Hewlett-Packard (HPQ)

NOTE 5:  PROPERTY AND EQUIPMENT

Property and equipment is stated net of accumulated depreciation of $5.0 billion and $4.7 billion at June 30, 2008 and December 31, 2007, respectively. Depreciation expense for the three months ended June 30, 2008 and 2007 was $197 million and $192 million, respectively. Depreciation expense for the six months ended June 30, 2008 and 2007 was $400 million and $373 million, respectively.

NOTE 3:  PROPERTY AND EQUIPMENT

Following is a summary of property and equipment, net, at December 31, 2007 and 2006 (in millions):

During 2005, the Company sold sixteen domestic and international real estate properties in connection with its efforts to improve its cost competitiveness and enhance workplace capacity usage. Net proceeds from the sale were $178 million. Fourteen properties involved in the sale have been leased back by the Company for various extended periods. A deferred net gain of $14 million has been allocated to the various leased properties and will be recognized by the Company over the respective term of each lease. The Company recognized a net gain of $3 million on the sale of the remaining properties which is included in other income in the 2005 consolidated statement of income.