HP 2008 Annual Report Download - page 121

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 9: Financial Instruments
Investments in Debt and Equity Securities
Investments in available-for-sale debt and equity securities at fair value were as follows for the
following fiscal years ended October 31:
2008 2007
Gross Gross Gross Gross
Unrealized Unrealized Estimated Unrealized Unrealized Estimated
Cost Gains Loss Fair Value Cost Gain Loss Fair Value
In millions
Available-for-Sale Securities
Debt securities:
Time deposits ............ $103 $— $ — $103 $141 $— $— $141
Commercial paper ......... 83 — (20) 63 104 — — 104
Corporate debt ........... — — — — 11 — — 11
Other debt securities ....... 21 1 — 22 27 — (2) 25
Total debt securities ......... 207 1 (20) 188 283 — (2) 281
Equity securities in public
companies ............... 3 2 — 5 3 6 — 9
$210 $ 3 $(20) $193 $286 $ 6 $ (2) $290
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 and also fixed income fund. 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 loss as of October 31, 2008 was due primarily to declines in certain
asset-backed securities associated with the commercial paper. HP intends to hold the commercial paper
and believes the asset-backed securities will recover over time. In fiscal 2008 and 2007, HP recognized
gross realized losses of $16 million and $15 million, respectively, associated with commercial paper.
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