Good day, ladies and gentlemen, and welcome to the Second Quarter 2012 Hewlett-Packard Earnings Conference Call. My name is Derrick, and I'll be your conference moderator for today's call. [Operator Instructions] As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. Rob Binns, Vice President of Investor Relations. Please proceed.

Good afternoon. Welcome to our second quarter 2012 earnings conference call with Meg Whitman, HP's Chief Executive Officer; and Cathie Lesjak, HP's Chief Financial Officer. Before handing the call over to Meg, may I remind you that this call is being webcast. A replay of the webcast will be made available shortly after the call for approximately 1 year. Some information provided during this call may include forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements, other than statements of historical facts, are statements that could be deemed forward-looking statements, including, but not limited to, any projections of revenue, margin, expenses, earnings, earnings per share, tax provisions, cash flows, share repurchases, currency exchange rates, the impact of acquisitions or other financial item; any projections of the amount, timing or impact of cost savings, restructuring charges, early retirement programs, workforce reductions or impairment charges; any statements of the plans, strategies and objectives of management for future operations; and any statements concerning the expected development, performance, market share or competitive performance relating to products or services; and any statements or assumptions underlying any of the foregoing. A discussion of some of these risks, uncertainties and assumptions is set forth in more detail in HP's SEC report, including its most recent Form 10-Q. HP assumes no obligation and does not intend to update any such forward-looking statement. The financial information discussed in connection with this call, including any tax-related items, reflects estimates based on information available at this time and could differ materially from amounts ultimately reported in HP's second quarter Form 10-Q. Revenue, earnings, operating margins and similar items at the company level are sometimes expressed on a non-GAAP basis and have been adjusted to exclude certain items, including amongst other things, amortization of purchased intangibles, restructuring charges and acquisition-related charges. The comparable GAAP financial information and a reconciliation of non-GAAP amounts to GAAP are included in the tables and in the slide presentation accompanying today's earnings release, both of which are available on HP's Investor Relations webpage at www.hp.com. I'll now turn the call over to Meg.

Thank you, Rob, and thanks to all of you for joining us today. The second quarter marks my first 6 months at HP, and I continue to learn about the company every day. It's inspiring. You're surrounded by incredible technology, tremendous innovation, and the people are just terrific. For example, since we last spoke, I participated in TechCon, which is HP's annual internal innovation show. Think of it as the world's greatest science fair for adults, and I was just blown away. The excitement, the enthusiasm, the commitment of HP's technical and innovation community is amazing. From nanoscale-sensing technologies to the memristor, to software that can actually learn, we have an array of forward-looking technologies that are revolutionary. Without question, our innovation engine is alive and well. Now we just need to do a better job of aligning that engine with our businesses in developing a better, faster path to market. I also recently attended the Drupa conference, which is a show held every 4 years in Düsseldorf, Germany, to showcase the very latest in commercial graphics and printing. And again, I was deeply impressed. It's a chance to see our Color Inkjet Web Press and Indigo portfolio in context. You can see customers and potential customers gravitating towards our innovation. And you clearly can see the shift from analog to digital commercial print happening right before your eyes. The market is being disrupted, and we're leading the charge. I left Drupa with a deeper appreciation for the opportunity HP has to transform that industry. So now let's talk about HP's performance. Overall, I feel cautiously optimistic coming out of Q2. Our results appear to be stabilizing. While I wouldn't say we turned the corner, we are making progress. For starters, we once again did what we said we were…

Thank you, Meg. I'll start with a quick review of the quarterly performance and then give some more details about the restructuring efforts, including expectations for cost savings, headcount reductions, reinvestment and GAAP charges. I'll close with our guidance for Q3 and the second half of fiscal '12. For the Q2 results. Revenue was $30.7 billion, down 3% year-over-year, both as reported and in constant currency. PSG revenue was flat year-over-year and gained 2 points a share worldwide, quarter-over-quarter, as the business recovered from the hard disk drive shortage triggered by last year's Thailand flooding. ESSN and IPG revenues declined generally as we expected due to the impact of the hard disk drive shortage on ESSN and IPG's continued focus on reducing excess channel inventory. In terms of our revenue performance by geography, in the Americas, revenue was $13.8 billion, flat year-over-year, both as reported and in constant currency. Revenue in EMEA was down 7% to $10.9 billion and revenue in Asia Pacific was down 1% year-over-year to $6 billion. On a constant-currency basis, EMEA and APJ revenues were down 6% and 3%, respectively, year-over-year. These results reflect the continued macroeconomic challenges in EMEA and some sequential improvement in China. Non-GAAP gross margin of 23.2% was down 150 basis points year-over-year and up 80 basis points sequentially. Non-GAAP gross margins continue to be impacted by the strong yen, a lower mix of supply, continued margin pressure in services and competitive pricing in our hardware businesses. Non-GAAP operating expenses were $4.4 billion, up 4% year-over-year, driven by acquisitions and our annual salary increases. Non-GAAP operating margin of 8.9% was down 240 basis points year-over-year and the company delivered $1.9 billion in operating profit. The bridge from operating profit to earnings per share includes the following. Other income and expense yielded a…

[Operator Instructions] And our first question is coming from the line of Katy Huberty for Morgan Stanley.

Cathie, first, a question on free cash flow. The second quarter numbers were quite strong after a weak first quarter. But when you take into consideration the cash cost of the restructuring, where do you expect free cash flow to end this fiscal year relative to non-GAAP income?

So the way to think of -- we haven't been guiding cash flow. The way to think about cash flow over the long term is that cash flow will generally trend in line with our non-GAAP earnings. It is important to understand kind of the cash flow implications for the restructuring charge. In fiscal '12, we expect the cash flow impact to be about $400 million. And then through 2014, we expect the cash flow impact cumulatively to be about $2.7 billion.

Okay. And then just as a follow-up, do you have a view yet as to whether the share gains in PCs were entirely sellout or were some of that sell-in and channels rebuild after the HDD shortages? And just on the back of that, do you have a view around demand next quarter as the channel and consumers wait for Windows 8?

I'll take that. So actually, we saw very good sellout in the channel and we are running at the low end of our desired channel inventory. So we feel pretty good about end-user demand and our ability to pull through that demand with good marketing and great product on the consumer side. And on the Enterprise side, I think we've actually struck that perfect balance between design and the workhorse devices that business and governments need. So we're feeling pretty good about demand.

Next question is from Bill Shope, Goldman Sachs.

Okay. Could you give us a little bit more detail on how you're thinking about the secular prospects for IPG, particularly in the consumer segment? And when you parse out this quarter's performance, how much of the supplies decline can we assign specifically to channel inventory reductions? And I guess an extension of that, do you still think we can return to sort of mid-teens margins anytime soon for overall IPG?

Let me take the first part of that question, Bill. So listen, in terms of the broad secular trends in this business, what we see at the highest level is an enormous wind at our backs going from analog to digital. There's going to be about 200 billion pages that are going to move from analog to digital over the next number of years. But you're right. In some segments, there is some decline. For example, what we know is people who have home printers are printing less photos in their homes, but we also feel good about the printing in the Enterprise. So here's what we've got to do, and I'll let Cathie answer the question about supplies. As an industry leader, we need to act like one. We need to step up our marketing, we need to take responsibility for growing the category and demonstrating new use cases for printing. We need to get our pricing correct on both our ink, as well as our printers, and we need to make sure we've got the right product at the right time for the right market. In the Enterprise, we missed a cycle on multifunction Color LaserJet, and we now come to market this fall with 8 new multifunction printers in the LaserJet category, which is really going to help us. This is the fastest-growing part of the market that we haven't played in as much as we should have. And then we have to look at the different business models, particularly in emerging geographies. And in emerging geographies, what we found is that you can actually price the printer a little higher, price the print, the ink a little lower and what you end up doing is selling a lot more ink because printing is more affordable to these emerging markets. So we're going to get very aggressive in the printing business. We've got a very clear strategy outlined and I feel very good about the way forward there. It will take a few quarters to, I think, see the results of a more aggressive strategy, but I think we've got this one, so the path forward here is really clear now.

And, Bill, just to address the question on the supplies decline and how much of that was due to channel inventory, the vast majority of the decline was due to channel inventory corrections this year -- I'm sorry this quarter. And we do expect that, obviously, to modulate as we go into Q3 because we ended the quarter within our acceptable ranges on IPG supplies. Now, the caveat I give you is that demand continued to be fairly weak, and so honestly, we would like to take channel inventories down a little bit in Q3, nothing compared to what we were -- we did in Q2, though.

Okay. And then the question on returning to mid-teens margins over time?

I think you have to go back and dissect, basically, where -- kind of what drove the margins this quarter. So if you actually look at it, there's kind of 3 big drivers of the margins year-over-year for IPG this past quarter. The first one is supplies mix, which was, as we've just addressed, was addressed -- was caused by both channel inventory corrections, which is the biggest impact, but also, we did see some softer demand from a supplies perspective. We also saw, obviously, lower volumes and that put some pressure on operating margins. And then finally, something that we, at this point, are not calling for a change and that's in the strength of the yen. That continues to be a headwind for us in our LaserJet business.

I'll make one last comment on that, Bill, as well. Joining forces between the PC business and the printing business, this is going very well. And I think it's actually going to help the printing business a lot in a couple of areas. One is in emerging markets. PSG had a much broader and deeper footprint in emerging markets than IPG, so we're going to leverage that. PSG had a broader account coverage model, direct account coverage model than IPG did, so we're going to leverage that as well. And we have some untapped opportunities in supply chain, nodes, logistics that were not fully exploited because these were different divisions that didn't coordinate as well as they might have. So I think that's another reason where we're going to create some financial capacity, which over time, we'll invest in things that we think make sense and we'll obviously try to improve the margin over time as well.

Next question is coming from the line of Toni Sacconaghi from Sanford Bernstein.

I know you stated several times that you expected the majority of your restructuring savings to be reinvested. If we take that quite literally and say 40% will actually drop to the bottom line, it's $1.5 billion or $0.60 a share after tax. Is that sort of the right framework that we should be thinking about? And I realize it's exiting 2014, but is that kind of the envisioned balance, given you used the adjective majority?

So we are in the process of -- we have a very well-defined outlook, I think, for the savings that we will get through the workforce reductions and early-retirement programs. Cathie said, this is something in my script as well, with $3 billion to $3.5 billion. But you're correct. We are doing a lot of work on supply chain, SKUs and platforms, real estate, go-to-market, pricing and promotions, centralizing advertising and marketing, but we are not to the point yet where we can make a decision about how much of that we want to reinvest in the business because we are now wanting to take a very disciplined approach to say, what is the return on invested capital of an R&D initiative in the Storage business? So what I would recommend, Toni, is listen to our guidance going forward. There will not be perfect linearity in the savings and what we put into investment versus what we drop to the bottom line. So for example, in the fourth quarter, we may get a lot of these savings, but we want to be prudent on investment. But in Q1, we may invest more and bring a little bit less to the bottom line. So I think the best guidance I can give you is we're going to be very disciplined about reinvestment. We're not -- we're going to only reinvest in those opportunities that make financial sense to set up HP for the long term. And this will not be perfectly linear. But we'll -- I think we'll also be able to give you a little more guidance on this at the end of Q3 and the end of Q4.

Okay. Talking about the nonperfect linearity, perhaps you can talk about forces at work on earnings in Q3 and Q4. I think your guidance, even if you strip out the incremental $0.05 to $0.10 from some of your initial savings that have not been reinvested, if we strip that out from the guidance, it still implies a 30-plus percent EPS growth from Q3 to Q4, which is sort of historically unprecedented at HP. Similarly, you're calling for earnings to be lower next quarter, despite not having the tailwind from further significant supplies reduction, not having the tailwind from -- excuse me, the headwind from that and not having the headwind from HDDs. So Cathie or Meg, maybe you can talk about forces at work on EPS that appear to be pushing down EPS in your view in Q3 and then leading to an unseasonably large expectation for EPS growth in Q4, even excluding the anticipated restructuring.

So Toni, actually, I'm a little puzzled by that because the math that we've done and the seasonality that we've looked at is that Q4 seems very much in line with normal seasonality off of Q3. And Q3 -- again pre-restructuring, and Q3 looks roughly in line with what we normally see from Q2. So we're really feeling like this is consistent with normal seasonality.

So you don't expect any sequential benefits or -- I gather, what are the offsetting headwinds, the tailwinds that you should be getting from relief from no supplies channel draw-down and from better availability on the HDD side?

Toni, it's Meg again. Let me copter all the way up here because, as I said, overall, we feel cautiously optimistic coming out of Q2, but I wouldn't say yet confidently that we have completely turned the corner. We have made real progress, but we are in the early stages of what we hope to achieve over the next several years. And the headwinds we're facing, I think, in Q3 and Q4 is first of all, Europe. I was just in Europe a couple of weeks ago, and I will tell you, every business leader over there is very concerned with the election of Hollande and what that will mean and what will happen to Greece. We are, as I said, at the early stages of a turnaround in a number of our different businesses. And in my experience, having done a number of these, turnarounds are not linear either. So there may be a setback that we can't anticipate at the moment. And then we're going through a lot of change here. We just joined forces of IPG and PSG, the Global Accounts now report to Dave Donatelli, we have centralized all of our marketing and communications, we've centralized sales ops for the first time under John Hinshaw, and we are undergoing a pretty big restructuring charge and our workforce reduction. So there's a lot of moving parts at HP. I feel confident about our ability to execute against that, but I don't want to get out over my skis in terms of what we tell you we can deliver.

And, Toni, I think you also have to play through a little bit on the currency. Now we are exposed to a huge basket of currencies, obviously, and we do a series of hedging -- different hedges across the different businesses. But at the end of the day, the currency that we're looking at right now is a headwind on a year-over-year basis in Q3 and for full year fiscal '12. On a sequential basis, it's minimal, but on a year-on-year basis, it is still a bit of a headwind from a top line perspective.

The next question is from Shannon Cross from Cross Research.

Meg and Cathie, could you provide more color on sort of how you're thinking about the restructuring? I mean, is every business unit going to get sort of a percentage to cut? Does it include any potential divestitures of noncore businesses? And then finally, I'm just curious if you think the back office systems that you have in place right now will allow you to sort of manage through the process, because that's one comment that I've heard from people over time, is that they'd like to see a little bit more sort of on the back office system from an operations perspective.

Yes, let me take a crack at that. I mean if you pull all the way back, our restructuring is really about 3 things: we've got to better align HP's cost structure with our revenue portfolio; we've got to position the company to take advantage of some of the biggest shifts that I've seen in technology in my 30-year career in business; and then we've got to streamline our operating model. And so the way we did this is we went business unit by business unit, and by that, I don't mean just at the ESSN level, I mean in Networking and the different projects -- products in Networking to the different PC categories to the different Services businesses that we're in to the different Software products, and basically said, what do we want to focus on? How many individuals do we need to deliver that service? What pieces of those businesses do we want to emphasize versus deemphasize, and came up with a bottoms-up approach to the cost savings that we thought we could achieve from the reduction in workforce, as well as the EERs, and then began to size things like supply chain and go-to-market that we talked about. Then you're right, we have to make some investments in this business, and internal tools and back-office processes are something that we need to invest in. It is not perfect by any means. And one of the steps we took was to combine our sales operations from both our Enterprise business and our consumer business under John Hinshaw, and we're finding lots of opportunities to streamline, to put tools in that will actually make it easier to work at HP. So we've got a lot of work to do in that regard. It is only one bucket of investment that we need to make. But when we do that, boy, I think you're going to see this company hum a lot more efficiently and effectively and be a lot easier place to work for the incredibly dedicated people we have working here.

Great. And then the second question I have is just on Autonomy. Can you talk a little bit more about the weakness in revenue, and if it changes your outlook on the business at all and how it integrates with HP or is this just something that some different oversight will fix?

Yes. So listen, when Autonomy turned in disappointing results, we actually did a fairly deep dive to understand what had happened here. And in my view, this is not the product. Autonomy's a terrific product. It's not the market. There is an enormous demand for Autonomy. It's not the competition. I was wondering, is there a competitor that we didn't see, and the answer to that is no. This is classic entrepreneurial company scaling challenges, and I have seen this movie before. When you try to go from $40 million to $400 million to $1 billion to $2 billion, boy, it takes -- it's a whole different ballgame. And we need to put in some sales ops processes, we need to put in better interface into HP in terms of how Autonomy interfaces with our Services business as well as our Service, Storage and Networking business, and we need a new organizational structure to support a $1 billion-plus company. So we have the people to do this, we have the expertise to do this. Something I'm extremely familiar with, having grown eBay from $4 million in revenues to $8 billion. I really have seen this movie before. And so I feel confident about the long haul, but it may take us a couple of quarters to work through some of the growing pains of the organization. But I think this was a very smart acquisition. I feel great about the product, and we have absolutely hit one of the scenes that is changing most in the Technology business. I mean, the opportunity around Big Data and analytics is fantastic and it can flow right across all of our businesses.

Your next question is from the line of Brian Marshall from ISI Group.

If we assume roughly $1 billion of the $3 billion to $3.5 billion savings goes to the bottom line when this is completed in fiscal '14 and the majority of that's going to be going to be going into the new focus areas, obviously Cloud, Big Data, security, is the majority of that $1 billion, would that go towards organic investment, and therefore, probably talking about a pretty sizable increase to the R&D, currently about $3.5 billion is spent annually on R&D. So if that's correct, would assume that we're not looking at any sizable M&A in these 3 areas as well going forward. And then I have a quick follow-up.

Yes, Brian. I think that's a fair characterization. We're looking towards organic innovation or organic investment. We don't see any big M&A transactions on the horizon. There may be some tuck-ins, as I've said before, to augment our Software business or maybe some of our other businesses. But I think that's exactly right. This is a -- the heritage at Hewlett-Packard is a fantastic engineering culture, products engineering, service engineering, and the best payback I can see here is to put money into R&D for our engineers to create great services and products and software. So we are going to increase the R&D budget pretty substantially. We're also going to be looking at design and quality because that's another area, I think, that was a hallmark of HP. We need to have the very best quality in the industry across all of our products. And I think we have good quality, but I think we can do better there. We are going to make investments in our people, as I said, in terms of career training -- oh sorry, career development, training. We've got a lot of work to do there as well. And then I think Shannon had called this out. We've got some investment in internal systems that are going to allow us to be a lot faster and nimbler in the marketplace. Cathie, do you want to add anything?

The only thing I want to add is that there are a bunch of numbers thrown out there, and I just want to be clear on what those numbers really mean. So we expect to, as we talked about, to save, on an annualized run rate basis, between $3 billion and $3.5 billion exiting 2014, and it's from that pool of savings that we will look at reinvestment. And at this point, we're not quantifying for you how much drops to the bottom line. Some will definitely drop to the bottom line, but the vast majority will be reinvested back into this business, either in key growth areas where we can grow faster and higher margin categories or back into process reengineering, IT, automation, that will allow us to, frankly, continue to generate savings over the long haul because we're a much more efficient organization.

Sure. And the quick follow-up is with the extra moneys that are not reinvested in the organization, any change to capital allocation technology [ph] post the completion of the reduction of workforce?

So there's no change in our capital allocation focus, both in the short term or the long term. So on the short term, we've talked a lot about the fact that kind of 2013 -- oh sorry, 2012 and into '13, that our focus is on rebuilding our balance sheet. And we've made progress in Q2 in doing just that because our net debt position improved $1.2 billion, so we're making progress there. Over the long term, the way we think about capital allocation is basically looking at the different opportunities to deploy capital and what types of returns we can get, factoring in both long term and short term because we need some of both, but it's going to be a risk-adjusted returns basis. And frankly, share repurchase has to be on that list of our potential investments as well, because we've got to rack and stack all these investments on an ROIC basis. And so returning cash to shareholders is one of the highest return on invested capital decisions that we make, that we can make, and that's what we'll do.

Next question is from Keith Bachman from Bank of Montréal.

I had 2 questions, if I could. The first is on Services. You've identified that you want to take out a number of people out of the collective HP, yet at the same time, indicated that there's areas of Services, particularly on the consulting side, that you need to mature and grow. How do you think about the net headcount as you look at Services over that period that you've suggested, say 2 or 3 years? How do you look at the actual change in headcount and trying to provide the consultants and yet at the same time take cost out? And I have a follow-up, please.

So we've talked a lot about the fact that Services is a turnaround and that it's going to take 3 to 5 years. And what we're doing is having a transition. We are transitioning our Services business from being heavily weighted to slower-growth, lower-margin portions or services within ITO, and we want to transition this to faster-growing, higher-margin sections related to strategic Enterprise Services -- well, what we consider strategic Enterprise Services, Cloud, security, Information Management and analytics and Application Modernization. And that's going to take us time to make that transition, but that is a big focus here. And at the same time that we're doing that, that obviously has headcount implications, so what we've done is we've basically modeled out that transition over a number of years and the types of skills that we need in order to execute on this transition. And I think it's also important to understand that that's kind of a mix. You can get better margins and services as a result of that mix shift, but it's not just about mix. We're also applying business process reengineering, lean methodologies to our delivery so that we also get a rate benefit on our installed base and obviously, on future contracts that we win.

Well, that's what I was alluding to Cathie, if I could just press on that before I ask my follow-up is, net-net, you need to add people, net-net over the next 2 years in Services, do you see headcount being up, down or flat? In Services?

I believe we will have a smaller, more profitable Services business over the next 2 to 5 years, which will have fewer people in it today than it -- fewer people in it tomorrow than it does today because we will have changed mix to businesses but we can make a real -- we have a real differentiation in our offering.

Fair enough, okay. Then let me try -- my follow-on is on the Enterprise side. You've had 2 quarters of non-GAAP margins of about 11.2%. As the G8 and x86 side ramps a little better here with HDDs, would you expect the operating margins to improve over the next few quarters in that division? And that's it for me.

I think if you go back and you look at what drove kind of the declines year-over-year growth this quarter, that's insightful. So we did have lower top line growth that was driven partially due to hard disk drive shortages, which we believe, we are largely through exiting Q2. So minimal impact in the second half from the hard disk drive constraint. But we also saw softer economic demand, I'd say Europe in particular. And that's going to -- we're not calling in our guidance, at least at this point, for a significant improvement in that. We also have seen higher hard disk drive cost, which we expect will also continue through fiscal '12. And then finally, you've got the ongoing headwind from a lower mix from Business Critical Systems that will continue to put pressure on us. Now we've got some -- I would say, some different solutions for customers in that space, but we expect that to continue to put pressure on margins.

And also to add one more thing, is that this is an area where, I believe, the return on invested capital and R&D is going to prove to be very high. This is sort of the core of who HP is, is our Server, Storage and Networking business, so we may see some organic improvement of operating margin, which we may choose to reinvest in R&D over the next several years. Because this is an area where, I think, we can be ahead of the curve in both our -- in Server, Storage and Networking, and you can start to see that in our results, I think. I mean even in Industry Standard Servers, which people say to me all the time, well, isn't that a commodity business? Not if we can help it. It shouldn't be. I mean you look at our next generation ProLiant -- Gen8 ProLiant servers, look at Moonshot, look at Odyssey. These are things that redefine that category and that's the kind of the thing we want to invest in.

I think we've got time for one more question here before we pass to Meg for some closing comments. Operator, one more question, please.

Your final question is coming from the line of Ben Reitzes from Barclays Capital.

Meg, you said something about China in your opening remarks. And I just want to make it clear that you said that the things were turning around there and that was a big headwind for you. And then you -- I just had a quick follow-up on end-demand for PCG, why you're so confident. So I'll ask you 2 at once.

Yes, I mean -- again, I don't want to get out over my skis on China because we had a really tough couple of years in China, but it is looking better. There's a 6- or 7-tier distribution system in China, which we're feeling better about. We have a new head of APJ, Dion Weisler, who was in Beijing, who has a tremendous amount of experience. We have spent more time there. I think we are seeing the fruits of our labor in our China Development Center and our China Design Center. So I think we are seeing positive early signs of a stabilization and turnaround. We -- as I said, we announced our new product line in Shanghai for a reason because we wanted to show the commitment to the Chinese government, to the Chinese people for our long-term commitment to the China market. So I feel good about it, but it's early days and, as you know better than most, it's been a tough road for HP and China over the last couple of years.

And those are specific comments to PSG. I guess a couple other bright spots in China, in Industry Standard Server, we had a record quarter in China. So things are looking good there from a Networking perspective. We are continuing to really do well with our H3C products in China. There are bright spots. And then the sequential improvement on the PSG side is a positive direction as well. But to Meg's point, we'll take it kind of one quarter at a time.

And we've got a fledgling but growing Services business in China. I’ve met with some of our biggest Services customers there, and actually, I think we have a good opportunity there. On your second question, which was end-user demand for PCs, gosh, everything we see in the marketplace says that there is a demand, there is a refresh coming, potentially around Windows 8. And it appears to be stronger end-user demand, I would say, in Asia and the United States. We still worry about Europe. Europe is one tough place to do business right now and my personal prediction is that this is going to get a little bit softer before it gets stronger, given all the uncertainties around the sovereign debt crisis, around what's going to happen to the Greek debt, about what's going to happen in France and what Germany is going to do to bail everybody out over there. So, okay. Well, let me just wrap up and sort of end where we began. I mean, overall, we feel cautiously optimistic coming out of Q2. And while I wouldn't say we've turned the corner, we have made real progress. And I think the entire senior leadership team at HP is increasingly confident in the way forward and in our future. So we're excited about continuing to execute over the next several quarters and years. So thank you very much for tuning in.

Ladies and gentlemen, this concludes our call for today. We thank you for participating. You may now disconnect.