HP 2005 Annual Report Download - page 106

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 11: Borrowings (Continued)
HP may redeem some or all of the Global Notes, Series A Medium-Term Notes and the Euro
Medium-Term Notes (collectively, the ‘‘Notes’’), as set forth in the above table, at any time at the
redemption prices described in the prospectus supplements relating thereto. The Notes are senior
unsecured debt.
The LYONs are convertible by the holders at an adjusted rate of 15.09 shares of HP common
stock for each $1,000 face value of the LYONs, payable in either cash or common stock at HP’s
election. At any time, HP may redeem the LYONs at book value, payable in cash only. In
December 2000, the Board of Directors authorized a repurchase program for the LYONs that allowed
HP to repurchase the LYONs from time to time at varying prices. HP did not repurchase any LYONs
in fiscal 2005, 2004 or 2003.
In March 2005, HP’s board authorized an increase in HP’s U.S. commercial paper program to
$6.0 billion and, of that amount, authorized HP subsidiaries to issue an amount up to $1.0 billion of
commercial paper. In April 2005, HP increased its available borrowings under its commercial paper
program to $6.0 billion. Hewlett-Packard International Bank PLC, a wholly-owned subsidiary of HP,
established a $500 million Euro Commercial Paper/Certificate of Deposit Programme in May 2001.
Until December 15, 2005, HP had two U.S. credit facilities consisting of a $1.5 billion 364-day
credit facility expiring in March 2006 and a $1.5 billion 5-year credit facility expiring in March 2009.
The credit facilities were subject to a weighted average commitment fee of 7.25 basis points per annum.
On December 15, 2005, HP replaced the two credit facilities with a $3.0 billion 5-year credit facility
that is subject to a commitment fee of 6.5 basis points per annum. Interest rates and other terms of
borrowing under the credit facility vary, based on HP’s external credit ratings. The credit facility is a
senior unsecured committed borrowing arrangement available for general corporate purposes, including
supporting the issuance of commercial paper. No amounts are outstanding under the credit facility.
HP also maintains lines of credit of approximately $2.3 billion from a number of financial
institutions that are uncommitted and are available through various foreign subsidiaries.
HP registered the sale of up to $3.0 billion of debt or global securities, common stock, preferred
stock, depositary shares and warrants under a shelf registration statement in March 2002 (the ‘‘2002
Shelf Registration Statement’’). In December 2002, HP filed a supplement to the 2002 Shelf
Registration Statement, which allows HP to offer from time to time up to $1.5 billion of Medium-Term
Notes, Series B, due nine months or more from the date of issuance (the ‘‘Series B Medium-Term Note
Program’’). As of October 31, 2005, HP has not issued Medium-Term Notes pursuant to the Series B
Medium-Term Note Program.
HP registered the sale of up to $3.0 billion of Medium-Term Notes under its Euro Medium-Term
Note Programme filed with the Luxembourg Stock Exchange and has offered such notes as set forth in
the table above. HP can denominate these notes in any currency, including the euro. However, these
notes have not been and will not be registered in the United States.
At October 31, 2005, HP had up to $14.6 billion of available borrowing resources under the 2002
Shelf Registration Statement, credit facilities and other programs described above.
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