Table: HP, with and without Compaq

On Its Own, HP Could Grow Faster in the Next Few Years...

ANNUAL REVENUE (billions) 2001 2002 2003 2004 GROWTH RATE HP/COMPAQ $77.8 $75.7 $81.5 $86.4 3.6% HP 44.2 46.6 51.5 54.5 7.3

...And Net Margins Would Be Higher...

NET MARGIN 2001 2002 2003 2004 HP/COMPAQ 2.3% 3.6% 5.3% 6.5% HP 3.4 4.9 6.1 6.3

...But by Buying Compaq, HP Can Expand Profits Faster...

ANNUAL NET INCOME (billions) 2001 2002 2003 2004 GROWTH RATE HP/COMPAQ $1.8 $2.7 $4.3 $5.6 45.9% HP 1.5 2.3 3.1 3.4 32.1

Data: BusinessWeek estimates are based on adjustments to Banc of America Securities projections for 2002 and 2003

...And Set Itself Up for Leadership in Key Markets

MARKET INDUSTRYWIDE INDUSTRYWIDE HP/COMPAQ SHARE/RANK GROSS PROFIT ANNUAL GROWTH MARGINS RATE PRINTERS* $19.4 BILLIONS 39.0%/1 31% 7.0% PCS 24.5 21.1/1 15 0.0 SERVERS 12.5 26.7/2 21 3.1 STORAGE 6.4 26.3/1 37 3.0 SERVICES 15.4 2.6/3 20 11.4

Data: Gartner Inc., IDC, Credit Suisse First Boston and company reports

All HP figures are based on a calendar year * Includes ink cartridges and accessories

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