Press Release:

Internal Revenue Service Selects HP Desktop and Notebook PCs in Contract Worth More Than $35 Million

PALO ALTO, Calif., Aug. 7, 2002

The federal agency that annually touches the lives of nearly 133 million Americans -- the Internal Revenue Service -- will purchase more than $35 million worth of new HP desktop and notebook PCs to meet the needs of its employees, HP (NYSE: HPQ) today announced.

HP will supply the IRS with more than 12,300 Compaq Evo D500 desktop PCs and monitors and more than 11,000 Compaq Evo N800 notebooks through an IRS contract vehicle held by PlanetGov Inc. of Chantilly, Va.

The contract with the IRS "represents a competitive win-back for the new HP," said Jim Weynand, vice president and general manager, HP Public Sector Organization. The IRS was a long-time Compaq customer until entering an agreement with a competitor. "Having a customer of this stature recognize the importance of consistency and predictability on the part of an IT vendor, as well as low price, is an important win for HP," said Weynand.

"We are excited to work in partnership with the new HP to assist the IRS in its modernization program, and we look forward to the successful deployment of these products to IRS locations nationwide," said Steve Baldwin, chief executive officer, PlanetGov.

"HP understands the complex technology requirements of agencies like the IRS and looks forward to helping them achieve efficiencies new technologies can bring," said Weynand. "The breadth and scope of products and services available through the new HP gives us a strong competitive advantage in the public sector."

The IRS projects there will be 232 million tax returns filed in 2002, with that number increasing 1.5 percent annually through 2008. By far the largest component of that total is individual tax returns, which are filed either as paper or electronic documents.

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

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.

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