Impact of internal reorganization

[Table of Contents](#i43adbcd383bc4dc48977980bcb999d17_79) HP INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)Note 6: Taxes on EarningsProvision for Taxes  
The domestic and foreign components of earnings before taxes were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | For the fiscal years ended October 31 |
|   | 2021 |  | 2020 |  | 2019 |
|   | In millions |
| U.S. | $ | 4,662  |  |  | $ | 884  |  |  | $ | (1,021) |  |
| Non-U.S. | 2,849  |  |  | 2,347  |  |  | 3,544  |  |
|   | $ | 7,511  |  |  | $ | 3,231  |  |  | $ | 2,523  |  |

The provision for (benefit from) taxes on earnings was as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | For the fiscal years ended October 31 |
|   | 2021 |  | 2020 |  | 2019 |
|   | In millions |
| U.S. federal taxes: |   |  |   |  |   |
| Current | $ | 1,118  |  |  | $ | (24) |  |  | $ | (987) |  |
| Deferred | (458) |  |  | (68) |  |  | 149  |  |
| Non-U.S. taxes: |   |  |   |  |   |
| Current | 420  |  |  | 319  |  |  | 386  |  |
| Deferred | (197) |  |  | 164  |  |  | (3) |  |
| State taxes: |   |  |   |  |   |
| Current | 77  |  |  | 23  |  |  | (160) |  |
| Deferred | 48  |  |  | (27) |  |  | (14) |  |
|   | $ | 1,008  |  |  | $ | 387  |  |  | $ | (629) |  |

 The differences between the U.S. federal statutory income tax rate and HP’s effective tax rate were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | For the fiscal years ended October 31 |
|   | 2021 |  | 2020 |  | 2019 |
| U.S. federal statutory income tax rate from continuing operations | 21.0  | % |  | 21.0  | % |  | 21.0  | % |
| State income taxes, net of federal tax benefit | 0.9  | % |  | 1.4  | % |  | 1.5  | % |
| Impact of foreign earnings including GILTI and FDII, net | (3.6) | % |  | (6.1) | % |  | (4.4) | % |
| U.S. Tax Reform enactment | —  | % |  | —  | % |  | (2.6) | % |
| Research and development (“R&D”) credit | (0.4) | % |  | (0.7) | % |  | (1.1) | % |
| Valuation allowances | (3.8) | % |  | 2.3  | % |  | (3.7) | % |
| Uncertain tax positions and audit settlements | 0.8  | % |  | (4.1) | % |  | (41.1) | % |
| Indemnification related items | —  | % |  | —  | % |  | 6.8  | % |
| Impact of internal reorganization | (1.2) | % |  | —  | % |  | —  | % |
| Other, net | (0.3) | % |  | (1.8) | % |  | (1.3) | % |
|   | 13.4  | % |  | 12.0  | % |  | (24.9) | % |

 The jurisdictions with favorable tax rates that have the most significant effective tax rate impact in the periods presented include Puerto Rico, Singapore, and Malaysia. HP has elected to treat GILTI inclusions as period costs.In fiscal year 2021, HP recorded $9 million of net income tax charges related to discrete items in the provision for taxes. This amount included income tax charges of $533 million related to the Oracle litigation proceeds, $15 million of uncertain tax 83
