<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file number 1-1969
CERIDIAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 52-0278528
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8100 34th Avenue South, Minneapolis, Minnesota 55425
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612)853-8100
(Former name, former address and former fiscal year if changed from last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES X NO
The number of shares of registrant's Common Stock, par value $.50 per
share, outstanding as of October 31, 1996, was 68,942,506.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
INDEX
Pages
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations
for the three and nine month periods ended
September 30, 1996 and 1995 .............................. 3
Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995 ................. 4
Consolidated Statements of Cash Flows for the nine
month periods ended September 30, 1996 and 1995 .......... 5
Notes to Consolidated Financial Statements ............... 6
In the opinion of the Company, the unaudited consolidated
financial statements reflect all adjustments (consisting only of
normal recurring accruals, except as set forth in the notes to
consolidated financial statements) necessary to present fairly
the financial position as of September 30, 1996, and results of
operations for the three and nine month periods and cash flows
for the nine month periods ended September 30, 1996 and 1995.
The results of operations for the nine month period ended
September 30, 1996, are not necessarily indicative of the
results to be expected for the full year.
The consolidated financial statements should be read in
conjunction with the notes to consolidated financial statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................ 10
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K ................... 14
Signature ........................................................ 15
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<TABLE>
<CAPTION>
FORM 10-Q
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS Ceridian Corporation
(Unaudited) and Subsidiaries
For Periods Ended September 30,
Three Months Nine Months
1996 1995 1996 1995
(Dollars in millions, except per share data)
<S> <C> <C> <C> <C>
Revenue
Product sales $ 147.5 $ 128.8 $ 448.2 $ 408.7
Services 213.5 189.1 643.3 562.8
Total 361.0 317.9 1,091.5 971.5
Cost of revenue
Product sales 101.2 91.5 317.4 300.7
Services 110.8 97.9 328.0 282.7
Total 212.0 189.4 645.4 583.4
Gross profit 149.0 128.5 446.1 388.1
Operating expenses
Selling, general and
administrative 81.9 71.5 246.4 218.4
Research and development 18.7 13.1 51.6 41.1
Other expense (income) (0.1) 0.6 1.8 0.8
Earnings before interest and taxes 48.5 43.3 146.3 127.8
Interest income 1.6 3.9 5.4 9.5
Interest expense (2.4) (7.7) (8.1) (23.3)
Earnings before income taxes 47.7 39.5 143.6 114.0
Income tax provision 3.3 5.9 11.0 15.7
Net earnings $ 44.4 $ 33.6 $ 132.6 $ 98.3
Primary earnings per share $ 0.59 $ 0.44 $ 1.74 $ 1.28
Fully diluted earnings per share $ 0.55 $ 0.42 $ 1.64 $ 1.23
Weighted average common shares
and equivalents (000's)
Primary 70,393 69,592 70,446 69,215
Fully diluted 80,777 79,976 80,830 79,599
See notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
FORM 10-Q
CONSOLIDATED Ceridian Corporation
BALANCE SHEETS (Unaudited) and Subsidiaries
September 30, December 31,
Assets 1996 1995
(In Millions)
<S> <C> <C>
Cash and equivalents $ 111.5 $ 151.7
Trade and other receivables, net 402.4 372.8
Inventories 45.4 30.4
Other current assets 16.6 15.9
Total current assets 575.9 570.8
Investments and advances 13.7 6.9
Property, plant and equipment, net 122.4 120.9
Goodwill and other intangibles, net 279.8 262.6
Software and development costs, net 101.6 72.6
Prepaid pension cost 99.5 88.6
Other noncurrent assets 2.2 3.7
Total assets $ 1,195.1 $ 1,126.1
Liabilities And Stockholders' Equity
Short-term debt and current
portion of long-term obligations $ 2.5 $ 4.6
Accounts payable 57.1 54.4
Drafts and settlements payable 142.0 146.3
Customer advances 90.2 73.7
Deferred income 83.1 90.1
Accrued taxes 72.1 68.7
Employee compensation and benefits 64.3 63.6
Restructure reserves, current portion 16.5 19.2
Other accrued expenses 80.3 85.0
Total current liabilities 608.1 605.6
Long-term obligations, less current portion 152.7 205.3
Deferred income taxes 9.2 7.1
Restructure reserves, less current portion 43.7 51.2
Employee benefit plans 74.3 78.7
Deferred income and other
noncurrent liabilities 16.3 28.2
Stockholders' equity 290.8 150.0
Total liabilities and
stockholders' equity $ 1,195.1 $ 1,126.1
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
FORM 10-Q
CONSOLIDATED STATEMENTS OF Ceridian Corporation
CASH FLOWS (Unaudited) and Subsidiaries
For Periods Ended September 30,
Nine Months
1996 1995
(In Millions)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 132.6 $ 98.3
Adjustments to reconcile net earnings
to net cash provided by (used for)
operating activities:
Depreciation and amortization
of capital and deferred assets 52.7 42.5
Restructure reserves utilized (11.7) (16.3)
Other (10.0) (2.6)
Net change in working capital items:
Trade and other receivables (26.0) (43.8)
Other current assets (15.1) (15.9)
Drafts and settlements payable (4.3) 4.1
Customer advances and deferred income 8.6 55.4
Other current liabilities (12.9) 11.4
Net cash provided by (used for)
operating activities 113.9 133.1
CASH FLOWS FROM INVESTING ACTIVITIES
Expended for capital assets (36.4) (40.4)
Expended for deferred software (35.1) (35.3)
Expended for business acquisitions (35.9) (23.0)
Short-term investments - 31.1
Proceeds from sales of businesses and assets 9.3 3.1
Other 0.5 0.4
Net cash provided by (used for)
investing activities (97.6) (64.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Revolving credit and overdrafts, net (49.2) (1.1)
Borrowings of other debt - 2.6
Repayment of other debt (6.2) (11.4)
Preferred stock dividends (9.7) (9.7)
Exercise of stock options and other 8.6 4.9
Net cash provided by (used for)
financing activities (56.5) (14.7)
Effect of exchange rate changes on cash - 0.2
NET CASH PROVIDED (USED) (40.2) 54.5
Cash and equivalents at beginning of period 151.7 137.8
Cash and equivalents at end of period $ 111.5 $ 192.3
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(Dollars in millions)
(Unaudited)
Capital and Deferred Assets
September 30, December 31,
1996 1995
Property, Plant and Equipment
Land $ 2.6 $ 3.0
Machinery and equipment 256.2 236.0
Buildings and improvements 74.8 79.4
Construction in progress 4.3 4.9
337.9 323.3
Accumulated depreciation (215.5) (202.4)
Property, plant and equipment, net $ 122.4 $ 120.9
Goodwill and Other Intangibles
Goodwill $ 246.7 $ 220.3
Accumulated amortization (36.7) (27.6)
Goodwill, net 210.0 192.7
Other intangible assets 79.7 78.8
Accumulated amortization (9.9) (8.9)
Other intangibles, net 69.8 69.9
Goodwill and other intangibles, net $ 279.8 $ 262.6
Software and Development Costs
Purchased software $ 38.7 $ 34.0
CII development cost 72.2 44.2
Other software development cost 22.8 18.5
133.7 96.7
Accumulated amortization (32.1) (24.1)
Software and development costs, net $ 101.6 $ 72.6
For Periods Ended
September 30,
Nine Months
Depreciation and Amortization
of Capital and Deferred Assets 1996 1995
Depreciation and amortization of
capital assets $ 33.2 $ 28.7
Amortization of goodwill 9.2 7.0
Amortization of other intangibles 4.1 2.0
Amortization of software and
development costs 8.0 5.1
Other (1.8) (0.3)
Total $ 52.7 $ 42.5
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
STOCKHOLDERS' EQUITY
September 30, December 31,
1996 1995
<S> <C> <C>
5-1/2% Cumulative Convertible Exchangeable
Preferred Stock, $100 par value
(liquidation preference of $236.0)
Shares issued and outstanding 47,200 $ 4.7 $ 4.7
Common Stock
Par value - $.50
Shares authorized - 200,000,000
Shares issued - 68,759,097 and 67,325,372 34.4 33.7
Shares outstanding - 68,727,651 and 67,277,436
Additional paid-in capital 1,122.8 1,106.6
Accumulated deficit (841.2) (963.9)
Foreign currency translation adjustments (4.1) (2.4)
Restricted stock awards (19.1) (21.9)
Pension liability adjustment (5.2) (5.2)
Treasury stock, at cost (31,446 and
47,936 common shares) (1.5) (1.6)
Total stockholders' equity $ 290.8 $ 150.0
</TABLE>
Net cash inflows from exercise of employee stock options and other
equity transactions during the first nine months of 1996 were $8.6.
Proceeds included $18.9 from stock options and $4.6 from purchases by
employees under the Company's Employee Stock Purchase Plan. Also during
this period, the Company repurchased 319,480 shares of its common stock for
$14.9 million, or an average price of $46.66 per share, in accordance with
a repurchase program authorized in 1994. Included in these shares were
111,095 repurchased from Company executives to facilitate their payment of
personal income taxes in connection with a performance restricted stock
plan initiated in 1994.
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<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
RECEIVABLES
September 30, December 31,
1996 1995
<S> <C> <C>
Trade and Other Receivables, Net:
Trade, less allowance of $11.7 and $12.4 $ 294.3 $ 278.9
Unbilled 101.6 86.5
Other 6.5 7.4
Total $ 402.4 $ 372.8
</TABLE>
RESTRUCTURE RESERVES
Bal Bal
Dec 31, Sep 30,
1995 Adds Paid Other 1996
Severance and Related
Costs $ 7.3 $ -- $ 2.2 $ -- $ 5.1
Equipment Lease
Termination 0.6 -- 0.5 -- 0.1
Vacant Space 18.2 -- 5.2 (0.2) 13.2
Costs to Dispose of
Businesses 2.0 -- 0.5 (0.3) 1.8
Legal Costs 13.2 -- 1.7 -- 11.5
Environmental Costs 12.5 -- 1.0 -- 11.5
Duplicate
Processing/Support 1.1 -- 0.3 -- 0.8
Other 15.5 -- 0.3 (1.0) 16.2
Total $70.4 $ -- $11.7 $ (1.5) $60.2
The "other" activity primarily represents the reclassification of proceeds
from sale of idled assets of restructured operations from operating
activities to investing activities for cash flow reporting.
-8-
<PAGE>
FORM 10-Q
CERIDIAN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(Dollars in millions)
(Unaudited)
INVESTING ACTIVITY
During the first nine months of 1996, Ceridian acquired several small
businesses related to its Information Services operations. In January, the
Company purchased for cash the assets of Information Learning Systems Inc.,
a provider of human resources management expert systems which had 1995
revenue of $2.5. In February, the Company acquired all of the outstanding
stock of EAS Technologies, Inc., a provider of advanced automated time and
attendance software solutions which had 1995 revenue of $3.1, in a
transaction accounted for by the pooling-of-interests method. Prior year
financial statements were not restated due to lack of materiality. In
March, the Company acquired in a stock-for-stock transaction a minority
equity interest in International Automated Energy Systems, Inc., ("IAES") a
provider of fuel management and payment systems for local fleets, which
will be associated with the Company's Comdata subsidiary. The acquisition
agreement also provided for advances to IAES by Ceridian during 1996 of up
to $6.5 (of which $4.6 had been advanced by September 30), repayable by the
end of 2000, and an option to Ceridian (which must be exercised under
certain circumstances) to acquire the remaining equity of IAES during 1997.
In June, the Company purchased for cash the assets of the Compower payroll
processing services business in the United Kingdom, which had 1995 revenue
of $6.0.
In July, the Company purchased for cash Transportation Communication
Consulting, Inc. and its affiliate, Inter-Point Management Company
("Transcom") which provides permit and vehicle escort services to trucking
companies. Transcom revenue in 1995 was approximately $7.0. In August,
the Company purchased for cash TIC Financial Services, Inc. ("TIC"), which
provides financial and information services for the transportation industry
and had 1995 revenue of approximately $9.0. In the same month, the Company
purchased for cash technical engineering and maintenance systems software
and certain related contracts from PRC Aviation LLC to be associated with
Computing Devices operations. Also, in August, the Company acquired for
stock, in a transaction accounted for by the pooling-of-interests method,
Employee Assistance Associates, Inc. which had 1995 revenue of
approximately $4.0. Prior year financial statements were not restated due
to lack of materiality.
The aggregate consideration for these acquisitions consisted of $30.4
in cash and 345,502 shares of the Company's common stock.
Results of operations and cash flows for 1995 have been restated for
the acquisitions of Resumix, Inc. and Comdata Holdings Corporation in
August and December 1995, respectively, which were accounted for by the
pooling-of-interests method.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
September 30, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The statements regarding the outlook for Ceridian Corporation (the
"Company") contained in the "Results of Operations" section below are
forward-looking statements based on current expectations, and entail
various risks and uncertainties that could cause actual results to differ
materially from those expressed in such forward-looking statements.
Important factors known to the Company that could cause such material
differences are discussed below and under the caption "1996 Financial
Outlook" contained in the "Management's Discussion and Analysis of Results
of Operations and Financial Condition" contained in Part II, Item 7 of the
Company's Annual Report on Form 10-K for the year ended December 31, 1995,
which discussion is incorporated herein by reference.
Results of Operations
Revenue. Revenue for the Company, its two industry segments and the
businesses that comprise those segments is as follows:
<TABLE>
Periods Ended September 30,
Three Months Nine Months
1996 1995 1996 1995
(Dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Information Services Segment % change % change
Arbitron $ 37.2 $ 34.7 7.0% $ 112.6 $ 99.3 13.4%
Human Resources Group 115.8 93.1 24.4% 356.9 294.3 21.2%
Comdata Corporation 77.9 72.8 7.0% 221.9 204.3 8.6%
Total Information Services 230.9 200.6 15.1% 691.4 597.9 15.6%
Defense Electronics Segment
Computing Devices International 130.1 117.3 10.9% 400.1 373.6 7.1%
Total Revenue $ 361.0 $ 317.9 13.6% $ 1,091.5 $ 971.5 12.3%
</TABLE>
About one-half of the revenue growth in the Human Resources Group
("HRG") in the three and nine-month comparisons was due to acquisitions,
primarily Centre-file. Apart from acquisitions and after adjusting for the
1996 decrease in the average annual yield on tax filing deposits, HRG's
revenue increased 11.7% and 10.1% in the quarterly and year-to-date
comparisons, respectively. Revenue growth computed on this basis from
payroll processing and tax filing services was 10.0% and 9.2% in the three
and nine-month comparisons, respectively, largely reflecting continuing new
customer demand for the Company's current generation payroll product.
Revenue growth apart from acquisitions in the other HRG businesses was
17.9% and 13.9%, respectively, over the same periods, primarily reflecting
revenue growth in the User Technology, Performance Partners and Resumix
businesses. Revenue growth in the HRG was restrained somewhat by decreased
revenue in the 1996 periods in Tesseract.
Comdata's revenue increase reflected 9.2% and 10.3% revenue growth
from transportation services in the quarterly and year-to-date comparisons,
respectively, and 4.3% and 7.6% revenue growth from gaming services over
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
September 30, 1996
Results of Operations (continued)
the same periods. About half of the transportation services revenue growth
in the quarterly comparison and about a third of such revenue growth in the
nine month comparison was due to acquisitions. After adjusting for the
third quarter 1996 acquisitions of TIC and Transcom and the net effect of
the first quarter 1995 acquisition of Trendar and sale of the retail
services division, Comdata's revenue increased 3.9% and 7.2% in the
quarterly and year-to-date comparisons. The internal revenue growth from
transportation services was primarily due to an increase in funds transfer
transactions as well as increased demand for Trendar fuel desk automation
systems and telecommunications services. The revenue growth from gaming
services occurred despite decreases in the number of credit card cash
advance transactions in the quarterly and year-to-date comparisons of 9.1%
and 1.1%, respectively, and was attributable to a third quarter 1996 price
increase on credit card cash advances, an increase in the average size of
such transactions, the expansion of Comdata's ATM network and the second
quarter 1996 introduction of surcharges in connection with such
transactions. The slower revenue growth from gaming services during 1996
largely reflects slower growth in the gaming industry generally and
increased competition, factors that may continue to affect this business
during 1997. Also contributing to Comdata's overall revenue growth was a
$2.5 million increase in revenue year-to-date from unsettled transactions.
After adjusting for the impact of a change in the revenue recognition
policy of the Scarborough Research Partnership at the beginning of 1996
that tended to make Arbitron's 1996/1995 revenue comparisons more favorable
early in 1996 than later in the year, Arbitron's revenue increased 11.2%
and 8.2% in the quarterly and year-to-date comparisons, respectively.
Revenue from sales of radio audience measurement services and analytical
software increased 8.3% and 7.1% in the three and nine-month comparisons,
respectively, reflecting sales to new customers, price increases and a
relatively high rate of customer renewals. Also contributing to the
revenue increase was increased sales of the Scarborough Report to radio,
television and cable broadcasters.
Computing Devices' revenue increase in both the three and nine month
comparisons was due to its Canadian and United Kingdom operations. The
revenue increase in the Canadian operations was due in large measure to
ground system products, particularly a multi-year contract to develop and
produce a reconnaissance system for a light armored vehicle. The increase
in revenue from the United Kingdom operations was primarily due to a
contract to provide ground systems for reconnaissance processing.
Costs and Expenses. The Company's gross margin increased from 40.4%
to 41.3% in the three comparison and from 40.0% to 40.9% in the nine month
comparison. These increases were due largely to the relatively greater
revenue growth in the Information Services segment, which has higher gross
margins, and to the gross margin improvement in Computing Devices from
24.1% to 25.0% in the quarterly comparison and from 21.5% to 23.0% in the
nine month comparison. The improvement in Computing Devices was due
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
September 30, 1996
Results of Operations (continued)
largely to revenue mix in its U.S. operations, with a greater portion of
1996 revenue attributable to higher margin production contracts for
avionics computers. Computing Devices' operating expenses were little
changed as a percentage of revenue in the comparative periods.
Information Services' cost of revenue and operating expenses,
expressed as a percentage of revenue, increased from 82.3% to 85.2% in the
three month comparison, and from 82.0% to 83.7% in the nine month
comparison, primarily reflecting cost and expense increases in HRG and
Comdata. In HRG, general and administrative expenses increased as a
percentage of revenue due in large measure to acquisitions made during 1995
and 1996, including related amortization of goodwill and intangibles.
Research and development expense in HRG also increased as a percentage of
revenue, reflecting development efforts related to client/server software
and upgrades and enhancements to payroll processing, tax filing and resume
tracking software. Partially offsetting these increases was a decrease in
HRG's selling expense as a percentage of revenue, reflecting increased
concentration of Employer Services' sales and marketing efforts on medium-
and large-sized employers. Comdata's increase in costs and expenses as a
percentage of revenue in the quarterly and year-to-date comparisons was due
in large measure to a rate of increase in agent commissions paid to gaming
locations in excess of the rate of growth in related revenue, and greater
revenue growth from lower margin products and services such as fuel desk
automation systems and telecommunications services.
As previously disclosed, the Company determined in the second quarter
1996 to delay the commercial release of the CII payroll processing software
in order to include certain enhancements to increase its functionality and
to add a client/server front-end that features open data base connectivity.
Among other things, this decision is expected to result in an increase in
the amount of capitalized software costs associated with this development
effort and to defer into 1997 the initial amortization of these costs and
the initial incurrence of certain incremental costs associated with
beginning the systematic commercial release of the CII software.
Expenses not attributable to either industry segment decreased in the
quarterly and year-to-date comparisons, due in part to lower than
anticipated health and casualty insurance costs and prescribed accounting
for pension costs.
Earnings Before Interest and Taxes ("EBIT"). The Company's EBIT
increased $5.4 million, or 12.5%, in the quarterly comparison and $18.5
million, or 14.5%, in the year-to-date comparison. Information Services'
EBIT decreased $1.3 million, or 3.7%, in the quarterly comparison, but
increased $5.3 million, or 5.0%, in the year-to-date comparison. The
Company expects that Information Services' EBIT in the fourth quarter and
full year 1996 will compare favorably with the respective 1995 periods. As
a percentage of revenue, Information Services' EBIT decreased from 17.7% to
14.8% in the quarterly comparison, and from 18.0% to 16.3% in the year-to-
date comparison. Computing Devices' EBIT increased $1.9 million, or 19.8%,
in the quarterly comparison, and $5.3 million, or 20.7%, in the year-to-
date comparison. As a percentage of revenue, Computing Devices' EBIT
increased from 8.2% to 8.8% in the three month comparison, and from 6.9% to
7.8% in the nine month comparison.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
September 30, 1996
Results of Operations (continued)
Interest Income and Expense and Taxes. The decrease in interest
expense in the quarterly and year-to-date comparisons reflected lower
levels of debt and lower interest rates, primarily as a result of the
December 1995 refinancing of Comdata's debt. The decrease in interest
income reflected lower levels of cash and short-term investments in 1996.
The decrease in the provisions for income taxes in the three and nine
month comparisons primarily represent the utilization of Ceridian's net
operating loss carryforwards to shelter Comdata's 1996 income from U.S.
federal income tax. The Company expects that its effective tax rate for
all of 1996 will be about 7.5%.
Financial Condition
With respect to operating cash flows, cash utilized for working
capital purposes in the first nine months of 1996 included an increase in
trade and other receivables, primarily reflecting an increase in Comdata's
receivables as compared to what is typically a seasonal low point at year-
end and an increase in Computing Devices' unbilled receivables, and an
increase in inventories, primarily in Computing Devices' U.S. operations.
Partially offsetting the impact of these increases was the receipt in the
second quarter 1996 of a $20.0 million customer advance as a result of
Computing Devices achieving a performance milestone under the Iris
contract.
The most significant contributors to the increase in cash used for
investing activities in the nine month comparison were the 1995 decrease in
short-term investments and the greater amount expended in 1996 to acquire
businesses (see the financial statement note entitled "Investing
Activity"). The cash used for financing activities during the first nine
months of 1996 primarily involved the repayment of $50.0 million under the
Company's revolving credit facility. Information regarding the cash impact
of the Company's repurchases of its common stock and of stock option
exercises during the first nine months of 1996 is contained in the
financial statement note entitled "Stockholders' Equity."
At September 30, 1996, $145.0 million in revolving loans and $1.4
million in standby letters of credit were outstanding under the Company's
revolving credit facility. The applicable interest rate for loans under
the credit facility varies, and at September 30, 1996 was 6.2%. As the
result of a September 1996 increase by Standard & Poor's in the Company's
senior unsecured long-term debt rating to BBB-, the applicable interest
rate under the credit facility decreased slightly effective October 1,
1996. At September 30, 1996, the Company was in compliance with all
covenants contained in the credit facility, and would have been entitled to
avail itself of an additional $194 million of borrowing under the permitted
debt covenant in the credit facility.
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<PAGE>
CERIDIAN CORPORATION AND SUBSIDIARIES
FORM 10-Q
September 30, 1996
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit Description Code
11 Statement re computation of per share
earnings E
Legend: (E) Electronic Filing
-14-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Quarterly Report on Form 10-Q for the
period ended September 30, 1996, to be signed on its behalf by the
undersigned thereunto duly authorized.
CERIDIAN CORPORATION
Registrant
Date: November 13, 1996 /s/L. D. Gross
L. D. Gross
Vice President and
Corporate Controller
(Principal Accounting Officer)
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<PAGE>
<PAGE>
<PAGE>
Exhibit 11
CERIDIAN CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
<TABLE>
(Amounts in millions, except per share data)
For Periods Ended September 30,
<S> <C> <C> <C> <C>
Three Months Nine Months
1996 1995 1996 1995
Net earnings for common
stockholders - primary $ 41.2 $ 30.4 $ 122.9 $ 88.6
Restore dividends on
convertible preferred
stock 3.2 3.2 9.7 9.7
Net earnings for fully
diluted earnings
per share $ 44.4 $ 33.6 $ 132.6 $ 98.3
Weighted average common
shares outstanding 68,035 66,178 67,700 66,093
Common share equivalents
from stock options and
restricted stock awards 2,359 3,414 2,746 3,122
Weighted average common
shares and equivalents
outstanding - primary 70,393 69,592 70,446 69,215
Shares issuable assuming
conversion of preferred
stock 10,384 10,384 10,384 10,384
Weighted average common
shares and equivalents
outstanding - adjusted
for full dilution 80,777 79,976 80,830 79,599
Net earnings for common
stockholders - primary $ 41.2 $ 30.4 $ 122.9 $ 88.6
Weighted average common
shares and equivalents
outstanding - primary 70,393 69,592 70,446 69,215
Primary earnings per share $ 0.59 $ 0.44 $ 1.74 $ 1.28
Net earnings for fully
diluted earnings
per share $ 44.4 $ 33.6 $ 132.6 $ 98.3
Weighted average common
shares and equivalents
outstanding - adjusted
for full dilution 80,777 79,976 80,830 79,599
Fully diluted earnings
per share $ 0.55 $ 0.42 $ 1.64 $ 1.23
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Sep-30-1996
<PERIOD-TYPE> 9-MOS
<CASH> 111,500
<SECURITIES> 0
<RECEIVABLES> 414,100
<ALLOWANCES> 11,700
<INVENTORY> 45,400
<CURRENT-ASSETS> 575,900
<PP&E> 337,900
<DEPRECIATION> 215,500
<TOTAL-ASSETS> 1,195,100
<CURRENT-LIABILITIES> 608,100
<BONDS> 152,700
<COMMON> 34,400
0
4,700
<OTHER-SE> 251,700
<TOTAL-LIABILITY-AND-EQUITY> 1,195,100
<SALES> 448,200
<TOTAL-REVENUES> 1,091,500
<CGS> 317,400
<TOTAL-COSTS> 645,400
<OTHER-EXPENSES> 1,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,100
<INCOME-PRETAX> 143,600
<INCOME-TAX> 11,000
<INCOME-CONTINUING> 132,600
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,600
<EPS-PRIMARY> 1.74
<EPS-DILUTED> 1.64
</TABLE>
