HP 2008 Annual Report Download - page 122

Download and view the complete annual report

Please find page 122 of the 2008 HP annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 183

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Financial Instruments (Continued)
Contractual maturities of available-for-sale debt securities were as follows at October 31, 2008:
Available-for-Sale
Securities
Estimated
Cost Fair Value
In millions
Due in less than one year ............................................ $ 93 $ 93
Due in 1-5 years .................................................. 31 32
Due in more than five years .......................................... 83 63
$207 $188
Proceeds from sales or maturities of available-for-sale and other securities were $280 million in
fiscal 2008, $425 million in fiscal 2007 and $94 million in fiscal 2006. The gross realized gains totaled
$19 million in fiscal 2008 and $42 million in fiscal 2007. The gross realized gains and losses totaled
$35 million and $2 million, respectively, in fiscal 2006. The specific identification method is used to
account for gains and losses on available-for-sale securities.
A summary of the carrying values and balance sheet classification of all investments in debt and
equity securities was as follows for the following fiscal years ended October 31:
2008 2007
In millions
Available-for-sale debt securities ......................................... $ 93 $152
Short-term investments ............................................... 93 152
Available-for-sale debt securities ......................................... 95 129
Available-for-sale equity securities ........................................ 5 9
Equity securities in privately-held companies ................................. 145 115
Marketable trading securities and other investments ........................... 280 418
Included in long-term financing receivables and other assets .................... 525 671
Total investments ..................................................... $618 $823
Equity securities in privately-held companies include cost basis and equity method investments.
Marketable trading securities and other investments consist primarily of marketable trading securities
held to generate returns that HP expects to offset changes in certain liabilities related to deferred
compensation arrangements. HP includes gains or losses from changes in fair value of these securities,
offset by losses or gains on the related liabilities, in interest and other, net, in HP’s Consolidated
Statements of Earnings. The gains or losses associated with these securities are not material for both
fiscal years 2008 and 2007.
Derivative Financial Instruments
HP is a global company that is exposed to foreign currency exchange rate fluctuations and interest
rate changes in the normal course of its business. As part of its risk management strategy, HP uses
derivative instruments, primarily forward contracts, swaps and options, to hedge certain foreign
currency and interest rate exposures. HP’s objective is to offset gains and losses resulting from these
116