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, 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: (847) 698-3000
Name of each Number of shares
Title of exchange on outstanding as of
each class which registered June 30, 1996
---------- ---------------- -------------
Common stock, New York Stock Exchange 50,371,511
$.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 Nine Months Ended June 30, 1996 and 1995......................3
Consolidated Balance Sheets --
June 30, 1996 and September 30, 1995....................................4
Consolidated Statements of Cash Flows --
Nine Months Ended June 30, 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 6. Exhibits and Reports on Form 8-K..................................12
SIGNATURES...................................................................13
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 Nine Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30
-------- ---------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Leasing
Operating .................................................... $ 349 $ 291 $ 995 $ 812
Direct financing ............................................. 37 44 116 137
Sales-type ................................................... 54 53 143 210
------- ------- ------- -------
Total leasing ............................................. 440 388 1,254 1,159
Sales .......................................................... 54 74 179 269
Business continuity and network services ....................... 83 68 231 197
Other .......................................................... 15 9 39 31
------- ------- ------- -------
Total revenue ................................................ 592 539 1,703 1,656
------- ------- ------- -------
Costs and expenses
Leasing
Operating .................................................... 266 214 750 597
Sales-type ................................................... 38 35 97 156
------- ------- ------- -------
Total leasing ............................................. 304 249 847 753
Sales .......................................................... 45 62 145 225
Business continuity and network services ....................... 72 60 201 176
Selling, general and administrative ............................ 60 58 180 172
Interest ....................................................... 64 68 194 206
------- ------- ------- -------
Total costs and expenses ..................................... 545 497 1,567 1,532
------- ------- ------- -------
Earnings before income taxes ...................................... 47 42 136 124
Income taxes ...................................................... 18 16 52 47
------- ------- ------- -------
Net earnings before preferred dividends .......................... 29 26 84 77
Preferred dividends ............................................... (2) (2) (6) (6)
------- ------- ------- -------
Net earnings to common stockholders .............................. $ 27 $ 24 $ 78 $ 71
======= ======= ======= =======
Retained earnings at beginning of period .......................... $ 808 $ 721 $ 764 $ 681
Net earnings to common stockholders .............................. 27 24 78 71
Cash dividends paid on common stock ............................... (4) (3) (11) (10)
------- ------- ------- -------
Retained earnings at end of period ................................ $ 831 $ 742 $ 831 $ 742
======= ======= ======= =======
Net earnings per common and common equivalent share:
Net earnings to common stockholders ........................ $ .51 $ .44 $ 1.47 $ 1.28
======= ======= ======= =======
Cash dividends paid per common share .............................. $ .07 $ .06 $ .21 $ .18
======= ======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(in millions except number of shares)
<TABLE>
<CAPTION>
June 30 September 30
1996 1995
---- ----
(unaudited)(audited)
<S> <C> <C>
ASSETS
Cash and cash equivalents ....................................... $ 24 $ 85
Cash - legally restricted ....................................... 20 30
Receivables, net ................................................ 163 176
Inventory of equipment .......................................... 155 133
Leased assets:
Direct financing and sales-type ............................... 1,748 1,968
Operating (net of accumulated depreciation) ................... 2,601 2,107
------- -------
Net leased assets ........................................... 4,349 4,075
Buildings, furniture and other, net ............................. 150 163
Other assets .................................................... 407 377
------- -------
$ 5,268 $ 5,039
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable ................................................... $ 1,077 $ 661
Term notes payable .............................................. 275 507
Senior and subordinated debt .................................... 1,541 1,289
Accounts payable ................................................ 166 111
Income taxes .................................................... 275 244
Other liabilities ............................................... 293 227
Discounted lease rentals ........................................ 850 1,124
------- -------
4,477 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 72,476,480 shares
(71,936,982 at September 30, 1995) .......................... 7 5
Additional paid-in capital .................................... 162 154
Deferred compensation (ESOP) .................................. (5) (8)
Deferred translation adjustment ............................... 5 13
Retained earnings ............................................. 831 764
------- -------
1,089 1,019
Common stock held in treasury, at cost; 22,104,969 shares
(19,666,386 shares at September 30, 1995) .................... (298) (243)
------- -------
Total stockholders' equity ................................ 791 776
------- -------
$ 5,268 $ 5,039
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in millions)
Nine Months Ended June 30, 1996 and 1995
Increase (decrease) in cash and cash equivalents:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Operating lease and other leasing receipts ..................... $ 1,123 $ 934
Direct financing and sales-type leasing receipts ............... 700 718
Leasing costs, primarily rentals paid .......................... (27) (28)
Sales .......................................................... 186 258
Sales costs .................................................... (90) (135)
Business continuity and network services receipts .............. 230 208
Business continuity and network services costs ................. (128) (159)
Other revenue .................................................. 39 31
Selling, general and administrative expenses ................... (168) (176)
Interest ....................................................... (186) (200)
Income taxes ................................................... (11) (7)
------- -------
Net cash provided by operating activities .................... 1,668 1,444
------- -------
Cash flows from investing activities:
Equipment purchased for leasing ................................. (1,717) (1,438)
Investment in business continuity and network services facilities (51) (6)
Other ........................................................... (35) (14)
------ ------
Net cash used in investing activities ........................ (1,803) (1,458)
------ ------
Cash flows from financing activities:
Discounted lease proceeds ...................................... 193 236
Net increase in notes payable .................................. 416 197
Issuance of term notes and senior notes ........................ 409 954
Maturities and repurchases of term notes and senior notes ...... (389) (765)
Principal payments on secured debt ............................. (467) (530)
Decrease in legally restricted cash ........................... 10 16
Preferred stock repurchased .................................... (2) (6)
Common stock repurchased and placed in treasury ................ (60) (80)
Dividends paid on common stock ................................. (11) (10)
Dividends paid on preferred stock .............................. (6) (6)
Other .......................................................... (19) 11
------- -------
Net cash provided by (used) by financing activities .......... 74 17
------- -------
Net increase (decrease) in cash and cash equivalents .............. (61) 3
Cash and cash equivalents at beginning of period .................. 85 51
------- -------
Cash and cash equivalents at end of period ........................ $ 24 $ 54
======= =======
</TABLE>
See accoumpanying notes to consolidated financial statements.
5
<PAGE>
Comdisco, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -- CONTINUED
(in millions)
Nine Months Ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
Reconciliation of net earnings to net cash
provided by operating activities:
<S> <C> <C>
Net earnings .............................................. $ 84 $ 77
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Leasing costs, primarily
depreciation and amortization ....................... 820 725
Leasing revenue, primarily principal portion of
direct financing and sales-type lease rentals ....... 569 493
Cost of sales ......................................... 55 90
Interest .............................................. 8 6
Income taxes .......................................... 41 40
Other - net ........................................... 91 13
------ ------
Net cash provided by operating activities $1,668 $1,444
====== ======
Supplemental schedule of noncash financing activities:
Common stock issued in acquisition of Netforce MTI ...... $ 9 $ --
====== ======
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
Comdisco, Inc. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 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 June 30, 1996, the Company had $1.3 billion of available domestic
and international borrowing capacity under various lines of credit from
commercial banks and commercial paper facilities, of which
approximately $200 million was unused.
The average daily borrowings outstanding during the nine months ended
June 30, 1996 were approximately $3.6 billion, with a related weighted
average interest rate of 7.03%. This compares to average daily
borrowings during the first nine months of fiscal 1995 of approximately
$3.7 billion, with a related weighted average interest rate of 7.25%.
3. Senior Notes
In October, 1995, 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 $750 million of senior debt
securities with terms to be set at the time of each sale. Pursuant to
the Shelf Offering, the Company on January 12, 1996 designated $400
million of 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. The net proceeds of the sale of securities
under the Shelf Offering have been used for general corporate
purposes.
At June 30, 1996, an aggregate of $325 million of medium-term notes
remain available for issuance under the Shelf Offering and $100
million remains undesignated under the Shelf Offering.
4. Common Stock
On July 24, 1996, the Board of Directors declared a quarterly cash
dividend of $.07 per common share to be paid on September 3, 1996 to
common stockholders of record as of August 2, 1996.
7
<PAGE>
During the quarter ended June 30, 1996, the Company purchased 149,500
shares of its common stock at an aggregate cost of approximately $4
million. At June 30, 1996, the Company had a remaining authorization of
approximately $31 million to purchase common stock. On July 24, 1996,
the Board of Directors authorized an additional $100 million for the
Company's repurchase plan. An additional 473,200 shares were purchased
between June 30, 1996 and July 22, 1996 at a cost of $12 million.
5. Earnings Per Common Share
Average common and common equivalent shares outstanding for the three
months ended June 30, 1996 and 1995 were 53,320,411 and 54,861,801,
respectively. Average common and common equivalent shares outstanding
for the nine months ended June 30, 1996 and 1995 were 53,375,506 and
55,312,557, 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
------------
The increase in net earnings in the three and nine months ended June
30, 1996 compared to the year earlier periods is due to increases in
earnings contributions from operating leases, and business continuity
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.
Equipment Volume
----------------
Leasing volume in the three and nine months ended June 30, 1996
increased as compared to the year earlier periods. Cost of equipment
placed on lease was $701 million during the quarter ended June 30,
1996. This compares to cost of equipment placed on lease of $518
million and $580 million during the quarters ended June 30, 1995 and
March 31, 1996, respectively. During the nine months ended June 30,
1996, cost of equipment placed on lease totaled $1.8 billion compared
to $1.6 billion during the nine months ended June 30, 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 both domestically and in Asia
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. In Europe, equipment volume declined
compared to the prior year periods. Equipment volume in the Company's
medical equipment group also declined, reflecting a continued soft
market for new equipment in the health care industry. Remarketing
activity, which is an important contributor to quarterly earnings,
declined compared to the year earlier periods. The Company believes the
reduction in remarketing activity reflects, in part, delays in hardware
acquistion decisions by customers pending release of additional
information concerning capabilities and delivery schedules of recent
product announcements from major mainframe manufacturers. Additionally,
strong remarketing in prior years, coupled with equipment volume
declines in fiscal 1993 and 1994, resulted in less equipment available
for remarketing in the current year.
The Company's disaster recovery segment expanded during 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. The disaster recovery business has expanded
significantly since its infancy in the 1980's and now encompasses far
more than the raised floor mainframe environment that gave rise to the
industry. The development of wide area networks, local area networks,
client/server technologies, workflow automation and other technologies,
coupled with the importance of workstations and telecommunications, has
changed the industry. Reflecting this change, the Company refers to
this business segment as business continuity.
Three months ended June 30, 1996
--------------------------------
Total revenue for the three months ended June 30, 1996 was $592 million
compared to $539 million in the prior year quarter. Total leasing
revenue of $440 million for the quarter ended June 30, 1996
9
<PAGE>
represented an increase of 13% compared to the year earlier period.
Total leasing revenue was $418 million in the second quarter of fiscal
1996. The increase in total leasing revenue in the current quarter
compared to the prior year quarter is due to a 20% increase in
operating lease revenue.
Operating lease revenue minus operating lease cost was $83 million, or
23.8% of operating lease revenue (the "Lease Margin Percentage"), and
$77 million, or 26.5% of operating lease revenue, in the three months
ended June 30, 1996 and 1995, respectively.
Revenue from business continuity and network services activities for
the three months ended June 30, 1996 and 1995 was $83 million and $68
million, respectively, a 22% increase. Cost of business continuity and
network services activities for the three months ended June 30, 1996
was $72 million and $60 million, respectively, 20% 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 $8 million.
Other revenue for the three months ended June 30, 1996 and 1995 was $15
million and $9 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 $3 million in the three months ended June 30, 1996 and
1995, respectively. The current year quarter includes $2 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 $545 million for the quarter ended June 30,
1996 represented a 10% increase compared to the prior year period. The
increase is primarily due to increased leasing costs, primarily related
to increasing operating lease revenue, and the growth of the business
continuity services.
Cost of sales for the three months ended June 30, 1996 and 1995 were
$45 million and $62 million, respectively. Margins on sales were 17%
and 16% in the quarters ended June 30, 1996 and 1995, respectively.
Interest expense for the three months ended June 30, 1996 totaled $64
million in comparison to $68 million in the quarter ended June 30, 1995
and $65 million in the quarter ended March 31, 1996. The decrease in
interest expense compared to the year earlier period primarily reflects
reduced interest rates and lower average daily borrowings.
Nine Months Ended June 30, 1996
-------------------------------
Total revenue was $1.70 billion and $1.65 billion for the nine months
ended June 30, 1996 and 1995, respectively. Leasing revenue was $1.3
billion and $1.2 billion for the nine months ended June 30, 1996 and
1995, respectively. Increases in operating lease revenue were offset by
decreases in sale-type lease revenue. Revenue from the sale of
ownership positions generated in conjunction with the Company's lease
financing transactions with early-stage high technology companies was
$9 million and $7 for the nine months ended June 30, 1996 and 1995,
respectively. Other revenue for the nine months ended June 30, 1996 and
1995 also includes $6 million and $3 million, respectively, 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 $1.57 billion for the nine months ended
June 30, 1996, represented an increase of 2% over the comparative
period of the prior year. The increase is primarily due to higher
operating lease costs resulting from increased operating lease revenue,
offset by lower sales costs due to lower sales revenue.
The Lease Margin Percentage was $245 million, or 24.6% of operating
lease revenue, and $215 million, or 26.5% of operating lease revenue,
in the nine months ended June 30, 1996 and 1995, respectively.
10
<PAGE>
Interest expense was $194 million for the nine months ended June 30,
1996 as compared to $206 million for the year earlier period. The
decrease in interest expense is primarily due to reduced interest rates
and a reduction in average daily borrowings (see Note 2 of Notes to
Consolidated Financial Statements).
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 nine months ended June 30, 1996 was $1.7 billion,
compared to $1.4 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.
Note on Forward-Looking Information
-----------------------------------
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.
11
<PAGE>
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.
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:
None
12
<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: July 30, 1996 /s/ John J. Vosicky
-------------------
John J. Vosicky
Executive Vice President and
Chief Financial Officer
13
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 Nine Months
ended ended
June 30 June 30
--------- -------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Average shares outstanding .................................................. 50 53 51 54
Effect of dilutive options .................................................. 3 2 2 1
---- ---- ---- ----
Total .................................................................... 53 55 53 55
---- ---- ----- -----
Net earnings to
common stockholders ..................................................... $ 27 $ 24 $ 78 $ 71
==== ==== ===== =====
Net earnings per common and
common equivalent share ................................................. $.51 $.44 $1.47 $1.28
==== ==== ===== =====
</TABLE>
14
Comdisco, Inc. and Subsidiaries Exhibit 12
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(dollars in millions)
<TABLE>
<CAPTION>
Nine months
ended
June 30 For the years ended September 30,
------- ---------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Fixed charges <F1>
Interest expense .................................................... $197 $209 $278 $266 $295 $355 $371
Approximate portion of
rental expense representative
of an interest factor ............................................. 6 9 11 13 22 29 37
---- ---- ---- ---- ---- ---- ----
Fixed charges ....................................................... 203 218 289 279 317 384 408
Earnings from continuing operations
before income taxes and
extraordinary item, and cumulative
effect of change in accounting principle,
net of preferred stock dividends .................................... 130 118 160 80 137 34 136
---- ---- ---- ---- ---- ---- ----
Earnings from continuing operations
before income taxes, extraordinary
item, cumulative effect of change
in accounting principle, net of
preferred stock dividends ............................................ $333 $336 $449 $359 $454 $418 $544
==== ==== ==== ==== ==== ==== ====
Ratio of earnings to fixed charges ..................................... 1.64 1.54 1.55 1.29 1.43 1.09 1.33
==== ==== ==== ==== ==== ==== ====
Rental expense:
Equipment subleases .................................................. $ 12 $ 20 $ 22 $ 30 $ 57 $ 77 $103
Office space, furniture, etc ......................................... 6 6 10 8 8 10 9
---- ---- ---- ---- ---- ---- ----
Total ............................................................. $ 18 $ 26 $ 32 $ 38 $ 65 $ 87 $112
==== ==== ==== ==== ==== ==== ====
1/3 of rental expense ............................................. $ 6 $ 9 $ 11 $ 13 $ 22 $ 29 $ 37
==== ==== ==== ==== ==== ==== ====
<FN>
<F1>Includes interest expense incurred by business continuity and network
services and included in business continuity and network services expenses
on the statements of earnings
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information
extracted from the Quartlerly Report on Form 10-Q
for the quarter ended June 30, 1996 and is qualified
in its entirety by reference to such financial statments.
</LEGEND>
<CIK> 0000722487
<NAME> Comdisco, Inc.
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<CASH> 24
<SECURITIES> 0
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0
89
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</TABLE>
