News release

HP Wins More Than $120 Million in IT Infrastructure Services Contracts

PALO ALTO, Calif., July 22, 2002

HP (NYSE: HPQ) today announced major customer wins worth $120 million in its HP Services business unit. Customers worldwide including Agere Systems, City of Espoo, Hong Kong SAR Government, Shanghai Stock Exchange, Sonera Corporation and Tata Steel have selected HP as their IT services partner to develop and deploy complex solutions and deliver outsourcing services to manage their multivendor, distributed IT environments.

"These new wins clearly validate the growing strength of the new HP Services organization," said Ann Livermore, executive vice president, HP Services. "Customers -- whether existing or brand-new ones -- are turning to HP as a services provider and enterprise partner that can help them realize measurable value from IT investments."

Details of the new wins include:

• Agere Systems, the world leader in communications components, awarded HP a three-year, managed services contract to implement a flexible and cost-effective plan to manage its data centers and improve its operational efficiencies.

• City of Espoo, Finland's second-largest city and high-tech center, awarded HP a three-year, managed services contract to help meet the needs of City of Espoo's extensive IT infrastructure. Outsourcing services will consist of a help desk to handle queries from Espoo city employees, security services and on-site support. HP also will maintain and manage the network and servers. City of Espoo selected HP based on the strength of the new combined company with Compaq Global Services.

• Hong Kong SAR Government selected HP for a comprehensive IT Professional Services Arrangement (ITPSA) tender that includes systems integration, network infrastructure, office systems, Web development and security management. HP is the only company that has been selected in all four major categories of the ITPSA, the government's largest and most comprehensive outsourced IT services tender.

• Shanghai Stock Exchange, one of the major trading centers in the Asia Pacific region, chose HP as its vendor of choice for project definition consultancy services for its Next Generation Trading Systems. This is one of the most strategic projects in the financial industry for China.

• Sonera Corporation, a provider of mobile and advanced telecommunications services, recently announced a five-year global collaboration with HP in the information and communication technology arena. The agreement includes a joint go-to-market strategy, research and development and the outsourcing of all of Sonera's data centers to HP.

• Tata Steel, Asia's first and India's largest integrated private sector steel company, awarded HP an outsourcing contract for IT infrastructure management. The outsourcing services include managing their entire mission-critical environment.

HP continues to land significant services deals in competitive bids, while retaining current customers with contract renewals. Currently HP Services is ranked No. 3 in the global IT services industry, which is expected to exceed $626 billion by 2006, increasing from $349 billion in 2001, according to IDC.⁽¹⁾

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its merger transaction involving Compaq Computer Corp. on May 3, 2002. The company would have had combined revenue on a pro forma basis with the Compaq transaction of approximately $81.1 billion in fiscal 2001, and has operations in more than 160 countries. More information about HP is available at http://www.hp.com.

⁽¹⁾ IDC, "Worldwide IT Services Industry Forecast and Analysis, 2001-2006," published May 2002.

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 employee management issues; 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 HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports. HP assumes no obligation and does not intend to update these forward-looking statements.