-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EPp06BBo1JzFUcroejM30zn25VuNjty9nhkMivinAC1CzBe83XFjMHK9wpRZBUvd ywexnlEkEspy4/iKniF13w== 0000950135-96-004747.txt : 19961209 0000950135-96-004747.hdr.sgml : 19961209 ACCESSION NUMBER: 0000950135-96-004747 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DIGITAL EQUIPMENT CORP CENTRAL INDEX KEY: 0000028887 STANDARD INDUSTRIAL CLASSIFICATION: 3570 IRS NUMBER: 042226590 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05296 FILM NUMBER: 96657860 BUSINESS ADDRESS: STREET 1: 146 MAIN ST CITY: MAYNARD STATE: MA ZIP: 01754 BUSINESS PHONE: 6178975111 MAIL ADDRESS: STREET 2: 111 POWDER MILL ROAD MS02-3/F13 CITY: MAYNARD STATE: MA ZIP: 01754 10-Q 1 DIGITAL EQUIPMENT CORPORATION 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. 2 DIGITAL EQUIPMENT CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands except per share data)
Three-Month Period Ended ----------------------------- September 28, September 30, 1996 1995 ------------- ------------- 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 ========== ========== (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.
Cash dividends on common stock have never been paid by the Corporation. The accompanying notes are an integral part of these financial statements. 2 3 DIGITAL EQUIPMENT CORPORATION CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
September 28, June 29, 1996 1996 ------------- ----------- 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 ========== ===========
The accompanying notes are an integral part of these financial statements. 3 4 DIGITAL EQUIPMENT CORPORATION CONSOLIDATED BALANCE SHEETS (continued) (Dollars in thousands)
September 28, June 29, 1996 1996 ------------- ------------ 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 ========== ===========
The accompanying notes are an integral part of these financial statements. 4 5 DIGITAL EQUIPMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Three-Month Period Ended ---------------------------- September 28, September 30, 1996 1995 ------------- ------------- 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) --------- ---------
The accompanying notes are an integral part of these financial statements. 5 6 DIGITAL EQUIPMENT CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Dollars in thousands)
Three-Month Period Ended ------------------------------ September 28, September 30, 1996 1995 ------------- ------------- 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 ========== ==========
The accompanying notes are an integral part of these financial statements. 6 7 DIGITAL EQUIPMENT CORPORATION COMPUTATION OF NET INCOME/(LOSS) PER COMMON AND COMMON EQUIVALENT SHARE (Dollars in thousands except per share data)
Three-Month Period Ended ------------------------------- September 28, September 30, 1996 1995 ------------- ------------- 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 ============ ============
The accompanying notes are an integral part of these financial statements. 7 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.
(in thousands) September 28, 1996 June 29, 1996 - - -------------------------------------------------------------------------------------- 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 - - -------------------------------------------------------------------------------------- Other (income)/expense, net: (in thousands) September 28, 1996 September 30, 1995 - - -------------------------------------------------------------------------------------- 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 - - --------------------------------------------------------------------------------------
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 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 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.
Revenues (dollars in millions) - - -------------------------------------------------------------------------------- First quarter of fiscal year 1997 1996 - - -------------------------------------------------------------------------------- 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 - - --------------------------------------------------------------------------------
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 11 EXPENSES AND PROFIT MARGINS
Gross margin (dollars in millions) - - -------------------------------------------------------------------------------- First quarter of fiscal year 1997 1996 - - -------------------------------------------------------------------------------- Product sales gross margin $474 $562 % of related revenues 31% 31% - - -------------------------------------------------------------------------------- Service revenues gross margin $438 $492 % of related revenues 32% 34% - - --------------------------------------------------------------------------------
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.
Operating expenses (dollars in millions) - - -------------------------------------------------------------------------------- First quarter of fiscal year 1997 1996 - - -------------------------------------------------------------------------------- Research and engineering $258 $256 % of total revenues 9% 8% - - -------------------------------------------------------------------------------- Selling, general and administative $732 $734 % of total revenues 25% 22% - - --------------------------------------------------------------------------------
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 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 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 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 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 EX-27 2 FINANCIAL DATA SCHEDULE
5 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. 1,000 U.S. DOLLARS 3-MOS JUN-28-1997 JUN-30-1996 SEP-28-1996 1 1,294,520 746,105 3,116,081 183,231 1,681,097 7,025,386 5,099,045 2,902,028 9,637,725 3,868,924 1,002,166 156,394 0 4,000 3,326,736 9,637,725 1,522,163 2,911,641 1,048,390 1,999,573 989,819 0 21,165 (61,579) 4,302 (65,881) 0 0 0 (65,881) (.48) 0
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