HP 2013 Annual Report Download - page 39

formation, administration and performance. Any failure by us to comply with the specific provisions in
our customer contracts or any violation of government contracting regulations could result in the
imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture
of profits, suspension of payments and, in the case of our government contracts, fines and suspension
from future government contracting. In addition, we have in the past been, and may in the future be,
subject to qui tam litigation brought by private individuals on behalf of the government relating to our
government contracts, which could include claims for up to treble damages. Further, any negative
publicity related to our customer contracts or any proceedings surrounding them, regardless of its
accuracy, may damage our business by affecting our ability to compete for new contracts. If our
customer contracts are terminated, if we are suspended or disbarred from government work, or if our
ability to compete for new contracts is adversely affected, we could suffer a reduction in expected
revenue.
HP’s stock price has historically fluctuated and may continue to fluctuate, which may make future prices of
HP’s stock difficult to predict.
HP’s stock price, like that of other technology companies, can be volatile. Some of the factors that
could affect our stock price are:
• speculation, coverage or sentiment in the media or the investment community about, or actual
changes in, our business, strategic position, market share, organizational structure, operations,
financial condition, financial reporting and results, effectiveness of cost-cutting efforts, value or
liquidity of our investments, exposure to market volatility, prospects, business combination or
investment transactions, future stock price performance, board of directors, executive team, our
competitors or our industry in general;
• the announcement of new, planned or contemplated products, services, technological
innovations, acquisitions, divestitures or other significant transactions by HP or its competitors;
• quarterly increases or decreases in revenue, gross margin, earnings or cash flows, changes in
estimates by the investment community or financial outlook provided by HP and variations
between actual and estimated financial results;
• announcements of actual and anticipated financial results by HP’s competitors and other
companies in the IT industry;
• developments relating to pending investigations, claims and disputes; and
• the timing and amount of share repurchases by HP.
General or industry specific market conditions or stock market performance or domestic or
international macroeconomic and geopolitical factors unrelated to HP’s performance also may affect
the price of HP stock. For these reasons, investors should not rely on recent or historical trends to
predict future stock prices, financial condition, results of operations or cash flows. In addition, as
discussed in Note 17 to the Consolidated Financial Statements, we are involved in several securities
class action litigation matters. Additional volatility in the price of our securities could result in the filing
of additional securities class action litigation matters, which could result in substantial costs and the
diversion of management time and resources.
Failure to maintain our credit ratings could adversely affect our liquidity, capital position, borrowing costs
and access to capital markets.
Our credit risk is evaluated by the major independent rating agencies. Two of those rating
agencies, Moody’s Investors Service and Standard & Poor’s Ratings Services, downgraded our ratings
once during fiscal 2012, and a third rating agency, Fitch Ratings, downgraded our ratings twice during
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