Hewlett-Packard pays $33 million to buy back convertibles, on top of $640 million in 2001

New York, Jan. 29 - Hewlett-Packard Co. said it spent $33 million from Nov. 1, 2001 through Jan. 15, 2002 to buy back its zero-coupon convertible subordinated notes due 2017, adding to the $640 million it spent on repurchases in fiscal 2001.

The most recent purchases accounted for notes with a book value of $42 million and resulted in a $6 million extraordinary gain on the early extinguishment of debt, net of $3 million of taxes, the Palo Alto, Calif. company said in a filing with the Securities and Exchange Commission.

Hewlett-Packard's directors authorized the repurchase program in December 2000.

In fiscal 2001, which ended Oct. 31, 2001, the company bought back notes with a book value of $729 million and face value of $1.2 billion. Because the cost was $640 million, the company recorded a $56 million extraordinary gain, net of $33 million in taxes. After the fiscal 2001 repurchases, the remaining book value was $465 million, according to the SEC filing.

Hewlett-Packard originally sold $2 billion face value of the notes in late 1997 for proceeds of $1.076 billion.

The notes convert to Hewlett-Packard stock at the rate of 15.09 shares for each $1,000 face value of the notes and are callable at any time at book value.

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