HP 2007 Annual Report Download - page 120

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Financial Instruments (Continued)
Time deposits consist of certificate of deposits with maturity dates greater than three months. Commercial paper
investments include asset-backed commercial paper. 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. 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, 2007 were associated with other debt securities with a fair value of
$20 million that had been in a continuous loss position for 12 months or longer. The gross unrealized losses were due
primarily to changes in interest rates. Because HP has the intent and ability to retain the investment for a period of time
sufficient to allow for the anticipated recovery in fair value, HP does not consider those investments to be other-than-
temporarily impaired as of October 31, 2007. 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.
Contractual maturities of available-for-sale debt securities were as follows at October 31, 2007:
Available-for-Sale
Securities
Cost
Estimated
Fair Value
In millions
Due in less than one year ......................................................................................................................... $152 $152
Due in 1-5 years....................................................................................................................................... 131 129
$283 $281
Proceeds from sales or maturities of available-for-sale and other securities were $425 million in fiscal 2007, $91 million
in fiscal 2006 and $2.1 billion in fiscal 2005. The gross realized gains totaled $42 million in fiscal 2007. The gross realized
gains and losses totaled $35 million and $2 million, respectively, in fiscal 2006. The gross realized gains and losses totaled
$31 million and $1 million, respectively, in fiscal 2005. The specific identification method is used to account for gains and
losses on available-for-sale securities.
106