| Balance Sheet
At the end of 2Q09, cash, cash equivalents, and marketable securities were €4,241.0 million versus €3,335.0 million in 1Q09. Long-term debt was €3,588.0 million versus €4,077.0 million in 1Q09.
Net (debt)/cash was €28.0 million in 2Q09 versus (€841.0) million in 1Q09.
Cash Flow
Cash flow from operating activities was (€287.0) million in 2Q09 versus (€43.0) million in 1Q09. Capital expenditure in 2Q09 was (€175.0) million versus (€165.0) million in 1Q09. Free cash flow in 2Q09 was (€696.0) million versus (€535.0) million in 1Q09.
One firm (Citigroup) models that the Company will generate $475.0 million of operating cash from working capital in 2HCY09, largely driven by continued improvements in collections.
Restructuring Update
In order to meet its year end cost reduction targets, the Company has taken a number of actions on a regional basis. These actions include headcount reductions, contractor reductions, co-sourcing, facility consolidation, reducing the use of agents, reducing commissions, and finding other operational efficiencies. To date, the Company estimates that it has achieved approximately 35.0% of its plan to reduce costs and expenses by €750.0 million on an exit run rate by 4Q09.
For FY09, Alcatel-Lucent expects the market for telecommunications equipment and related deployment services to be down between 8.0% and 12.0% at constant exchange rates. For FY10, the Company expects to achieve a gross margin in the mid-thirties range and operating margin in the mid-single-digit range. For FY11, ALU expects to achieve a gross margin in the mid- to- high thirties range and operating margin in the mid-to- high single-digit range.
Others
On June 23, 2009, Alcatel-Lucent announced the appointment of Christel Heydemann, as Strategic Alliance Vice President for HP reporting to Tom Burns, President of Alcatel-Lucent Enterprise Product Group. She will be based in California.
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