HP 2011 Annual Report Download - page 37

Any failure by us to execute on our strategy for operational efficiency successfully could result in total costs
and expenses that are greater than expected.
We have an operating framework that includes a disciplined focus on operational efficiency. As
part of this framework, we have adopted several initiatives, including our ongoing initiative to
transform our supply chain and leverage our corporate infrastructure and a more recent initiative to
implement better tools, standardize key processes, integrate critical IT systems, minimize redundant or
legacy systems and take other actions to improve our productivity, sales, forecasting and business
decisions. We also implemented 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. These estimates and
assumptions are subject to significant economic, competitive and other uncertainties, some of which are
beyond our control. In addition, we are vulnerable to increased risks associated with implementing
changes to our tools, processes and systems given our large portfolio of businesses, the broad range of
geographic regions in which we and our customers and partners operate, and the number of
acquisitions that HP has completed in recent years. There are also significant risks associated with our
enterprise services workforce restructuring plan, including potential delays in the implementation of
that plan 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 are unsuccessful at implementing changes to our
tools, processes and systems, 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, train, motivate, develop and transition key employees, and
failure to do so could seriously harm us.
In order to be successful, we must attract, retain, train, motivate, develop and transition qualified
executives and other key employees, including those in managerial, technical, sales, marketing and IT
support positions. Identifying, developing internally or hiring externally, training 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 share-based incentive awards include stock options, restricted stock units and
performance-based restricted units, some of which contain conditions relating to HP’s stock price
performance and HP’s long-term financial performance that make 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. Further, changes in our management team may be disruptive to our business, and any
failure to successfully transition and assimilate key new hires or promoted employees could adversely
affect our business and results of operations.
Terrorist acts, conflicts, wars and geopolitical uncertainties 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 or
adversely affect our ability to manage logistics, operate our transportation and communication systems
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