our issuance of $3.25 billion of senior notes in July 2010 and $1.15 billion of short-term borrowings made pursuant to certain of our revolving credit agreements. Cash, cash equivalents and marketable securities included $20.4 billion held by our foreign subsidiaries as of May 31, 2011, $16.1 billion of which we consider indefinitely reinvested earnings outside the United States. These undistributed earnings would be subject to U.S. income tax if repatriated to the United States. Assuming a full utilization of the foreign tax credits, the potential deferred tax liability associated with these undistributed earnings would be approximately $4.6 billion. The amount of cash, cash equivalents and marketable securities that we report in U.S. Dollars for a significant portion of the cash held by these subsidiaries is subject to translation adjustments caused by changes in foreign currency exchange rates as of the end of each respective reporting period (the offset to which is recorded to accumulated other comprehensive income in our consolidated balance sheet). As the U.S. Dollar generally weakened against certain major international currencies during fiscal 2011, the amount of cash, cash equivalents and marketable securities that we reported in U.S. Dollars for these subsidiaries increased as of May 31, 2011 relative to what we would have reported using constant currency rates as of May 31, 2010. The aforementioned increases in our cash, cash equivalents and marketable securities balances were partially offset by the repayment of $2.25 billion of our senior notes which matured in January 2011, the repayment of $881 million of commercial paper notes, the usage of $1.9 billion of net cash for acquisitions, repurchases of our common stock, and the payments of cash dividends to our stockholders.

The increase in cash, cash equivalents and marketable securities at May 31, 2010 in comparison to May 31, 2009 was primarily due to cash generated from our operating activities and our issuance of $4.5 billion of senior notes in July 2009. The increase was partially offset by a decrease in our reported cash, cash equivalents and marketable securities balances caused by the strengthening of the U.S. Dollar in comparison to certain major international currencies during fiscal 2010. Additionally, the increase in our cash, cash equivalents and marketable securities balances was partially offset by $5.6 billion of net cash used for our acquisition of Sun and other companies, the repayment of $700 million of Sun’s legacy convertible notes, repurchases of our common stock, and the payment of cash dividends to our stockholders.

Days sales outstanding, which is calculated by dividing period end accounts receivable by average daily sales for the most recently completed fiscal quarter, modestly increased to 55 days at May 31, 2011 in comparison to 53 days at May 31, 2010. The days sales outstanding calculation excludes the adjustment that reduces our acquired software license updates and product support obligations and hardware systems support obligations to fair value.

 

Cash flows from operating activities:     Our largest source of operating cash flows is cash