Employment report. The bailout trail back in court. Bernanke, paulson, geithner expected to take the stand this week. A live report from washington. And bitcoin loses a fifth of its value over the weekend. Well explain why and what it can mean now for future of a controversial crypto currency. First up, shares of hewlettpackard jumping in the premarket. Confirming the company will split itself into two publicly traded companies. Services businesses take the name hewlettpackard enterprise. Davids going to have a live interview with hps chairman and Ceo Meg Whitman in moments from now. Well find out when this all began and why they couldnt have done this a few years ago. A lot more detail. You know, carl, for broader takeaways here, it is interesting focus on of course following announcement from ebay last week, and you know connection between these two companies, john donohoe taken over from meg whitman as ceo at ebay. And also in the interview i did with him last week, citing so many of the same reasons that meg whitman cited to me when we were able to speak late last night about this perspective split, namely agility, increasing speed of the marketplace in terms of responding to needs of customers. One has to wonder with ebay, with hp, a much more significant split, creating two fortune 50 companies, whether going to see other companies perhaps consider it as well. This whole idea of creating more agility, creating more focus, so many things that you hear will that translate into other companies that also feel now is the time . Activism, i think that it plays a role on both sides here. Ebay we had an activist, carl icahn, beaten the first time but might have been another activist, perhaps at ebay. Here the activist was chairman of board until not long ago until he had to resign due to health reasons. The shadow of activism is casting a long oning activism is casting a long shadow, i should say, over boards who have perhaps are feeling more pressure to act, more quickly than they might otherwise. Does it drive growth . Thats the big question. Ibm shedding its business. Does that increase focus drive growth or a way to ramp up more m a for each of them . For instance, people looking to emc. I dont i dont know. I mean i guess we will see whether in fact growth comes from these decisions. Lets get to it joining me if an exclus interview, hewlettpackards chairman and ceo, meg whitman. Always good to have you. I know its been a few long nights for you. Meg, weve talked many times, in fact, every quarter, sense you took over as ceo, happily, we have spoken. Yeah. You have talked about one hp often and you have talked about the power of the combined forces at hewlettpackard. And now, of course, talking about the combined power of having separated them. And so im left to wonder, as others are, admission in some way your turnaround has not succeeded . Actually, quite the opposite. Today is only possible because the turnaround has succeeded. Think about what we have accomplished over the last three years, a rebuilt balance sheet, an innovation pipeline that is significantly improved over three years ago. I would argue best in class in the industry now. Inspired workforce, new leadership team, renewed confidence of partners, customers, shareholders as well. But we have to gather ourselves as one hp. But now were in the position to take advantage of whats going on in the marketplace and position these two companies for growth. They go after quite different Market Segments and we now have the opportunity to align rewards and results, to respond to customer needs faster with these two big companies. Were excited about this. I think its going to be better, offering for customers and partners, Career Opportunities for employees, and we believe it will create real shareholder value. No stranger, of course, to those who followed the company closely, as a possibility. Yet you chose not to do it when you took observe, to do it the year after, the year after that. Why now . First we had a lot of work to do to get hp in fighting shape. A tremendous amount of repair work, gathering ourselves to be able to compete in the new world order. And now, the time is right as we think about what is the next phase of this turnaround . Were in year three of a fiveyear turnaround. Your call that fy15 was an accelerant year, we think the best tactic to continue the turnaround journey and position hp in into great new companies that are real scale and have a chance to make a difference on a go forward basis. Before a few months ago we were not in the right position to do this. This is a very big undertaking for a company of any size and scale. We now have the leadership to go to market, the innovation engine, the balance sheet, and the confidence of our various constituencies that allows us do this. So, it is the right time now. And it wasnt when i first got here. I dont even think it was a couple of years ago. Well, you know its funny, it may not have been as little as six weeks ago, you and i were sitting on this very set, talking about your most recent reported earnings. And i asked you, you know, what about the idea amongst your board, perhaps, that if the turnaround doesnt work, will you consider splitting the company . Here was your answer. Our objectives to execute the turnaround strategy that we laid out three years ago and were working very hard on that. But as ive said to you before we obviously have to prove that thesis. But we believe providing end to end solution for customers is a very important Value Proposition. So, again, weve got to prove thesis but feel good where we are in the turnaround. So, meg, did you no longer prove the thesis that providing an end to end solution for customers is a very important Value Proposition . Listen, we think this is the best alternative for our customers and shareholders. The market has changed dramatically in terms of speed, and were in a position now where we can pursue the turnaround to hewlettpackard, by the way the brand remains on both companies in one form or another, and were in a better position to get focus companies who can respond more quickly. Think about this for a second. The competitors for printing and personal systems business are almost entirely different than the competitors that we face in our enterprise group, our Enterprise Services business, and our software business. So more focus, more agility, tying rewards to results. We think is going to make a big difference and propel us on the next level of the journey on our turnaround. Were so pleased with where we are today because, as i said, if we had not done the hard work, if we hadnt executed the turnaround as one hp, we wouldnt be in a position to take advantage of the next opportunity. You know, meg, id like to explore this idea of the speed of the marketplace because it is something i heard from john donna hand, the man who replaced you as ceo at ebay, last week in articulating the reasons to split paypal and the marketplace business at your old company. What does that mean when you and he both refer to the speed of the marketplace increasing . Give our viewers some sense to what youre talking about in the real world. Yeah. So every 10 to 15 years in our industry there are big, enormous tectonic plate changes where things speed up, profit pools are in play, new competitors emerge. You can go all the way back from the mainframe to the Client Server environment, Client Server to web 1. Oh i had a front seat at revolution i saw the speed happen. From web 1. 0 to web services, and mobility, were on the cusp of another enormous change. Everything about how compute is being bought, paid for, sold, applications are written from, you know, a licensed model to a sass model, how employees and customers interact with technology. And you can just see the pace of change. And theres technology that is enabling that change that wasnt available four, five years ago. Whether that is cloud or the ability to take huge data sets and gain insight. So we have to take advantage of those changes. And if youre not careful, youll be disrupted and youve got to stay on your toes and be able to respond much more rapidly when the industry is in a more normal state. And thats, by the way, great thing being in technology. But youve got to be set up to go grab those opportunities and make sure youre on your front foot. Right. To be fair, though, you may say these two companies will be more agile, but theyre enormous, talking about enormous employee bases and 57 billion in revenues on one side, 58 billion on the other. Are they still too big to be able to response to the Market Opportunity . No, theyre not too big. The good news is they still have scale, distribution scale, purchasing scale, go to market scale, but they are now more focused, first, hp, hewlettpackard enterprise will be completely now focused on the enterprise space. Really on the strategy around new technology for enterprise, while the printing and personal systems business will be some consumer business as well as the enterprise business, but in the device and printing area which has different characteristics. By the way, both companies have incredible innovation road maps and he i think theyll be able to pursue road maps better than we are currently configured. And you have to remember, continuity of leadership is an important thing here. Ill still be the ceo of hewlettpackard enterprise, and i will be the nonexecutive chairman of the board of hp ink. Ill make sure where there are insert gis that we can take advantage of, whether supply chain other things well take advantage of that, but where the companies are better served to go 100 miles an hour against respective markets theyll be able to do that as well. Meg, youve talked about fiscal year 15 as being year after acceleration in the plan you put in place three plus years ago, a fiveyear plan. In your Earnings Call this morning, and associated materials, youve indicated its going to be a flat revenue year in fiscal 15 versus fiscal 14, Constant Currency headwinds but flat. Was that a reason that youre not photog see that acceleration that you are now pulling a lever of the splitup . No, it wasnt. Yeah, we said that 2015 wed flat in Constant Currency without Enterprise Services the company would grow. The Revenue Growth was not at issue here. Really it was, whats the best way to set businesses up to compete for the long term . How do they become more focused competitors with a customer focus that is unique to the markets in which they serve . So, we actually have a positive outlook for 2015, and we, you know, think these companies can grow and beyond 2015, into 2016, 2017. So the revenue flat revenue 2015 was not part of the equation. It was not. So it wasnt as though no. Were not going to hit the original goals i set out years ago, therefore weve got to do Something Else . No, no. This we undertake a Strategic Review of the Company Every year with the board of directors and we had seen the market change, we had seen how much stronger we are, how much stronger the company is, how our go to market capabilities have improved, innovation engine and felt like this was the right time to take advantage of setting up, too, as you said, Scale Companies but more focussed and more nimble. Meg, separately, but along with todays announcement, you updated us on your restructuring efforts, which began in 2012. Under that plan originally 36,000 targeted layoffs, you moved to 45 to 50. Now today youre at 55, another 5,000 potential layoffs at hewlettpackard. Is there going to be more from here . I would think particularly when you have you leading one company and another leader of the other company focusing on those employment ranks, is there even more layoffs to come beyond this additional 5,000 for hp . Well, pleat give you the context of the reshaping of the workforce at hp. As you recall, what weve done over the last three years is we have invested in i. T. Systems, redesigned processes, we have changed our goto market, we have focused our r d while we have at same time r d spending increased. We are seeing results of the i. T. Investments in that business process reengineering and even more opportunity for efficiency. And efficiency is another watch word for companies today. We live in a very competitive market. We have to have the leanest, most Effective Organization that we can have. So when we see opportunities, we obviously need to take advantage of them. And it makes us stronger and a more competitive company. So, we, i think for 2015 in terms of this restructuring we are done. When you split companies apart, often there is again realignment of the workforce, but well see how it goes. Well know or. Were going to take each business now and say, knowing what we know now, whats the cost vuk tstructure, how to go market, how to leverage the supply complain between the two, and making sure that we set these two companies up to win. Its one of those great opportunities that you have to really say, whats the right cost structure, right focus for these two companies as they go off to win in their own markets. Well, sounds to me, from that answer that conceivably there are going to be more job cuts to come for the companies. We have to organization the companies to win in the market. Were more efficient than we were three years ago, as you can see, but we have to set companies up to win, that is our mission. You were asked on the call about dissynergies. So the question is, what about any dissynergies now as a result of agreements between two sides of the businesses . And, as you say, goto market power of bringing a fuller portfolio of products to your customers . Do you lose any business . So heres the thesis on d dissynergies, recall back in 2011, we were spinning off potentially, it wasnt even a definitive, the company was potentially spinning off pcs, and the biggest dissynergy was the brand because printing was staying with remaining company and pcs going off on its own, there needed to be a new brand for pcs. Its costly to build a new brand. This time we are separating our printing and personal systems business, which is where all of our consumer facing businesses are, they will be hp ink with the blue logo, so they will not have to build a new brand. On the enterprise side, hewlettpackard enterprise. We take advantage of the hewlettpackard brand there. So the good news is, thats one big dissynergy we wont see. Supply chain was another d dissynergy, not as big as the brand, but well mitigate that potential by having a supply chain agreement between these two new companies. Revenue dissynergies, there may be some because we did get some benefit from going with a full portfolio, but we think thats really manageable. I. T. Has to be split, that will be a onetime cost. But this will give both companies the chance to have a clean sheet i. T. Organization that is uniquely suited for their business. So, there will be some d dissynergies, but lie tell you the teams are committed to working off the dissynergies as past as humanly possible. Its a different situation than it was august 2011. Meg, youre going with the hewlettpackard enterprises company, as its ceo. A, why did you choose hewlettpackard enterprises and, b, why not go with a name perhaps thats different on that side . I get hp inc, keep the branding but a different set of customers . Why did you choose that side to go with ceo and are you going to stick with the name . Yeah we love that name. Hewlettpackard enterprises and hp inc both have the strength of the Iconic Company that everybody recognizes worldwide, Everybody Loves hp, our customers from the beginning have said we want hewlettpackard to win. So i think that was the right decision. And i decided to, with the support of the board, go to hewlettpackard enterprises because i have a passion for the enterprise. I have a passion for the new things that are happening in cloud, the data, security, mobility, and converged infrastructure. We also had a fantastic executive who has deep domain expertise in the personal systems business and printing business over the last couple of years, deon weissler. Where are my skills best suited . Where is the breadth of the talent and the board and the Management Team felt like this was the right answer. And, again, yes, i am going with hewlettpackard enterprises but also, as you know, being i will be nonexecutive chairman of hp inc, ill make sure that that cups off to a good start as well. Finally, you have been in the job over three years, as ive said. Youve talked to me oftentimes on air about the complexity of the organization. You know, is this a conclusion, then, based on your decision to split the company and the boards that hp was simply too big and complex to effectively manage . Well i wouldnt say it that way exactly. What i would say is these two entities are better suited to compete in very rapidly changing markets with two quite different customer bases, even within the enterprise, and and we will be two simpler companies by reducing scale. But i think the major thing is we are strong now because of our turnaround efforts, were in a position to undertake this, and by the way, its an enormous undertaking in a way that i know we wont miss a beat with customers and that we will make sure that we do this in a really planned and thoughtful way. And i think weve set up two companies that can win in the future in their markets and thats very exciting. Meg whitman, as always, very much appreciate your willingness to come on and talk. Meg whitman, chairman and ceo, least for now, and for probably another year or so of hewlettpackard. Meg, thank you. Thanks a lot, david. Gra great to see you. Carl . All right. Fascinating interview. A lot of people commenting, no matter what you think of her strategic or tactical views, yeartodate of 25 , two years up 258 . You cant argue with what shes done with the share price. No. I mean, to the extent that she discusses putting hewlettpackard on the right foot to then pursue this split, youd have to argues that has been reflected in the stock market. A company that had a great deal of debt and little cash flow, for example, and now generating a lot of Free Cash Flow. I can give you the numbers. Numbers are significant, Free Cash Flow yield, attractive, many would say. That goes to the Financial Health of the company and the firm footing shes been abl