3 Debt benefiting FS consists of intercompany equity that is treated as debt

3 debt benefiting fs consists of intercompany equity

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(3) Debt benefiting FS consists of intercompany equity that is treated as debt for segment reporting purposes, intercompany debt, and borrowing- and funding-related activity associated with FS and its subsidiaries. Debt benefiting FS totaled $11.4 billion at October 31, 2019 and 2018, respectively, and was determined by applying an assumed debt-to-equity ratio, which management believes to be comparable to that of other similar financing companies. FS equity at both October 31, 2019 and October 31, 2018 was $1.6 billion. At October 31, 2019 and 2018, FS net cash and cash equivalents were $711 million and $813 million, respectively. Net portfolio assets at October 31, 2019 increased 0.9% from October 31, 2018. The increase generally resulted from new financing volume exceeding portfolio runoff during the period. FS bad debt expense includes charges to reserves for sales-type, direct-financing and operating leases. FS recorded net bad debt expense of $75 million, $91 million and $45 million in fiscal 2019, 2018 and 2017, respectively. | HEWLETT PACKARD ENTERPRISE 10-K 57
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58 HEWLETT PACKARD ENTERPRISE COMPANY AND SUBSIDIARIES Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued) Corporate Investments For the fiscal years ended October 31, 2019 2018 2017 Dollars in millions Net revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 507 $ 543 $ 553 Loss from operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (108) $ (91) $ (91) Loss from operations as a % of net revenue . . . . . . . . . . . . . . (21.3)% (16.8)% (16.5)% Fiscal 2019 compared with Fiscal 2018 Corporate Investments net revenue decreased by $36 million, or 6.6% (decreased 4.4% on a constant currency bases), in fiscal 2019 as compared to fiscal 2018. The decrease in Corporate Investments net revenue was due to lower services revenue from the Communications and Media Solutions (‘‘CMS’’) business and unfavorable currency fluctuations. Corporate Investments loss from operations as a percentage of net revenue increased 4.5 percentage points in fiscal 2019 as compared to fiscal 2018, due primarily to higher R&D expenses from Hewlett Packard Labs and a legal settlement expense in the CMS business, partially offset by a higher gross margin from the CMS business. Fiscal 2018 compared with Fiscal 2017 Corporate Investments net revenue decreased by $10 million, or 1.8% (decreased 4.0% on a constant currency bases), in fiscal 2018 as compared to fiscal 2017. The decrease in Corporate Investments net revenue, was due to lower services revenue from the CMS business. Corporate Investments loss from operations as a percentage of net revenue increased 0.3 percentage points in fiscal 2018 as compared to fiscal 2017, due primarily to the net revenue decline and a lower gross margin partially offset by lower R&D expenses from Hewlett Packard Labs, lower field selling costs and administrative expense from the CMS business. We use cash generated by operations as our primary source of liquidity. We believe that internally generated cash flows will be generally sufficient to support our operating businesses, capital expenditures, product development initiatives, acquisition and disposal activities including legal settlements, restructuring
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  • Spring '12
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  • vice president, U.S. Securities and Exchange Commission, David Packard, William Reddington Hewlett, Hewlett Packard Enterprise

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