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To: jbn3 who wrote (47303)	6/12/1998 9:06:00 AM
From: Jack T. Pearson	Respond to of 176387

Re: Where is Compaq going to get the cash? Compaq + DEC had about $9B in cash prior to the acquisition.

To: jbn3 who wrote (47303)	6/12/1998 10:32:00 AM
From: Meathead	Read Replies (1) \| Respond to of 176387

3, also... notice how hpeace/steve vanished from the thread once his bully prognostications were proven to be a bunch of baloney. MEATHEAD

To: jbn3 who wrote (47303)	6/12/1998 2:29:00 PM
From: jim kelley	Respond to of 176387

3, I guess they can get some cash from tax loss carry forwards. How much and how soon, I do not know. But it looks like they are down : 4.5 B for DEC Check 1.2 B in Employee severances The inventory write down and restructuring charges total about 6.4 B. Some of this looks like accounting transactions that have an affect on the balance sheet. But I suspect there is about 2B in actual additional cash outlays for investment bankers, etc. So let's say that the cash outlay comes to 8.4 B. That leaves CPQ with roughly 1.1 B in cash to run the combined businesses. Eventually if they become profitable they will get some of this back from tax loss carry forwards. For the time being though it looks like they are going to be left with marginal liquidity. Perhaps they can sell off some of the business units for cash? It is hard to get excited about the new company. I do not think this is an IBM. IBM has many core technologies that are worth big bucks such as Disk drives, Semiconductor manufacturing, basic patents, Applications software, etc. CPQ does not have this. The way the market is reacting to this merger is somewhat puzzling at this point. But accepting this behavior, the next few quarters are going to be interesting for Godzilla. I do not think the new company will be profitable anytime this year. regards, Jim Kelley

To: jbn3 who wrote (47303)	6/12/1998 2:58:00 PM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Good morning Bachman, Re: CPQ cash. Bear in mind that inventory write-downs are non-cash charges along with a number of merger-related charges. Also Compaq and DEC have a fair amount of annual depreciation which adds cash to the corporate coffers. I wouldn't be concerned with CPQ running out of cash just yet. Nevertheless, it looks as if the pain at Compaq will continue for at least another quarter and perhaps right through the end of the year. And that assumes that the merger will be fairly seamless. That appears to be an unwarranted assumption based on the news reports I'm seeing. A lot of DEC people are very upset with impending layoffs, and morale seems to be very low. I have a feeling (and I have no substantiation for this) that this will be a merger made in hell. But maybe we should defer all of these corporate culture and financial issues to Steve (aka hpeace) who will undoubtedly provide us with the divine answer. TTFN, CTC