HP 2012 Annual Report Download - page 129
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 10: Financial Instruments (Continued)
The before-tax effect of derivative instruments in cash flow and net investment hedging
relationships for fiscal years 2012 and 2011 were as follows:
Gain (Loss)
Recognized in
Other Gain Recognized in
Comprehensive Income on Derivative
Income (‘‘OCI’’) Gain (Loss) Reclassified from (Ineffective portion
on Derivative Accumulated OCI Into Income and Amount Excluded
(Effective Portion) (Effective Portion) from Effectiveness Testing)
2012 Location 2012 Location 2012
In millions In millions In millions
Cash flow hedges:
Foreign exchange
contracts ........ $402 Net revenue $408 Net revenue $—
Foreign exchange
contracts ........ (65) Cost of products (15) Cost of products —
Foreign exchange Other operating Other operating
contracts ........ (7) expenses (6) expenses —
Foreign exchange
contracts ........ (8) Interest and other, net (3) Interest and other, net —
Foreign exchange
contracts ........ 13 Net revenue 15 Interest and other, net —
Total cash flow
hedges ........ $335 $399 $—
Net investment hedges:
Foreign exchange
contracts ........ $37 Interest and other, net $ — Interest and other, net $—
Gain Recognized in
Gain (Loss) Income on Derivative
Recognized in Gain (Loss) Reclassified from (Ineffective portion
OCI on Derivative Accumulated OCI Into Income and Amount Excluded
(Effective Portion) (Effective Portion) from Effectiveness Testing)
2011 Location 2011 Location 2011
In millions In millions In millions
Cash flow hedges:
Foreign exchange
contracts ........ $(278) Net revenue $(616) Net revenue $—
Foreign exchange
contracts ........ 41 Cost of products 38 Cost of products —
Foreign exchange Other operating Other operating
contracts ........ 2 expenses 4 expenses —
Foreign exchange
contracts ........ (116) Interest and other, net (91) Interest and other, net —
Foreign exchange
contracts ........ (23) Net revenue 7 Interest and other, net 4
Total cash flow
hedges ........ $(374) $(658) $ 4
Net investment hedges:
Foreign exchange
contracts ........ $(52) Interest and other, net $ — Interest and other, net $—
As of October 31, 2012, HP expects to reclassify an estimated net accumulated other
comprehensive loss of approximately $86 million, net of taxes, to earnings in the next twelve months
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