HP 2014 Annual Report Download - page 156
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 11: Financial Instruments (Continued)
The pre-tax effect of derivative instruments in cash flow and net investment hedging relationships
for fiscal years ended October 31, 2014, 2013 and 2012 was as follows:
Gain (Loss)
Recognized in OCI
on Derivatives Gain (Loss) Reclassified from Accumulated OCI
(Effective Portion) Into Earnings (Effective Portion)
2014 2013 2012 Location 2014 2013 2012
In millions In millions
Cash flow hedges:
Foreign currency contracts .... $593 $ (53)$415 Net revenue $ (21) $ 48 $423
Foreign currency contracts .... (203) (192) (65) Cost of products (71) (165) (15)
Foreign currency contracts .... 7 (19) (7)Other operating expenses (9) 1 (6)
Foreign currency contracts .... (60) 21 (8)Interest and other, net (50) 10 (3)
Total currency hedges ...... $337 $(243) $335 $(151) $(106) $399
Net investment hedges:
Foreign currency contracts .... $ 57 $ 38 $ 37 Interest and other, net $ — $ — $ —
As of October 31, 2014 and October 31, 2013, no portion of the hedging instruments’ gain or loss
was excluded from the assessment of effectiveness for fair value, cash flow or net investment hedges.
As of October 31, 2012 the portion of the hedging instruments’ gain or loss excluded from the
assessment of effectiveness was not material for fair value, cash flow or net investment hedges. Hedge
ineffectiveness for fair value, cash flow and net investment hedges was not material for fiscal 2014, 2013
and 2012.
As of October 31, 2014, HP expects to reclassify an estimated net Accumulated other
comprehensive gain of approximately $185 million, net of taxes, to earnings in the next twelve months
along with the earnings effects of the related forecasted transactions associated with cash flow hedges.
The pre-tax effect of derivative instruments not designated as hedging instruments on the
Consolidated Statements of Earnings for fiscal years ended October 31, 2014, 2013 and 2012 was as
follows:
Gain (Loss) Recognized in Income on Derivatives
Location 2014 2013 2012
In millions
Foreign currency contracts ....................... Interest and other, net $56 $166 $171
Other derivatives .............................. Interest and other, net — 11 (32)
Interest rate contracts .......................... Interest and other, net — 3 13
Total ...................................... $56 $180 $152
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