Hewlett-Packard (HPQ)

Fiscal 2009 Restructuring Plan

        In May 2009, HP's management approved and initiated a restructuring plan to structurally change and improve the effectiveness of the Imaging and Printing Group ("IPG"), the Personal Systems Group ("PSG"), and Enterprise Storage and Servers ("ESS"). The total expected cost of the plan is $303 million in severance-related costs associated with the planned elimination of approximately 5,000 positions. As of January 31, 2010, approximately 2,800 positions have been eliminated. HP expects the majority of the restructuring costs to be paid out by the fourth quarter of fiscal 2010. In future

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 7: Restructuring Charges (Continued)

quarters, HP expects to record an additional charge of approximately $5 million related to severance costs associated with this plan.

Fiscal 2009 Restructuring Plan

        In May 2009, HP's management approved and initiated a restructuring plan to structurally change and improve the effectiveness of the Imaging and Printing Group ("IPG"), the Personal Systems Group ("PSG"), and Enterprise Storage and Servers ("ESS"). In fiscal 2009, HP recorded a net charge of $297 million in severance-related costs associated with the planned elimination of approximately 5,000 positions. As of October 31, 2009, approximately 2,100 positions have been eliminated. HP expects the majority of the restructuring costs to be paid out by the fourth quarter of fiscal 2010. In future quarters, HP expects to record an additional charge of approximately $6 million related to severance costs associated with this plan.

Fiscal 2008 Restructuring Plan

        In connection with the acquisition of EDS on August 26, 2008, HP's management approved and initiated a restructuring plan to streamline the combined company's services business and to better align the structure and efficiency of that business with HP's operating model. The restructuring plan is expected to be implemented over four years from the acquisition date and includes changes to the combined company's workforce as well as changes to corporate overhead functions, such as real estate, IT and procurement.

        In the fourth quarter of fiscal 2008, HP recorded a liability of approximately $1.8 billion related to this restructuring plan. Approximately $1.5 billion of the liability was associated with pre-acquisition EDS and was recorded to goodwill, and the remaining approximately $0.3 billion was associated with HP and was recorded as a restructuring charge. The liability consisted mainly of severance costs to eliminate approximately 25,000 positions, costs to vacate duplicative facilities and costs associated with early termination of certain contractual obligations. For the three months and six months ended April 30, 2009, HP recorded a net charge of $94 million and $243 million, respectively, due primarily to adjustments for severance and facilities costs. As of April 30, 2009, approximately 12,800 positions have been eliminated.

        HP expects the majority of the restructuring costs to be paid out by the second quarter of fiscal 2010. In future quarters, HP expects to record an additional charge of approximately $551 million related to severance costs and the cost to vacate duplicative facilities.

        All restructuring costs associated with pre-acquisition EDS are reflected in the purchase price of EDS 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 2008 Restructuring Plan

        In connection with the acquisition of EDS on August 26, 2008, HP's management approved and initiated a restructuring plan to streamline the combined company's services business and to better align the structure and efficiency of that business with HP's operating model. The restructuring plan is expected to be implemented over the next four years and will include changes to the combined company's workforce as well as changes to corporate overhead functions, such as real estate, IT and procurement.

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Notes to Consolidated Condensed Financial Statements (Continued)

(Unaudited)

Note 7: Restructuring Charges (Continued)

        In the fourth quarter of fiscal 2008, HP recorded a liability of approximately $1.8 billion related to this restructuring plan. Approximately $1.5 billion of the liability was associated with pre-acquisition EDS and was recorded to goodwill, and the remaining approximately $0.3 billion was associated with HP and was recorded as a restructuring charge. The liability consisted mainly of severance costs to eliminate approximately 25,000 positions, costs to vacate duplicate facilities and costs associated with early termination of certain contractual obligations. For the three months ended January 31, 2009, HP recorded a net charge of $150 million, due primarily to adjustments for severance and facilities costs. As of January 31, 2009, over 9,000 positions have been eliminated.

        HP expects the majority of the restructuring costs to be paid out by the end of fiscal 2009. In future quarters, HP expects to record an additional charge of approximately $115 million related to severance costs and the cost to vacate duplicative facilities.

Fiscal 2008 Restructuring Plan

        In connection with the acquisition of EDS on August 26, 2008, HP's management approved and initiated a restructuring plan to streamline the combined company's services business and to better align the structure and efficiency of that business with HP's operating model. The restructuring plan is expected to be implemented over the next four years and will include changes to the combined company's workforce as well as changes to corporate overhead functions, such as real estate, IT and procurement. As part of the restructuring plan, HP expects to eliminate approximately 24,700 positions.

        In the fourth quarter of fiscal 2008, HP recorded a liability of approximately $1.8 billion related to the restructuring plan. Approximately $1.5 billion of the liability was associated with pre-acquisition EDS and was recorded to goodwill, and the remaining approximately $0.3 billion was associated with HP and was recorded as a restructuring charge. The liability consisted mainly of severance costs, costs to vacate duplicate facilities and costs associated with early termination of certain contractual obligations. As of October 31, 2008, approximately 2,300 positions had been eliminated.

        HP expects the restructuring costs to be paid out through 2012 with the majority paid out by the end of fiscal 2009. In future quarters, HP expects to record an additional charge of approximately $280 million related to severance costs for approximately 2,700 employees and the cost to vacate duplicate facilities.

        All restructuring costs associated with pre-acquisition EDS are reflected in the purchase price of EDS 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 2008 Restructuring Plan

        In connection with the acquisition of EDS on August 26, 2008, HP's management approved and initiated a restructuring plan to streamline
the combined company's services business and to better align the structure and efficiency of that business with HP's operating model. The restructuring plan is expected to be implemented over the next
four years and will include changes to the combined company's workforce as well as changes to corporate overhead functions, such as real estate, IT and procurement. As part of the restructuring plan,
HP expects to eliminate approximately 24,700 positions.

        In
the fourth quarter of fiscal 2008, HP recorded a liability of approximately $1.8 billion related to the restructuring plan. Approximately $1.5 billion of the liability
was associated with pre-acquisition EDS and was recorded to goodwill, and the remaining approximately $0.3 billion was associated with HP and was recorded as a restructuring charge.
The liability consisted mainly of severance costs, costs to vacate duplicate facilities and costs associated with early termination of certain contractual obligations. As of October 31, 2008,
approximately 2,300 positions had been eliminated.

        HP
expects the restructuring costs to be paid out through 2012 with the majority paid out by the end of fiscal 2009. In future quarters, HP expects to record an additional charge of
approximately $280 million related to severance costs for approximately 2,700 employees and the cost to vacate duplicate facilities.

        All
restructuring costs associated with pre-acquisition EDS are reflected in the purchase price of EDS 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 2005 Restructuring Plan

        During the three and nine months ended July 31, 2005, HP recorded restructuring charges of $109 million related to severance costs associated with the termination of approximately 1,450 employees, of whom approximately 1,040 had been terminated as of July 31, 2005. The remaining employees are expected to exit by the end of fiscal 2005. Of the initial restructuring amount, approximately $17 million had been paid as of July 31, 2005, and the remainder is expected to be paid by the end of the first quarter of fiscal 2006.

        On July 19, 2005, HP's management announced its intention to restructure certain of its operations with the goal of reducing costs, simplifying HP's operating structure and placing greater focus on its customers. These actions could result in approximately 14,500 employees, or about 10% of its regular full-time staff, exiting HP through workforce restructuring or early retirement programs over the next six fiscal quarters beginning in the fourth quarter of fiscal 2005. As a first step towards achieving this

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objective, in late July 2005, HP implemented an enhanced early retirement program in the U.S. The deadline to elect participation in the enhanced early retirement program closed for eligible U.S. employees on August 19, 2005. As of that date, approximately 3,200 employees elected to participate in the program at an estimated cost to HP of approximately $400 million. These costs will be recognized as a restructuring charge in the fourth quarter of fiscal 2005. Now that the number of participants in the U.S. early retirement program is known, HP expects to develop and approve plans for additional workforce restructuring actions beginning in the fourth quarter of fiscal 2005.