Conference 7.286::digital

    It is more than the 700 people that account for the $150M.  I believe
    the cost of COD days, various retraining programs, etc. are included.

    Does this $150M account for the 3rd quarter and all subsequent quarters,
    the total cost of the COD program, or can we expect similar expenses
    for the next couple of quarters?  Does it also include the total buyout
    packages that the COD people are offered? 
    
    Another interesting part of the statement was that we paid $0 in taxes. 
    Is this common, or did we over estimate in the last quarters taxes?
    
    

    COD people are not severance people.  They are headquarters people that
    are transitioned into field jobs.  I understand it is a fairly
    expensive program.  The severance program pays lump sums.  Unless there
    is some estimate of future buyouts and the money was put aside into a
    fund for that purpose, I would expect that additional expense would hit
    each quarter.  

    COD = "Career Opportunity Days", job fairs where people in corporate
    encounter people in the field.
    
    People, it's a very private decision between Digital and its auditors
    to consider some expense to be a one-time only restructuring expense
    or an operating (or recurring) expense.
    
    Speculation as to what is folded in to that number and what isn't
    folded into that number, in detail, is something that's just none of our
    business.
    
    The amount is large to create a reserve against future restructuring
    expenses as well, this was disclosed by Digital.

    Re .3  In this morning's Wall St. Journal report on the Q3 Report,
           there is actually a referance to the "higher taxes" we owed,
           I'm not sure who is right.  But I, too, was surprised that
           we escaped with $0.00, considering the revenue we had.
    
           The WSJ also states that "company sources" indicate that
           "The Package" is "going than expected", that  8,000 more
           employees have been identified for "The PAckage"  and that
           5,000 of those are expected to accept severance.
    
           Earlier this week, we were informed about COD III, either
           later this quarter on early Q1.  There are apparently nearly
           1500 new req's in post-COD II, that are open in anticipation
           of COD III.  COD is really the expensive part of the
           restructuring.  The relo benefits (aside from the low $$$ Merrill
           Lynch is willing to pay for your home!) have been improved
           with each iteration of COD.  Yesterday, a colleague anticipating
           a transfer to Atlanta, told me DEC pays up $7,000 for any
           costs entailed by a spouse in finding a new job for a
           transferee.  That plus the free air travel to sites throughout
           the U.S. for interviews add up fast.
    
           Personally, I think U.S. Sales did a great job in the last
           six weeks of the quarter to bring in the unforecasted revenue.
           

    Oh boy...  I can see that I'm going to have a busy day.
    
    re: higer taxes
    
    If Digital didn't have a restructuring expense, then its income would
    have been higher, let's say, $10 million, but it really wouldn't have
    been the full $10 million because we'd have to pay taxes on that $10
    million, let's say $2 million yielding $8 million, therefore the
    impact of the restructing charge has to take in account the higher
    taxes we would have had to have paid.
    
    re: "8,000"
    
    "The Package", in capitals,  is not how it appears in today's Wall Street
    Journal.  I don't know what agenda you are pushing but please don't
    mis-quote the Wall Street Journal, it does a great disservice of the
    readers of this conference.  It's almost irresponsible.  The relevant
    sentences are:
    
       Digital said its plans are still "evolving".  Sources
       have indicated that as many as 8,000 workers will be
       offered serverance packages, and analysts expect a cut of
       more than 5,000 jobs from the workforce of 125,800.  But
       the program is progressing more slowly than expected.
       
    "slowly" is missing from .5.  Attempting to describe what is folded
    into the restructuring expense charge is speculation on your part.
    
    re: U.S. Sales
    
    Revenue is recorded by the corporation when products are shipped, that
    is when they leave Digital's plant and pass into the hand of some
    carrier, or in the case of service, when the service is performed or
    contracted for.
    
    Orders received by the U.S. Sales Force in February or March are more
    likely to be reflected in revenue in the quarter ending in June than
    in the one ending in March.

Regarding further restructuring charges, here's what the press release said:

  "Third quarter operating results include a restructuring charge of
  $150,000,000, equal to $1.20 per share, which primarily reflects costs for
  employee separations and redeployment," said Jim Osterhoff, vice president,
  Finance.  "Further opportunities for cost savings are being investigated,
  and there may be additional restructuring charges in the future.

[taken from Livewire]

RE: .4

>    People, it's a very private decision between Digital and its auditors
>    to consider some expense to be a one-time only restructuring expense
>    or an operating (or recurring) expense.
    
>    Speculation as to what is folded in to that number and what isn't
>    folded into that number, in detail, is something that's just none of our
>    business.
    
	Hi, Pat, a little clarification, please.  When you say that the
	nature of that expense is none of our business, do you mean that
	it's none of our business as employees, or none of our business
	as noters?  I assume you mean that this is an inappropriate
	forum for such speculation.  I ask, because as a stockholder and thus 
	owner, I would think that such a figure directly affects my wealth, 
	and hence is very much my business.

		Dave

    Dave, your "right to know" is very explicitly defined by law and
    practices of the accounting profession.
    
    Shareholders have been told the amount of the restructuring charge.
    That's all you are going to be told.  Speculation as to what is in and
    not in that charge from people who don't know, just creates anxiety for
    people who don't realize that a note discussing the restructuring
    charge quoting Digital's announcement of it also has opinion mixed in.
    {Sorry for the complexity of that sentence}
    
    I'm curious, but I know that I won't be told how much of the price of
    the VAX 9000 is broken down into materials, labor, amortization of the
    development costs, and profit, either as an employee or shareholder.

    whats wrong with digital?????
    
         see replies 4 & 9 for a clue.
    
               re -4  ...between digital and the auditors....
    
                             excuse me, but I AM PART OF DIGITAL.
    
                      ....none of our business.....
    
                             excuse me but everything that affects digital
                             is my business.
    
    "none of your business" is a standard phrase here at dec.  typical
    management Bull S*IT. 

    re: .10
    
    Please tell me your salary.
    
    It affects Digital and therefore, by your reasoning, it is my business.
    
    Thank you.
    
    Al
    

    I am the author of 1088.4 and 1088.9 and part of Digital as well.  How
    little you know about me and the issues that you are so critical about.
    
    Digital is in the middle of a crisis in communications.  I'm in the
    middle of it.  I'm routinely denied the information I need to help
    Digital win large contracts, yet the same sort of information is
    forthcoming from third parties that I deal with.  I've got some vice
    presidents here trying to figure it all out.  Maybe it is my business
    to know what systems Digital expects to offer for sale in 1991, maybe
    it isn't.
    
    On the other hand, I've accepted the challenge in this conference and a
    few others to unofficially debate the other side of the issue, namely
    that there are plenty of things around which people have a reasonable
    curiosity (product shipments, backlog, costs, etc.) for which there are
    good reasons not to satisfy.  People like Mark Steinkrauss are not
    about to jump into every conference to explain this stuff, so as a
    amateur, I do so.
    
    The details of what is and is not considered by Digital and its
    auditors a part of the restructuring charge is none of your business
    in my opinion.  If you can make the case to someone on Jim Osterhoff's
    staff, I'm sure someone there will help you.
              

    Well here goes!  I think Patrick has some good points. But you must
    read thru his replies slowly to see them. I understand a lot of what he
    is talking about and he at least replies. Down here at GSO the BullS**t
    flows like a river. So someone that gives answers that don't say "none
    of your business" is nice. But IMOHO he fights the same S**t. 
    
    "I'm ROUTINELY DENIED the information I need to help Digital to win
    large contracts...."
    
    Thats the point others in here are tryng to make. IMOHO! We are given
    info in the term "none of your.....".  
    
    AND ANYTIME THAT ANYONE GIVES ME A LINE OF JUNK A LIGHT GOES OFF IN MY
    HEAD SAYING "WHAT THE HECK IS GOING ON HERE?"
    
    Ben

    .13:
    
�                                ...  Down here at GSO the BullS**t
�    flows like a river.  ...
    
    Call the veterinarian immediately!  Your bull sounds like he has
    'scours', which can be serious if it goes on for long.
    
    Dick

    "Scours" is a way of life here now. The sad part is I can remenber back
    a few years ago when we ALL worked together. We don't need a Vet, we
    need a Butcher.
    
    Ben