HP 2006 Annual Report Download - page 121
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 14: Stockholders’ Equity (Continued)
Comprehensive Income
The changes in the components of other comprehensive income, net of taxes, were as follows for
the following fiscal years ended October 31:
2006 2005 2004
In millions
Net earnings ............................................... $6,198 $2,398 $3,497
Net unrealized losses on available-for-sale securities:
Change in net unrealized gains (losses), net of taxes of $3 in 2006, $6 in
2005 and tax benefit of $12 in 2004 ........................... 7 9 (12)
Net unrealized gains reclassified into earnings, net of taxes of $9 in 2006,
$6 in 2005 and $5 in 2004 .................................. (13) (10) (8)
(6) (1) (20)
Net unrealized gains (losses) on cash flow hedges:
Change in net unrealized losses, net of tax benefit of $24 in 2006, $16 in
2005 and $59 in 2004 ..................................... (41) (28) (100)
Net unrealized losses reclassified into earnings, net of tax benefit of $24 in
2006, $56 in 2005 and $42 in 2004 ............................ 41 97 72
— 69 (28)
Net change in cumulative translation adjustment, net of tax benefit of $40 in
2006, $8 in 2005, and taxes of $4 in 2004 ......................... 54 (17) 21
Net change in additional minimum pension liability, net of tax benefit of $1
in 2006, taxes of $89 in 2005, and tax benefit of $3 in 2004 ........... (9) 171 (13)
Comprehensive income ....................................... $6,237 $2,620 $3,457
The components of accumulated other comprehensive income (loss), net of taxes, were as follows
for the following fiscal years ended October 31:
2006 2005
In millions
Net unrealized gains on available-for-sale securities ..................... $16 $22
Net unrealized losses on cash flow hedges ............................ (46) (46)
Cumulative translation adjustment .................................. 67 13
Additional minimum pension liability ................................ (19) (10)
Accumulated other comprehensive income (loss) ....................... $18 $(21)
Note 15: Retirement and Post-Retirement Benefit Plans
Plan Design Changes
In conjunction with management’s plan to restructure certain of its operations, as discussed in
Note 8 to the Consolidated Financial Statements, HP modified its U.S. retirement programs to align
more closely to industry practice. Effective January 1, 2006, HP no longer offers U.S. defined benefit
pension plans and subsidized retiree medical programs to new U.S. hires. In addition, HP ceased
pension accruals and eliminated eligibility for the subsidized retiree medical program for current
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