HP 2013 Annual Report Download - page 80

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Continued)
under our existing shelf registration statement, if necessary to offset reductions in the market capacity
for our commercial paper.
CONTRACTUAL AND OTHER OBLIGATIONS
The impact that we expect our contractual and other obligations as of October 31, 2013 to have on
our liquidity and cash flow in future periods is as follows:
Payments Due by Period
1 Year or More than
Total Less 1-3 Years 3-5 Years 5 Years
In millions
Principal payments on long-term debt(1) ......... $21,420 $4,971 $5,534 $3,728 $ 7,187
Interest payments on long-term debt(2) .......... 4,591 565 951 672 2,403
Operating lease obligations .................. 2,900 728 1,004 445 723
Purchase obligations(3) ...................... 2,166 1,191 706 269 —
Capital lease obligations .................... 289 229 27 8 25
Total(4)(5)(6) .............................. $31,366 $7,684 $8,222 $5,122 $10,338
(1) Amounts represent the expected principal cash payments relating to our long-term debt and do not
include any fair value adjustments, discounts or premiums.
(2) Amounts represent the expected interest payments relating to our long-term debt. We have
outstanding interest rate swap agreements accounted for as fair value hedges that have the
economic effect of changing fixed interest rates associated with some of our global notes to
variable interest rates. The impact of these interest rate swaps was factored into the calculation of
the future interest payments on long-term debt.
(3) Purchase obligations include agreements to purchase goods or services that are enforceable and
legally binding on us and that specify all significant terms, including fixed or minimum quantities
to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the
transaction. These purchase obligations are related principally to inventory and other items.
Purchase obligations exclude agreements that are cancellable without penalty. Purchase obligations
also exclude open purchase orders that are routine arrangements entered into in the ordinary
course of business, as they are difficult to quantify in a meaningful way. Even though open
purchase orders are considered enforceable and legally binding, the terms generally allow us the
option to cancel, reschedule, and adjust terms based on our business needs prior to the delivery of
goods or performance of services.
(4) In fiscal 2014, we expect to contribute approximately $617 million to our non-U.S. pension plans
and approximately $33 million to cover benefit payments to U.S. non-qualified plan participants.
We expect to pay approximately $109 million to cover benefit claims for our post-retirement
benefit plans. Our policy is to fund our pension plans so that they meet at least the minimum
contribution requirements, as established by local government, funding and taxing authorities.
Expected contributions to our pension and post-retirement benefit plans are excluded from the
table because they do not represent contractual cash outflows as they are dependent on numerous
factors, which may result in a wide range of outcomes. See Note 15 to the Consolidated Financial
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