HP 2008 Annual Report Download - page 73

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
accounts payable management. These changes contributed to the decrease in our current year cash
conversion cycle compared to the prior year.
2008 Compared to 2007
Operating Activities
Net cash provided by operating activities increased by approximately $5.0 billion during fiscal 2008
from fiscal 2007. The increase was due primarily to higher net earnings in fiscal 2008, a decrease in
accounts and financing receivables, and increased accounts payable.
Investing Activities
Net cash used in investing activities increased by approximately $4.6 billion in fiscal 2008 from
fiscal 2007, due primarily to higher cash payments made in connection with acquisitions.
Financing Activities
Net cash used in financing activities decreased by approximately $3.6 billion during fiscal 2008
from fiscal 2007. The decrease was due primarily to higher net issuance of commercial paper and debt.
Common Stock Repurchases
We repurchase shares of our common stock under an ongoing program to manage the dilution
created by shares issued under employee benefit plans as well as to repurchase shares opportunistically.
This program authorizes repurchases in the open market or in private transactions. In fiscal 2008, we
completed share repurchases of approximately 230 million shares. Repurchases of approximately
216 million shares were settled for $9.6 billion, which included approximately 1 million shares
repurchased in transactions that were executed in fiscal 2007 but settled in fiscal 2008. At the end of
fiscal 2008, we had approximately 14 million shares which would be settled in the next fiscal year. In
fiscal 2007, we completed share repurchases of approximately 209 million shares. Repurchases of
approximately 210 million shares were settled for $9.1 billion in fiscal 2007, including approximately
1 million shares repurchased in transactions that were executed in fiscal 2006 but settled in fiscal 2007.
We intend to continue to repurchase shares as a means to manage dilution from the issuance of
shares under employee benefit plans and to purchase shares opportunistically. On September 19, 2008,
our Board of Directors authorized an additional $8.0 billion for future share repurchases. As of
October 31, 2008, we had remaining authorization of approximately $9.1 billion for future share
repurchases. For more information on our share repurchases, see Item 5 and Note 14 to the
Consolidated Financial Statements in Item 8, which are incorporated herein by reference.
2007 Compared to 2006
Operating Activities
Net cash provided by operating activities decreased by $1.7 billion during fiscal 2007 from fiscal
2006. The decrease was due primarily to an increase in accounts receivable, a decrease in accounts
payable and higher payments for bonuses earned in fiscal 2006 and paid in the first quarter of fiscal
2007. The decease in our cash flow from operations was partially offset by higher earnings in fiscal
2007.
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