HP and Raytheon to Ruggedize iPAQ Pocket PC for Military and Industrial Markets.

Business Editors/High-Tech & Defense Writers

PALO ALTO, Calif. & MARLBOROUGH, Mass.--(BUSINESS WIRE)--June 19, 2002

HP (NYSE:HPQ) today announced that it will provide HP iPAQ Pocket PC technology and intellectual property to Raytheon Company (NYSE:RTN) as an extension of Raytheon's original 1986 technology licensing agreement with Compaq Computer Corp., which recently merged with HP. Raytheon will manufacture and market Agama -- a handheld computer based on a ruggedized iPAQ -- and repackage it to withstand extreme environmental conditions required for military and industrial use.

According to a March 2001 Venture Development Corp. report, the fully ruggedized handheld computer market is expected to exceed $129 million by 2005.

Raytheon's Agama is one of the company's extended environment, commercial-off-the-shelf (E2COTS(TM)) rugged computer products that are customized for the global military, heavy industrial and niche markets. Customers in these markets need products that can withstand adverse environmental conditions such as extreme temperatures, severe shock, vibration and humidity. Agama will be available in the summer of 2002.

Frank Marchilena, Raytheon Company executive vice president, said, "Raytheon leverages HP's multi-billion dollar computer technology investment to provide solutions for customers with rigorous requirements. Our E2COTS products are tough enough to go to war."

"This agreement marks the continuation of a 15-year relationship between HP and Raytheon," said Jim Milton, managing director, HP Americas, and senior vice president, HP Enterprise Systems Group. "The relationship is mutually beneficial. It allows Raytheon to expand its product portfolio and HP to increase its market presence and gain a new vertical market."

Ranked by analysts as the No. 1 Pocket PC in the world, the HP iPAQ Pocket PC continues to define next-generation voice and data access solutions to better communicate and manage information. HP plans to incorporate the newest X-Scale processor from Intel(R) into the iPAQ Pocket PC product line later this year, providing a clear product improvement path for Agama.

Raytheon's Agama handheld computer is part of the company's E2COTS(TM) portfolio of Rugged Computer Products, which includes the Chameleon and Iguana notebooks as well as the Gecko flat panel display.

Photos and information about Raytheon computer products are available at http://www.raytheon-computers.com. Agama users can obtain software upgrades, application support and optimization tips at http://www.myagama.net and http://www.myagama.com.

History of Partnering

Raytheon partnered with HP for its innovative technology and its depth of experience. The extension of the technology license agreement further exemplifies the business alliance that exists between Raytheon and HP.

Through various technology agreements and partnerships, HP and Raytheon have helped to grow each other's businesses. An existing technology agreement allows Raytheon to build and resell Alpha systems to military specifications using Compaq-developed technology. HP and Raytheon are also partners on the ASCI supercomputing project at the Los Alamos National Laboratory.

About Raytheon

With headquarters in Lexington, Mass., Raytheon Company is a global technology leader in defense, government and commercial electronics, and business and special mission aircraft.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP merged with Compaq Computer Corp. on May 3, 2002. The merged company had combined revenue of approximately $81.1 billion in fiscal 2001 and operations in more than 160 countries. More information about HP is available at http://www.hp.com.

Intel is registered trademark of Intel Corp.

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports. HP assumes no obligation and does not intend to update these forward-looking statements.