Taxes on Earnings

6 Months Ended

Apr. 30, 2025

Income Tax Disclosure [Abstract]

Taxes on Earnings

Taxes on Earnings

Provision for Taxes

HP’s effective tax rate was 19.8% and 23.8% for the three months ended April 30, 2025 and 2024, respectively, and 19.8% and 22.7% for the six months ended April 30, 2025 and 2024, respectively.

During the three and six months ended April 30, 2025, HP recorded $40 million and $34 million of net income tax benefits, respectively, related to discrete items in the provision for taxes. The three and six months ended April 30, 2025 included benefits of $19 million related to litigation charges and $24 million and $38 million related to restructuring charges, respectively. For the six months ended April 30, 2025, these benefits were partially offset by $15 million of uncertain tax position charges and $17 million related to changes in tax rates. In addition to the discrete items mentioned above, HP recorded excess tax benefits of $15 million associated with stock options, restricted stock units and performance-adjusted restricted stock units for the six months ended April 30, 2025.

Uncertain Tax Positions

As of April 30, 2025, the amount of gross unrecognized tax benefits was $1.2 billion, of which up to $886 million would affect HP’s effective tax rate if realized. Total gross unrecognized tax benefits increased by $15 million for the six months ended April 30, 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 April 30, 2025 and 2024, HP had accrued $157 million and $119 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 $182 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.