

	As of January 31, 2020								As of October 31, 2019
	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	In millions
Cash Equivalents:
Corporate debt	$	1,001	$	—	$	—	$	1,001	$	1,283	$	—	$	—	$	1,283
Government debt	2,162		—		—		2,162		2,422		—		—		2,422
Total cash equivalents	3,163		—		—		3,163		3,705		—		—		3,705
Available-for-Sale Investments:
Corporate debt ⁽¹⁾	242		—		—		242		—		—		—		—
Financial institution instruments ⁽¹⁾	31		—		—		31		—		—		—		—
Government debt ⁽¹⁾	15		—		—		15		—		—		—		—
Marketable equity securities and Mutual funds	40		20		—		60		40		16		—		56
Total available-for-sale investments	328		20		—		348		40		16		—		56
Total cash equivalents and available-for-sale investments	$	3,491	$	20	$	—	$	3,511	$	3,745	$	16	$	—	$	3,761

All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of January 31, 2020 and October 31, 2019, the carrying amount of cash equivalents approximated fair value due to the short period of time to maturity. The estimated fair value of the available-for-sale investments may not be representative of values that will be realized in the future.

Equity securities in privately held companies are included in Other non-current assets in the Consolidated Condensed Balance Sheets. These amounted to $46 million and $46 million as of January 31, 2020 and October 31, 2019, respectively.

HP uses derivatives to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps and, at times, option contracts to hedge certain foreign currency, interest rate and, return on certain investment exposures. HP may designate its derivative contracts as fair value hedges or cash flow hedges and classifies the cash flows with the activities that correspond to the underlying hedged items. Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivative instruments at fair value in the Consolidated Condensed Balance Sheets.

As a result of its use of derivative instruments, HP is exposed to the risk that its counterparties will fail to meet their contractual obligations. Master netting agreements mitigate credit exposure to counterparties by permitting HP to net amounts due from HP to counterparty against amounts due to HP from the same counterparty under certain conditions. To further limit credit risk, HP has collateral security agreements that allow HP’s custodian to hold collateral from, or require HP to post collateral to, counterparties when aggregate derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of HP and its counterparties. If HP’s or the counterparty’s credit rating falls below a specified credit rating, either party has the right to request full collateralization of the derivatives’ net liability position. The fair value of derivatives with credit contingent features in a net liability position was $43 million and $45 million as of January 31, 2020 and as of October 31, 2019, respectively, all of which were fully collateralized within two business days.

Under HP’s derivative contracts, the counterparty can terminate all outstanding trades following a covered change of control event affecting HP that results in the surviving entity being rated below a specified credit rating. This credit contingent provision did not affect HP’s financial position or cash flows as of January 31, 2020 and October 31, 2019.

HP enters into fair value hedges, such as interest rate swaps, to reduce the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar London Interbank Offered Rate (“LIBOR”)-based floating interest expense.

For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the change in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change.

HP uses forward contracts and, at times, option contracts designated as cash flow hedges to protect against the foreign currency exchange rate risks inherent in its forecasted net revenue and, to a lesser extent, cost of revenue and operating expenses. HP’s foreign currency cash flow hedges mature predominantly within twelve months; however, hedges related to long-term procurement arrangements extend several years.

For derivative instruments that are designated and qualify as cash flow hedges, HP initially records changes in fair value of the derivative instrument in Accumulated other comprehensive loss as a separate component of stockholders’ deficit in the Consolidated Condensed Balance Sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings. HP reports the changes in the fair value of the derivative instrument in the same financial statement line item as changes in the fair value of the hedged item.

Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. HP uses total return swaps to hedge its executive deferred compensation plan liability.

For derivative instruments not designated as hedging instruments, HP recognizes changes in fair value of the derivative instrument, as well as the offsetting change in the fair value of the hedged item, in Interest and other, net in the Consolidated Condensed Statements of Earnings in the period of change.

For interest rate swaps designated as fair value hedges, HP measures hedge effectiveness by offsetting the change in fair value of the hedged item with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow hedges, HP measures hedge effectiveness by comparing the cumulative change in fair value of the hedge contract with the cumulative change in fair value of the hedged item, both of which are based on forward rates.



	As of January 31, 2020										As of October 31, 2019
	Outstanding Gross Notional		Other Current Assets		Other Non-Current Assets		Other Current Liabilities		Other Non-Current Liabilities		Outstanding Gross Notional		Other Current Assets		Other Non-Current Assets		Other Current Liabilities		Other Non-Current Liabilities
	In millions
Derivatives designated as hedging instruments
Fair value hedges:
Interest rate contracts	$	750	$	—	$	4	$	—	$	—	$	750	$	—	$	4	$	—	$	—

Cash flow hedges:
Foreign currency contracts	15,980		258		99		104		26		15,639		260		111		123		28
Total derivatives designated as hedging instruments	16,730		258		103		104		26		16,389		260		115		123		28
Derivatives not designated as hedging instruments
Foreign currency contracts	5,406		17		—		19		—		7,146		10		—		14		—
Other derivatives	151		13		—		2		—		134		7		—		1		—
Total derivatives not designated as hedging instruments	5,557		30		—		21		—		7,280		17		—		15		—
Total derivatives	$	22,287	$	288	$	103	$	125	$	26	$	23,669	$	277	$	115	$	138	$	28

HP recognizes all derivative instruments on a gross basis in the Consolidated Condensed Balance Sheets. HP does not offset the fair value of its derivative instruments against the fair value of cash collateral posted under its collateral security agreements. As of January 31, 2020 and October 31, 2019, information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows:



	In the Consolidated Condensed Balance Sheets
							Gross Amounts Not Offset
	Gross Amount Recognized (i)		Gross Amount Offset (ii)		Net Amount Presented (iii) = (i)–(ii)		Derivatives (iv)		Financial Collateral (v)			Net Amount (vi) = (iii)–(iv)–(v)
	In millions
As of January 31, 2020
Derivative assets	$	391	$	—	$	391	$	104	$	247	⁽¹⁾	$	40
Derivative liabilities	$	151	$	—	$	151	$	104	$	42	⁽²⁾	$	5
As of October 31, 2019
Derivative assets	$	392	$	—	$	392	$	113	$	259	⁽¹⁾	$	20
Derivative liabilities	$	166	$	—	$	166	$	113	$	43	⁽²⁾	$	10

Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded

Gain/(Loss) Recognized in Earnings on Derivative Instrument

Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item

Derivative Instrument

Location

Three months ended January 31, 2020

Hedged Item

Location

Three months ended January 31, 2020

In millions

Interest rate contracts

Interest and other, net

—

Fixed-rate debt

Interest and other, net

—

Total amounts of income/ (expense) line items presented in the statement of financial performance in which the effects of fair value hedges are recorded

Gain/(Loss) Recognized in Earnings on Derivative Instrument

Gain/(Loss) Recognized in Earnings on Derivative and Related Hedged Item

Derivative Instrument

Location

Three months ended January 31, 2019

Hedged Item

Location

Three months ended January 31, 2019

In millions

Interest rate contracts

Interest and other, net

(26

)

(12

)

Fixed-rate debt

Interest and other, net



	Gain/(Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives			Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded			Gain /(Loss) Reclassified from Accumulated OCI Into Earnings
	Three months ended January 31, 2020		Location	Three months ended January 31, 2020
	In millions			In millions
Cash flow hedges:
Foreign currency contracts	$	60	Net revenue	$	14,618		$	61
			Cost of revenue	(11,746		)	(1		)
			Operating expenses	(2,007		)	(1		)
Total	$	60					$	59



	Gain/(Loss) Recognized in Other Comprehensive Income ("OCI") on Derivatives				Total amounts of income and expense line items presented in the statement of financial performance in which the effects of cash flow hedges are recorded			Gain /(Loss) Reclassified from Accumulated OCI Into Earnings
	Three months ended January 31, 2019			Location	Three months ended January 31, 2019
	In millions				In millions
Cash flow hedges:
Foreign currency contracts	$	(107	)	Net revenue	$	14,710		$	191
				Cost of revenue	(12,098		)	(10		)
				Operating expenses	(1,686		)	(2		)
Total	$	(107	)					$	179

As of January 31, 2020, HP expects to reclassify an estimated accumulated other comprehensive gain of $108 million, net of taxes, to earnings within the next twelve months associated with cash flow hedges along with the earnings effects of the related forecasted transactions. The amounts ultimately reclassified into earnings could be different from the amounts previously included in Accumulated other comprehensive loss based on the change of market rate, and therefore could have different impact on earnings.



	(Loss) /Gain Recognized in Earnings on Derivatives
	Location	Three months ended January 31, 2020			Three months ended January 31, 2019
		In millions
Foreign currency contracts	Interest and other, net	$	(8	)	$	(40	)
Other derivatives	Interest and other, net	5			14
Total		$	(3	)	$	(26	)