Fiorina: Economy, Not Deception, Led To Lower Merger Revenue Forecasts

Hewlett-Packard

Fiorina's testimony came as the trial, in a suit filed by Walter Hewlett seeking to overturn the March 19 proxy vote, began. The trial is expected to last three days.

Hewlett attorney Stephen Neal, in a standing-room-only Delaware Chancery courtroom, questioned Fiorina for more than an hour. Neal, in his opening argument and in his initial questioning of Fiorina, appeared to virtually ignore Hewlett's primary charge that HP fraudulently coerced Deutsche Bank into switching 17 million votes to favor the deal on the morning of the March 19 proxy vote.

Instead, he hammered away at the charge that HP misrepresented revenue and earnings projections for the combined company in order to win shareholder approval.

Neal said that in HP's Dec. 19, 2001, proxy statement, the company projected 2003 revenue of $80.9 billion, but that by mid-March that figure had dropped to $77.4 billion.

Fiorina didn't dispute those numbers, but testified, "That clearly means the economy was deteriorating."

Neal was seeking to show that the Value Capture (VC) reports HP management was getting from business unit planners differed from its initial public disclosure.

Fiorina said the Dec. 19 Securities and Exchange Commission proxy filing was "a snapshot of where [the projections stood at the time. . . . At the time of the document, they were our best assessment."

Fiorina is scheduled to resume her testimony after lunch.

Fiorina's testimony was hampered by faulty courtroom microphones that had even the court reporter, sitting five feet away from the witness stand, requesting that she speak louder so he could hear.

Reporters stood in line beginning at 5 a.m. to get in the courtroom, which holds only about 150 people. People were being paid up to $100 per hour to hold places in line for others. Those posted at the front of the line waiting outside the Wilmington Chancery court had been in line since midnight.

HP CFO Bob Wayman was also in attendance at the trial Monday morning, as was Walter Hewlett.