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 March 31, 1996
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 March 31, 1996
----------- ---------------------- -----------------
Common stock, New York Stock Exchange 50,299,267
$.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. Yes XX No .
1
<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 Six Months Ended March 31, 1996 and 1995...................3
Consolidated Balance Sheets --
March 31, 1996 and September 30,1995.................................4
Consolidated Statements of Cash Flows --
Six Months Ended March 31, 1996 and 1995.............................5
Notes to Consolidated Financial Statements............................7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations...............................................9
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders..................12
Item 6. Exhibits and Reports on Form 8-K.....................................12
SIGNATURES....................................................................14
2
<PAGE>
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 Six Months Ended March 31,1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------ ----------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenue
Leasing
Operating ..................................... $ 330 $ 272 $ 646 $ 521
Direct financing .............................. 39 46 79 93
Sales-type .................................... 49 93 89 157
------- ------- ------- -------
Total leasing .............................. 418 411 814 771
Sales ........................................... 74 105 125 195
Disaster recovery ............................... 78 65 148 129
Other ........................................... 11 12 24 22
------- ------- ------- -------
Total revenue ................................. 581 593 1,111 1,117
------- ------- ------- -------
Costs and expenses
Leasing
Operating ..................................... 249 202 484 383
Sales-type .................................... 35 75 59 121
------- ------- ------- -------
Total leasing .............................. 284 277 543 504
Sales ........................................... 59 89 100 163
Disaster recovery ............................... 68 58 129 116
Selling, general and administrative ............. 60 58 120 114
Interest ........................................ 65 70 130 138
------- ------- ------- -------
Total costs and expenses ...................... 536 552 1,022 1,035
------- ------- ------- -------
Earnings before income taxes ....................... 45 41 89 82
Income taxes ....................................... 17 15 34 31
------- ------- ------- -------
Net earnings before preferred dividends ............ 28 26 55 51
Preferred dividends ................................ (2) (2) (4) (4)
------- ------- ------- -------
Net earnings to common stockholders ................ $ 26 $ 24 $ 51 $ 47
======= ======= ======= =======
Retained earnings at beginning of period ........... $ 785 $ 701 $ 764 $ 681
Net earnings to common stockholders ................ 26 24 51 47
Cash dividends paid on common stock ................ (3) (4) (7) (7)
------- ------- ------- -------
Retained earnings at end of period ................. $ 808 $ 721 $ 808 $ 721
======= ======= ======= =======
Net earnings per common and common equivalent share:
Net earnings available to common stockholders ...... $ .49 $ .43 $ .96 $ .84
======= ======= ======= =======
Common and common equivalent shares outstanding .... 53 55 53 56
======= ======= ======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
3
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in millions except number of shares)
<TABLE>
<CAPTION>
March 31, September 30,
1996 1995
------- -------
ASSETS (unaudited) (audited)
<S> <C> <C>
Cash and cash equivalents ....................................... $ 79 $ 85
Cash - legally restricted ....................................... 30 30
Receivables, net ................................................ 190 176
Inventory of equipment .......................................... 134 133
Leased assets:
Direct financing and sales-type ............................... 1,799 1,968
Operating (net of accumulated depreciation) ................... 2,364 2,107
Net leased assets ........................................... 4,163 4,075
Buildings, furniture and other, net ............................. 153 163
Other assets .................................................... 413 377
------- -------
$ 5,162 $ 5,039
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable ................................................... $ 887 $ 661
Term notes payable .............................................. 276 507
Senior notes .................................................... 1,602 1,289
Accounts payable ................................................ 128 111
Income taxes .................................................... 259 244
Other liabilities ............................................... 308 327
Discounted lease rentals ........................................ 930 1,124
------- -------
4,390 4,263
------- -------
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 ..............
3,562,600 shares issued (3,625,800 at September 30, 1995) 89 91
Common stock $.10 par value ...................................
Authorized 200,000,000 shares issued 72,253,698 shares
(71,936,982 at September 30, 1995) .......................... 7 5
Additional paid-in capital .................................... 160 154
Deferred compensation (ESOP) .................................. (7) (8)
Deferred translation adjustment ............................... 9 13
Retained earnings ............................................. 808 764
------- -------
1,066 1,019
Common stock held in treasury, at cost; 21,954,431 shares
(19,666,386 shares at September 30, 1995) ................... (294) (243)
------- -------
Total stockholders' equity ................................ 772 776
------- -------
$ 5,162 $ 5,039
======= =======
See accompanying notes to consolidated financial statements.
</TABLE>
4
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
For the Six Months Ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
Increase (decrease) in cash and cash equivalents:
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Operating lease and other leasing receipts ...... $ 705 $ 598
Direct financing and sales-type leasing receipts 476 456
Leasing costs, primarily rentals paid ........... (18) (14)
Sales ........................................... 125 173
Sales costs ..................................... (63) (101)
Disaster recovery receipts ...................... 140 136
Disaster recovery costs ......................... (91) (103)
Other revenue ................................... 24 22
Selling, general and administrative expenses .... (117) (120)
Interest ........................................ (127) (137)
Income taxes .................................... (16) --
------- -------
Net cash provided by operating activities ..... 1,038 910
------- -------
Cash flows from investing activities:
Equipment purchased for leasing .................. (1,038) (959)
Investment in disaster recovery facilities ....... (20) (6)
Other ............................................ (16) 3
------- -------
Net cash used in investing activities ......... (1,074) (962)
------- -------
Cash flows from financing activities:
Discounted lease proceeds ....................... 130 159
Net increase in notes payable ................... 226 329
Issuance of term notes and senior notes ......... 384 335
Maturities and repurchases of term notes
and senior notes .............................. (302) (318)
Principal payments on secured debt .............. (324) (359)
Decrease in legally restricted cash ............. -- 12
Preferred stock repurchased ..................... (2) (5)
Common stock repurchased and placed in treasury . (56) (67)
Dividends paid on common stock .................. (7) (7)
Dividends paid on preferred stock ............... (4) (4)
Other ........................................... (15) 7
------- -------
Net cash provided by financing activities ..... 30 82
------- -------
Net increase (decrease) in cash and cash equivalents (6) 30
Cash and cash equivalents at beginning of period ... 85 51
------- -------
Cash and cash equivalents at end of period ......... $ 79 $ 81
======= =======
</TABLE>
5
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -- CONTINUED
(in millions)
For the Six Months Ended March 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
------ ------
Reconciliation of net earnings to net cash provided by operating activities:
<S> <C> <C>
Net earnings ................................................................... $ 55 $ 51
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Leasing costs, primarily
depreciation and amortization ............................................ 525 490
Leasing revenue, primarily principal portion of
direct financing and sales-type lease rentals ............................ 367 283
Cost of sales .............................................................. 37 62
Interest ................................................................... 3 1
Income taxes ............................................................... 18 31
Other - net ................................................................ 33 (8)
------ ------
Net cash provided by operating activities .................... $1,038 $ 910
====== ======
Supplemental schedule of noncash financing activities:
Common stock issued in acquisition of NetforceMTI ........................... $ 9 $ --
====== ======
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
Comdisco, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1996 and 1995
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, 1995.
The balance sheet at September 30, 1995 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, 1995.
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. Interest-Bearing Liabilities
At March 31, 1996, the Company had $1.2 billion of available domestic and
international borrowing capacity under various lines of credit from commercial
banks and commercial paper facilities, of which approximately $310 million was
unused.
The average daily borrowings outstanding during the six months ended March 31,
1996 were approximately $3.6 billion, with a related weighted average interest
rate of 7.08%. This compares to average daily borrowings during the first six
months of fiscal 1995 of approximately $3.7 billion, with a related weighted
average interest rate of 7.23%.
3. Senior Notes
In October, 1995, the Company filed a Registration Statement on Form S-3 with
the Securities and Exchange Commission for the shelf offering (the "Shelf
Offering") of up to $750 million of senior debt securities with terms to be set
at the time of the sale. Pursuant to the Shelf Offering, the Company filed a
Prospectus Supplement on January 12, 1996 relating to $400 million in
medium-term notes. On February 15, 1996, the Company, pursuant to the Shelf
Offering, issued $250 million in 5.75% Notes due February 15, 2001.
An aggregate of $325 million of medium-term notes remain available for issuance
under the Shelf Offering.
7
<PAGE>
4. Common Stock
On April 24, 1996, the Board of Directors declared a quarterly cash dividend of
$.07 per common share to be paid on June 17, 1996 to common stockholders of
record as of May 24, 1995.
During the quarter ended March 31, 1996, the Company purchased 1.3 million
shares of its common stock at an aggregate cost of approximately $26 million. At
March 31, 1996, the Company had a remaining authorization of approximately $10
million to purchase common stock. On April 24, 1996, the Board of Directors
authorized an additional $25 million for the Company's repurchase plan. An
additional 12,700 shares were purchased between March 31, 1996 and May 10, 1996
at a cost of $.3 million.
5. Earnings Per Common Share
Average common and common equivalent shares outstanding for the three months
ended March 31, 1996 and 1995 were 52,755,656 and 55,205,204, respectively.
Average common and common equivalent shares outstanding for the six months ended
March 31, 1996 and 1995 were 53,397,949 and 55,539,474 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
<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 March 31, 1996 were $26 million, or $.49 per share,
as compared to $24 million, or $.43 per share, for the three months ended March
31, 1995. Net earnings for the six months ended March 31, 1996, were $51
million, or $.96 per share, as compared to $47 million, or $.84 per share, for
the year earlier period. The increase in net earnings in the three and six
months ended March 31, 1996 compared to the year earlier periods is due to
increases in earnings contributions from operating leases, and disaster recovery
activities, offset by decreases in earnings contributions from direct financing
leases and remarketing activities. Earnings per share in the current year
periods benefited from the Company's stock repurchase program, which has reduced
the average common equivalent shares outstanding.
Certain statements in this Form 10-Q and in the future filings by the Company
with the Securities and Exchange Commission and in the Company's written and
oral statements made by or with the approval of an authorized executive officer
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
and the Company intends that such forward-looking statements be subject to the
safe harbors created thereby. The words "believe", "expect" and "anticipate" and
similar expressions identify forward-looking statements. These forward-looking
statements reflect the Company's current views with respect to future events and
financial performance, but are subject to many uncertainties and factors
relating to the Company's operations and business environment which may cause
the actual results of the Company to be materially different from any future
results expressed or implied by such forward-looking statements. Examples of
such uncertainties include, but are not limited to, changes in customer demand
and requirements, mix of leases written, new product announcements, interest
rate fluctuations, changes in federal income tax laws and regulations,
competition, unanticipated expenses and delays in the integration of
newly-acquired businesses, industry specific factors and world wide economic and
business conditions.. The mix of leases written in a quarter is 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. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements whether as a result of new information, future events or otherwise.
Equipment Volume and Recovery Services
- --------------------------------------
Leasing volume in the three and six months ended March 31, 1996 increased as
compared to both the year earlier periods and the prior quarter. Cost of
equipment placed on lease was $580 million during the quarter ended March 31,
1996. This compares to cost of equipment placed on lease of $536 million and
$540 million during the quarters ended March 31, 1995 and December 31, 1995,
respectively. During the six months ended March 31, 1996, cost of equipment
placed on lease totaled $1.1 billion compared to $1.0 billion during the six
months ended March 31, 1995. Among other factors, the continued growth of the
Company's electronic equipment group, which targets the worldwide semiconductor
chip-manufacturing market, had a favorable impact on volume in the current year
periods compared to the prior year periods. The Company's distributed systems
activities also had year-to-year increases in equipment volume. Remarketing
activity, which is an important contributor to quarterly earnings, declined
compared to the year earlier periods.
9
<PAGE>
The Company's disaster recovery segment expanded during the second quarter of
fiscal 1996 to include the results of NetforceMTI, a network services business,
which was acquired in December 1995 for shares of the Company's common stock
valued at approximately $9 million. Additionally, during the latter part of the
second quarter, the Company acquired the assets and contracts of the disaster
recovery division of CSC Compusource for approximately $9 million. These
acquisitions coupled with new service enhancements, which include the industries
first millennium testing ("Year 2000") offering, are expected to have a positive
impact on the customer base and the results of operations during the second half
of fiscal 1996 and beyond
Three Months ended March 31, 1996
- ---------------------------------
Total revenue for the three months ended March 31, 1996 was $581 million
compared to $593 million in the prior year quarter. Total leasing revenue of
$418 million for the quarter ended March 31, 1996 represented an increase of 2%
compared to the year earlier period. Total leasing revenue was $396 million in
the first quarter of fiscal 1996. The increase in total leasing revenue in the
current quarter compared to the prior year quarter is due to a 21% increase
operating lease revenue.
Operating lease revenue minus operating lease cost was $81 million, or 24.5% of
operating lease revenue (the "Lease Margin Percentage"), and $70 million, or
25.7% of operating lease revenue, in the three months ended March 31, 1996 and
1995, respectively. Operating lease revenue minus operating lease cost was $81
million, or 25.6% of operating lease revenue in the quarter ended December 31,
1995.
Revenue from disaster recovery activities for the three months ended March 31,
1996 and 1995 was $78 million and $65 million, respectively, a 20% increase.
Cost of disaster recovery activities for the three months ended March 31, 1996
was $68 million and $58 million, respectively, a 17% increase. The current year
quarter includes the results of operations of NetforceMTI, which the Company
acquired in December, 1995. NetforceMTI increased both revenue and expenses by
approximately $6 million.
Other revenue for the three months ended March 31, 1996 and 1995 was $11 million
and $12 million, respectively. Revenue from the sale of ownership positions
generated in conjunction with the Company's lease financing transactions with
early-stage high technology companies was $3 million and $2 million in the three
months ended March 31, 1996 and 1995, respectively. The prior year quarter
includes $3 million of gains generated from the sale of stock, originally
received by the Company in fiscal 1993 in connection with the sale of all of the
assets of its wholly-owned subsidiary, Comdisco Systems, Inc.
Total costs and expenses of $536 million for the quarter ended March 31, 1996
represented a 3% decrease compared to the prior year period. The decrease is
primarily due to lower sales-type costs and cost of sales related to the reduced
level of remarketing activity, offset by increased leasing costs related to
increasing operating lease revenue, and the growth of disaster recovery
services.
10
<PAGE>
Cost of sales for the three months ended March 31, 1996 and 1995 were $59
million and $89 million, respectively. Margins on sales were 20% and 15% in the
quarters ended March 31, 1996 and 1995, respectively. Margins on sales were 20%
in the first quarter of fiscal 1996.
Interest expense for the three months ended March 31, 1996 totaled $65 million
in comparison to $70 million in the quarter ended March 31, 1995 and $65 million
in the quarter ended December 31, 1995. The decrease in interest expense
primarily reflects reduced interest rates and a decrease in average daily
borrowings (see Note 2 of Notes to Consolidated Financial Statements). The
decrease in average daily borrowings reflects the Company's level of cash
provided by operating activities.
Six Months Ended March 31, 1996
- -------------------------------
Total revenue was $1.1 billion for the six months ended March 31, 1996 and 1995.
Leasing revenue of $814 million for the six months ended March 31, 1996,
represented an increase of 6% compared to the year earlier period.
The Lease Margin Percentage was $162 million, or 25.1% of operating lease
revenue, and $138 million, or 26.5% of operating lease revenue, in the six
months ended March 31, 1996 and 1995, respectively.
Selling, general and administrative expenses totaled $120 million and $114
million for the six months ended March 31, 1996 and 1995, respectively. Factors
contributing to the increase in the current period compared to the year earlier
period include the development of the Company's technology integration
activities, the acquisition of NetforceMTI and the growth of the Company's
electronics equipment group.
Interest expense was $130 million for the six months ended March 31, 1996 as
compared to $138 million for the year earlier period. The decrease in interest
expense is primarily due to reduced 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 noncancelable lease
rentals to various financial institutions at fixed interest rates on a
nonrecourse basis. Cash provided by operating activities for the six months
ended March 31, 1996 was $1.0 billion, compared to $910 million 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.
11
<PAGE>
Part II Other Information
Item 4. Submission of Matters to a Vote of Security Holders a) The Annual
Meeting of Shareholders was held on January 23, 1996.
b) The three nominees, Edward H. Fiedler, Jr., Basil R. Twist, Jr. And John J.
Vosicky listed in the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement dated and mailed December 22, 1995 were elected to the Board of
Directors of the Company for a term of three years.
Nominee Votes Cast For Percent of Votes Cast
--------- -------------- ---------------------
Edward H. Fiedler, Jr. 46,255,888 99%
Basil R. Twist, Jr. 46,060,510 99%
John J. Vosicky 46,237,627 99%
c) As set forth in the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement dated and mailed December 22, 1995 as Item 2, approval of the
1995 Long-Term Stock Ownership Incentive Plan (the "Long-Term Plan"), to
increase the share authorization for stock-based plans and to provide the
Company with greater flexibility with respect to employee incentives. There were
31,716,184 (62%) common shares voted for this proposal, 8,844,326 (17%) common
shares voted against, 2,626,530 (5%), common shares abstained and 8,138,116,
(16%) were not voted. The affirmative vote of the holders of a majority of all
votes entitled to be cast at the Annual Meeting was required for approval of
this proposal.
d) As set forth in the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement dated and mailed December 22, 1995, as Item 3, approval of
performance goal criteria, to be used by the Company in connection with grants
of Performance Units under the Long-Term Plan. There were 42,886,921 (84%)
common shares voted for this proposal, 932,201 (2%) common shares voted against,
2,647,837 (5%) common shares abstained and 4,858,197 (9%) were not voted. The
affirmative vote of the holders of a majority of all votes entitled to be cast
at the Annual Meeting was required for approval of this proposal.
e) As set forth in the Company's Notice of Annual Meeting of Stockholders and
Proxy Statement dated and mailed December 22, 1995, as Item 4, approval of KPMG
Peat Marwick LLP, independent certified public accountants, as auditors, to
audit the financial statements for fiscal 1996 and to perform other accounting
services, as appropriate. There were 46,468,030 (91%) common shares voted for
this proposal, 49,401 (0%)common shares voted against, 97,623 (0%) common shares
abstained and 4,710,102 (9%) were not voted.
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits:
Exhibit No. Description of Exhibit
- ----------- ---------------------------------------------------------------
3.01 Restated Certificate of Incorporation of Registrant dated
February 12, 1998
Incorporated by reference to Exhibit 4.1 filed with the
Company's Registration Statement on Forms S-8 and S-3, File No.
33-20715, filed March 8, 1988.
12
<PAGE>
Exhibit No. Description of Exhibit
- ----------- ---------------------------------------------------------------
3.02 By-Laws of Registrant as amended through November 18, 1987
Incorporated by reference to Exhibit 3.5 filed with the
Company's Annual Report fro the year ended September 30, 1987
on Form 10-K, File No. 1-7725.
3.03 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.
3.04 Certificate of Designations with respect to the Company's
8 3/4% Cumulative Preferred Stock, Series B, as filed with the
Secretary of the State of Delaware on July 2, 1994.
Incorporated by reference to Exhibit 4.1 filed with the
Company's Current Report on Form 8-K dated June 30, 1994, as
filed with the Commission July 21, 1994, File No. 1-7725.
4.01 Shareholder Rights Agreement dated November 18, 1987, as
amended and restated as of November 7, 1994, between Comdisco,
Inc. and Chemical Bank, as Rights Agent, which includes as
Exhibit A thereto the Form of Rights Certificate
Incorporated by reference to Exhibit 4.1 filed with the
Company's Current Report on Form 8-K, filed on December 6,1994,
File No. 1-7725.
4.02 Indenture Agreement between Registrant and Yasuda Bank and
Trust Company (U.S.A.), as Trustee dated as of December 1, 1995
Incorporated by reference to Exhibit 4.1 filed with the
Company's Current Report on Form 8-K dated January 12, 1996, as
filed with the Commission on January 17, 1996, File No. 1-7725,
the copy of the Indenture dated as of December 1, 1995 between
the Registrant and Yasuda Bank and Trust Company (U.S.A), as
Trustee
11 Computation of Earnings Per Common Share
12 Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
b) Reports on Form 8-K:
On February 17, 1996, the Company filed a current report on
Form 8-K, dated February 7, 1996, reporting Item 7. Financial
Statements and Exhibits. The filing was related to the 5.75%
Notes Due February 15, 2001 and included the Underwriting
Agreement, the Terms Agreement and the forms of 5.75% Notes.
13
<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: May 15, 1996 /s/ John J. Vosicky
John J. Vosicky
Executive Vice President and
Chief Financial Officer
14
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:
<TABLE>
<CAPTION>
Three Months Six Months
ended ended
March 31 March 31
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average shares outstanding......... 50 53 51 54
Effect of dilutive options......... 3 2 2 2
---- ---- ---- ----
Total .......................... 53 55 53 56
==== ==== ==== ====
Net earnings to
common stockholders ........... $ 26 $ 24 $ 51 $ 47
==== ==== ==== ====
Net earnings per common and
common equivalent share ......... $.49 $.43 $.96 $.84
==== ==== ==== ====
</TABLE>
Comdisco, Inc. and Subsidiaries Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<TABLE>
<CAPTION>
Six months ended
March 31 For the years ended September 30,
----------- ---------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges
Interest expense<F1> ............................................................ $ 132 $ 140 $ 278 $ 266 $ 295 $ 355 $ 371
Approximate portion of
rental expense representative
of an interest factor ......................................................... 5 5 11 13 22 29 37
---- ---- ---- ---- ---- ---- ----
Fixed charges ................................................................... 137 145 289 279 317 384 408
Earnings from continuing operations
before income taxes and
extraordinary item, and cumulative
effect of change in accounting principle,
net of preferred stock dividends ............................................... 85 78 160 80 137 34 136
---- ---- ---- ---- ---- ---- ----
Earnings from continuing operations before income taxes, extraordinary item,
cumulative effect of change in accounting principle, net of
preferred stock dividend ........................................................ $ 222 $ 223 $ 449 $ 359 $ 454 $ 418 $ 544
===== ===== ===== ===== ===== ===== =====
Ratio of earnings to fixed charges ................................................ 1.62 1.54 1.55 1.29 1.43 1.09 1.33
===== ===== ===== ===== ===== ===== =====
Rental expense:
Equipment subleases ............................................................. $ 10 $ 12 $ 22 $ 30 $ 57 $ 77 $ 103
Office space, furniture, etc .................................................... 4 4 10 8 8 10 9
---- ---- ---- ---- ---- ---- ----
Total ........................................................................ $ 14 $ 16 $ 32 $ 38 $ 65 $ 87 $ 112
===== ===== ===== ===== ===== ===== =====
1/3 of rental expense ........................................................ $ 5 $ 5 $ 11 $ 13 $ 22 $ 29 $ 37
===== ===== ===== ===== ===== ===== =====
<FN>
<F1> Includes interest expense incurred by disaster recovery services and included
in disaster recovery services expenses on the statements of earnings.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information
extracted from the Quarterly Report on Form 10-Q
for the quarter ended March 31, 1996 and is qualified
in its entirety by reference to such financial statments.
</LEGEND>
<CIK> 0000722487
<NAME> Comdisco, Inc.
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> Oct-01-1995
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 79
<SECURITIES> 0
<RECEIVABLES> 212
<ALLOWANCES> (22)
<INVENTORY> 134
<CURRENT-ASSETS> 403
<PP&E> (1,682)
<DEPRECIATION> (1,592)
<TOTAL-ASSETS> 5,162
<CURRENT-LIABILITIES> 1,015
<BONDS> 1,602
0
89
<COMMON> 7
<OTHER-SE> 676
<TOTAL-LIABILITY-AND-EQUITY> 5,162
<SALES> 418
<TOTAL-REVENUES> 581
<CGS> 284
<TOTAL-COSTS> 471
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65
<INCOME-PRETAX> 45
<INCOME-TAX> 17
<INCOME-CONTINUING> 28
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26
<EPS-PRIMARY> 0.490
<EPS-DILUTED> 0.490
</TABLE>
