HP 2010 Annual Report Download - page 124

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 11: 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:
2010 2009
In millions
Minimum lease payments receivable ................................... $7,094 $ 6,413
Allowance for doubtful accounts ...................................... (140) (108)
Unguaranteed residual value ........................................ 212 244
Unearned income ................................................ (596) (571)
Financing receivables, net ........................................... 6,570 5,978
Less current portion ............................................... (2,986) (2,675)
Amounts due after one year, net ..................................... $3,584 $ 3,303
As of October 31, 2010, scheduled maturities of HP’s minimum lease payments receivable were as
follows for the following fiscal years ended October 31:
2011 2012 2013 2014 Thereafter Total
Scheduled maturities of minimum lease payments
receivable ........................... $3,320 $1,951 $1,113 $520 $190 $7,094
Equipment leased to customers under operating leases was $3.5 billion at October 31, 2010 and
$3.0 billion at October 31, 2009 and is included in machinery and equipment. Accumulated
depreciation on equipment under lease was $1.0 billion at October 31, 2010 and $0.9 billion at
October 31, 2009. As of October 31, 2010, minimum future rentals on non-cancelable operating leases
related to leased equipment were as follows for the following fiscal years ended October 31:
2011 2012 2013 2014 Thereafter Total
Minimum future rentals on non-cancelable operating
leases ................................. $1,169 $785 $398 $127 $46 $2,525
Note 12: Guarantees
Guarantees and Indemnifications
In the ordinary course of business, HP may provide certain clients with subsidiary performance
guarantees and/or financial performance guarantees, which may be backed by standby letters of credit
or surety bonds. In general, HP would be liable for the amounts of these guarantees in the event that
the nonperformance of HP or HP’s subsidiaries permits termination of the related contract by the
client, the likelihood of which HP believes is remote. HP believes that the company is in compliance
with the performance obligations under all material service contracts for which there is a performance
guarantee.
HP has certain service contracts supported by client financing or securitization arrangements.
Under specific circumstances involving nonperformance resulting in service contract termination or
failure to comply with terms under the financing arrangement, HP would be required to acquire certain
assets. HP considers the possibility of its failure to comply to be remote and the asset amounts involved
to be immaterial.
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