HP Announces Global Real Estate Initiative

Four-year effort intended to reduce real estate costs and upgrade work environments
PALO ALTO, Calif., July 6, 2006

HP today took another step in the company’s efforts to streamline operations by announcing a four-year program to ensure that its workspaces across the globe are fully aligned with the company’s business needs.

The program is intended to lead to reduced real estate costs by consolidating several hundred HP real estate locations worldwide to fewer core sites. HP plans to use a portion of those savings to upgrade these core sites into offices that provide improved technology infrastructure, productivity enhancements and a common HP look and feel.

To reduce costs, HP expects to consolidate real estate holdings into core sites in key locations around the world, relinquish floor space within certain leased buildings and close certain sites or floors in buildings that it owns. Doing so should enable the company to improve its utilization of those sites and drive down the cost of workplace services. Plans are not yet finalized as to which facilities will be closed or how much in savings will be generated.

To create more vibrant and productive work environments, HP plans to make substantial improvements to the core worksites, so they better showcase HP technology and provide a consistent look and feel across sites worldwide. Updated sites will use more open seating and shared team spaces to increase collaboration and innovation.

The company plans to expand private spaces for individual work including focus booths and free address workstations. Additional enhancements are expected to include high-quality HP print stations, mobility-enabling technology - voice over IP/wireless LAN - and improved IT access in coffee, cafeteria and lounge areas.

This initiative is an extension of HP’s restructuring announced on July 19, 2005, to simplify the company’s structure, reduce costs and bring a renewed focus on serving customers. The workplace changes complement the company’s recently announced initiatives to consolidate HP’s 85 IT data centers to six centers in three geographic locations and to realign its global operations function.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company’s offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended April 30, 2006, HP revenue totaled $88.9 billion. More information about HP (NYSE, Nasdaq: HPQ) is available at http://www.hp.com.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If such risks or uncertainties materialize or such assumptions prove incorrect, the results of HP and its consolidated subsidiaries could 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 but not limited to statements of the plans, strategies and objectives of management for future operations; any statements concerning expected development, performance or market share relating to products and services; anticipated operational and financial results; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the achievement of expected results and other risks that are described from time to time in HP’s Securities and Exchange Commission reports, including but not limited to the risks described in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2006, and other reports filed after HP’s Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2005. HP assumes no obligation and does not intend to update these forward-looking statements.

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