HP 2013 Annual Report Download - page 155

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 16: Commitments (Continued)
Future annual lease commitments and sublease rental income as of October 31, 2013 were as
follows:
2014 2015 2016 2017 2018 Thereafter Total
In millions
Operating lease commitments ............. $763 $605 $435 $275 $180 $735 $2,993
Less: Sublease rental income ............. (35) (24) (12) (5) (5) (12) (93)
$728 $581 $423 $270 $175 $723 $2,900
Capital lease commitments ............... $229 $ 20 $ 7 $ 4 $ 4 $ 25 $ 289
Less: Interest payments ................. (5) (3) (2) (2) (2) (6) (20)
$224 $ 17 $ 5 $ 2 $ 2 $ 19 $ 269
Unconditional Purchase Obligations
At October 31, 2013, HP had unconditional purchase obligations of approximately $2.2 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, 2013 were as follows:
2014 2015 2016 2017 2018 Thereafter Total
In millions
Unconditional purchase obligations ........ $1,191 $510 $196 $141 $128 $— $2,166
Note 17: 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 accrues a liability when
management believes that it is both probable that a liability has been incurred and the amount of loss
can be reasonably estimated. HP believes it has recorded adequate provisions for any such matters,
and, as of October 31, 2013, it was not reasonably possible that an additional material loss had been
incurred in an amount in excess of the amounts already recognized in HP’s financial statements. HP
reviews these matters at least quarterly and adjusts its accruals 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 resolution of one or more of these contingencies.
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