HP 2015 Annual Report Download - page 35

Table of Contents
•developments relating to pending investigations, claims and disputes; and
•the timing and amount of our share repurchases.
General or industry specific market conditions or stock market performance or domestic or international macroeconomic and geopolitical factors
unrelated to our performance also may affect the price of our 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. Additional volatility in the price of our securities could result in the filing of 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. Fitch Ratings, Moody's Investor Service and Standard & Poor's Rating Services
downgraded Hewlett-Packard Company's ratings in the past. Past downgrades have increased the cost of borrowing under our credit facilities, have reduced
market capacity for our commercial paper, and may require the posting of additional collateral under some of our derivative contracts. We cannot assure you
that we will be able to maintain our current credit ratings, and any additional actual or anticipated changes or downgrades in our credit ratings, including any
announcement that our ratings are under further review for a downgrade, may further impact us in a similar manner and may have a negative impact on our
liquidity, capital position and access to capital markets.
We make estimates and assumptions in connection with the preparation of our Consolidated Financial Statements, and any changes to those estimates and
assumptions could adversely affect our results of operations.
In connection with the preparation of our Consolidated Financial Statements, we use certain estimates and assumptions based on historical experience
and other factors. Our most critical accounting estimates are described in the section entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operations" in Item 7 of this report. In addition, as discussed in Note 16 to the Consolidated Financial Statements, we make certain estimates,
including decisions related to provisions for legal proceedings and other contingencies. While we believe that these estimates and assumptions are
reasonable under the circumstances, they are subject to significant uncertainties, some of which are beyond our control. Should any of these estimates and
assumptions change or prove to have been incorrect, it could adversely affect our results of operations.
Unanticipated changes in our tax provisions, the adoption of new tax legislation or exposure to additional tax liabilities could affect our financial
performance.
We are subject to income and other taxes in the United States and numerous foreign jurisdictions. Our tax liabilities are affected by the amounts we
charge in intercompany transactions for inventory, services, licenses, funding and other items. We are subject to ongoing tax audits in various jurisdictions.
Tax authorities may disagree with our intercompany charges, cross-jurisdictional transfer pricing or other matters, and may assess additional taxes as a result.
We regularly assess the likely outcomes of these audits in order to determine the appropriateness of our tax provision. However, we cannot assure you that we
will accurately predict the outcomes of these audits, and the amounts ultimately paid upon resolution of audits could be materially different from the
amounts previously included in our income tax expense and therefore could have a material impact on our tax provision, net income and cash flows. In
addition, our effective tax rate in the future could be adversely affected by changes to our operating structure, changes in the mix of earnings in countries
with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in tax laws and the discovery of
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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