HP 2012 Annual Report Download - page 157

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 17: Commitments (Continued)
Future annual minimum lease payments, sublease rental income commitments and capital lease
commitments at October 31, 2012 were as follows:
2013 2014 2015 2016 2017 Thereafter Total
In millions
Minimum lease payments ................ $780 $665 $517 $351 $218 $805 $3,336
Less: Sublease rental income ............. (28) (23) (18) (9) (4) (12) (94)
$752 $642 $499 $342 $214 $793 $3,242
Capital lease commitments ............... $ 59 $240 $ 11 $ 7 $ 4 $ 33 $ 354
Less: Interest payments ................. (8) (6) (3) (2) (2) (12) (33)
$ 51 $234 $ 8 $ 5 $ 2 $ 21 $ 321
At October 31, 2012, HP had unconditional purchase obligations of approximately $1.6 billion.
These unconditional purchase obligations include agreements to purchase goods or services that are
enforceable and legally binding on HP and that specify all significant terms, including fixed or
minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate
timing of the transaction. Unconditional purchase obligations exclude agreements that are cancelable
without penalty. These unconditional purchase obligations are related principally to inventory and other
items. Future unconditional purchase obligations at October 31, 2012 were as follows:
2013 2014 2015 2016 2017 Thereafter Total
In millions
Unconditional purchase obligations ......... $1,131 $230 $218 $53 $— $— $1,632
Note 18: Litigation and Contingencies
HP is involved in lawsuits, claims, investigations and proceedings, including those identified below,
consisting of intellectual property, commercial, securities, employment, employee benefits and
environmental matters that arise in the ordinary course of business. HP records a provision for a
liability when management believes that it is both probable that a liability has been incurred and the
amount of the loss can be reasonably estimated. HP believes it has adequate provisions for any such
matters, and, as of October 31, 2012, it was not reasonably possible that an additional material loss had
been incurred in an amount in excess of the amounts already recognized on HP’s financial statements.
HP reviews these provisions at least quarterly and adjusts these provisions to reflect the impact of
negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining
to a particular case. Based on its experience, HP believes that any damage amounts claimed in the
specific matters discussed below are not a meaningful indicator of HP’s potential liability. Litigation is
inherently unpredictable. However, HP believes that it has valid defenses with respect to legal matters
pending against it. Nevertheless, cash flows or results of operations could be materially affected in any
particular period by the unfavorable resolution of one or more of these contingencies.
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