1. Stretching IT Budgets with Flexible Financial Solutions Anita Brennan Compaq Financial Services

2. Agenda • Compaq Financial Services Overview • Advantages of Financing Technology • Financial Alternatives and Examples • Next Steps

3. Compaq Financial Services Overview • Compaq Financial Services (“CFS”) is a wholly owned subsidiary of Compaq Computer Corporation • In 1997, Compaq formed an in-house equipment leasing and financing unit, to finance technology solutions for Compaq customers • Headquartered in Murray Hill, NJ we have a dedicated GEM operations and sales organization • CFS custom-tailors leasing and financing packages for the full range of Compaq’s products and services, as well as non-Compaq offerings that might be part of a total Compaq solution

4. Why Finance Technology? WHAT YOU MAY NOT KNOW: • Over 90% of all U.S. corporations and 40% of all government entities finance all or some of their equipment (ELA 2000) • Gartner Dataquest predicts by 2003, 60% of all IT acquisitions will be leased • Leasing provides GEM customers the ability to leverage existing budgets, thereby acquiring more equipment than possible with purchasing • Leasing avoids the costs of surplus property disposal • 325 million PCs will be obsolete by 2005

5. Why Choose Alternative Financing…

6. Funding Alternatives Cash • Capital expense funds are limited • Provides one time solution Bank Loans • Not willing to assume residual risk • Most do not retain lease paper for their own accounts - making upgrades very difficult Bonds • Fee intensive (.5% - 1%) • Very time consuming • One time technology solution • Subject to voter rejection • Poor matching of term vs. useful life

7. Total Cost of Acquisition CASH LEASE BONDS Equipment Cost $100,000 $100,000 $100,000 Financing Cost 7,771 6,560 58,400 (Opportunity Cost = 5.5%) (36 pmts of 2,939) (5% 20 yr. Bond) Disposal Costs 3,000 03,000 Total Costs $110,771 $106,560 $161,400

8. S-t-r-e-t-c-h Technology Budgets A lease over a cash alternative enables over 3x the number of units deployed on Day 1 of an IT acquisition. Example: Technology Budget $341,000 YEAR 1 YEAR 2 YEAR 3 CASH OPTION 341,000 341,000 341,000 CASH Units/ea yr 341 341 341 CASH Units/total 341 682 1,023 LEASE OPTION 341,000 341,000 341,000 LEASE Units/ea yr 1,000 0 0 LEASE Units/total 1,000 1,000 1,000

9. Flexible Financing Alternatives • Lease terms ~ 12 to 48 months • Various structures ~Quarterly,semi-annual, & annual payments • Cost per seat/Managed Services Plan • Technology refresh lease • Non-appropriation clause option for public entities • Equipment add-on and upgrades can be incorporated throughout the lease term • Simple application & approval process

10. Technology Refresh Lease • Stay ahead of the technology curve • Built in ability to upgrade at month 24 or 36 • Allows for equipment refresh prior to the end of the lease term • Keeps computer systems current and guards against technological obsolescence

11. The Laptop LeaseExample: Based upon acquisition of 75 units New Laptop $1,500 Year 1 Year 2 Buyout $716 $716 $165 $358 per Semester Over 2 years, pay for less than cost of laptop

12. Q2 Special Offers • 0% Free Time Lease: -- 30 mos FMV, all COMPAQ -- 24 mos FMV, equipment mix • 120 Day Deferral Lease: -- any term, 1st 120 days no interest, no payment • Single Payment Lease: -- 36 mos FMV, 95% payment

13. Next Steps • Review Technology Plan • Discuss budget issues/financial alternatives with Compaq and CFS SOLVE your budget issues TODAY with CFS alternative financial solutions!

14. Contact Information