Hewlett-Packard (HPQ)

Investing Activities

        Net cash used in investing activities decreased by approximately $0.3 billion for the three months ended January 31, 2010 as compared to the corresponding period in fiscal 2009 due primarily to higher cash payments made in connection with fiscal 2009 acquisitions.

Investing Activities

        Net cash used in investing activities decreased by approximately $10.1 billion for fiscal 2009 as compared to fiscal 2008 due primarily to higher cash payments made in connection with fiscal 2008

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Table of Contents

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued)

acquisitions and increased by approximately $4.6 billion for fiscal 2008, as compared to fiscal 2007 due to fiscal 2008 acquisition activity.

Investing Activities

        Net cash used in investing activities decreased by $0.6 billion for the six months ended April 30, 2009 as compared to the corresponding period in fiscal 2008 due primarily to lower payments in relation to business acquisitions, the effect of which was partially offset by higher net investments in property, plant and equipment associated with growth in our leasing and outsourced services businesses.

Investing Activities

        Net cash used in investing activities increased by $274 million for the three months ended January 31, 2009 as compared to the corresponding period in fiscal 2008 due primarily to higher net investments in property, plant and equipment associated with growth in our leasing and outsourced services businesses.

Investing Activities

        Net cash used in investing activities increased by $6.3 billion in fiscal 2007 from fiscal 2006, due primarily to higher cash payments made in connection with acquisitions.

Investing Activities

        Net cash used in investing activities increased by $6.3 billion in fiscal 2007 from fiscal 2006, due primarily to higher cash
payments made in connection with acquisitions.

Investing Activities

        Net cash used in investing activities decreased by approximately $3.2 billion for the nine months ended July 31, 2008 as compared to the corresponding period in fiscal 2007 due primarily to lower cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities decreased by $3.4 billion for the six months ended April 30, 2008 as compared to the corresponding period in fiscal 2007 due primarily to lower cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities decreased by $4.3 billion for the three months ended January 31, 2008 as compared to the corresponding period in fiscal 2007 due primarily to lower cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities increased by $1.0 billion during fiscal 2006 due primarily to higher capital expenditures for property, plant and equipment, lower net proceeds from maturities and sales of investments and higher amounts of cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities increased by $4.3 billion for the nine months ended July 31, 2007 as compared to the corresponding period in fiscal 2006 due primarily to cash paid for acquisitions and higher investments in property, plant and equipment.

Investing Activities

        Net cash used in investing activities increased by $4.2 billion for the six months ended April 30, 2007 as compared to the corresponding period in fiscal 2006 due primarily to cash paid for acquisitions and higher payments for property, plant and equipment.

Investing Activities

Net cash used in investing activities increased by $4 billion for the three months ended January 31, 2007 as compared to the corresponding period in fiscal 2006 due primarily to cash paid for acquisitions, including the acquisition of Mercury, and higher payments for property, plant and equipment.

Investing Activities

        Net cash used in investing activities decreased by 28% during fiscal 2005 due primarily to lower cash paid for acquisitions and reduced expenditures for property, plant and equipment.

Investing Activities

        Net cash used in investing activities increased by $783 million for the nine months ended July 31, 2006 as compared to the corresponding period in fiscal 2005. The increase was due primarily to higher cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities increased by $535 million for the six months ended April 30, 2006 as compared to the corresponding period in fiscal 2005. The increase was due primarily to higher cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities increased by $556 million for the three months ended January 31, 2006 as compared to the corresponding period in fiscal 2005. The increase was due primarily to higher cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities rose by 62% in fiscal 2004 due primarily to the $1.1 billion we spent for several business acquisitions, including Triaton GmbH, Synstar plc and Digital GlobalSoft Limited, as compared to the $149 million we spent on acquisitions in fiscal 2003. Capital expenditures increased only slightly, by 7%, during fiscal 2004, with the increase mostly offset by asset disposition activities.

Investing Activities

        Net cash used in investing activities decreased by 30% for the nine months ended July 31, 2005 as compared to the corresponding period in fiscal 2004. The decrease was due primarily to lower cash paid for acquisitions.

Investing Activities

        Net cash used in investing activities decreased by 25% for the six months ended April 30, 2005 as compared to the first half of fiscal 2004. The decrease was due to lower cash paid for acquisitions, offset in part by higher capital expenditures reflecting a 14% improvement in financing originations.

Investing Activities

        Net cash used in investing activities increased by 37% compared to the first quarter of fiscal 2004. The increase was due primarily to higher capital expenditures reflecting a 25% improvement in financing originations. Beginning in April 2004, we invested in auction rate securities, primarily preferred stocks, in order to generate higher investment returns. Purchases and sales of such securities during the first quarter of fiscal 2005 were approximately $1.5 billion. In the three months ended January 31, 2004, cash proceeds from the sales of investments reflect the sale of a non-strategic investment, which was more than offset by cash used for acquisitions in the same period.

Investing Activities

        The change in net cash flows from investing activities from fiscal 2003 as compared to fiscal 2002 was due primarily to the $3.6 billion of cash acquired in the Compaq acquisition in fiscal 2002, as well as $879 million recorded upon the dissolution of our equity method investment in Liquidity Management Corporation ("LMC"), when it became a wholly-owned subsidiary on November 1, 2001. In addition, net capital expenditures were $1.6 billion in fiscal 2003 as compared to $1.3 billion in fiscal 2002. Capital expenditure increases in fiscal 2003 related mainly to assets under lease by HPFS to third parties and to continued investment in IPG manufacturing equipment. In fiscal 2002, capital expenditures related primarily to financing assets and manufacturing investments across our businesses. HPFS capital expenditures in fiscal 2003 and fiscal 2002 increased primarily as a result of the acquisition of Compaq in the third quarter of fiscal 2002.