News release

HP Selected by P&G for $3 Billion, 10-year IT Services Contract

HP (NYSE:HPQ) and The Procter & Gamble Company (NYSE:PG) today announced an agreement in principle to a $3 billion, 10-year information technology (IT) managed services contract. The companies expect to reach a definitive agreement in mid-May 2003.

P&G Global Business Services selected HP after a comprehensive and competitive process that included major IT services providers.

HP Services will manage P&G's IT infrastructure, data center operations, desktop and end-user support, network management and some applications development and maintenance support for P&G's global operations in 160 countries. Approximately 1,850 P&G employees from 50 countries will transition to HP Services, mostly from P&G's Global Business Services unit.

"We are excited about the opportunity to partner with one of the most innovative companies in the world. We have selected HP for its global IT expertise, services quality and cost, and collaborative approach, as well as our shared vision and values," said Filippo Passerini, global business services officer, Procter & Gamble. "HP is an industry leader and will help us substantially lower costs and accelerate innovation throughout P&G."

"We are delighted to work with such a world-class partner. Through our highly experienced services professionals, global capabilities and flexible approach to technology, we will deliver P&G an extraordinary customer experience and the best return on IT," said Ann Livermore, executive vice president, HP Services.

About Procter & Gamble

Two billion times a day, P&G brands touch the lives of people around the world. Some of the nearly 300 P&G brands consumers know and use with confidence in over 160 countries around the world include: Pampers®, Tide®, Ariel®, Always®, Whisper®, Pantene®, Bounty®, Pringles®, Folgers®, Charmin®, Downy®, Lenor®, Iams®, Crest®, Actonel®, Olay® and Clairol Nice 'n Easy®. The P&G community consists of nearly 102,000 employees working in almost 80 countries worldwide. Please visit http://www.pg.com for the latest news and in-depth information about P&G and its brands.

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 acquisition of Compaq Computer Corporation on May 3, 2002. More information about HP is available at http://www.hp.com.

HP's Securities and Exchange Commission reports, including but not limited to HP's quarterly report on Form 10-Q for the quarter ended January 31, 2003, 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 to update these forward-looking statements.