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Rev. Dec. 1, 2009

THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):

DEAL DESIGN

Reflecting on her prior analysis, Kathryn Macalester was comfortable with the pricing
and believed there were strategic benefits to the proposed merger. Like all smart investors,
however, Macalester knew that the trade-off between deal terms and pricing could mean the
difference between success and failure. She had directed her research associate to gather
additional information specific to transaction structure, the exchange ratio, and other provisions
of the deal so she could assess the strengths and weaknesses of the proposed merger. Macalester
was working over the weekend to prepare for a Monday morning meeting with her partners, as
the fund’s vote on the merger proposal was due by 8:00 a.m. on Tuesday, March 19, 2002.

Summary of Terms

Under the terms of the merger agreement, each Compaq shareholder would receive
0.6325 share of Hewlett-Packard (HP) common stock, resulting in approximately 36%
ownership of the new company by former Compaq shareholders. The company was to retain the
Hewlett-Packard name, and the HWP ticker symbol would be changed to HPQ. Carly Fiorina,
HP’s chairman and CEO, was to maintain those positions in the new company, and Michael
Capellas, Compaq’s chairman and CEO, was to be named president of the new HP. The new
board of directors would have 11 members, with a maximum of two employee directors; six
directors would come from HP. Macalester reviewed the other significant deal terms regarding
ownership and control, as summarized by her associate (Exhibit 1).

Reverse-Triangular Merger

The merger was described as a tax-free reorganization, in which a Hewlett-Packard

subsidiary, Heloise Merger Corporation, was created solely for merging with Compaq. The
supplemental research material provided to Macalester included a diagram of the merger
transaction (Exhibit 2). Macalester was familiar with a reverse-triangular merger, and she

This case was prepared by Anna D. Buchanan under the supervision of Robert F. Bruner. It was written as a basis
for class discussion rather than to illustrate effective or ineffective handling of an administrative situation. Copyright
 2004 by the University of Virginia Darden School Foundation, Charlottesville, VA. All rights reserved. To order
copies, send an e-mail to sales@dardenbusinesspublishing.com. No part of this publication may be reproduced,
stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic,
mechanical, photocopying, recording, or otherwise—without the permission of the Darden School Foundation. Rev.
12/09.

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 -2- UV3982

reflected on the pros and cons of such a deal structure. A reverse-triangular merger would result
in a tax-free reorganization in which HP would control “substantially all” of Compaq’s assets
through a wholly owned subsidiary, thereby limiting HP’s exposure to Compaq’s liabilities. The
transaction would be tax free to HP, as long as the form of payment for at least 80% of the
consideration was paid with HP voting stock. Although a shareholder vote of the target was
required, a minority freeze-out could be accomplished, if necessary. This form of transaction
would limit HP’s ability to sell or spin off assets immediately before the transaction.1

Exchange Ratio

In considering whether an appropriate exchange ratio was being offered, Macalester

studied the contribution analysis that had been prepared for her (Exhibit 3). Based on a variety
of measures, the CPQ/HWP ratios were broadly distributed. In reviewing the Goldman Sachs
and Salomon Smith Barney fairness opinions (Exhibit 4), Macalester paid particularly close
attention to each adviser’s assessment of the exchange ratio.

Acquisition Premium

On August 31, 2001, the last trading day before the September 3, 2001, announcement
date, HP and Compaq shares closed at $23.21 and $12.35, respectively, which implied an 18.9%
premium at the 0.6325 exchange ratio. As of the February 4, 2002, proxy, when HP and Compaq
shares closed at $22.04 and $12.20, respectively, the implied premium was 14.3%. At the end of
trading on Friday, March 15, 2002, HP and Compaq shares closed at $19.05 and $10.33,
respectively.

“Merger of Equals”

From the announcement date throughout the contentious campaign for shareholder votes,
Hewlett-Packard and Compaq executives touted the transaction as a merger of equals (MOE).
Fiorina and Capellas continued to describe the business combination as a mutually beneficial
marriage of two technology companies, each with different strengths and areas of contribution.
Perhaps aiming to downplay valuation differences or integration challenges, the CEOs as well as
members of their boards of directors—Walter Hewlett notwithstanding—continued to describe
the deal as a merger of equals. Informed observers could be justifiably dubious of the MOE
characterization, whether euphemism or earnest intent. In spite of the term’s presumably positive
intended consequences, Hewlett took issue with the merger of equals and later stated his view to
the Council of Institutional Investors:

1
The description of a reverse-triangular merger presented in this section (as well as the diagram shown in
Exhibit 2) also appears in Robert F. Bruner, Applied Mergers & Acquisitions (Hoboken, NJ: John Wiley & Sons,
2004), 556–57, 560.

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A merger of equals is the toughest kind of integration to pull off. It is much harder
than an acquisition, and certainly much harder than a spin-off. A spin-off creates
focus, creates winners, and doesn’t require integration. In mergers of equals there
is invariably a battle for power, sometimes subtle at first but often becoming quite
blatant, and there is no reason to think it will be different this time. Who will win
two years from now? Texas or Silicon Valley? The Dallas Morning News is
already placing its chips on Michael Capellas, and the Houston Chronicle’s
technology columnist has said that Compaq would be better off without HP and
the huge problems integration would bring.2

Macalester understood the MOE term to describe a merger of firms that are approximately equal
in size and where a low (or zero) acquisition premium is paid. By indicating that neither party is
strongly dominant in the combined companies, the term often conveys an attitude of teamwork
and cooperation. Although both acquirer and target benefit from the realization of synergies that
result from the merger, given the lower acquisition premium typically paid, the target’s
shareholders are believed to bear more of the cost of an MOE structure.3 While an MOE
structure might facilitate getting a deal done and be beneficial to HP shareholders in the short
term, Macalester wondered about the ramifications to HP of an MOE after the deal was
consummated.

Integration

As Macalester thoughtfully considered a merger of equals, she pondered both the

similarities and differences of the two companies and how the integration would play out. Walter
Hewlett and others had repeatedly claimed that technology mergers were particularly susceptible
to failure, given the difficulty of quickly and effectively combining two businesses whose
product life cycles were short and whose businesses were driven by fast delivery of innovative
products to market. Macalester’s assistant had provided her with a few observations on the
integration of HP and Compaq (Exhibit 5). As she reviewed the analysis before her, as well as
the section of the proxy statement that addressed integration (Exhibit 6), she questioned whether
the HP and Compaq management teams presented a compelling case for integration success.

Accretion/Dilution

Macalester turned her attention to the merger’s impact on shareholder dilution. By

acquiring Compaq with equity, HP would be issuing more than a billion new shares of stock. She
studied the pro forma financial statements provided in the joint proxy/prospectus statement
(Exhibits 7 and 8). Clearly, the merger would be dilutive if synergies were not realized.
Macalester reviewed the information on synergies valuation and revenue losses previously

2
Walter Hewlett, “Council of Institutional Investors Presentation Comments,” March 11, 2002, filed with the
SEC on March 12, 2002, 8.
3
This description of a “merger of equals” also appears in Bruner, Applied Mergers & Acquisitions, 672–74.

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provided by her associate. It would be important for her to quantify the merger’s accretive value
to HP shareholders.

The Proxy Deadline Nears

After reviewing the deal terms and structure, Macalester prepared a list of additional
analyses required to assess fully the merits of the merger. Furthermore, in recommending how
her firm should vote its shares, she would need to summarize for her partners the significant
aspects of the transaction. Macalester made a to-do list:

1. Evaluate the deal terms.

2. Evaluate the exchange ratio and accretion/dilution impact.
3. Critique the merger of equals.
4. Evaluate the integration plan.
5. Decide how to vote.

Macalester was scheduled to meet with her partners in the morning to discuss the merger and
deliver her recommendation.

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Exhibit 1
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Summary Term Sheet, Announced September 4, 2001
Consideration
Form of payment Stock
Exchange ratio 0.6325 shares of HWP for each share of CPQ
Ownership
Ownership in merged company: 64% HP; 36% Compaq
Number of Hewlett-Packard shares issued (millions) 1,068
Ratio of former CPQ shareholders to HWP shareholders 1 to 1.8
Price
Market value per HWP share at 8/31/01 $23.21
Market value per CPQ share at 8/31/01 $12.35
Value of each CPQ share implied by exchange ratio $14.68
Implied premium paid for CPQ shares 18.9%
Combined market capitalization – 8/31/01 (millions) $65,961
Market value per HWP share at 9/4/01 $18.87
Market value per CPQ share at 9/4/01 $11.08
Value of each CPQ share implied by exchange ratio $11.94
Implied premium paid for CPQ shares 7.7%
Combined market capitalization – 9/4/01 (millions) $55,388
Tax and Accounting
Accounting method Purchase
Tax considerations Tax-free reorganization
Reorganization structure Merger of Equals
Merger method Reverse Triangular merger
Management, Board, and Control
Company name of new firm Hewlett-Packard
Chairman and CEO Carly Fiorina (former HP Chairman & CEO)
President Michael Capellas (former Compaq Chairman & CEO)
Board of directors Eleven members, with five from Compaq and no
more than two employee directors
Executive officers Six of 20 most senior executive positions occupied by
former Compaq executives
Corporate headquarters Palo Alto, CA (company maintained a significant
presence in Houston, TX, for strategic R&D)
Voting rights by former HP and Compaq shareholders 64% HP; 36% Compaq
Hewlett & Packard families ownership 18.6% before; 8.4% after
Other
Shareholder vote Shareholder approvals from both parties required
Termination fees $750 million by either party if either HP or Compaq:
a) was acquired by a third party
b) breached its representations and warranties
c) suffered a material adverse change
Ticker symbol change From HWP to HPQ
Synergies $2.0 billion was expected in fiscal 2003; annualized
cost savings of $2.5 billion by mid fiscal 2004

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Exhibit 2
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Reverse-Triangular Merger

At Effective Time

Hewlett- Hewlett-
Compaq
Packard Packard

Merger Result

Stock (and cash for

fractional shares)
Compaq Heloise
Compaq
Shareholders Stock Merger Corp.
Merger Sub Surviving Corporation

From summary section of HP/Compaq joint proxy statement/prospectus dated February 4, 2002
(page 7):

Under the terms of the merger agreement, a wholly owned subsidiary of HP will
merger with and into Compaq and Compaq will survive the merger as wholly
owned subsidiary of HP. Upon completion of the merger, holders of Compaq
common stock will be entitled to receive 0.6325 of a share of HP common stock
for each share of Compaq common stock they then hold. HP shareowners will
continue to own their existing shares of HP common stock after the merger. HP
currently intends to merge Compaq into HP as soon as reasonably practicable
following the merger.

From Article I of the “Agreement and Plan of Reorganization by and among Hewlett-Packard
Company, Heloise Merger Corporation, and Compaq Computer Corporation,” dated September 4,
2001:

At Effective Time, and subject to and upon the terms and conditions of this
Agreement and the applicable provisions of Delaware Law, Merger Sub shall be
merged with and into Compaq (the “Merger”), the separate corporate existence of
Merger Sub shall cease and Compaq shall continue as the surviving corporation.
Compaq, as the surviving corporation after the Merger, is hereafter sometimes
referred to as the “Surviving Corporation.”

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Exhibit 3
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Contribution Analysis

Hewlett- Ratio of Ratio of CPQ to

Packard Compaq CPQ/HWP (CPQ+HWP)
Ticker HWP CPQ
Primary location California Texas
Auditor E&Y PWC
Fiscal year-end 31-Oct 31-Dec
Employees 86,200 63,700 73.9% 42.5%
Selected Financial Data at 2001 FYE (dollars in millions)
Total assets 32,584 23,689 72.7% 42.1%
Total long-term debt 3,729 600 16.1% 13.9%
Total liabilities 18,631 12,572 67.5% 40.3%
Total stockholders’ equity 13,953 11,117 79.7% 44.3%
Sales 45,226 33,554 74.2% 42.6%
Gross profit 12,947 8,489 65.6% 39.6%
Gross-profit margin 28.6% 25.3% 88.4% 46.9%
EBIT 2,030 479 23.6% 19.1%
EBIT margin 4.5% 1.4% 31.8% 24.1%
Shares Outstanding (millions)
Basic 1,936 1,689 87.2% 46.6%
Diluted 1,974 1,689 85.5% 46.1%
Share Prices
07/31/01 $24.66 $14.94 60.6% NMF
08/31/01 $23.21 $12.35 53.2% NMF
09/28/01 $16.05 $8.31 51.8% NMF
10/31/01 $16.83 $8.75 52.0% NMF
11/30/01 $21.99 $10.15 46.2% NMF
12/31/01 $20.54 $9.76 47.5% NMF
01/31/02 $22.11 $12.35 55.9% NMF
Market Value (dollars in millions)
07/31/01 47,928 25,398 53.0% 34.6%
08/31/01 45,110 20,995 46.5% 31.8%
09/28/01 31,137 14,127 45.4% 31.2%
10/31/01 32,651 14,875 45.6% 31.3%
11/30/01 42,661 17,255 40.4% 28.8%
12/31/01 39,848 16,592 41.6% 29.4%
01/31/02 42,924 20,995 48.9% 32.8%
Proposed exchange ratio 0.6325

Data source: Standard & Poor’s Research Insight 7.9, a division of the McGraw-Hill Companies, Inc.

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Exhibit 4
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Summary of Financial Advisers’ Fairness Opinions

Goldman Sachs & Co. Salomon Smith Barney

Role in Merger Financial Advisor to Hewlett- Financial Advisor to Compaq in the
Packard in the merger merger
Previous Engagements with HP Co-manager on Agilent IPO, 1999 Various unspecified.
Manager of HP public debt
offerings:
June 2000 ($1.5 billion)
July 2001 ($750 million)
July 2001 ($50 million)
Previous Engagements with Compaq Various unspecified financial Various unspecified.
advisory and securities services
Advisor’s ownership of HWP or CPQ  451,315 shares HP Acknowledged but amounts not
securities (in either proprietary or  160,896 shares Compaq disclosed.
custodial accounts)  $42.4 million in Compaq
convertible bonds
Items reviewed, analyzed or  Merger Agreement  Merger Agreement
accomplished in connection with  Previous five years of 10-K  Discussions with senior
fairness opinion reports (HWP & CPQ) management of HP and
 Interim 10-Q reports and other Compaq
reports to shareholders (HWP  Publicly available financial
& CPQ) information
 Other communications from  Financial Forecasts and
HP and Compaq to information provided by
shareholders management
 Internal financial analyses and  Historical market prices,
forecasts for HP and Compaq trading volumes, historical and
prepared by their respective projected earnings,
managements, including capitalization and financial
estimates of Synergies condition of Compaq and HP
 Discussions with senior  Comparable transactions
management of HP and
Compaq
 Trading history of HP and
Compaq shares

Data source: Joint proxy/prospectus statement dated February 4, 2002, 65–71, 74–83.

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Exhibit 4 (continued)
Goldman Sachs & Co.
Analyses conducted and  Contribution analysis (0.524 to 
Exchange Ratios calculated 1.00)
as a result of analyses  Historical Exchange Ratio
analysis (0.494 to 0.627)
 Selected Companies analysis
 Synergies analysis (WACC range 
of 10% to 14% and terminal
value growth rates of 0% to 4% 
resulted in a NPV $11.3 billion
to $24.5 billion for synergies)
 Pro Forma Merger analysis
(scenario analysis indicated
merger would be from 6.5%
dilutive to 34.3% accretive in FY
2003)
Disclaimer  Relied on accuracy and
completeness of financial and
accounting information, internal
forecasts
 Assumed estimates of Synergies
provided by HP and Compaq
would be realized
 No independent evaluation of
assets or liabilities of HP or
Compaq
 Assumed all regulatory consents
and approvals would be obtained
Opinion “Based upon and subject to the
foregoing and based upon such other
matters as we consider relevant, it is
our opinion that as of the date hereof
the Exchange Ratio is fair from a
financial point of view to Hewlett-
Packard.”
Fees  $5 million upon execution of
Merger Agreement
 $28 million upon completion
Data source: Joint proxy/prospectus statement dated February 4, 2002, 65–71, 74–83.
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Salomon Smith Barney
Contribution analysis (0.617 to
0.764 based on EBIT and 0.491
to 0.565 based on net income)
 Historical Exchange Ratio
analysis (0.532 to 0.596)
Comparable Public Market
Valuations
Synergies analysis (WACC range
of 12.5%–13.5% and terminal
value of 13.4–14.5 EBIT resulted
in NPV of $28.3 billion to 31.2
billion)
 Similar Transactions Premium
analysis (0.585 to 0.680)
 Precedent Industry Transaction
Valuation analysis (0.637 to
0.863)
 Relied upon accuracy and
completeness of public data and
internal information
 No view expressed with respect
to forecasts or analyses
 No likely trading range on stock
implied
 Relative merits of other
alternatives not considered
“Based upon and subject to the
foregoing, our experience as
investment bankers, our work as
described above and other financial
factors we deemed relevant, we are of
the opinion that, as of the date hereof
the Exchange Ratio is Fair, from a
financial point of view, to the holders
of Company Stock.”
 $500,000 at engagement
 $9.5 million upon execution of
Merger Agreement
 0.25% of deal value (less $10
million described above)
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Exhibit 5
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Integration Impact by Segment

Hewlett Packard1 Compaq2 Observations on Integration

Imaging and Printing (IPG) No market presence Although there was no overlap with Compaq in imaging and printing, IPG would be impacted by
Printers merger integration. For synergies to be completely realized, Compaq’s strengths in cost cutting and
Scanners inventory management would need to be adopted by IPG. Furthermore, R&D priorities and
Supplies allocations would need to be revisited given the company’s more balanced product portfolio. With
the new and improved end-to-end product portfolio of HP overall, IPG would be one of four key
segments of company operations rather than the core.
Computing Access Compaq’s strength in PCs would rule in the integration of PC groups. Compaq had successfully
Commercial PCs Commercial PCs created a direct model in PCs and believed scale would enable it to maintain market leader status,
Consumer PCs Consumer PCs compete more effectively with Dell on costs, and return to profitability.
Notebooks
Workstations Enterprise Computing In enterprise computing, HP and Compaq brought different strengths to the combined company.

2020.
Industry Standard Servers Compaq’s position was strong in the higher growth markets of industry standard servers, business
PC Servers Business Critical Servers critical servers, and storage products. HP was strong in the slower growing but higher margin Unix
Unix Servers Storage Products server market. Integration of the enterprise groups would require a significant amount of strategic
Storage Products planning, careful R&D resource allocation, and supply chain optimization for optimal merger
Software synergies to be realized. Decision-making in the area of enterprise computing would have a direct
impact on the success of the company’s aim to rival IBM in offering customers a “one-stop shop”
in enterprise products.
IT Services Global Services At the proxy date, management believed HP and Compaq held the No. 8 and No. 9 positions,
Support Support respectively, in IT services market share, and post-merger, management hoped to claim the No 3
Outsourcing Professional Services spot in services.3 Integration here would probably be most challenging, as neither company was a
Education Financial Services clear leader in this highly fragmented, competitive segment, and success would depend somewhat
Financial Services on the company’s successful integration of the enterprise-computing group. Success in services
was important to the company’s goal to be a serious competitor with IBM in end-to-end solutions.

1
Hewlett-Packard has three main operating segments: Imaging and Printing, Computing, and IT Services. For descriptive benefit to the reader, a few key product groups
within each segment are shown, which do not necessarily reflect actual organizational operating groups.
2
Compaq’s three main segments of operations are Access, Enterprise Computing, and Global Services. For descriptive benefit to the reader, a few key product groups within
each segment are shown, which do not necessarily reflect actual organizational operating groups.
3
As described in management’s package of presentation slides, “HP Position on Compaq Merger,” provided to shareholders and filed with the SEC on December 19, 2001.

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Exhibit 6
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Integration Planning

The following description of HP and Compaq’s integration plan is excerpted from page 113 of
the joint proxy statement/prospectus dated February 4, 2002:

“HP recognizes the challenge inherent in integrating enterprises of the size and complexity of HP and
Compaq. HP also recognizes that a swift and successful integration of the two companies is crucial to capturing the
potential value of the merger. Accordingly, HP has established an integration office that will report directly to Ms.
Fiorina. This office will be run jointly by Mr. McKinney and Mr. Clarke, each a key executive officer at HP and
Compaq, respectively. Mr. McKinney currently serves as the President of HP’s Business Customer Organization and
provides a proven record as line manager and deep expertise in the HP organization. Mr. Clarke currently serves as
Compaq’s Senior Vice President, Finance and Administration, and Chief Financial Officer and provides his depth of
knowledge of the IT industry and of Compaq. Mr. Clarke also brings significant expertise in finance and general
corporate matters. The integration office now consists of more than 450 dedicated employees, supported by advisors
and divided into teams with specifically defined functions.

By the time of completion of the merger, the integration office plans to have established:

 an operating model and organization to design and implement a transition plan and provide internal clarity
regarding asset and resources allocation and priorities, go-to-market strategy and customer account
responsibilities;
 management structure, roles and responsibilities multiple layers into the organization, as well as
compensation and human resources policies, which we believe will encourage our employees to focus on
business performance and avoid the distraction of personal and organizational uncertainty;
 clear product roadmaps and investment protection programs, which we believe will give our customers a
high degree of confidence in our ability to meet or exceed their business requirements without disrupting
their existing relationship with us or their installed technology platform; and
 standard policies, practices, and procedures to govern our relationships with our partners and facilitate a
smooth transition of our respective commercial arrangements to the combined company.”

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Exhibit 7
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Unaudited Pro Forma Condensed Combined Consolidated Balance Sheet of HP and Compaq
October 31, 2001 (in millions of dollars)
Historical Pro forma Pro forma
HP Compaq adjustments combined
Assets
Current assets:
Cash and cash equivalents $ 4,197 $ 3,940 $ 8,137
Short-term investments 139 -- 139
Accounts receivable, net 4,488 4,780 9,268
Financing receivables, net 2,183 1,076 3,259
Inventory 5,204 1,582 50 6,836
Other current assets 5,094 3,291 8,385
Total current assets 21,305 14,669 50 36,024
Property, plant and equipment, net 4,397 3,244 1,100 8,741
Long-term investments and other assets 6,126 4,224 (2,366) 7,984
Amortizable intangible assets, net 89 1,451 2,649 4,189
Goodwill and intangible assets with indefinite lives 667 220 11,363 12,250
Total assets $32,584 $23,808 $12,796 $69,188
Liabilities and stockholders’ equity
Current liabilities:
Notes payable and short-term borrowings $ 1,722 $ 1,501 $ 3,223
Accounts payable 3,791 3,619 7,410
Deferred revenue 1,867 1,170 (220) 2,817
Other accrued liabilities 6,584 4,493 150 11,227
Total current liabilities 13,964 10,783 (70) 24,677
Long-term debt 3,729 600 4,329
Other liabilities 938 1,185 1,256 3,379
Total stockholders’ equity 13,953 11,240 11,610 36,803
Total liabilities and stockholders’ equity $32,584 $23,808 $12,796 $69,188

Data source: Joint proxy/prospectus statement dated February 4, 2002.

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Exhibit 8
THE MERGER OF HEWLETT-PACKARD AND COMPAQ (B):
DEAL DESIGN
Unaudited Pro Forma Condensed Combined Consolidated Statement of Earnings of
HP and Compaq for Year Ended October 31, 2001
(in millions of dollars, except per-share amounts)
Historical Pro forma Pro forma
HP Compaq adjustments combined
Net revenue:
Products $37,498 $29,834 $67,332
Services 7,325 6,505 13,830
Financing income 403 168 571
Total net revenue 45,226 36,507 81,733
Cost and expenses:
Cost of products sold1 28,370 23,485 110 51,965
Cost of services 4,870 4,718 9,588
Financing interest 234 114 348
Research and development 2,670 1,390 4,060
Selling, general and administrative1 7,085 5,657 20 12,762
Restructuring and related charges 384 656 1,040
Amortization of intangible assets 12 302 298 612
Amortization of goodwill 162 29 191
Total cost and expenses 43,787 36,351 428 80,566
Earnings from operations 1,439 156 (428) 1,167
Interest and other, net (737) (2,116) (2,853)
Earnings (loss) from continuing operations before taxes 702 (1,960) (428) (1,686)
Provision (benefit) for taxes 78 (588) (150) (660)
Net earnings (loss) from continuing operations2 $624 $(1,372) $ (278) $(1,026)
Net earnings (loss) per share from continuing operations:2
Basic $ 0.32 $ (0.81) $ (0.34)
Diluted $ 0.32 $ (0.81) $ (0.34)
Average number of shares and share equivalents:
Basic 1,936 1,689 3,004
Diluted 1,974 1,689 3,004
1
Historical amounts for amortization of intangibles and goodwill have been reclassified to separate line items.
2
Net earnings (loss) and net earnings (loss) per share from continuing operations are presented before
extraordinary items and cumulative effect of change in accounting principle.

Data source: Joint proxy/prospectus statement dated February 4, 2002.

This document is authorized for use only in Prof. Anubha Shekhar Sinha's Mergers, Acquisitions & Strategic Alliances at IIM Kozhikode - EPGP Kozhikode Campus from Nov 2019 to May
2020.