Financial: Compaq Provides Framework for Digital Integration

Edge: Work-Group Computing Report, June 15, 1998

With the Compaq acquisition of Digital effective Thursday following Digital shareholders' approval morning, Compaq began to map out its plans for the integration of Digital into Compaq.

"Together, Compaq and Digital will be a much stronger competitor than we were as separate companies," said Eckhard Pfeiffer, Compaq's President and Chief Executive Officer. "Compaq will move to integrate Digital as rapidly as possible."

"As a necessary part of the integration process and to position Compaq for future growth, Compaq will record several acquisition-related charges in the second quarter," said Earl Mason, Compaq's Senior Vice President and Chief Financial Officer.

These acquisition charges will include the write-off for purchased in-process technology, Compaq restructuring charges for elimination of duplicate facilities and employee separations, and other related operating adjustments.

"Excluding these charges, we believe the combined company will achieve approximately break-even results for the second quarter," said Mason.

Outlook "While the third quarter will be transitional, focused both on the integration of Digital businesses and the achievement of synergies, we continue to believe earnings of the combined companies will be accretive as early as the fourth quarter," said Mason.

Compaq Computer Corporation, the world's largest computer manufacturer, is a Fortune Global 200 company and the largest global supplier of personal computers. Founded in 1982, Compaq develops and markets hardware, software, solutions and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, networking and communication products, commercial desktop and portable products and consumer PCs. The company is a leader in environmentally friendly programs and business practices.

Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. Customer support and information about Compaq and its products are available at http://www.compaq.com or by calling 1-800-OK-COMPAQ. Product information and reseller locations are available by calling 1-800-345-1518.