Financial Instruments

9 Months Ended

Jul. 31, 2025

Investments, All Other Investments [Abstract]

Cash Equivalents and Available-for-Sale Investments


	As of July 31, 2025								As of October 31, 2024
	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
	In millions
Cash Equivalents:
Time deposits	$	1,773	$	—	$	—	$	1,773	$	1,012	$	—	$	—	$	1,012

Government debt(1)	398		—		—		398		1,332		—		—		1,332
Total cash equivalents	2,171		—		—		2,171		2,344		—		—		2,344
Available-for-Sale Investments:

Financial institution instruments	3		—		—		3		3		—		—		3

Marketable securities and mutual funds(2)	110		21		—		131		115		69		—		184

Total available-for-sale investments	113		21		—		134		118		69		—		187
Total cash equivalents and available-for-sale investments	$	2,284	$	21	$	—	$	2,305	$	2,462	$	69	$	—	$	2,531

(1) Government debt includes instruments such as U.S. treasury notes, U.S. agency securities and non-U.S. government bonds. Money market funds invested in government debt and traded in active markets are included in Level 1.

(2) As of July 31, 2025 and October 31, 2024, $67 million and $78 million, respectively, of debt securities were restricted to fund benefits received by qualifying employees under a sponsored defined benefit plan.

All highly liquid investments with original maturities of three months or less at the date of acquisition are considered cash equivalents. As of July 31, 2025 and October 31, 2024, 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.

Contractual maturities of investments in available-for-sale debt securities were as follows:


	As of July 31, 2025
	Amortized Cost		Fair Value
	In millions
Due in one year	$	17	$	17
Due in one to five years	53		53
	$	70	$	70

Non-marketable equity securities in privately held companies are included in Other current and non-current assets in the Condensed Consolidated Balance Sheets. These amounted to $119 million and $107 million as of July 31, 2025 and October 31, 2024, respectively.

HP determines credit losses on cash equivalents and available-for-sale debt securities at the individual security level. All instruments are considered investment grade. No credit-related or noncredit-related impairment losses were recorded for the three and nine months ended July 31, 2025.

Derivative Instruments

HP uses derivative instruments, primarily forward contracts, interest rate swaps, total return swaps, treasury rate locks, forward starting swaps and option contracts to offset business exposure to foreign currency and interest rate risk on expected future cash flows and on certain existing assets and liabilities. 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 Condensed Consolidated 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 the net fair value of financial instruments fluctuates from contractually established thresholds. The Company includes gross collateral posted and received in other current assets and other current liabilities in the Condensed Consolidated Balance Sheets, respectively. The fair value of derivatives with credit contingent features in a net liability position was $242 million and $59 million as of July 31, 2025 and as of October 31, 2024, 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 July 31, 2025 and October 31, 2024.

Fair Value Hedges

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 benchmark interest rates on HP’s future interest payments.

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 Condensed Consolidated Statements of Earnings in the period of change.

Cash Flow Hedges

HP uses forward contracts, option contracts, treasury rate locks and forward starting swaps designated as cash flow hedges to protect against the foreign currency exchange and interest rate risks inherent in its forecasted products net revenue, cost of products net 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, contractual pricing and/or business unit specific exposures may 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 Condensed Consolidated 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

Other derivatives not designated as hedging instruments consist primarily of forward contracts used to hedge foreign currency-denominated balance sheet exposures. HP also 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 Condensed Consolidated Statements of Earnings in the period of change.

Hedge Effectiveness

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, forward contracts and forward starting swaps 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.

During the three and nine months ended July 31, 2025 and 2024, no portion of the hedging instruments’ gain or loss was excluded from the assessment of effectiveness for fair value and cash flow hedges.

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets

The gross notional and fair value of derivative instruments in the Condensed Consolidated Balance Sheets were as follows:


	As of July 31, 2025										As of October 31, 2024
	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	$	250	$	—	$	—	$	4	$	—	$	750	$	—	$	—	$	11	$	10
Cash flow hedges:
Foreign currency contracts	13,819		92		14		275		74		14,563		169		36		117		34
Interest rate contracts	—		—		—		—		—		500		—		4		—		1
Total derivatives designated as hedging instruments	14,069		92		14		279		74		15,813		169		40		128		45
Derivatives not designated as hedging instruments
Foreign currency contracts	4,088		27		—		23		—		4,284		20		—		7		—
Other derivatives	156		1		—		1		—		156		—		—		2		—
Total derivatives not designated as hedging instruments	4,244		28		—		24		—		4,440		20		—		9		—
Total derivatives	$	18,313	$	120	$	14	$	303	$	74	$	20,253	$	189	$	40	$	137	$	45

Offsetting of Derivative Instruments

HP recognizes all derivative instruments on a gross basis in the Condensed Consolidated 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 July 31, 2025 and October 31, 2024, information related to the potential effect of HP’s master netting agreements and collateral security agreements was as follows:


	In the Condensed Consolidated Balance Sheets
	(i)		(ii)		(iii) = (i)–(ii)		(iv)		(v)			(vi) = (iii)–(iv)–(v)
							Gross Amounts Not Offset
	Gross Amount Recognized		Gross Amount Offset		Net Amount Presented		Derivatives		Financial Collateral			Net Amount
	In millions
As of July 31, 2025
Derivative assets	$	134	$	—	$	134	$	128	$	—	(1)	$	6
Derivative liabilities	$	377	$	—	$	377	$	128	$	343	(2)	$	(94)
As of October 31, 2024
Derivative assets	$	229	$	—	$	229	$	113	$	88	(1)	$	28
Derivative liabilities	$	182	$	—	$	182	$	113	$	61	(2)	$	8

(1)Represents the cash collateral posted by counterparties as of the respective reporting date for HP’s asset position, net of derivative amounts that could be offset, as of, generally, two business days prior to the respective reporting date.

(2)Represents the collateral posted by HP including any re-use of counterparty cash collateral as of the respective reporting date for HP’s liability position, net of derivative amounts that could be offset as of, generally, two business days prior to the respective reporting date.

Effect of Derivative Instruments in the Condensed Consolidated Statements of Earnings

The pre-tax effect of derivative instruments and related hedged items in a fair value hedging relationship were as follows:


Derivative Instrument	Hedged Item	Location	Year	Total amounts of income/(expense) line items in the statement of financial performance in which the effects of fair value hedges are recorded		Gain/(loss) recognized in earnings on derivative instruments		Gain/(loss) recognized in earnings on hedged item
				In millions
Three months ended July 31
Interest rate contract	Fixed-rate debt	Interest and other, net	2025	$	(92)	$	2	$	(2)
			2024	$	(113)	$	13	$	(13)
Nine months ended July 31
Interest rate contract	Fixed-rate debt	Interest and other, net	2025	$	(381)	$	17	$	(17)
			2024	$	(410)	$	28	$	(28)

The pre-tax effect of derivative instruments in cash flow hedging relationships included in Accumulated other comprehensive (loss) income was as follows:


	Three months ended July 31				Nine months ended July 31
	2025		2024		2025		2024
	In millions
Gain/(loss) recognized in Accumulated other comprehensive (loss) income on derivatives:
Foreign currency contracts	$	59	$	(33)	$	(304)	$	(44)
Interest rate contracts	—		(3)		3		(3)
Total	$	59	$	(36)	$	(301)	$	(47)

The pre-tax effect of derivative instruments in cash flow hedging relationships included in earnings were as follows:


	Gain/(loss) reclassified from Accumulated other comprehensive (loss) income into earnings
		Three months ended July 31		Nine months ended July 31
				2025		2024		2025		2024
			In millions
Products net revenue				$	(184)	$	117	$	50	$	355
Cost of products net revenue				(21)		(33)		(71)		(109)
Operating expenses				—		—		1		(4)
Interest and other, net				3		3		9		9
Total				$	(202)	$	87	$	(11)	$	251

As of July 31, 2025, HP expects to reclassify an estimated accumulated other comprehensive loss of $162 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) income based on the change of market rate, and therefore could have different impacts on earnings.

The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Condensed Consolidated Statements of Earnings as follows:


	Gain/(loss) recognized in earnings on derivative instrument
		Three months ended July 31				Nine months ended July 31
	Location	2025		2024		2025		2024
		In millions
Foreign currency contracts	Interest and other, net	$	7	$	16	$	(7)	$	23
Other derivatives	Interest and other, net	(3)		7		2		5
Total		$	4	$	23	$	(5)	$	28

HP INC 10-Q