HP 2006 Annual Report Download - page 69

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
under the Euro Program. Fees associated with these facilities do not generally differ materially from
the cash discounts offered to these customers under the previous alternative prompt payment programs.
We have the following short-term or long-term financings available, if we need additional liquidity:
At October 31, 2006
Original Amount
Available Used Available
In millions
2002 Shelf Registration Statement
Debt, global securities and up to $1,500 of Series B
Medium-Term Notes .............................. $ 3,000 $2,000 $ 1,000
Euro Medium-Term Notes ............................. 3,000 — 3,000
Lines of credit ...................................... 2,186 41 2,145
Commercial paper programs
U.S. ........................................... 6,000 — 6,000
Euro ........................................... 500 190 310
$14,686 $2,231 $12,455
In May 2006, we filed a shelf registration statement with the Securities and Exchange Commission
(the ‘‘SEC’’) to enable us to offer and sell from time to time, in one or more offerings, debt securities,
common stock, preferred stock, depositary shares and warrants. On May 23, 2006, we issued $1.0 billion
in Floating Rate Global Notes under this registration statement. We used a portion of the proceeds
received to repay our 5.25% Euro Medium-Term Notes due July 2006 at maturity. We used the
remainder of the net proceeds for general corporate purposes.
The securities issuable under the 2002 shelf registration statement include notes with due dates of
nine months or more from issuance. The lines of credit are uncommitted and are available primarily
through various foreign subsidiaries. In April 2005, we increased our U.S. commercial paper program
to $6.0 billion.
We have a $3.0 billion U.S. credit facility expiring in December 2010. This credit facility is a senior
unsecured committed borrowing arrangement primarily to support our U.S. commercial paper program.
Our ability to have a U.S. commercial paper outstanding balance that exceeds the $3.0 billion
committed credit facility is subject to a number of factors, including liquidity conditions and business
performance.
Our credit risk is evaluated by three independent rating agencies based upon publicly available
information as well as information obtained in our ongoing discussions with them. Standard & Poor’s
Ratings Services, Moody’s Investors Service and Fitch Ratings currently rate our senior unsecured long
term debt A-, A3 and A and our short-term debt A-1, Prime-1, and F1, respectively. We do not have
any rating downgrade triggers that would accelerate the maturity of a material amount of our debt.
However, a downgrade in our credit rating would increase the cost of borrowings under our credit
facilities. Also, a downgrade in our credit rating could limit or, in the case of a significant downgrade,
preclude our ability to issue commercial paper under our current programs. If this occurs, we would
seek alternative sources of funding, including our credit facility or the issuance of notes under our
existing shelf registration statements and our Euro Medium-Term Note Programme.
On December 15, 2006, we repaid our $1.0 billion Global Notes due December 2006 at maturity.
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