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Table 1				HP Services						May-05
				(Fiscal year end: Oct 31)
			2005e	% of	Change	2004	% of	Change	2003	% of
			($ Mill)	Rev	05/04	($ Mill)	Rev	04/03	($ Mill)	Rev
_	_	_	_	_	_	_	_	_	_	_
Revenue			18%			17%			17%
Business Segments (est)
	Outsourcing		$3,230	21.0%	30.0%	$2,484	18.0%	35.0%	$1,840	15.0%
	Integration		$2,930	19.0%	7.1%	$2,735	19.9%	4.0%	$2,630	21.4%
	Maintenance		$9,240	60.0%	8.0%	$8,559	62.1%	9.2%	$7,835	63.7%
Total Revenue (w. Maint.)			$15,400	100.0%	11.8%	$13,778	100.0%	12.0%	$12,305	100.0%
(w/o Maint.)			$6,160		18.0%	$5,219	16.8%	16.8%	$4,470
	2Q05 Actual		$3,984		13.6%	$3,508
Costs
Cost of Revenue			$12,010	78.0%	13.1%	$10,620	77.1%	15.7%	$9,180	74.6%
One-time Charges			$74
Total Costs			$12,084	78.5%	13.8%	$10,620	77.1%	15.7%	$9,180	74.6%
Gross Profit/Margin			$3,316	21.5%	5.0%	$3,158	22.9%	1.1%	$3,125	25.4%
Expenses
Sales, General & Marketing			$1,850	12.0%	-1.1%	$1,870	13.6%	16.9%	$1,600	13.0%
Restructuring Charges (apportioned to HPS)						$20			$135
Research & Development
Total Expenses			$1,850	12.0%	-2.1%	$1,890	13.7%	8.9%	$1,735	14.1%
Operating Profit (Loss)			$1,466	9.5%	15.6%	$1,268	9.2%	-8.8%	$1,390	11.3%
as reported w/o charges						$1,263	9.2%	-9.2%	$1,391	11.3%
	2Q05 Actual		$292	7.3%	-12.0%	$332	9.5%
Other Income (Loss)			($5)	-0.0%	-6.5%	($5)	-0.0%	296.7%	($1)	-0.0%
Income (Loss) Before Tax			$1,461	9.5%	15.7%	$1,263	9.2%	-9.1%	$1,389	11.3%
Income Tax (Benefit)			$243	16.7%	15.7%	$210	16.7%	25.4%	$168	12.1%
Net Income (Loss)			$1,218	7.9%	15.7%	$1,053	7.6%	-13.8%	$1,221	9.9%
Earnings per share (basic)		2.91	0.42			0.36			0.42
				Pro Forma Valuation
		P/E Ratio	Rev Ratio	Market Cap (est.)			Spin-off	Actual
				P/E	Rev	Combined	Benefit	(4/4/05)
Industry Segment Avg		17.80	0.87	$21.67	$13.40	$17.54
HP Corporate		12.96	0.69	$63.69	$62.24	$11.36		$63.44
HP Services		20.00	0.90	$24.35	$13.86	$19.11	$7.75
	Source: Annex Research
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