© 2007 Hewlett-Packard Development Company, L.P.The information contained herein is subject to change without notice

Package Sustainability at Hewlett PackardJudy GlazerDirector, Global Social and Environmental Responsibility Operations

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Agenda• HP overview • Global citizenship

priorities• Package environmental

and regulatory trends• HP innovation strategy

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HP today• Fortune 14 company • Simplifying technology experiences

around the world• 178 countries• 172,000 employees• 145,000 sales partners • 70,000 service partners

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Financial strength

HP Services$ 16.6B

Imaging & Printing Group$ 28.4B

Enterprise Storage & Servers$ 18.8B

Software & Other$ 2.3B

HP Financial Services$ 2.3B

Personal Systems Group$ 36.4B

FY07$104.3B

$17

$19

$21

$23

$25

$27

$29

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.90

$1.00

Revenue

Non-GAAP EPS

Revenue & EPS performanceIn billions

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HP Supply Chain• Procurement− Largest purchaser of electronic

components

• Logistics −Every day HP delivers

1.3 million Inkjet cartridges, 110,000 printers,75,000 personal systems,3,500 servers

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HP’s Global Citizenship Objectives

Established in 1957Design for Environment Program 1992

Product re-use & recyclingSupply chain Climate & EnergyHP provides customers with efficient reuse and recycling options, and we collaborate with other leading organizations to develop common standards and solutions

HP aims for leadership in energy efficiency in our products as well as our own operations, and we collaborate with others to extend our reach

HP is providing leadership to the electronics industry’s efforts to raise labor and environmental standards in our supply chain through collaboration

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Global citizenship prioritiesReducing impact throughout the product lifecycle

• Design for the environment

• Responsible manufacturing and supply chain practices

• Efficient energy usage

• Product reuse and recycling

ProductProductlifecyclelifecycle

Recycle

DFE

Use

Mfg& SC

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Sustainability – What does it mean?

EnvironmentalSocial

Economic

Sustainability

“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”–World Commission on Environment and Development 1987

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Sustainability Evolution

Reactive Proactive

Product Safety

Product Stewardship Sustainability

ProductLiability

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Packaging regulatory trendsNJ rigid container

1990’s 2000 2005 2008-2012

Germany Green Dot

US state rigid

container CA toxic-free oceansCanada

Pkg’g fees

Brazil pkg’g TB

EU REACHChina RoHSEU Pkg’g Directive

1980’s

Regulations aimed at landfill diversion and reducing environmental impact: • Takeback fees & infrastructure• Materials restrictions or substance declaration• Reporting

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Packaging regulation perceived as effective tool to reduce solid waste

Municipal Solid Waste in the United States

00.5

11.5

22.5

33.5

44.5

5

1966 1980 1990 2000 2005

Per c

apita

Was

te p

er D

ay (l

bs)

Containers & Packaging

Source: US Environmental Protection Agencyhttp://www.epa.gov/garbage/facts.htmhttp://www.epa.gov/garbage/pubs/mswchar05.pdf

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Role of Non-Governmental Organizations

• Influencing legislative and corporate agendas

• Creating customer demand (consumer and enterprise)

• Encouraging and leveraging transparency

• Specialized expertise

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Strategic Options • React to the laws as

they pass• React to the laws as

they are proposed• Identify and capitalize

on new business opportunities

• Collaborate on roadmaps, standards, and other innovation enablers

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HP Strategy• Building capability in the

industry• Benchmarking and goal

setting• Engagement along the entire

value chain• Materials innovation• Design for Logisitcs

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Building Industry Capability:Environmental Electronics Packaging ProgramUniversity of California Santa Barbara Bren School project

• Updated Packaging Design forthe Environment Guideline for the Electronics Industry

• Study Guide

• Certification Exam

• Industry-wide accessible site for the Guideline, Study Guide and Exam

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Building Industry Capability: Lifecycle Analysis

Which material generates the lesser footprint on the environment?

Molded Pulp

• Raw material acquisition

• Energy to produce

• Impact on finished goods transportation

• End of Life

EPS

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Benchmarking and goal setting

• Expand existing tools−New Product Introduction

tools−EU take-back fee

database

• Analyze historical data• Establish reduction goals

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HP Packaging Weight Trends

290278

297

249

48 5466

51

0

50

100

150

200

250

300

350

2005 2006 1Q07 2Q07

Gra

ms

of P

acka

ging

per

Uni

t Sol

d

Paper

Plastic

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Materials Innovation• Replacement of PVC

with R-PET & other packaging materials

• Alternate pallet materials and designs

• Molded pulp for heavier products

• Increased use of post-consumer material

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Replacement of PVC with R-PET

Prior solution in PVC clamshell

• Size reduction and material change

• Collaboration along the value chain

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Lightweight Plastic Pallets for Air Shipments

• Airfreight weight reduction: 35-45 lb pallet reduced to 8 lbs

• CO2 reduction: 7 metric tons for China to Europe, Latin America for notebook computers in 2006 alone

• Space savings allow more units per container

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Plywood pallet limitations

• Deck breaks causing carton damage

• Phytosanitary sterilization

• Poor reuse and recycling rate

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Pallet Recycling

Recycled High Impact Polystyrene is melted down and reused

Polystyrene is a by-product of oil refining

Recycled Expanded Polystyrene is made into insulating

panels used in home

construction

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Design for Logistics• Product, Packaging and Logistics decisions

determine total environmental footprint• Examples

– Cube optimization– Bulk pack

Packagematerials selection

Packaging Environmental FootprintPackaged

product size and weight

Product size, weight & physical robustness Logistics

Environmental Footprint

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The ROSe Tool

• Product fragility vs. pack size

• Package design• Cube maximization

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Notebook Packaging Reduction

Was 48 Is 60 Will Be 66

25% Reduction in Packaging Material

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Bulk Packaging DesignIndividually Boxed Units = 24 Units8 Units/box:

2 layers with4 units each

Layer 2Layer 1

vs.

8 keyboards,mice, and

power cords

Bulk Pack Pallet = 32 UnitsInside the Bulk Packaging:• 8 SFF units, KBs, mice, and power cords in a single box• 50%+ reduction in packaging material• 33% increase in pack density

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Packaging Investigations

• 100% post-consumerExpanded Polystyrene cushions

• Bio-based plastics

• Enterprise customer package take-back

• Consumer package return

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Designing for the environment at Hewlett Packard

"Environmental responsibility is good business. We've reached the tipping point where the price and performance of IT are no longer compromised by being green, but are now enhanced by it."

-- Mark Hurd, CEO

Q&A