HP’s Q3 FY09 earnings conference call is accessible via an audio webcast at www.hp.com/investor/q32009webcast.

About HP

HP, the world’s largest technology company, simplifies the technology experience for consumers and businesses with a portfolio that spans printing, personal computing, software, services and IT infrastructure. More information about HP is available at http://www.hp.com/.

Use of non-GAAP financial information

To supplement HP’s consolidated condensed financial statements presented on a GAAP basis, HP provides non-GAAP operating profit, non-GAAP operating margin, non-GAAP net earnings, non-GAAP diluted earnings per share and gross cash. HP also provides forecasts of non-GAAP diluted earnings per share. A reconciliation of the adjustments to GAAP results for this quarter and prior periods is included in the tables below. In addition, an explanation of the ways in which HP management uses these non-GAAP measures to evaluate its business, the substance behind HP management’s decision to use these non-GAAP measures, the material limitations associated with the use of these non-GAAP measures, the manner in which HP management compensates for those limitations, and the substantive reasons why HP management believes that these non-GAAP measures provide useful information to investors is included under “Use of Non-GAAP Financial Measures” after the tables below. This additional non-GAAP financial information is not meant to be considered in isolation or as a substitute for operating profit, operating margin, net earnings, diluted earnings per share, or cash and cash equivalents prepared in accordance with GAAP.

EDS acquisition

HP completed its acquisition of Electronic Data Systems Corporation on August 26, 2008. Results of, and comparisons to, the three and nine months ended July 31, 2008 do not include the results of operations of EDS for those prior periods.

Forward-looking statements

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the results of HP may differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to any projections of revenue, margins, expenses, earnings, tax provisions, cash flows, benefit obligations, share repurchases, acquisition synergies, currency exchange rates or other financial items; any statements of the plans, strategies, and objectives of management for future operations, including execution of cost reduction programs and restructuring and integration plans; any statements concerning the expected development, performance or market share relating to products or services; any statements regarding current or future macroeconomic trends or events and the impact of those trends and events on HP and its financial performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include macroeconomic and geopolitical trends and events; execution and performance of contracts by HP and its suppliers, customers and partners; the challenge of managing asset levels, including inventory; the difficulty of aligning expense levels with revenue changes; assumptions related to pension and other post-retirement costs; expectations and assumptions relating to the execution and timing of cost reduction programs and restructuring and integration plans; the possibility that the expected benefits of business combination transactions may not materialize as expected; the resolution of pending investigations, claims and disputes; and other risks that are described in HP’s Annual Report on Form 10-K for the fiscal year ended October 31, 2008 and HP’s other filings with the Securities and Exchange Commission, including HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2009. As in prior periods, the financial information set forth in this release, including tax-related items, reflects estimates based on information available at this time. While HP believes these estimates to be meaningful, these amounts could differ materially from actual reported amounts in HP’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2009. In particular, determining HP’s actual tax balances and provisions as of July 31, 2009 requires extensive internal and external review of tax data (including consolidating and reviewing the tax provisions of numerous domestic and foreign entities), which is being completed in the ordinary course of preparing HP’s Form 10-Q. HP assumes no obligation and does not intend to update these forward-looking statements.

Note to editors: More news from HP, including links to RSS feeds, is available at http://www.hp.com/hpinfo/newsroom/.

© 2009 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. HP shall not be liable for technical or editorial errors or omissions contained herein.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
	Three months ended
	July 31, 2009				April 30, 2009				July 31, 2008
Net revenue	$	27,451			$	27,351			$	28,032
Costs and expenses (a) :
Cost of sales		20,936				20,919				21,197		(c)
Research and development		667				716				895
Selling, general and administrative		2,874				2,880				3,193		(c)
Amortization of purchased intangible assets		379				380				213
Restructuring charges		362				94				5
Acquisition-related charges		59				75				-
Total costs and expenses		25,277				25,064				25,503
Earnings from operations		2,174				2,287				2,529
Interest and other, net		(177	)			(180	)			23
Earnings before taxes		1,997				2,107				2,552
Provision for taxes (b)		355				391				525
Net earnings	$	1,642			$	1,716			$	2,027
Net earnings per share:
Basic	$	0.69			$	0.72			$	0.82
Diluted	$	0.67			$	0.70			$	0.80
Cash dividends declared per share	$	0.16			$	-			$	0.16
Weighted-average shares used to compute net earnings per share:
Basic		2,382				2,394				2,459
Diluted		2,436				2,438				2,533
(a) Stock-based compensation expense included under SFAS 123(R) was as follows:
Cost of sales	$	41			$	48			$	34
Research and development		12				18				16
Selling, general and administrative		94				109				90
Acquisition-related charges		3				16				-
Total costs and expenses	$	150			$	191			$	140
(b) Tax benefit from stock-based compensation	$	(51	)		$	(59	)		$	(38	)
(c) For the prior year reporting periods presented, certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to organizational realignments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(Unaudited)
(In millions except per share amounts)
	Nine months ended
	July 31, 2009				July 31, 2008
Net revenue	$	83,602			$	84,761
Costs and expenses (a) :
Cost of sales		63,924				63,846		(c)
Research and development		2,115				2,701
Selling, general and administrative		8,647				9,820		(c)
Amortization of purchased intangible assets		1,171				630
In-process research and development charges		6				13
Restructuring charges		602				19
Acquisition-related charges		182				-
Total costs and expenses		76,647				77,029
Earnings from operations		6,955				7,732
Interest and other, net		(589	)			98
Earnings before taxes		6,366				7,830
Provision for taxes (b)		1,154				1,613
Net earnings	$	5,212			$	6,217
Net earnings per share:
Basic	$	2.18			$	2.49
Diluted	$	2.13			$	2.41
Cash dividends declared per share	$	0.32			$	0.32
Weighted-average shares used to compute net earnings per share:
Basic		2,395				2,497
Diluted		2,442				2,577
(a) Stock-based compensation expense included under SFAS 123(R) was as follows:
Cost of sales	$	141			$	106
Research and development		47				55
Selling, general and administrative		288				288
Acquisition-related charges		25				-
Total costs and expenses	$	501			$	449
(b) Tax benefit from stock-based compensation	$	(158	)		$	(130	)
(c) For the prior year reporting periods presented, certain pursuit-related costs previously reported as Cost of sales have been realigned retroactively to Selling, general and administrative expenses due to organizational realignments.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
	Three months ended July 31, 2009				Diluted earnings per share				Three months ended April 30, 2009				Diluted earnings per share				Three months ended July 31, 2008				Diluted earnings per share
GAAP net earnings	$	1,642			$	0.67			$	1,716			$	0.70			$	2,027			$	0.80
Non-GAAP adjustments:
Amortization of purchased intangible assets		379				0.16				380				0.16				213				0.08
Restructuring charges		362				0.15				94				0.04				5				-
Acquisition-related charges		59				0.03				75				0.03				-				-
Adjustments for taxes		(232	)			(0.10	)			(167	)			(0.07	)			(57	)			(0.02	)
Non-GAAP net earnings	$	2,210			$	0.91			$	2,098			$	0.86			$	2,188			$	0.86
GAAP earnings from operations	$	2,174							$	2,287							$	2,529
Non-GAAP adjustments:
Amortization of purchased intangible assets		379								380								213
Restructuring charges		362								94								5
Acquisition-related charges		59								75								-
Non-GAAP earnings
from operations	$	2,974							$	2,836							$	2,747
GAAP operating margin		8	%							8	%							9	%
Non-GAAP adjustments		3	%							2	%							1	%
Non-GAAP operating margin		11	%							10	%							10	%

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
ADJUSTMENTS TO GAAP NET EARNINGS, EARNINGS FROM OPERATIONS,
OPERATING MARGIN AND EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
	Nine months ended July 31, 2009				Diluted earnings per share				Nine months ended July 31, 2008				Diluted earnings per share
GAAP net earnings	$	5,212			$	2.13			$	6,217			$	2.41
Non-GAAP adjustments:
Amortization of purchased intangible assets		1,171				0.48				630				0.24
In-process research and development charges		6				-				13				0.01
Restructuring charges		602				0.25				19				0.01
Acquisition-related charges		182				0.08				-				-
Adjustments for taxes		(580	)			(0.24	)			(171	)			(0.07	)
Non-GAAP net earnings	$	6,593			$	2.70			$	6,708			$	2.60
GAAP earnings from operations	$	6,955							$	7,732
Non-GAAP adjustments:
Amortization of purchased intangible assets		1,171								630
In-process research and development charges		6								13
Restructuring charges		602								19
Acquisition-related charges		182								-
Non-GAAP earnings from operations	$	8,916							$	8,394
GAAP operating margin		8	%							9	%
Non-GAAP adjustments		3	%							1	%
Non-GAAP operating margin		11	%							10	%

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)
	July 31, 2009			October 31, 2008
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	13,521		$	10,153
Short-term investments		66			93
Accounts receivable		14,735			16,928
Financing receivables		2,532			2,314
Inventory		5,850			7,879
Other current assets		12,138			14,361
Total current assets		48,842			51,728
Property, plant and equipment		11,194			10,838
Long-term financing receivables and other assets		10,857			10,468
Goodwill and purchased intangible assets		40,179			40,297
Total assets	$	111,072		$	113,331
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and short-term borrowings	$	3,288		$	10,176
Accounts payable		12,778			14,917
Employee compensation and benefits		3,596			4,159
Taxes on earnings		786			869
Deferred revenue		6,458			6,287
Other accrued liabilities		14,904			16,531
Total current liabilities		41,810			52,939
Long-term debt		13,892			7,676
Other liabilities		13,835			13,774
Stockholders' equity		41,535			38,942
Total liabilities and stockholders' equity	$	111,072		$	113,331

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In millions)
	Three months ended July 31, 2009				Nine months ended July 31, 2009
Cash flows from operating activities:
Net earnings	$	1,642			$	5,212
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		1,179				3,546
Stock-based compensation expense		150				501
Provision for bad debt and inventory		114				462
In-process research and development charges		-				6
Restructuring charges		362				602
Deferred taxes on earnings		220				272
Excess tax benefit from stock-based compensation		(39	)			(67	)
Other, net		2				(1	)
Changes in assets and liabilities:
Accounts and financing receivables		(141	)			1,635
Inventory		(144	)			1,843
Accounts payable		1,278				(2,228	)
Taxes on earnings		(289	)			691
Restructuring		(296	)			(844	)
Other assets and liabilities		(182	)			(1,684	)
Net cash provided by operating activities		3,856				9,946
Cash flows from investing activities:
Investment in property, plant and equipment		(1,091	)			(2,749	)
Proceeds from sale of property, plant and equipment		151				401
Purchases of available-for-sale securities and other investments		(50	)			(105	)
Maturities and sales of available-for-sale securities and other investments		-				103
Payments made in connection with business acquisitions, net		-				(348	)
Net cash used in investing activities		(990	)			(2,698	)
Cash flows from financing activities:
Repayment of commercial paper and notes payable, net		(2,417	)			(6,866	)
Issuance of debt		2,000				6,778
Payment of debt		(1,071	)			(1,181	)
Issuance of common stock under employee stock plans		443				936
Repurchase of common stock		(999	)			(3,038	)
Excess tax benefit from stock-based compensation		39				67
Dividends		(191	)			(576	)
Net cash used in financing activities		(2,196	)			(3,880	)
Increase in cash and cash equivalents		670				3,368
Cash and cash equivalents at beginning of period		12,851				10,153
Cash and cash equivalents at end of period	$	13,521			$	13,521

	HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
	SEGMENT INFORMATION
	(Unaudited)
	(In millions)
			Three months ended
			July 31, 2009				April 30, 2009				July 31, 2008 (a)
Net revenue:
	Services (b)		$	8,470			$	8,488			$	4,386
	Enterprise Storage and Servers			3,660				3,456				4,741
	HP Software			847				880				1,086
	Technology Solutions Group			12,977				12,824				10,213
	Personal Systems Group			8,432				8,191				10,254
	Imaging and Printing Group			5,660				5,916				7,041
	HP Financial Services			670				641				680
	Corporate Investments			193				188				271
	Total Segments			27,932				27,760				28,459
	Eliminations of intersegment net revenue and other			(481	)			(409	)			(427	)
	Total HP Consolidated		$	27,451			$	27,351			$	28,032
Earnings from operations:
	Services (b)		$	1,289			$	1,172			$	567
	Enterprise Storage and Servers			356				250				544
	HP Software			153				157				135
	Technology Solutions Group			1,798				1,579				1,246
	Personal Systems Group			386				374				587
	Imaging and Printing Group			960				1,074				1,042
	HP Financial Services			53				46				51
	Corporate Investments			(10	)			(19	)			26
	Total Segments			3,187				3,054				2,952
	Corporate and unallocated costs and eliminations			(81	)			(62	)			(85	)
	Unallocated costs related to stock-based compensation expense			(132	)			(156	)			(120	)
	Amortization of purchased intangible assets			(379	)			(380	)			(213	)
	Restructuring charges			(362	)			(94	)			(5	)
	Acquisition-related charges			(59	)			(75	)			-
	Interest and other, net			(177	)			(180	)			23
Total HP Consolidated Earnings Before Taxes			$	1,997			$	2,107			$	2,552
(a) Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue and operating profit among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, certain previously allocated costs were reclassified to unallocated costs related to stock-based compensation expense. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, Personal Systems Group, HP Financial Services and Corporate Investments segments.
(b) Includes the results of EDS which was acquired on August 26, 2008.

	HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
	SEGMENT INFORMATION
	(Unaudited)
	(In millions)
			Nine months ended
			July 31, 2009				July 31, 2008 (a)
Net revenue:
	Services (b)		$	25,704			$	12,700
	Enterprise Storage and Servers			11,064				14,341
	HP Software			2,605				3,072
	Technology Solutions Group			39,373				30,113
	Personal Systems Group			25,410				31,116
	Imaging and Printing Group			17,557				22,042
	HP Financial Services			1,947				2,007
	Corporate Investments			577				719
	Total Segments			84,864				85,997
	Eliminations of intersegment net revenue and other			(1,262	)			(1,236	)
	Total HP Consolidated		$	83,602			$	84,761
Earnings from operations:
	Services (b)		$	3,584			$	1,573
	Enterprise Storage and Servers			1,011				1,872
	HP Software			450				288
	Technology Solutions Group			5,045				3,733
	Personal Systems Group			1,195				1,759
	Imaging and Printing Group			3,139				3,404
	HP Financial Services			140				141
	Corporate Investments			(48	)			40
	Total Segments			9,471				9,077
	Corporate and unallocated costs and eliminations			(119	)			(308	)
	Unallocated costs related to stock-based compensation expense			(436	)			(375	)
	Amortization of purchased intangible assets			(1,171	)			(630	)
	In-process research and development charges			(6	)			(13	)
	Restructuring charges			(602	)			(19	)
	Acquisition-related charges			(182	)			-
	Interest and other, net			(589	)			98
Total HP Consolidated Earnings Before Taxes			$	6,366			$	7,830
(a) Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue and operating profit among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, certain previously allocated costs were reclassified to unallocated costs related to stock-based compensation expense. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, Personal Systems Group, HP Financial Services and Corporate Investments segments.
(b) Includes the results of EDS which was acquired on August 26, 2008.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
		Three months ended
		July 31, 2009				April 30, 2009				July 31, 2008 (a)
Net revenue:
Infrastructure technology outsourcing		$	3,932			$	3,785			$	1,393
Technology services			2,404				2,441				2,614
Application services			1,384				1,502				336
Business process outsourcing			711				709				43
Other			39				51				-
Services (b)			8,470				8,488				4,386
Industry standard servers			2,262				1,988				2,874
Storage			820				818				1,038
Business critical systems			578				650				829
Enterprise Storage and Servers			3,660				3,456				4,741
Business technology optimization			563				568				718
Other			284				312				368
HP Software			847				880				1,086
Technology Solutions Group			12,977				12,824				10,213
Notebooks			4,802				4,697				5,350
Desktops			3,090				2,967				4,163
Workstations			299				287				463
Handhelds			32				47				90
Other			209				193				188
Personal Systems Group			8,432				8,191				10,254
Supplies			3,949				4,103				4,527
Commercial hardware			1,085				1,193				1,718
Consumer hardware			626				620				796
Imaging and Printing Group			5,660				5,916				7,041
HP Financial Services			670				641				680
Corporate Investments			193				188				271
Total Segments			27,932				27,760				28,459
Eliminations of intersegment net revenue and other			(481	)			(409	)			(427	)
Total HP Consolidated		$	27,451			$	27,351			$	28,032
(a) Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, revenue was transferred among the business units within the Services, HP Software, Imaging and Printing Group, and Personal Systems Group segments. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, HP Financial Services and Corporate Investments segments.
(b) Includes the results of EDS, which was acquired on August 26, 2008. The businesses included in the former consulting and integration business unit were divided among the application services and technology services business units and the HP software segment. The businesses included in the former outsourcing services business unit were divided among the infrastructure technology outsourcing and business process outsourcing business units. The infrastructure technology outsourcing, application services and business process outsourcing business units were added with the technology services business unit, and these four business units now comprise the Services segment.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SEGMENT / BUSINESS UNIT INFORMATION
(Unaudited)
(In millions)
		Nine months ended
		July 31, 2009				July 31, 2008 (a)
Net revenue:
Infrastructure technology outsourcing		$	11,620			$	3,957
Technology services			7,296				7,640
Application services			4,478				984
Business process outsourcing			2,163				119
Other			147				-
Services (b)			25,704				12,700
Industry standard servers			6,572				8,680
Storage			2,551				3,058
Business critical systems			1,941				2,603
Enterprise Storage and Servers			11,064				14,341
Business technology optimization			1,725				2,006
Other			880				1,066
HP Software			2,605				3,072
Technology Solutions Group			39,373				30,113
Notebooks			14,406				16,387
Desktops			9,360				12,494
Workstations			919				1,415
Handhelds			136				281
Other			589				539
Personal Systems Group			25,410				31,116
Supplies			12,102				13,664
Commercial hardware			3,517				5,576
Consumer hardware			1,938				2,802
Imaging and Printing Group			17,557				22,042
HP Financial Services			1,947				2,007
Corporate Investments			577				719
Total Segments			84,864				85,997
Eliminations of intersegment net revenue and other			(1,262	)			(1,236	)
Total HP Consolidated		$	83,602			$	84,761
(a) Certain fiscal 2009 organizational reclassifications have been reflected retroactively to provide improved visibility and comparability. For each of the quarters in fiscal year 2008, the reclassifications resulted in the transfer of revenue among the Services, HP Software and Imaging and Printing Group financial reporting segments. In addition, revenue was transferred among the business units within the Services, HP Software, Imaging and Printing Group, and Personal Systems Group segments. There was no impact on the previously reported financial results for the Enterprise Storage and Servers, HP Financial Services and Corporate Investments segments.
(b) Includes the results of EDS, which was acquired on August 26, 2008. The businesses included in the former consulting and integration business unit were divided among the application services and technology services business units and the HP software segment. The businesses included in the former outsourcing services business unit were divided among the infrastructure technology outsourcing and business process outsourcing business units. The infrastructure technology outsourcing, application services and business process outsourcing business units were added with the technology services business unit, and these four business units now comprise the Services segment.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
		Three months ended
		July 31, 2009			April 30, 2009			July 31, 2008
Numerator:
Net earnings		$	1,642		$	1,716		$	2,027
Adjustment for interest expense on zero-coupon subordinated convertible notes, net of taxes			-			-			-
Net earnings, adjusted		$	1,642		$	1,716		$	2,027
Denominator:
Weighted-average shares used to compute basic EPS			2,382			2,394			2,459
Effect of dilutive securities:
Dilution from employee stock plans			54			44			74
Zero-coupon subordinated convertible notes			-			-			-
Dilutive potential common shares			54			44			74
Weighted-average shares used to compute diluted EPS			2,436			2,438			2,533
Net earnings per share:
Basic (a)		$	0.69		$	0.72		$	0.82
Diluted (b)		$	0.67		$	0.70		$	0.80
(a) HP's basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period.
(b) The diluted earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options and vesting of restricted stock units, except when such issuances would be anti-dilutive.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
		Nine months ended
		July 31, 2009			July 31, 2008
Numerator:
Net earnings		$	5,212		$	6,217
Adjustment for interest expense on zero-coupon subordinated convertible notes, net of taxes			-			3
Net earnings, adjusted		$	5,212		$	6,220
Denominator:
Weighted-average shares used to compute basic EPS			2,395			2,497
Effect of dilutive securities:
Dilution from employee stock plans			47			76
Zero-coupon subordinated convertible notes			-			4
Dilutive potential common shares			47			80
Weighted-average shares used to compute diluted EPS			2,442			2,577
Net earnings per share:
Basic (a)		$	2.18		$	2.49
Diluted (b)		$	2.13		$	2.41
(a) HP's basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period.
(b) The diluted earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options, vesting of restricted stock units and conversion of debt, except when such issuances would be anti-dilutive.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NON-GAAP NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
		Three months ended
		July 31, 2009			April 30, 2009			July 31, 2008
Numerator:
Non-GAAP net earnings		$	2,210		$	2,098		$	2,188
Adjustment for interest expense on zero-coupon subordinated convertible notes, net of taxes			-			-			-
Non-GAAP net earnings, adjusted		$	2,210		$	2,098		$	2,188
Denominator:
Weighted-average shares used to compute basic EPS			2,382			2,394			2,459
Effect of dilutive securities:
Dilution from employee stock plans			54			44			74
Zero-coupon subordinated convertible notes			-			-			-
Dilutive potential common shares			54			44			74
Weighted-average shares used to compute diluted EPS			2,436			2,438			2,533
Non-GAAP net earnings per share:
Basic (a)		$	0.93		$	0.88		$	0.89
Diluted (b)		$	0.91		$	0.86		$	0.86
(a) HP's basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period.
(b) The diluted earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options and vesting of restricted stock units, except when such issuances would be anti-dilutive.

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CALCULATION OF NON-GAAP NET EARNINGS PER SHARE
(Unaudited)
(In millions except per share amounts)
		Nine months ended
		July 31, 2009			July 31, 2008
Numerator:
Non-GAAP net earnings		$	6,593		$	6,708
Adjustment for interest expense on zero-coupon subordinated convertible notes, net of taxes			-			3
Non-GAAP net earnings, adjusted		$	6,593		$	6,711
Denominator:
Weighted-average shares used to compute basic EPS			2,395			2,497
Effect of dilutive securities:
Dilution from employee stock plans			47			76
Zero-coupon subordinated convertible notes			-			4
Dilutive potential common shares			47			80
Weighted-average shares used to compute diluted EPS			2,442			2,577
Non-GAAP net earnings per share:
Basic (a)		$	2.75		$	2.69
Diluted (b)		$	2.70		$	2.60
(a) HP's basic earnings per share was calculated based on net earnings and the weighted-average number of shares outstanding during the reporting period.
(b) The diluted earnings per share included additional dilution from potential issuance of common stock, such as stock issuable pursuant to exercise of stock options, vesting of restricted stock units and conversion of debt, except when such issuances would be anti-dilutive.

Use of Non-GAAP Financial Measures