News release

HP Announces Agreement to Acquire Technology Services Business Units from Comdisco

PALO ALTO, Calif., July 16, 2001

Hewlett-Packard Company (NYSE:HWP) today announced that it has signed a definitive agreement with Comdisco, Inc. to acquire substantially all of Comdisco's Availability Solutions (Technology Services) business for $610 million in cash, subject to certain closing adjustments. The units included in the agreement provide business continuity and complementary consulting services for mission-critical environments. They employ more than 1,300 employees worldwide and generated approximately $440 million in revenues during Comdisco's fiscal year 2000, ended Sept. 30.

Separately today, Comdisco announced that its parent company and 50 of its U.S. domestic subsidiaries have filed voluntary petitions for relief under chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern District of Illinois. Comdisco's operations outside of the U.S. are not included in the filing. The agreement between the two companies is subject to the bankruptcy sales process and bankruptcy court and regulatory approvals.

Under the terms of the transaction, which is expected to close in HP's fourth fiscal quarter, ending Oct. 31, 2001, HP will assume certain, limited liabilities. The transaction is expected to be accretive to HP's cash earnings per share in its fiscal year 2002.

Comdisco's business continuity and professional services focus, core competencies and strong customer base in Fortune 500 and financial services companies are highly complementary to HP Services' current capabilities. With this acquisition, HP expects to become the leading provider of business continuity services worldwide, able to deliver clients an integrated offering that helps them ensure the continuity of both their business processes and their underlying information technology infrastructure.

"The acquisition of these Comdisco availability services businesses presents a compelling opportunity for HP and is consistent with our focus on building a premier global services capability," said Ann Livermore, president, HP Services. "Comdisco has built a strong, profitable business for delivering availability services including backup and contingency planning services and disaster recovery services."

Livermore continued, "Through its industry-leading solutions, talented employees and proven commitment to customer service, the Availability Solutions team has established deep relationships with a large and loyal customer base of more than 3,000 businesses in North America, Europe and Asia. HP has strong momentum in our services business. We are confident that the addition of the Comdisco business continuity and complementary consulting services businesses will further enhance our ability to deliver solutions for an always-on Internet infrastructure to customers worldwide."

Norm Blake, chairman and chief executive officer, Comdisco, said: "As a result of our comprehensive strategic review, which we commenced upon my arrival four months ago, we decided that the sale of our technology services business was in the best interest of Comdisco and our stakeholders. We established clear criteria for selecting the most appropriate buyer: expertise and experience in the industry; global presence; a reputation for outstanding customer service; a culture that values people and the development of their employees; and the resources to grow this business. Hewlett-Packard unambiguously fits this criteria."

HP expects to integrate the Comdisco continuity and professional services businesses within its HP Operations organization, which is part of HP Services. HP has a particularly strong business continuity services presence in Europe and significant expertise in the manufacturing, telecommunications and service provider market segments.

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to all. HP had total revenue from continuing operations of $48.8 billion in its 2000 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the ability of HP to retain and motivate key employees; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to the annual report on Form 10-K for the year ended Oct. 31, 2000, and subsequently filed reports. HP does not intend to update these forward-looking statements.