Hewlett-Packard (HPQ)

Fiscal 2007 Mercury Plan

        In connection with the acquisition of Mercury, HP's management approved and initiated plans to restructure the operations of Mercury to eliminate certain duplicative activities, reduce the cost structure and better align product and operating expenses with existing general economic conditions. During fiscal 2007, HP recorded $45 million in severance-related costs associated with the initial estimate of the elimination of approximately 370 positions primarily in the United States and in Europe. HP eliminated substantially all of these positions and paid the majority of the related severance payments in fiscal 2007.

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        During fiscal 2007, HP also recorded a total cost of $13 million related to exiting duplicative leased facilities. HP expects to pay the costs for exiting the facilities through 2014.

        All Mercury restructuring costs are reflected in the purchase price of Mercury in accordance with EITF 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." These costs are subject to change based on the actual costs incurred. Changes to these estimates could increase or decrease the amount of the purchase price allocated to goodwill.

Fiscal 2007 Mercury Plan

        In connection with the acquisition of Mercury, HP's management approved and initiated plans to restructure the operations of Mercury to eliminate certain duplicative activities, reduce cost structure and better align product and operating expenses with existing general economic conditions. During the third quarter of fiscal 2007, HP recorded $1 million in severance-related costs. For the nine months ended July 31, 2007, HP recorded $45 million in severance-related costs associated with the elimination of approximately 370 positions primarily in the United States and in Europe. HP expects to eliminate substantially all of these positions and to pay substantially all of the related severance payments by the end of fiscal 2007.

        In the third quarter of fiscal 2007, HP also recorded an adjustment of $1 million to reduce the estimated costs of exiting duplicative leased facilities. In the first nine months of fiscal 2007, the total costs related to exiting duplicative leased facilities totaled $18 million. HP expects to pay the costs for exiting the facilities through 2014.

        All Mercury restructuring costs are reflected in the purchase price of Mercury in accordance with EITF 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." These costs are subject to change based on the actual costs incurred. Changes to these estimates could increase or decrease the amount of the purchase price allocated to goodwill.

Fiscal 2007 Mercury Plan

        In connection with the acquisition of Mercury, HP's management approved and initiated plans to restructure the operations of Mercury to eliminate certain duplicative activities, reduce cost structure and better align product and operating expenses with existing general economic conditions. During the second quarter of fiscal 2007, HP recorded $19 million in severance-related costs associated with the elimination of approximately 140 positions primarily in Europe. For the six months ended April 30, 2007, HP recorded $44 million in severance-related costs associated with the elimination of approximately 370 positions primarily in the U.S. and in Europe. HP expects to eliminate substantially all of these positions and to pay substantially all of the related severance payments by the end of fiscal 2007.

        In the second quarter of fiscal 2007, HP also recorded an adjustment of $2 million to reduce the estimated costs of exiting duplicative leased facilities. In the first half of fiscal 2007, the total costs related to exiting duplicative leased facilities totaled $19 million. HP expects to pay the costs for exiting the facilities through 2014.

        All Mercury restructuring costs are reflected in the purchase price of Mercury in accordance with EITF 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination." These costs are subject to change based on the actual costs incurred. Changes to these estimates could increase or decrease the amount of the purchase price allocated to goodwill.

Fiscal 2007 Mercury Plan

In connection with the acquisition of Mercury, HP’s management approved and initiated plans to restructure the operations of Mercury to eliminate certain duplicative activities, reduce cost structure and better align product and operating expenses with existing general economic conditions. HP recorded $25 million in severance-related costs associated with the elimination of approximately 230 positions primarily in the U.S. and Israel. These positions are expected to be substantially eliminated and the related severance payments are expected to be substantially paid by the end of fiscal 2007. HP expects there will be additional positions eliminated, but HP does not expect to meet the accrual criteria relating to these eliminations until the second quarter of fiscal 2007. HP also recorded $21 million related to costs of vacating duplicative leased facilities. The costs for the facilities are expected to be paid through 2014. These costs are reflected in the purchase price of Mercury in accordance with EITF 95-3, “Recognition of Liabilities in Connection with a Purchase Business Combination.” These costs are subject to change based on the actual costs incurred. Changes to these estimates could increase or decrease the amount of the purchase price allocated to goodwill.