HP Says WSJ Piece is 'Thoroughly Misleading'
HP (NYSE: HPQ) today issued the following statement related to the Jan. 3, 2013, Wall Street Journal “Heard on the Street” article, “Questioning Receivable Wisdom at H-P”:
The Wall Street Journal story is thoroughly misleading. HP continues to make significant improvements to both its cash flow from operations as well as its balance sheet. In fiscal 2012, we generated $10.6 billion in operating cash flow and $7.5 billion in free cash flow. To put that number in context, $10.6 billion in generated operating cash flow is more than some of the most respected companies in the world, such as Coca Cola, Disney, FedEx, McDonald's and Visa, in their most recent fiscal years. We used that cash to both return value to shareholders in the form of stock buybacks and dividends, and reduced our debt by $5.6 billion for the year, to a net debt position of $5.8 billion.
As it relates to the idea that the acceleration of cash via sold receivables added significantly to HP's free cash flow generation, this is not accurate. As we explained to the reporter prior to his story, HP would have received the cash directly from customers in any event. This program has been in place since May 2011, and as noted in our 10K filing, the impact on cash flow in the fiscal year 2012 was negligible. It is important to note that the purpose of these receivable sales programs is to support our partner and customer ecosystems, and it is consistent with the practices of many other companies.
We are at a loss to explain why the Wall Street Journal published a story that misleads its readers.
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