Hewlett-Packard recognizes deferred tax assets and liabilities for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year the differences are expected to reverse. Hewlett-Packard records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be realized.
Source: Hewlett-Packard Co., Annual Report
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Hewlett-Packard Co., income tax expense (benefit), continuing operations
USD $ in millions
| 12 months ended | Oct 31, 2011 | Oct 31, 2010 | Oct 31, 2009 | Oct 31, 2008 | Oct 31, 2007 | Oct 31, 2006 | |
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Current | |
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U.S. federal taxes | |
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Non-U.S. taxes | |
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State taxes | |
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Deferred | |
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Provision for (benefit from) taxes on earnings | |
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Source: Based on data from Hewlett-Packard Co. Annual Reports
| Item | Description | The company |
|---|---|---|
| Current | The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations. | Hewlett-Packard Co.'s current increased from 2009 to 2010 but then slightly declined from 2010 to 2011. |
| Deferred | The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations. | Hewlett-Packard Co.'s deferred declined from 2009 to 2010 but then slightly increased from 2010 to 2011. |
| Provision for (benefit from) taxes on earnings | The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy. | Hewlett-Packard Co.'s provision for (benefit from) taxes on earnings increased from 2009 to 2010 but then slightly declined from 2010 to 2011 not reaching 2009 level. |
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Hewlett-Packard Co., effective income tax rate (EITR) reconciliation
| Oct 31, 2011 | Oct 31, 2010 | Oct 31, 2009 | Oct 31, 2008 | Oct 31, 2007 | Oct 31, 2006 | ||
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U.S. federal statutory income tax rate | % |
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State income taxes, net of federal tax benefit | % |
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Lower rates in other jurisdictions, net | % |
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Research and development credit | % |
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Foreign net operating loss | % |
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Valuation allowance | % |
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U.S. federal tax audit settlement | % |
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Accrued taxes due to post-acquisition integration | % |
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Nondeductible goodwill | % |
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Other, net | % |
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HP's effective tax rate | % |
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Source: Based on data from Hewlett-Packard Co. Annual Reports
| Item | Description | The company |
|---|---|---|
| HP's effective tax rate | A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations. | Hewlett-Packard Co.'s hP's effective tax rate increased from 2009 to 2010 and from 2010 to 2011. |
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Hewlett-Packard Co., deferred tax assets (liabilities), net
USD $ in millions
| Oct 31, 2011 | Oct 31, 2010 | Oct 31, 2009 | Oct 31, 2008 | Oct 31, 2007 | Oct 31, 2006 | ||
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Loss carryforwards | |
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Credit carryforwards | |
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Inventory valuation | |
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Fixed assets | |
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Warranty | |
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Employee and retiree benefits | |
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Accounts receivable allowance | |
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Capitalized research and development | |
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Purchased intangible assets | |
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Restructuring | |
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Equity investments | |
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Deferred revenue | |
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Other | |
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Gross deferred tax assets | |
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Valuation allowance | |
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Deferred tax assets | |
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Unremitted earnings of foreign subsidiaries | |
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Inventory valuation | |
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Intercompany transactions, profit in inventory | |
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Fixed assets | |
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Warranty | |
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Employee and retiree benefits | |
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Accounts receivable allowance | |
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Purchased intangible assets | |
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Restructuring | |
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Equity investments | |
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Deferred revenue | |
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Other | |
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Deferred tax liabilities | |
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Deferred tax assets net of deferred tax liabilities | |
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Source: Based on data from Hewlett-Packard Co. Annual Reports
| Item | Description | The company |
|---|---|---|
| Gross deferred tax assets | The sum of the tax effects as of the balance sheet date of the amounts of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws (before the valuation allowance, if any, to reduce such sum amount to net realizable value). Includes any tax benefit realized in deferred tax assets for significant impacts of tax planning strategies. | Hewlett-Packard Co.'s gross deferred tax assets increased from 2009 to 2010 and from 2010 to 2011. |
| Deferred tax assets | The aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; net of deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. | Hewlett-Packard Co.'s deferred tax assets increased from 2009 to 2010 and from 2010 to 2011. |
| Deferred tax assets net of deferred tax liabilities | For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods. | Hewlett-Packard Co.'s deferred tax assets net of deferred tax liabilities increased from 2009 to 2010 but then declined significantly from 2010 to 2011. |
May 23, 2012