HP 2012 Annual Report Download - page 79

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
Income Tax Obligations
In addition to the above, at October 31, 2012, we had approximately $2.3 billion of recorded
liabilities and related interest and penalties pertaining to uncertainty in income tax positions, which will
be partially offset by $338 million of deferred tax assets and interest receivable. These liabilities and
related interest and penalties include $81 million expected to be paid within one year. For the
remaining amount, we are unable to make a reasonable estimate as to when cash settlement with the
tax authorities might occur due to the uncertainties related to these tax matters. See Note 14 to the
Consolidated Financial Statements in Item 8, which is incorporated herein by reference, for additional
information on taxes.
Restructuring Funding Commitments
As a result of our approved restructuring plans, we expect future cash expenditures of
approximately $2.7 billion. We expect to make cash payments of approximately $1.6 billion in fiscal
2013 with remaining cash payments through fiscal 2016. In addition to these cash expenditures, we
expect to fund approximately $833 million of the enhanced early retirement program (‘‘EER’’)
announced in May 2012 through use of our U.S. pension plan assets. The use of plan assets to fund the
U.S. EER in fiscal 2012 did not cause us to increase our funding to our U.S. pension plan. See Note 8
and Note 16 to the Consolidated Financial Statements in Item 8, which are incorporated herein by
reference, for additional information on our restructuring plans and pension activities, respectively. We
expect to use a combination of cash from operations and our available borrowing resources to meet our
near-term funding commitments.
Guarantees and Indemnifications
See Note 12 to the Consolidated Financial Statements in Item 8, which is incorporated herein by
reference, for additional information on liabilities that may arise from guarantees and indemnifications.
Litigation and Contingencies
See Note 18 to the Consolidated Financial Statements in Item 8, which is incorporated herein by
reference, for additional information on liabilities that may arise from litigation and contingencies.
Off-Balance Sheet Arrangements
As part of our ongoing business, we have not participated in transactions that generate material
relationships with unconsolidated entities or financial partnerships, such as entities often referred to as
structured finance or special purpose entities (‘‘SPEs’’), which would have been established for the
purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited
purposes. As of October 31, 2012, we are not involved in any material unconsolidated SPEs.
HP has third-party financing arrangements in order to facilitate the working capital requirements
of certain partners consisting of revolving short-term financing. The total aggregate capacity of the
facilities was $1.5 billion as of October 31, 2012, including a $0.9 billion partial recourse facility entered
into in May 2011 and an aggregate capacity of $0.6 billion in non-recourse facilities. For more
information on our revolving trade receivables-based facilities, see Note 4 to the Consolidated Financial
Statements in Item 8, which is incorporated herein by reference.
71