News release

HP Enables R.R. Donnelley to Offer Flexible Short-run Book Printing with HP Indigo Press 3000

High-speed Digital Color Press Supports R.R. Donnelley's New Inventory Management Solution

PALO ALTO, Calif., July 25, 2002

HP (NYSE: HPQ) today announced that the high-speed HP Indigo Press 3000 will play a major role in R.R. Donnelley's Inventory Management Solution (IMS), a new book-on-demand soft-cover production system designed to help book publishers improve cash flow through shorter printing runs.

At the heart of the IMS system is an integrated digital in-line printing and binding module that results in greater inventory control, maximized warehouse space utilization and a streamlined administrative process. The system's soft-cover print solution will be provided by the HP Indigo Press 3000 (formerly the Indigo UltraStream 2000), an up-to-seven color digital press with rich offset quality, high-definition resolution and outstanding substrate compatibility.

According to John J. Conley, vice president of digital services for R.R. Donnelley, the leading provider of integrated communications solutions, the first IMS module will be installed this summer in the company's Harrisonburg, Va., book plant. The 600,000-square-foot facility is part of R.R. Donnelley Print Solutions' trade book manufacturing platform, the largest of its type in the world.

"The Inventory Management Solution will reduce staffing, waste and make-ready time and provide a reliable delivery system to our customers," said Conley. "We will have an in-line solution that is both productive and efficient. And our soft-cover print solution will be driven by an HP Indigo digital press, which ensures high-quality covers and maximum production flexibility."

"R.R. Donnelley has created a total solution that addresses the issues surrounding inventory management for book publishers," said Rick Mangold, general manager, HP Indigo North America. "As an integral part of that solution, the digital power of the HP Indigo Press 3000 delivers short run, high-quality printing on demand, improving the overall cost-effectiveness of the publishing process itself."

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.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; 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. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend to update these forward-looking statements.