Gain expected to be reclassified from Accumulated OCI into earnings in next 12 months

[Table of Contents](#i43adbcd383bc4dc48977980bcb999d17_79) HP INC. AND SUBSIDIARIESNotes to Consolidated Financial Statements (Continued)  
Note 10: Financial Instruments (Continued)  
The pre-tax effect of derivative instruments in cash flow hedging relationships included in earnings were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Total amounts of income/ (expense) line items in the statement of financial performance in which the effects of cash flow hedges are recorded |  | Gain/ (loss) reclassified from Accumulated other comprehensive loss into earnings |
|  | For the fiscal years ended October 31 |  | For the fiscal years ended October 31 |
|  | 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019 |
|  | In millions |  | In millions |
| Net revenue | $ | 63,487  |  |  | $ | 56,639  |  |  | $ | 58,756  |  |  | $ | (214) |  |  | $ | 108  |  |  | $ | 425  |  |
| Cost of revenue | (50,070) |  |  | (46,202) |  |  | (47,586) |  |  | (30) |  |  | (25) |  |  | (43) |  |
| Operating expenses | (8,115) |  |  | (6,975) |  |  | (7,293) |  |  | 1  |  |  | 2  |  |  | (2) |  |
| Interest and other, net | 2,209  |  |  | (231) |  |  | (1,354) |  |  | —  |  |  | —  |  |  | —  |  |
| Total | $ | 7,511  |  |  | $ | 3,231  |  |  | $ | 2,523  |  |  | $ | (243) |  |  | $ | 85  |  |  | $ | 380  |  |

As of October 31, 2021, HP expects to reclassify an estimated Accumulated other comprehensive gain of approximately $10 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.The pre-tax effect of derivative instruments not designated as hedging instruments recognized in Interest and other, net in the Consolidated Statements of Earnings for fiscal years 2021, 2020 and 2019 was as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   | Gain/(loss) recognized in earnings on derivative instrument |
|   | Location |  | 2021 |  | 2020 |  | 2019 |
|   |   |  | In millions |
| Foreign currency contracts | Interest and other, net |  | $ | (65) |  |  | $ | 40  |  |  | $ | (119) |  |
| Other derivatives | Interest and other, net |  | 8  |  |  | (9) |  |  | 14  |  |
| Total |   |  | $ | (57) |  |  | $ | 31  |  |  | $ | (105) |  |

100
