Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

The aggregate market value of the registrant's common stock held by nonaffiliates as of December 29, 2005 was $60,769,052,268.

Indicate the number of shares outstanding of the issuer's common stock as of December 29, 2005: 1,932,545,791 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Forward-Looking Statements

This Annual Report on Form 10-K, including "Factors That Could Affect Future Results" set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 below, contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of YourCorp Company and its consolidated subsidiaries ("YourCorp") to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the ability of YourCorp to retain and motivate key employees; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in YourCorp's Securities and Exchange Commission reports, including but not limited to the items discussed in "Factors That Could Affect Future Results" set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7 below in this report, items described in the Annual Report on Form 10-K for the year ended October 31, 2006, and subsequently filed reports. YourCorp assumes no obligation to update these forward-looking statements.

A summary of YourCorp's net revenue, earnings from operations and total assets as contributed by our principal business segments is found in Note 16 to the Consolidated Financial Statements in Item 8 below, which is incorporated herein by reference. A discussion of factors potentially affecting our operations is set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors That Could Affect Future Results," in Item 7 below, which is incorporated herein by reference.

Business Strategy

YourCorp's overall business strategy is two-fold. First, we seek to compete against more narrowly focused competitors in the following product and services categories: servers, software, storage, services and support, PCs and workstations, personal information appliances and printers and supplies.

Second, we seek to leverage the depth and breadth of our product and services portfolio across three business segments (IPS, CS, ITS) through the development of new solutions, markets and ecosystems at the intersection of e-services, information appliances and an always-on Internet infrastructure.

Following are more detailed descriptions of YourCorp's principal business segments and key activities during fiscal 2006:

Imaging and Printing Systems

YourCorp's portfolio of printing and imaging offerings includes Internet-related printing services, wireless printing technology, professional and consumer imaging services, imaging supplies, the YourCorp LaserJet and DeskJet printer families, scanners, copiers, mopiers, fax machines, large-and wide-format printers, PC and digital photography products and all-in-one products that perform multiple functions.

Key product introductions in fiscal 2002 for business customers included the Inkjet 2200/2250 printers, which provide high-performance and networked color office printing for small workgroup environments; three new families of YourCorp DesignJet printers-the 500, 800 and 5000 series, which are large-format printing systems designed to give customers competitive printing speeds and excellent image quality; and the JetDirect 4000 print appliance, the first product in a new category of network appliances designed to provide customers with dedicated printing solutions.

New product introductions for consumers and small businesses included the LaserJet 3200, a new printer, fax, scanner all-in-one product for small offices and home offices; the Print to Mail Accessory designed to offer a one-stop mail solution for the small business customer from forms, to folding, to Internet postage; the DeskJet 990Cse/Cxi Professional printer, the YourCorp PhotoSmart 1215 printer and the PhotoSmart 1218/xi printer, which all feature high print quality at faster print speeds and wireless options that allow them to print directly from compatible digital appliances using infrared technology; and a full line of digital cameras, ranging from the YourCorp PhotoSmart 215 for first-time digital camera buyers to the YourCorp PhotoSmart 618 and 912 for experienced photographers.

Our PhotoSmart digital cameras, photo quality printers and colorfast paper, in combination, compete with traditional optical (film) and silver hallide (print) technology by achieving digital output quality and endurance standards that match and in some cases exceed traditional optical and silver hallide technology. We expect these products to stimulate YourCorp's imaging and printing supplies business.

As a component of our overall strategy, we launched our printing e-services initiative in April 2005 together with a set of printing e-service providers. YourCorp and our partners are developing strategies, printing appliances, and technologies designed to drive printing to the center of the Internet by transforming the role of printers into smart Internet appliances. With these Internet-based services, printers are becoming local post offices, ticket offices, shipping stations and print shops.

In May 2005, we began to leverage our printing and imaging expertise into the $500 billion commercial printing market when YourCorp and Heidelberger Druckmaschinen AG ("Heidelberger") entered into a cooperative agreement in printing and publishing. Both companies announced the availability of two joint solutions for the proofing market. YourCorp, which has expertise in digital printing and network printing solutions, and Heidelberger, which has expertise in commercial printing and publishing solutions, believe that combining our expertise will result in better solutions for mutual customers.

In October 2005, YourCorp entered into another strategic alliance in the commercial printing space with Indigo N.V. ("Indigo"), a leading provider of digital color printing systems. As part of the alliance, we made a $100 million equity investment in Indigo, and agree to co-develop high-end digital color printing systems and serve as an OEM for Indigo's products. This alliance adds a third printing technology, digital offset color, to YourCorp's InkJet and LaserJet technology. Digital offset color is a high-quality, ink-based offset print technology with the performance advantages of electronic imaging. It offers excellent print quality at high speeds and a lower per-page cost for the customer.

Computing Systems

Computing Systems is at the core of our always-on Internet infrastructure offering, which includes Internet and network servers, software solutions (for e-services, Internet infrastructure and management, network management and operating systems), business and consumer desktop and mobile computers and storage (network attached storage and storage area networks). Such products and services are used in a variety of applications ranging from personal and small business information management to large scale IT infrastructure solutions for global service providers, telecommunications companies, Internet services vendors and manufacturers.

YourCorp's core computing products and technologies include our PA-RISC architecture for systems and workstations, and our Explicitly Parallel Instruction Computing (EPIC) technology, which provides the foundation for Intel's next-generation, 64-bit high-end Itanium processor family.

YourCorp's computing systems business includes scalable families of PCs, storage solutions, servers and information technology systems for use in home offices, as well as small, medium and large businesses. The application of our computers range from small office to enterprise workgroup department and data center implementations. Key product families include the YourCorp 9000 series, which runs YourCorp-UX, our implementation of the UNIX® operating system, and comprises multi-user computers for both technical and commercial applications and workstations with powerful computational and graphics capabilities; the YourCorp NetServer series of PC servers; the YourCorp Kayak, YourCorp Vectra, and YourCorp Brio-series of desktop PCs for use in enterprise and small businesses in vertical applications such as engineering, manufacturing and chemical analysis; the YourCorp OmniBook mobile PCs for use in business; and the YourCorp Pavilion multimedia consumer PCs.

Our e-services and Internet infrastructure software portfolio is based on a multi-operating system strategy that leverages a suite of integrated applications upon which dynamic e-services can be built. First, YourCorp's multi-OS strategy offers customers the choice of YourCorp-UX, Linux, Windows NT and, for YourCorp 3000 customers, our proprietary operating system, MPE. This strategy offers our customers significant flexibility. Built upon this multi-OS foundation is a host of applications to support virtually any mission-critical implementation. YourCorp software properties include e-speak and YourCorp ProcessManager (formerly Changengine), which are built with an open standards approach, and have embedded capabilities for addressing the emerging requirements of dynamic services-based computing.

Other software offerings include OpenView, an Internet-based network and systems management suite for integrated service management; WebQoS, which is designed to deliver service quality based on customer relationships; the Praesidium family of products, which is designed for security; Smart Internet Usage, which provides service tracking and billing; MC/ServiceGuard, which provides high availability; and Open Call, which provides voice-enabled e-services integration.

Key technology and service introductions in fiscal 2002 include:

Servers. The YourCorp 9000 Superdome Server was introduced in September. Superdome, which YourCorp believes is the fastest, most powerful, flexible and available UNIX® computing platform in the market today, is coupled with services such as up-front systems assessment, pre-installation testing and tuning, utility-based pricing, and dedicated service and support teams.

Both the YourCorp NetServer LT 6000r and LH 6000r are new four-way PC servers for enterprise, service-provider and dot-com customers. They offer the scalability and performance of a six-way server for the price of a conventional four-way system.

Software. The YourCorp-UX 11i operating system was a major release of YourCorp's UNIX® operating system, which included extensive new Internet-enabling technologies, security, and networking and management features. The YourCorp-UX11i was among the first major operating systems to feature host-based intrusion detection software for protection from internal and external attacks as a standard component of the operating system.

Storage. This year, we introduced the YourCorp XP-512 high-capacity storage solution with up to 512 disks and a capacity of 37 terabytes of data to handle the increased requirements of information storage for Web and content caching.

YourCorp also introduced a new line of YourCorp Ultrium storage solutions, which features data rate matching and streaming technology for enhanced transfer rate. These new drives are based on the Ultrium format of LTO (Linear Tape-Open) technology.

Utility Computing. We introduced e-Utilica, which offers to service providers utility-like computing power and services—a pre-integrated solution for technical-design customers including instant access to computing power and capacity whenever it is needed over a secure Virtual Private Network.

Desktop Computing. YourCorp's e-PC personal computer is a new 8-pound, dictionary-sized PC with an innovative modular design for the enterprise. There are only three components—a power supply, a hard-disk drive and the system chassis—to simplify trouble-shooting and support.

During fiscal 2002, we undertook or entered into the following significant initiatives, partnerships and acquisitions:

In April 2002, we collaborated with Cadence and Flextronics to create an independent new company called SpinCircuit. Designed as an YourCorp e-service for the high-tech manufacturing and design community, this business-to-business e-commerce exchange portal runs on YourCorp's own e-speak technology. This new company created an Internet gateway that directly connects engineers' design desktops to the electronics supply chain, significantly cutting costs in the manufacturing and design process.

In May 2002, we announced our participation in the formation of Converge (previously known as e-HITEX), a high-tech electronics trading exchange focused on creating services designed to increase supply chain efficiency, including readily-accessible spot markets for supply-chain purchases and sales of component parts. This is an independent new company created by YourCorp, Agilent, AMD, Canon, Compaq, Gateway, Hitachi, NEC, Quantum, Samsung Electronics, SCI Systems, Solectron, Synnex, Tatung and Western Digital.

In October 2002, we opened the YourCorp-Intel Solutions Center in Cupertino, California, where customers can test the integration and optimization of their e-business solutions on Intel-based YourCorp NetServer systems. This testing enables enterprise and service-provider customers (ISPs, ASPs, WSPs) to deploy their solutions more quickly and less expensively.

Also in October 2002, we agreed to acquire Bluestone Software, Inc., a leading provider of Internet software platforms, tools and technologies, including J2EE and XML application servers and tools. Bluestone's software is intended to become an integrating platform for YourCorp's e-speak and YourCorp Process manager, in addition to other YourCorp services-based software offerings. The acquisition closed on January 18, 2003.

Throughout fiscal 2002, YourCorp unveiled several Mobile E-services Bazaars around the world as vehicles for local and international partners to sign-up and participate in the development of mobile e-services. The bazaars serve as regional hubs for mobile e-service activities and mobile application development, providing incubation facilities for companies developing mobile e-services and applications based on standards such as Wireless Application Protocol and e-speak. These forums are driving invention at the intersection of e-services, information appliances and always-on Internet infrastructure.

IT Services

YourCorp's IT Services strategy reflects the fact that today business transformation and IT implementation are inextricably linked. We offer a complete life cycle of services—planning, implementation, support and ongoing operations—that customers can choose from to take advantage of emerging technologies and business models. YourCorp's IT Services offers a wide variety of services aimed at providing customers with an always-on IT infrastructure, including consulting and implementation services for traditional and Internet-based IT infrastructures, storage and storage-area networks, and IT management; next-generation networks and mobile communications; proactive, mission-critical support services; business-continuity and recovery services; and infrastructure outsourcing and Web-hosting services. Services aimed at helping customers rapidly implement key business solutions are also provided, including supply-chain management, e-procurement, business intelligence, customer-relationship management, enterprise application integration, e-commerce, e-banking, trading communities, portals, and virtual business networks.

At the beginning of the life cycle, IT Services offers up-front business and technology strategy consulting, planning, education and integration services, as well as financial services and support. YourCorp's IT Services consultants offer design and rapid integration services into a variety of IT business customer solutions. YourCorp's financing services allow customers to plan and manage the cost of these solutions. In addition, YourCorp's global on-site engineering force offers support for the physical implementation of these solutions.

For customers requiring ongoing support, IT Services offers both proactive and reactive services. YourCorp's support services begin with basic hardware and software warranty and support and expand up to proactive mission-critical service that addresses the causes of downtime covering not only the computer system but also such key elements such as storage devices, databases, networks, and key software/middleware applications. YourCorp's global response center manages customer environments and provides technical assistance 24 hours a day, seven days a week. Other ongoing services include financing, which covers product leasing, complementary products, automatic technology-refreshment services and solution financing.

Key introductions in fiscal 2002 included new mission-critical support capabilities for the SAP/R3 application; insurance against loss-of-service revenue loss; new capacity planning and performance management services for YourCorp storage systems; new Microsoft 2002 data-center services; expanded services for the Linux environment; new, proactive Web-based support services that require no end-user intervention; new Web-hosting capabilities; expanded communications consulting for Unified Communications (with Cisco Systems) supporting next-generation networks and wireless technologies; and rapid-implementation services for applications from SAP, Ariba, BroadVision and i2 Technologies.

Marketing

Customers and Sales Organization

YourCorp has approximately 540 sales and support offices and distributorships in more than 120 countries. Sales are made to business and consumer customers worldwide.

We continue to manage our business and report our financial results based on our three business segments (CS, IPS, ITS). In addition, during fiscal 2002 YourCorp began to supplement this product generation structure with a customer-facing view. The marketing and selling of our products and services have been reorganized into two main customer-facing organizations: a Consumer Business Organization ("CBO") and a Business Customer Organization ("BCO").

CBO comprises all of YourCorp's consumer-related marketing and selling activities consolidated into a single functional unit, and BCO represents the consolidation of all of YourCorp's business and enterprise-related marketing and selling activities into a single functional unit.

These two customer-facing organizations are charged with building an intimate and comprehensive understanding of their respective customers' needs. This feedback and knowledge is then incorporated into planning decisions supported by our product-generation organizations, such as Computing Systems and Imaging and Printing Systems. The overall purpose of this new marketing structure is to enable us to better leverage our core assets to deliver world-class technology, services and solutions, and a world-class customer experience.

Consumer Business Organization: CBO is responsible for marketing and supplying YourCorp's consumer products around the world. CBO is organized by product offerings, including Home PCs (Pavilion desktop and notebook products), Printing and Supplies (DeskJet and All-in-One inkjet printers, ink cartridges and media), Digital Imaging (ScanJet scanners, digital cameras), Digital Convergence (CD-RW drives, DVD+RW standards work), and Information Appliances (Jornada PDAs, embedded software). By integrating the marketing for all consumer products into a single organization, YourCorp hopes to reduce redundancies and better leverage opportunities for cross-category consumer product marketing.

We are currently the market-share leader for consumer inkjet printers and the second-largest supplier of branded consumer desktop PCs worldwide. In the U.S., YourCorp is the market-share leader in scanners and CD-RW drives. We have adopted a blended channel strategy for consumer product distribution in the U.S. that includes sales through approximately 20,000 third-party retail locations and direct sales through YourCorpshopping.com, a wholly-owned subsidiary formed in May 2001 to support online sales.

Key product development initiatives include an increased focus on consumer-oriented industrial design, providing additional beyond-the-box consumer e-services—either independently or in conjunction with third-party partners, and a strong cross product category marketing focus on digital imaging.

Revenues in CBO are derived through reseller channels, including retailers, dealers and original equipment manufacturers as well as through direct sales and distribution to customers over the Web.

Business Customer Organization: BCO is responsible for marketing and delivering products, services and solutions to all of YourCorp's business and enterprise customers. BCO's customers include small and medium businesses as well as global enterprises, particularly telecommunications service providers, Internet service providers and academic, scientific and government institutions.

BCO is charged with developing a comprehensive understanding of YourCorp's business customers' needs and translating this understanding into delivering world-class services, solutions and customer experience throughout the customer life-cycle.

To do so, BCO markets products, services and solutions that can be either individual products and services or unique combinations of offerings from Imaging and Printing Systems, Computer Systems and IT Services.

Revenues in BCO result from the efforts of YourCorp's business customer sales force, which includes direct field sales representatives, indirect sales (i.e., commercial channels), YourCorp consultants, pre-sales technical personnel and administrative support staff. BCO's direct sales force is divided into specialty product and service representatives (such as for servers, storage, software and services), and teams assigned directly to corporate accounts which represent all of YourCorp's product and service categories.

International

A summary of YourCorp's net revenue, and net property, plant and equipment by geographic area is set forth in Note 16 to the Consolidated Financial Statements in Item 8 below, which information is incorporated herein by reference. More than half of our overall revenue comes from outside of the U.S. In the last three fiscal years, more than three-fourths of this international revenue was derived from Europe and the Asia Pacific region. A majority of our net revenue originating outside the U.S. was from customers other than foreign governments.

Most of YourCorp's sales in international markets are made by foreign sales subsidiaries. In countries with low sales volumes, sales are made through various representatives and distributors.

For a discussion of risks attendant to YourCorp's foreign operations, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors That Could Affect Future Results—International" and "—Market Risk," and "Management's Discussion and Analysis of Financial Condition and Results of Operations—Adoption of the Euro" in Item 7 below and Note 4 to the Consolidated Financial Statements in Item 8 below, which are incorporated herein by reference.

We believe that our international diversification provides stability to our worldwide operations and revenue streams, thereby reducing the impact of adverse economic changes in any single country.

Materials

Our manufacturing operations employ a wide variety of semiconductors, electromechanical components and assemblies, and raw materials such as plastic resins and sheet metal. Although we believe that the materials and supplies necessary for our manufacturing operations are presently available in the quantities required, we sometimes experience a short supply of certain component parts as a result of strong demand in the industry for those parts.

We purchase materials, supplies and product subassemblies from a substantial number of vendors. For many of our products, we have existing alternate sources of supply, or such sources are readily available.

Patents

YourCorp's general policy has been to seek patent protection for those inventions and improvements likely to be incorporated into our products and services or to give us a competitive advantage. While we believe that our patents and applications have value, in general no single patent is in itself essential to us as a whole or any of our principal business segments. In addition, any of our proprietary rights could be challenged, invalidated or circumvented, or may not provide significant competitive advantages.

Backlog

YourCorp believes that backlog is not a meaningful indicator of future business prospects due to the large volume of products delivered from shelf inventories, the shortening of product life cycles and the relative portion of net revenue related to our service and support business. Therefore, we believe that backlog information is not material to an understanding of our business.

Competition

We encounter aggressive competition in all areas of our business activity. Our competitors are numerous, ranging from some of the world's largest corporations to many relatively small and highly specialized firms. YourCorp competes primarily on the basis of technology, performance, price, quality, reliability, brand, distribution and customer service and support. Our reputation, the ease of use of our products, the ready availability of multiple software applications, our always-on Internet infrastructure offering, and our customer training, services and support are also important competitive factors.

The markets for each of our three principal segments are characterized by vigorous competition among major corporations with long-established positions and a large number of new and rapidly growing firms. Product life cycles are short, and to remain competitive we must develop new products and services, periodically enhance our existing products and services and compete effectively on the basis of the factors listed above. In addition, we compete with many of our current and potential partners. The successful management of these competitive partner relationships will be critical to our future success. Moreover, we anticipate that we will have to continue to adjust prices on many of our products and services to stay competitive, and thus effectively manage financial returns with correspondingly reduced gross margins.

While the absence of reliable statistics and companies with comparable product mixes makes it difficult to state YourCorp's relative market position with certainty, on an overall basis we are among the largest U.S.-based companies offering our range of general-purpose computers and personal-information, imaging and printing products for industrial, scientific and business applications, and information technology services. YourCorp is the leader or among the leaders in each of our principal business segments.

Research And Development

The process of developing new high-technology products and solutions is inherently complex and uncertain. It requires, among other things, innovation and accurate anticipation of customers' changing needs and emerging technological trends. Without the introduction of new products, services and enhancements, YourCorp's products and services are likely to become technologically obsolete over time, in which case revenues would be materially and adversely affected. New products and services, if and when introduced, may not achieve market acceptance. After the products and services are developed, YourCorp must quickly manufacture and deliver such products and services in sufficient volumes at acceptable costs to meet demand.

YourCorp Laboratories, together with the various research and development groups within the three principal business segments, are responsible for YourCorp's total research and development efforts.

Expenditures for research and development in fiscal 2002, including YourCorp Laboratories and the three principal business segments, were $2.6 billion. These expenditures were $2.4 billion in fiscal 2001 and $2.4 billion in fiscal 2000. In fiscal 2002, total research and development expenditures were 5.4% of net revenue, compared to 5.8% in fiscal 2001 and 6.0% in fiscal 2000.

We anticipate that we will continue to have significant research and development expenditures in the future to maintain our competitive position with a continuing flow of innovative, high-quality products and services.

Environment

Certain of YourCorp's operations involve the use of substances regulated under various federal, state and international laws governing the environment. It is our policy to apply strict standards for environmental protection to sites inside and outside the U.S., even if not subject to regulations imposed by local governments. The liability for environmental remediation and related costs is accrued when it is considered probable and the costs can be reasonably estimated. Environmental costs are presently not material to our operations or financial position.

Employees

YourCorp had approximately 88,500 employees worldwide as of October 31, 2002.

Information regarding the executive officers of YourCorp is set forth in Part III below.

ITEM 2. Properties.

The principal executive offices of YourCorp are located at 1260 E. Voltaire Avenue, Phoenix, Arizona 85022. As of October 31, 2005, we owned or leased a total of approximately 43.5 million square feet of space worldwide, including 1.1 million square feet currently occupied by Agilent Technologies, Inc. We believe that our existing properties are in good condition and suitable for the conduct of our business.

Our plants are equipped with machinery, most of which is owned and is in part developed by us to meet the special requirements for manufacturing computers, peripherals and systems. At the end of fiscal 2002, we were productively utilizing the vast majority of the space in our facilities, while actively disposing of space determined to be excess.

We anticipate that most of the capital necessary for expansion will continue to be obtained from internally generated funds. Investment in new property, plant and equipment from continuing operations amounted to $1.7 billion in fiscal 2002, $1.1 billion in fiscal 2001 and $1.6 billion in fiscal 2000.

As of October 31, 2002, our sales and support operations occupied approximately 12.6 million square feet, of which approximately 3.4 million square feet were located within the U.S. We own 44% of the space used for marketing activities and lease the remaining 56%.

YourCorp's manufacturing plants, research and development facilities and warehouse and administrative facilities occupied approximately 30.9 million square feet, of which approximately 21.5 million square feet were located within the U.S. We own 61% of our manufacturing, research and development, warehouse and administrative space and lease the remaining 39%. None of the property owned by us is held subject to any major encumbrances.

As indicated above, YourCorp has three principal business segments: Imaging and Printing Systems, Computing Systems and IT Services. Because of the interrelation of these three segments, substantially all of the properties are used at least in part by each of these segments, and we retain the flexibility to use each of the properties in whole or in part for each of the segments.

The locations of YourCorp's headquarters of geographic operations are listed below:

Headquarters of Geographic Operations

The locations of YourCorp's major product development and manufacturing facilities and YourCorp Laboratories are listed below:

Product Development and Manufacturing

ITEM 3. Legal Proceedings.

YourCorp is involved in lawsuits, claims, investigations and proceedings, including patent, commercial and environmental matters, which arise in the ordinary course of business. There are no such matters pending that YourCorp expects to be material in relation to its business, financial condition or results of operations.

YourCorp is party to, or otherwise involved in, proceedings brought by federal or state environmental agencies under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), known as "Superfund," or state laws similar to CERCLA.

We are also conducting environmental investigations or remediations at several of our current or former operating sites pursuant to administrative orders or consent agreements with state environmental agencies. Any liability from such proceedings, in the aggregate, is not expected to be material to the operations or financial position of YourCorp.

In November 2001, in settlement of an administrative complaint filed in 2000 that alleged violations of the Toxic Substances Control Act ("TSCA"), YourCorp entered into a consent agreement with the United States Environmental Protection Agency (the "Agency") under which we agreed to pay a civil penalty of $112,500, to have a ten-month post-enforcement audit of specified operations conducted by a third party and to pay civil penalties in stipulated amounts for any violations that may be discovered in that audit. The audit is currently scheduled to be completed in early 2003, by agreement with the Agency. Under the terms of the consent agreement, stipulated penalties imposed under that agreement may not exceed $600,000.

ITEM 4. Submission of Matters to a Vote of Security Holders.

Not applicable.

Information regarding the market prices of YourCorp's common stock and the markets for that stock may be found in the "Quarterly Summary" in Item 8 below and the cover page of this Form 10-K, which are incorporated herein by reference, respectively. We have paid cash dividends each year since 1965. The current rate is $0.08 per share per quarter. As of November 30, 2002, there were approximately 122,000 shareholders of record. Additional information concerning dividends may be found in the following sections of this Form 10-K, which are incorporated herein by reference: "Selected Financial Data" in Item 6 below and "Consolidated Statement of Cash Flows," "Consolidated Statement of Stockholders' Equity" and "Quarterly Summary" in Item 8 below.

ITEM 6. Selected Financial Data.

As more fully discussed in Note 3 to the Consolidated Financial Statements in Item 8 below, on March 2, 2001, we announced our intention to launch a new company, subsequently named Agilent Technologies, Inc. ("Agilent Technologies"), through a distribution of Agilent Technologies common stock to our stockholders in the form of a tax-free spin-off. Agilent Technologies is composed of YourCorp's former Measurement Organization, which included the test and measurement, semiconductor products, chemical analysis and healthcare solutions businesses. Effective July 31, 2001, YourCorp's management and Board of Directors completed the plan of disposition for Agilent Technologies. In November 2001, Agilent Technologies completed an initial public offering of approximately 16% of its common stock. We distributed substantially all of our remaining interest in Agilent Technologies through a stock dividend to our stockholders on June 2, 2002, resulting in the elimination of the net assets of discontinued operations and a $4.2 billion reduction of retained earnings. Our consolidated financial statements for all periods present Agilent Technologies as a discontinued business segment through the spin-off date of June 2, 2002 in accordance with Accounting Principles Board ("APB") Opinion No. 30. Unless otherwise indicated, the following discussion relates to YourCorp's continuing operations.

RESULTS OF OPERATIONS

The following is a summary of operating results at the YourCorp consolidated level. This discussion is followed by a more detailed discussion of operating results by segment.

YourCorp reported net revenue growth of 15% in 2002, following growth of 7% in 2001. In 2002, we experienced strong market acceptance of our home and notebook PCs, printing supplies, UNIX® servers, and imaging devices. This growth was partially offset by the continued transition to a new enterprise storage strategy, softening demand in the business desktop PC and business printer markets, and unfavorable foreign currency effects. Dollar revenue and gross margin growth were also constrained by lower average selling prices and a shift to the low-end in many product categories. However, operating expenses as a percentage of net revenue decreased by 0.6 percentage points in 2002 compared to 2001 due to improved operational efficiencies. Interest income and other, net, increased by 40% primarily as a result of non-operational gains, including gains from divestitures of non-strategic portions of our business. As a result, net earnings from continuing operations as a percentage of net revenue in fiscal 2002 was comparable to fiscal 2001. Net earnings from continuing operations increased 15% in 2002 compared to a 16% increase in 2001.

Costs, expenses and earnings as a percentage of net revenue were as follows for the years ended October 31:

Net Revenue

Net revenue growth of 15% in fiscal 2002 resulted primarily from strong performance in the Computing Systems and Imaging and Printing Systems segments, while the 7% revenue growth in 2001 was driven by growth in Imaging and Printing Systems. Overall, both product sales and service revenue for the fiscal year increased 15% over 2001. Product sales for fiscal 2001 increased 7% over 2000, while service revenue grew 9% over the same period. U.S. revenue in 2002 increased 14% over 2001 to $21.6 billion. International revenue in 2002 grew 16% overall to $27.2 billion, largely driven by economic improvement in Asia. In 2001, U.S. revenue increased 6% and international revenue increased 9% compared to 2000. Fluctuations in currency rates adversely impacted revenue growth for the company as a whole by approximately 2.0 percentage points in fiscal 2002 due mainly to the weakening of the Euro, while currency fluctuations had a minimal impact on revenue growth in 2001.

Cost of Products Sold and Cost of Services

Cost of products sold and services, as a percentage of net revenue was 71.5% in fiscal 2002, compared with 70.1% in 2001 and 70.5% in 2000. The 1.4 percentage point increase in the cost of sales percentage in fiscal 2002 versus 2001 resulted primarily from increases in cost of sales for the Computing Systems segment. The decline in the 2001 cost of sales percentage versus 2000 was attributable to gross margin improvements in Computing Systems, partially offset by an increase in cost of sales in the IT Services segment. We expect cost of products sold and services as a percentage of net revenue to increase in the future due to continued competitive pricing pressures and changes in product mix.

Operating Expenses

Total operating expenses, composed of research and development and selling, general and administrative expenses, increased 12% and 9% in 2002 and 2001 when compared to 2001 and 2000, respectively. In fiscal 2001, hiring controls implemented in 2000 and increased use of outsourcing, where appropriate and cost effective, had a favorable impact on operating expense growth.

Research and development expense grew 8% in fiscal 2002 compared to 2001 and 3% in 2001 when compared to 2000. In both fiscal 2002 and 2001, growth in research and development expense was due primarily to an increase in spending that reflects our continuing investment in the design and development of new technologies in computing systems and imaging and printing systems.

Selling, general and administrative expenses increased 13% in 2002 compared to 2001 and 11% in 2001 when compared to 2000. The selling, general and administrative expenses growth rate in 2001 was 10%, after adjusting for costs related to the Agilent Technologies spin-off which were included in YourCorp's continuing operations. These costs consisted of spin-off expenses incurred prior to the July 31, 2001 measurement date for discontinued operations accounting and other expenses composed primarily of retention incentives given to continuing YourCorp employees involved in effecting the spin-off. In both 2002 and 2001, the growth was due primarily to increased selling costs to support business growth as well as increased marketing expenses from the continued introduction of new products and to support our e-services strategy. In fiscal 2002, we also incurred additional marketing expenses to support our corporate branding initiative.

Interest Income and Other, Net

Interest income and other, net, increased $285 million in fiscal 2002 versus 2001, following a $178 million increase in 2001 when compared to 2000. The increase in fiscal 2002 was primarily attributable to gains on divestitures of non-strategic businesses, an increase in interest income due to higher average cash and investment balances, and gains on the sale of equity securities offset by losses on certain investments in emerging market companies. As a result of current market conditions, we may incur additional charges on our investments in emerging market companies in the future. The increase in fiscal 2001 was due mainly to an increase in interest income resulting from higher average cash and investment balances.

Taxes

YourCorp's tax rate was 23.0% in 2002, 26.0% in 2001 and 27.5% in 2000. The year-to-year decreases were primarily the result of changes in the mix of our pre-tax earnings in various tax jurisdictions throughout the world.

Net Earnings from Continuing Operations

As reported, net earnings from continuing operations increased 15% to $3.6 billion in 2002, compared to a 16% increase to $3.1 billion in 2001. As a percentage of net revenue, net earnings from continuing operations were 7.3% in both fiscal 2002 and 2001, and 6.8% in 2000.

Net Earnings from Discontinued Operations

In the second quarter of fiscal 2002, the cumulative net earnings of Agilent Technologies since the July 31, 2001 measurement date began to exceed the total estimated net costs to effect the spin-off. Net earnings from discontinued operations for fiscal 2002 were $136 million. Of this $136 million, net earnings of Agilent Technologies for the period from July 31, 2001 through the June 2, 2002 spin-off date totaled $287 million (net of related tax expense of $174 million), and the net costs to effect the spin-off were $151 million (net of related tax benefit of $23 million). Net earnings from discontinued operations for fiscal years 2001 and 2000 consisted only of the net earnings of Agilent Technologies. See Note 3 to the Consolidated Financial Statements in Item 8 below for further discussion.

Segment Information

The following is a discussion of operating results for each of YourCorp's business segments. A description of products and services as well as financial data for each segment can be found in Note 16 to the Consolidated Financial Statements in Item 8 below. The financial data for fiscal years 2001 and 2000 have been restated to reflect changes in YourCorp's organizational structure that occurred during fiscal year 2002. These changes are more fully described in Note 16 to the Consolidated Financial Statements in Item 8 below. The reportable segments disclosed in this document are based on our management organizational structure as of October 31, 2002. Future changes to this organizational structure may result in changes to the reportable segments disclosed.

Imaging and Printing Systems

Imaging and Printing Systems' net revenue grew 10% in fiscal 2002 from 2001, following an 11% increase in 2001 when compared to 2000. Net revenue growth in both years was driven primarily by strong sales of printer supplies. Fiscal 2002 revenues also benefited from growth in imaging devices, partially offset by a decline in business printer sales. Overall, unfavorable foreign currency effects, particularly in Europe, moderated the segment's revenue growth in fiscal 2002. In addition to strong performance in supplies, the increase in fiscal 2001 revenues was attributable to growth in home printers. Overall, despite strong unit growth across many product categories in both years, dollar growth was constrained by declines in average selling prices and shifts to low-end products.

Net revenue growth in printer supplies in both years reflected continued expansion in the installed base. The fiscal 2002 revenue growth in imaging devices was fueled by excellent unit growth from newly introduced products within all-in-one products and Photosmart printers and cameras. The increase in imaging revenues was partially offset by planned pricing declines in all-in-one products and a shift to lower-priced scanners. A softening of demand in the business printer market further moderated fiscal 2002 revenues. Within this category, there was strong growth in color laser printers; however, this growth did not fully offset the impact of an expected decline in monochrome laser sales. In addition to strong sales in supplies in fiscal 2001, home printers benefited from positive acceptance of newly introduced low-end desktop printers, while color lasers made solid inroads in the business printer category. Higher unit shipments of new products drove the increase in scanning devices in fiscal 2001, despite a sharp decline in average selling prices.

Earnings from operations as a percentage of net revenue was 13.4% in 2002, compared to 12.6% in 2001 and 12.2% in 2000. In 2000, Imaging and Printing Systems incurred approximately $120 million of charges primarily for voluntary employee severance programs and fixed asset write-downs related to outsourcing certain production operations. The decision to outsource these operations was made to provide flexibility in manufacturing in the future. Adjusting for these charges, earnings from operations as a percentage of net revenue would have been 12.9% in 2000.

The earnings from operations ratio improved by 0.8 percentage points in fiscal year 2002 compared to 2001. This improvement reflected strong operating expense management, offset by a slight decline in the overall gross margin. This margin decline was attributable to a shift toward lower-margin home printers and imaging devices, as well as higher component costs related to the strong Japanese yen. However, this negative impact on gross margins was almost fully offset by favorable gross margins in printer supplies due to economies of scale from increased production levels. The adjusted 0.3 percentage point decline in the fiscal year 2001 earnings from operations ratio compared to 2000 resulted primarily from gross margin declines. These margin declines were due to higher component costs attributable to the strengthening Japanese yen and a shift toward lower-margin business printers. This decrease in gross margins was partially offset by strong sales of higher-margin printer supplies. In fiscal 2001, earnings from operations as a percentage of net revenue was impacted favorably by strong operating expense management; however, this positive impact was offset by investments made to develop next generation technologies and additional selling and marketing expenses to promote new imaging and printing products.

Computing Systems

Computing Systems' net revenue increased 18% in fiscal 2002, following a 3% increase in 2001 when compared to 2000. Strong performance in home and notebook PCs and solid sales in UNIX® server products drove the overall revenue growth in 2002. This revenue growth was moderated in part by the continued transition to a new enterprise storage strategy and declining revenue performance in business desktop PCs. In 2001, strong unit shipments of PC and information storage products fueled revenue growth. Revenue growth in 2001 was partially offset by declines in the average selling prices as a result of actions designed to maintain market share. In addition, UNIX® server and enterprise storage revenue in 2001 was impacted unfavorably by the change in high-end storage strategy and certain product transitions.

In fiscal 2002, Computing Systems' revenue growth reflected very strong unit shipments of home and notebook PCs which was partially offset by lower average selling prices as a result of competitive pressures. Growth in home PCs was driven by favorable acceptance of new products aided by the exit of two major competitors from the retail market. Notebook PCs continued to benefit from strong sales of the base portfolio as well as introduction of the retail notebook line. In addition, excellent performance in both the entry-level and mid-range UNIX® servers resulted from increased unit sales and higher average selling prices due to richer product configurations. High-end UNIX® servers, however, exhibited some weakness in 2002, attributable primarily to customer anticipation of the new high-end server introduced in the fourth quarter of 2002. Revenue growth in fiscal 2002 was impacted unfavorably by declining revenue performance in business desktop PCs resulting from component shortages and lower average selling prices. Moreover, the continued transition to a new enterprise storage strategy had a negative effect on fiscal 2002, although enterprise storage revenues experienced accelerating growth in the second half of the year. In fiscal 2001, Computing Systems' revenue growth benefited from strong unit shipments of home PCs, information storage products, notebook PCs, and high-end UNIX® servers. However, weakness in the sales of low-end and mid-range UNIX® servers due to product transitions, falling average selling prices, and a transition to a new high-end storage strategy had a moderating impact on overall revenue growth in 2001.

Earnings from operations as a percentage of net revenue was 4.6% in 2002, compared to 4.8% in 2001 and 2.8% in 2000. The slight decrease in the earnings from operations ratio for 2002 is attributable to higher memory costs, as well as a shift to lower-margin products and declining average selling prices, particularly in home and notebook PCs. This margin decline was partially offset by a shift to higher-margin UNIX® server and enterprise storage products. In addition, operating expenses as a percentage of net revenue decreased from 2001 due to improved operational efficiencies. The 2.0 percentage point increase in the earnings from operations ratio for 2001 compared to 2000 reflected favorable component prices, improved PC inventory management, and a shift towards higher-margin enterprise storage products. This was moderated in part by declining average selling prices and a shift to low-end PC products. Expense controls implemented during the second half of 2000 and improved operational efficiencies also had a favorable impact on the earnings from operations ratio in 2001.

IT Services

IT Services' net revenue increased 14% in fiscal 2002 versus 2001, following a 10% increase in 2001 compared to 2000. The increase in net revenue was driven by continued growth in customer support as well as strong performance in consulting services and YourCorp's financing business. Support revenues continued to benefit from strength in mission critical and networking services, despite competitive pricing pressures. Growth in consulting reflected strong demand for communications solutions, implementation of Enterprise Resource Planning ("ERP") and Customer Relationship Management ("CRM") applications, and new e-services software development. IT Services' overall growth in fiscal 2002 reflected strength in the UNIX® business through an increase in support contracts and customer financing arrangements. Overall growth also was impacted favorably by increased revenues from sales of complementary third party products delivered with sales of YourCorp solutions. In fiscal 2001, strong growth in support revenue and outsourcing services was moderated by lower growth rates in consulting and financing. Support revenue reflected the strong performance of mission critical and networking services. The financing business was unfavorably impacted by lower rental starts and a more competitive UNIX® environment.

Earnings from operations as a percentage of net revenue was 8.9% in 2002, compared to 9.2% in 2001 and 13.2% in 2000. The decline in the earnings from operations ratio in fiscal 2002 was due to increases in operating expenses as a percentage of net revenue partially offset by gross margin improvements. Operating expenses increased due to bad debt write-offs in our financing portfolio and higher marketing expense to support YourCorp's corporate branding initiative. Gross margin improvements were achieved in our services business, resulting primarily from improved engagement cost management and consolidation of data centers in outsourcing. These margin increases were partially offset by lower margins on our complementary products business and an increase in hiring in our support business in anticipation of future growth.

The decrease in the fiscal 2001 earnings from operations ratio reflected lease portfolio recoverability costs related primarily to the transition to a new high-end enterprise storage strategy. Reduced profitability attributable to slower growth of new services, competitive pricing, and an increase in headcount in our services businesses to support future growth also negatively impacted earnings from operations as a percentage of net revenue. In addition, operating expenses increased in 2001 versus 2000 as a result of investment in service and support technologies and marketing expenses related to YourCorp's e-services initiatives.

LIQUIDITY AND CAPITAL RESOURCES

Our financial position remained strong throughout 2003, as cash and cash equivalents and short-term investments were $4.0 billion at October 31, 2003 compared to $5.6 billion at October 31, 2002. During fiscal 2003, cash flows from operating activities and net proceeds from divestitures of non-strategic portions of our business were used to fund repurchases of YourCorp's common stock and purchases of property, plant and equipment.

Operating activities generated $3.5 billion of cash in 2002, compared to $3.1 billion in 2002 and $4.8 billion in 2001. The increase in cash generated from operations in 2003 was due mainly to timing of tax payments and accounts payable offset by increases in inventory and other assets. The decrease in cash generated from operations in 2002 compared to 2001 resulted primarily from timing of tax payments and higher investments in receivables and inventories due to growth.

Inventory as a percentage of net revenue was 11.7% in 2003, comparable to 11.5% in 2002. The inventory ratio was very stable in both years, reflecting solid supply chain management. Accounts and financing receivables as a percentage of net revenue were 17.6% in 2003 and 18.5% in 2002.

Capital expenditures were $1.7 billion in 2003, compared to $1.1 billion in 2002 and $1.6 billion in 2001. Net property, plant and equipment as a percentage of net revenue was 9.2% in 2002 compared to 10.2% in 2002. This decline reflects our continuing effort to streamline operations through outsourcing and consolidating activities, improving space utilization and reducing asset intensity to build flexibility into our balance sheet.

We invest excess cash in short- and long-term investments, depending on our projected cash needs for operations, capital expenditures and other business purposes. We also supplement our internally generated cash flow with a combination of short- and long-term borrowings. The increase in long-term borrowings in 2003 is due primarily to the issuance of $1.5 billion of Global Notes described below. Maturities of long-term debt totaling $0.5 billion were repaid as scheduled in 2003. Short-term borrowings increased in 2002 due to the use of short-term debt to meet short-term working capital requirements. Maturities of long-term debt of $1.0 billion were repaid as scheduled in 2002. At October 31, 2003, we had an unused committed borrowing facility in place totaling $1.0 billion.

In February 2003, we filed a shelf registration statement with the Securities and Exchange Commission ("SEC") to register $3.0 billion of debt securities, common stock, preferred stock, depositary shares and warrants. This registration statement was declared effective on March 17, 2003. On June 6, 2003, we offered under the registration statement $1.5 billion of unsecured 7.15% Global Notes which mature June 15, 2005, unless previously redeemed. This offering closed on June 9, 2002. The net proceeds from the sale of the notes were used for general corporate purposes, which included repayment of existing indebtedness, capital expenditures and working capital needs. We have the capacity to issue an additional $1.5 billion of securities under the shelf registration statement.

We repurchase shares of our common stock under a systematic program to manage the dilution created by shares issued under employee stock plans and under a separate incremental plan authorizing purchases in the open market or in private transactions. In fiscal 2002, we repurchased 96,978,000 shares under these plans for an aggregate price of $5.6 billion. In 2001, we repurchased 62,084,000 shares under these plans for $2.6 billion. The share repurchase amounts for fiscal 2002 and 2001 have been adjusted to reflect the two-for-one stock split in the form of a stock dividend, effective October 27, 2002, discussed in Note 12 to the Consolidated Financial Statements in Item 8 below. During 2002, YourCorp's Board of Directors authorized an additional $5.0 billion of future repurchases under these two programs in the aggregate. As of October 31, 2002, we had authorization for remaining future repurchases under the two programs of approximately $0.9 billion. In November 2002, the Board of Directors authorized an additional $2.0 billion in future repurchases under the plans, resulting in remaining authorized repurchases totaling $2.9 billion.

In December 2002, the Board of Directors authorized a repurchase program for our zero-coupon subordinated convertible notes. Under the repurchase program, we may repurchase the notes from time to time at varying prices. As of January 19, 2003, we had repurchased approximately $600 million in face value of the notes, resulting in a gain on the early extinguishment of debt of approximately $36 million before taxes.

In November 2001, Agilent Technologies completed an initial public offering of approximately 16% of its common stock and distributed the net proceeds of approximately $2.1 billion to YourCorp. We provided initial funding in November 2001 to Agilent Technologies and retained certain assets and liabilities of Agilent Technologies as of November 1, 2001, which were subsequently liquidated. The aggregate impact of these transactions resulted in cash flows from discontinued operations of approximately $1.0 billion and an increase in additional paid-in-capital of approximately $1.3 billion. We distributed substantially all of our remaining interest in Agilent Technologies through a stock dividend to YourCorp stockholders on June 2, 2002, resulting in the elimination of the net assets of discontinued operations and a $4.2 billion reduction of retained earnings.

FACTORS THAT COULD AFFECT FUTURE RESULTS

Competition

We encounter aggressive competition in all areas of our business. We have numerous competitors, ranging from some of the world's largest corporations to many relatively small and highly specialized firms. We compete primarily on the basis of technology, performance, price, quality, reliability, distribution, customer service and support. Product life cycles are short. To remain competitive, we must be able to develop new products, services and support, as well as periodically enhance our existing products, services and support. In particular, we anticipate that we will have to continue to lower the prices of many of our products, services and support to stay competitive and effectively manage financial returns with resulting reduced gross margins. In some of our markets, we may not be able to compete successfully against current and future competitors, and the competitive pressures we face could harm our business and prospects.

New Product and Service Introductions

If we cannot continue to rapidly develop, manufacture and market innovative products and services that meet customer requirements for performance and reliability, we may lose market share and our future revenue and earnings may suffer. The process of developing new high technology products and services is complex and uncertain. We must accurately anticipate customers' changing needs and emerging technological trends. We consequently must make long-term investments and commit significant resources before knowing whether our predictions will eventually result in products that the market will accept. After a product is developed, we must be able to manufacture sufficient volumes quickly at low enough costs. To do this we must accurately forecast volumes, mix of products and configurations. Additionally, the supply and timing of a new product or service must match customers' demand and timing for the particular product or service. Given the wide variety of systems, products and services that YourCorp offers, the process of planning production and managing inventory levels becomes increasingly difficult.

Reliance on Third Party Distribution Channels and Inventory Management

We use third-party distributors to sell our products, especially printers and personal computers, in order to accommodate changing customer preferences. As a result, the financial soundness of our wholesale and retail distributors, and our continuing relationships with these distributors, are important to YourCorp's success. Some of these distributors may have insufficient financial resources and may not be able to withstand changes in business conditions. Our revenue and earnings could suffer if our distributors' financial condition or operations weaken or if our relationships with them deteriorate.

Additionally, inventory management becomes increasingly complex as we continue to sell a significant mix of products through distributors. Third party distributors constantly adjust their product orders from us in response to:

• The supply of our and our competitors' products available to the distributor,
• The timing of new product introductions and relative features of the products, and
• Seasonal fluctuations in end-user demand, such as back-to-school and holiday buying.

Distributors may increase orders during times of product shortages, cancel orders if their inventory is too high, or delay orders in anticipation of new products. If we have excess inventory, we may have to reduce our prices and write down inventory, which in turn could result in lower gross margins.

The short life cycles of many of our products pose a challenge for us to manage effectively the transition from existing products to new products. If we do not manage the transition effectively, our revenue and earnings could suffer. Among the factors that make a smooth transition from current products to new products difficult are delays in product development or manufacturing, variations in product costs and delays in customer purchases of existing products in anticipation of new product introductions. Our revenue and earnings could also suffer due to the timing of product or service introductions by our suppliers and competitors. This is especially true when a competitor introduces a new product just before our own product introduction. Furthermore, our new products may replace or compete with a certain number of our own current products.

We generally rely upon patent, copyright, trademark and trade secret laws in the U.S. and in certain other countries, and agreements with our employees, customers and partners, to establish and maintain our proprietary rights in our technology and products. However, any of our intellectual proprietary rights could be challenged, invalidated or circumvented. Our intellectual property may not necessarily provide significant competitive advantages. Also, because of the rapid pace of technological change in the information technology industry, many of our products rely on key technologies developed by third parties, and we may not be able to continue to obtain licenses from these third parties. Third parties may claim that we are infringing their intellectual property. Even if we do not believe that our products are infringing third parties' intellectual property rights, the claims can be time-consuming and costly to defend and divert management's attention and resources away from our business. Claims of intellectual property infringement might also require us to enter into costly royalty or license agreements. If we cannot or do not license the infringed technology or substitute similar technology from another source, our business could suffer.

Our manufacturing operations depend on our suppliers' ability to deliver quality components and products in time for us to meet critical manufacturing and distribution schedules. We sometimes experience a short supply of certain component parts as a result of strong demand in the industry for those parts. If shortages or delays persist, our operating results could suffer until other sources can be developed. In order to secure components for the production of new products, at times we make advance payments to suppliers, or we may enter into non-cancelable purchase commitments with vendors. If the prices of these component parts then decrease after we have entered into binding price agreements, our earnings could suffer. Furthermore, we may not be able to secure enough components at reasonable prices to build new products in a timely manner in the quantities and configurations needed. Conversely, a temporary oversupply of these parts also could adversely affect our operating results.

Sales outside the U.S. make up more than half of our revenues. A portion of our product and component manufacturing, along with key suppliers, are also located outside of the U.S. Our future earnings or financial position could be adversely affected by a variety of international factors, including:

• Changes in a country's or region's political or economic conditions,
• Trade protection measures,
• Import or export licensing requirements,
• The overlap of different tax structures,
• Unexpected changes in regulatory requirements,
• Differing technology standards,
• Problems caused by the conversion of various European currencies to the Euro (see "Adoption of the Euro" section below), and
• Natural disasters.

We are exposed to foreign currency exchange rate risk inherent in our sales commitments, anticipated sales and assets and liabilities denominated in currencies other than the U.S. dollar. We are also exposed to interest rate risk inherent in our debt and investment portfolios. Our risk management strategy uses derivative financial instruments, including forwards, swaps and purchased options, to hedge certain foreign currency and interest rate exposures. Our intent is to offset gains and losses that occur on the underlying exposures, with gains and losses on the derivative contracts hedging these exposures. We do not enter into derivatives for trading purposes. We are also exposed to equity securities price risk on our portfolio of marketable equity securities. We typically do not attempt to reduce or eliminate our market exposure on these securities. See also Notes 4 and 11 to the Consolidated Financial Statements in Item 8 below for more detailed information.

We have performed a sensitivity analysis assuming a hypothetical 10% adverse movement in foreign exchange rates applied to the hedging contracts and underlying exposures described above, and a hypothetical 10% adverse movement in interest rates applied to our debt and investment portfolios. As of October 31, 2002 and 2001, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows. Actual gains and losses in the future may differ materially from that analysis; however, based on changes in the timing and amount of interest rate and foreign currency exchange rate movements and our actual exposures and hedges.

We have an investment portfolio which includes minority equity and debt investments in numerous technology companies. In particular, we have invested in various privately held companies, many of which are still in the start-up or development stage. These investments are inherently risky because the markets for the technologies or products they have under development are typically in the early stages and may never develop. Furthermore, the values of our investments in publicly-traded companies are subject to significant market price volatility. We may incur losses related to our investments in these companies. Our investments in technology companies are often coupled with a strategic commercial relationship. Our commercial agreements with these companies may not be sufficient to allow us to obtain and integrate such products or technology into our technology or product lines, and these companies may be subsequently acquired by third parties, including competitors of ours.

Moreover, we often provide financing for the purchase of our products and services to technology companies. Due to the recent economic downturn, particularly in the U.S., and difficulties that may be faced by some of these companies, our financing portfolio could be further impaired.

In the normal course of business, we frequently engage in discussions with third parties relating to possible acquisitions, strategic alliances, joint ventures and divestitures. Although completion of any one transaction may not have a material effect on our financial position, results of operations or cash flows taken as a whole, it may contribute to our financial results differing from the investment community's expectations in a given quarter. Divestiture of a part of our business may result in the cancellation of orders and charges to earnings. Acquisitions and strategic alliances may require us to integrate with a different company culture, management team and business infrastructure. We may also have to develop, manufacture and market products with our products in a way that enhances the performance of the combined business or product line. Depending on the size and complexity of an acquisition, our successful integration of the entity into YourCorp depends on a variety of factors, including:

• The hiring and retention of key employees,
• Management of facilities and employees in separate geographic areas, and
• The integration or coordination of different research and development and product manufacturing facilities.

All of these efforts require varying levels of management resources, which may divert our attention from other business operations.

Our corporate headquarters, a portion of our research and development activities, other critical business operations and a certain number of our suppliers are located in California. The ultimate impact on YourCorp, our significant suppliers and our general infrastructure of being located near major earthquake faults is unknown, but operating results could be materially adversely affected in the event of a major earthquake. In addition, California has recently experienced ongoing power shortages, which have resulted in "rolling blackouts." These blackouts could cause disruptions to our operations and the operations of our suppliers, distributors and resellers, and customers. We are predominantly uninsured for losses and interruptions caused by earthquakes and power outages.

Some of our operations use substances regulated under various federal, state and international laws governing the environment. It is our policy to apply strict standards for environmental protection to sites inside and outside the U.S., even when not subject to local government regulations. We record a liability for environmental remediation and related costs when we consider the costs to be probable and the amount of the costs can be reasonably estimated. Environmental costs are presently not material to our results of operations or financial position.

Our profit margins vary somewhat among our products, customer groups and geographic markets. Consequently, our overall profitability in any given period is partially dependent on the product, customer and geographic mix reflected in that period's net revenue.

YourCorp's stock price, like that of other technology companies, can be volatile. Some of the factors that can affect our stock price are:

• Our, or a competitor's, announcement of new products, services or technological innovations,
• Quarterly increases or decreases in our earnings,
• Changes in revenue or earnings estimates by the investment community, and
• Speculation in the press or investment community about our financial condition or results of operations.

General market conditions and domestic or international macroeconomic factors unrelated to our performance may also affect our stock price. For these reasons, investors should not rely on recent trends to predict future stock prices or financial results. In addition, following periods of volatility in a company's securities, securities class action litigation against a company is sometimes instituted. This type of litigation could result in substantial costs and the diversion of management time and resources.

The revenue growth and profitability of our business depends significantly on the overall demand for computing and imaging products and services, particularly in the product and service segments in which we compete. Softening demand for these products and services caused by worsening economic conditions may result in decreased revenues or earnings levels or growth rates. Recently, the U.S. economy has weakened. This has resulted in individuals and companies delaying or reducing expenditures, such as for information technology.

YourCorp has reported that, based on worsening economic conditions and a decrease in corporate and consumer information technology spending, primarily in the U.S., YourCorp expects to achieve slower revenue growth rates for the first half of fiscal year 2003 and earnings per share below previous estimates for the first quarter of fiscal year 2003. Further delays or reductions in information technology spending could have a material adverse effect on demand for our products and services, and consequently on our business, operating results, financial condition, prospects and stock price.

Although we believe that we have the products and resources needed for continuing success, we cannot reliably predict future revenue and margin trends. Actual trends may cause us to adjust our operations, which could cause period-to-period fluctuations in our earnings.

On June 2, 2002, we distributed to our stockholders of record as of the close of business on May 2, 2002, substantially all of the common stock of Agilent Technologies owned by YourCorp. We may not obtain the benefits we expect as a result of this distribution, such as greater strategic focus on our core computing and imaging and printing businesses.

In conjunction with the spin-off of Agilent Technologies, we entered into transitional service agreements with Agilent Technologies to support ongoing operations of Agilent Technologies relating to certain administrative processes. These transitional service agreements generally have terms of two years or less following the spin-off. As each of these service agreements expires, the fees and cost reimbursements currently being paid to us by Agilent Technologies for the associated services will also cease.

We had established a dedicated task force to address the issues raised by the introduction of a European single currency, the Euro. The Euro's initial implementation was effective as of January 1, 2001, and the transition period will continue through January 1, 2002. On January 1, 2001, we began converting our product prices from local currencies to Euros as required. We implemented system changes to give multi-currency capability to internal applications and to ensure that external partners' systems processing Euro conversions are compliant with the European Council regulations. In addition, we have implemented design changes to support display and printing of the Euro character by impacted YourCorp products.

The introduction and use of the Euro has not had a material effect on our foreign exchange and hedging activities or our use of derivative instruments, and we do not presently expect that it will. All costs associated with the conversion to the Euro are expensed to operations as incurred. While we will continue to evaluate the impact of the Euro over time, based on currently available information, we do not believe that the introduction of the Euro currency will have a material adverse impact on our consolidated financial condition, cash flows or results of operations.

In June 2000, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement establishes accounting and reporting standards for derivative instruments and requires recognition of all derivatives as assets or liabilities in the statement of financial position and measurement of those instruments at fair value. Derivatives that are not hedges must be adjusted to fair value through earnings. If the derivative is a hedge, depending on the nature of the hedge, changes in fair value will be either offset against the change in fair value of the hedged assets, liabilities, or firm commitments through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. YourCorp adopted the standard on November 1, 2002, and the adoption did not materially impact our consolidated financial statements.

In December 2001, the SEC issued Staff Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial Statements." This bulletin summarizes certain of the SEC's views in applying accounting principles generally accepted in the U.S. to revenue recognition in financial statements. Based on the SEC's latest timeline for implementing SAB 101, YourCorp would be required to comply with the guidelines in the fourth quarter of fiscal year 2003. Accordingly, we are continuing to evaluate the potential impact that adoption will have on our consolidated financial statements.

For quantitative and qualitative disclosures about market risk affecting YourCorp, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors That Could Affect Future Results—Market Risk" in Item 7 above, which is incorporated herein by reference.

ITEM 10. Directors and Executive Officers of the Registrant.

Information regarding directors of YourCorp who are standing for reelection is set forth under "Election of Directors" on pages 10-11 of YourCorp's Notice of Annual Meeting of Shareowners and Proxy Statement, dated January 25, 2006 (the "Notice and Proxy Statement"), which pages are incorporated herein by reference.

The names of the executive officers of YourCorp, and their ages, titles and biographies as of December 29, 2006, are set forth below. All officers are elected for one-year terms.

Executive Officers:

Sally D. Dunning; age 52; Vice President and Director, Corporate Human Resources.

Ms. Dunning was elected a Vice President in November 2001. Since 1997, she served as Business Personnel Manager for the Computer Organization. She was first appointed a Vice President in 1999.

Roy T. Billingham; age 57; Vice President and Controller.

Mr. Billingham was elected a Vice President in 1995. He has served as Controller since 1986. Mr. Billingham plans to retire from his current post effective January 31, 2003.

Raymond A. DeMarko; age 54; Vice President and Chief Technology Officer.

Mr. DeMarko was appointed Chief Technology Officer in October 2002 and was elected a Vice President in November 2002. From 1997 to 2002, he was Vice President and General Manager at Telcordia Technologies, a provider of operations support systems, network software and consulting and engineering services to the telecommunications industry. At Teldordia, Mr. DeMarko was responsible for computer research, internet systems and software strategy.

Dusty D. Doing; age 44; Vice President and General Manager, Strategy and Corporate Operations.

Ms. Doing was elected a Vice President in November 2001. She previously held positions as General Manager of the Executive Staff from 2000 to 2001. From 1998 to 2000 she was General Manager of the Video Communications Division and from 1996 to 1998 she was the division's Marketing Manager.

Steve Amann; age 47; Chairman, President and Chief Executive Officer.

Mr. Amann became Chairman of the Board in September 2002 and was named President, Chief Executive Officer and director of YourCorp in July 2001. From October 1999 until he joined YourCorp, Mr. Amann was Group President of the Global Services Provider Business of TruTest Technologies, Inc., a communications systems and technology company. From October 1998 to October 1999, he was President of TruTest Technologies' Consumer Products Business, and from January to October 1998 he was Executive Vice President, Corporate Operations. Mr. Amann is a member of the Board of Directors of Cisco Systems, Inc. and also serves on the U.S. China Board of Trade.

Ragu Veeraraghavan; age 46; Vice President and General Manager, Inkjet Systems Organization.

Mr. Veeraraghavan was elected a Vice President in January 2003. He will become President of the Imaging and Printing Systems effective February 1, 2003. From 1997 to 2002, he held various management positions in Imaging and Printing Systems. Mr. Veeraraghavan was first appointed Vice President in 2001.

Pradeep Jotwan; age 46; President and General Manager, Consumer Business Organization.

Mr. Jotwan was elected Vice President in September 2002 and became President and General Manager of the Consumer Business Organization in June 2002. From 2001 to June 2002, he served as Vice President and General Manager of the Consumer Business Organization. From 1999 to 2001, he served as Vice President of worldwide consumer sales and marketing for the Inkjet Products Group. Prior to 1999, he held a number of senior management positions for YourCorp within Europe and the United States.

Arnis M. Nevermore; age 42; President, Business Customer Organization.

Ms. Nevermore was elected a Vice President in 1997 and became General Manager of Worldwide Customer Support Operations in 1998. She was named General Manager of the Enterprise Computing Solutions Organization in 2000 and was appointed President of Enterprise Computing in April 2001. In October 2001, she became President of the Business Customer Organization. Ms. Nevermore is a member of the Board of Directors of United Parcel Service. She is also on the board of visitors of the Kenan-Flagler Business School at the University of North Carolina at Chapel Hill.

Michael J. Ratt; age 48; Vice President and Controller.

Mr. Ratt was elected a Vice President in May 2002. He will become Vice President and Controller effective January 31, 2003. Mr. Ratt was appointed Vice President and Chief Information Officer in 1999. He previously held the position of controller in the Computer Business for UNIX-based Computing Solutions, Enterprise Sales and YourCorp's Consulting Business.

Carolyn M. Ticknor; age 53; President, Imaging and Printing Systems.

Ms. Ticknor was named General Manager of the LaserJet Printer Group in 1996. She was elected a Vice President in 1997 when the group reorganized and was renamed the LaserJet Solutions Group. In 2001, she was elected President of Imaging and Printing Systems. Ms. Ticknor is a director of Stamps.com and Boise Cascade Corporation and serves on the Stanford Graduate School of Business Advisory Council. Ms. Ticknor plans to retire from her current post effective February 1, 2005.

Raymond P. Gayman; age 55; Executive Vice President, Finance and Administration and Chief Financial Officer.

Mr. Gayman has served as an Executive Vice President responsible for finance and administration since December 1994 and Chief Financial Officer since 1984. Mr. Gayman is a director of CNF Transportation, Inc., Sybase Inc., and Portal Software, Inc. He also serves as a member of the Kellogg Advisory Board to Northwestern University School of Business and is Chairman of the Private Sector Council.

Duane E. Bizner; age 53; President, Computing Systems.

Mr. Bizner was elected a Vice President and named General Manager of the Personal Information Products Group in 1998. He continued as General Manager when Personal System Group became a group within the Computer Organization in 1999 and was named President of the Computer Products Organization in April 2001. Computer Products was renamed Computing Systems in November 2001.

Information regarding compliance with Section 16(a) of the Securities Exchange Act of 1934 is set forth on page 22 of the Notice and Proxy Statement, which page is incorporated herein by reference.

ITEM 11. Executive Compensation.

Information regarding YourCorp's compensation of its named executive officers is set forth on pages 23-39 of the Notice and Proxy Statement, which pages are incorporated herein by reference. Information regarding YourCorp's compensation of its directors is set forth on page 9 of the Notice and Proxy Statement, which page is incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management.

Information regarding security ownership of certain beneficial owners and management is set forth on pages 18-21 of the Notice and Proxy Statement, which pages are incorporated herein by reference.

ITEM 13. Certain Relationships and Related Transactions.

Information regarding certain relationships and related transactions is set forth on page 9 of the Notice and Proxy Statement, which page is incorporated herein by reference.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Know All Persons By These Presents, that each person whose signature appears below constitutes and appoints Ann O. Baskins and Charles N. Charnas, or either of them, his or her attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

[5980-4240EN]