HP 2010 Annual Report Download - page 135

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 14: Taxes on Earnings (Continued)
credit and net operating loss carrybacks to earlier fiscal years and reduce the tax benefits of
carryforwards to subsequent years, by approximately $80 million. HP plans to contest certain of the
adjustments proposed in the Notice of Deficiency and the RAR. Towards this end, HP filed a Petition
with the United States Tax Court on September 25, 2007. HP believes that it has provided adequate
reserves for any tax deficiencies or reductions in refund claims that could result from the IRS actions.
HP has not provided for U.S. federal income and foreign withholding taxes on $21.9 billion of
undistributed earnings from non-U.S. operations as of October 31, 2010 because HP intends to reinvest
such earnings indefinitely outside of the United States. If HP were to distribute these earnings, foreign
tax credits may become available under current law to reduce the resulting U.S. income tax liability.
Determination of the amount of unrecognized deferred tax liability related to these earnings is not
practicable. HP will remit non-indefinitely reinvested earnings of its non-US subsidiaries for which
deferred U.S. federal and withholding taxes have been provided where excess cash has accumulated and
it determines that it is advantageous for business operations, tax or cash management reasons.
Note 15: Stockholders’ Equity
Dividends
The stockholders of HP common stock are entitled to receive dividends when and as declared by
HP’s Board of Directors. Dividends are paid quarterly. Dividends declared were $0.32 per common
share in each of fiscal 2010, 2009 and 2008.
Stock Repurchase Program
HP’s share repurchase program authorizes both open market and private repurchase transactions.
In fiscal 2010, HP executed share repurchases of 241 million shares. Repurchases of 240 million shares
were settled for $11.0 billion, which included 3 million shares repurchased in transactions that were
executed in fiscal 2009 but settled in fiscal 2010. HP had approximately 4 million shares repurchased in
the fourth quarter of fiscal 2010 that will be settled in the next fiscal year. In fiscal 2009, HP completed
share repurchases of approximately 120 million shares. Repurchases of approximately 132 million shares
were settled for $5.1 billion, which included approximately 14 million shares repurchased in transactions
that were executed in fiscal 2008 but settled in fiscal 2009. In fiscal 2008, HP completed share
repurchases of approximately 230 million shares. Repurchases of approximately 216 million shares were
settled for $9.6 billion, which included approximately 1 million shares repurchased in transactions that
were executed in fiscal 2007 but settled in fiscal 2008. The foregoing shares repurchased and settled in
fiscal 2010, fiscal 2009 and fiscal 2008 were all open market repurchase transactions.
In fiscal 2010, HP’s Board of Directors authorized an additional $18.0 billion for future share
repurchases. In fiscal 2009, there was no additional authorization for future share repurchases by HP’s
Board of Directors. In fiscal 2008, HP’s Board of Directors authorized an additional $16.0 billion for
future share repurchases. As of October 31, 2010, HP had remaining authorization of approximately
$10.9 billion for future share repurchases.
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