Letter from Mark Hurd
Chairman, Chief Executive Officer and President

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HP’s employees delivered an impressive performance in 2007, and it showed in our results. We surpassed $100 billion in revenue — a first for a technology company.  We grew non-GAAP operating profit dollars 30 percent. And we delivered advanced products and services that helped make our customers — from consumers to the largest global companies — more cost efficient, more energy efficient and more productive.

As much progress as we’ve made, we still have work to do.  We’re not satisfied to be a world class company. We want to be the world leader — not only in our market and financial performance but in our global citizenship activities as well. HP is keenly aware of our responsibilities as a global citizen. We do business across most countries and markets in the world, and we know that our policies and practices — from our ethics and governance to energy and the environment — have an impact far outside the confines of our business. To us, global citizenship is not just an important business initiative; it is a statement of our values, a measure of our commitment to society and the planet we all share, and the foundation for responsible leadership in an increasingly interdependent world. To that end, HP continues to support the UN Global Compact, the world's largest, global corporate citizenship initiative.

Our three global citizenship priorities — supply chain responsibility, climate and energy, and product reuse and recycling — are more critical than ever to our business success. These are the areas that reflect growing customer demands and where we can make the greatest contribution. 

Supply chain responsibility
We work closely with our suppliers in one of the largest global supply chains in the IT industry to promote improved social and environmental practices, touching the lives of more than 400,000 workers around the world. We ask our suppliers to uphold the same rigorous standards to which we hold ourselves. To support greater accountability and transparency, HP this year is disclosing our list of top tier suppliers. We believe we are the first in our industry to do so.

Climate and energy
Climate change represents one of the most daunting challenges facing our planet. HP is at the forefront of providing products and solutions for an increasingly energy-efficient, low-carbon world. That starts with reducing our own impact on the environment as well as the impact of our products. For example, we are expanding our use of renewable energy, including solar power for our San Diego facility and wind power for several of our facilities in Ireland. And we are designing carbon reduction and energy efficiency into our products and solutions, from the data center to the desktop, mobile devices and digital printing. HP solutions such as Dynamic Smart Cooling can save up to 40% in data center cooling costs.

We are more than two years ahead of schedule in meeting our commitment to cut the combined energy consumption and associated greenhouse gas emissions of HP operations and products to 20 percent below 2005 levels by 2010 — so we’ve raised our goal to 25 percent. We’re also researching the development of low-carbon solutions that will help reduce climate impact in other parts of the economy and collaborating with other companies, policy makers and non-governmental organizations to develop effective responses to combat climate change.

Product reuse and recycling
HP has long been a leader in helping companies, organizations and consumers responsibly dispose of IT products and supplies — part of our effort to enable a simplified technology experience. We are continually working to make our products easier to reuse and recycle, and to incorporate greater volumes of recycled materials in our products. We exceeded the goal that we set for ourselves of recycling a cumulative one billion pounds of electronic products and supplies by the end of 2007. We plan to recover an additional one billion pounds of electronic products and supplies by the end of 2010.

In addition to these priorities, we continue to address other global citizenship areas vital to our business. With the growing challenge to privacy from emerging technologies, HP is pioneering an approach to the protection and responsible use of personal information. This effort goes beyond compliance with the law and our codes of conduct to take into account our values, customer expectations and a range of potential risks.

At the same time, we’re investing in programs that enrich the communities where we work and live around the world. In 2008, we will further align our investments with education, focusing on student achievement and entrepreneurship.

With our presence around the world and our history of responsible citizenship, HP is in a rare position to help address some of the planet’s most critical challenges — not alone but in partnership with governments, organizations, companies and individuals. I am confident we will meet these challenges the way we have met others — with focus, resolve and ingenuity — to become the global corporate citizen that we aspire to be.

Sincerely,

Mark Hurd
Chairman, CEO and President
HP