Note 12: Borrowings

Notes Payable and Short-Term Borrowings

	As of April 30, 2015					As of October 31, 2014
	Amount Outstanding		Weighted- Average Interest Rate			Amount Outstanding		Weighted- Average Interest Rate
	In millions					In millions
Current portion of long-term debt	$	1,930		1.8	%	$	2,655		2.2	%
Commercial paper(1)		3,104		0.5	%		298		0.5	%
Notes payable to banks, lines of credit and other(1)		560		3.6	%		533		4.0	%

	$	5,594				$	3,486

(1)	Commercial paper includes $289 million and $298 million and Notes payable to banks, lines of credit and other includes $396 million and $404 million at April 30, 2015 and October 31, 2014, respectively, of borrowing- and funding-related activity associated with HPFS and its subsidiaries.

Long-Term Debt

	As of
	April 30, 2015			October 31, 2014
	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		$	500
$750 issued at discount to par at a price of 99.932% in March 2008 at 5.5%, due March 2018		750			750
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
$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
$750 issued at discount to par at a price of 99.977% in September 2011 at 2.35%, paid March 2015		—			750
$1,300 issued at discount to par at a price of 99.784% in September 2011 at 3.0%, due September 2016		1,299			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			1,199
$650 issued at discount to par at a price of 99.946% in December 2011 at 2.625%, paid December 2014		—			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			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			1,250

		16,438			17,837
EDS Senior Notes(1)
$300 issued October 1999 at 7.45%, due October 2029		313			313
Other, including capital lease obligations, at 0.00%-8.30%, due in calendar years 2015-2024(2)		473			424
Fair value adjustment related to hedged debt		170			120
Less: current portion		(1,930	)		(2,655	)

Total long-term debt	$	15,464		$	16,039

(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 $196 million and $123 million as of April 30, 2015 and October 31, 2014, 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.

Interest expense on borrowings recognized in the Consolidated Condensed Statements of Earnings was as follows:

		Three months ended April 30				Six months ended April 30
Expense	Location	2015		2014		2015		2014
		In millions
Financing interest	Financing interest	$	61	$	69	$	124	$	141
Interest expense	Interest and other, net		75		91		142		190

Total interest expense		$	136	$	160	$	266	$	331

Shelf Registration Statement

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. This shelf registration statement expired in May 2015.

Commercial Paper

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.

Credit Agreements

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. 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.

On April 30, 2015, HP entered into a credit agreement that provides for a senior unsecured delayed, multiple-draw term loan facility in the aggregate principal amount of $5.0 billion. Funds to be borrowed under this agreement may be used for general corporate purposes, including to pay expenses associated with HP's proposed plan to separate into two independent publicly-traded companies and matters related to the acquisition of Aruba. Under the terms of the credit agreement, borrowings will bear interest, at HP's option, by either (i) the LIBOR plus a margin between 100 and 112.5 basis points, depending on the rating of HP's long-term senior unsecured debt or (ii) an alternate base rate, which is the highest of the agent bank's prime rate, the federal funds effective rate plus one half of 1%, and one-month LIBOR plus 1%, plus a margin between zero and 12.5 basis points, depending on the rating of HP's long-term senior unsecured debt. The scheduled maturity date of the credit agreement is the earlier of November 1, 2015 or the completion date of HP's separation. HP has the option to extend the maturity date upon its request, subject to the agreement of the lenders. The credit facility contains customary representations and warranties and customary affirmative, negative and financial covenants. The financial covenant requires HP to meet a quarterly financial test with respect to a minimum consolidated interest coverage ratio. As of April 30, 2015, HP was in compliance with the financial covenants in the agreement and no amounts were outstanding. On May 15, 2015, HP borrowed $2.5 billion under this credit agreement.

Available Borrowing Resources

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

	As of April 30, 2015
	In millions
2012 Shelf Registration Statement(1)		Unspecified
Commercial paper programs(2)	$	13,396
Term Loan Facility	$	5,000
Uncommitted lines of credit	$	1,625

(1)	HP had 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. This shelf registration statement expired in May 2015.
(2)	The extent to which HP is able to utilize 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.