XML 22 R12.htm IDEA: XBRL DOCUMENT v3.25.2
Taxes on Earnings
 9 Months Ended
Jul. 31, 2025
Income Tax Disclosure [Abstract]  
Taxes on Earnings Taxes on Earnings
Provision for Taxes
HP’s effective tax rate was (22.3)% and 22.6% for the three months ended July 31, 2025 and 2024, respectively, and 5.5% and 22.7% for the nine months ended July 31, 2025 and 2024, respectively. The difference between the U.S. federal statutory tax rate of 21% and HP’s effective tax rate for the three and nine months ended July 31, 2025 was primarily due to decreases in unrecognized tax benefits.
During the three and nine months ended July 31, 2025, HP recorded $281 million and $315 million of net income tax benefits, respectively, related to discrete items in the provision for taxes. These amounts included income tax benefits of $243 million and $228 million related to changes in uncertain tax positions, $20 million and $58 million related to restructuring charges, and $15 million and $18 million related to the filing of tax returns in various jurisdictions for the three and nine months ended July 31, 2025, respectively. The three and nine months ended July 31, 2025 also included benefits of $55 million related to changes in valuation allowances and $22 million related to audit settlements in various jurisdictions. These benefits were partially offset by income tax charges of $80 million related to tax effects of internal reorganization for the three and nine months ended July 31, 2025.
Uncertain Tax Positions
As of July 31, 2025, the amount of gross unrecognized tax benefits was $1.0 billion, of which up to $707 million would affect HP’s effective tax rate if realized. Total gross unrecognized tax benefits decreased by $238 million for the nine months ended July 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 Condensed Consolidated Statements of Earnings. As of July 31, 2025 and 2024, HP had accrued $129 million and $130 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 $131 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.