HP 2007 Annual Report Download - page 125

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10: Financing Receivables and Operating Leases (Continued)
included in financing receivables and long-term financing receivables and other assets, were as follows for the following
fiscal years ended October 31:
2007 2006
In millions
Minimum lease payments receivable................................................................................................... $5,568 $5,010
Allowance for doubtful accounts......................................................................................................... (84) (80)
Unguaranteed residual value................................................................................................................ 291 289
Unearned income ................................................................................................................................. (490) (439)
Financing receivables, net.................................................................................................................... 5,285 4,780
Less current portion ............................................................................................................................. (2,507) (2,440)
Amounts due after one year, net .......................................................................................................... $2,778 $2,340
As of October 31, 2007, scheduled maturities of HP’ s minimum lease payments receivable were as follows for the
following fiscal years ended October 31:
2008 2009 2010 2011 2012 Thereafter Total
In millions
Scheduled maturities of minimum lease payments receivable.... $2,706 $1,485 $759 $334 $168 $116 $5,568
Equipment leased to customers under operating leases was $2.4 billion at October 31, 2007 and $2.1 billion at
October 31, 2006 and is included in machinery and equipment. Accumulated depreciation on equipment under lease was
$0.6 billion at both October 31, 2007 and October 31, 2006. As of October 31, 2007, minimum future rentals on non-
cancelable operating leases related to leased equipment were as follows for the following fiscal years ended October 31:
2008 2009 2010 2011 2012 Thereafter Total
In millions
Minimum future rentals on non-cancelable operating leases...... $882 $430 $196 $85 $31 $25 $1,649
Note 11: Guarantees
Indemnifications
In the ordinary course of business, HP enters into contractual arrangements under which HP may agree to indemnify the
third party to such arrangement from any losses incurred relating to the services they perform on behalf of HP or for losses
arising from certain events as defined within the particular contract, which may include, for example, litigation or claims
relating to past performance. Such indemnification obligations may not be subject to maximum loss clauses. Historically,
payments made related to these indemnifications have been immaterial.
Warranty
HP provides for the estimated cost of product warranties at the time it recognizes revenue. HP engages in extensive
product quality programs and processes, including actively monitoring and
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