Cash equivalents and available-for-sale investments at fair value as of October 31, 2011 and October 31, 2010 were as follows:

		October 31, 2011									October 31, 2010

		Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value		Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
		In millions
Cash Equivalents
	Time deposits	$	5,112	$	—	$	—		$	5,112	$	6,590	$	—	$	—		$	6,590
	Money market funds		236		—		—			236		971		—		—			971

Total cash equivalents			5,348		—		—			5,348		7,561		—		—			7,561

Available-for-Sale Investments
Debt securities:
	Time deposits		8		—		—			8		8		—		—			8
	Foreign bonds		317		66		—			383		315		58		—			373
	Corporate bonds and other debt securities		74		—		(21	)		53		89		—		(30	)		59

Total debt securities			399		66		(21	)		444		412		58		(30	)		440

Equity securities in public companies			114		4		—			118		5		4		—			9

Total cash equivalents and available-for-sale investments		$	5,861	$	70	$	(21	)	$	5,910	$	7,978	$	62	$	(30	)	$	8,010

Cash equivalents consist of investments in time deposits, commercial paper and money market funds with original maturities of three months or less. Interest income related to cash and cash equivalents was approximately $167 million in fiscal 2011, $111 million in fiscal 2010 and $119 million in fiscal 2009. Time deposits were primarily issued by institutions outside the U.S. as of October 31, 2011 and October 31, 2010. Available-for-sale securities consist of short-term investments which mature within twelve months or less and long-term investments with maturities greater than twelve months. Investments primarily include institutional bonds, equity securities in public companies, fixed-interest securities and time deposits. HP estimates the fair values of its investments based on quoted market prices or pricing models using current market rates. These estimated fair values may not be representative of actual values that will be realized in the future.

The gross unrealized loss as of October 31, 2011 was due primarily to declines in certain debt securities of $21 million that has been in a continuous loss position for more than twelve months. The gross unrealized loss as of October 31, 2010 was due primarily to declines in the fair value of certain debt securities and included $28 million that had been in a continuous loss position for more than twelve months. HP does not intend to sell these debt securities, and it is not likely that HP will be required to sell these debt securities prior to the recovery of the amortized cost. In fiscal 2011, HP recognized an insignificant impairment charge associated with debt securities. In fiscal years 2010 and 2009, HP recognized an impairment charge of $12 million and $24 million, respectively, on total investments.

Contractual maturities of short-term and long-term investments in available-for-sale debt securities at October 31, 2011 were as follows:

A summary of the carrying values and balance sheet classification of all short-term and long-term investments in debt and equity securities as of October 31, 2011 and October 31, 2010 was as follows:

		October 31, 2011		October 31, 2010

		In millions
Available-for-sale debt securities		$	—	$	5

	Included in Other current assets		—		5

Available-for-sale debt securities			444		435
Available-for-sale equity securities			118		9
Equity securities in privately-held companies			48		154
Other investments			8		9

	Included in long-term financing receivables and other assets	$	618	$	607

Total investments		$	618	$	612

Equity securities in privately held companies include cost basis and equity method investments. Other investments include marketable trading securities. HP includes gains or losses from changes in fair value of these securities, offset by losses or gains on the related liabilities, in Interest and other, net, in HP's Consolidated Statements of Earnings. The net impact associated with these securities was not material in fiscal years 2011 and 2010, respectively.

HP is a global company that is exposed to foreign currency exchange rate fluctuations and interest rate changes in the normal course of its business. As part of its risk management strategy, HP uses derivative instruments, primarily forward contracts, option contracts, interest rate swaps, and total return swaps, to hedge certain foreign currency, interest rate and, to a lesser extent, equity exposures. HP's objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings or protecting fair values of assets and liabilities. HP does not have any leveraged derivatives and does not use derivative contracts for speculative purposes. HP designates its derivatives as fair value hedges, cash flow hedges or hedges of the foreign currency exposure of a net investment in a foreign operation ("net investment hedges"). Additionally, for derivatives not designated as hedging instruments, HP categorizes those economic hedges as other derivatives. HP recognizes all derivatives, on a gross basis, in the Consolidated Balance Sheets at fair value and reports them in Other current assets, Long-term financing receivables and other assets, Other accrued liabilities, or Other liabilities. HP classifies cash flows from the derivative programs as operating activities in the Consolidated Statements of Cash Flows.

As a result of the use of derivative instruments, HP is exposed to the risk that counterparties to derivative contracts will fail to meet their contractual obligations. To mitigate the counterparty credit risk, HP has a policy of only entering into contracts with carefully selected major financial institutions based upon their credit ratings and other factors, and HP maintains dollar risk limits that correspond to each institution's credit rating and other factors. HP's established policies and procedures for mitigating credit risk on principal transactions and short-term cash include reviewing and establishing limits for credit exposure and continually assessing the creditworthiness of counterparties. Master agreements with counterparties include master netting arrangements as further mitigation of credit exposure to counterparties. These arrangements permit HP to net amounts due from HP to a counterparty with amounts due to HP from the same counterparty.

To further mitigate credit exposure to counterparties, HP may enter into collateral security arrangements with its counterparties. These arrangements require HP to post collateral or to hold collateral from counterparties when the derivative fair values exceed contractually established thresholds which are generally based on the credit ratings of HP and its counterparties. Such funds are generally transferred within two business days. As of October 31, 2011, HP had posted $96 million associated with the counterparties under these collateralized arrangements. Collateral amounts as of October 31, 2010 were not material.

HP enters into fair value hedges to reduce the exposure of its debt portfolio to interest rate risk. HP issues long-term debt in U.S. dollars based on market conditions at the time of financing. HP uses interest rate swaps to mitigate the market risk exposures in connection with the debt to achieve primarily U.S. dollar LIBOR-based floating interest expense. The swap transactions generally involve principal and interest obligations for U.S. dollar-denominated amounts. Alternatively, HP may choose not to swap fixed for floating interest payments or may terminate a previously executed swap if it believes a larger proportion of fixed-rate debt would be beneficial. When investing in fixed-rate instruments, HP may enter into interest rate swaps that convert the fixed interest returns into variable interest returns and would classify these swaps as fair value hedges. For derivative instruments that are designated and qualify as fair value hedges, HP recognizes the gain or loss on the derivative instrument, as well as the offsetting loss or gain on the hedged item, in Interest and other, net in the Consolidated Statements of Earnings in the current period.

HP uses a combination of forward contracts and options 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 sales, operating expense, and intercompany lease loan denominated in currencies other than the U.S. dollar. HP's foreign currency cash flow hedges mature generally within twelve months. However, certain leasing revenue-related forward contracts and intercompany lease loan forward contracts extend for the duration of the lease term, which can be up to five years. For derivative instruments that are designated and qualify as cash flow hedges, HP initially records the effective portion of the gain or loss on the derivative instrument in accumulated other comprehensive income or loss as a separate component of stockholders' equity and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in earnings. HP reports the effective portion of cash flow hedges in the same financial statement line item as the changes in value of the hedged item. During fiscal years 2011, 2010 and 2009, HP did not discontinue any cash flow hedge for which it was probable that a forecasted transaction would not occur.

HP uses forward contracts designated as net investment hedges to hedge net investments in certain foreign subsidiaries whose functional currency is the local currency. These derivative instruments are designated as net investment hedges and, as such, HP records the effective portion of the gain or loss on the derivative instrument together with changes in the hedged items in cumulative translation adjustment as a separate component of stockholders' equity.

Other derivatives not designated as hedging instruments consist primarily of forward contracts HP uses to hedge foreign currency balance sheet exposures. HP also uses total return swaps and, to a lesser extent, interest rate swaps, based on the equity and fixed income indices, to hedge its executive deferred compensation plan liability. For derivative instruments not designated as hedging instruments, HP recognizes changes in the fair values in earnings in the period of change. HP recognizes the gain or loss on foreign currency forward contracts used to hedge balance sheet exposures in Interest and other, net in the same period as the remeasurement gain and loss of the related foreign currency denominated assets and liabilities. HP recognizes the gain or loss on the total return swaps and interest rate swaps in Interest and other, net in the same period as the gain or loss from the change in market value of the executive deferred compensation plan liability.

For interest rate swaps designated as fair value hedges, HP measures effectiveness by offsetting the change in fair value of the hedged debt with the change in fair value of the derivative. For foreign currency options and forward contracts designated as cash flow or net investment hedges, HP measures effectiveness by comparing the cumulative change in the hedge contract with the cumulative change in the hedged item, both of which are based on forward rates. HP recognizes any ineffective portion of the hedge, as well as amounts not included in the assessment of effectiveness, in the Consolidated Statements of Earnings. As of October 31, 2011 and 2010, the portion of 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 in fiscal years 2011, 2010 and 2009.

As discussed in Note 9, HP estimates the fair values of derivatives primarily based on pricing models using current market rates and records all derivatives on the balance sheet at fair value. The gross notional and fair value of derivative financial instruments in the Consolidated Balance Sheets was recorded as follows:

		As of October 31, 2011										As of October 31, 2010

		Gross Notional⁽¹⁾		Other Current Assets		Long-term Financing Receivables and Other Assets		Other Accrued Liabilities		Other Liabilities		Gross Notional⁽¹⁾		Other Current Assets		Long-term Financing Receivables and Other Assets		Other Accrued Liabilities		Other Liabilities
		In millions
Derivatives designated as hedging instruments
Fair value hedges:
	Interest rate contracts	$	10,075	$	30	$	508	$	—	$	—	$	8,575	$	—	$	656	$	—	$	—
Cash flow hedges:
	Foreign exchange contracts		21,666		192		30		324		126		16,862		98		20		503		83
Net investment hedges:
	Foreign exchange contracts		1,556		7		4		44		56		1,466		8		2		58		62

Total derivatives designated as hedging instruments			33,297		229		542		368		182		26,903		106		678		561		145

Derivatives not designated as hedging instruments
Foreign exchange contracts			13,994		66		5		244		38		13,701		51		3		129		55
Interest rate contracts⁽²⁾			2,200		—		55		—		71		2,200		—		79		—		89
Other derivatives			410		25		6		—		1		397		5		6		—		—

Total derivatives not designated as hedging instruments			16,604		91		66		244		110		16,298		56		88		129		144

Total derivatives		$	49,901	$	320	$	608	$	612	$	292	$	43,201	$	162	$	766	$	690	$	289

The before-tax effect of a derivative instrument and related hedged item in a fair value hedging relationship for fiscal years ended October 31, 2011 and October 31, 2010 was as follows:

The before-tax effect of derivative instruments in cash flow and net investment hedging relationships for fiscal years 2011 and 2010 were as follows:

			Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative (Effective Portion)			Gain (Loss) Reclassified from Accumulated OCI Into Income (Effective Portion)				Gain Recognized in Income on Derivative (Ineffective portion and Amount Excluded from Effectiveness Testing)

			2011			Location	2011			Location	2011
			In millions				In millions				In millions
Cash flow hedges:
	Foreign exchange contracts		$	(278	)	Net revenue	$	(616	)	Net revenue	$	—
	Foreign exchange contracts			41		Cost of products		38		Cost of products		—
	Foreign exchange contracts			2		Other operating expenses		4		Other operating expenses		—
	Foreign exchange contracts			(116	)	Interest and other, net		(91	)	Interest and other, net		—
	Foreign exchange contracts			(23	)	Net revenue		7		Interest and other, net		4

		Total cash flow hedges	$	(374	)		$	(658	)		$	4

Net investment hedges:
	Foreign exchange contracts		$	(52	)	Interest and other, net	$	—		Interest and other, net	$	—

			Gain (Loss) Recognized in OCI on Derivative (Effective Portion)			Gain (Loss) Reclassified from Accumulated OCI Into Income (Effective Portion)			Gain Recognized in Income on Derivative (Ineffective portion and Amount Excluded from Effectiveness Testing)

			2010			Location	2010		Location	2010
			In millions				In millions			In millions
Cash flow hedges:
	Foreign exchange contracts		$	273		Net revenue	$	325	Net revenue	$	—
	Foreign exchange contracts			50		Cost of products		80	Cost of products		—
	Foreign exchange contracts			1		Other operating expenses		—	Other operating expenses		—
	Foreign exchange contracts			20		Interest and other, net		—	Interest and other, net		—
	Foreign exchange contracts			25		Net revenue		26	Interest and other, net		9

		Total cash flow hedges	$	369			$	431		$	9

Net investment hedges:
	Foreign exchange contracts		$	(82	)	Interest and other, net	$	—	Interest and other, net	$	—

As of October 31, 2011, HP expects to reclassify an estimated net accumulated other comprehensive loss of approximately $45 million, net of taxes, to earnings in the next twelve months along with the earnings effects of the related forecasted transactions in association with cash flow hedges.

The before-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Earnings for fiscal years 2011 and 2010 were as follows:

	Gain (Loss) Recognized in Income on Derivative

	Location	2011
		In millions
Foreign exchange contracts	Interest and other, net		$(117	)
Other derivatives	Interest and other, net		19
Interest rate contracts	Interest and other, net		(6	)

Total			$(104	)

	Gain (Loss) Recognized in Income on Derivative

	Location	2010
		In millions
Foreign exchange contracts	Interest and other, net		$(764	)
Other derivatives	Interest and other, net		8
Interest rate contracts	Interest and other, net		6

Total			$(750	)

For the balance of HP's financial instruments, accounts receivable, financing receivables, notes payable and short-term borrowings, accounts payable and other accrued liabilities, the carrying amounts approximate fair value due to their short maturities. The estimated fair value of HP's short- and long-term debt was approximately $31.1 billion at October 31, 2011, compared to a carrying value of $30.6 billion at that date. The estimated fair value of HP's short- and long-term debt was approximately $22.5 billion at October 31, 2010, compared to a carrying value of $22.3 billion at that date. The estimated fair value of the debt is based primarily on quoted market prices, as well as borrowing rates currently available to HP for bank loans with similar terms and maturities.