HP 2010 Annual Report Download - page 36

implemented a workforce restructuring program in fiscal 2008 relating to our acquisition of Electronic
Data Systems Corporation (‘‘EDS’’), a workforce restructuring program in fiscal 2009 relating to our
product businesses and a multi-year restructuring plan in the third quarter of fiscal 2010 relating to our
enterprise services business.
Our ability to achieve the anticipated cost savings and other benefits from these initiatives within
the expected time frame is subject to many estimates and assumptions, including estimates and
assumptions regarding the cost of consolidating real estate locations, the amount of accelerated
depreciation or asset impairment to be incurred when we vacate facilities or cease using equipment
before the end of their respective lease term or asset life, and the costs and timing of other activities in
connection with these initiatives. These estimates and assumptions are subject to significant economic,
competitive and other uncertainties, some of which are beyond our control. In addition, there are
significant risks associated with our workforce restructuring programs, including potential delays in the
implementation of those programs in highly regulated locations outside of the United States,
particularly in Europe and Asia, decreases in employee morale, and the failure to meet operational
targets due to the loss of employees. If these estimates and assumptions are incorrect, if we experience
delays, or if other unforeseen events occur, our business and results of operations could be adversely
affected.
In order to be successful, we must attract, retain and motivate key employees, and failure to do so could
seriously harm us.
In order to be successful, we must attract, retain and motivate executives and other key employees,
including those in managerial, technical, sales, marketing and IT support positions. Hiring and retaining
qualified executives, engineers, skilled solutions providers in the IT support business and qualified sales
representatives are critical to our future, and competition for experienced employees in the IT industry
can be intense. In order to attract and retain executives and other key employees in a competitive
marketplace, we must provide a competitive compensation package, including cash and share-based
compensation. Our primary form of share-based incentive award is performance-based restricted stock
units, which contain conditions relating to HP’s long-term financial and stock price performance that
makes the future value of those awards uncertain. If the anticipated value of such share-based incentive
awards does not materialize, if our share-based compensation otherwise ceases to be viewed as a
valuable benefit, or if our total compensation package is not viewed as being competitive, our ability to
attract, retain, and motivate executives and key employees could be weakened. The failure to
successfully hire executives and key employees or the loss of any executives and key employees could
have a significant impact on our operations.
Terrorist acts, conflicts and wars may seriously harm our business and revenue, costs and expenses and
financial condition and stock price.
Terrorist acts, conflicts or wars (wherever located around the world) may cause damage or
disruption to HP, our employees, facilities, partners, suppliers, distributors, resellers or customers. The
potential for future attacks, the national and international responses to attacks or perceived threats to
national security, and other actual or potential conflicts or wars, including the ongoing military
operations in Iraq and Afghanistan have created many economic and political uncertainties. In
addition, as a major multinational company with headquarters and significant operations located in the
United States, actions against or by the United States may impact our business or employees. Although
it is impossible to predict the occurrences or consequences of any such events, they could result in a
decrease in demand for our products, make it difficult or impossible to deliver products to our
customers or to receive components from our suppliers, create delays and inefficiencies in our supply
chain and result in the need to impose employee travel restrictions. We are predominantly uninsured
for losses and interruptions caused by terrorist acts, conflicts and wars.
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