Good day, ladies and gentlemen, and welcome to the fourth quarter 2006 Hewlett-Packard earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today's call, Mr. Brian Humphries, Vice President, Investor Relations. Please proceed, sir.

Thank you, Colby and good afternoon, everyone. I would like to welcome you to our fourth quarter earnings conference call. Joining me today is our Chairperson and CEO, Mark Hurd; and CFO, Bob Wayman. Before we get started, I would like to remind you that is call is being webcast live. The webcast and the fourth quarter's earnings slide presentation, including non-GAAP reconciliation tables, can be accessed on the HP Investor Relations page under Company Information on HP.com. A replay will also be available shortly after the conclusion of the call for approximately one year. Next it is my duty to inform you that the primary purpose of this call is to provide you with information regarding the fourth quarter and fiscal year end. However, some of our comments and responses to your questions may include forward-looking statements. These forward-looking statements are based on certain assumptions and are subject to a number of risks and uncertainties and actual future results may vary materially. I encourage you to read the risk factors described in the company's annual report on Form 10-K for the fiscal year ended October 31, 2005; the company's quarterly report on Form 10-Q for the fiscal quarter ended July 31, 2006; as well as other SEC reports filed after that date. As in prior years, the financial information presented and discussed in connection with this call, including tax-related items, reflects estimates based on the information available at this time. As such, these amounts can differ materially from the amount ultimately reported in HP's Form 10-K for the fiscal year ended October 31, 2006. I would also like to point out that earnings, gross margins, operating expenses and similar items discussed at a company level are sometimes expressed on a non-GAAP basis and therefore have been adjusted to exclude certain items, including: in-process R&D, amortization of goodwill and purchased intangibles, restructuring charges, pension curtailment gains and net investment gains or losses. The presentation of GAAP financial information for the fourth quarter and fiscal year end and a reconciliation of non-GAAP amounts to GAAP are included in the financial statements accompanying today's earnings release, which is also available on the HP Investor Relations page under Company Information at HP.com. Finally and with a view to allowing time for questions from multiple firms, please refrain from asking multi-part questions or clarifications. With that, I'll turn the call over to Mark.

Thank you, Brian. Good afternoon and thank you for joining us. Hewlett-Packard closed the year with a strong fourth quarter, driven by solid revenue growth across all our businesses and geographies, share gains in key businesses, expense discipline, margin expansion and record quarterly cash flow from operations. We saw significant operating margin improvements in our reportable segments with a year-over-year operating profit increase of 68% in the personal systems group, 42% in the technology solutions group and 21% in the image and printing group. All of this resulted in our most balanced segment profitability performance in many years, with the technology solutions group delivering a similar fourth quarter dollar profit contribution as the imaging and printing group. Financial highlights of the quarter include: revenue growth of 7% year over year, or $1.6 billion to $24.6 billion; non-GAAP gross margin of 24.3%, up from 23.5% in the prior year period; continued year-over-year operating margin expansion in key businesses, with personal systems margins of 4.3%, imaging and printing margins of 14.8%, enterprise storage and server margins of 10.7%, HP Services margins of 12.4% and software margins of 17.2%. Non-GAAP operating margin of 9%, up from 7.6% in the prior-year period; non-GAAP EPS of $0.68, representing 33% year over year; and cash flow from operations of $3.2 billion up from $1.9 billion in the prior year period. The fourth quarter closed out a strong fiscal 2006 for Hewlett-Packard. On a year-over-year basis, revenue grew $5 billion, or 6%, to $91.7 billion. Non-GAAP operating margins grew 1.6 points to 8% of revenue. Non-GAAP EPS grew 47% to $2.38. Cash flow from operations grew $3.3 billion to $11.4 billion. During the year, we also made significant progress to strengthen HP's long-term competitive position in the market, including: lowering our cost structure by substantially completing our…

Thank you, Mark and good afternoon, everyone. I will begin with a review of the performance of our financial services business. Revenue for HPFS during the quarter was $545 million, up 6% year over year and 5% sequentially. The revenue increase reflects increased financing volume, which was up 1% year over year and 12% sequentially. End of lease transactions contributed to the sequential increase. Portfolio assets increased 4% year over year and 2% sequentially, and are now at their highest level in several years. Operating margin was 6.4%, down from 10.1% from Q4 of last year and 6.7% in Q3. The year-over-year margin decline reflects the release of certain accounts receivable reserves in the prior year period. While we're encouraged with the growth in financing volume over the last several quarters, we know we have more work to do and are focused on continuing volume momentum. Before getting into the key elements of the P&L, let me remind you that fiscal 2005 results including cost of sales, operating expenses, operating profit, net income and EPS did not include the impact of FAS 123 R stock based compensation. Consistent with last quarter, to assist you in comparing results versus prior periods, we have included a quarterly historical EPS trend in the financial tables accompanying the earnings release. This should allow you to view the results as though all stock-based compensation had been included in previously reported results. Non-GAAP EPS for the quarter was $0.68, including approximately $0.04 from stock-based compensation, up from $0.51 a year ago, which again excluded the impact of FAS 123 R. GAAP EPS for the quarter was $0.60, which included $208 million, or $0.07 of after-tax adjustments, that were not included in our non-GAAP results. The adjustments primarily relate to restructuring charges and the amortization of purchased…

(Operator Instructions) Your first question comes from Andrew Neff - Bear Stearns.

As you look at the different business areas, is there room for further improvement? You made a lot of improvement in terms of the margins. Is it going to get better than this? Specifically, can you talk about in terms of the IT savings, when do we begin to see the impact of that?

Andy, thanks for the question. Listen, we've got to do better than this. This was a good quarter for us, clearly, in terms of how you would look at milestones along the way. As I've said in my comments, we've been successful, I think, at delivering on the short-term milestones we have had, but frankly investing in the long term includes, to your point, being able to improve our cost structure. Our cost structure has work left to do, and we have got to get that done at the same time as investing for growth. So we certainly are not taking any victory lap here. We have got work to do, but I will tell you at the same time I am pleased with the progress.

Your next question comes from Keith Bachman - Banc of America.

Thanks very much. I wanted to talk about the inventories. If I heard you right, your comment was that it didn't impact the level of sales, since it was normalized compared to last year's. Can you just please confirm that? My follow-up is: it does look like, correspondingly, that account receivables was up sequentially more than I would have anticipated. So I just want to come back and see how that relates to your inventory comments and get any additional color, please, on how the AR bump might have been impacted by the sequential change in inventories.

So our fourth quarter is always back end loaded. August is slow, and October is big. As you saw, we exceeded revenue estimates. And frankly, some of that comes from the strength that we saw late in the quarter, and that strength in revenue is not yet collected, so receivables tend to be a little bit higher. We are very much impacted by consumer volumes this time of year, and it has been a strength to the company and that's reflected there. We have built our inventory. Inventory has grown a little faster than revenue. It is, as I said, up. It stands at 38 days compared to 35 days last year. But we feel good about our inventory. It's fresh inventory; it's what we want. The inventory build that we've actually seen in prior quarters and in this quarter have served us well in terms of meeting what continues to be a pretty decent market demand. So we have, I think, the right levels of inventory in the right places. I mentioned strategic buys. We have talked about this for a number of quarters. We are buying inventory when we can get good prices on it. That, too, has served us well. It has helped us achieve a better cost structure and a better gross margin to be more competitive in the marketplace.

Keith, I'd just say one thing on the owned inventory side. We're really looking at a total cost structure as we look at inventory, so inventory is one dimension of an aggregated, optimized cost structure to look at our overall COGS positioning. Some of the owned inventory is literally a position to lower our COGS. So this is not an accident, if you will, in terms of some of the stuff that you're describing. On the channel inventory side -- listen, we're trying to optimize the answer in the sense of both being in a position to take care of future demand at the same time as we are taking care of the quarter demand. I think at the quarter overall, we're generally comfortable. If anything, there are stories within the story, depending on what region you go to and what product line; but when you look at the Company overall, we feel pretty comfortable with where we are.

Your next question comes from Ben Reitzes - UBS.

Thanks a lot. Mark, could you comment on Vista and the PC market? You had a great out performance in the quarter. You're the number one PC company in the world. What does Vista mean for HP, not only in the first quarter but as we go throughout the year? As I look at your guidance, it means about 5% organic growth if you exclude Mercury, which is a deceleration from the 6% the last two quarters. I've got to think if Vista is any bit of an accelerator to the market, that's conservative guidance. So go ahead. That's all the questions.

I appreciate the color on the guidance, Ben. I think the point on the PC business is that when you look at constant currency, our performance has been pretty steady, I think, when you look at. On Vista, right now, as it relates to the short term, we just don't know what will happen as it comes up to the holiday and really even not just the holiday, but post-holiday to introduction may be a window that we just can't forecast well enough to be able to tell you exactly how it will work out. Now, as it relates to the long term, we feel good about it and we feel good about our positioning within Vista. We think we're well-positioned from an offering perspective. And clearly not just Vista, but the collection of where we see demand based on what market segment, where we see it by region and our product line of combined -- yes, we feel pretty good about how we're positioned.

Your next question comes from Harry Blount - Lehman Brothers.

Thank you. I just want to circle back on the restructuring, Bob. You may have mentioned it in the comments, but I missed it. You guys are now largely complete with the headcount reductions, but the cost savings still should carry over into fiscal '07. Could you remind me a little bit of how much the incremental impact is going to be in fiscal '07?

I'm not going to give you a new update for '07. What I will say is that when you look year over year, certainly there's going to be significantly more cost savings in '07 than what we saw in '06. So we have been coming down in headcount; or I should say our restructuring effects have been a couple thousand a quarter until the fourth quarter, where it was 4,200. Obviously, we have not seen the full year benefit of that. So expect to see additional savings from the actions we have taken.

Right. What I was driving at was trying to get an understanding of how much of the EPS improvement year-over-year in guidance in '07 is coming from the restructuring actions of '06 versus just core continued improvement in mix and other areas.

I don't we broke that out, Harry.

The guidance we gave you a year ago in terms of savings of was around $1 billion in '06?

About $1.9 billion to $2 billion.

Right. With around $1 billion or so of that in '06 getting significantly higher in '07.

Harry, just to give you a few data points, remember that part of that was a pension that we got early in the year in 2006. And then you've seen a blending of the improvements in Q1/Q2 into some of our sequential quarter performance. So clearly from Q4, our actions sequentially will begin to have some effects now in '07. But we had a one-time pension action that occurred at the end of '05. It went on in '06, and then we blended it in from there. So that's really where we're at with it. Of course, as we discussed at the time, some of that will get reinvested back into the business in terms of whether it be pricing or competitiveness in proposals or going to hire a sales resource, et cetera. But clearly, it will be a help to us.

Just one other item as well. We did say that those gross savings, that maybe half of it would fall to the bottom line. Certainly, some of the success that you're seeing in Q4 comes from investing some of that back and driving better top line results with demand generation spending. Hopefully, over the longer term, some of the hiring we are doing of additional salespeople will lead to additional growth as well.

Yes, Harry, I don't think that should be lost here that part of what we're doing here is to try to do further work to variables in our cost structure. When we do see opportunities in the marketplace to grow and hopefully grow profitably, we will use some of that flexibility to take advantage of the opportunity. So we think we've made a bit of progress on this. We still got some work to do.

Your next question comes from Laura Conigliaro - Goldman Sachs.

Thank you. Can you provide some observations on what's happening on the component front including pricing? For example, which components seem to be in short supply and where the situation has gotten worse or better? You had previously referred to the possibility, for example, of better CPU pricing, given the AMD/Intel competition. Are you seeing any of that yet?

Certainly, we did see memory pricing pressures and availability issues in Q4. We did get most of them resolved by the time we finished up. We did pay a little more money for memory than we had planned going into the quarter in a couple of our businesses. So memory has been the commodity of interest in Q4. But we also had a few issues on microprocessors, particular types of microprocessors. Panels have been in good supply and pricing has been favorable there. Panels is one area that we have done some strategic buying, much to our advantage. Hard drives, really no change. A very competitive marketplace, availability is pretty good.

Your next question comes from Richard Gardner - Citigroup.

Another question on the PC business if I could. It relates to what looks to be a pretty significant shortfall in motherboard shipments out of Taiwan, desktop motherboards, in particular, which has led folks to believe that PC demand is deteriorating. It certainly doesn't look like you saw that in your results, but I'd love to get your thoughts on the current demand environment and any color that you can give us by customer segment and geographic region would be helpful.

I would say that demand does differ a little by region and sometimes frankly within region. But if you aggregate it together, it is stable; stable market demand. So from that perspective, we don't see that instability that you're describing. Again, I could go into lots of different stories by segment, by country. But when you net it all together, we saw stable demand.

Could I follow up and just ask, Mark, if --

Isn't that against Brian's rules? But go ahead. Go ahead.

The question was whether you could give us any visibility of whether there was a sharp or significant downtick in commercial PC demand during the quarter?

No. I can't say I saw that. We saw pretty stable demand. Again, it can vary. If you ask me corporate by country, I could get into a couple but when you looked at the aggregate, no. Our real issue in the quarter, if anything, on the supply side was in memory, as Bob has referenced, we paid up a little bit for memory. I wish we hadn't, but we did. Our overall macro demand picture was roughly stable.

Your next question comes from Toni Sacconaghi - Sanford Bernstein.

Thank you. Your gross margins declined about 50 basis points sequentially. If I look at your business mix, it looks perfectly neutral on a sequential basis. Supplies were up pretty well in line with company revenue and the enterprise group, which also has pretty good margins, actually up fractionally as a percentage of sales. So it doesn't appear to be a mix issue. Were you incrementally more aggressive on price then, and can you comment across what product family?

I'll start, Tony. I think it is fair that in a couple of groups, we saw opportunity for growth and we took it. So for example, in IPG, and you looked at overall mix, the mix is sequentially different as it relates to supplies versus hardware, which shows up in our 17% hardware unit growth. So clearly, I wouldn't describe it as an issue underneath, but certainly in the mix of hardware and certainly, that did have an effect on our margins.

Tony, mix within segment is also important. Sticking with IPG, as we mentioned in the script, very strong growth in our basic level printers. I think it was 60%. But anyway, it's in the script, a very large growth and very large growth in color laser. Both of those are lower-margin products than some of the other items in our line. So, while overall hardware may have been the same, we could definitely see a different mix of hardware within that hardware slice of the pie.

Your next question comes from Richard Farmer - Merrill Lynch.

Mark and Bob, you both talked about cash flow and cash generation in the quarter. Bob, you made some comments about the first quarter of '07 that the share count would modestly decline and about flat in all of '07 if I heard you right. I'm just trying to reconcile, you have $16 billion of cash on the balance sheet, net cash $11 billion. I understand you have to pay $4.5 billion for Mercury, but you're also generating $9 billion in operating, $7 billion in free cash flow. So what are your priorities for the cash over the next couple of years? Why wouldn't you use the majority of the $7 billion in free cash generation for buybacks? Why wouldn't share count go down a lot more than you articulated?

Of course, I have to say I don't know because it all depends upon what happens to share price and some other things. While we did spend $4.5 billion on Mercury, that's just in Q1. Who knows what we will need for acquisitions throughout the year? So all of this is based upon a bunch of assumptions. I will tell you my comments assumed that we would continue using a good hunk of that free cash flow for share buybacks. Keep in mind, though, that the share price is quite a bit higher today than it was on average for '06, and so it just doesn't go as far. Furthermore, as the share price moves up, option exercises pick up. We've seen that. We saw that in Q4. We saw it throughout the year. We saw it again in Q4. My comments assumed that as we get into the 40s here, we will see even more option exercises. So it's all of those variables mixed together. One other, I should mention, of course, we have to calculate common stock equivalents, which again gets directly driven by increased share price. So there is a lot of dynamics here. It's my best guess that it comes down a little in Q1 and then stay roughly flat. Could it come down a little bit more? We'll see. Do we intend to keep buying, I'll call it aggressively? Yes, unless something else changes in the world around us.

One thing, we're going to be active in the area. I think the point is we have worked real hard to get our option overhang down. We're working on it. We will continue to be active. So, to Bob's point, I don't think you should have any expectations that we won't be. But we've got other factors as we consider our aggregated capital strategy.

Yes, we do have $5.6 billion remaining of the authorization that the Board acted on last quarter.

Your next question comes from Rebecca Runkle - Morgan Stanley.

Mark, just a quick question following up on your storage performance and comments. Clearly, a phenomenal quarter across the board, but you noted storage is one area of weakness. Just as you sit here now and look at that business, what in your mind are the issues? Is it technology? Is it product? Is it go to market? What are the top strategies for turning that business around over the next four quarters?

There's a couple of different dimensions to it, Rebecca. First, it's a business that has worked hard to improve its operating margin, which it has done. I think that part is a positive, so I don't want to take away from that. But to be very blunt, I'm disappointed in the revenue growth for the business. The market is a strong market for us. We're investing in the market. We think we actually have a pretty strong product line-up right now. We just need to do a better job from a demand creation perspective. There's opportunities for us in the mid-market that we think are important for us to go get. As I go through our field checks, we feel about as good about our product line-up as we have in quite a while. We have done a decent job at improving the operating margin of the business. We need to go get more business. We have invested in software. We do have the tape declines, but we still think we can do better. And we're going to go focus on it.

Your next question comes from Bill Shope – JP Morgan.

Great, thanks. Can you guys comment on the pricing environment in PCs for both the commercial and the consumer segments? There's been a lot of chatter that perhaps your largest competitor has eased up on pricing somewhat. I'm wondering if you saw any evidence of this throughout the quarter.

Nothing spectacular, Bill. I would say that the quarter was steady. We didn't see anything extraordinary from a pricing perspective. But I say that against the backdrop of a pretty aggressive environment, period. We have more than one competitor out there. So when you look at different markets, there are different people that show up as competitors. Obviously, we're very global and we're very competitive in many markets. So I think we would say there's nothing extraordinary. But there are multiple competitors out there. The environment, I would say was steady. That would probably be the best way I could describe it.

Your next question comes from Brian Alexander - Raymond James.

Thank you. Just a clarification and then a question on service profitability. The clarification on the revenue guidance, I just want to make sure I understand. We should assume that you're looking for normal seasonality in the first quarter as well as normal seasonality in the PC business specifically to get to the range that you provided. Then, I have a follow-up.

Yes, there's no particular new trend that we're trying to convey here. The guidance, I think, fits with normal trends.

Great. Then on the service margin, can you just talk about the profitability that you saw in each of the segments within HPS? Where did you see the biggest increase in profitability in what I thought was actually a negative mix shift away from tech services and more toward managed services and consulting?

So, a couple of points. Bob, we don't give the profitability numbers out by segment specifically. But I would say there are three kinds of costs in the service business. As I mentioned in my prepared comments, there's overhead costs that comes from the corporation into services. Because of its headcount profile, it absorbs quite a bit of that overhead, point 1. Point 2, any services business, even across all three segments, has its own overhead, infrastructure. You can go down a whole number of different characteristics. Then, you have the actual service delivery itself, and we're working on all three lines. Those improvements in all three pieces have led us to improved profitability in both consulting and integration and in managed services that has also benefited, to some degree, technology services, even with the revenue performance we've had.

Your next question comes from Louis Miscioscia - Cowen.

Thank you. Maybe if we could stick with the services area, in the sense you obviously had a very good quarter. Is this something that we should, from a revenue standpoint, expect to continue on a sequential basis? Because services is a little bit less seasonal to hardware and some other things. Maybe if you could also talk about the pipeline?

Services is still a little seasonal. Q4 is usually our best quarter from a profitability point of view, and Q1 is often a bit more challenged, both on the top line and bottom line. So while it may be less seasonal, there are seasonal trends. Part of it is driven also by projects. So while there is a lot of annuity run rate to the business, there are projects and managed services transactions, and some we pursue. Frankly, right now, we are very picky about what we do pursue. We have two characteristics: one, that we can make money; and second, that we can deliver the service we commit to. If either one of those are not there, we will typically walk away from a transaction. So that's the main reason. Again, I believe that costs drives growth and that we're trying to get our cost structure right. As we do, we will be in a better position to grow. But we're very particular about how we grow, profitably.

So let me just summarize a bit here. Certainly, the profit improvements that you saw in Q4 in services, some of them are quite fundamental and we expect them to continue. At the same time, I wouldn't extrapolate sequentially from Q4 into Q1 when it comes to profit.

Your next question comes from Chris Whitmore - Deutsche Bank.

I wanted to follow up on the inventory question. You have been making strategic buys now for the past several quarters. Should we think about your inventory levels as being structurally higher going forward? In other words, is it an ongoing part of the business we should expect going forward? Secondly, you mentioned you are making strategic buys in panels, but availability and supply of panels is quite good. I wanted to understand that dynamic a little better.

Let me start, and Mark can chime in. So with regard to panels, as an example, there are times when suppliers come to us and say, I've got this inventory and I will give you a really good price if you buy it from me and take delivery in the next three days, even though we don't need delivery for 20 days or something like that. If it's worth it, we will consider doing that kind of thing. Obviously, we have the financial capacity to do so. So we look at the trade-off between the inventory carrying costs, what we think the price trends would be and how much better this is than what we would predict trends to be. Frankly, it has helped us over the past year. Whether it's structural or not, that particular one, I don't know. It just depends upon what vendors bring to the table. They could stop doing that, and then that would go away. Other inventory investments that we have made, we mentioned, for example, some changes in the supply chain. We're moving product production around the world to get lower prices, but it adds to the inventory pipeline. That is probably going to continue -- not forever -- but it is driven generally by country-based economics and is unlikely to change quickly. So that's probably going to be with us for a little while.

I think just to add to it, first on the panels, sometimes more supply actually creates the best deals, to Bob's point. Secondly, we have had significant demand for consumer notebooks across the year. So it has been quite strong. I think, thirdly, we want to get away from thinking about inventory as an isolated metric. I like a lot of metrics, but you can get overmetricized in some of these areas. We want to look at the aggregated ability to get our capital leveraged at the same time as be able to get the best profitability out in the marketplace. Inventory is only one component of the aggregated mix. So we're looking very hard at inter-relating the inventory positions to take to our ability to get into a positive pricing environment or our ability to compete. So a long answer to your question, but the answer is we may keep these inventory levels the way they are if we think it provides an aggregate economic benefit to Hewlett-Packard.

Your next question comes from Jesse Tortora - Prudential.

Thanks. Hi, guys. PSG operating margin increased to 4.3%, ESS to 10.7% in the quarter. What do you think the key drivers were behind this, and what is your outlook for these segments going forward?

Well, we will talk more about our outlook going forward when we get to New York, other than that, we're not going to give any more than the guidance we gave today. I think, in PSG, we continue to have strong performance in notebooks and a strong mix. I think it's basically what we've said. You have seen us take positions in inventory, and the strategic buys have helped us from a margin perspective. We benefited from a mix of and leverage between AMD and Intel, a series of things that we have talked about over the past quarters. I think, in ISS, which has a main driver in terms of ESS, you've had the same kind of effect from an industry standard server perspective. It doesn't hurt when you grow because you leap over a lot of your fixed cost structures. So when you get 9% growth in ISS, 38% growth in blades, it tends to have an effect for you. So I think for us, it's a mix of growth. It's a mix of balance and our ability to leverage our supply chain. We feel we've made some improvement. I can tell you this: that we are focused on trying to do better.

Your next question comes from Bill Fearnley - FTN Midwest.

Thanks, good afternoon. How should we be thinking about levers that drive corporate gross margin improvement going forward? What is the biggest lever? Is it mix? Is it component cost trends? Is it the buys that you are doing? Is it attach rate? How should we be thinking about gross margin improvement now?

I think you hit on all the right points. For us remember, a big part of our gross margin is cost of service. So it isn't just what you see in the COGS line, which you hit I think quite effectively in terms of our ability to get the attach levels right and the ability to get the mix right. So for us, Bob, I thought made a very important point about the mix of software. It's going to now start folding into our P&L. That is going to have an effect on our gross margin, and I think that's a positive. We certainly are doing more work in intellectual property around all of our hardware segments at the same time as we're trying to optimize the mix of all components, whether it be microprocessor all the way through the supply chain; taking better inventory positions, better attach. Cost of service though, is mainly a headcount-driven model that we're also trying to work hard to not only leverage our labor model but also deal with automating our service processes. I think, with those we've said, we've hit a majority of the levers. At the same time, we have got some fixed cost structure that goes up there too. So we're trying to pull them all.

Your final question comes from Dan Renouard - Robert Baird.

Thanks for taking my question. My question is just on the sales hiring and your progress there. Can you maybe give us some metrics in terms of the success you have had or where you're at in terms of either number of salespeople added or just how you think about progress there and how much more you have left to do?

I think the answer is “sort of” to your question. We don't give out the numbers by group and so forth in terms of that kind of metric. But I think it would be fair to say that we made significant progress. I'd say we got more than halfway to the goal that we were hoping to get to. I can tell you internally we had all kinds of optimistic plans to get people in. But frankly, getting this done, well it's more important to us to get this done right than to just show up with a bunch of headcount. So we're really looking for quality people that can really help us change the game. I'd say we made what I believe to be the expected progress you would make doing this. We have more to do. If you know of great people who know a lot about enterprise selling and channel selling, we would love to talk to them.

Thanks, Bob. We're going to wrap up. Let me just summarize today's call by saying that I am pleased with our progress in the fourth quarter. HP delivered solid revenue growth to gain market share in key businesses. It drove significant growth in key initiatives, expanded our margins across our segments, delivered our most balanced segment profitability and posted record quarterly cash flow from operations. We did do this while continuing to make progress on our cost structure by substantially completing our restructuring program and making further progress on strategic initiatives that will strengthen HP's long-term competitive positioning and increasing our non-GAAP EPS guidance for the fifth consecutive quarter. All-in-all, it was a solid quarter for HP, closing out a strong fiscal 2006. We do have more work to do, though. That said, I do believe we're on our way to building a stronger, more competitive HP. Finally, we look forward to seeing you in New York City at our annual securities analyst meeting on December 12. Thanks again for joining us on the call.

Thank you for your participation in today's conference.