<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the quarterly period ended September 28, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5296
DIGITAL EQUIPMENT CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2226590
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
111 Powdermill Road, Maynard, Massachusetts 01754
(Address of principal executive offices) (Zip Code)
(508) 493-5111
(Registrant's telephone number, including area code)
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.
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date. Number of shares of Common
Stock, par value $1, outstanding as of September 28, 1996: 154,894,180.
<PAGE> 2
DIGITAL EQUIPMENT CORPORATION
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share data)
<CAPTION>
Three-Month Period Ended
-----------------------------
September 28, September 30,
1996 1995
------------- -------------
<S> <C> <C>
REVENUES
Product sales ...................................... $1,522,163 $1,818,659
Service revenues ................................... 1,389,478 1,452,461
---------- ----------
TOTAL OPERATING REVENUES ........................... 2,911,641 3,271,120
---------- ----------
COSTS AND EXPENSES
Cost of product sales .............................. 1,048,390 1,256,678
Service expense .................................... 951,183 960,907
Research and engineering expenses .................. 257,644 256,432
Selling, general and administrative expenses ....... 732,175 734,434
---------- ----------
Operating income/(loss) ............................ (77,751) 62,669
Other (income)/expense, net ........................ (16,172) 5,892
---------- ----------
INCOME/(LOSS) BEFORE INCOME TAXES .................. (61,579) 56,777
Provision for income taxes ......................... 4,302 8,606
---------- ----------
NET INCOME/(LOSS) .................................. (65,881) 48,171
Dividend on preferred stock ........................ 8,875 8,875
---------- ----------
NET INCOME/(LOSS) APPLICABLE TO COMMON STOCK ....... $ (74,756) $ 39,296
========== ==========
NET INCOME/(LOSS) APPLICABLE PER COMMON SHARE (1) .. $ (0.48) $ 0.26
========== ==========
<FN>
(1) Net loss applicable per common share is based only on the weighted
average number of common shares outstanding during the period: 154,335,259
shares for the three months ended September 28, 1996. Net income applicable per
per common share is based on the weighted average number of common shares and
common share equivalents outstanding during the period: 151,574,303 for the
three months ended September 30, 1995. See page 7 of this report.
</TABLE>
Cash dividends on common stock have never been paid by the Corporation.
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 3
DIGITAL EQUIPMENT CORPORATION
<TABLE>
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
September 28, June 29,
1996 1996
------------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash, cash equivalents and short-term investments .. $2,040,625 $ 2,039,158
Accounts receivable, net of allowances
of $183,231 and $182,033 ........................... 2,932,850 3,223,293
Inventories ........................................
Raw materials ...................................... 467,432 536,911
Work-in-process .................................... 407,972 439,318
Finished goods ..................................... 805,693 844,582
---------- -----------
Total inventories .................................. 1,681,097 1,820,811
Prepaid expenses, deferred income taxes
and other current assets ........................... 370,814 336,836
---------- -----------
TOTAL CURRENT ASSETS ............................... 7,025,386 7,420,098
---------- -----------
Property, plant and equipment, at cost ............. 5,099,045 5,120,110
Less accumulated depreciation ...................... 2,902,028 2,897,190
---------- -----------
Net property, plant and equipment .................. 2,197,017 2,222,920
Other assets ....................................... 415,322 432,363
---------- -----------
TOTAL ASSETS ....................................... $9,637,725 $10,075,381
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
DIGITAL EQUIPMENT CORPORATION
<TABLE>
CONSOLIDATED BALANCE SHEETS (continued)
(Dollars in thousands)
<CAPTION>
September 28, June 29,
1996 1996
------------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank loans and current portion
of long-term debt ................................ $ 16,938 $ 17,896
Accounts payable ................................. 716,233 903,618
Income taxes payable ............................. 79,079 79,528
Salaries, wages and related items ................ 624,410 632,413
Deferred revenues and customer advances .......... 1,052,618 1,099,328
Accrued restructuring costs ...................... 541,208 619,416
Other current liabilities ........................ 838,438 879,434
---------- -----------
TOTAL CURRENT LIABILITIES ........................ 3,868,924 4,231,633
---------- -----------
Long-term debt ................................... 1,002,166 999,131
Postretirement and other postemployment
benefits ......................................... 1,279,505 1,238,411
---------- -----------
TOTAL LIABILITIES ................................ 6,150,595 6,469,175
---------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, $1.00 par value (liquidation
preference of $100.00 per share);
authorized 25,000,000 shares; 4,000,000 shares
of Series A 8-7/8% Cumulative Preferred Stock
issued and outstanding ........................... 4,000 4,000
Common stock, $1.00 par value; authorized
450,000,000 shares; 156,394,180 and
155,504,284 shares issued ........................ 156,394 155,504
Additional paid-in capital ....................... 3,776,293 3,764,224
Retained deficit ................................. (392,278) (317,522)
Treasury stock at cost; 1,500,000 shares
and 0 shares ..................................... (57,279) --
---------- -----------
TOTAL STOCKHOLDERS' EQUITY ....................... 3,487,130 3,606,206
---------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ....... $9,637,725 $10,075,381
========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
DIGITAL EQUIPMENT CORPORATION
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<CAPTION>
Three-Month Period Ended
----------------------------
September 28, September 30,
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) ................................. $ (65,881) $ 48,171
Adjustments to reconcile net income/(loss) to
net cash from operating activities:
Depreciation ...................................... 97,386 98,438
Amortization ...................................... 15,155 16,894
Gain on disposition of other assets ............... (12,330) --
Other adjustments to net income/(loss) ............ 28,741 9,292
Decrease in accounts receivable ................... 290,443 170,962
(Increase)/decrease in inventories ................ 139,714 (163,005)
(Increase)/decrease in prepaid expenses and other
current assets .................................... (33,269) 53,768
Decrease in accounts payable ...................... (187,385) (162,104)
Increase/(decrease) in taxes ...................... (1,133) 19,602
Increase in salaries, wages, benefits
and related items ................................. 33,091 32,091
Decrease in deferred revenues and
customer advances ................................. (46,710) (151,001)
Decrease in accrued restructuring costs ........... (78,208) (99,199)
Increase/(decrease) in other current liabilities .. (41,398) 99,788
--------- ---------
Total adjustments ................................. 204,097 (74,474)
--------- ---------
Net cash flows from operating activities .......... 138,216 (26,303)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in property, plant and equipment ....... (86,338) (78,486)
Proceeds from the disposition of
property, plant and equipment ..................... 2,671 6,965
Purchases of short-term investments ............... (658,212) (41,472)
Maturities of short-term investments .............. 159,511 61,752
Additions to other assets ......................... (4,201) (20,572)
Proceeds from the disposition of other assets ..... 8,262 4,693
--------- ---------
Net cash flows from investing activities .......... (578,307) (67,120)
--------- ---------
Net cash flows from operating and
investing activities .............................. (440,091) (93,423)
--------- ---------
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
DIGITAL EQUIPMENT CORPORATION
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Dollars in thousands)
<CAPTION>
Three-Month Period Ended
------------------------------
September 28, September 30,
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of debt ........... 3,035 --
Payments to retire debt ...................... (1,223) (1,559)
Purchase of treasury shares .................. (57,279) --
Issuance of common shares .................... 7,199 23,300
Dividend on preferred stock .................. (8,875) (8,875)
---------- ----------
Net cash flows from financing activities ..... (57,143) 12,866
---------- ----------
Net decrease in cash and cash equivalents .... (497,234) (80,557)
Cash and cash equivalents at the
beginning of the year ........................ 1,791,754 1,531,849
---------- ----------
Cash and cash equivalents at end of period ... $1,294,520 $1,451,292
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
DIGITAL EQUIPMENT CORPORATION
<TABLE>
COMPUTATION OF NET INCOME/(LOSS) PER COMMON AND COMMON EQUIVALENT SHARE
(Dollars in thousands except per share data)
<CAPTION>
Three-Month Period Ended
-------------------------------
September 28, September 30,
1996 1995
------------- -------------
<S> <C> <C>
Net income/(loss) applicable to common and
common equivalent shares ..................... $ (74,756) $ 39,296
============ ============
Weighted average number of common shares
outstanding during the period ................ 154,335,259 149,592,266
Common stock equivalents from application
of "treasury stock" method to unexercised
and outstanding stock options ................ -- 1,982,037
------------ ------------
Total weighted average number of common
and common equivalent shares outstanding
during the period ............................ 154,335,259 151,574,303
============ ============
Net income/(loss) applicable per common
and common equivalent share .................. $ (0.48) $ 0.26
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
DIGITAL EQUIPMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Significant Accounting Policies
Principles of consolidation: The accompanying unaudited financial statements as
of and for the three month periods ended September 28, 1996 and September 30,
1995 have been prepared on substantially the same basis as the annual
consolidated financial statements, reflecting all adjustments of a normal
recurring nature. In the opinion of management, the financial statements reflect
all adjustments necessary for a fair presentation of the results for those
periods and the financial condition at those dates. Certain prior year's amounts
have been reclassified to conform with the current year presentation.
Short term investments: Investments with maturities greater than three months at
date of acquisition mature in less than one year from the balance sheet date and
are classified as short-term investments. Short-term investments are valued at
cost plus accrued interest, which approximates market.
<TABLE>
<CAPTION>
(in thousands) September 28, 1996 June 29, 1996
- - --------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents $1,294,520 $1,791,754
Short-term investments 746,105 247,404
- - --------------------------------------------------------------------------------------
Cash, cash equivalents and
short-term investments $2,040,625 $2,039,158
- - --------------------------------------------------------------------------------------
<CAPTION>
Other (income)/expense, net:
(in thousands) September 28, 1996 September 30, 1995
- - --------------------------------------------------------------------------------------
<S> <C> <C>
Interest income $(25,050) $(17,527)
Interest expense 21,165 23,419
Net (gain)/loss on divestments (12,287) --
- - --------------------------------------------------------------------------------------
Other (income)/expense, net $(16,172) $ 5,892
- - --------------------------------------------------------------------------------------
</TABLE>
Note B - Restructuring Actions
During the first three months of fiscal 1997, restructuring actions resulted in
approximately 1,000 employee separations, with respect to which the Corporation
incurred costs of approximately $44 million, net of postretirement benefits
curtailment gains.
During the first quarter of fiscal 1997, the Corporation incurred costs of
approximately $37 million for facility closures and related actions. Cash
expenditures of $37 million for these actions were offset by proceeds of $3
million from the sale of property, plant and equipment.
8
<PAGE> 9
Note C - Litigation
Several purported class action lawsuits were filed against the Corporation
during the fourth quarter of fiscal 1994 alleging violations of the Federal
securities laws arising from alleged misrepresentations and omissions in
connection with the Corporation's issuance and sale of Series A 8-7/8%
Cumulative Preferred Stock and the Corporation's financial results for the
quarter ended April 2, 1994. During fiscal 1995, the lawsuits were consolidated
into three cases, which were pending before the United States District Court for
the District of Massachusetts. On August 8, 1995, the Massachusetts federal
court granted the defendants' motion to dismiss all three cases in their
entirety. On September 6, 1995, notices of appeal were filed in two of the
cases. On May 7, 1996, the United States Court of Appeals for the First Circuit
affirmed in part and reversed in part the dismissal of the two cases, and
remanded for further proceedings.
Note D - Treasury Stock
During the first quarter of fiscal 1997, the Corporation purchased in the open
market 1.5 million shares of its common stock for an aggregate purchase price of
$57.3 million, or $38.19 per common share. All of the acquired shares are held
in treasury.
9
<PAGE> 10
Management's Discussion and Analysis of Financial Condition and Results of
Operations
REVENUES
Total operating revenues for the first quarter of fiscal 1997 were $2.9 billion,
down 11% from the comparable quarter last year. Total operating revenues
included product sales of $1.5 billion and service revenues of $1.4 billion.
Operating revenues from customers outside of the United States were $1.9
billion, or 65% of total revenues, and $2.1 billion, or 63% of total revenues,
for the first quarter of fiscal 1997 and 1996, respectively. The net effect of
the translation of local currency revenue into U.S. dollars was negative in the
first three months of fiscal 1997 compared with the first three months of fiscal
1996.
<TABLE>
<CAPTION>
Revenues (dollars in millions)
- - --------------------------------------------------------------------------------
First quarter of fiscal year 1997 1996
- - --------------------------------------------------------------------------------
<S> <C> <C>
Product sales $1,522 $1,819
% of total revenues 52% 56%
- - --------------------------------------------------------------------------------
Service revenues $1,390 $1,452
% of total revenues 48% 44%
- - --------------------------------------------------------------------------------
Total revenues $2,912 $3,271
- - --------------------------------------------------------------------------------
</TABLE>
Product sales for the first three months of fiscal 1997 were down
16% from the comparable period last year. Disruptions resulting from changes in
the sales organization contributed to the decline in product sales. These
changes are intended to increase the extent and effectiveness of account
coverage and to achieve greater sales productivity. The Corporation expects that
the benefits of these changes are not likely to be fully realized until the
second half of the fiscal year and beyond. In addition, the decline in product
sales was impacted by a planned reduction in inventories in distribution
channels, the effects of divestments and discontinued product lines, and as
noted above, the effects of currency exchange rate movements.
For the first quarter of fiscal 1997, Alpha-based systems revenues
increased 4%, representing 30% of product sales for the first quarter of fiscal
1997, compared with 24% for the same period last year. Revenues from sales of
Intel-based personal computer systems declined 17% for the quarter compared with
the first quarter last year, representing 27% of product sales for the first
quarter of fiscal 1997, unchanged from the comparable period last year. Revenues
from the Corporation's other product businesses, including VAX systems, storage
subsystems, networks and software, declined 24% and represented 43% of product
sales for the first quarter of fiscal 1997, compared with 49% for the comparable
period of fiscal 1996.
Service revenues for the first quarter of fiscal 1997 were $1.4 billion, down 4%
from 1.5 billion in the same quarter of fiscal 1996. Decreased revenues from the
Digital products maintenance business were partially offset by increased
revenues from multivendor services.
10
<PAGE> 11
EXPENSES AND PROFIT MARGINS
<TABLE>
<CAPTION>
Gross margin (dollars in millions)
- - --------------------------------------------------------------------------------
First quarter of fiscal year 1997 1996
- - --------------------------------------------------------------------------------
<S> <C> <C>
Product sales gross margin $474 $562
% of related revenues 31% 31%
- - --------------------------------------------------------------------------------
Service revenues gross margin $438 $492
% of related revenues 32% 34%
- - --------------------------------------------------------------------------------
</TABLE>
Product gross margin was 31% of product sales for the first quarter of fiscal
1997 and 1996. Product gross margin remained stable due principally to an
increased proportion of revenues from sales of higher-margin Alpha-based systems
and manufacturing cost efficiencies, offset by lower sales volume.
Service gross margin was 32% of service revenues for the first three months of
fiscal 1997 compared with 34% for the same period last year. The decline in
service gross margin was due principally to the continued shift in the mix of
maintenance service revenues toward lower-margin multivendor service offerings.
<TABLE>
<CAPTION>
Operating expenses (dollars in millions)
- - --------------------------------------------------------------------------------
First quarter of fiscal year 1997 1996
- - --------------------------------------------------------------------------------
<S> <C> <C>
Research and engineering $258 $256
% of total revenues 9% 8%
- - --------------------------------------------------------------------------------
Selling, general and administative $732 $734
% of total revenues 25% 22%
- - --------------------------------------------------------------------------------
</TABLE>
Research and engineering (R&E) expenses totaled $258 million for the first three
months of fiscal 1997, essentially unchanged from $256 million for the same
period last year. The Corporation believes that the level of R&E spending is
appropriate to support current operations and to offer competitive market-driven
products.
Selling, general and administrative (SG&A) expenses were $732 million and $734
million for the first quarter of fiscal 1997 and 1996, respectively. SG&A
expenses reflect increased salaries and wages and other inflationary effects,
offset by the effect of restructuring actions taken principally in the second
half of fiscal 1996 and reductions in discretionary spending.
During the fourth quarter of fiscal 1996, the Corporation implemented a
restructuring plan intended to increase sales productivity, further consolidate
manufacturing plants and distribution sites, improve service delivery and
further reduce overhead in support areas. The Corporation expects to meet the
objectives of the plan and the total estimated cost of planned restructuring
actions remains unchanged (see Note B).
11
<PAGE> 12
Employee population decreased by 2,100 from the end of fiscal 1996 to
approximately 57,000, and by 4,500 from the end of the first quarter of fiscal
1996.
As noted above, the net effect of currency exchange rate movements on revenues
was negative in the first three months of fiscal 1997 compared with the first
three months of fiscal 1996. This effect was partially offset by the effects of
currency exchange rate movements on non-dollar denominated costs and by
competitive responses to market conditions resulting from currency fluctuations.
Net other income for the first quarter of fiscal 1997 was $16 million, compared
with net other expense of $6 million for the first quarter of fiscal 1996. The
increase was due principally to divestment gains recorded in the first quarter
of fiscal 1997 and an increase in interest income resulting from higher cash and
short-term investment balances (see Note A). Divestment gains recorded in the
quarter resulted principally from post-closing events with respect to
divestments consummated in fiscal 1996. In prior periods, gains and losses from
divestments were recorded in SG&A expenses.
Income tax expense for the first quarter of fiscal 1997 was $4 million, compared
with $9 million for the same period of fiscal 1996. Income tax expense reflects
several factors, including income taxes provided for profitable operations,
benefits taken from net operating loss carryforwards and an inability to
recognize currently certain tax benefits from operating losses.
In October 1996, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123 - Accounting for Stock-Based
Compensation. SFAS No. 123 encourages, but does not require, companies to
recognize compensation costs for all stock-based compensation arrangements using
a fair value method of accounting. Alternatively, SFAS No. 123 permits a company
to continue accounting for these arrangements under Accounting Principles Board
Opinion No. 25 - Accounting for Stock Issued to Employees, accompanied by
footnote disclosure of the pro forma effects on net income and earnings per
share had the new rules been applied. The Corporation adopted the alternative
approach as of the first day of fiscal 1997.
AVAILABILITY OF FUNDS TO SUPPORT CURRENT AND FUTURE OPERATIONS AND SPENDING
FOR OPERATIONS
Cash and short-term investments totaled $2.0 billion at the end of the first
quarter of fiscal 1997, unchanged from the end of fiscal 1996.
Net cash generated from operating activities was $204 million for the first
three months of fiscal 1997, due principally to decreased accounts receivable
and inventories, offset by lower accounts payable. Cash expenditures for
restructuring activities were $80 million, net of proceeds of approximately $3
million from the sale of property, plant and equipment. The Corporation
currently estimates that total cash expenditures for planned restructuring
actions will total $550 million. Cash expenditures for the remainder of fiscal
1997 will be between $350 million and $400 million, and between $150 million and
$200 million in fiscal 1998 and beyond (see Note B).
12
<PAGE> 13
Net cash used for investing activities was $578 million for the first quarter of
fiscal 1997, due principally to the purchase of short-term investments (see Note
A).
Net cash used for financing activities was $57 million for the first three
months of fiscal 1997, due principally to the open market purchase of 1.5
million shares of the Corporation's common stock (see Note D).
The Corporation's need for, cost of and access to funds are dependent on future
operating results, as well as conditions external to the Corporation. The
Corporation historically has maintained a conservative capital structure, and
believes that its current cash position and its sources of and access to capital
are adequate to support current and future operations.
Factors That May Affect Future Results
From time to time, information provided by the Corporation or statements made by
its employees may contain "forward-looking" information, as that term is defined
in the Private Securities Litigation Reform Act of 1996 (the "Act"). The
Corporation cautions investors that there can be no assurance that actual
results or business conditions will not differ materially from those projected
or suggested in such forward-looking statements as a result of various factors,
including but not limited to the following:
- - -- The Corporation's future operating results are dependent on its ability to
develop, produce and market new and innovative products and services. There are
numerous risks inherent in this complex process, including rapid technological
change and the requirement that the Corporation bring to market in a timely
fashion new products and services which meet customers' changing needs.
- - -- Historically, the Corporation has generated a disproportionate amount of its
operating revenues toward the end of each quarter, making precise prediction of
revenues and earnings particularly difficult and resulting in risk of variance
of actual results from those forecast at any time. In addition, the
Corporation's operating results historically have varied from fiscal period to
fiscal period; accordingly, the Corporation's financial results in any
particular fiscal period are not necessarily indicative of results for future
periods.
- - -- The Corporation offers a broad variety of products and services to customers
around the world. Changes in the mix of products and services comprising
revenues could cause actual operating results to vary from those expected.
- - -- The Corporation's success is partly dependent on its ability to successfully
predict and adjust production capacity to meet demand, which is partly dependent
upon the ability of external suppliers to deliver components at reasonable
prices and in a timely manner; capacity or supply constraints could adversely
affect future operating results.
- - -- The Corporation operates in a highly competitive environment and in a highly
competitive industry, which include significant competitive pricing pressures
and intense competition for skilled employees. Particular business segments may
from time to time experience unanticipated intense competitive pressure,
possibly causing operating results to vary from those expected.
- - -- The Corporation offers its products and services directly and through
indirect distribution channels. Changes in the financial condition of,
13
<PAGE> 14
or the Corporation's relationship with, distributors and other indirect channel
partners, could cause actual operating results to vary from those expected.
- - -- The Corporation does business worldwide in over 100 countries. Global and/or
regional economic factors and potential changes in laws and regulations
affecting the Corporation's business, including without limitation, currency
fluctuations, changes in monetary policy and tariffs, and federal, state and
international laws regulating the environment, could impact the Corporation's
financial condition or future results of operations.
- - -- As the Corporation continues to implement its strategic plan and respond to
external market conditions, there can be no assurance that additional
restructuring actions will not be required. With regard to completion of planned
restructuring actions, there can be no assurance that the estimated cost of such
actions will not change.
- - -- The market price of the Corporation's securities could be subject to
fluctuations in response to quarter to quarter variations in operating results,
changes in analysts' earnings estimates, market conditions in the information
technology industry, as well as general economic conditions and other factors
external to the Corporation.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None.
(b) Reports on Form 8-K.
None.
14
<PAGE> 15
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.
DIGITAL EQUIPMENT CORPORATION
(Registrant)
By: /s/ Vincent J. Mullarkey
------------------------------------------
Vincent J. Mullarkey
Vice President, Finance and Chief Financial
Officer (Duly Authorized Officer and
Principal Financial Officer)
November 12, 1996
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF DIGITAL EQUIPMENT CORPORATION FOR THE
THREE MONTHS ENDED SEPTEMBER 28, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH QUARTERLY REPORT FOR THE PERIOD ENDED SEPTEMBER 28, 1996.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-28-1997
<PERIOD-START> JUN-30-1996
<PERIOD-END> SEP-28-1996
<EXCHANGE-RATE> 1
<CASH> 1,294,520
<SECURITIES> 746,105
<RECEIVABLES> 3,116,081
<ALLOWANCES> 183,231
<INVENTORY> 1,681,097
<CURRENT-ASSETS> 7,025,386
<PP&E> 5,099,045
<DEPRECIATION> 2,902,028
<TOTAL-ASSETS> 9,637,725
<CURRENT-LIABILITIES> 3,868,924
<BONDS> 1,002,166
<COMMON> 156,394
0
4,000
<OTHER-SE> 3,326,736
<TOTAL-LIABILITY-AND-EQUITY> 9,637,725
<SALES> 1,522,163
<TOTAL-REVENUES> 2,911,641
<CGS> 1,048,390
<TOTAL-COSTS> 1,999,573
<OTHER-EXPENSES> 989,819
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,165
<INCOME-PRETAX> (61,579)
<INCOME-TAX> 4,302
<INCOME-CONTINUING> (65,881)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (65,881)
<EPS-PRIMARY> (.48)
<EPS-DILUTED> 0
</TABLE>
