HP 2012 Annual Report Download - page 77

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
2011, short-term debt and long-term debt increased by $1.0 billion and $7.3 billion, respectively, as
compared to fiscal 2010. The net increase in total debt is due primarily to investments in acquisitions
and share repurchases.
During fiscal 2013, $5.5 billion of U.S. Dollar Global Notes will mature. We expect to have
sufficient cash, cash from operations and access to capital markets to repay those maturing global
notes.
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 0.46x in fiscal 2012, due primarily to a decrease in
shareholders equity by $16.2 billion at the end of fiscal 2012. 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 weighted-average interest rate reflects the average effective rate on our borrowings prevailing
during the year; it factors in the impact of swapping some of our global notes with fixed interest rates
for global notes with floating interest rates. For more information on our interest rate swaps, see
Note 10 to the Consolidated Financial Statements in Item 8, which is incorporated herein by reference.
The low weighted-average interest rate over the past three years is a result of a combination of lower
market interest rates and swapping some of our fixed-interest obligations associated with some of our
fixed-rate U.S. Dollar Global Notes for variable-rate obligations through interest rate swaps in a
declining rate environment.
For more information on our borrowings, see Note 13 to the Consolidated Financial Statements in
Item 8, which is incorporated herein by reference.
Available Borrowing Resources
At October 31, 2012, we had the following resources available to obtain short-term or long-term
financings if we need additional liquidity:
At October 31, 2012
In millions
2012 Shelf Registration Statement(1) .................................... Unspecified
Commercial paper programs(1) ........................................ $16,135
Uncommitted lines of credit(1) ........................................ $ 1,301
(1) For more information on our available borrowings resources, see Note 13 to the Consolidated
Financial Statements in Item 8, which is incorporated herein by reference.
Credit Ratings
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. The ratings as of
October 31, 2012 were:
Standard & Poor’s Moody’s Investors Fitch Ratings
Ratings Services Service Services
Short-term debt ratings ....................... A-2 Prime-2 F2
Long-term debt ratings ....................... BBB+ A3 Aǁ
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