HP 2006 Annual Report Download - page 106

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Financial Instruments (Continued)
Corporate debt consists primarily of loans to the other companies that are guaranteed by standby
letters of credit issued by third party banks. Other debt securities consist primarily of fixed-interest
securities invested for early retirement purposes as required by German laws. Equity securities in public
companies are primarily common stock.
HP estimated the fair values based on quoted market prices or pricing models using current
market rates. These estimated fair values may not be representative of actual values that could have
been realized as of year-end or that will be realized in the future.
The gross unrealized losses as of October 31, 2006 were associated with other debt securities with
a fair value of $18 million and had been in a continuous loss position for fewer than 12 months. The
gross unrealized losses as of October 31, 2005 were associated with investments in public equity
securities with a fair value of $10 million and had been in a continuous loss position for fewer than
12 months.
Contractual maturities of available-for-sale debt securities were as follows at October 31, 2006:
Available-for-Sale
Securities
Estimated
Cost Fair Value
In millions
Due in less than one year ............................................ $22 $22
Due in 1-5 years ................................................... 21 20
$43 $42
Proceeds from sales or maturities of available-for-sale and other securities were $91 million in
fiscal 2006, $2.1 billion in fiscal 2005 and $4.3 billion in fiscal 2004. The gross realized gains and losses
totaled $35 million and $2 million, respectively, in fiscal 2006. Gross realized gains and losses totaled
$31 million and $1 million, respectively, in fiscal 2005. Gross realized gains and losses totaled
$27 million and $4 million, respectively, in fiscal 2004. 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:
2006 2005
In millions
Available-for-sale debt securities ......................................... $ 22 $ 18
Short-term investments ............................................... 22 18
Available-for-sale debt securities ......................................... 20 18
Available-for-sale equity securities ........................................ 36 64
Equity securities in privately-held companies and other investments ................ 362 353
Included in long-term financing receivables and other assets ..................... 418 435
Total investments ..................................................... $440 $453
102