SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995.
[ ] 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 1-8729
UNISYS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 38-0387840
----------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Township Line and Union Meeting Roads
Blue Bell, Pennsylvania 19424
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(215) 986-4011
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Number of shares of Common Stock outstanding as of September 30,
1995: 171,396,755.
Page 2
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEET
(Millions)
September 30,
1995 December 31,
(Unaudited) 1994
----------------------------
Assets
Current Assets
Cash and cash equivalents $ 813.0 $ 868.4
Marketable securities 7.0 16.2
Accounts and notes receivable, net 1,037.1 945.1
Inventories
Finished equipment and supplies 365.5 355.0
Work in process and raw materials 358.9 281.3
Deferred income taxes 281.4 310.5
Other current assets 89.1 98.3
Net assets of discontinued operations 526.5
------- -------
Total 2,952.0 3,401.3
------- -------
Long-term receivables, net 59.5 71.5
------- -------
Properties and rental equipment 2,091.9 2,209.9
Less-Accumulated depreciation 1,407.9 1,479.9
------- -------
Properties and rental equipment, net 684.0 730.0
------- -------
Cost in excess of net assets acquired 1,019.5 998.0
Investments at equity 369.8 315.8
Deferred income taxes 514.0 583.2
Other assets 1,142.5 1,093.6
------- -------
Total $6,741.3 $7,193.4
======= =======
Liabilities and stockholders' equity
Current liabilities
Notes payable $ 18.3 $ 8.9
Current maturities of long-term debt 343.4 71.2
Accounts payable 839.2 917.6
Other accrued liabilities 870.8 1,123.6
Dividends payable 30.2 26.6
Estimated income taxes 141.1 237.7
------- -------
Total 2,243.0 2,385.6
------- -------
Long-term debt 1,533.5 1,864.1
Other liabilities 347.7 339.2
Stockholders' equity
Preferred stock 1,570.3 1,570.3
Common stock, issued:
1995, 172.3; 1994, 171.8 1.7 1.7
Retained earnings 4.4 45.7
Other capital 1,040.7 986.8
------- -------
Stockholders' equity 2,617.1 2,604.5
------- -------
Total $6,741.3 $7,193.4
======= =======
See notes to consolidated financial statements.
Page 3
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Millions, except per share data)
Three Months Nine Months
Ended September 30 Ended September 30
--------------------------- ---------------------------
1995 1994 1995 1994
------------ ----------- ------------ -----------
Revenue
Sales $ 570.3 $ 723.4 $1,879.6 $2,070.2
Services 546.3 429.8 1,481.7 1,165.1
Equipment maintenance 344.1 328.7 1,002.3 993.9
-------- -------- -------- --------
1,460.7 1,481.9 4,363.6 4,229.2
-------- -------- -------- --------
Costs and expenses
Cost of sales 352.5 393.9 1,073.7 1,110.1
Cost of services 442.0 331.0 1,182.4 896.9
Cost of equipment maintenance 219.0 207.7 632.1 611.6
Selling, general and administrative 389.4 375.8 1,111.2 1,059.2
Research and development 86.0 110.5 270.3 338.1
-------- -------- -------- --------
1,488.9 1,418.9 4,269.7 4,015.9
-------- -------- -------- --------
Operating income (loss) (28.2) 63.0 93.9 213.3
Interest expense 49.5 50.2 151.1 153.1
Other income, net 28.9 30.2 117.4 61.4
-------- -------- -------- --------
Income (loss) from continuing
operations before income taxes (48.8) 43.0 60.2 121.6
Estimated income taxes (benefit) (16.6) 12.2 20.5 33.5
-------- -------- -------- --------
Income (loss) from continuing operations
before extraordinary item (32.2) 30.8 39.7 88.1
Income from discontinued operations 12.1 12.5 72.4
Extraordinary item (7.7)
-------- -------- -------- --------
Net income (loss) (32.2) 42.9 52.2 152.8
Dividends on preferred shares 30.2 30.0 90.1 90.1
-------- -------- -------- --------
Earnings (loss) on common shares $ (62.4) $ 12.9 $ (37.9) $ 62.7
======== ======== ======== ========
Earnings (loss) per common share
Primary
Continuing operations $ (.36) $ .01 $ (.29) $ (.02)
Discontinued operations .07 .07 .42
Extraordinary item (.04)
-------- -------- -------- --------
Total $ (.36) $ .08 $ (.22) $ .36
======== ======== ======== ========
Fully diluted
Continuing operations $ (.36) $ .02 $ (.29) $ (.02)
Discontinued operations .06 .07 .42
Extraordinary item (.04)
-------- -------- -------- --------
Total $ (.36) $ .08 $ (.22) $ .36
======== ======== ======== ========
See notes to consolidated financial statements.
Page 4
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Millions)
Nine Months Ended
September 30
------------------------
1995 1994
--------- --------
Cash flows from operating activities
Income from continuing operations $ 39.7 $ 88.1
Add (deduct) items to reconcile income
from continuing operations to net cash
(used for) provided by operating
activities:
Effect of extraordinary item ( 7.7)
Depreciation 156.0 163.9
Amortization:
Marketable software 94.9 114.7
Cost in excess of net assets acquired 30.5 27.7
(Increase) in deferred income taxes ( 7.4) ( 9.4)
Decrease in receivables, net 20.0 33.6
(Increase) in inventories ( 67.4) ( 65.2)
(Decrease) in accounts payable and other
accrued liabilities ( 352.2) ( 283.7)
(Decrease) in estimated income taxes ( 83.3) ( 38.4)
(Decrease) in other liabilities ( 4.4) ( 12.3)
(Increase) decrease in other assets ( 96.6) 75.8
Other 18.8 33.8
------- ------
Net cash (used for)
provided by operating activities ( 251.4) 120.9
------- ------
Cash flows from investing activities
Proceeds from investments 2,628.0 1,330.8
Purchases of investments ( 2,642.6) ( 1,348.7)
Proceeds from marketable securities 14.4 185.3
Purchases of marketable securities ( 97.2)
Proceeds from sales of properties 28.1 16.9
Investment in marketable software ( 92.2) ( 93.7)
Capital additions of properties
and rental equipment ( 142.4) ( 135.7)
Purchase of businesses ( 39.2)
------- ------
Net cash used for investing activities ( 245.9) ( 142.3)
------- ------
Cash flows from financing activities
Principal payments of debt ( 67.9) ( 139.8)
Net proceeds from short-term borrowings 9.3 9.0
Dividends paid on preferred shares ( 90.0) ( 198.0)
Other 2.8 3.1
------- ------
Net cash used for financing activities ( 145.8) ( 325.7)
------- ------
Effect of exchange rate changes on
cash and cash equivalents 7.2 ( 10.3)
------- ------
Net cash used for continuing operations ( 635.9) ( 357.4)
------- ------
Discontinued operations
Proceeds from sale 862.0
Other ( 281.5) 88.9
------- ------
Net cash provided by discontinued operations 580.5 88.9
------- ------
(Decrease) in cash and cash equivalents ( 55.4) ( 268.5)
Cash and cash equivalents, beginning of period 868.4 835.4
------- ------
Cash and cash equivalents, end of period $ 813.0 $ 566.9
======= =======
See notes to consolidated financial statements.
Page 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the financial information furnished herein
reflects all adjustments necessary for a fair presentation of the financial
position, results of operations and cash flows for the interim periods
specified. These adjustments consist only of normal recurring accruals.
Because of seasonal and other factors, results for interim periods are not
necessarily indicative of the results to be expected for the full year.
a. In May, 1995, the Company sold its defense business to Loral Corporation
("Loral") for cash of $862 million. The Company's financial results of
operations for the nine months ended September 30, 1995 include the
results of operations of its defense business for the three months
ended March 31, 1995. For such period and all prior periods, the net
results of these defense operations are being reported separately in
the Consolidated Statement of Income as "income from discontinued
operations". In addition, the other financial statements have been
restated to report the defense business as a discontinued operation.
In November, 1995, the Company and Loral completed the agreed upon
purchase price adjustment process. The impact of the sale, which is
not expected to be material, will be reported in the December, 1995
quarter as discontinued operations.
The following is a summary of the results of operations of the Company's
defense business (in millions of dollars):
Year Three Months Nine Months Three Months
Ended Ended Ended Ended
Dec. 31, 1994 Sept. 30, 1994 Sept. 30, 1994 March 31, 1995
------------- -------------- -------------- --------------
Revenue $1,421.5 $ 306.2 $1,047.0 $258.1
======== ======= ======= ======
Operating income $ 151.6 $ 22.5 $ 114.3 $ 25.7
======== ======= ======= ======
Income before income taxes $ 138.6 $ 17.5 $ 104.4 $ 19.0
Estimated income taxes 42.5 5.4 32.0 6.5
-------- ------- ------- ------
Net income $ 96.1 $ 12.1 $ 72.4 $ 12.5
======== ======= ======= ======
The net assets of discontinued operations at December 31, 1994 were as
follows (in millions of dollars):
Current assets $266.7
Current liabilities (123.8)
Property, plant and equipment, net 203.7
Cost in excess of net assets acquired 144.5
Other, net 35.4
------
Total $526.5
======
Page 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D.)
b. During the nine months ended September 30, 1994, the Company recorded an
extraordinary charge for repurchases of debt of $7.7 million, net of $5.1
million of income tax benefits, or $.04 per fully diluted common share.
c. For the three and nine months ended September 30, 1995, the computation of
primary earnings per share is based on the weighted average number of
outstanding common shares. The computation of primary earnings per
share for the three and nine months ended September 30, 1994 also
includes additional shares assuming the exercise of stock options.
The computation of fully diluted earnings per share, for the three
months ended September 30, 1994, assumes the conversion of the 8 1/4%
Convertible Subordinated Notes due August 1, 2000. Such conversion was
not assumed for the three and nine months ended September 30, 1995 or
for the nine months ended September 30, 1994 since it would have been
antidilutive. None of the periods presented below assumes conversion
of the Series A Preferred Stock since this would have been antidilutive.
The shares used in the computations are as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30
------------------- -------------------
1995 1994 1995 1994
---- ---- ---- ----
Primary 171,387 171,803 171,185 172,460
Fully diluted 171,387 205,597 171,185 172,460
Page 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview
On October 6, 1995, the Company announced that it will dismantle
its highly interdependent matrix management structure and realign
internally into three business units (information services,
support services and computer systems), each with its own
marketing and sales organizations. The Company's goal from the
realignment is to reduce its current cost structure and create
annual savings of at least $400 million by the end of 1996. Cost
savings are expected to come from reducing the overhead and
administrative costs associated with the matrix structure,
facility consolidation and personnel reductions. In addition,
the Company will be evaluating its deferred tax assets and cost
in excess of net assets acquired in light of the planned
restructuring actions. The Company expects to take a significant
charge against earnings in the fourth quarter of 1995 in
connection with these initiatives. The Company is in the process
of determining the size of the charge and impact on employment
levels.
In May, 1995, the Company sold its defense business to Loral
Corporation ("Loral") for cash of $862 million. The Company's
financial results of operations for the nine months ended
September 30, 1995 include the results of operations of its
defense business for the three months ended March 31, 1995. For
such period and all prior periods, the net results of these
defense operations are being reported separately in the
Consolidated Statement of Income as "income from discontinued
operations". In addition, the other financial statements have
been restated to report the defense business as a discontinued
operation. In November, 1995, the Company and Loral completed
the agreed upon purchase price adjustment process. The impact of
the sale, which is not expected to be material, will be reported
in the December, 1995 quarter as discontinued operations.
During the third quarter of 1995, the Company acquired its South
African distributor for cash. The acquisition benefited both
revenue and profitability for the quarter.
Results of Operations
For the three months ended September 30, 1995, the Company
reported a net loss from continuing operations of $32.2 million,
or $.36 per primary and fully diluted common share, compared to
net income from continuing operations of $30.8 million, or $.01
per primary and $.02 per fully diluted common share, for the
three months ended September 30, 1994. Total net income in the
year ago period was $42.9 million, or $.08 per primary and fully
diluted share, including $12.1 million, or $.07 per primary and
$.06 per fully diluted share, from discontinued operations.
Page 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Cont'd).
Revenue for the quarter ended September 30, 1995 was $1.46
billion, down 1% from $1.48 billion for the quarter ended
September 30, 1994. Sales revenue declined 21%, when compared to
the prior year period, principally due to decreases in sales of
enterprise systems and servers. Services revenue in the quarter
increased 27% to $546.3 million from $429.8 million in last
years' third quarter. Services revenue, which is the Company's
single largest revenue stream, represented 37% of total revenue
for the three months ended September 30, 1995 compared to 29% in
the comparable period a year ago. Equipment maintenance revenue
for the current quarter increased 5% from the prior year.
Sales gross profit margin was 38% in the current period compared
to 46% in the prior year period. The decline was due in large
part to a higher proportion of lower-margin personal computer
sales and the reduced volume of large computer systems sales.
Services gross profit margin was 19% in the current quarter
compared to 23% a year ago. The decline in services gross
profit margin was mainly due to project cost adjustments.
Business risks associated with services contracts, particularly
large, multi-year, fixed-price systems integration contracts,
may, from time to time, continue to create volatility in margins.
Equipment maintenance gross profit margin was 36% in the current
period compared to 37% last year.
The total gross profit margin was 31% for the three months ended
September 30, 1995 compared to 37% in the comparable period a
year ago. The total gross profit margin is expected to continue
to be pressured by competitive pricing and the continuing shift
to lower-margin products and services.
In the third quarter of 1995, selling, general and administrative
expenses were $389.4 million compared to $375.8 million in the
third quarter of 1994, with approximately one-third of the increase
due to the effects of foreign currency translation.
Research and development expenses were $86.0 million in the
quarter ended September 30, 1995 compared to $110.5 million a
year earlier. The reduction principally reflects the Company's
move to common hardware platforms and technologies. Research and
development expense as a percent of total revenue is expected to
continue to decline consistent with the increasing proportion of
revenue from the services business which requires less research
and development expenditures.
As a result of the above, the Company had an operating loss of
$28.2 million in the current period compared to operating income
of $63.0 million last year.
Page 9
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Cont'd).
It is the Company's policy to minimize its exposure to foreign
currency fluctuations. Due to a weakening of the U.S. dollar
compared to foreign currencies, foreign currency changes,
including the cost of hedging, had a modest positive effect on
net income when compared to the year-ago quarter.
The loss from continuing operations before income taxes was $48.8
million in the current quarter compared to income of $43.0
million a year earlier.
Estimated income taxes were a benefit of $16.6 million for the
three months ended September 30, 1995 compared to a provision of
$12.2 million for the three months ended September 30, 1994.
For the nine months ended September 30, 1995, net income from
continuing operations was $39.7 million or a loss of $.22 per
primary and fully diluted common share after preferred dividends.
Net income from discontinued operations in the quarter ended
March 31, 1995 was $12.5 million or $.07 per primary share and
$.06 per fully diluted share. The 1995 second quarter financial
impact from the defense business, which was sold in May, will be
reported in the December, 1995 quarter as discontinued
operations. In the nine-month period one year ago, net income
from continuing operations was $88.1 million or a $.02 per share
loss (both primary and fully diluted) after preferred dividends.
In the year-ago period, total net income was $152.8 million, or
$.36 per primary and fully diluted share including an
extraordinary charge of $7.7 million or $.04 per share associated
with repurchases of debt. Revenue was $4.36 billion, compared to
$4.23 billion for the first nine months of 1994.
Financial Condition
During the nine months ended September 30, 1995, cash used for
operating activities was $251.4 million compared to $120.9
million of cash provided by operating activities during the nine
months ended September 30, 1994. The increase in cash used was
due in large part to restructuring payments and a reduction in
payables, an increase in income tax payments and management's
decision to reduce the level of accounts receivable discounting.
Investments in properties and rental equipment during the nine
months ended September 30, 1995 were $142.4 million compared to
$135.7 million in the prior year.
At September 30, 1995, total debt was $1.90 billion, a decrease
of $49.0 million from December 31, 1994. Cash, cash equivalents
and marketable securities at September 30, 1995 were $820.0
million compared to $884.6 million at December 31, 1994. During
the nine months ended September 30, 1995, debt net of cash and
marketable securities increased $15.6 million to $1,075.2
million. As a percent of total capital, debt net of cash and
marketable securities was 29% at both September 30, 1995 and
December 31, 1994.
Page 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Cont'd).
During the nine months ended September 30, 1995 and 1994, the
Company retired $67.9 million and $139.8 million principal amount
of debt securities, respectively. The Company intends, from time
to time, to continue to redeem or repurchase its securities in
the open market or in privately negotiated transactions depending
upon availability, market conditions, and other factors.
The Company has on file with the Securities and Exchange
Commission an effective registration statement covering $500
million of debt or equity securities. The registration statement
enables the Company to be prepared for future market
opportunities. Proceeds from future offerings of these
securities are anticipated to be used for general corporate
purposes, including reduction or refinancing of debt.
On March 27, 1995, the Company amended its revolving credit
agreement to increase the amount available for borrowing to $325
million from $300 million and to extend the term until May 31,
1996. During the three months ended September 30, 1995, the
Company's banks waived compliance with the interest coverage
covenant set forth therein for the third quarter of 1995. The
Company expects that further discussions with its banks will be
held regarding the anticipated fourth-quarter charge. The credit
agreement provides for short-term borrowings and up to $100
million of letters of credit. During the nine months ended
September 30, 1995, there were no borrowings under this
agreement.
Dividends paid on preferred stock amounted to $90.0 million
during the nine months ended September 30, 1995 compared to
$198.0 million in the year-ago period. The prior year amount
included full payment of preferred dividend arrearages.
Net cash provided by the discontinued defense operations during
the nine months ended September 30, 1995 was $580.5 million
consisting of $862.0 million proceeds from the sale offset by
cash used of $281.5 million. In November, 1995, in connection
with completion of the purchase price adjustment process relating
to the sale of its defense business, the Company received cash of
approximately $88 million, which will be reflected in the
December, 1995 quarter as an offset against cash used by
discontinued operations.
Stockholders' equity increased $12.6 million during the nine
months ended September 30, 1995 to $2,617.1 million, principally
reflecting net income of $52.2 million and favorable foreign
currency translation of $51.5 million offset by the payment of
preferred dividends.
Page 11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Cont'd).
At September 30, 1995, the Company had deferred tax assets in
excess of deferred tax liabilities of $1,057 million. For the
reasons cited below, management determined that it is more likely
than not that $730 million of such assets will be realized,
therefore resulting in a valuation allowance of $327 million. In
assessing the likelihood of realization of this asset, the
Company considered various factors including its forecast of
future taxable income and available tax planning strategies that
could be implemented to realize deferred tax assets.
The principal basis used to assess the likelihood of realization
was the Company's forecast of future taxable income which was
adjusted by applying probability factors to the achievement of
this forecast. Forecasted taxable income is expected to arise
from ordinary and recurring operations and to be sufficient to
realize the entire amount of net deferred tax assets.
Approximately $2.1 billion of future taxable income
(predominantly U.S.) is needed to realize all of the net deferred
tax assets.
The Company's net deferred tax assets include substantial amounts
of net operating loss and tax credit carryforwards. The major
portion of such carryforwards expire in 1998 and beyond. In
addition, substantial amounts of foreign net operating losses
have an indefinite carryforward period. Failure to
achieve forecasted taxable income might affect the ultimate
realization of the net deferred tax assets. In recent years, the
information management business has undergone dramatic changes
and there can be no assurance that in the future there would not
be increased competition or other factors which may result in a
decline in sales or margins, loss of market share, or
technological obsolescence.
As discussed above, the Company will evaluate the realizability
of its net deferred tax assets in light of the planned
restructuring actions and will adjust the amount of its valuation
allowance, if necessary.
The Company may settle certain open tax years with the Internal
Revenue Service in 1996. It is expected that such settlements
will result in cash payments of approximately $80 million
(including interest). These payments will not affect earnings
since provision for these taxes has been made in prior years.
Page 12
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
During the quarter ended September 30, 1995, the Company filed no
Current Reports on Form 8-K.
Page 13
SIGNATURE
---------
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.
UNISYS CORPORATION
Date: November 14, 1995 By: /s/ George T. Robson
------------------ --------------------
George T. Robson
Senior Vice President and
Chief Financial Officer
(principal financial officer)
Page 14
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
11.1 Statement of Computation of Earnings Per Share for the nine
months ended September 30, 1995 and 1994.
11.2 Statement of Computation of Earnings Per Share for the three
months ended September 30, 1995 and 1994
12 Statement of Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
EXHIBIT 11.1
UNISYS CORPORATION
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(Millions, except share data)
Primary Earnings Per Common Share 1995 1994
----------- -----------
Average Number of Outstanding Common Shares 171,184,699 170,689,839
Additional Shares Assuming Exercise of Stock Options 816,414 1,769,947
----------- -----------
Average Number of Outstanding Common Shares and
Common Share Equivalents 172,001,113 172,459,786
=========== ===========
Income From Continuing Operations Before
Extraordinary Item $ 39.7 $ 88.1
Dividends on Series A, B and C Preferred Stock ( 90.1) ( 90.1)
------ ------
Primary Earnings on Common Shares Before Discontinued
Operations and Extraordinary Item ( 50.4) ( 2.0)
Income From Discontinued Operations 12.5 72.4
Extraordinary Item ( 7.7)
------ ------
Primary Earnings (Loss) on Common Shares $( 37.9) $ 62.7
====== ======
Primary Earnings (Loss) Per Common Share
Continuing Operations $( .29) $( .02)
Discontinued Operations .07 .42
Extraordinary Item ( .04)
------ ------
Total $( .22) $.36
====== ======
Fully Diluted Earnings Per Common Share
Average Number of Outstanding Common
Shares and Common Share Equivalents 172,001,113 172,459,786
Additional Shares:
Assuming Conversion of 8 1/4% Convertible Notes 33,697,387 33,698,698
Attributable to Stock Options 34,992 148,368
----------- -----------
Common Shares Outstanding Assuming Full Dilution 205,733,492 206,306,852
=========== ===========
Primary Earnings (Loss) on Common Shares Before
Discontinued Operations and Extraordinary Item $( 50.4) $( 2.0)
Interest Expense on 8 1/4% Convertible Notes,
Net of Applicable Tax 13.3 13.3
------ ------
Fully Diluted Earnings (Loss) on Common Shares
Before Discontinued Operations and
Extraordinary Item ( 37.1) 11.3
Income From Discontinued Operations 12.5 72.4
Extraordinary Item ( 7.7)
------ ------
Fully Diluted Earnings (Loss) on Common Shares $( 24.6) $76.0
====== ======
Fully Diluted Earnings (Loss) per Common Share
Continuing Operations $( .18) $ .06
Discontinued Operations .06 .35
Extraordinary Item ( .04)
------ ------
Total $( .12) $ .37
====== ======
Earnings (Loss) Per Common Share As Reported
Primary
Continuing Operations $( .29) $ ( .02)
Discontinued Operations .07 .42
Extraordinary Item ( .04)
------ ------
Total $( .22) $ .36
====== ======
Fully Diluted
Continuing Operations $( .29) $( .02)
Discontinued Operations .07 .42
Extraordinary Item ( .04)
------ ------
Total $( .22) $ .36
====== ======
EXHIBIT 11.2
UNISYS CORPORATION
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994
(UNAUDITED)
(Millions, except share data)
Primary Earnings Per Common Share 1995 1994
----------- -----------
Average Number of Outstanding Common Shares 171,387,269 170,831,860
Additional Shares Assuming Exercise of Stock Options 644,899 970,853
----------- -----------
Average Number of Outstanding Common Shares and
Common Share Equivalents 172,032,168 171,802,713
=========== ===========
Income (Loss) From Continuing Operations $( 32.2) $ 30.8
Dividends on Series A, B and C Preferred Stock ( 30.2) ( 30.0)
------ ------
Primary Earnings (Loss) on Common Shares Before
Discontinued Operations ( 62.4) .8
Income From Discontinued Operations 12.1
------ ------
Primary Earnings (Loss) on Common Shares $( 62.4) $ 12.9
====== ======
Primary Earnings (Loss) Per Common Share
Continuing Operations $( .36) $ .01
Discontinued Operations .07
------ ------
Total $( .36) $.08
====== ======
Fully Diluted Earnings Per Common Share
Average Number of Outstanding Common
Shares and Common Share Equivalents 172,032,168 171,802,713
Additional Shares:
Assuming Conversion of 8 1/4% Convertible Notes 33,697,387 33,697,762
Attributable to Stock Options 96,648
----------- -----------
Common Shares Outstanding Assuming Full Dilution 205,729,555 205,597,123
=========== ===========
Primary Earnings (Loss) on Common Shares Before
Discontinued Operations $( 62.4) $ .8
Interest Expense on 8 1/4% Convertible Notes,
Net of Applicable Tax 4.4 4.4
------ ------
Fully Diluted Earnings (Loss) on Common Shares
Before Discontinued Operations ( 58.0) 5.2
Income From Discontinued Operations 12.1
------ ------
Fully Diluted Earnings (Loss) on Common Shares $( 58.0) $ 17.3
====== ======
Fully Diluted Earnings (Loss) per Common Share
Continuing Operations $( .28) $ .02
Discontinued Operations .06
------ ------
Total $( .28) $ .08
====== ======
Earnings (Loss) Per Common Share As Reported
Primary
Continuing Operations $( .36) $ .01
Discontinued Operations .07
------ ------
Total $( .36) $ .08
====== ======
Fully Diluted
Continuing Operations $( .36) $ .02
Discontinued Operations .06
------ ------
Total $( .36) $ .08
====== ======
Exhibit 12
UNISYS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
($ in millions)
Nine
Months
Ended
September
30, Years Ended December 31
-------- ------------------------------------------------
1995 1994 1993 1992 1991 1990
-------- ------ ------- ------- ---------- ----------
Income (loss) from continuing
operations before income taxes $ 60.2 $ 14.6 $370.9 $301.3 $(1,425.6) $(456.8)
Add (deduct) share of loss (income)
of associated companies (13.4) 16.6 14.5 3.2 (6.5) (51.8)
------ ------ ------ ------ -------- -----
Subtotal 46.8 31.2 385.4 304.5 (1,432.1) (508.6)
------ ------ ------ ------ -------- -----
Interest expense
(net of interest capitalized) 151.1 203.7 241.7 340.6 407.6 446.7
Amortization of
debt issuance expenses 4.0 6.2 6.6 4.8 1.8 1.5
Portion of rental expense
representative of interest 48.8 65.0 70.5 78.8 80.9 77.0
------ ------ ------ ------ -------- -----
Total Fixed Charges 203.9 274.9 318.8 424.2 490.3 525.2
------ ------ ------ ------ -------- -----
Earnings (loss) from continuing
operations before income taxes
and fixed charges $250.7 $306.1 $704.2 $728.7 $(941.8) $16.6
====== ====== ====== ====== ======== =====
Ratio of earnings to fixed charges 1.23 1.11 2.21 1.72 (a) (a)
====== ====== ====== ====== ======== =====
(a) Earnings for the years ended December 31, 1991 and 1990 were inadequate
to cover fixed charges by approximately $1,432.1 million and $508.6 million respectively.
5
