Taxes on Earnings

3 Months Ended

Jan. 31, 2025

Income Tax Disclosure [Abstract]

Taxes on Earnings

Taxes on Earnings

Provision for Taxes

HP’s effective tax rate was 19.7% and 21.6% for the three months ended January 31, 2025 and 2024, respectively. During the three months ended January 31, 2025, excess tax benefits associated with stock options, restricted stock units and performance-adjusted restricted stock units were $15 million.

Uncertain Tax Positions

As of January 31, 2025, the amount of gross unrecognized tax benefits was $1.2 billion, of which up to $873 million would affect HP’s effective tax rate if realized. Total gross unrecognized tax benefits decreased by $9 million for the three months ended January 31, 2025. HP recognizes interest income from favorable settlements and interest expense and penalties accrued on unrecognized tax benefits in the provision for taxes in the Consolidated Condensed Statements of Earnings. As of January 31, 2025 and 2024, HP had accrued $145 million and $105 million, respectively, for interest and penalties.

HP engages in continuous discussions and negotiations with taxing authorities regarding tax matters in various jurisdictions. HP expects complete resolution of certain tax years with various tax authorities within the next 12 months. HP believes it is reasonably possible that its existing gross unrecognized tax benefits may be reduced by $166 million within the next 12 months, affecting HP’s effective tax rate if realized.

HP is subject to income tax in the United States and approximately 61 other countries and is subject to routine corporate income tax audits in many of these jurisdictions. In addition, HP is subject to numerous ongoing audits by federal, state and foreign tax authorities. The Internal Revenue Service (“IRS”) is conducting an audit of HP’s 2018 and 2019 income tax returns.