HP 2007 Annual Report Download - page 126
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 11: Guarantees (Continued)
evaluating the quality of its component suppliers; however, product warranty terms offered to customers, ongoing product
failure rates, material usage and service delivery costs incurred in correcting a product failure, as well as specific product
class failures outside of HP’ s baseline experience, affect the estimated warranty obligation. If actual product failure rates,
material usage or service delivery costs differ from estimates, revisions to the estimated warranty liability would be required.
The changes in HP’ s aggregate product warranty liabilities were as follows for the following fiscal years ended
October 31:
2007 2006
In millions
Product warranty liability at beginning of year ................................................ $2,248 $2,172
Accruals for warranties issued.......................................................................... 2,712 2,467
Adjustments related to pre-existing warranties (including changes in
estimates)..........................................................................................................
(108) (45)
Settlements made (in cash or in kind)............................................................... (2,476) (2,346)
Product warranty liability at end of year .......................................................... $2,376 $2,248
Note 12: Borrowings
Notes Payable and Short-Term Borrowings
Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows for the
following fiscal years ended October 31:
2007 2006
Amount
Outstanding
Weighted-
Average
Interest Rate
Amount
Outstanding
Weighted-
Average
Interest Rate
In millions
Current portion of long-term debt............................................. $675 4.0% $2,081 5.7%
Commercial paper..................................................................... 2,065 5.0% 190 3.3%
Notes payable to banks, lines of credit and other...................... 446 5.2% 434 4.6%
$3,186 $2,705
Notes payable to banks, lines of credit and other includes deposits associated with HP’ s banking-related activities of
approximately $391 million and $393 million at October 31, 2007 and 2006, respectively.
112