HP Helps DreamWorks Create "Spirit: Stallion of the Cimarron"

Film Represents Re-invention of Traditional Animation into "Tradigital" Format

PALO ALTO and GLENDALE, Calif., June 3, 2002

HP (NYSE:HPQ) today announced that its Linux-based technology played a critical role in the production of "Spirit: Stallion of the Cimarron," the newest animated film from DreamWorks SKG. To date, the film has grossed more than $38.7 million.

The popular movie is the first to place Linux in the hands of traditional animators, allowing for a seamless blend of two-dimensional (2D) with three-dimensional (3D) animation, a format that DreamWorks calls "tradigital" animation. During the making of the film, HP engineers worked closely with DreamWorks to enhance the functionality of Linux to power ToonShooter™, DreamWorks' proprietary 2D animation software. ToonShooter allows animators to convert traditional hand-drawn artwork into a digital format that can be easily played back and manipulated during production.

ToonShooter's video playback feature needed to run at film speed (24 frames-per-second) with synchronized audio. At the time, 2D playback at that speed had never been achieved on Linux. HP and DreamWorks worked together to enable ToonShooter to perform at well above the necessary 24 frames-per-second, running on Linux. The result is a film with visual dimensions never before achieved in traditionally-animated films.

"HP is giving our animators the chance to stay a step ahead of today's production technology and helping them focus on what they do best -- creating memorable films for audiences," said Ed Leonard, head of animation technology, DreamWorks.

To complete the film, DreamWorks used high-performance HP Linux workstations and HP servers. The combination allowed DreamWorks to leverage the visual power of 3D while preserving the expressiveness of hand-drawn animation to enhance the film's detail. The result has set a new benchmark for the visual complexity and richness of traditionally animated films.

"DreamWorks pushes the limits of Linux-based computer technology in a constant effort to lower costs and provide animators with the best filmmaking tools possible," said Terry Brown, manager, HP Entertainment Industry Solutions. "As the face of digital animation continues to change rapidly, HP is pleased to help DreamWorks stay on the cutting edge of today's technology."

HP and DreamWorks began their relationship two years ago when the studio determined that driving down costs and production time while leveraging emerging technologies was imperative to success.

DreamWorks is currently in production with three animated films using HP technology which will be produced almost exclusively using Linux. Earlier this year, HP and DreamWorks announced a three-year multi-million dollar technology alliance with HP providing the computing infrastructure for DreamWorks' next-generation digital studio. The Glendale-based studio is beginning production on an all-computer graphics animated feature.

About DreamWorks

DreamWorks SKG was formed in October 1994 by its three principal partners -- Steven Spielberg, Jeffrey Katzenberg and David Geffen -- to produce live-action motion pictures; animated feature films; network and cable television programming; home video entertainment; records; books; toys; and consumer products.

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 $81.7 billion in fiscal 2001 and operations in more than 160 countries. More information about HP is available at http://www.hp.com.

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.