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HP Updates Second Quarter EPS After $400 Million Settlement with Pitney Bowes

Press release from the issuing company

PALO ALTO, Calif., June 4, 2001 As announced earlier today, Hewlett-Packard Company (NYSE:HWP) settled patent infringement litigation with Pitney Bowes Inc., and is revising its previously released statement of earnings for its second fiscal quarter, ended April 30, 2001. A $400 million pre-tax charge will be recorded as "other expense" in HP's statement of earnings for the second fiscal quarter. While the settlement was not reached until June 4, 2001, Generally Accepted Accounting Principles (GAAP) require that this charge be reflected in HP's second fiscal quarter financial statements, which will be filed in a Quarterly Report on Form 10-Q by June 14, 2001. On May 16, 2001, HP reported pro forma earnings per share (EPS) on a diluted basis of 18 cents, which remains unchanged. On a diluted basis, GAAP EPS was 15 cents before an extraordinary gain on extinguished debt. Including the settlement charge, GAAP EPS is 3 cents on a diluted basis before the extraordinary gain. Net earnings before the extraordinary item for the second fiscal quarter was $307 million. Including the settlement charge, net earnings before the extraordinary item is $55 million.