Hewlett-Packard (HPQ)

Pending Acquisitions

        In December 2006, HP agreed to acquire Knightsbridge Solutions Holdings Corporation, a privately held services company specializing in the information management areas of business intelligence, data warehousing, data integration and information quality. The transaction is subject to certain closing conditions and is expected to be completed during the first quarter of fiscal 2007. Upon completion, the business is expected to be fully integrated into HP Services.

        Also in December 2006, HP agreed to acquire Bitfone Corporation, a privately held global software and services company that develops software solutions for mobile device management for the wireless industry. The transaction is subject to certain closing conditions and is expected to be completed by February 2007. Following the close of the acquisition, the business is expected to be fully integrated into the Handheld Business Unit of HP's Personal Systems Group.

Pending Acquisitions

        On July 25, 2006, we entered into an Agreement and Plan of Merger pursuant to which we will acquire Mercury Interactive Corporation ("Mercury"), a leading IT management software and services company, for $52 per share, representing an enterprise value of approximately $4.5 billion, net of existing cash and debt.

        The acquisition is being conducted by means of a tender offer for all of the outstanding shares of Mercury. We commenced the tender offer on August 17, 2006, and we expect to complete the acquisition in the fourth calendar quarter of 2006. For additional information, see Note 5 to the Consolidated Condensed Financial Statements, which is incorporated herein by reference.