Whitman, after posting better than expected quarterly revenues, of course, driven by strong numbers amidst personal systems group, including sales of pcs and the like. A mixed picture for the rest of the businesses, but a lot to get to. Bank of america, though, you can lose sight, jim, of the numbers themselves, almost 17 billion. We talked about this, speculated on for so long. Ranked up as one of the worst deals of all time. 17 billion on 4 billion. By the way, almost have they paid . I dont know how much you attribute seoully to countrywide and accusation of merrill as well. Its a mortgage machine i reported on. Years and in house of cards documentary on it, a book i wrote, that was going on for years in which, of course, you had borrowers not qualitied put in loans, packaged up, sold, and made into c degredos, and now, years later, seven, eight years later, we are seeing some of the settlements. I think they made a decision at bank of america. I think there was a faction that just wanted to fight this all the way through to a new administration, but the process that holder was clearly put in place has run the show. Its to sue them everywhere. So in the end, you had to make a decision. Sued everywhere, and powell pushman from new jersey suing new york, or you pay the piper. The piper is 9 billion in cash. Thats the key number. Rest is not as important. I understand this is difficult to know what the reserve was. This wipes out the next quarter, 25 cents charge. You know, i think that the number they arrived at, the former ceo of wells, the number that was maximum pain. That was the number embarrassing to bank of america . Its not like they sat down and said, heres the damages. This puts bank of america in a position where you figure out normalized earnings power. Remember, this deal was known by the fed so the fed still let them put the dividend through, why is the stock going up . The answer is because jpmorgan went of up after they did their deal, and this citi had a good deal, but i think gary lynch, by the way, bank of america guy who is new, former head of enforcements, hes great, hes a great lawyer, but he was up against a Justice Department that wanted to maximize embarrassment, the pain, and its interesting, you talk about the things you report on, how many of the people were interested or paid for it. Said, listen, they just going after the bad guys, would have. The lesson, but Justice Department got it, and this is very big thing. Yeah. Well that, of course, theres news that, of course, angela, 75 years old, ran country wide, may face civil prosecution from the Justice Department, reporting out there. They came after him and other countrywide executives that went by the wayside. Theres mr. Mozillo. They never got the head, so to speak. No. In it was, again, reporting on it for many years during and after the fact, it was widespread. Right. No doubt. Many, many people within the organizations were well aware that mortgages were packaged that was below any quality that conceivably they should have been, and then repackaged and repackaged again into synthetic cdos which, of course, the likes of pallson, for example, was able to bet against making billions of dollars. Yes. That comes from the advocacy deal, back from that deal. They got stuck. Listen no people. No people. Remember, back and forth, bank of america, it was my judgment, no one knows what you have in reserve, okay . Thats not a disclosed figure. I know that they had a certain amount of earnings power, and i think the Justice Department picked a number to wipe it out. Citi had a better than expected quarter, so turns out the Justice Department guessed wrong in wiping out citi. They are controlling the bank, and banks making a comeback, full disclosure, but could exceed the number. Doing well. Beware. Im saying the process was to figure out kind of what do they owe, and lets make it above the reserve. Lets try to make it painful. Right. Bank of america could have a blow out quarter, and everything will be fine, but i think the process was a very punitive process, not against the people you described. A quick summation. They are done now. They are are done. I know, thats why i like the stock. Thats why i like the stock. Manned up having been 70plus billion, and now most, if not all of it, is blind them. I dont know what it does to a certain degree to the districts, but the stocks higher because now im thinking theres 2 earnings power. Interest rates have to go higher to hit the 2 number, but a possible 2 number as early as 2015 and a buyback, but i am very bullish on the settlement. Its just that im bullish to have it behind. The 2 on 15, are you kidding me, really . Pe of seven and a half times, come on. A lot of earnings power. Okay. Some say not until 2016. If Interest Rates go to 3, delivering alpha, everyone thought the 10year 3. Then they have the earnings power. At this level, no, this level of added Interest Rates is killing the banks, even welsh, such a machine, gathering assets, but they cant deploy them. Moving on here, up next, exclusive with hps ceo, meg whitman, shes pauking here to post nine. Well talk when squawk on the street comes right back. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. Taking 5 look there, a live shot of the Justice Department awaiting attorney general holders remarks on settlement reached with bank of america. In fact, the starmt is out that they reached a comprehensive settlement with the department of justice, certain federal agencies, six states including release on securitization, origination sale, and other things related to securities related to mortgages and all the Different Things they did with the mortgages as well. 9. 65 billion in cash, and 7 billion, cash portion is 5. 02 billion, and 4. 63 billion in compensation payments. Well monitor remarks on what may be the last of the big banks to settle with the department of justice. I love they got the numbers. I mean, its like they are the most capricious, arbitrary numbers. That lady is testing things out. Hp reported an increase in the quarterly revenue, increased sales in the division that sells personal computers, tablets, things of that nature. They continue with the turn around effort. Joining us now in the exclusive interview is the chairman and ceo, meg whitman. First time here. Excited to be here, thank you for having me. First time i said chairman as well associated with that p zb. Yes. We wish whitworth the best. Yes. Ralph and i worked together closely, and we just decided, the board decided it made since to combine the chair and ceo role. Double responsibility, but focuses the turn around, maintains consistency of the strategy, and pat russo, you know her well. Yes. All right, to the turn around itself, almost three years in now, focused yesterday on the fact there was Revenue Growth, for the first time in three years, but it was spotty to be fair. Printing was down. As you said in the conference call, different businesses, some are still in decline, so is Revenue Growth here to stay . Yeah, it was a milestone for the company after three years, put up 1 Revenue Growth, not the aspiration, but better than declines we had. As in any turn around, theres bright spots and spots to work on. As you pointed out, pcs strong, servers strong, Industry Standard server group up 9 reversing a long term trend, traditional storage was up. We had some very good bright spots. We got work to do. Yeah. When you say work to do, what do you think about in particular . We have work to do to make sure we continue to grow our software business. Software is in the middle of a very difficult transition from traditional license model to sas, so we have a portfolio that moves from licensed to sas. That is choppy on the front line, moving to a payment over time, that changing the financial architecture. We sat here many times talking about the death of the pc, despite the fact were surrounded by them. Not the case. Right. There are those saying its a con tracting market. You said that you believe youll continue sioux see growth there. Largely results of taking market share . It is a result of taking market share. The traditional pc business is flat to declining market overtime, but theres pockets of growth. Workstations, amazingly, a pocket of growth. Convertibles all in one. We have to segment the market, go after where they is growth, and then take share. You see consolidation in the industry where they take share from the smaller players. One of the highest businesses is printing. Margins moving up there. In fact, what many anticipated, but right now, revenues are not moving up. Yeah. Theres certainly concern. Give us some sense there as to why youre confident that ink, so to speak, and toner as part of printing, are going to actually stabilize, if not start to grow again . Well, this is one of the great alltime businesses for hp, and what we see in both ink and toner is some stabilization, and we will see that going forward, and what were excited about in ink is ink is moving up into the office. You think of ink as your home printer, but ink is twice the speed of laser, same quality, and half the cost per page. So businesses are saying, wow, this is a really interesting way to cut costs. Were excited about our ink and office product. It grew nicely in the quarter. Expect ink in the office is something to rely on in terms of dropping price . Yeah, absolutely, absolutely. You know, on the laser side, listen, we have an installed base. We had not kept up with multifunction printers. We didnt have a product in ten years, but now were the leader. I think toner resolves over the next year. Hit in part because competition from japan, i think, the weak yen. Youll see more toner sales. I want to first congratulate you on Free Cash Flow. Youll return cash to shareholders, but i think you need to get into 3d printing. Stratus is real, real earnings, manufacturing, and cost 7 billion to get. Why he plays banker as well. Thats the growth story that say to people, hp is not playing defense. Its not growing at is 1 . Were not midsingle digit, but its real, why not do it . Well, so we are going to take really the enterprise side of 3d printing o koesed to the consumer side. Thats why i said stratus, not 3d systems, not that way. All ogranicly . All ogranicly. It has a lot of shared technology with actually our toner business. Makes so much sense. Were doing that ogranicly. As i side, well announce the technology, and youll see that begin to pick in for hp, but remember, we run 1 10 billion company, so even a couple hundred Million Dollars in revenue, fabulous for a startup, its hard to move the top line on a big company like ours. Is this the Israeli Technology . Yes. Very smart. You got questions on the m a first time i recall because there was release saying you have nonpublic Material Information preventing the Company Buying back stock in the last quarter, raising, okay, what were they working on, was it m a related . I dont comment on it because it was nonpublic, so if i told you, it would be public. Good point. This is a desemination. They say its okay. It is. Were safe. That never works, by the way, never get a ceo to tell me something. To jims question, you said youll consider it now, but yes. You seem to be drawing a fairly small circle around, which youre willing to do. Well, first of all, we have spent the last couple years repairing our Balance Sheet, and we have a net cash position of 4. 7 billion, which is so different when i first started talking to you, it was 12 billion dollars negative cash position. Or negative net debt. Good news is were in a position where we can comfortably do m a, but we want to be thoughtful about it and committed to our Capital Allocation strategy of returning 50 of cash to shareholders through Share Repurchase and dividends leaving us room for acquisition, but we want to be thoughtful, returns based, and do things we only cant do ogranicly. One of the core values of the company is innovation, engineering, research and development. When we unleash engineers, amazing what they can do. Well acquire, but thoughtful about it. Talking about engineering and research and development, people are led to believe, give me examples here. People seize on that, the old hp, ideas of incredible innovation. Growth, and that comes with it. So you saw our announcements in may on hp helium, our hybrid cloud built on open stack. Great reception to that. Think about the server road map, moon shot, introduced apollo in june, first water cooled server. We have a lot of innovation. All flash storage, so theres a lot of innovation. Look at ink in the office, another, you know, innovation. Our laptops, you know, some of the best laptops weve had in years. Our Software Define Networks offering in our networking group, so a lot of innovation, and the good news is, youll start so see it hit the market at a much more rapid pace than before, and thats what growth is built upon. I know you cannot be happy with Enterprise Services 6 decline, why is that . Good sales people, good equipment, thats happening in the line item . People do not know were the number two Services Business in the world behind ibm, and that business had a couple big accounts that ran off as i got to the company, actually. We talked about them, general motors, bank of america. Those are still running off. We are signing new logos, but its hard to sign logos fast enough to account for the run you have. Good news is its almost complete now, so now we start from a stable baseline, which we ought to be able to grow from. Are you worried about a trojan horse relationship between ibm, number one, and apple, where you dip in the iphone6, and then you go to the it department saying, listen, i dont want my hewlettpackard, i want apple, a beautiful mac. You have to be worried that a trojan horse against your company, not just samsung. Yeah, so, listen, we watch with great interest, obviousldy and thats their nay senior thing. We got to be in thosing thes. We got to sell the value of hewlett pack ard, and its easier to manage devices on a stack with one easy vendor. We have a plan there. One of the great things in the Technology Business is its amazingly competitive. You see it here at the desk. What happened in three years happens now in three months. Look at the cloud. If you thought the cloud would be as important as it was even three years ago, no one would have said that was the case. Tonight on mad money yeah. The bigger picture, meg, people watch the turn around as we have, thanks for the willingness to come on with us, update us, cost discipline in the company, seeing growth in areas we might not have anticipated. A goto Market Strategy many say is greatly improved, 50,000 employees will have left the company by end of this year or next year . End of next year. But when do you transition, if you do at all to sort of a solid growth trajectory . That is another major milestone for the company. We have to get the basics right and strategy of the company well articulated. We have to capture heards and mind of hp people who have been through a rough spot, and if you dont have your people with you, you have no hope. Your people show up to the customer every day. Id say the basics are now in place. We made a lot of investments in automation in systems to be more efficient, and now we have to turn to consistent, profitable growth across all of our businesses. Now, theres always going to be issues in a company our scale, always a problem somewhere, but we have to be more consistently delivering profitable growth in the businesses, and thats the objective over two years of the fiveyear turn around. There was a thought when you began, certainly, i think, among some even amongst your board, perhaps, that if this does not work, the breakup plan is to separate businesses, separate the company and allow each of the divisions to go on their own. Yeah. Do you still think of that as a possibility . Well, our objective is to execute the turn around strategy laid out three years ago, and were working forhearted on that. As i said before, we have to prove that thesis, but we do believe with that providing an endtoend solution for our customers is a very important valuable proposition. So, again, we have to prove the thesis, and we feel good about the turn around. Pull the lens back and say, were about where i thought i would be here. You are, really are . Sometimes a little bit better, sometimes worse, but about where we thought wed be heading into the fourth year. Three years went by in the fiveyear turn around. With ink, you get a read on the economy worldwide. Yes. You shared with us in the past. Worried about europe now, are you worry about europe . What are you seeing in trends around the kbloglobe . Yeah, we had a good year in europe overall in the enterprise business. They go up and down rapidly. A small thing happens in, you know, portugal or greece, and, of course, you get russia and the ukraine. Our overall performance in europe was very good. Russia was tough, and, of course, russia affects all of europe, so id say europe is next. The United States, to me, feels like its getting betser, and you know i said for many quarters, boy, i dont see the improvement, but it feels better to me, spending picking up, confidence to invest in it and future of your small, immediame big business. Asia is doing well for us. We had a good quarter unlike our competitors, china was good to us. Commercial pcs did well, printing did well in china, service was up double digits there. A good quarter in china. Autonomy, two years since we sat here and talked about and you didnt use the words fraud , but i did. We have not seen anything. Was that not what you said it was . Autonomy, the wheels of justice says turn slowly, and we appropriately urn itted the investigation over to the department 6 justice, Serious Fraud