UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
_
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1994
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _______________ to _______________
Commission file number 1-7725
I.R.S. Employer Identification Number 36-2687938
COMDISCO, INC.
(a Delaware Corporation)
6111 North River Road
Rosemont, Illinois 60018
Telephone: (708) 698-3000
Name of each Number of shares
Title of exchange on outstanding as of
each class which registered June 30, 1994 _
Common stock, New York Stock Exchange 37,339,581
$.10 par value Chicago Stock Exchange
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. YesXX No .
<PAGE>
Comdisco, Inc. and Subsidiaries
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Statements of Earnings and Retained Earnings --
Three and Nine Months Ended June 30, 1994 and 1993 3
Consolidated Balance Sheets --
June 30, 1994 and September 30, 1993 4
Consolidated Statements of Cash Flows --
Nine Months Ended June 30, 1994 and 1993 5
Notes to Consolidated Financial Statements 7
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
SIGNATURES 16
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF EARNINGS AND RETAINED EARNINGS (UNAUDITED)
(in millions except per share data)
For the Three and Nine Months Ended June 30, 1994 and 1993
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenue
Leasing
Operating $ 244 $ 269 $ 760 $ 832
Direct financing 46 47 139 144
Sales-type 74 70 255 212
Total leasing 364 386 1,154 1,188
Sales 64 60 207 232
Disaster recovery 60 55 178 161
Other 26 12 40 33
Total revenue 514 513 1,579 1,614
Costs and expenses
Leasing
Operating 181 197 564 619
Sales-type 51 55 194 165
Total leasing 232 252 758 784
Sales 53 50 171 203
Disaster recovery 55 53 166 153
Selling, general and administrative 60 50 157 147
Litigation 10 - 10 -
Interest 64 71 198 221
Total costs and expenses 474 476 1,460 1,508
Earnings before income taxes 40 37 119 106
Income taxes 16 14 48 42
Earnings before cumulative effect of
change in accounting principle 24 23 71 64
Cumulative effect of change in accounting
principle - - - 20
Net earnings before preferred dividends 24 23 71 84
Preferred dividends (2) (2) (6) (5)
Net earnings to common stockholders $ 22 $ 21 $ 65 $ 79
Retained earnings at beginning of
period $ 686 $ 634 $ 650 $ 582
Net earnings to common stockholders 22 21 65 79
Cash dividends paid on common stock (3) (3) (10) (9)
Retained earnings at end of period $ 705 $ 652 $ 705 $ 652
==== ==== ==== ====
Net earnings per common and common equivalent share:
Earnings from continuing
operations $ .57 $ .50 $ 1.66 $ 1.44
Cumulative effect of change in
accounting principle - - - .49
----- ----- ------ ------
Net earnings to common
stockholders $ .57 $ .50 $ 1.66 $ 1.93
===== ===== ==== ====
Cash dividends paid per common
share $ .09 $ .07 $ .26 $ .21
===== ===== ==== ====
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in millions except number of shares)
<CAPTION>
June 30 September 30
1994 1994
---------- -----------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 46 $ 70
Cash - legally restricted 47 48
Receivables, net 161 158
Inventory of equipment 148 164
Leased assets:
Direct financing and sales-type 2,149 2,073
Operating (net of accumulated depreciation) 1,698 1,834
------- -------
Net leased assets 3,847 3,907
Buildings, furniture and other, net 172 175
Other assets 410 438
-------- -------
$4,831 $4,960
===== =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable $ 784 $ 655
Term notes payable 204 206
Senior notes 967 1,119
Accounts payable 69 100
Income taxes 218 202
Other liabilities 264 269
Discounted lease rentals 1,553 1,670
------ -------
4,059 4,221
Stockholders' equity:
Preferred stock $.10 par value.
Authorized 100,000,000 shares:
8.75% Cumulative Preferred Stock, Series A and B.
$25 stated value and liquidation preference.
4,000,000 shares issued 100 100
Common stock $.10 par value.
Authorized 200,000,000 shares issued 47,293,714 shares
(47,219,823 at September 30, 1993) 5 5
Additional paid-in capital 139 138
Deferred compensation (ESOP) (10) (12)
Deferred translation adjustment (5) (7)
Retained earnings 705 650
------ ------
934 874
Common stock held in treasury, at cost; 9,954,133 shares
(8,608,502 shares at September 30, 1993) (162) (135)
Total stockholders' equity 772 739
------ -------
$4,831 $4,960
==== =======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
Nine Months Ended June 30, 1994 and 1993
Increase (decrease) in cash and cash equivalents:
<CAPTION>
1994 1993
<S> <C> <C>
Cash flows from operating activities:
Operating lease and other leasing receipts $ 860 $ 932
Direct financing and sales-type leasing receipts 659 683
Sale of direct financing and sales-type lease receivables - 181
Leasing costs, primarily rentals paid (36) (58)
Sales 216 244
Sales costs (98) (132)
Disaster recovery receipts 175 153
Disaster recovery costs (149) (140)
Other revenue 20 31
Selling, general and administrative expenses (141) (163)
Interest (200) (223)
Income taxes (34) (29)
------- ------
Net cash provided by operating activities 1,272 1,479
Cash flows from investing activities:
Equipment purchased for leasing (1,068) (1,145)
Investment in disaster recovery facilities (36) (9)
Other (12) (7)
------- -------
Net cash used in investing activities (1,116) (1,161)
Cash flows from financing activities:
Discounted lease proceeds 520 579
Net increase (decrease) in notes and term notes payable 127 (191)
Net increase (decrease) in senior notes (152) 24
Principal payments on nonrecourse debt (639) (732)
Common stock repurchased and placed in treasury (27) (19)
Decrease in legally restricted cash 1 16
Dividends paid on common stock (10) (9)
Dividends paid on preferred stock (6) (5)
Other 6 (9)
---- ----
Net cash used in financing activities (180) (346)
Net decrease in cash and cash equivalents (24) (28)
Cash and cash equivalents at beginning of period 70 74
------ ------
Cash and cash equivalents at end of period $ 46 $ 46
==== =======
</TABLE>
<PAGE>
<TABLE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -- CONTINUED
(in millions)
Nine Months Ended June 30, 1994 and 1993
<CAPTION>
1994 1993
<S> <C> <C>
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings $ 71 $ 84
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Leasing costs, primarily
depreciation and amortization 722 726
Leasing revenue, primarily principal portion of
direct financing and sales-type lease rentals 365 427
Sale of direct financing and sales-type
lease receivables - 181
Cost of sales 73 71
Interest (2) (2)
Income taxes 14 13
Cumulative effect of change in accounting for
income taxes - (20)
Litigation charge 10 -
Other - net 19 (1)
------- ------
Net cash provided by operating activities $1,272 $1,479
==== =======
Supplemental schedule of noncash financing activities:
Assumption of discounted lease rentals in lease
portfolio acquisition $ 2 $ 25
======= ======
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
Comdisco, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1994 and 1993
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial statements and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
disclosures required by generally accepted accounting principles for
annual financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. For further information, refer to the
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year
ended September 30, 1993.
The balance sheet at September 30, 1993 has been derived from the audited
financial statements included in the Company's Annual Report on Form 10-K
for the year ended September 30, 1993.
Legally restricted cash represents cash and cash equivalents that are
restricted solely for use as collateral in secured borrowings
and are not available to other creditors.
2. Change in Method of Accounting for Income Taxes
Effective October 1, 1992, the Company adopted FASB Statement No.
109 ("FAS 109"), "Accounting for Income Taxes." The adoption of FAS
109 changed the Company's method of accounting for income taxes from the
deferred method (APB No. 11) to an asset and liability approach.
Previously the Company provided deferred income taxes for income and
expenses that were recognized in different periods for income tax purposes
than for financial reporting purposes, measured at the tax rate in effect
in the year the difference originated. Under the asset and
liability method of FAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to differences between
the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carry forwards.
Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or
settled. Under FAS 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
As permitted by FAS 109, the Company elected not to restate the financial
statements of any prior years. The effect of the change on income
tax expense for the three months ended December 31, 1992 was not material;
however, the cumulative effect of the change increased net earnings to common
stockholders by $20 million, or $.49 per share. The cumulative effect
primarily represents the impact of adjusting deferred taxes to reflect the
current Federal tax rate of 34% as opposed to the higher tax rates that were
in effect when the deferred taxes originated.
Income taxes are provided on earnings at the appropriate statutory rates
applicable to such earnings. The Company estimates that the annual
effective tax rate will be approximately 40% for fiscal 1994, which is the
same as the estimated rate used in the nine months ended June 30, 1993.
As disclosed in Note 12 of Notes to Consolidated Financial Statements in
the Company's Annual Report on Form 10-K for the year ended
September 30, 1993, in February, 1992, the Internal Revenue Service commenced
an income tax audit for fiscal years 1989 and 1990. The Company received the
Revenue Agent's Report. The IRS recently issued a 30 day letter in
connection withthe Review Agent's Review and the Company has
responded to that 30 day letter. The Company believes that all issues raised
in the report will be resolved with no material impact on the Company's
financial condition.
3. Litigation
In the third quarter of fiscal 1994, the Company increased by $10 million the
litigation reserve, originally established in fiscal 1992, to cover the
current estimate of continuing costs associated with its litigation with
International Business Machines Corporation and IBM Credit Corporation
(see Note 16 of Notes to Consolidated Financial Statements in the Company's
Annual Report on Form 10-K for the year ended September 30, 1993).
4. Interest-Bearing Liabilities
The average daily borrowings outstanding during the nine months ended
June 30, 1994 were approximately $3.6 billion, with a related weighted average
interest rate of 7.17%. This compares to average daily borrowings during the
first nine months of fiscal 1993 of approximately $3.9 billion, with a related
weighted average interest rate of 7.50%.
At June 30, 1994, the Company had $1 billion of available domestic and
international borrowing capacity under various lines of credit from
commercial banks and commercial paper facilities, of which approximately
$216 million was unused.
5. Senior Notes
In June, 1992, the Company filed a Registration Statement on Form S-3 with the
Securities and Exchange Commission for a shelf offering (the "Shelf
Offering") of up to $500 million of senior debt securities with terms to be
set at the time of sale. At June 30, 1994,
$172 million of debt securities remain available for issuance under the
Shelf Offering.
6. Common Stock
On July 20, 1994, the Board of Directors declared a quarterly cash dividend
of $.09 per common share to be paid on September 6, 1994 to common
stockholders of record as of August 8, 1994.
During the quarter ended June 30, 1994, the Company purchased 690,000 shares of
its common stock at an aggregate cost of approximately $14 million. On
May 16 1994, the Board of Directors authorized $25 million for common
stock repurchases. At June 30, 1994, the Company had a remaining
authorization of approximately $23 million to
purchase common stock. An additional 639,900 shares were purchased between
June 30, 1994, and August 1, 1994 at a cost of $12 million.
7. Earnings Per Common Share
Average common and common equivalent shares outstanding for the three months
ended June 30, 1994 and 1993 were 38,331,698 and 40,265,127,
respectively. Average common and common equivalent shares
outstanding for the nine months ended
June 30, 1994 and 1993 were 38,835,317 and 40,581,954, respectively.
Earnings per common and common equivalent share reflects the assumed
exercise of stock options that would have a dilutive effect on
earnings per common share if exercised.
8. Contingent Liabilities
Refer to Note 16 of Notes to Consolidated Financial Statements in the Company's
Annual Report on Form 10-K for the year ended September 30, 1993, for
information on the Company's contingent liabilities. Management believes such
information adequately reflects the current status of such contingencies.
<PAGE>
Comdisco, Inc. and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Net Earnings
Net earnings to common stockholders (hereinafter referred to as "net earnings")
for the three months ended June 30, 1994 were $22 million, or $.57 per share,
as compared to $21 million, or $.50 per share, for the three months ended
June 30, 1993. Net earnings for the nine months ended June 30, 1994, were
$65 million, or $1.66 per share, as compared to $79 million, or $1.93 per
share, for the year earlier period. The first quarter of fiscal 1993 includes
the cumulative effect of the adoption of FAS 109 (see Note 2 of Notes to
Consolidated Financial Statements) which increased net earnings by $20 million,
or $.49 per share (the "Cumulative Effect"). Excluding the
Cumulative Effect, the increase in net earnings
in the three and nine months ended June 30, 1994 compared to the year earlier
periods is due to an increase in earnings contributions from remarketing
coupled with a decrease
in interest expense, offset by a decrease in the earnings contributions
from operating leases. Direct financing revenue declined compared to the
prior year periods, reflecting both a decline in interest rates and the
impact of a reduction in the
net investment in direct financing leases resulting from the Company's offering
of lease-backed certificates.
The Company's operating results are subject to quarterly fluctuations
resulting from a variety of factors, including variations in the mix of leases
written and changes in interest rates. The mix of leases written in a
quarter is also a result of a
combination of factors, including, but not limited to, changes in customer
demands and/or requirements, new product announcements, price changes,
changes in delivery dates, changes in maintenance policies and the pricing
policies of equipment manufacturers, and price competition from other lessors.
Leasing
Leasing volume in the three and nine months ended June 30, 1994 decreased as
compared to the year earlier periods. However, remarketing activity remained
strong, and overall margins on remarketing activities increased. The decline
in leasing volume is due to a number of factors, including, but not limited
to, the slow growth in worldwide economies, changes in the traditional
mainframe business, including the repositioning of the traditional mainframe
as a powerful "file server"
running networks of PCs and newer, transitional mainframe products leading
toward system integration, delays in equipment acquisition decisions pending
definitive product strategy announcements from the leading high technology
equipment manufacturers, cost pressures and the related impact on capital
budgets, and, with respect to the medical industry, uncertainty surrounding
federal proposals on healthcare. Conversely, cost pressures have
strengthened the Company's remarketing
activities as high technology equipment users opt for remarketed equipment
as a cost effective alternative to new equipment.
During the nine months ended June 30, 1994, equipment purchased for leasing
totaled $1.07 billion compared to $1.15 billion of equipment purchased for
leasing during the nine months ended June 30, 1993. During the quarter ended
June 30, 1994, equipment purchased for leasing totaled $361 million compared to
$364 million and $293 million of equipment purchased for leasing during the
quarters ended June 30, 1993 and
March 31, 1994, respectively. The decline in the overall lease portfolio may
have an impact on the Company's future remarketing activities as the
Company has less equipment to remarket.
In June, 1994, the Company signed an agreement under which the Company
will acquire the computer leasing business of Promodata S. A., one of France's
largest independent computer leasing companies. The Company believes that this
acquisition will enhance it's position in the European market for information
technology.
Disaster Recovery
In March, 1994, the Company announced a $30 million project to expand
and enhance the Company's current disaster recovery services and to provide
the industry's first recovery center dedicated to client/server environments.
Enhanced capabilities are to include client/server platforms, workareas, open
systems, networks, midrange and mainframe computers. The Company expects
to complete this expansion during the fourth quarter of fiscal 1994. For the
nine months ended June 30, 1994, the Company has invested $36 million in
its disaster recovery facilities, compared to $9 million in the prior year
period.
Three months ended June 30, 1994
Total revenue for the three months ended June 30, 1994 was $514 million
compared to $513 million in the prior year quarter. The decline in operating
lease revenue as compared to the year earlier period reflects reduced leasing
volume in the latter part of fiscal 1993 and the first nine months
of fiscal 1994 as compared to the prior year periods, the aging IBM 3090
lease portfolio and the lack of growth in the
mainframe market (primarily high-end IBM ES/9000 and comparable models) during
the last twenty four months. The increase in sales-type revenue as compared
to the prior year quarter reflects the Company's strong remarketing
activities. Total leasing revenue of $364 million for the quarter ended
June 30, 1994 represented a decrease of 6% compared to the year earlier
period. Total leasing revenue was $386 million in the third quarter of fiscal
1993. The increase in other revenue as compared to the prior year period is
due to the receipt of key-man life
insurance proceeds of $20 million (the "Proceeds") as a result of the death on
June 24, 1994 of Mr. Kenneth N. Pontikes, Founder, Chairman of the
Board and President of Comdisco, Inc.
Total costs and expenses of $474 million for the quarter ended June 30, 1994
represented a modest decrease compared to the prior year period. Excluding the
impact of the $10 million increase to the litigation reserve and a one time
charge of $10 million to establish the Comdisco Foundation, which are
discussed below,
total costs and expenses declined 5%, primarily due to reduced leasing costs
related to declining operating lease revenue and a decrease in interest expense.
Operating lease revenue minus operating lease cost (the "Lease Margin") was
$63 million, or 25.8% of operating lease revenue, and $72 million, or 26.8%
of operating lease revenue, in the three months ended June 30, 1994 and 1993,
respectively. The Company expects the Lease Margin to remain at or slightly
below current levels throughout the remainder of fiscal 1994.
Sales-type costs decreased compared to the prior period despite an increase in
sales-type revenue, reflecting higher margins on remarketing of equipment in
the lease portfolio.
Cost of sales for the three months ended June 30, 1994 and 1993 were $53
million and $50 million, respectively. Margins on sales were 17% in the
quarters ended June 30, 1994 and 1993, respectively.
Selling, general and administrative expenses were $60 and $50 million for the
three months ended June 30, 1994 and 1993, respectively. During the quarter
ended June 30, 1994, the Company recorded a contribution of $10 million to
establish and fund the Comdisco Foundation (the "Contribution"). The Company
has a history of charitable giving because it believes that active support of
charitable organizations helps fulfill the Company's social and philanthropic
responsibilities to the communities in which it operates. The formation
of the Comdisco Foundation, which will contribute its funds periodically to
other charitable organizations, will provide an efficient means by which the
Company can continue to fulfill its charitable giving goals. The Company
estimates that the net effect of the Contribution will be an annual cash
savings and reduction in selling, general and administrative expense of
approximately $700,000 beginning in fiscal 1995. Excluding the Contribution,
selling, general and administrative expenses have remained at the same level
as in the prior year quarter, reflecting the impact of the Company's emphasis
on cost containment.
The Company continues to incur costs in its litigation with International
Business Machines Corporation ("IBM") and IBM Credit Corporation
(see Note 16 of Notes to Consolidated Financial Statements in the Company's
Annual Report on Form 10-K for the year ended September 30, 1993). In the
third quarter of fiscal 1994, the Company increased by $10 million the
litigation reserve, originally established in fiscal 1992, to cover the
current estimate of continuing costs associated with the ultimate resolution
of these matters.
Interest expense for the three months ended June 30, 1994 totaled $64 million
in comparison to $71 million in the quarter ended June 30, 1993 and $65 million
in the quarter ended March 31, 1994. The decrease in interest expense
primarily reflects the decline in interest rates and reduced average
daily borrowings.
Nine Months Ended June 30, 1994
Total revenue was $1.6 billion for the nine months ended June 30, 1994
and 1993. Leasing revenue of $1.2 billion for the nine months ended
June 30, 1994, represented a decrease of 3% compared to the year earlier
period. The decrease relates primarily to a decline in operating lease
revenue, offset by higher sales-type revenue.
Total costs and expenses of $1.5 billion for the nine months ended
June 30, 1994,
represented a decrease of 3% over the comparative period of the
prior year. The decrease is primarily due to reduced leasing costs related to
declining operating lease revenue and a decrease in interest expense, offset
by higher sale-type costs and expenses resulting from the increase in
remarketing and the impact of the
increase to the litigation reserve and the Contribution.
The Lease Margin was $196 million, or 25.8% of operating lease revenue, and
$213 million, or 25.6% of operating lease revenue, in the nine months ended
June 30, 1994 and 1993, respectively.
Selling, general and administrative expenses totaled $157 million and $147
million for the nine months ended June 30, 1994 and 1993, respectively. The
increase is due to the Contribution.
Interest expense was $198 million for the nine months ended June 30, 1994 as
compared to $221 million for the year earlier period. The decrease in interest
expense is primarily due to declining interest rates and lower average daily
borrowings.
Financial Condition
The Company's current financial resources and estimated cash flows from
operations are considered adequate to fund anticipated future growth and
operating requirements. The Company utilizes a variety of financial
instruments to fund its short and long-term needs.
Capital expenditures for equipment are generally financed by cash provided by
operating activities, recourse debt, or by assigning the noncancellable lease
rentals to various financial institutions at fixed interest rates on a
nonrecourse basis. Cash provided by operating activities for the
nine months ended June 30, 1994 was $1.3 billion, compared to
$1.5 billion for the year earlier period. Cash provided by operations has
been used to finance equipment purchases
and, accordingly, had a positive impact on the level of borrowing required
to support the Company's investment in its lease portfolio. The Company
expects this trend to continue, with cash flow from leasing and remarketing
reinvested in the equipment portfolio.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
Exhibit No. Description of Exhibit
4.01 Indenture Agreement between Registrant and Citibank, N.A., as Trustee
dated as of June 15, 1992
Incorporated by reference to Exhibit 4.1 filed with the Company's Current
Report on Form 8-K dated September 1, 1992, as filed with the Commission on
September 2, 1992, File No. 1-7725, the copy of Indenture, dated as of
June 15, 1992 between Registrant and Citibank, N.A., as Trustee,
(said Indenture defines certain rights of security holders).
4.02 Indenture between Registrant and Chemical Bank, N.A., as Trustee dated
as of April 1, 1988
Incorporated by reference to Exhibit 4.5 filed with the Form 8 Amendment to the
Company's Annual Report on Form 10-K for the year ended September 30, 1990,
filed February 21, 1991, File No. 1-7725, the copy of Indenture dated as of
April 1, 1988, between Registrant and Manufacturers Hanover Trust Company,
as Trustee, (said Indenture defines certain rights of security holders).
4.03 First Supplemental Indenture between Registrant and Chemical Bank, N.A.,
as Trustee dated as of January 1, 1990
Incorporated by reference to Exhibit 4.8 filed with the Company's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1990,
File No. 1-7725, the copy of the First Supplemental Indenture dated as of
January 1, 1990, between Registrant and Manufacturers Hanover Trust Company,
as Trustee (said Indenture defines certain rights of security holders).
4.04 Shareholder Rights Agreement dated November 18, 1987
Incorporated by reference to Exhibit 4.4 filed with the Company's Annual
Report for the year ended September 30, 1987 on Form 10-K, File No. 1-7725.
4.05 Shareholder Rights Agreement
Incorporated by reference to Pages 7 - 10 of the Company's Form 10-K for
the fiscal year ended September 30, 1987, File No. 1-7725.
4.06 Certificate of Designations with respect to the Company's 8 3/4%
Cumulative Preferred Stock, Series A, as filed with the Secretary of State of
Delaware on September 18, 1992.
Incorporated by reference to Exhibit 4.1 filed with the Company's Current
Report on Form 8-K dated September 17, 1992, as filed with the Commission
October 9, 1992, File No. 1-7725.
4.07 Certificate of Designations with respect to the Company's 8 3/4%
Cumulative Preferred Stock, Series B, as filed with the Secretary of State
of the State of Delaware on July 2, 1993
Incorporated by reference to Exhibit 4.1 filed with the Company's Current
Report on Form 8-K dated June 30, 1993, as filed with the Commission
July 21, 1994, File No. 1-7725.
11 Computation of Earnings Per Common Share
12 Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends
b) Reports on Form 8-K:
On June 27, 1994, the Company filed a Current Report on Form 8-K dated
June 24, 1994, reporting Item 5. Other Events, the death of
Mr. Kenneth N. Pontikes, Chairman of the Board and President.
On July 11,1994, the Company filed a Current Report on Form 8-K dated
July 11, 1994, reporting Item 1. Changes in Control.
On July 28, 1994, the Company filed a Current Report on Form 8-K dated
June 30, 1994, reporting Item 7. Financial Statements and Exhibits.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMDISCO, INC.
Registrant
Date: August 15, 1994 /s/ John J. Vosicky
John J. Vosicky
Executive Vice President and
Chief Financial Officer
<TABLE>
Comdisco, Inc. and Subsidiaries Exhibit 11
COMPUTATION OF EARNINGS PER COMMON SHARE
(in millions except per share data)
Average shares used in computing net earnings per common and common equivalent
share were as follows:
<CAPTION>
Three Months Nine Months
ended ended
June 30 June 30
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Average shares outstanding 38 40 39 41
Effect of dilutive options - - - -
Total 38 40 39 41
Net earnings to
common stockholders $ 22 $ 21 $ 65 $ 79
Net earnings per common and
common equivalent share $.57 $.50 $1.66 $1.93
</TABLE>
<TABLE>
Comdisco, Inc. and Subsidiaries Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(dollars in millions)
<CAPTION>
Nine Months Ended
June 30
1994 1993 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges
Interest expense <F1> $203 $224 $295 $355 $371 $343 $290
Approximate portion of rental expense
representative of an interest factor 10 17 22 29 37 39 35
Fixed charges 213 241 317 384 408 382 325
Preferred stock dividends <F2> 11 8 11 - - - -
Combined fixed charges and
preferred stock dividends 224 249 328 384 408 382 325
Earnings from continuing operations
before income taxes and extraordinary item,
net of preferred stock dividends 113 101 137 34 136 134 167
Earnings from continuing operations
before income taxes, extraordinary item,
combined fixed charges and preferred
stock dividend $337 $350 $465 $418 $544 $516 $492
Ratio of earnings to combined fixed charges
and preferred stock dividends 1.50 1.41 1.42 1.09 1.33 1.35 1.51
Rental expense:
Equipment subleases $ 24 $ 45 $ 57 $ 77 $103 $ 109 $ 99
Office space, furniture, etc. 6 6 8 10 9 8 7
Total $ 30 $ 51 $ 65 $ 87 $112 $ 117 $ 106
1/3 of rental expense $ 10 $ 17 $ 22 $ 29 $ 37 $ 39 $ 35
<FN>
<F1> Includes interest expense incurred by disaster recovery services and included
in disaster recovery services expenses on the statements of earnings.
<F2> There were no preferred stock dividend requirements prior to fiscal 1993.
</TABLE>
