HP 2012 Annual Report Download - page 128
Download and view the complete annual report
Please find page 128 of the 2012 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.-
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
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
 |
 |
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10: Financial Instruments (Continued)
Fair Value of Derivative Instruments in the Consolidated Balance Sheets
As discussed in Note 9, HP estimates the fair values of derivatives primarily based on pricing
models using current market rates and records all derivatives on the balance sheet at fair value. The
gross notional and fair value of derivative financial instruments in the Consolidated Balance Sheets
were as follows:
As of October 31, 2012 As of October 31, 2011
Long-term Long-term
Financing Financing
Other Receivables Other Other Receivables Other
Gross Current and Accrued Other Gross Current and Accrued Other
Notional(1) Assets Other Assets Liabilities Liabilities Notional(1) Assets Other Assets Liabilities Liabilities
In millions
Derivatives designated as
hedging instruments
Fair value hedges:
Interest rate contracts . . . $ 7,900 $ 43 $276 $ — $ — $10,075 $ 30 $508 $ — $ —
Cash flow hedges:
Foreign exchange contracts 19,409 160 24 277 79 21,666 192 30 324 126
Net investment hedges:
Foreign exchange contracts 1,683 14 15 36 24 1,556 7 4 44 56
Total derivatives designated as
hedging instruments ..... 28,992 217 315 313 103 33,297 229 542 368 182
Derivatives not designated as
hedging instruments
Foreign exchange contracts . . 18,687 61 17 51 19 13,994 66 5 244 38
Interest rate contracts(2) .... 2,200 25 — 29 — 2,200 — 55 — 71
Other derivatives ........ 383 1 — 3 — 410 25 6 — 1
Total derivatives not
designated as hedging
instruments .......... 21,270 87 17 83 19 16,604 91 66 244 110
Total derivatives ........ $50,262 $304 $332 $396 $122 $49,901 $320 $608 $612 $292
(1) Represents the face amounts of contracts that were outstanding as of October 31, 2012 and October 31, 2011, respectively.
(2) Represents offsetting swaps acquired through previous business combinations that were not designated as hedging instruments.
Effect of Derivative Instruments on the Consolidated Statements of Earnings
The before-tax effect of derivative instruments and related hedged items in a fair value hedging
relationship for fiscal years ended October 31, 2012 and October 31, 2011 were as follows:
Gain (Loss) Recognized in Income on Derivative and Related Hedged Item
Derivative Instrument Location 2012 Hedged Item Location 2012
In millions In millions
Interest rate contracts Interest and other, net $(130) Fixed-rate debt Interest and other, net $134
Gain (Loss) Recognized in Income on Derivative and Related Hedged Item
Derivative Instrument Location 2011 Hedged Item Location 2011
In millions In millions
Interest rate contracts Interest and other, net $(119) Fixed-rate debt Interest and other, net $128
120