Hewlett-Packard (HPQ)

Note 3: Net Earnings Per Share ("EPS")

        HP calculates basic EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and the assumed conversion of convertible notes.

        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows for the following fiscal years ended October 31:

        In fiscal 2006, 2005 and 2004, HP excluded options with exercise prices that were greater than the average market price for HP's common stock to purchase approximately 130 million, 255 million and 408 million, respectively, shares from the calculation of diluted EPS because their effect was anti-dilutive. Also, as a result of adopting SFAS 123R on November 1, 2005, HP excluded an additional

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48 million options in fiscal 2006, whose combined exercise price, unamortized fair value and excess tax benefit were greater than the average market price for HP's common stock as these shares were also anti-dilutive. In addition, HP excluded approximately 8 million shares of HP stock issuable upon the assumed conversion of zero-coupon subordinated notes from the calculation of diluted EPS in fiscal 2005 because the effect was antidilutive.

Note 3: Net Earnings Per Share ("EPS")

        HP calculates basic EPS using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and the assumed conversion of convertible notes.

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        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows:

        For the third quarter of fiscal 2006 and 2005, HP excluded options to purchase approximately 135 million shares and 265 million shares, respectively, from the calculation of diluted EPS because the effect was antidilutive. For the first nine months of fiscal 2006 and 2005, HP excluded options to purchase approximately 135 million shares and 443 million shares, respectively, from the calculation of diluted EPS because the effect was antidilutive. Stock options are antidilutive when the exercise price of the options is greater than the average market price for the period.

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Note 3: Net Earnings Per Share ("EPS")

        HP's basic EPS is calculated using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and the assumed conversion of convertible notes.

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        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows:

        For the second quarter of fiscal 2006 and 2005, HP excluded options to purchase approximately 139 million shares and 466 million shares, respectively, from the calculation of diluted EPS because the effect was antidilutive. For the first six months of fiscal 2006 and 2005, HP excluded options to purchase approximately 184 million shares and 468 million shares, respectively, from the calculation of diluted EPS because the effect was antidilutive. Stock options are antidilutive when the exercise price of the options is greater than the average market price for the period.

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Note 3: Net Earnings Per Share ("EPS")

        HP's basic EPS is calculated using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and the assumed conversion of convertible notes.

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        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows:

        In the first quarter of fiscal 2006 and 2005, HP excluded options to purchase approximately 223 million and 316 million shares, respectively, from the calculation of diluted EPS because the effect was antidilutive. Stock options are antidilutive when the exercise price of the options is greater than the average market price of the common shares for the period.

Note 2: Net Earnings Per Share ("EPS")

        HP's basic EPS is calculated using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of stock options and the assumed conversion of convertible notes.

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        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows for the following fiscal years ended October 31:

        In fiscal 2005, 2004 and 2003, HP excluded from the calculation of diluted EPS approximately 255 million, 408 million and 362 million, respectively, shares of HP stock issuable upon the exercise of options because the effect was antidilutive. Stock options are antidilutive when the exercise price of the options is greater than the average market price of the common shares for the period. In addition, HP excluded approximately 8 million shares of HP stock issuable upon the assumed conversion of zero-coupon subordinated notes from the calculation of diluted EPS in fiscal 2005 and fiscal 2003 because the effect was antidilutive.

Note 2: Net Earnings Per Share ("EPS")

        HP's basic EPS is calculated using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of certain stock options and the assumed conversion of convertible notes.

        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows:

        In the third quarter of fiscal 2005 and 2004, options to purchase approximately 265 million shares and 413 million shares, respectively, of HP stock were excluded from the calculation of diluted EPS because the effect was antidilutive. Additionally, in the first nine months of fiscal 2005 and 2004, options to purchase 443 million shares and 290 million shares, respectively, of HP stock were excluded from the calculation of diluted EPS because the effect was antidilutive. Stock options are antidilutive

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when the exercise price of the options is greater than the average market price of the common shares for the period.

Note 2: Net Earnings Per Share ("EPS")

        HP's basic EPS is calculated using net earnings and the weighted-average number of shares outstanding during the reporting period. Diluted EPS includes the effect from potential issuance of common stock, such as stock issuable pursuant to the exercise of certain stock options and the assumed conversion of convertible notes.

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        The reconciliation of the numerators and denominators of the basic and diluted EPS calculations was as follows:

        In the second quarter of fiscal 2005 and 2004, options to purchase approximately 466 million shares and 287 million shares, respectively, of HP stock were excluded from the calculation of diluted EPS because the effect was antidilutive. Additionally, in the first six months of fiscal 2005 and 2004, options to purchase 468 million shares and 286 million shares, respectively, of HP stock were excluded from the calculation of diluted EPS because the effect was antidilutive. Stock options are antidilutive when the exercise price of the options is greater than the average market price of the common shares for the period.

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