

	As of April 30, 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	$	622	$	—	$	—	$	622	$	1,283	$	—	$	—	$	1,283
Government debt	2,207		—		—		2,207		2,422		—		—		2,422
Total cash equivalents	2,829		—		—		2,829		3,705		—		—		3,705
Available-for-Sale Investments:
Marketable equity securities and Mutual funds	39		13		—		52		40		16		—		56
Total available-for-sale investments	39		13		—		52		40		16		—		56
Total cash equivalents and available-for-sale investments	$	2,868	$	13	$	—	$	2,881	$	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 April 30, 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 $40 million and $46 million as of April 30, 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, treasury rate locks 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 $29 million and $45 million as of April 30, 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 April 30, 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, treasury rate locks and, at times, option contracts designated as cash flow hedges to protect against the foreign currency exchange and interest rate risks inherent in its forecasted net revenue, cost of revenue, operating expenses and debt issuance. 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 income/loss (“AOCI”) 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.

In March 2020, HP entered into a series of treasury rate lock agreements with notional amounts totaling $750 million to hedge the exposure to variability in future cash flows resulting from changes in interest rate related to an anticipated issuance of long-term debt. These agreements were designated as cash flow hedges.

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 April 30, 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	$	—	$	14	$	—	$	—	$	750	$	—	$	4	$	—	$	—

Cash flow hedges:
Foreign currency contracts	15,530		388		131		81		21		15,639		260		111		123		28
Interest rate contracts	750		—		—		8		—		—		—		—		—		—
Total derivatives designated as hedging instruments	17,030		388		145		89		21		16,389		260		115		123		28
Derivatives not designated as hedging instruments
Foreign currency contracts	4,666		19		—		33		—		7,146		10		—		14		—
Other derivatives	119		12		—		1		—		134		7		—		1		—
Total derivatives not designated as hedging instruments	4,785		31		—		34		—		7,280		17		—		15		—
Total derivatives	$	21,815	$	419	$	145	$	123	$	21	$	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 April 30, 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 April 30, 2020
Derivative assets	$	564	$	—	$	564	$	112	$	497	⁽¹⁾	$	(45	)
Derivative liabilities	$	144	$	—	$	144	$	112	$	29	⁽²⁾	$	3
As of October 31, 2019
Derivative assets	$	392	$	—	$	392	$	113	$	259	⁽¹⁾	$	20
Derivative liabilities	$	166	$	—	$	166	$	113	$	43	⁽²⁾	$	10

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship for the three and six months ended April 30, 2020 and 2019 were as follows:

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 April 30, 2020

Hedged Item

Location

Three months ended April 30, 2020

In millions

Interest rate contracts

Interest and other, net

—

Fixed-rate debt

Interest and other, net

(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

Six months ended April 30, 2020

Hedged Item

Location

Six months ended April 30, 2020

In millions

Interest rate contracts

Interest and other, net

Fixed-rate debt

Interest and other, net

(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 April 30, 2019

Hedged Item

Location

Three months ended April 30, 2019

In millions

Interest rate contracts

Interest and other, net

(45

)

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

Six months ended April 30, 2019

Hedged Item

Location

Six months ended April 30, 2019

In millions

Interest rate contracts

Interest and other, net

(71

)

Fixed-rate debt

Interest and other, net

(16

)



	Gain/(Loss) Recognized in AOCI 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 AOCI Into Earnings
	Three months ended April 30, 2020			Location	Three months ended April 30, 2020
	In millions				In millions
Cash flow hedges:
Foreign currency contracts	$	239		Net revenue	$	12,469		$	62
Interest rate contracts	(8		)	Cost of revenue	(9,976		)	(10		)
				Operating expenses	(1,667		)	1
Total	$	231						$	53



	Gain/(Loss) Recognized in AOCI 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 AOCI Into Earnings
	Six months ended April 30, 2020			Location	Six months ended April 30, 2020
	In millions				In millions
Cash flow hedges:
Foreign currency contracts	$	299		Net revenue	$	27,087		$	123
Interest rate contracts	(8		)	Cost of revenue	(21,722		)	(11		)
				Operating expenses	(3,674		)	—
Total	$	291						$	112



	Gain/(Loss) Recognized in AOCI 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 AOCI Into Earnings
	Three months ended April 30, 2019		Location	Three months ended April 30, 2019
	In millions			In millions
Cash flow hedges:
Foreign currency contracts	$	198	Net revenue	$	14,036		$	—
			Cost of revenue	(11,307		)	(6		)
			Operating expenses	(1,801		)	—
Total	$	198					$	(6	)



	Gain/(Loss) Recognized in AOCI 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 AOCI Into Earnings
	Six months ended April 30, 2019		Location	Six months ended April 30, 2019
	In millions			In millions
Cash flow hedges:
Foreign currency contracts	$	91	Net revenue	$	28,746		$	191
			Cost of revenue	(23,405		)	(16		)
			Operating expenses	(3,487		)	(2		)
Total	$	91					$	173

As of April 30, 2020, HP expects to reclassify an estimated accumulated other comprehensive gain of $236 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 AOCI based on the change of market rate, and therefore could have different impact on earnings.