch of our multi-jet 3D printing solutions.
  • Announced the definitive agreement to acquire Samsung's printer business to accelerate our disruption of the A3 copier segment, one of the key growth areas in Printing. This transaction is expected to close in the second half of fiscal 2017.
  • Returned over $2 billion of capital to stockholders in the form of dividends and share repurchases.
  • Celebrated the 50th anniversary of HP Labs, our hub for innovation and megatrends.
  • Established HP Tech Ventures, which gives us greater connections with Silicon Valley's start-up community and the cutting edge of tech, to help accelerate our future.

In a challenging global macroeconomic and foreign currency environment, our fiscal 2016 results for the incentive plan included:

in Corporate Revenue

(as defined on page 38) compared to a target goal of $52.5 billion under our annual incentive plan.

in Corporate Net Earnings

(as defined on page 38) compared to a target goal of $3.1 billion under our annual incentive plan.

Corporate Free Cash Flow

(as a percentage of revenue; as defined on page 38) and including adjustment defined on footnote 2 on page 39 compared to a target goal of 5.2% under our annual incentive plan.

Through discipline and focus, we out-performed our competition and gained market share throughout the year. We have momentum as we enter fiscal 2017 with the best product lineup in decades and a consistent strategy to further stabilize revenue. We have an incredible channel network, passionate employees and a culture committed to keep reinventing.

How We Delivered

Personal systems FY16

Printing FY16

1. CC = Constant currency; adjusted to eliminate the effects of foreign exchange fluctuations.

NOTE: Arrows represent the mathematical direction of the amount the arrow is associated with.

Operating highlights

  • Year-over-year print hardware revenue growth in addition to improved average selling prices both year-over-year and sequentially.
  • Printing Supplies revenue trajectory on track to stabilize in constant currency by the end of fiscal year 2017.
  • Constant currency growth in Graphics for the thirteenth consecutive quarter.
  • Instant Ink enrollees grew sequentially, with the highest quarterly enrollment to date in the fourth quarter of fiscal year 2016.
  • In Printing, we announced the acquisition of Samsung's printer business, the A3 platform and 13 laser and 3 ink models, and launched Sprocket, a mobile photo printer and new Indigo platform for Graphics.
  • Year-over-year and sequential revenue growth, market share gains and increased operating profit in Personal Systems.
  • Share gains in Personal Systems across all three regions, yielding a record high position of 21.4% market share worldwide, outgrowing all major competitors.
  • Revenue growth in our strategic areas in Personal Systems, which include consumer premium, gaming, commercial mobility and commercial services.
  • In Personal Systems, we launched products like Elite Slice, EliteBook with privacy screen, OMEN gaming, Chromebook 13, Pavilion Wave and Spectre x360.