Press Release:

HP Expands Relationship with Procter & Gamble; Announces New Finance and Administration Business Process Outsourcing Deal

Agreement builds on $3 billion global IT outsourcing contract signed in 2003
PALO ALTO, Calif., March 16, 2004

HP and The Procter & Gamble Company (P&G) today announced an agreement in principle to transition P&G's corporate-wide transactional accounts payable operations to HP Services in order to improve productivity and make the company more adaptive.

The deal, expected by HP and P&G to be signed in April 2004, would expand upon the companies' existing $3 billion, 10-year information technology outsourcing contract signed in 2003. P&G selected HP after a comprehensive and competitive process that included major business process outsourcing (BPO) and IT service providers.

"Our existing alliance and HP's proven ability to innovate makes them a strong fit and an ideal partner for our accounts payable services," said Filippo Passerini, global business services officer, Procter & Gamble. "During the past ten months of our partnership, HP has exhibited a deep understanding of our business, culture and values. Its own business operations are similar in scope and scale, and we are confident that HP can effectively leverage its own experience to help P&G innovate and drive value for consumers and shareholders."

"In this strategic expansion of our collaboration with P&G, we will help enhance P&G's financial business services, helping link business processes and applications across its suppliers," said Ann Livermore, executive vice president, HP Services. "This deal builds on our more than 250 managed services wins in the past 20 months, including most recently, the Bank of Ireland, Bank of India and China Development Bank deals."

HP also announced that Marc Schwarz, formerly the director of global outsourcing of Deloitte Consulting, will lead its new BPO finance and administration (F&A) function. HP has extensive F&A capabilities and can process more than 4 million invoices per year for its own outsourced finance and administration function. Under Schwarz' leadership, the BPO team will target business opportunities in the growing F&A segment within the BPO industry. HP plans to continue working with its system integrator partners in BPO areas outside of finance and administration.

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 last four fiscal quarters, HP revenue totaled $74.7 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. Risks, uncertainties and assumptions include the possibility that the proposed contract may not be entered into on the terms or within the timeframe currently contemplated or at all; that the market for the sale of certain products and services may not develop as expected; that development and performance 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 the Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2003, and reports filed after the form 10-K. 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