<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 10-Q



               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934



                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002



                          COMMISSION FILE NUMBER 1-9026



                           COMPAQ COMPUTER CORPORATION
             (Exact name of registrant as specified in its charter)



            DELAWARE                                             76-0011617
 (State or other jurisdiction of                              (I.R. Employer
  incorporation or organization)                            Identification No.)


                       20555 SH 249, HOUSTON, TEXAS 77070
                                 (281) 370-0670
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)




Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                                  Yes [X ] No [ ]


The number of shares of the registrant's Common Stock, $.01 par value,
outstanding as of March 31, 2002, was approximately 1.7 billion.



<PAGE>



                           COMPAQ COMPUTER CORPORATION
                                    FORM 10-Q
                        THREE MONTHS ENDED MARCH 31, 2002

                                TABLE OF CONTENTS


<Table>
<S>      <C>                                                                                               <C>

                          PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements                                                                                3

Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations              12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                         24

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings                                                                                  25

Item 4.  Submission of Matters to a Vote of Security Holders                                                25

Item 6.  Exhibits and Reports on Form 8-K                                                                   25

         Signatures                                                                                         27
</Table>

                                       2

<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                           COMPAQ COMPUTER CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET

<Table>
<Caption>
                                                             MARCH 31,    DECEMBER 31,
(In millions, except par value)                                2002          2001
                                                            ----------    ------------
                                                            (UNAUDITED)
<S>                                                         <C>           <C>
ASSETS

Current assets:
   Cash and cash equivalents                                $    3,702    $    3,874
   Trade accounts receivable, net                                4,147         4,623
   Leases and other accounts receivable                          1,957         1,881
   Inventories                                                   1,419         1,402
   Other assets                                                  1,440         1,498
                                                            ----------    ----------
     Total current assets                                       12,665        13,278

Property, plant and equipment, net                               3,171         3,199
Other assets, net                                                6,935         7,212
                                                            ----------    ----------
       Total assets                                         $   22,771    $   23,689
                                                            ==========    ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Borrowings                                               $    1,666    $    1,692
   Accounts payable                                              3,350         3,881
   Deferred income                                               1,191         1,181
   Other liabilities                                             3,984         4,379
                                                            ----------    ----------
     Total current liabilities                                  10,191        11,133
                                                            ----------    ----------

Long-term debt                                                     600           600
                                                            ----------    ----------
Postretirement and other postemployment benefits                   844           839
                                                            ----------    ----------
Commitments and contingencies
Stockholders' equity:
   Preferred stock, $.01 par value
     Shares authorized:  10 million; shares issued:  none           --            --
   Common stock and capital in excess of $.01 par value
     Shares authorized:  3 billion
     Shares issued:  March 31, 2002 - 1,774 million
       December 31, 2001 - 1,766 million                         8,375         8,307
   Retained earnings                                             4,394         4,393
   Accumulated other comprehensive loss                           (182)         (132)
   Treasury stock (shares:  March 31, 2002 - 62 million
       December 31, 2001 - 62 million)                          (1,451)       (1,451)
                                                            ----------    ----------
     Total stockholders' equity                                 11,136        11,117
                                                            ----------    ----------
       Total liabilities and stockholders' equity           $   22,771    $   23,689
                                                            ==========    ==========
</Table>


 See accompanying notes to interim condensed consolidated financial statements.

                                       3

<PAGE>



                           COMPAQ COMPUTER CORPORATION
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                   (UNAUDITED)

<Table>
<Caption>
                                                             THREE MONTHS ENDED MARCH 31,
                                                             ----------------------------
(In millions, except per share amounts)                         2002            2001
--------------------------------------                       ------------    ------------
<S>                                                          <C>             <C>
Revenue:
   Products                                                  $      6,109    $      7,480
   Services                                                         1,619           1,701
                                                             ------------    ------------
     Total revenue                                                  7,728           9,181

Cost of sales:
   Products                                                         4,969           5,893
   Services                                                         1,169           1,212
                                                             ------------    ------------
     Total cost of sales                                            6,138           7,105
                                                             ------------    ------------
Selling, general and administrative                                 1,157           1,438
Research and development                                              286             364
Restructuring and related charges                                      --             249
Merger-related costs                                                   35              --
Other (income) expense, net                                            49            (106)
                                                             ------------    ------------
                                                                    1,527           1,945
                                                             ------------    ------------

Income before income taxes                                             63             131
Provision for income taxes                                             19              40
                                                             ------------    ------------
Income before cumulative effect of accounting change                   44              91
Cumulative effect of accounting change, net of tax                     --            (222)
                                                             ------------    ------------

Net income (loss)                                            $         44    $       (131)
                                                             ============    ============

Earnings (loss) per common share:
Basic:
   Before cumulative effect of accounting change             $       0.03    $       0.05
   Cumulative effect of accounting change, net of tax                  --           (0.13)
                                                             ------------    ------------
                                                             $       0.03    $      (0.08)
                                                             ============    ============
Diluted:
   Before cumulative effect of accounting change             $       0.03    $       0.05
   Cumulative effect of accounting change, net of tax                  --           (0.13)
                                                             ------------    ------------
                                                             $       0.03    $      (0.08)
                                                             ============    ============

Shares used in computing earnings (loss) per common share:
   Basic                                                            1,705           1,685
                                                             ============    ============
   Diluted                                                          1,718           1,685
                                                             ============    ============
</Table>


 See accompanying notes to interim condensed consolidated financial statements.

                                       4

<PAGE>

                           COMPAQ COMPUTER CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (UNAUDITED)

<Table>
<Caption>
                                                                  THREE MONTHS ENDED MARCH 31,
                                                                  ----------------------------
(In millions)                                                        2002            2001
-------------                                                     ------------    ------------
<S>                                                               <C>             <C>
Cash flows from operating activities:
   Net income (loss)                                              $         44    $       (131)
   Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
       Cumulative effect of accounting change, net of tax                   --             222
       Depreciation and amortization                                       320             388
       Restructuring and related charges                                    --             249
       Gain on sale of investments                                         (11)           (132)
       Deferred income taxes and other                                     118             107
       Changes in assets and liabilities                                  (493)           (204)
                                                                  ------------    ------------
           Net cash provided by (used in) operating activities             (22)            499
                                                                  ------------    ------------

Cash flows from investing activities:
   Capital expenditures, net                                              (153)           (370)
   Other, net                                                                8             112
                                                                  ------------    ------------
           Net cash used in investing activities                          (145)           (258)
                                                                  ------------    ------------

Cash flows from financing activities:
   Decrease in short-term borrowings                                       (26)            (61)
   Common stock transactions, net                                           68             (55)
   Dividends to stockholders                                               (43)            (42)
                                                                  ------------    ------------
           Net cash used in financing activities                            (1)           (158)
                                                                  ------------    ------------

Effect of exchange rate changes on cash and cash equivalents                (4)            (10)
                                                                  ------------    ------------
           Net increase (decrease) in cash and cash equivalents           (172)             73
Cash and cash equivalents at beginning of period                         3,874           2,569
                                                                  ------------    ------------

Cash and cash equivalents at end of period                        $      3,702    $      2,642
                                                                  ============    ============
</Table>




 See accompanying notes to interim condensed consolidated financial statements.

                                       5

<PAGE>



                           COMPAQ COMPUTER CORPORATION
          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BASIS OF PRESENTATION

         The accompanying interim condensed consolidated financial statements of
Compaq Computer Corporation ("Compaq") as of March 31, 2002 and December 31,
2001 and for the three month periods ended March 31, 2002 and 2001,
respectively, have been prepared on substantially the same basis as Compaq's
annual consolidated financial statements and should be read in conjunction with
Compaq's Annual Report on Form 10-K for the year ended December 31, 2001. The
interim condensed consolidated financial statements reflect all adjustments,
consisting of only normal recurring adjustments, necessary for a fair
presentation of the results for those periods and the financial condition at
those dates. The consolidated results for interim periods are not necessarily
indicative of results to be expected for the full year.

NOTE 2 - ACCOUNTING CHANGES

         In June 2001, the Financial Accounting Standards Board issued FAS 142,
Goodwill and Other Intangible Assets ("FAS 142"). Under FAS 142, goodwill and
intangible assets with indefinite lives are no longer amortized but are reviewed
at least annually for impairment. With respect to goodwill amortization, Compaq
adopted FAS 142 effective January 1, 2002. The result of the application of the
non-amortization provisions of FAS 142 for goodwill is not material for the
three months ended March 31, 2002. At March 31, 2002, Compaq had goodwill of
$248 million. Pursuant to FAS 142, Compaq will complete its test for goodwill
impairment during the second quarter 2002 and, if impairment is indicated,
record such impairment as a cumulative effect of accounting change effective
January 1, 2002. Compaq is currently evaluating the effect that the impairment
review may have on its consolidated results of operation and financial position.

         Effective January 1, 2001, Compaq adopted Emerging Issues Task Force
Issue 01-9, Accounting for Consideration Given by a Vendor to a Customer or a
Reseller of the Vendor's Products, ("EITF 01-9"), which was issued in November
2001. Compaq's adoption of EITF 01-9 resulted in a change in method of
accounting for certain sales incentive offerings. Compaq recognized a cumulative
effect of an accounting change of $341 million ($222 million, net of tax). Also
in accordance with EITF 01-9, Compaq reclassified certain customer financing
costs from interest expense to net revenue.

NOTE 3 - PENDING MERGER WITH HEWLETT-PACKARD COMPANY

         On September 3, 2001, Compaq and Hewlett-Packard Company ("HP")
announced that a definitive merger agreement was unanimously approved by both
Boards of Directors, subject to, among other conditions, regulatory approval and
affirmative stockholders' vote by both companies. Under the terms of the
agreement dated as of September 4, 2001, Compaq stockholders will receive 0.6325
of a newly issued HP share for each outstanding share of Compaq common stock.
The transaction will be accounted for as a purchase. During the first quarter
2002, the proposed merger received the required European and U.S. government
regulatory approvals. On March 20, 2002, Compaq shareholders approved the
merger. On March 28, 2002, Walter Hewlett, a director and shareholder of HP
individually and as Co-Trustee of the William R. Hewlett Revocable Trust ("the
Trust"), Edwin E. van Bronkhorst, as Co-Trustee of the Trust, and the Trust
itself brought an action in the Court of Chancery of Delaware against HP in
connection with the planned merger. A bench trial on the action commenced in the
Court of Chancery on April 23, 2002 and is expected to conclude in three days. A
ruling by the presiding judge is expected in the near future following the
conclusion of the trial. On April 17, 2002, HP announced that the preliminary
vote count from the March 19, 2002 special meeting of HP shareowners affirms
that the proposed merger was approved. While the results of the HP shareholder
vote are not yet official and the outcome of the litigation against HP is
presently unknown, Compaq believes the planned merger will ultimately be
consummated; however, the outcome is presently uncertain.

                                       6

<PAGE>

NOTE 4 - CERTAIN BALANCE SHEET COMPONENTS

         Raw materials, work-in-progress and finished goods were $265 million,
$210 million and $944 million, respectively, at March 31, 2002 and $298 million,
$172 million and $932 million, respectively, at December 31, 2001.

         Accumulated depreciation was $3.9 billion at both March 31, 2002 and
December 31, 2001.

         At March 31, 2002 and December 31, 2001, Compaq held $265 million and
$370 million of equity investments, respectively, included in other non-current
assets. As of March 31, 2002, the cost basis and fair value of Compaq's
available-for-sale securities were approximately $45 million and $53 million,
respectively.

         Intangibles included in non-current other assets are shown below:

<Table>
<Caption>
(in millions)                           MARCH 31,     DECEMBER 31,
                                          2002           2001
                                       ----------    -------------
<S>                                    <C>           <C>
Gross intangibles:
     Installed customer base           $    1,224    $       1,221
     Proven research and development          545              545
     Capitalized software                     378              338
     Other intangibles                        220              230
                                       ----------    -------------
                                            2,367            2,334

Accumulated amortization:
     Installed customer base                 (308)            (287)
     Proven research and development         (413)            (386)
     Capitalized software                    (127)            (102)
     Other intangibles                       (157)            (150)
                                       ----------    -------------
                                           (1,005)            (925)

Goodwill, net                                 248              242
                                       ----------    -------------

Total intangibles, net                 $    1,610    $       1,651
                                       ==========    =============
</Table>

         Substantially all of the installed customer base intangible asset
relates to the 1998 acquisition of Digital Equipment Corporation, and the asset
was recorded at fair value. Estimated aggregate amortization expense based on
current intangibles for the next five years is as follows: $300 million in 2002,
$230 million in 2003, $150 million in 2004, $90 million in 2005 and $90 million
in 2006.

         In February 2002, Compaq reduced its multi-year revolving credit
facility that expires in October 2002 from $2.0 billion to $1.75 billion. Compaq
also has a 364-day $1.75 billion revolving credit facility that expires in
September 2002. The facilities bear interest at LIBOR plus 0.325 percent and
LIBOR plus 0.625 percent, respectively. There were no borrowings outstanding
under these facilities at March 31, 2002.

         At March 31, 2002, borrowings included $1.3 billion in commercial paper
and $275 million in debt securities maturing August 1, 2002. At December 31,
2001, borrowings included $1.2 billion in commercial paper and $275 million in
debt securities maturing August 1, 2002.

                                       7

<PAGE>

         On February 25, 2002, the Board of Directors of Compaq approved a cash
dividend of $0.025 per share of common stock, or approximately $43 million, to
stockholders of record as of March 6, 2002, payable on April 2, 2002. On
January 26, 2001, the Board of Directors of Compaq approved a cash dividend of
$0.025 per share of common stock, or approximately $42 million, to stockholders
of record as of March 31, 2001, payable on April 20, 2001.

NOTE 5 - COMPREHENSIVE INCOME (LOSS)

         The components of comprehensive income (loss), net of tax, are listed
below:

<Table>
<Caption>
                                                                    THREE MONTHS ENDED MARCH 31,
                                                                    ----------------------------
(In millions)                                                          2002            2001
-------------                                                       ------------    ------------
<S>                                                                 <C>             <C>
Net income (loss)                                                   $         44    $       (131)
Other comprehensive income (loss):
   Foreign currency translations                                             (22)              6
   Changes in gains  and losses on derivative instruments, net of
     reclassifications                                                        (9)             14
   Changes in unrealized gains and losses on investments, net of
     reclassifications                                                       (19)           (135)
                                                                    ------------    ------------
Comprehensive loss                                                  $         (6)   $       (246)
                                                                    ============    ============
</Table>

NOTE 6 - OTHER INCOME AND EXPENSE

         Other (income) and expense consisted of the following:

<Table>
<Caption>
                               THREE MONTHS ENDED MARCH 31,
                               ----------------------------
(In millions)                      2002            2001
-------------                  ------------    ------------
<S>                            <C>             <C>
Interest and dividend income   $        (32)   $       (110)
Investment income, net                   (5)            (75)
Interest expense                         29              26
Other expense, net                       57              53
                               ------------    ------------
                               $         49    $       (106)
                               ============    ============
</Table>

NOTE 7 - EARNINGS PER COMMON SHARE

         Basic earnings per common share are computed using the weighted average
number of common shares outstanding during the period. Diluted earnings per
common share are computed using the combination of dilutive common share
equivalents and the weighted average number of common shares outstanding during
the period. Stock options to purchase 231 million and 175 million shares of
common stock for the three month periods ended March 31, 2002 and 2001,
respectively, were outstanding but not included in the computation of diluted
earnings per common share because the option exercise price was greater than the
average market price of the common shares.

                                       8

<PAGE>

NOTE 8 - SEGMENT DATA

         Summary financial data by business segment follows:

<Table>
<Caption>
                                 THREE MONTHS ENDED MARCH 31,
                                 ----------------------------
(In millions)                        2002            2001
----------------                 ------------    ------------
<S>                              <C>             <C>
Enterprise Computing
   Revenue                       $      2,351    $      2,920
   Operating income                        18             144
Access
   Revenue                              3,545           4,346
   Operating loss                         (36)           (110)
Compaq Global Services
   Revenue                              1,882           1,935
   Operating income                       229             254
Segment Eliminations and Other
   Revenue                                (50)            (20)
   Operating income (loss)                (15)             20
Consolidated Segment Totals
   Revenue                       $      7,728    $      9,181
   Operating income              $        196    $        308
</Table>

         A reconciliation of Compaq's consolidated segment operating income to
consolidated income before income taxes follows:

<Table>
<Caption>
                                        THREE MONTHS ENDED MARCH 31,
                                        ----------------------------
(In millions)                               2002            2001
-------------                           ------------    ------------
<S>                                     <C>             <C>
Consolidated segment operating income   $        196    $        308
Unallocated corporate expenses                   (49)            (34)
Restructuring and related charges                 --            (249)
Merger-related costs                             (35)             --
Other income (expense), net                      (49)            106
                                        ------------    ------------
Income before income taxes              $         63    $        131
                                        ============    ============
</Table>

NOTE 9 - RESTRUCTURING AND RELATED CHARGES

         In the first and second quarters of 2001, Compaq's management approved
restructuring plans to realign its organization and reduce operating costs.
Compaq formed the Access segment and implemented significant changes in its
business model and supply chain operations. In addition, Compaq consolidated
certain functions within its global business units and reduced administrative
functions.

         Restructuring and related charges of $249 million and $493 million were
expensed during the first and second quarters of 2001, respectively. The first
quarter charge was comprised of $173 million related to employee separations,
$64 million of related asset impairment charges and $12 million for other exit
costs. The second quarter charge was comprised of $303 million related to
employee separations, $138 million of related asset impairment charges, $40
million for facility closure costs and $12 million for other exit costs. During
the fourth quarter of 2001, Compaq reversed excess reserves of $68 million for
employee separation costs accrued in conjunction with the first and second
quarter plans and expensed an additional charge of approximately the same amount
for additional reductions of 1,400 employee positions as approved by management
to further achieve its objectives of realigning its organization and reducing
operating costs. Employee separation benefits under each plan were similar and
included severance, medical and other benefits. Employee separations under the
2001 plans were substantially completed as of March 31, 2002.

                                       9

<PAGE>

         Components of accrued restructuring costs and amounts charged against
the 2001 plans as of March 31, 2002 were as follows:

<Table>
<Caption>

                                          ADJUSTMENTS
                            BEGINNING         AND          DECEMBER 31,                     MARCH 31,
 (In millions)               ACCRUAL      EXPENDITURES        2001        EXPENDITURES        2002
                          -------------   -------------   -------------   -------------   -------------
<S>                       <C>             <C>             <C>             <C>             <C>
 Employee separations     $         476   $         245   $         231   $         120   $         111
 Facility closure costs              40              15              25               6              19
 Other exit costs                    24              16               8               6               2
                          -------------   -------------   -------------   -------------   -------------
                          $         540   $         276   $         264   $         132   $         132
                          =============   =============   =============   =============   =============
</Table>

         The accrual at March 31, 2002 consists primarily of future cash
payments to employees separated prior to March 31, 2002.

NOTE 10 - LITIGATION

         Compaq is subject to legal proceedings and claims that arise in the
ordinary course of business. Compaq does not believe that the outcome of any of
those matters will have a material adverse effect on Compaq's consolidated
financial position, operating results or cash flows.

         Compaq and certain of its current and former officers and directors
were named in two consolidated class action lawsuits pending in the United
States District Court for the Southern District of Texas, Houston Division
("USDC - Houston"). One lawsuit was filed in 1998 and the other in 1999.

         The 1998 litigation consolidates five class action lawsuits brought by
persons who purchased Compaq common stock from July 10, 1997 through March 6,
1998. It asserts claims under Section 19(b) of the Securities Exchange Act of
1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder and Section 29(a) of
the Exchange Act. Allegations in the 1998 lawsuit include the claim that the
defendants withheld information and made misleading statements about channel
inventory and factoring of receivables in order to inflate the market price of
Compaq's common stock and further alleges that certain individual defendants
sold Compaq common stock at the inflated prices. In the 1998 litigation, USDC -
Houston entered an order granting class certification. Compaq appealed class
certification to United States Court of Appeals for the Fifth Circuit ("Fifth
Circuit Appellate Court"). Only July 25, 2001, Fifth Circuit Appellate Court
vacated USDC - Houston's order certifying a class and appointing class
representatives and remanded the case to USDC - Houston for further proceedings
in accordance with its opinion. A petition for rehearing before the Fifth
Circuit appellate Court was denied on January 15, 2002. On February 8, 2002,
USDC - Houston ordered plaintiffs to file supplemental motions on class
certification by April 19, 2002. Plaintiff filed a supplemental motion renewing
their motion for class certification on February 28, 2002. Compaq filed an
opposition on March 19, 2002. The matter is pending before the USDC - Houston.
Compaq is vigorously defending the 1998 lawsuit.

         The 1999 litigation also consolidated a number of class action
lawsuits. The litigation was brought on behalf of purchasers of Compaq common
stock between January 27, 1999 and April 9, 1999. It asserted claims for alleged
violations of Section 19(b) of the Exchange Act and Rule 10b-5 promulgated
thereunder, Section 20(a) of the Exchange Act; and Sections 11 and 15 of the
Securities Act of 1933 ("Securities Act"). Allegations in the 1999 litigation
included the claim that certain defendants and Compaq issued a series of
materially false and misleading statements concerning Compaq's prospectus in
1999 in order to inflate the market price of Compaq's common stock and further
alleges that certain individual defendants sold Compaq common stock at the
inflated prices. On April 1, 2002, the USDC - Houston dismissed the second
amended complaint in the 1999 litigation with prejudice.

                                       10

<PAGE>

         Compaq is a defendant in two consumer class action lawsuits, (LaPray v.
Compaq and Sprung v. Compaq) that are part of a series of similar lawsuits filed
against other major computer manufacturers, involving claims that the computer
industry sold computers with allegedly defective floppy disk controllers. LaPray
is pending in the District Court of Jefferson County, Texas, 60th Judicial
District in Beaumont ("State District Court - Beaumont") while Sprung is pending
in the United States District Court for the District of Colorado ("USDC -
Colorado"). A class certification hearing was held in LaPray on June 8, 2001.
State District Court - Beaumont entered an order granting class certification on
July 23, 2001. Compaq has appealed the class certification order. The Sprung
case has been stayed while USDC - Colorado considers Compaq's motion to dismiss.
Compaq continues to provide information to the Federal government and state
attorneys general in California and Illinois in response to inquiries regarding
floppy disk controllers in computers sold to government entities.


                                       11


<PAGE>



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         Founded in 1982, Compaq Computer Corporation is a leading global
provider of information technology products, services and solutions for
enterprise customers. Compaq Computer Corporation, together with its
consolidated subsidiaries, (collectively "Compaq") designs, develops,
manufactures and markets information technology equipment, software, services
and solutions, including industry-leading enterprise storage and computing
solutions, fault-tolerant business-critical solutions, communication products,
personal desktop and notebook computers, and personal entertainment and Internet
access devices that are sold in more than 200 countries.

         On September 3, 2001, Compaq and Hewlett-Packard Company ("HP")
announced that a definitive merger agreement was unanimously approved by both
Boards of Directors, subject to, among other conditions, regulatory approval and
affirmative stockholders' vote by both companies. Under the terms of the
agreement dated as of September 4, 2001, Compaq stockholders will receive 0.6325
of a newly issued HP share for each outstanding share of Compaq common stock.
The transaction will be accounted for as a purchase. During the first quarter
2002, the proposed merger received the required European and U.S. government
regulatory approvals. On March 20, 2002, Compaq shareholders approved the
merger. On March 28, 2002, Walter Hewlett, a director and shareholder of HP
individually and as Co-Trustee of the William R. Hewlett Revocable Trust ("the
Trust"), Edwin E. van Bronkhorst, as Co-Trustee of the Trust, and the Trust
itself brought an action in the Court of Chancery of Delaware against HP in
connection with the planned merger. A bench trial on the action commenced in the
Court of Chancery on April 23, 2002 and is expected to conclude in three days. A
ruling by the presiding judge is expected in the near future following the
conclusion of the trial. On April 17, 2002, HP announced that the preliminary
vote count from the March 19, 2002 special meeting of HP shareowners affirms
that the proposed merger was approved. While the results of the HP shareholder
vote are not yet official and the outcome of the litigation against HP is
presently unknown, Compaq believes the planned merger will ultimately be
consummated; however, the outcome is presently uncertain. Despite Compaq's
intent to complete the planned merger, as part of its ordinary course strategic
planning, Compaq continues to consider its revenue and cost forecasts, capital
resources, business units' growth and contraction and other forward looking
planning as a stand-alone entity.

         The following discussion should be read in conjunction with the interim
condensed consolidated financial statements presented in Item 1. Certain
statements contained herein may constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements involve a number of risks, uncertainties and other factors that could
cause actual results to differ materially, as discussed more fully herein.


                                       12


<PAGE>



RESULTS OF OPERATIONS

         Summary financial data by business segment follows:

<Table>
<Caption>
                                 THREE MONTHS ENDED MARCH 31,
                                 ----------------------------
(In millions)                        2002            2001
-------------                    ------------    ------------
<S>                              <C>             <C>
Enterprise Computing
   Revenue                       $      2,351    $      2,920
   Operating income                        18             144
Access
   Revenue                              3,545           4,346
   Operating loss                         (36)           (110)
Compaq Global Services
   Revenue                              1,882           1,935
   Operating income                       229             254
Segment Eliminations and Other
   Revenue                                (50)            (20)
   Operating income (loss)                (15)             20
Consolidated Segment Totals
   Revenue                       $      7,728    $      9,181
   Operating income              $        196    $        308
</Table>

         A reconciliation of Compaq's consolidated segment operating income to
consolidated income before income taxes follows:

<Table>
<Caption>
                                        THREE MONTHS ENDED MARCH 31,
                                        ----------------------------
(In millions)                               2002            2001
-------------                           ------------    ------------
<S>                                     <C>             <C>
Consolidated segment operating income   $        196    $        308
Unallocated corporate expenses                   (49)            (34)
Restructuring and related charges                 --            (249)
Merger-related costs                             (35)             --
Other income (expense), net                      (49)            106
                                        ------------    ------------
Income before income taxes              $         63    $        131
                                        ============    ============
</Table>

OVERVIEW

         Compaq reported first quarter consolidated revenue of $7.7 billion, a
decrease of 16 percent compared with the first quarter of 2001. Economic
uncertainty and competitive pricing pressures continued into the first quarter
of 2002 with revenue decreasing across all segments compared to the prior year
quarter.

         Consolidated gross margin of $1.6 billion (21 percent of revenue)
declined 2 percentage points for the quarter ended March 31, 2002 compared with
the first quarter of 2001. The competitive pricing environment and a shift in
demand to low-cost technology alternatives drove lower gross margin in all
segments.

         Consolidated operating expense, excluding merger-related costs of $35
million, was $1.4 billion for the first quarter of 2002, a reduction of $359
million, or 20 percent, compared with the first quarter of 2001. As a percentage
of revenue, operating expense decreased 1 point to 19 percent during the current
quarter compared with the prior year period. Operating expenses declined for the
fifth consecutive quarter as Compaq continued to realize cost savings related to
restructuring actions implemented in 2001.

                                       13

<PAGE>

         Compaq's effective tax rate was 30 percent for the quarters ended March
31, 2002 and 2001.

         For the first quarter of 2002, Compaq's net income (excluding special
items) was $65 million, or $0.04 per diluted common share, compared with $214
million, or $0.13 per diluted common share in the prior year quarter. On a
reported basis, Compaq's consolidated net income was $44 million, or $0.03 per
diluted common share, for the first quarter of 2002, compared with a net loss of
$131 million, or $(0.08) per diluted common share, in the prior year quarter.

         Special items in the first quarter of 2002 included merger-related
costs of $35 million; and net investment income of $5 million (collectively $21
million, net of tax), while special items in the first quarter of 2001 included
a restructuring charge of $249 million, net investment income of $75 million
(collectively $123 million, net of tax) and a cumulative effect of accounting
change of $222 million, net of tax.

ENTERPRISE COMPUTING

         Enterprise Computing designs, develops, manufactures and markets
advanced computing and telecommunications products and solutions for enterprise
customers worldwide, including business-critical servers, industry-standard
servers and storage products.

Revenue

         Enterprise Computing revenue decreased $569 million, or 19 percent,
compared with the first quarter of 2001 and represented 30 percent of
consolidated revenue during the quarter. The combination of weak economic
conditions and a shift in mix toward lower-end products significantly reduced
segment revenue. Revenue from industry-standard servers decreased as intense
price competition resulted in average selling price declines of 18 percent,
offsetting an increase in the number of units sold. Consistent with the overall
IT market, business-critical server revenue declined as large customers such as
stock exchanges and telecommunications firms reduced IT spending. Continued
pricing pressures due to customer spending constraints also led to a 19 percent
decline in enterprise storage product revenue compared with the prior year
quarter. However, Compaq shipped 35 petabytes of storage during the first
quarter of 2002 compared with 18 petabytes for the prior year quarter.

Operating Income

         Enterprise Computing operating income decreased $126 million, or 88
percent, in the first quarter of 2002 compared with the prior year period.
Overall declines in revenue, resulting from intense pricing pressures as
previously noted, and the shift in mix to lower-end products drove the decrease
in operating income. The decrease in operating income was partially offset by
continued cost reductions compared with the prior year quarter. Operating
expenses within this segment decreased in whole dollars and as a percentage of
revenue as benefits were realized from restructuring actions implemented in the
prior year.

                                       14

<PAGE>
ACCESS

         The Access business delivers personal computing products and solutions
targeting the convergence of business and home-user computing for the
Internet-connected world.

Revenue

         Access revenue decreased $801 million, or 18 percent, compared with the
first quarter of 2001 and represented 46 percent of consolidated revenue during
the quarter. Declines in revenue from the prior year period resulted from
worldwide PC market declines of six percent, continued weak economic conditions
and aggressive price competition. Average selling prices for desktops and
notebooks were lower by 6 percent and 18 percent, respectively, for the first
quarter 2002 compared with the prior year period. Weak market conditions drove
overall unit sales of desktops and notebooks lower by 15 percent compared with
the first quarter of 2001. Unit sales of the Compaq iPAQ(TM) handheld grew 14
percent compared with the prior year quarter due to lessened supply constraints.

Operating Income

         The Access business incurred an operating loss of $36 million during
the first quarter of 2002, an improvement of $74 million compared with the prior
year period. The improvement over the prior year quarter was driven by
significant continued cost reductions, as the decline in operating expense
outpaced the decline in revenue. These cost reductions resulted primarily from
actions related to the consolidation of Compaq's previous two personal computing
businesses. Segment gross margin declined compared with the prior year quarter
due to aggressive pricing and weak economic conditions. Compaq was able to
partially mitigate the downward pressure on margins by increasing its direct
sales mix 8 percentage points in North America.

COMPAQ GLOBAL SERVICES

         Compaq Global Services delivers worldwide infrastructure and solution
design implementation, management and support services, as well as leasing and
asset management services.

Revenue

         Compaq Global Services revenue decreased $53 million, or 3 percent,
compared with the first quarter of 2001 and represented 24 percent of
consolidated revenue during the quarter. Growth in financial services and
customer support was more than offset by declines in the systems integration
business. Revenue in the financial services sector increased 13 percent over the
prior year quarter driven by increased asset management and growth in the
leasing portfolio. Customer support revenue increased slightly compared with the
prior year quarter as customers continued to seek services and solutions to
increase productivity and reduce costs. While revenue benefited from customer
demand for cost-efficient solutions, continued economic weakness has caused
customers to delay spending on IT investment projects. General declines in the
IT consulting market contributed to decreased revenue from systems integration.
Pricing pressures also negatively affected revenue in the services segment due
to consumer focus on cost savings in purchasing decisions.


                                       15

<PAGE>

Operating Income

         Compaq Global Services operating income decreased $25 million, or 10
percent, during the quarter compared with the first quarter of 2001. Gross
margin declines in customer support and systems integration were partially
offset by margin growth in financial services. The current sales mix of lower
margin services and intense price competition within the systems integration
market placed downward pressure on operating income during the quarter. Compaq
continues to refine the service delivery fulfillment model in order to mitigate
downward margin pressures of business mix changes and shifting revenue profile.

RESTRUCTURING AND RELATED CHARGES

         In the first and second quarters of 2001, Compaq's management approved
restructuring plans to realign its organization and reduce operating costs.
Compaq formed the Access segment and implemented significant changes in its
business model and supply chain operations. In addition, Compaq consolidated
certain functions within its global business units and reduced administrative
functions.

         Restructuring and related charges of $249 million and $493 million were
expensed during the first and second quarters of 2001, respectively. The first
quarter charge was comprised of $173 million related to employee separations,
$64 million of related asset impairment charges and $12 million for other exit
costs. The second quarter charge was comprised of $303 million related to
employee separations, $138 million of related asset impairment charges, $40
million for facility closure costs and $12 million for other exit costs. During
the fourth quarter of 2001, Compaq reversed excess reserves of $68 million for
employee separation costs accrued in conjunction with the first and second
quarter plans and expensed an additional charge of approximately the same amount
for additional reductions of 1,400 employee positions as approved by management
to further achieve its objectives of realigning its organization and reducing
operating costs. Employee separation benefits under each plan were similar and
included severance, medical and other benefits. Employee separations under the
2001 plans were substantially completed as of March 31, 2002.

         Compaq believes that its substantially completed restructuring actions
will yield annualized savings in cost of sales and operating expenses of
approximately $950 million, in line with its previous target estimates.

         Components of accrued restructuring costs and amounts charged against
the 2001 plans as of March 31, 2002 were as follows:

<Table>
<Caption>
                                        ADJUSTMENTS
                          BEGINNING         AND        DECEMBER 31,                    MARCH 31,
 (In millions)             ACCRUAL      EXPENDITURES      2001        EXPENDITURES       2002
                         ------------   ------------   ------------   ------------   ------------
<S>                      <C>            <C>            <C>            <C>            <C>
Employee separations     $        476   $        245   $        231   $        120   $        111
Facility closure costs             40             15             25              6             19
Other exit costs                   24             16              8              6              2
                         ------------   ------------   ------------   ------------   ------------
                         $        540   $        276   $        264   $        132   $        132
                         ============   ============   ============   ============   ============
</Table>

         The accrual at March 31, 2002 consists primarily of future cash
payments to employees separated prior to March 31, 2002.

                                       16

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES

         Compaq's cash and cash equivalents decreased $172 million to $3.7
billion at March 31, 2002. The decrease resulted primarily from $22 million used
in operating activities and $145 million used in investing activities.

         Net cash of $22 million used in operating activities consisted
primarily of net income adjusted for non-cash items of $471 million, offset by
$493 million used in working capital and other activities. Net cash used in
working capital and other activities resulted primarily from a decrease in
accounts payable, restructuring and other current liabilities, partially offset
by a decrease in receivables. Days sales outstanding, inventory turns and days
payable data was as follows:

<Table>
<Caption>
                                MARCH 31,            DECEMBER 31,           MARCH 31,
                                   2002                  2001                  2001
                                ---------            ------------           ---------
<S>                             <C>                  <C>                   <C>
Days sales outstanding              49                    50                    56
Inventory turns                     17                    19                    14
Days payable                        49                    52                    48
</Table>

         Net cash of $145 million used in investing activities consisted of $153
million used for net capital expenditures partially offset by $8 million
provided by other investing activities.

         Cash used in financing activities of $1 million consisted of a decrease
in short-term borrowings of $26 million and dividends paid to stockholders of
$43 million, offset by net common stock transactions of $68 million.

         Estimated future uses of cash in 2002 include capital expenditures for
land, buildings and equipment of approximately $560 million and purchases of
equipment to be leased to third parties of approximately $260 million.

         As part of its on-going business, Compaq does not participate in
transactions that generate relationships with unconsolidated entities or
financial partnerships, such as entities often referred to as structured finance
or special purpose entities, which would have been established for the purpose
of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes.

         Compaq currently expects to fund expenditures for capital requirements
as well as liquidity needs from a combination of available cash balances,
internally generated funds and financing arrangements. In February 2002, Compaq
reduced its multi-year revolving credit facility that expires in October 2002
from $2.0 billion to $1.75 billion. Compaq also has a 364-day $1.75 billion
revolving credit facility that expires in September 2002. The facilities bear
interest at LIBOR plus 0.325 percent and LIBOR plus 0.625 percent, respectively.
There were no borrowings outstanding under these facilities at March 31, 2002.
Compaq operates two short-term commercial paper programs authorized for a total
of $4.7 billion. These programs are supported by the two $1.75 billion credit
facilities. Outstanding commercial paper reduces available borrowings under
these credit facilities. At March 31, 2002, Compaq had $1.3 billion in
commercial paper outstanding under the programs, with a weighted average
interest rate of 2.3 percent. The carrying amount of the borrowings under the
commercial paper programs approximates their fair value. Additionally, Compaq
maintains various lines of credit, totaling $537 million, which were unused at
March 31, 2002.

                                       17

<PAGE>



         In May 2000, Compaq registered $2.0 billion of debt securities. Compaq
had the following debt securities outstanding under its effective registration
statement as of March 31, 2002:

<Table>
<Caption>
          DATE              AMOUNT          INTEREST RATE           INTEREST PAYABLE              MATURITY DATE
     ----------------    --------------     --------------      -----------------------          ----------------
<S>                      <C>                <C>                 <C>                              <C>
       August 2000       $300 million           7.65%           February 1 and August 1           August 1, 2005
       August 2000       $275 million           7.45%           February 1 and August 1           August 1, 2002
</Table>

         In February 2001, Compaq established under its effective registration
statement a $1.4 billion medium-term notes program for issuance of debt
securities due nine months or more from date of issue. Compaq had the following
debt securities outstanding under its medium-term notes program as of March 31,
2002:

<Table>
<Caption>
          DATE              AMOUNT          INTEREST RATE           INTEREST PAYABLE              MATURITY DATE
     ----------------    --------------     --------------      -----------------------          ----------------
<S>                      <C>                <C>                 <C>                              <C>
        May 2001         $300 million           6.2%             May 15 and November 15            May 15, 2003
</Table>

         The net proceeds from the sale of these senior unsecured debt
securities were used for general corporate purposes including investments in
Compaq's leasing operations, capital expenditures and repayment of outstanding
indebtedness (including commercial paper issued for working capital purposes).
At March 31, 2002, Compaq had the capacity to issue an additional $1.1 billion
under its medium-term notes program.

         Compaq's contractual obligations at March 31, 2002, and the effect such
obligations are expected to have on its liquidity and cash flow in future
periods have not changed materially since December 31, 2001.

         Compaq is in compliance with all covenants or other requirements set
forth in its credit agreements or indentures. Further, Compaq does not have any
rating downgrade triggers that would accelerate the maturity dates of its debt.
However, a downgrade in Compaq's credit rating could adversely affect Compaq's
ability to renew existing, or obtain access to new, credit facilities in the
future and could increase the cost of such facilities. For example, a downgrade
in credit rating could preclude Compaq's ability to issue commercial paper under
its current programs. Should this occur, Compaq would seek alternative sources
of funding, including issuance of bonds under its existing medium-term notes
program and other potential bond offerings, and secured lending. In addition,
Compaq has the ability at its option to draw upon its $1.75 billion revolving
credit facility prior to its commitment termination in September 2002 with
repayment due in September 2003.

                                       18

<PAGE>



FACTORS THAT MAY AFFECT FINANCIAL CONDITION AND FUTURE RESULTS

          Compaq participates in a highly volatile industry that is
characterized by intense industry-wide competition. Industry participants
confront aggressive pricing practices by competitors, continually changing
customer demand patterns and rapid technological developments. The following
cautionary statements discuss important factors that could cause actual results
to differ materially from the projected results contained in the forward-looking
statements in this report.

         Compaq's business and stock price may be adversely affected if the
merger with Hewlett-Packard Company ("HP") is not completed. On September 4,
2001, Compaq entered into an agreement to combine its business with HP. If the
merger is not completed, Compaq could be subject to a number of risks that may
adversely affect its business and stock price, including: Compaq would not
realize the benefits it expects by being part of a combined company with HP, as
well as the potentially enhanced financial and competitive position as a result
of being part of the combined company; the diversion of management attention
from Compaq's day-to-day business and the unavoidable disruption to its
employees and its relationships with customers and joint venture partners as a
result of efforts and uncertainties relating to Compaq's anticipated merger with
HP may detract from its ability to grow revenues and minimize costs, which, in
turn may lead to a loss of market position that Compaq could be unable to regain
if the merger does not occur; Compaq's ability to borrow in certain capital
markets, such as the commercial paper market, may be hindered, resulting in
increased borrowing costs, more restrictive covenants and the extension of less
open credit; the market price of shares of Compaq's common stock may decline to
the extent that the current market price of those shares reflects a market
assumption that the merger will be completed; Compaq must pay the costs related
to the merger, such as legal and accounting fees and a portion of the investment
banking fees; and Compaq may not be able to continue its present level of
operations, may need to scale back its business, may have to consider additional
reductions in force, may have to consider alternative sources of funding and may
not be able to take advantage of future opportunities or effectively respond to
competitive pressures, any of which could have a material adverse effect on its
business and results of operations.

         The delay in closing the planned merger could have an adverse effect on
Compaq's revenues in the near-term if customers delay, defer, or cancel
purchases pending completion of the planned merger with HP. To the extent a
prolonged delay in completing the planned merger creates uncertainty among those
persons and organizations contemplating purchases of products or services such
that several large customers, or a significant group of small customers, delay
purchase decisions pending resolution of the planned merger, this could have an
adverse effect on Compaq's results of operations, and quarterly revenues could
be substantially below the expectations of market analysts and could cause a
reduction in stock price. Compaq has implemented customer assurance programs to
address the risk of customer loss due to their uncertainty relating to the
planned merger, which may result in additional obligations of Compaq that could
result in higher long-term costs to Compaq.

         Continued weak global economic conditions could adversely impact
Compaq's revenues and growth rate. During the past year, the information
technology market weakened, first in the United States, then in Europe and Asia.
Continued softness in these markets, particularly in the telecommunications and
consumer sectors, and purchasers' uncertainty about the extent of the global
economic downturn could result in lower demand for products and services. Compaq
has observed effects of the global economic downturn in many areas of its
business. For example, the downturn has contributed to reported net revenue and
gross margin declines, reflecting the effect of competitive pressures. The
economic downturn also has led, in part, to restructuring actions and
contributed to write-downs to reflect the impairment of certain investments in
Compaq's investment portfolio. While worsening economic conditions have had a
negative impact on revenues to date, revenues, gross margins and earnings could
further deteriorate or Compaq's growth rate could be adversely affected in the
future as a result of economic conditions.

                                       19

<PAGE>

        The competitive environment in the information technology industry
places pressure on revenue, gross margins and market share. Competition remains
intense in the information technology industry with a large number of
competitors vying for customers and market share domestically and
internationally. These competitive factors have spurred more aggressive pricing
tactics due to the softness in the information technology industry, which
continues to put pressure on revenue, gross margins and market share. In 2002,
Compaq intends to continue aggressive pricing and programs to drive demand
generation in core markets and to reduce reseller inventories. Compaq cannot
guarantee that programs and lower prices will generate growth in demand, or that
the growth in demand will offset the relative reduction in its gross margins.
Further, if its pricing and programs are not sufficiently competitive with the
pricing and programs offered by its current and future competitors, Compaq may
lose market share, which could adversely affect its revenues and prospects.
Failure to successfully manage operating expenses, in connection with pricing
programs, could adversely affect results of operations.

         Expansion of Compaq's solutions model could be delayed by cost
constraints and organizational transition, which may have an adverse impact on
its revenues. Compaq is focusing its business development on offering total
information technology solutions to its customers. To succeed in this effort,
Compaq must continue to expand its vertical industry presence, increase its
service and software offerings, and offer programs that enable its customers to
purchase information technology as a utility. Compaq must also invest
significant resources in developing new solutions offerings and retain or
develop significant new employee skills. Compaq's failure to successfully expand
its information technology solutions model or delay in its internal development
or its acquisition of significant external resources in this area could result
in its offerings not being competitive and lead to a reduction in consumer
demand for its products and services, which could adversely affect its revenues.

         The consolidation of Compaq's high performance servers on a single
microprocessor architecture could adversely affect its revenues. In June 2001,
Compaq announced a strategic alliance with Intel that, over a multi-year period,
will lead to consolidation of its NonStop(TM) Himalya(TM) and AlphaServer(TM)
systems onto a single microprocessor architecture. The transition to the Intel
architecture could lead to the loss of potential new business for Compaq's
high-end enterprise products with different microprocessor architecture and
service business associated with such products and, more significantly, the loss
of current customers to high-end enterprise hardware competitors in this sector.
Compaq believes it has successfully communicated its product transition strategy
to its customers and while Compaq has not observed a significant loss of
existing customers or new business in the period since the announced strategic
alliance with Intel, such a loss of business or current customers in the
high-end performance enterprise server market could adversely affect Compaq's
revenues.

         Compaq's failure to timely and successfully implement changes in its
delivery models could negatively affect its revenues. Compaq uses a variety of
delivery models to sell its broad array of products and services. Compaq sells
directly to end-users in all market sectors, but the largest proportion of its
direct hardware sales is in large United States enterprise accounts. Some of
Compaq's computing hardware products are sold to the commercial market through
third-party resellers while some consumer personal computing products are sold
through retail outlets. Compaq has established a variety of programs designed to
achieve improved operational capabilities for all of its delivery models by
simplifying its product set and pricing model, re-engineering its channel
delivery model and more rapidly expanding its e-commerce capabilities for large,
medium and small businesses. Should Compaq fail to implement the most
advantageous delivery model for each of its products and services, Compaq could
lose market opportunities which could result in an adverse impact on its
revenues.

                                       20

<PAGE>

         As Compaq continues to increase its commitment to direct sales, Compaq
could risk alienating channel partners and adversely affecting its distribution
model which, in turn, could adversely affect Compaq's revenues. Compaq's
business model is slowly evolving from a distribution model to a direct and
auto-replenishment model. Since direct sales made by Compaq may compete with the
sales made by third-party resellers and distributors, these third-party
resellers and distributors may elect to use other suppliers that do not directly
sell their own products. Therefore, any increase by Compaq of its commitment to
direct sales could alienate some of its channel partners, particularly in the
European Union where the direct sales model is not widely embraced. As a result,
Compaq may lose some of its customers that purchase from third-party resellers
or distributors, which in turn could adversely affect Compaq's revenues.

         Erosion of the financial condition of customers could adversely affect
Compaq's business. Compaq continually monitors and manages the credit it extends
to its customers and attempts to limit credit risks by utilizing risk transfer
arrangements and obtaining security interests. Compaq's business could be
adversely affected in the event that the financial condition of its customers
erodes. As the global information technology market weakens, the likelihood of
the erosion of the financial condition of these customers increases. Upon the
financial failure of a customer, Compaq could experience disruptions in
distribution as well as a loss associated with the unsecured portion of any of
its outstanding accounts receivable. Additionally, Compaq provides information
technology leasing and financing solutions to customers. As a consequence,
Compaq is exposed to the risk that lessees will be unable to make required lease
payments and to the risk that leased equipment will be worth less upon its
return to Compaq than was estimated at lease inception. While Compaq believes
that its allowances for credit losses are adequate and that its estimates of the
residual values of leased equipment are reasonable, these allowances may not
cover actual losses and Compaq may not realize estimated residual values, both
of which could adversely affect its business.

         Compaq's failure to successfully align its service practices with the
trend toward industry-standard products could adversely affect its business.
Compaq's Global Services business has traditionally provided services that
included the design and implementation of both high-end proprietary systems and
industry-standard products. As the trend for design and implementation of
systems continues to move from proprietary environments to industry-standard
products, Compaq will need to continue to accelerate retraining and rebalancing
its services workforce to compete in the new environment. Compaq's failure to
successfully continue rebalancing, training, and attracting the necessary
personnel to achieve this transition as Compaq adapts its service practices to
changing conditions could adversely affect its business.

         Unanticipated delays in Compaq's product schedules could negatively
affect product demand and adversely affect its business. The process of
developing new high-technology products and services is complex and often
uncertain due to the frequent introduction of new products that offer improved
performance and pricing. Compaq's ability to successfully transition products
and deploy new products requires that Compaq make accurate predictions of the
product development schedule as well as volumes, product mix, customer demand
and configuration. Compaq may anticipate demand and perceived market acceptance
that differs from the product's realizable customer demand and revenue stream.
Further, in the face of intense industry competition, any delay in the
development, production or marketing of a new product could decrease any
advantage Compaq may have to be the first or among the first to market. Compaq's
failure to carry out a product rollout in the time frame anticipated and in the
quantities appropriate to customer demand could adversely affect the future
demand for its products and the related services and have an adverse effect on
its business.

                                       21

<PAGE>

         Compaq's quarterly sales cycle makes planning and operational
efficiencies difficult and future financial results less predictable. Like other
technology companies, Compaq generally sells more hardware products in the third
month of each quarter than in the first and second months. Despite recent
improvements in linearity, this sales pattern places pressure on manufacturing
and logistics systems based on internal forecasts and may adversely affect
Compaq's ability to predict its financial results accurately. In addition, to
rationalize manufacturing utilization, Compaq may build products early in the
quarter in anticipation of demand late in the quarter. Developments late in a
quarter, such as lower-than-anticipated product demand, a systems failure,
component pricing movements, or global logistics disruptions could adversely
impact inventory levels, cash and related profitability in a manner that is
disproportionate to the number of days in the quarter affected.

         The risks of doing business in developing countries and economically
volatile areas could adversely affect Compaq's operations and earnings. Compaq's
operations in developing countries, such as Brazil and India, and the expansion
of sales into economically volatile areas, such as Asia-Pacific, Latin America
and other emerging markets, subject Compaq to a number of economic and other
risks. Such risks include financial instability among customers in these
regions, the volatility of economic conditions in countries dependent on exports
from the United States and European markets, and political instability and
potential conflicts among developing nations. Compaq generally has experienced
longer accounts receivable cycles in emerging markets, in particular Latin
American markets, when compared with the United States and European markets.
Compaq is also subject to any political and financial instability in the
countries in which it operates, including inflation, recession, trade protection
measures, local labor conditions, and unexpected changes in regulatory
requirements, currency devaluation and interest rate fluctuations. Compaq's
failure to successfully manage economic, political and other risks relating to
doing business in developing countries and economically and politically volatile
areas could adversely affect its business.

         Compaq's reliance on third-party suppliers could curtail production.
Compaq depends on many third-party suppliers, such as Original Equipment
Manufacturers (OEMs) and Electronic Manufacturing Services (EMS) companies, for
key components contained in its product offerings and certain other supply chain
functions. For some of these components, Compaq may only use a single source
supplier. From time to time, the supply for key components in its products lags
behind worldwide demand. If the supply of a key material component is delayed or
curtailed, Compaq's ability to ship the related product in desired quantities
and in a timely manner could be adversely affected. For example, in 2001 Compaq
experienced shortages in microprocessors and printed circuit assemblies, which
constrained production. In the event that the financial condition of Compaq's
third-party suppliers for key components were to erode, the delay or curtailment
of deliveries of key material components could occur. Further, Compaq's reliance
on third-party suppliers of key material components exposes it to potential
product quality issues that could affect the reliability and performance of its
product set. Compaq's inability to ship its products in desired quantities and
in a timely manner due to a delay or curtailment of the supply of material
components, or product quality issues arising from faulty components
manufactured by third-party suppliers, could adversely affect the market for its
products and lead to a reduction in its revenues. Compaq's attempts to mitigate
the risk of reliance on third-party suppliers by working closely on product
plans, coordinated product introductions, purchases on the spot market and
selected strategic purchases could also fail.

                                       22

<PAGE>

         Delays in implementing Compaq's business and information management and
system improvements could adversely affect its business. Compaq continues to
focus on increasing the effectiveness and efficiency of its business and
information management processes to increase customer satisfaction, improve
productivity and lower costs. In 2002, Compaq continues to focus on improvements
required to support more direct sales and changes in its manufacturing supply
chain operations to improve inventory levels. Capital investments to improve its
systems infrastructure and increase system security could be hampered by its
need to balance increased operational efficiency against budgetary constraints.
Delays in implementing the improvements necessary to support more direct sales
and changes to Compaq's manufacturing supply chain operations could adversely
affect its business.

        Compaq's stock price, like that of other technology companies, can be
volatile. Some of the factors that could affect Compaq's stock price are
Compaq's, or a competitor's, announcement of new products, services or
technological innovations, quarterly increases or decreases in revenue or
earnings, changes in revenue or earnings estimates by the investment community,
and speculation in the press or investment community about Compaq's financial
condition or results of operations. General market conditions and domestic or
international economic factors unrelated to Compaq's performance may also affect
its stock price. For these reasons, investors should not rely on recent trends
to predict future stock prices or financial results. In addition, following
periods of volatility in a company's securities, securities class action
litigation against a company is sometimes instituted. This type of litigation
could result in substantial costs and the diversion of management time and
resources.
         Because of the foregoing factors (Factors That May Affect Financial
Condition and Future Results), as well as other variables affecting Compaq's
operating results, past financial performance should not be considered a
reliable indicator of future performance and investors should not use historical
trends to anticipate results or trends in future periods.

                                       23

<PAGE>



ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         For quantitative and qualitative disclosures about market risks
affecting Compaq, see Item 7A "Quantitative and Qualitative Disclosure About
Market Risk" of Compaq's Annual Report on Form 10-K for the year ended December
31, 2001. Compaq's exposure to market risks has not changed materially since
December 31, 2001.


                                       24

<PAGE>



                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         See Note 10 to unaudited interim condensed consolidated financial
statements.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the special meeting of stockholders of Compaq on March 20, 2002, the
stockholders voted on the proposal to approve and adopt the Agreement and Plan
of Reorganization among Hewlett-Packard Company, Heloise Merger Corporation and
Compaq, and to approve the merger contemplated by the agreement and Plan of
Merger. The results of the vote were:

<Table>
<Caption>
      NUMBER OF SHARES            NUMBER OF SHARES                                   NUMBER OF SHARES
         VOTED FOR                 VOTED AGAINST               ABSTENTIONS           BROKER NON-VOTES
<S>                               <C>                         <C>                    <C>
     1,059,041,372.740            105,182,599.644             6,791,066.094                    0
</Table>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         Exhibit No.       Description

(a)

         10.1     Letter dated December 4, 2001, regarding Notice of Compaq
                  Computer Corporation's ("Compaq") Commitment Reduction to the
                  $3,000,000,000 Credit Agreement among Compaq, the banks
                  signatory thereto and the Bank of America National Trust
                  Savings Association, as Administrative Agent.

         10.2     Letter dated January 31, 2002, regarding Notice of Compaq's
                  Commitment Reduction to the $3,000,000,000 Credit Agreement
                  among Compaq, the banks signatory thereto and the Bank of
                  America National Trust Savings Association, as Administrative
                  Agent.

(b)      Reports on Form 8-K

     (i)      Report on Form 8-K, dated January 31, 2002, containing Compaq
              Computer Corporation's ("Compaq") news release dated January 31,
              2002, reporting that the European Commission gave formal clearance
              to the proposed merger between Hewlett-Packard Company ("HP") and
              Compaq.

     (ii)     Report on Form 8-K, dated February 5, 2002, containing Compaq's
              news release dated February 5, 2002, reporting that a special
              meeting of shareholders will be held on March 20, 2002, to vote on
              the proposed merger with HP.

     (iii)    Report on Form 8-K, dated March 6, 2002, containing Compaq's news
              release dated March 6, 2002, reporting that the U.S. Federal Trade
              Commission closed its investigation of the proposed merger between
              HP and Compaq.

                                       25

<PAGE>

     (iv)     Report on Form 8-K, dated March 20, 2002, containing Compaq's news
              release dated March 20, 2002, reporting that a majority of the
              holders of the common stock of Compaq approved the proposed merger
              between HP and Compaq at a special shareholders meeting held on
              March 20, 2002.

     (v)      Report on Form 8-K, dated April 8, 2002, containing Compaq's news
              release dated April 8, 2002, reporting that, based on preliminary
              financial data, revenue for the first quarter ended March 31,
              2002, is expected to be approximately $7.7 billion, which would
              meet or exceed current analyst expectations.

     (vi)     Report on Form 8-K, dated April 18, 2002, containing Compaq's
              news release dated April 18, 2002, announcing its earnings
              release for the first quarter of 2002 and attaching the financial
              discussion document from Compaq's website supplementing the
              information in the news releases for the first quarter of 2002.

All other items specified by Part II of this report are inapplicable and
accordingly have been omitted.





                                       26


<PAGE>



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


April 24, 2002                                COMPAQ COMPUTER CORPORATION



                                                    /s/ Jeff Clarke
                                                    ----------------------------

                                                    Jeff Clarke
                                                    Senior Vice President,
                                                    Finance and Administration
                                                    and Chief Financial Officer
                                                    (as authorized officer and
                                                    as principal financial
                                                    officer)


                                       27

<PAGE>
                                 EXHIBIT NUMBER

<Table>
<Caption>
       EXHIBIT
       NUMBER     DESCRIPTION
       -------    -----------
<S>               <C>
         10.1     Letter dated December 4, 2001, regarding Notice of Compaq
                  Computer Corporation's ("Compaq") Commitment Reduction to the
                  $3,000,000,000 Credit Agreement among Compaq, the banks
                  signatory thereto and the Bank of America National Trust
                  Savings Association, as Administrative Agent.

         10.2     Letter dated January 31, 2002, regarding Notice of Compaq's
                  Commitment Reduction to the $3,000,000,000 Credit Agreement
                  among Compaq, the banks signatory thereto and the Bank of
                  America National Trust Savings Association, as Administrative
                  Agent.
</Table>