HP 2014 Annual Report Download - page 133

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 6: Taxes on Earnings (Continued)
tax positions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and
other information and events pertaining to a particular audit. However, income tax audits are
inherently unpredictable and there can be no assurance that HP will accurately predict the outcome of
these audits. The amounts ultimately paid on resolution of an audit could be materially different from
the amounts previously included in the Provision for taxes and therefore the resolution of one or more
of these uncertainties in any particular period could have a material impact on net income or cash
flows.
HP has not provided for U.S. federal income and foreign withholding taxes on $42.9 billion of
undistributed earnings from non-U.S. operations as of October 31, 2014 because HP intends to reinvest
such earnings indefinitely outside of the U.S. If HP were to distribute these earnings, foreign tax credits
may become available under current law to reduce the resulting U.S. income tax liability.
Determination of the amount of unrecognized deferred tax liability related to these earnings is not
practicable. HP will remit non-indefinitely reinvested earnings of its non-U.S. subsidiaries for which
deferred U.S. federal and withholding taxes have been provided where excess cash has accumulated and
HP determines that it is advantageous for business operations, tax or cash management reasons.
Deferred Income Taxes
The significant components of deferred tax assets and deferred tax liabilities were as follows:
As of October 31
2014 2013
Deferred Deferred Deferred Deferred
Tax Ta x Tax Tax
Assets Liabilities Assets Liabilities
In millions
Loss carryforwards .............................. $ 9,476 $ — $ 9,807 $ —
Credit carryforwards ............................. 2,377 — 4,261 —
Unremitted earnings of foreign subsidiaries ............ — 7,828 — 7,469
Inventory valuation .............................. 152 8 128 13
Intercompany transactions—profit in inventory .......... 136 — 125 —
Intercompany transactions—excluding inventory ......... 4,403 — 1,923 —
Fixed assets ................................... 383 74 289 72
Warranty ..................................... 616 — 622 —
Employee and retiree benefits ...................... 2,790 57 2,350 11
Accounts receivable allowance ...................... 107 1 185 1
Intangible assets ................................ 212 596 224 886
Restructuring .................................. 354 — 340 —
Deferred revenue ............................... 1,143 12 1,119 19
Other ........................................ 1,573 1,145 1,443 759
Gross deferred tax assets and liabilities ................ 23,722 9,721 22,816 9,230
Valuation allowance ............................. (11,915) — (11,390) —
Net deferred tax assets and liabilities ................. $11,807 $9,721 $ 11,426 $9,230
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