Hewlett-Packard (HPQ)

Interest and Other, Net

        Interest and other, net decreased by $721 million in fiscal 2009 as compared to fiscal 2008. The decrease was driven primarily by higher interest expenses due to higher average debt balances principally related to the EDS acquisition, lower interest income as a result of lower interest rates, and higher currency losses on balance sheet remeasurement items. Additionally, there were higher gains from the sale of real estate in fiscal 2008 as compared to fiscal 2009.

        Interest and other, net decreased by $458 million in fiscal 2008 as compared to fiscal 2007. The decrease resulted primarily from currency losses on balance sheet remeasurement items and lower interest income as a result of lower interest rates, the effect of which was partially offset by lower interest expense. Additionally, the prior-year period benefited from higher gains from the sale of real estate.

Interest and Other, Net

        For the three and six months ended April 30, 2009, interest and other, net decreased by $183 million and $487 million, respectively, as compared to the corresponding periods in fiscal 2008. The decreases in both periods were driven primarily by higher interest expenses due to higher average debt balances, which were principally related to the EDS acquisition, and lower interest income as a result of lower interest rates. Additionally, the prior-year periods benefited from higher gains from the sale of real estate. For the six months ended April 30, 2009, the decrease in interest and other, net was also due to higher currency losses on balance sheet remeasurement items.

Interest and Other, Net

        Interest and other, net decreased by $304 million for the three months ended January 31, 2009 as compared to the corresponding period in fiscal 2008. The decrease resulted primarily from currency losses on balance sheet remeasurement items, lower interest income as a result of lower interest rates, as well as higher interest expenses due to higher average debt balances.

Interest and Other, Net

        Interest and other, net decreased by $458 million in fiscal 2008 as compared to fiscal 2007. The decrease resulted primarily from currency losses on balance sheet remeasurement items and lower interest income as a result of lower interest rates, the effect of which was partially offset by lower interest expense. Additionally, the prior-year period benefited from higher gains from the sale of real estate.

        Interest and other, net decreased by $173 million in fiscal 2007 from fiscal 2006. The decrease was due primarily to higher interest expense resulting from higher average debt balances. Net gains on investment in fiscal 2007 and fiscal 2006 resulted primarily from gains on the sale of equity investments, which were offset in part by impairment charges on our investment portfolio.

Interest and Other, Net

        Interest and other, net decreased by $458 million in fiscal 2008 as compared to fiscal 2007. The decrease resulted primarily
from currency losses on balance sheet remeasurement items and lower interest income as a result of lower interest rates, the effect of which was partially offset by lower interest expense.
Additionally, the prior-year period benefited from higher gains from the sale of real estate.

        Interest
and other, net decreased by $173 million in fiscal 2007 from fiscal 2006. The decrease was due primarily to higher interest expense resulting from higher average debt
balances. Net gains on investment in fiscal 2007 and fiscal 2006 resulted primarily from gains on the sale of equity investments, which were offset in part by impairment charges on our investment
portfolio.

Interest and Other, Net

        For the three and nine months ended July 31, 2008, interest and other, net decreased by $147 million and $293 million, respectively, compared to the same periods in fiscal 2007. The decreases for both periods resulted primarily from higher currency losses on various balance sheet items and lower interest income as a result of lower interest rates, the effect of which was partially offset by lower interest expense. Additionally, the prior-year period benefited from higher gains from the sale of real estate.

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Interest and Other, Net

        For the three and six months ended April 30, 2008, interest and other, net decreased by $97 million and $146 million, respectively, compared to the same periods in fiscal 2007. The decrease for both periods resulted primarily from higher currency losses on various balance sheet items and lower interest income as a result of lower interest rates and lower cash and investment balances, the effect of which was partially offset by lower interest expense.

Interest and Other, Net

        Interest and other, net decreased by $49 million for the three months ended January 31, 2008 compared to the corresponding period in fiscal 2007. The decrease resulted primarily from lower short-term interest income over the prior-year period related to lower short-term interest rates on lower investment balances in the first quarter of fiscal 2008, lower currency gains on various balance sheet items and higher impairment charges on our investment portfolio, which were partially offset by lower interest expense.

Interest and Other, Net

        Interest and other, net decreased by $162 million in fiscal 2007 from fiscal 2006. The decrease was due primarily to higher interest expense resulting from higher average debt balances.

        Interest and other, net increased by $523 million in fiscal 2006 from fiscal 2005. The increase in fiscal 2006 resulted primarily from higher net interest income over the prior year related to higher short-term interest rates in fiscal 2006, net gains from sales of certain real estate properties, and lower interest expense due to our lower average debt balances. The increase in fiscal 2006 also was attributable to a net $106 million of dispute settlement charge and its related interest charge recorded in fiscal 2005. In fiscal 2005, we reached a legal settlement of $141 million in our patent infringement case with Intergraph Hardware Technologies Company ("Intergraph") and recorded a charge of $116 million related to a cross-license agreement with Intergraph for products shipped in prior years. Partially offsetting this amount was a $10 million recovery from an individual related to a prior period settlement with the Government of Canada.

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Interest and Other, Net

        For the three and nine months ended July 31, 2007, interest and other, net decreased by $56 million and $53 million, respectively, compared to the same periods in fiscal 2006. The decrease for both periods was due primarily to higher interest expense resulting from higher average debt balances, which was partially offset by a more favorable foreign currency impact on our various balance sheet items.

Interest and Other, Net

        For the three months ended April 30, 2007, interest and other, net decreased by $70 million compared to the prior year period. The decrease resulted primarily from less favorable foreign currency impact on our various balance sheet items and higher interest expenses due to our higher average debt balances. For the six months ended April 30, 2007, interest and other, net increased slightly compared to the prior year period as a result of a favorable foreign currency impact on our various balance sheet items and higher interest income, which were partially offset by higher interest expense.

Interest and Other, Net

Interest and other, net increased by $73 million for the three moths ended January 31, 2007 compared to the corresponding period in fiscal 2006. The increase resulted primarily from favorable currency impacts on various balance sheet items and higher interest income over the prior year period related to higher short-term interest rates in fiscal 2007, which were partially offset by higher interest expenses due to our higher average debt balances.

Interest and Other, Net

        Interest and other, net increased by $417 million in fiscal 2006 from fiscal 2005. The increase in fiscal 2006 resulted primarily from higher net interest income over the prior year related to higher short-term interest rates in fiscal 2006, net gains from sales of certain real estate properties, and lower interest expenses due to our lower average debt balances. The increase in fiscal 2006 also was attributable to a charge recorded in fiscal 2005 for estimated sales and use taxes and related interest associated with pre-acquisition Compaq sales and use tax audits as described below.

        Interest and other, net increased by $154 million in fiscal 2005 from fiscal 2004. The increase in fiscal 2005 was the result primarily of higher short-term U.S. interest rates, which increased the interest income from our cash balances and reduced the cost associated with foreign exchange hedges. Increased interest expense and a charge related to a sales and use tax audit of Compaq prior to its acquisition by HP for the fiscal years 1998-2002 partially offset the increase in interest and other, net for fiscal 2005.

Interest and Other, Net

        Interest and other, net increased by $102 million and $359 million in the third quarter and first nine months, respectively, of fiscal 2006 compared to the corresponding periods in fiscal 2005. The increase for both periods resulted primarily from net gains on our real estate property transactions recorded in the third quarter of fiscal 2006, higher net interest income over the prior year related to higher short-term interest rates in fiscal 2006 and lower interest expenses due to our debt repayments, which were partially offset by unfavorable currency impacts on various balance sheet items. The increase for the first nine months of fiscal 2006 also was impacted by a charge of $112 million recorded in the first nine months of fiscal 2005 for estimated sales and use taxes and related interest associated with pre-acquisition Compaq sales and use tax audits.

Interest and Other, Net

        Interest and other, net increased by $13 million in the three months ended January 31, 2006 compared to the corresponding period in fiscal 2005, resulting primarily from higher short-term U.S. interest rates, which increased the interest income from our cash balances and reduced the cost associated with foreign exchange hedges. These increases were moderated by higher net foreign currency losses related to balance sheet remeasurement and net loss on our non-operational property sales. Interest expense remained relatively flat due to lower debt balances in the three months ended January 31, 2006 compared to prior year period.

Interest and Other, Net

        Interest and other, net increased $154 million in fiscal 2005 from fiscal 2004. The increase in fiscal 2005 was the result primarily of higher short-term U.S. interest rates, which increased the interest income from our cash balances and reduced the cost associated with foreign exchange hedges. Increased interest expense and a charge related to a sales and use tax audit of Compaq prior to its acquisition by HP for the years 1998-2002 partially offset the increase in interest and other, net for fiscal 2005.

        Interest and other, net increased $14 million in fiscal 2004 from fiscal 2003. The increase in fiscal 2004 was the result of lower interest expense, which was offset partially by higher currency losses from balance sheet remeasurement and related hedging strategies.

Interest and Other, Net

        The decrease in interest and other, net in the second quarter and first six months of fiscal 2005 was attributable primarily to a charge of $101 million for estimated taxes and related interest associated with a pre-acquisition Compaq sales and use tax audit for the years 1998-2002.

Interest and Other, Net

        Interest and other, net increased $14 million for the three months ended January 31, 2005 compared to the corresponding period in fiscal 2004 primarily from increased interest income due to new investment strategies and higher interest rates offset partially by increased interest expense.

Interest and Other, Net

        On a combined company basis, interest and other, net remained essentially flat in fiscal 2003. In fiscal 2003, lower net losses on foreign currency transactions resulting from our balance sheet remeasurement and related hedging strategies as compared to fiscal 2002 were offset almost entirely by lower interest income and higher interest expense on debt.