John, here is the relevant portion of the 10-Q concerning liquidity. I was incorrect in a previous post when I estimated the R&D at $1,500MM. Here is the section:
"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. Compaq from time to time may borrow funds for actual or anticipated funding needs or because it is economically beneficial to borrow funds instead of repatriating funds in the form of dividends from Compaq's foreign subsidiaries. In addition, on October 3, 1998, Compaq entered into a one-year $1 billion unsecured revolving credit
facility to replace a similar facility that expired on September 21, 1998. Compaq also has a $3 billion syndicated credit facility that expires in September 2002, which was unused at September 30, 1998. Compaq has established a commercial paper program, supported by the syndicated credit facility, which was unused at September 30, 1998. Compaq believes that these sources of credit provide sufficient financial flexibility to meet future funding requirements. Compaq continually evaluates the need to establish other sources of working capital and will pursue those it considers appropriate based upon Compaq's needs and market conditions.
"Other planned uses of cash include the efforts to develop the purchased in-process technology related to the Digital and Microcom acquisitions into commercially viable products. This primarily consists of the completion of all planning, designing, prototyping, high-volume manufacturing verification and testing activities that are necessary to establish that a product can be produced to meet its design specifications, including functions, features and technical performance requirements. Bringing the purchased in-process technology to market also includes developing firmware and diagnostic software, device driver development, and testing the technology for compatibility and interoperability with commercially viable products. As of the date of acquisition, the estimated costs to be incurred to develop the Digital-related purchased in-process technology into
commercially viable products total approximately $3.1 billion in the aggregate through the year 2005: $60 million in 1998, $510 million in 1999, $660 million in 2000, $630 million in 2001, $520 million in 2002, $400 million in 2003, $210 million in 2004 and $90 million in 2005. In addition, the estimated costs to develop the Microcom purchased in-process technology into commercially viable products is approximately $500 million from the date of acquisition through the year 2001."
Hope this helps,
TTFN,
CTC |
