v3.6.0.2
Borrowings
 12 Months Ended
Oct. 31, 2016
Debt Disclosure [Abstract]  
Borrowings
Borrowings
Notes Payable and Short-Term Borrowings
Notes payable and short-term borrowings, including the current portion of long-term debt, were as follows:
 
As of October 31,
 
2016
 
2015
 
Amount
Outstanding
 
Weighted-Average
Interest Rate
 
Amount
Outstanding
 
Weighted-Average
Interest Rate
 
Dollars in millions
Current portion of long-term debt
$
2,776

 
1.7
%
 
$
161

 
2.6
%
FS Commercial paper
326

 
0.1
%
 
39

 
0.2
%
Notes payable to banks, lines of credit and other(1)
430

 
2.0
%
 
491

 
2.7
%
Total notes payable and short-term borrowings
$
3,532

 
 

 
$
691

 
 

_______________________________________________________________________________
(1)
Notes payable to banks, lines of credit and other includes $381 million and $374 million at October 31, 2016 and 2015, respectively, of borrowing- and funding-related activity associated with FS and its subsidiaries.
Long-Term Debt
 
As of October 31,
 
2016
 
2015
 
In millions
Hewlett Packard Enterprise Senior Notes(1)
 

 
 

$2,250 issued at discount to par at a price of 99.944% in October 2015 at 2.45%, due October 5, 2017, interest payable semi-annually on April 5 and October 5 of each year
$
2,249

 
$
2,249

$2,650 issued at discount to par at a price of 99.872% in October 2015 at 2.85%, due October 5, 2018, interest payable semi-annually on April 5 and October 5 of each year
2,648

 
2,647

$3,000 issued at discount to par at a price of 99.972% in October 2015 at 3.6%, due October 15, 2020, interest payable semi-annually on April 15 and October 15 of each year
2,999

 
2,999

$1,350 issued at discount to par at a price of 99.802% in October 2015 at 4.4%, due October 15, 2022, interest payable semi-annually on April 15 and October 15 of each year
1,348

 
1,347

$2,500 issued at discount to par at a price of 99.725% in October 2015 at 4.9%, due October 15, 2025, interest payable semi-annually on April 15 and October 15 of each year
2,494

 
2,493

$750 issued at discount to par at a price of 99.942% in October 2015 at 6.2%, due October 15, 2035, interest payable semi-annually on April 15 and October 15 of each year
750

 
749

$1,500 issued at discount to par at a price of 99.932% in October 2015 at 6.35%, due October 15, 2045, interest payable semi-annually on April 15 and October 15 of each year
1,499

 
1,499

$350 issued at par in October 2015 at three-month USD LIBOR plus 1.74%, due October 5, 2017, interest payable quarterly on January 5, April 5, July 5 and October 5 of each year
350

 
350

$250 issued at par in October 2015 at three-month USD LIBOR plus 1.93%, due October 5, 2018, interest payable quarterly on January 5, April 5, July 5 and October 5 of each year
250

 
250

EDS Senior Notes(1)
 

 
 

$300 issued October 1999 at 7.45%, due October 2029
312

 
313

Other, including capital lease obligations, at 0.00%-7.45%, due in calendar years 2016-2022(2)
382

 
423

Fair value adjustment related to hedged debt
103

 
(55
)
Less: current portion
(2,776
)
 
(161
)
Total long-term debt
$
12,608

 
$
15,103

_______________________________________________________________________________
(1)
The Company may redeem some or all of the fixed-rate Hewlett Packard Enterprise Senior Notes and the EDS Senior Notes at any time in accordance with the terms thereof.
(2)
Other, including capital lease obligations includes $181 million and $196 million as of October 31, 2016 and 2015, respectively, of borrowing- and funding-related activity associated with FS 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.
In fiscal 2016, as a result of the MphasiS transaction, $40 million of long-term debt previously included in the Other, including capital lease obligations category was divested.
Interest expense on borrowings recognized in the Consolidated and Combined Statements of Earnings was as follows:
 
 
 
Fiscal years ended October 31,
Expense
Location
 
2016
 
2015
 
2014
 
 
 
In millions
Financing interest
Financing interest
 
$
249

 
$
240

 
$
277

Interest expense
Interest and other, net
 
328

 
29

 
45

Total interest expense
 
 
$
577

 
$
269

 
$
322


Hewlett Packard Enterprise Senior Notes
On October 9, 2015, Hewlett Packard Enterprise completed its offering of $14.0 billion of fixed rate notes and $0.6 billion of floating rate notes, with the interest rate and maturity date described in the table above.
The Notes are Hewlett Packard Enterprise's senior unsecured obligations and rank equally in right of payment with all of Hewlett Packard Enterprise's existing and future senior unsecured indebtedness. The Notes were initially guaranteed on a senior unsecured basis by HP Co., which guarantee was automatically and unconditionally released upon HP Co.'s distribution of all of the outstanding shares of Hewlett Packard Enterprise common stock to HP Co.'s shareholders on November 1, 2015, in connection with the separation of Hewlett Packard Enterprise from HP Co. (the "Distribution"), and beneficial ownership of substantially all of the assets intended to be included in Hewlett Packard Enterprise were transferred to Hewlett Packard Enterprise.
Hewlett Packard Enterprise distributed approximately $14.5 billion of net proceeds from the Notes offering to HP Co. HP Co. utilized the net proceeds to fund repurchases and redemptions of its outstanding Senior Notes, and to repay other indebtedness, to facilitate the separation of Hewlett Packard Enterprise from HP Co.
During fiscal 2015, the Company incurred issuance costs of $54 million which are included in Other assets in the Consolidated Balance Sheets and are being amortized to interest expense over the term of the Notes. As of October 31, 2016, issuance costs included in Other assets in the Consolidated Balance Sheets amounted to $50 million.
On November 23, 2016, Hewlett Packard Enterprise launched an offer to exchange new registered notes for all of the outstanding $14.6 billion of unregistered Senior Notes. The terms of the new Notes in the exchange offer are substantially identical to the terms of the outstanding unregistered Senior Notes, except that the new Notes will be registered under the Securities Act, and certain transfer restrictions, registration rights and additional interest provisions relating to the outstanding Senior Notes do not apply to the new Notes.
As disclosed in Note 12, "Financial Instruments", the Company 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 rate. Concurrent with the issuance of the Senior Notes, Hewlett Packard Enterprise entered into interest rate swaps to reduce the exposure of $9.5 billion of aggregate principal amount of fixed rate Senior Notes to changes in fair value resulting from changes in interest rates by achieving LIBOR-based floating interest rate. Interest rates on long-term debt in the table above have not been adjusted to reflect the impact of any interest rate swaps.
Available Borrowing Resources
The Company had the following resources available to obtain short- or long-term financing if additional liquidity is needed:
 
As of
October 31, 2016
 
In millions
Commercial paper programs
$
4,174

Uncommitted lines of credit
$
1,884


Commercial Paper
Hewlett Packard Enterprise's Board of Directors has authorized the issuance of up to $4.0 billion in aggregate principal amount of commercial paper by Hewlett Packard Enterprise. Hewlett Packard Enterprise's subsidiaries are authorized to issue up to an additional $500 million in aggregate principal amount of commercial paper. Hewlett Packard Enterprise maintains two commercial paper programs, and a wholly-owned subsidiary maintains a third program. Hewlett Packard Enterprise's U.S. program provides for the issuance of U.S. dollar-denominated commercial paper up to a maximum aggregate principal amount of $4.0 billion. Hewlett Packard Enterprise'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 $4.0 billion authorized by Hewlett Packard Enterprise's Board of Directors. The Hewlett Packard Enterprise subsidiary's euro Commercial Paper/Certificate of Deposit Program provides for the issuance of commercial paper in various currencies of up to a maximum aggregate principal amount of $500 million.
Revolving Credit Facility
On November 1, 2015, the Company entered into a revolving credit facility (the "Credit Agreement"), together with the lenders named therein, JPMorgan Chase Bank, N.A. ("JPMorgan"), as co-administrative agent and administrative processing agent, and Citibank, N.A., as co-administrative agent, providing for a senior, unsecured revolving credit facility with aggregate lending commitments of $4.0 billion. Loans under the revolving credit facility may be used for general corporate purposes. Commitments under the Credit Agreement are available for a period of five years, which period may be extended, subject to satisfaction of certain conditions, by up to two, one-year periods. Commitment Fees, interest rates and other terms of borrowing under the credit facility vary based on Hewlett Packard Enterprise's external credit rating.
Future Maturities of Long-term Debt
As of October 31, 2016, aggregate future maturities of the Company's long-term debt at face value (excluding a fair value adjustment related to hedged debt of $103 million and a net discount on debt issuance of $1 million), including capital lease obligations were as follows:
Fiscal year
In millions
2017
$
2,777

2018
2,948

2019
40

2020
3,002

2021
57

Thereafter
6,458

Total
$
15,282