HP 2015 Annual Report Download - page 34

Table of Contents
•If we do not hire, train, motivate and effectively utilize employees with the right mix of skills and experience in the right geographic regions
to meet the needs of our services clients, our financial performance could suffer. For example, if our employee utilization rate is too low, our
profitability and the level of engagement of our employees could suffer. If that utilization rate is too high, it could have an adverse effect on
employee engagement and attrition and the quality of the work performed, as well as our ability to staff projects. If we are unable to hire and
retain a sufficient number of employees with the skills or backgrounds to meet current demand, we might need to redeploy existing personnel,
increase our reliance on subcontractors or increase employee compensation levels, all of which could also negatively affect our profitability.
In addition, if we have more employees than we need with certain skill sets or in certain geographies, we may incur increased costs as we work
to rebalance our supply of skills and resources with client demand in those geographies.
Failure to comply with our customer contracts or government contracting regulations could adversely affect our business and results of operations.
Our contracts with our customers may include unique and specialized performance requirements. In particular, our contracts with federal, state, provincial
and local governmental customers are subject to various procurement regulations, contract provisions and other requirements relating to their 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. Such failures could also
cause reputational damage to our business. In addition, Hewlett-Packard Company has in the past been, and we 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 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, our financial performance could suffer.
Hewlett-Packard Company's stock price has historically fluctuated, and our stock price may continue to fluctuate, which may make future prices of
HP Inc.'s stock difficult to predict.
Our 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 us or our competitors;
•quarterly increases or decreases in revenue, gross margin, earnings or cash flows, changes in estimates by the investment community or our
financial outlook and variations between actual and estimated financial results;
•announcements of actual and anticipated financial results by our competitors and other companies in the IT industry;
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.