HP 2008 Annual Report Download - page 126
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Financial Instruments (Continued)
2007
Long-term
Financing
Other Receivables Other
Gross Current and Accrued Other
Notional Assets Other Assets Liabilities Liabilities Total
In millions
Fair value hedges .................. $ 2,450 $ — $21 $ — $ — $ 21
Cash flow hedges .................. 9,657 73 — (183) — (110)
Net investment hedges .............. 1,002 5 — (78) (27) (100)
Other derivatives .................. 17,854 86 7 (377) (87) (371)
Total ........................... $30,963 $164 $28 $(638) $(114) $(560)
Fair Value of Other Financial Instruments
For certain of HP’s financial instruments, including cash and cash equivalents, short-term
investments, accounts receivable, financing receivables, notes payable and short-term borrowings,
accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their
short maturities. The estimated fair value of HP’s short- and long-term debt was approximately
$17.7 billion at October 31, 2008, compared to a carrying value of $17.9 billion at that date. The
estimated fair value of the debt is based primarily on quoted market prices, as well as borrowing rates
currently available to HP for bank loans with similar terms and maturities.
Note 10: Financing Receivables and Operating Leases
Financing receivables represent sales-type and direct-financing leases resulting from the marketing
of HP’s and third-party products. These receivables typically have terms from two to five years and are
usually collateralized by a security interest in the underlying assets. Financing receivables also include
billed receivables from operating leases. The components of net financing receivables, which are
included in financing receivables and long-term financing receivables and other assets, were as follows
for the following fiscal years ended October 31:
2008 2007
In millions
Minimum lease payments receivable ................................... $5,338 $ 5,568
Allowance for doubtful accounts ...................................... (90) (84)
Unguaranteed residual value ........................................ 254 291
Unearned income ................................................ (466) (490)
Financing receivables, net ........................................... 5,036 5,285
Less current portion ............................................... (2,314) (2,507)
Amounts due after one year, net ..................................... $2,722 $ 2,778
120