HP 2015 Annual Report Download - page 63

Table of Contents
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Restructuring charges increased in fiscal 2014 due primarily to higher charges in connection with the 2012 Plan and from increases to the 2012 Plan
announced in fiscal 2014. During fiscal 2014, HP increased the total for positions expected to be eliminated under the 2012 Plan from 34,000 to 55,000
positions. In fiscal 2015, HP recognized restructuring charges of $640 million in connection with the 2012 Plan.
Acquisition and Other Related Charges
Acquisition and other related charges increased for fiscal 2015, due primarily to the acquisition of Aruba resulting in a non-cash inventory fair value
adjustment charge and professional services and legal fees associated with the acquisition.
Separation Costs
Separation costs for fiscal 2015 were primarily comprised of third-party consulting, contractor fees and other related costs.
Defined Benefit Plan Settlement Charges
Defined benefit plan settlement charges for fiscal 2015 were related to U.S. defined benefit plan settlement expense and net periodic benefit cost
resulting from the voluntary lump sum program announced in January 2015.
Impairment of Data Center Assets
Impairment of data center assets for fiscal 2015 was related to our exit from several ES data centers.
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Interest and other, net expense increased by $111 million in fiscal 2015. The increase was in connection with $167 million of early debt settlement costs
and higher foreign currency transaction losses, partially offset by lower interest expense due to lower weighted average interest rates and a decrease in
miscellaneous other expenses.
Interest and other, net expense increased by $7 million in fiscal 2014. The increase was due primarily to higher currency transaction losses partially
offset by lower interest expense from a lower average debt balance.
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Our effective tax rates were 3.8%, 23.5% and 21.5% in fiscal 2015, 2014 and 2013, respectively. Our effective tax rate generally differs from the U.S.
federal statutory rate of 35% due to favorable tax rates associated with certain earnings from our operations in lower tax jurisdictions throughout the world.
The jurisdictions with favorable tax rates that had the most significant impact on HP's effective tax rate in the periods presented were Puerto Rico, Singapore,
China, Malaysia, Ireland and Netherlands. HP plans to reinvest certain earnings of these jurisdictions indefinitely outside the U.S. and therefore has not
provided U.S. taxes on those indefinitely reinvested earnings.
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Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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