Press Release:

HP to Explore Expanded Research and Development Activity in Puerto Rico

New HP Labs operation possible
PALO ALTO, Calif. and SAN JUAN, Puerto Rico, Sept. 29, 2004

HP and the government of Puerto Rico today announced they have signed a memorandum of understanding to explore expanding HP's research and development presence on the island, with the possibility of establishing a new branch of HP Labs there.

HP Labs is the central research organization for the company. It is headquartered in Palo Alto and has facilities in Bangalore, India; Bristol, U.K.; Cambridge, Mass., USA; Haifa, Israel, and Tokyo, Japan.

"We are very pleased at the prospect of increasing HP's R&D activities in Puerto Rico," said Richard A. (Dick) Lampman, senior vice president of research, HP, and director, HP Labs. "HP has been a proud member of the Puerto Rican community for 25 years with its manufacturing and development operations in Aguadilla. We are eager to play an appropriate role as the government seeks to expand its technology sector."

"Puerto Rico's sustainable economic development largely depends on the establishment of a culture of innovation based on science and technology, a high level of both public and private investment in research and development, and a globally competitive, knowledge-based economy," said Gov. Sila M. Calderon. "We are looking forward to our continued relationship with HP."

The memorandum of understanding was signed by Lampman and Hon. Milton Segarra, secretary, Department of Economic Development and Commerce.

HP currently employs approximately 2,000 people in Puerto Rico, including its Aguadilla facility and its San Juan sales and service organization. Aguadilla manufactures a wide range of products, including thermal inkjet cartridges and boards for HP Superdome servers. If a lab were to be established, it would likely be located initially at the HP site, with the possibility of moving to an adjacent technology park that is expected to undergo construction soon.

Staffing could include current HP Puerto Rico personnel, supplemented by new hires from universities within the Commonwealth. The lab would report to Howard Taub, vice president and director, Printing and Imaging Research Center, HP Labs, in Palo Alto. Scientists and graduate students from the University of Puerto Rico are also expected to play a role in the research efforts. The university conducts world-class research in areas of interest to HP.

The primary focus area could be in the pharmaceutical industry. Puerto Rico is home to a large number of drug manufacturing companies and HP has been exploring how to use new and existing technologies to address key challenges or create new business opportunities within the industry. For example, the technologies could play a role in anti-counterfeiting activities for drug companies or provide new ways to dispense medication.

Other areas of research could include utility computing and advanced micromechanical devices.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the four fiscal quarters ended July 31, 2004, HP revenue totaled $78.4 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they ever 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 and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services 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 Quarterly Report on Form 10-Q for the period ended July 31, 2004 and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2003. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at