Hewlett-Packard (HPQ)

Financing Activities

        Net cash used in financing activities increased by approximately $2.3 billion for the three months ended January 31, 2010 as compared to the corresponding period in fiscal 2009. The increase was due primarily to a decline in the issuance of debt and increased repurchases of our common stock, the impact of which was partially offset by the cash received through more issuances of common stock under employee stock plans.

        For more information on our share repurchase programs, see Note 14 to the Consolidated Condensed Financial Statements in Item 1, which is incorporated herein by reference.

Financing Activities

        Net cash used in financing activities increased by approximately $4.7 billion for fiscal 2009, as compared to fiscal 2008. The increase was due primarily to higher net repayments of commercial paper and debt, the impact of which was partially offset by decreased repurchases of our common stock. Net cash used in financing activities decreased by approximately $3.6 billion for fiscal 2008, as compared to fiscal 2007. The decrease was due primarily to higher net issuance of commercial paper and debt.

        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.

Financing Activities

        Net cash used in financing activities decreased by approximately $3.7 billion for the six months ended April 30, 2009 as compared to the corresponding period in fiscal 2008 due primarily to lower share repurchases and higher proceeds from issuance of debt, partially offset by increased repayments of commercial paper and notes payable.

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Financing Activities

        Net cash provided by financing activities increased by approximately $4.8 billion for the three months ended January 31, 2009 as compared to the corresponding period in fiscal 2008 due primarily to the issuance of debt, commercial paper and notes payable, and lower share repurchases.

Financing Activities

        Net cash used in financing activities decreased by $0.5 billion during fiscal 2007 from fiscal 2006. The decrease was due primarily to higher net issuance of commercial paper and debt, the impact of which was partially offset by increased repurchases of our common stock.

Financing Activities

        Net cash used in financing activities decreased by $0.5 billion during fiscal 2007 from fiscal 2006. The decrease was due
primarily to higher net issuance of commercial paper and debt, the impact of which was partially offset by increased repurchases of our common stock.

Note 2: Financing Activities

In August 2008, HP issued approximately $9.9 billion of commercial paper under its existing commercial paper programs to fund the acquisition of EDS.  As of the original issuance date, the average maturities of the commercial paper was approximately 30 days with a weighted average yield of 2.25%.  HP may replace some of the commercial paper with issuances of term debt securities.

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Financing Activities

        Net cash used in financing activities increased by approximately $1.1 billion for the nine months ended July 31, 2008 as compared to the corresponding period in fiscal 2007 due primarily to lower issuances of debt and lower proceeds from our common stock issued under employee stock plans, the effect of which was partially offset by decreased repurchases of our common stock.

Financing Activities

        Net cash used in financing activities increased by $2.8 billion for the six months ended April 30, 2008 as compared to the corresponding period in fiscal 2007 due primarily to net repayments of commercial paper and debt.

Financing Activities

        Net cash used in financing activities increased by $2.5 billion for the three months ended January 31, 2008 as compared to the corresponding period in fiscal 2007 due primarily to higher net repayments of commercial paper and debt and increased repurchases of our common stock.

Financing Activities

        Net cash used in financing activities increased by $1.1 billion during fiscal 2006 from fiscal 2005. The increase was due primarily to a $2.5 billion increase in repurchases of common stock and a $1.7 billion prepayment for common stock to be repurchased in future periods. These expenditures were partially offset by a $1.6 billion net increase to financing activities resulting from higher borrowings and lower debt payments and $1.4 billion increased proceeds from the issuance of common stock related to our employee stock plans due mainly to increased exercises of employee stock options as a result of higher market prices for our common stock during fiscal 2006.

Financing Activities

        Net cash used in financing activities decreased by $0.4 billion for the nine months ended July 31, 2007 as compared to the corresponding period in fiscal 2006 due primarily to higher net issuance of our debt and commercial paper, which was partially offset by increased repurchases of our common stock.

        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. We completed share repurchases of approximately 167 million shares for approximately $7.0 billion in the first nine months of fiscal 2007. We completed share repurchases of approximately 160 million shares for approximately $5.0 billion in the first nine months of fiscal 2006.

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        In addition to the above transactions, we entered into an Accelerated Share Repurchase program (the "ASR Program") with a third-party investment bank during the second quarter of fiscal 2007. Pursuant to the terms of the ASR Program, we purchased 40 million shares of our common stock from a third-party investment bank for $1.8 billion (the "Purchase Price") on March 30, 2007 (the "Purchase Date"). We decreased our shares outstanding and reduced the outstanding shares used to calculate the weighted-average common shares outstanding for both basic and diluted EPS on the Purchase Date. The shares delivered to us included shares that the investment bank borrowed from third parties. The investment bank purchased an equivalent number of shares in the open market to cover its position with respect to the borrowed shares during a contractually specified averaging period that began on the Purchase Date and ended on June 6, 2007. At the end of the averaging period, the investment bank's total purchase cost based on the volume weighted-average purchase price of our shares during the averaging period was approximately $90 million less than the Purchase Price. In June 2007, we received approximately 2 million additional shares purchased by the investment bank in the open market with a value approximately equal to that amount. We reduced our shares outstanding upon receipt of those shares.

        In addition to the above transactions, we entered into a prepaid variable share purchase program ("PVSPP") with a third-party investment bank during the first quarter of 2006 and prepaid $1.7 billion in exchange for the right to receive a variable number of shares of our common stock weekly over a one year period beginning in the second quarter of fiscal 2006 and ending during the second quarter of fiscal 2007. We completed all repurchases under the PVSPP on March 9, 2007. As of that date, we had cumulatively received a total of 53 million shares. We retired all shares repurchased and no longer deem those shares outstanding.

        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 March 15, 2007, our Board of Directors authorized an additional $8.0 billion for future repurchases of our common stock. As of July 31, 2007, we had remaining authorization of approximately $4.8 billion for future share repurchases.

Financing Activities

        Net cash used in financing activities decreased by $1.3 billion for the six months ended April 30, 2007 as compared to the corresponding period in fiscal 2006 due primarily to higher issuances of debt and commercial paper partially offset by increased repurchases of our common stock.

        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. We completed share repurchases of approximately 112 million shares for approximately $4.5 billion in the first half of fiscal 2007. We completed share repurchases of approximately 88 million shares for approximately $2.7 billion in the first half of fiscal 2006.

        In addition to the above transactions, we entered into an Accelerated Share Repurchase program (the "ASR Program") with a third-party investment bank during the second quarter of fiscal 2007. Pursuant to the terms of the ASR Program, we purchased 40 million shares of our common stock from a third-party investment bank for $1.8 billion (the "Purchase Price") on March 30, 2007 (the "Purchase Date"). We decreased our shares outstanding and reduced the outstanding shares used to calculate the weighted-average common shares outstanding for both basic and diluted EPS on the Purchase Date. The shares delivered to us included shares that the investment bank borrowed from third parties. The investment bank purchased an equivalent number of shares in the open market to cover its position with respect to the borrowed shares during a contractually specified averaging period that began on the Purchase Date and ended on June 6, 2007. As of April 30, 2007, the investment bank had purchased approximately 18 million shares in the open market for an aggregate purchase price of approximately $736 million. At the end of the averaging period, the investment bank's total purchase cost based on the volume weighted-average purchase price of our shares during the averaging period was approximately $90 million less than the Purchase Price. As a result, we expect to receive additional HP shares to be purchased by the investment bank in the open market with a value approximately equal to that amount. We expect to receive the additional shares during the third quarter of fiscal 2007 and will treat them as additional repurchased shares at that time.

        In addition to the above transactions, we entered into a prepaid variable share purchase program ("PVSPP") with a third-party investment bank during the first quarter of 2006 and prepaid $1.7 billion in exchange for the right to receive a variable number of shares of our common stock weekly over a one year period beginning in the second quarter of fiscal 2006 and ending during the second quarter of fiscal 2007. During the first half of fiscal 2007, we had received 19 million shares for an aggregate price of $629 million under the PVSPP. We completed all repurchases under the PVSPP on March 9, 2007. As of that date, we had cumulatively received a total of 53 million shares. We retired all shares repurchased and no longer deemed those shares outstanding.

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        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 March 15, 2007, our Board of Directors authorized an additional $8.0 billion for future repurchases of our common stock. As of April 30, 2007, we had remaining authorization of approximately $7.3 billion for future share repurchases.

Financing Activities

Net cash used in financing activities decreased by $1.5 billion for the three months ended January 31, 2007 as compared to the corresponding period in fiscal 2006 due primarily to a $1.7 billion prepayment for  future stock repurchases made in the first quarter of fiscal 2006 as described below. We did not make a prepayment for future stock repurchases in the first quarter of fiscal 2007. In addition, we increased borrowings from commercial paper and notes payable. These actions were partially offset by a $0.9 billion increase in repurchases of common stock and a $0.8 billion increase in debt repayment.

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Financing Activities

        Net cash used in financing activities increased by 21% during fiscal 2005 as compared to fiscal 2004. The increase was due primarily to the maturity of our debt and increased repurchases of our common stock. These cash payments were offset partially by increased proceeds from the issuance of common stock related to our employee stock plans.

        We repaid $1.8 billion of debt during fiscal 2005 compared to $0.3 billion during fiscal 2004 primarily due to the maturity of the $1.5 billion U.S. Dollar Global Notes and the $0.3 billion Medium-Term Notes assumed from the Compaq acquisition. Also, proceeds from the issuance of common stock under employee plans were $1.2 billion in fiscal 2005 compared to $0.6 billion in fiscal 2004, mainly because higher overall market prices during fiscal 2005 led to increased exercises of employee stock options.

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        We repurchase shares of our common stock under an ongoing program to manage the dilution created by shares issued under employee stock plans as well as to repurchase shares opportunistically. This program authorizes repurchases in the open market or in private transactions. We completed share repurchases of approximately 150 million shares, of which 148 million shares were settled for $3.5 billion in fiscal 2005, as compared to repurchases and settlements of approximately 172 million shares for $3.3 billion in fiscal 2004. In addition, in November 2004, we paid $51 million in connection with the completion of the fiscal 2004 accelerated share repurchase program. We intend to continue to repurchase shares as a means to manage dilution from the issuance of shares under employee benefit plans and to repurchase shares opportunistically. During fiscal 2005, the Board of Directors of HP authorized an additional $4.0 billion for future repurchases of our outstanding shares of common stock. As of October 31, 2005, we had remaining authorization of approximately $3.4 billion for future share repurchases.

Financing Activities

        Net cash used in financing activities increased by $896 million in the nine months ended July 31, 2006 as compared to the corresponding period in fiscal 2005. The increase was due primarily to a $2.9 billion increase in repurchases of common stock over the prior year and a $1.7 billion prepayment for common stock to be repurchased in future periods, which were partially offset by a net increase of $2.7 billion in borrowings from commercial paper, notes payable and debt and $0.9 billion increase in proceeds received from the issuance of common stock under employee stock plans.

        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. We completed share repurchases of approximately 160 million shares for approximately $5.0 billion in the first nine months of fiscal 2006. In the first nine months of fiscal 2005, we repurchased approximately 96 million shares for an aggregate price of $2.1 billion.

        In addition to the shares we repurchased, we received approximately 20 million shares for an aggregate price of $662 million under a prepaid variable share purchase program ("PVSPP") entered into with a third-party investment bank during the first quarter of 2006. Under the PVSPP, we prepaid $1.7 billion in the first quarter of fiscal 2006 in exchange for the right to receive a variable number of shares of our common stock weekly over a one year period beginning in the second quarter of fiscal 2006 and ending during the second quarter of fiscal 2007. We recorded the payment as a prepaid stock repurchase in the stockholders' equity section of our Consolidated Condensed Balance Sheet, and the payment was included in the cash flows from financing activities in the Consolidated Condensed Statement of Cash Flows. In connection with this program, the investment bank has purchased and will continue to trade shares of our common stock in the open market over time. The prepaid funds will be expended ratably over the term of the program.

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        Under the PVSPP, the prices at which we purchase the shares are subject to a minimum and maximum price that was determined in advance of any repurchases being completed under the program, thereby effectively hedging our repurchase price. The minimum and maximum number of shares we could receive under the program are 52 million shares and 70 million shares, respectively. The exact number of shares to be repurchased is based upon the volume weighted average market price of our shares during each weekly settlement period, subject to the minimum and maximum price as well as regulatory limitations on the number of shares we are permitted to repurchase. We decrease our shares outstanding each settlement period as shares are physically received. We will retire all shares repurchased under the PVSPP, and we will no longer deem those shares outstanding.

        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. As of July 31, 2006, we had remaining authorization of approximately $645 million in future share repurchases under the $4.0 billion repurchase authorization approved on February 14, 2006. Previously authorized share repurchases also will be made under the PVSPP until the remaining available balance is exhausted in the second quarter of fiscal 2007. On August 15, 2006, HP's Board of Directors authorized an additional $6.0 billion for future repurchases of outstanding shares of common stock.

Financing Activities

        Net cash used in financing activities increased by $2.6 billion in the six months ended April 30, 2006 as compared to the corresponding period in fiscal 2005. The increase was due primarily to a $1.7 billion prepayment for common stock to be repurchased in the future, higher repurchases of common stock under our regular open market share repurchase program and higher repayments of debt, notes payable and commercial paper. Such increases were offset in part by higher proceeds received from shares issued in connection with employee stock plans.

        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. We completed share repurchases of approximately 88 million shares for approximately $2.7 billion in the first half of fiscal 2006. In the first half of fiscal 2005, we repurchased approximately 59 million shares for an aggregate price of $1.2 billion.

        In addition to the shares we repurchased, we received approximately 7 million shares for an aggregate price of $232 million under a prepaid variable share purchase program ("PVSPP") entered into with a third-party investment bank during the first quarter of 2006. Under the PVSPP, we prepaid $1.7 billion in the first quarter of fiscal 2006 in exchange for the right to receive a variable number of shares of our common stock weekly over a one year period beginning in the second quarter of fiscal 2006 and ending during the second quarter of fiscal 2007. We recorded the payment as a prepaid stock repurchase in the stockholders' equity section of our Consolidated Condensed Balance Sheet, and the payment was included in the cash flows from financing activities in the Consolidated Condensed Statement of Cash Flows. In connection with this program, the investment bank has purchased and will continue to trade shares of our common stock in the open market over time. The prepaid funds will be expended ratably over the term of the program.

        Under the PVSPP, the prices at which we purchase the shares are subject to a minimum and maximum price that was determined in advance of any repurchases being completed under the program, thereby effectively hedging our repurchase price. The minimum and maximum number of shares we could receive under the program are 52 million shares and 70 million shares, respectively. The exact number of shares to be repurchased is based upon the volume weighted average market price of our shares during each weekly settlement period, subject to the minimum and maximum price as well as regulatory limitations on the number of shares we are permitted to repurchase. We decrease our shares outstanding each settlement period as shares are physically received. We will retire all shares repurchased under the PVSPP, and we will no longer deem those shares outstanding.

        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 February 14, 2006, our Board of Directors authorized an additional $4.0 billion for future repurchases of our outstanding shares of common stock. As of April 30, 2006, we had remaining authorization of approximately $2.9 billion in future share repurchases. Previously authorized share repurchases also will be made under the PVSPP through the second quarter of fiscal 2007 until the remaining available balance under the PVSPP has been exhausted.

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Financing Activities

        Net cash used in financing activities increased by $2.3 billion in the three months ended January 31, 2006 as compared to the corresponding period in fiscal 2005. The increase was due

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primarily to a $1.7 billion prepayment for common stock to be repurchased in the future, higher repurchases of common stock under our regular open market share repurchase program and higher repayments of debt, notes payable and commercial paper. Such increases were offset in part by higher proceeds received from shares issued in connection with employee stock plans.

        We repurchase shares of our common stock under a 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. We completed share repurchases of approximately 48 million shares for approximately $1.4 billion in the first quarter of fiscal 2006. In the first quarter of fiscal 2005, we repurchased approximately 29 million shares for an aggregate price of $0.6 billion.

        In addition to the shares we repurchased, we entered into a prepaid variable share purchase program ("PVSPP") with a third party investment bank during the first quarter of 2006 and prepaid $1.7 billion in exchange for the right to receive a variable number of shares of our common stock weekly over a one year period beginning in the second quarter of fiscal 2006 and ending during the second quarter of fiscal 2007. We recorded the payment as a prepaid stock repurchase in the stockholders' equity section of our Consolidated Condensed Balance Sheet, and the payment is included in the cash flows from financing activities in the Consolidated Condensed Statement of Cash Flows. In connection with this program, the investment bank has purchased and they will continue to trade shares of our common stock in the open market over time. The prepaid funds will be expended ratably over the term of the program.

        Under the PVSPP, the prices at which we will purchase the shares are subject to a minimum and maximum price determined in advance of any repurchases being completed under the program, thereby effectively hedging our repurchase price. The minimum number and maximum number of shares we could receive under the program are 52 million and 70 million shares, respectively. The exact number of shares that will be repurchased will be based upon the volume weighted average market price of our shares during each weekly settlement period, subject to the minimum and maximum price as well as regulatory limitations on the number of shares we are permitted to repurchase. We will decrease our shares outstanding each settlement period as shares are physically received. We will retire all shares repurchased under PVSPP, and we will no longer deem those shares outstanding.

        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. As of January 31, 2006, we had remaining authorization of approximately $258 million for future share repurchases. On February 14, 2006, our Board of Directors authorized an additional $4.0 billion for future repurchases of our outstanding shares of common stock.

Financing Activities

        The significant increase in net cash used in financing activities during fiscal 2004 resulted from a higher level of share repurchases compared to fiscal 2003. During fiscal 2004, HP's Board of Directors authorized $5.0 billion for future repurchases of outstanding shares, including an authorization of $3.0 billion in the fourth quarter of fiscal 2004. We completed share repurchases of approximately 172 million shares for $3.3 billion in fiscal 2004, including approximately 72 million shares under an accelerated share repurchase program, as compared to repurchases of 40 million shares for $751 million in fiscal 2003. As of October 31, 2004, we had remaining authorization of approximately $2.9 billion for future share repurchases.

        Proceeds from the issuance of stock options and shares sold to employees under the stock purchase plan were $570 million, or 18% higher in fiscal 2004 compared to fiscal 2003, mainly because of higher overall market prices during fiscal 2004. Also during fiscal 2004, borrowing activity as compared to the prior fiscal year was significantly reduced. Net debt repayments in fiscal 2004 totaled $448 million and reflected lower net levels of commercial paper borrowings and current maturities payable. Fiscal 2003 borrowings activity included the issuance of debt as well as repayments, which on a net repayment basis totaled $303 million.

Financing Activities

        Net cash used in financing activities was 91% higher for the nine months ended July 31, 2005 than in the first nine months of fiscal 2004. The increase was due primarily to higher repayment of debt and increased levels of repurchases of common stock.

        We repurchase shares of our common stock under a systematic 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. We completed share repurchases of approximately 96 million shares for approximately $2.1 billion in the first nine months of fiscal 2005. In addition, in November 2004, we paid $51 million in connection with the completion of the fiscal 2004 accelerated share repurchase program. 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. In the first nine months of fiscal 2004, we repurchased approximately 51 million shares for an aggregate price of $1.1 billion. As of July 31, 2005, we had remaining authorization of approximately $780 million for future share repurchases. On August 25, 2005, the Board of Directors of HP authorized an additional $4.0 billion for future repurchases of HP's outstanding shares of common stock.

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Financing Activities

        Net cash used in financing activities was 21% higher in the six months ended April 30, 2005 than in the first half of fiscal 2004. The increase was due primarily to higher levels of repurchases of common stock.

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        We repurchase shares of our common stock under a systematic program to manage the dilution created by shares issued under employee stock plans and also to return cash to stockholders. This program authorizes repurchases in the open market or in private transactions. We completed share repurchases of approximately 59 million shares for $1.2 billion in the first half of fiscal 2005. In addition, in November 2004, we paid $51 million in connection with the completion of the fiscal 2004 accelerated share repurchase program. We intend to continue to repurchase shares opportunistically, as well as offsetting dilution from the issuance of shares under employee benefit plans. In the first half of fiscal 2004, we repurchased approximately 27 million shares for an aggregate price of $604 million. As of April 30, 2005, we had remaining authorization of approximately $1.6 billion for future share repurchases.

Financing Activities

        Net cash used in financing activities was 10% higher in the three months ended January 31, 2005 compared to the first quarter of fiscal 2004. The increase was due primarily to increased share repurchases, offset in part by higher issuance of debt under our commercial paper program and lower repayments of long-term debt.

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        We repurchase shares of our common stock under a systematic program to manage the dilution created by shares issued under employee stock plans and also to return cash to stockholders. This program authorizes repurchases in the open market or in private transactions. We completed share repurchases of approximately 29 million shares for $586 million in the first quarter of fiscal 2005. In addition, in November 2004, we paid $51 million in connection with the completion of the fiscal 2004 accelerated share repurchase program. We intend to continue to repurchase shares opportunistically as a means of returning cash to stockholders, as well as offsetting dilution from the issuance of shares under employee benefit plans. In the first quarter of fiscal 2004, we repurchased approximately 12 million shares for an aggregate price of $256 million. As of January 31, 2005, we had remaining authorization of approximately $2.3 billion for future share repurchases.

Financing Activities

        The slight decrease in net cash used in financing activities in fiscal 2003 as compared to fiscal 2002 was due primarily to a decrease in net repayments of total debt to approximately $303 million in fiscal 2003 compared to net repayments of $472 million in fiscal 2002 and, to a lesser extent, from an increase in cash generated by issuances of common stock under various employee stock plans. These increases were offset in part by an increase in repurchases of approximately 40 million shares for $751 million in fiscal 2003 and 40 million shares for $671 million in fiscal 2002.