HP 2015 Annual Report Download - page 163

Table of Contents
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Interest expense on borrowings recognized in the Consolidated Statements of Earnings during the fiscal years was as follows:
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On October 9, 2015, Hewlett Packard Enterprise completed the offering and pricing of nine series of senior unsecured notes (the "Notes") in an aggregate
principal amount of $14.6 billion which includes $14.0 billion of fixed rate notes and $600 million of floating rate notes. The interest on fixed rate notes are
payable semiannually and the interest on floating-rate notes are payable quarterly. The issuance costs of $54 million are included in Other assets on the
Consolidated Balance Sheets and are being amortized to Interest expense over the term of the Notes. The Notes were initially guaranteed by HP. The
guarantee was automatically and unconditionally released upon the completion of the Separation on November 1, 2015.
Concurrent with the issuance of the Notes, Hewlett Packard Enterprise entered into interest rate swaps to reduce the exposure of $9.5 billion of aggregate
principal amount of fixed rate senior notes to changes in fair value resulting from changes in interest rates by achieving LIBOR-based floating interest
expense.
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On September 30, 2015, HP commenced cash tender offers ("the Tender Offers") to purchase up to $8.85 billion outstanding debt securities in two
separate offers, for (i) any and all of its outstanding 2.20% notes due December 2015, 2.65% notes due June 2016, 3.00% notes due September 2016, 3.30%
notes due December 2016, 5.40% notes due March 2017, 2.60% notes due September 2017 and 5.50% notes due March 2018 and (ii) up to $2.3 billion in
aggregate principal amount of its outstanding 2.75% notes due January 2019, Floating Rate notes due January 2019, 3.75% notes due December 2020,
4.30% notes due June 2021, 4.375% notes due September 2021, 4.650% notes due December 2021, 4.050% notes due September 2022 and 6.00% notes due
September 2041. In the fourth quarter of fiscal 2015, HP redeemed and repaid $6.6 billion and this early extinguishment of debt resulted in a loss of
$167 million, net of realized gains from fair value hedges, which was recorded as "Interest and other, net" on the Consolidated Statements of Earnings. On
November 4, 2015, HP incrementally redeemed and repaid a total of $2.1 billion fixed-rate U.S. Dollar Global Notes which resulted in a loss of $66 million,
net of realized gains from fair value hedges.
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HP's Board of Directors has authorized the issuance of up to $16.0 billion in aggregate principal amount of commercial paper by HP. HP's subsidiaries are
authorized to issue up to an additional $1.0 billion in aggregate principal amount of commercial paper. HP maintains two commercial paper
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Financing interest Financing interest $ 240 $ 277 $ 312
Interest expense Interest and other, net 327 344 426
Total interest expense $ 567 $ 621 $ 738
Source: HP INC, 10-K, December 16, 2015 Powered by Morningstar® Document Research℠
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