HP 2012 Annual Report Download - page 124
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10: Financial Instruments
Cash Equivalents and Available-for-Sale Investments
Cash equivalents and available-for-sale investments at fair value as of October 31, 2012 and
October 31, 2011 were as follows:
October 31, 2012 October 31, 2011
Gross Gross Estimated Gross Gross Estimated
Unrealized Unrealized Fair Unrealized Unrealized Fair
Cost Gain Loss Value Cost Gain Loss Value
In millions
Cash Equivalents
Time deposits .......... $3,633 $— $ — $3,633 $5,112 $— $ — $5,112
Money market funds ..... 4,630 — — 4,630 236 — — 236
Mutual funds .......... 69 — — 69 — — — —
Total cash equivalents ...... 8,332 — — 8,332 5,348 — — 5,348
Available-for-Sale
Investments
Debt securities:
Time deposits .......... 8 — — 8 8 — — 8
Foreign bonds .......... 303 82 — 385 317 66 — 383
Mutual funds .......... 400 — — 400 — — — —
Corporate bonds and other
debt securities ........ 62 — (17) 45 74 — (21) 53
Total debt securities ....... 773 82 (17) 838 399 66 (21) 444
Equity securities in public
companies ............. 50 9 — 59 114 4 — 118
Total cash equivalents and
available-for-sale
investments ............ $9,155 $91 $(17) $9,229 $5,861 $70 $(21) $5,910
Cash equivalents consist of investments in time deposits, money market funds and mutual funds
with original maturities of three months or less. Interest income related to cash and cash equivalents
was approximately $155 million in fiscal 2012, $167 million in fiscal 2011 and $111 million in fiscal
2010. Time deposits were primarily issued by institutions outside the United States as of October 31,
2012 and October 31, 2011. Available-for-sale securities consist of short-term investments which mature
within twelve months or less and long-term investments with maturities greater than twelve months.
Investments primarily include institutional bonds, mutual funds, equity securities in public companies,
fixed-interest securities and time deposits. HP estimates the fair values of its investments based on
quoted market prices or pricing models using current market rates. These estimated fair values may not
be representative of actual values that will be realized in the future.
The gross unrealized loss as of October 31, 2012 and 2011 was due primarily to declines in the fair
value of certain debt securities of $17 million and $21 million, respectively, that have been in a
continuous loss position for more than twelve months. HP does not intend to sell these debt securities,
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