Note 12: Borrowings

Notes Payable and Short-Term Borrowings

Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows:

	2014					2013
	As of October 31
	Amount Outstanding		Weighted-Average Interest Rate			Amount Outstanding		Weighted-Average Interest Rate
	In millions					In millions
Current portion of long-term debt	$	2,655		2.2	%	$	5,226		2.8	%
Commercial paper(1)		298		0.5	%		327		0.4	%
Notes payable to banks, lines of credit and other(1)		533		4.0	%		426		1.7	%

	$	3,486				$	5,979

(1)	Commercial paper includes $298 million and $327 million and Notes payable to banks, lines of credit and other includes $404 million and $368 million at October 31, 2014 and October 31, 2013, respectively, of borrowing- and funding-related activity associated with HPFS and its subsidiaries.

Long-Term Debt

	As of October 31
	2014			2013
	In millions
U.S. Dollar Global Notes(1)
2006 Shelf Registration Statement:
$500 issued at discount to par at a price of 99.694% in February 2007 at 5.4%, due March 2017	$	500		$	499
$750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018		750			750
$2,000 issued at discount to par at a price of 99.561% in December 2008 at 6.125%, paid March 2014		—			1,999
$1,500 issued at discount to par at a price of 99.993% in February 2009 at 4.75%, paid June 2014		—			1,500
2009 Shelf Registration Statement:
$1,100 issued at discount to par at a price of 99.887% in September 2010 at 2.125%, due September 2015		1,100			1,100
$650 issued at discount to par at a price of 99.911% in December 2010 at 2.2%, due December 2015		650			650
$1,350 issued at discount to par at a price of 99.827% in December 2010 at 3.75%, due December 2020		1,349			1,349
$500 issued at par in May 2011 at three-month USD LIBOR plus 0.4%, paid May 2014		—			500
$500 issued at discount to par at a price of 99.971% in May 2011 at 1.55%, paid May 2014		—			500
$1,000 issued at discount to par at a price of 99.958% in May 2011 at 2.65%, due June 2016		1,000			1,000
$1,250 issued at discount to par at a price of 99.799% in May 2011 at 4.3%, due June 2021		1,248			1,248
$350 issued at par in September 2011 at three-month USD LIBOR plus 1.55%, paid September 2014		—			350
$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, due March 2015		750			750
$1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016		1,298			1,298
$1,000 issued at discount to par at a price of 99.816% in September 2011 at 4.375%, due September 2021		999			999
$1,200 issued at discount to par at a price of 99.863% in September 2011 at 6.0%, due September 2041		1,199			1,198
$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, paid December 2014		650			650
$850 issued at discount to par at a price of 99.790% in December 2011 at 3.3%, due December 2016		849			849
$1,500 issued at discount to par at a price of 99.707% in December 2011 at 4.65%, due December 2021		1,496			1,496
$1,500 issued at discount to par at a price of 99.985% in March 2012 at 2.6%, due September 2017		1,500			1,500
$500 issued at discount to par at a price of 99.771% in March 2012 at 4.05%, due September 2022		499			499
2012 Shelf Registration Statement:
$750 issued at par in January 2014 at three-month USD LIBOR plus 0.94%, due January 2019		750			—
$1,250 issued at discount to par at a price of 99.954% in January 2014 at 2.75%, due January 2019		1,250			—

		17,837			20,684
EDS Senior Notes(1)
$300 issued October 1999 at 7.45%, due October 2029		313			314
Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2014-2024(2)		424			689
Fair value adjustment related to hedged debt		120			147
Less: current portion		(2,655	)		(5,226	)

Total long-term debt	$	16,039		$	16,608

(1)

HP may redeem some or all of the fixed-rate U.S. Dollar Global Notes and EDS Senior Notes at any time in accordance with the terms thereof. The U.S. Dollar Global Notes and EDS Senior Notes are senior unsecured debt.

(2)

Other, including capital lease obligations includes $123 million and $244 million as of October 31, 2014 and 2013, respectively, of borrowing- and funding-related activity associated with HPFS and its subsidiaries that are collateralized by receivables and underlying assets associated with the related capital and operating leases. For both the periods presented, the carrying amount of the assets approximated the carrying amount of the borrowings.

As disclosed in Note 11, HP uses interest rate swaps to mitigate the exposure of its debt portfolio to changes in fair value resulting from changes in interest rates by achieving a primarily U.S. dollar LIBOR-based floating interest expense. Interest rates shown in the table of long-term debt have not been adjusted to reflect the impact of any interest rate swaps.

In May 2012, HP filed a shelf registration statement (the "2012 Shelf Registration Statement") with the Securities and Exchange Commission ("SEC") to enable the company to offer for sale, from time to time, in one or more offerings, an unspecified amount of debt securities, common stock, preferred stock, depositary shares and warrants.

HP's Board of Directors has authorized the issuance of up to $16.0 billion in aggregate principal amount of commercial paper by HP. HP's subsidiaries are authorized to issue up to an additional $1.0 billion in aggregate principal amount of commercial paper. HP maintains two commercial paper programs, and a wholly-owned subsidiary maintains a third program. HP's U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $16.0 billion. HP's euro commercial paper program provides for the issuance of commercial paper outside of the U.S. denominated in U.S. dollars, euros or British pounds up to a maximum aggregate principal amount of $3.0 billion or the equivalent in those alternative currencies. The combined aggregate principal amount of commercial paper outstanding under those programs at any one time cannot exceed the $16.0 billion authorized by HP's Board of Directors. The HP subsidiary's Euro Commercial Paper/Certificate of Deposit Programme provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $500 million.

HP maintains senior unsecured committed credit facilities primarily to support the issuance of commercial paper. HP has a $3.0 billion five-year credit facility that expires in March 2017 and a $4.5 billion five-year credit facility that expires in April 2019. The $4.5 billion credit facility expiring in April 2019 was executed in the second quarter of fiscal 2014 and replaced a previous $4.5 billion credit facility that was to expire in February 2015. Both facilities support the U.S. commercial paper program and the euro commercial paper program. Commitment fees, interest rates and other terms of borrowing under the credit facilities vary based on HP's external credit ratings. HP's ability to have an outstanding U.S. commercial paper balance that exceeds the $7.5 billion supported by these credit facilities is subject to a number of factors, including liquidity conditions and business performance. In addition, the $3.0 billion five-year credit facility was amended in September 2012 to permit borrowings in euros and British pounds, with the amounts available in euros and British pounds being limited to the U.S. dollar equivalent of $2.2 billion and $300 million, respectively.

HP's and the HP subsidiary's resources available to obtain short- or long-term financing were as follows:

	As of October 31, 2014
	In millions
2012 Shelf Registration Statement(1)		Unspecified
Commercial paper programs		$ 16,202
Uncommitted lines of credit		$ 1,587

(1)	HP has the capacity to issue an unspecified amount of additional debt securities, common stock, preferred stock, depositary shares and warrants under the 2012 Shelf Registration Statement.

The extent to which HP is able to utilize the 2012 Shelf Registration Statement and the commercial paper programs as sources of liquidity at any given time is subject to a number of factors, including market demand for HP securities and commercial paper, HP's financial performance, HP's credit ratings and market conditions generally.

As of October 31, 2014, aggregate future maturities of long-term debt at face value (excluding a fair value adjustment related to hedged debt of $120 million, a premium on debt issuance of $13 million and a discount on debt issuance of $13 million) were as follows:

	2015		2016		2017		2018		2019		Thereafter		Total
	In millions
Aggregate future maturities of debt outstanding including capital lease obligations	$	2,652	$	3,027	$	2,920	$	786	$	2,003	$	7,186	$	18,574

Interest expense on borrowings recognized in the Consolidated Statements of Earnings during the fiscal years was as follows:

Expense	Location	2014		2013		2012
		In millions
Financing interest	Financing interest	$	277	$	312	$	317
Interest expense	Interest and other, net		344		426		514

Total interest expense		$	621	$	738	$	831