HP 2011 Annual Report Download - page 72

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
remained flat year over year. The decrease in DPO was due primarily to a change in purchasing
linearity in the fourth quarter.
Investing Activities
Net cash used in investing activities increased by $2.6 billion for fiscal 2011, as compared to fiscal
2010, and increased by approximately $7.8 billion for fiscal 2010, as compared to fiscal 2009. The
increases were due primarily to higher investments in acquisitions in both 2011 and 2010.
Financing Activities
Net cash used in financing activities decreased by approximately $1.3 billion for fiscal 2011, as
compared to fiscal 2010. The decrease was due primarily to higher net proceeds from the issuance of
debt and a decrease in cash paid for repurchases of our common stock, the impact of which was
partially offset by higher net repayment of commercial paper and a decrease in cash received from the
issuance of common stock under employee stock plans. Net cash used in financing activities decreased
by approximately $3.8 billion for fiscal 2010, as compared to fiscal 2009. The decrease was due
primarily to a higher net issuance of commercial paper, the impact of which was partially offset by
increased repurchases of our common stock and lower global debt issuances.
For more information on our share repurchase programs, see Item 5 and Note 15 to the
Consolidated Financial Statements in Item 8, which are incorporated herein by reference.
CAPITAL RESOURCES
Debt Levels
For the fiscal years ended October 31
2011 2010 2009
In millions, except
interest rates and ratios
Short-term debt ....................................... $ 8,083 $ 7,046 $ 1,850
Long-term debt ....................................... $22,551 $15,258 $13,980
Debt-equity ratio ...................................... 0.79x 0.55x 0.39x
Weighted-average interest rate ............................ 2.4% 2.0% 2.7%
We maintain debt levels that we establish through consideration of a number of factors, including
cash flow expectations, cash requirements for operations, investment plans (including acquisitions),
share repurchase activities, overall cost of capital, and targeted capital structure.
Short-term debt and long-term debt increased by $1.0 billion and $7.3 billion, respectively, for
fiscal 2011, as compared to fiscal 2010. The net increase in total debt is due primarily to investments in
acquisitions and share repurchases. In fiscal 2010, short-term debt and long-term debt increased by
$5.2 billion and $1.3 billion, respectively, as compared to fiscal 2009. This was due primarily to
spending on acquisitions and share repurchases.
Our debt-equity ratio is calculated as the carrying value of debt divided by the carrying value of
equity. Our debt-equity ratio increased by 0.24x in fiscal 2011, due primarily to the issuance of
$11.6 billion of U.S Dollar Global Notes and a decrease in shareholders equity by $1.8 billion at the
end of fiscal 2011. Our debt-equity ratio increased by 0.16x in fiscal 2010, due primarily to the issuance
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