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 June 30, 1994.
OR
___
[___] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 1-8729
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 June 30, 1994:
170,820,349
-2-
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
UNISYS CORPORATION
CONSOLIDATED BALANCE SHEET
(Millions)
June 30, December 31,
1994 1993
(Unaudited) (Audited)
----------- ------------
Assets
Current assets
Cash and cash equivalents $ 492.2 $ 835.4
Marketable securities 35.9 115.1
Accounts and notes receivable, net 1,038.1 1,088.2
Inventories
Finished equipment and supplies 353.8 354.1
Work in process and raw materials 469.3 399.8
Deferred income taxes 313.4 313.4
Other current assets 94.2 94.1
-------- --------
Total 2,796.9 3,200.1
-------- --------
Long-term receivables, net 96.9 104.3
-------- --------
Properties and rental equipment 2,708.4 2,776.0
Less-Accumulated depreciation 1,771.2 1,814.2
-------- --------
Properties and rental equipment, net 937.2 961.8
-------- --------
Cost in excess of net assets acquired 1,163.2 1,183.9
Investments at equity 310.8 303.6
Deferred income taxes 543.8 543.8
Other assets 1,181.0 1,221.7
-------- --------
Total $7,029.8 $7,519.2
======== ========
Liabilities and stockholders' equity
Current liabilities
Notes payable $ 10.3 $ 6.0
Current maturities of long-term debt 71.2 25.0
Accounts payable 900.9 1,027.0
Other accrued liabilities 869.3 1,016.1
Dividends payable 26.6 39.9
Estimated income taxes 232.8 251.9
-------- --------
Total 2,111.1 2,365.9
-------- --------
Long-term debt 1,864.3 2,025.0
Other liabilities 401.7 432.8
Stockholders' equity
Preferred stock 1,570.3 1,570.2
Common stock, issued: 1994, 171.7; 1993, 171.2 1.7 1.7
Retained earnings 114.9 159.8
Other capital 965.8 963.8
-------- --------
Stockholders' equity 2,652.7 2,695.5
-------- --------
Total $7,029.8 $7,519.2
======== ========
See notes to consolidated financial statements.
-3-
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(Millions, except per share data)
Three Months Six Months
Ended June 30 Ended June 30
------------------- --------------------
1994 1993 1994 1993
-------- -------- -------- --------
Revenue
Sales $ 975.7 $1,191.8 $1,950.2 $2,381.4
Services 487.3 370.9 872.7 717.4
Equipment maintenance 336.2 364.5 665.2 735.9
-------- -------- -------- --------
1,799.2 1,927.2 3,488.1 3,834.7
-------- -------- -------- --------
Costs and expenses
Cost of sales 586.8 686.2 1,171.4 1,401.0
Cost of services 378.3 284.6 687.2 564.3
Cost of equipment maintenance 206.1 204.3 403.9 428.2
Selling, general and
administrative 391.3 410.3 744.3 816.7
Research and development 117.6 124.1 239.2 254.4
-------- -------- -------- --------
1,680.1 1,709.5 3,246.0 3,464.6
-------- -------- -------- --------
Operating income 119.1 217.7 242.1 370.1
Interest expense 50.9 59.7 102.9 131.8
Other income (expense), net 2.0 (6.5) 26.3 (3.3)
-------- -------- -------- --------
Income before income taxes 70.2 151.5 165.5 235.0
Estimated income taxes 20.3 48.5 47.9 75.2
-------- -------- -------- --------
Income before extraordinary
items and changes in accounting
principles 49.9 103.0 117.6 159.8
Extraordinary items (7.7) (26.4)
Effect of changes in accounting
principles 230.2
-------- -------- -------- --------
Net income 49.9 103.0 109.9 363.6
Dividends on preferred shares 30.0 30.6 60.1 61.0
-------- -------- -------- --------
Earnings on common shares $ 19.9 $ 72.4 $ 49.8 $ 302.6
======== ======== ======== ========
Earnings per common share
Primary
Before extraordinary items
and changes in accounting
principles $ .12 $ .44 $ .33 $ .60
Extraordinary items (.04) (.16)
Effect of changes in accounting
principles 1.39
-------- -------- -------- --------
Total $ .12 $ .44 $ .29 $ 1.83
======== ======== ======== ========
Fully diluted
Before extraordinary items
and changes in accounting
principles $ .12 $ .39 $ .32 $ .65
Extraordinary items (.04) (.11)
Effect of changes in accounting
principles .94
-------- -------- -------- --------
Total $ .12 $ .39 $ .28 $ 1.48
======== ======== ======== ========
See notes to consolidated financial statements.
-4-
UNISYS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(Millions)
Six Months Ended June 30
------------------------
1994 1993
---- ----
Cash flows from operating activities
Net income $ 109.9 $ 363.6
Add (deduct) items to reconcile net income
to net cash provided by operating activities
Effect of extraordinary items and changes
in accounting principles 7.7 ( 203.8)
Depreciation 124.7 156.3
Amortization:
Marketable software 76.4 69.6
Cost in excess of net assets acquired 20.7 20.7
Decrease in receivables, net 50.0 295.5
(Increase) decrease in inventories ( 69.2) 49.3
(Decrease) in accounts payable and
other accrued liabilities (266.2) ( 305.6)
(Decrease) in estimated income taxes ( 19.1) ( 30.5)
(Decrease) in other liabilities ( 31.1) ( 17.8)
Decrease in other assets 26.9 2.5
Other ( 1.0) 12.1
-------- --------
Net cash provided by operating activities 29.7 411.9
-------- --------
Cash flows from investing activities
Proceeds from investments 742.6 1,067.8
Purchases of investments (749.4) (1,068.3)
Proceeds from marketable securities 182.3 98.1
Purchases of marketable securities ( 92.3) ( 48.5)
Proceeds from sales of properties 15.3 13.4
Investment in marketable software ( 62.7) ( 51.9)
Capital additions of properties
and rental equipment ( 96.8) ( 96.7)
-------- --------
Net cash used for investing activities ( 61.0) ( 86.1)
-------- --------
Cash flows from financing activities
Payment of debt (139.5) ( 248.9)
Net proceeds from (reduction in) short-
term borrowings 4.3 ( 25.1)
Dividends paid on preferred shares (168.0) ( 92.1)
Other 2.9 3.7
-------- --------
Net cash used for financing activities (300.3) ( 362.4)
-------- --------
Effect of exchange rate changes on cash
and cash equivalents ( 11.6) ( 10.8)
-------- --------
Decrease in cash and cash equivalents (343.2) ( 47.4)
Cash and cash equivalents, beginning of period 835.4 809.1
-------- --------
Cash and cash equivalents, end of period $ 492.2 $ 761.7
======== ========
See notes to consolidated financial statements.
-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. During the six months ended June 30, 1994, the Company recorded an
extraordinary charge for the repurchases of debt of $7.7 million, net of
$5.1 million of income tax benefits, or $.04 per fully diluted common
share.
b. Effective January 1, 1993, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards ("SFAS") 106,
"Employers' Accounting for Postretirement Benefits Other Than Pensions,"
and SFAS 109, "Accounting for Income Taxes." The adoption of SFAS 106
decreased net income for the six months ended June 30, 1993 by $194.8
million, net of $124.5 million of income tax benefits, or $.79 per fully
diluted common share, and the adoption of SFAS 109 increased net income for
the six months ended June 30, 1993 by $425.0 million, or $1.73 per fully
diluted common share.
c. In April 1993, the Company settled lawsuits with Honeywell Inc. in
connection with its sale of the Sperry Aerospace Group in December 1986.
As a result of the settlement, in the six months ended June 30, 1993, the
Company recorded an extraordinary charge of $26.4 million, net of $16.8
million of income tax benefits, or $.11 per fully diluted common share.
d. For the three and six months ended June 30, 1994 and 1993, the computation
of primary earnings per share is based on the weighted average number of
outstanding common shares and additional shares assuming the exercise of
stock options. The computation of fully diluted earnings per share, for
the three months ended June 30, 1994 and 1993, and for the six months ended
June 30, 1994, assumes the conversion of the 8 1/4% Convertible
Subordinated Notes due August 1, 2000, but does not assume conversion of
the Series A Preferred Stock since this would have been antidilutive. For
the six months ended June 30, 1993, in addition to the assumed conversion
of the Convertible Notes, the fully diluted earnings per share computation
also assumes the conversion of Series A Preferred Stock. The shares used
in the computations are as follows (in thousands):
Three months ended Six months ended
June 30, June 30,
----------------- -----------------
1994 1993 1994 1993
------- ------- ------- -------
Primary 172,245 164,881 172,788 164,953
Fully diluted 205,943 198,621 206,661 246,532
-6-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
-------------------------------------------------
Results of Operations
For the three months ended June 30, 1994, the Company reported net income of
$49.9 million, or $.12 per primary and fully diluted common share, compared to
net income of $103.0 million, or $.44 per primary common share and $.39 per
fully diluted common share, for the three months ended June 30, 1993.
Revenue for the second quarter ended June 30, 1994 was $1.8 billion, down 7%
from $1.9 billion for the second quarter ended June 30, 1993. The largest
declines occurred in Europe, where revenue was weaker than anticipated, and in
the Government Systems business, which continues to be impacted by a decline
in government spending and increased competition. The Company anticipates
a positive turn in European revenue by the fourth quarter. Sales revenue
declined 18% to $1.0 billion from $1.2 billion in last years' second quarter,
due to decreases in sales of enterprise systems and servers, departmental
servers and desktop systems, software and custom defense systems. Services
revenue increased 31% to $487.3 million from $370.9 million in last years'
second quarter as the Company continued to implement its strategy to
aggressively grow its services and systems integration business. Equipment
maintenance revenue declined 8% to $336.2 million from $364.5 million last
year, due principally to a decline in equipment sales and improved product
reliability.
Total gross profit margin was 35% in the second quarter of 1994 compared to
39% in the same period a year earlier. Sales gross profit margin was 40% in
the current period compared to 42% last year; services gross profit margin was
22% in the current quarter compared to 23% last year; and equipment
maintenance gross profit margin was 39% in the current quarter compared to 44%
in the comparable period a year ago. Gross profit margins are expected to be
pressured by competitive pricing and the continuing shift to lower margin
products and services.
In the second quarter of 1994, selling, general and administrative expenses
were $391.3 million compared to $410.3 million in the second quarter of 1993.
The decline was principally due to the effects of cost containment actions.
Research and development expenses were $117.6 million in the quarter ended
June 30, 1994 compared to $124.1 million a year earlier.
As a result of the above, operating income was $119.1 million for the three
months ended June 30, 1994 or 7% of revenue, compared to $217.7 million, or
11% of revenue, in the year ago period. The decline in operating income was
principally due to lower revenue and lower gross profit margin. Partially
offsetting these declines were further cost reductions.
-7-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (cont'd.)
-------------------------------------------------
Interest expense was $50.9 million compared to $59.7 million a year earlier,
principally reflecting lower average debt levels.
Other income in the second quarter of 1994 was $2.0 million compared to an
expense of $6.5 million in the year ago period. The change is principally due
to the effects of foreign currency translation. Partially offsetting this is
a charge under the 1991 "Ill Wind" settlement agreement, which requires the
Company to make contingency payments based on proceeds from asset sales and on
net income. Other income in the second quarter of 1994 includes a charge of
$4.3 million for such contingency payments compared to zero in the year ago
period. The maximum contingent amount payable for 1994 under this settlement
agreement is $30.0 million, of which $10.3 million has been expensed through
June 30, 1994. The maximum contingent amount payable for 1993 was $20.0
million, all of which was provided for in the first quarter of 1993.
It is the Company's policy to minimize its exposure to foreign currency
fluctuations. On a net basis, and after taking into account the cost of the
Company's hedging program, foreign currency effects had a minimal effect on
pretax results for the three months ended June 30, 1994.
Estimated income taxes were $20.3 million in the second quarter of 1994
compared to $48.5 million in the second quarter of 1993.
For the six months ended June 30, 1994, net income was $109.9 million, or $.29
per primary and $.28 per fully diluted common share, on revenue of $3.5
billion. Net income for the six months ended June 30, 1993 was $363.6
million, or $1.83 per primary and $1.48 per fully diluted common share, on
revenue of $3.8 billion. Net income for the six months ended June 30, 1994
included a cost of $7.7 million, or $.04 per fully diluted common share, as a
result of an extraordinary charge for repurchases of debt. Net income for the
six months ended June 30, 1993 included an extraordinary charge of $26.4
million, or $.11 per fully diluted common share, and a credit of $230.2
million, or $.94 per fully diluted common share, as a result of the adoption
of new accounting standards.
Extraordinary Items and Accounting Changes
During the six months ended June 30, 1994, the Company repurchased and
redeemed $112.5 million of debt. The associated costs resulted in an
extraordinary charge of $7.7 million, net of $5.1 million of income tax
benefits, or $.04 per fully diluted common share.
-8-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (cont'd.)
-------------------------------------------------
Effective January 1, 1994, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards ("SFAS") 112,
"Employers' Accounting for Postemployment Benefits," and SFAS 115, "Accounting
for Certain Investments in Debt and Equity Securities." SFAS 112 establishes
financial accounting standards for employers that provide benefits to former
or inactive employees after employment but before retirement. SFAS 115
establishes financial accounting standards for investments in equity
securities that have readily determinable fair values and for all investments
in debt securities. The effect of adoption of these statements on the
Company's consolidated financial position and results of operations was
immaterial.
In April 1993, the Company settled lawsuits with Honeywell Inc. in connection
with its sale of the Sperry Aerospace Group in December 1986. As a result of
the settlement, in the six months ended June 30, 1993, the Company recorded an
extraordinary charge of $26.4 million, net of $16.8 million of income tax
benefits, or $.11 per fully diluted common share.
Effective January 1, 1993, the Company adopted SFAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions," and SFAS 109,
"Accounting for Income Taxes." The adoption of SFAS 106 decreased net income
for the six months ended June 30, 1993 by $194.8 million, net of $124.5
million of income tax benefits, or $.79 per fully diluted common share, and
the adoption of SFAS 109 increased net income for the six months ended June
30, 1993 by $425.0 million, or $1.73 per fully diluted common share.
Financial Condition
During the six months ended June 30, 1994, net cash provided from operations
was $29.7 million compared to $411.9 million in the same period a year
earlier. Cash flow from operations decreased from a year ago as inventories
increased and less cash was generated from accounts receivable.
Investments in properties and rental equipment during the first half of 1994
were $96.8 million compared to $96.7 million in last years' first half.
At June 30, 1994, total debt was $1.9 billion, a decline of $110.2 million
from December 31, 1993 principally due to the repurchases and redemptions
discussed above. The Company intends to continue repurchases or redemptions
from time to time. Cash, cash equivalents and marketable securities at June
30, 1994 were $528.1 million compared to $950.5 million at December 31, 1993.
During the six months ended June 30, 1994, debt net of cash and marketable
securities increased $312.2 million. As a percent of total capital, debt net
of cash and marketable securities at June 30, 1994 was 35% compared to 29% at
December 31, 1993.
-9-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (cont'd.)
-------------------------------------------------
Dividends paid on preferred stock amounted to $168.0 million during the first
half of 1994 compared to $92.1 million in the year ago period. The current
year amount includes full payment for all dividend arrearages.
Stockholders' equity decreased $42.8 million during the first six months of
1994, principally reflecting net income of $109.9 million, offset by preferred
dividends of $154.7 million.
At June 30, 1994, the Company had deferred tax assets in excess of deferred
tax liabilities of $1,123 million. For the reasons cited below, management
believes that it is more likely than not that $773 million of such assets will
be realized, therefore resulting in a valuation allowance of $350 million. In
assessing the likelihood of realization of this asset, the Company has
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
varying 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 $2.3 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 beyond the year 2003. 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 computer
industry has undergone dramatic changes and there can be no assurance that in
the future there could not be increased competition or other factors which may
result in a decline in sales or margins, loss of market share, or
technological obsolescence. The Company will evaluate quarterly the
realizability of its net deferred tax assets by assessing its valuation
allowance and by adjusting the amount of such allowance if necessary.
In 1994, the Company may settle certain open tax years with the Internal
Revenue Service, which could result in cash payments by the Company of
approximately $125 million. These payments will not affect earnings since
provision for these taxes has been made in prior years.
-10-
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Company's 1994 Annual Meeting of Stockholders (the "Annual Meeting")
was held on April 28, 1994 in Philadelphia, Pennsylvania.
(c) The following matters were voted upon at the Annual Meeting and
received the following votes:
1. Election of Directors as follows:
Gail D. Fosler -- 140,485,469 votes for; 1,579,541 votes withheld
Melvin R. Goodes -- 140,494,551 votes for; 1,570,459 votes withheld
Edwin A. Huston -- 140,535,981 votes for; 1,529,029 votes withheld
Robert McClements, Jr. -- 140,515,021 votes for; 1,549,989 votes
withheld
2. A proposal to ratify the selection of the Company's independent
auditors for 1994 -- 140,641,810 votes for; 839,867 votes against;
583,333 abstentions
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See Exhibit Index.
(b) Reports on Form 8-K
During the quarter ended June 30, 1994, the Company filed no Current
Reports on Form 8-K.
-11-
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: August 12, 1994 By: /s/ Deborah C. Hopkins
-----------------------------
Deborah C. Hopkins
Vice President and Controller
(chief accounting officer)
-12-
EXHIBIT INDEX
-------------
Exhibit
Number Description
- ------- -----------
11.1 Statement of Computation of Earnings
Per Share for the six months ended
June 30, 1994 and 1993
11.2 Statement of Computation of Earnings
Per Share for the three months ended
June 30, 1994 and 1993
12 Statement of Computation of Ratio
of Earnings to Fixed Charges
EXHIBIT 11.1
UNISYS CORPORATION
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE SIX MONTHS ENDED JUNE 30, 1994 and 1993 (UNAUDITED)
(Millions, except share data)
1994 1993
---- ----
Primary Earnings Per Common Share
Average Number of Outstanding Common Shares 170,618,828 162,229,245
Additional Shares Assuming Exercise of Stock Options 2,169,494 2,723,267
----------- -----------
Average Number of Outstanding Common Shares and
Common Share Equivalents 172,788,322 164,952,512
=========== ===========
Income Before Extraordinary Items and Changes
in Accounting Principles $117.6 $159.8
Dividends on Series A, B and C Preferred Stock (60.1) (61.0)
------ ------
Primary Earnings on Common Shares Before Extraordinary
Items and Changes in Accounting Principles 57.5 98.8
Extraordinary Items (7.7) (26.4)
Effect of Changes in Accounting Principles 230.2
------ ------
Primary Earnings on Common Shares $ 49.8 $302.6
====== ======
Primary Earnings Per Common Share
Before Extraordinary Items and Changes
in Accounting Principles $ .33 $ .60
Extraordinary Items (.04) (.16)
Effect of Changes in Accounting Principles 1.39
------ ------
Total $ .29 $1.83
====== ======
Fully Diluted Earnings Per Common Share
Average Number of Outstanding Common
Shares and Common Share Equivalents 172,788,322 164,952,512
Additional Shares:
Assuming Conversion of:
Series A Preferred Stock 47,712,453
8 1/4% Convertible Notes 33,698,698 33,699,634
Attributable to Stock Options 174,229 167,598
----------- -----------
Common Shares Outstanding Assuming Full Dilution 206,661,249 246,532,197
=========== ===========
Primary Earnings on Common Shares Before Extraordinary
Items and Changes in Accounting Principles $ 57.5 $ 98.8
Exclude Dividends on Series A Preferred Stock 53.5
Interest Expense on 8 1/4% Convertible Notes,
Net of Applicable Tax 8.9 9.0
------ ------
Fully Diluted Earnings on Common Shares Before
Extraordinary Items and Changes in Accounting Principles 66.4 161.3
Extraordinary Items (7.7) (26.4)
Effect of Changes in Accounting Principles 230.2
------ ------
Fully Diluted Earnings on Common Shares $ 58.7 $365.1
====== ======
Fully Diluted Earnings Per Common Share
Before Extraordinary Items and Changes
in Accounting Principles $ .32 $ .65
Extraordinary Items (.04) (.11)
Effect of Changes in Accounting Principles .94
------ ------
Total $ .28 $1.48
====== ======
EXHIBIT 11.2
UNISYS CORPORATION
STATEMENT OF COMPUTATION OF EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1994 and 1993 (UNAUDITED)
(Millions, except share data)
1994 1993
---- ----
Primary Earnings Per Common Share
Average Number of Outstanding Common Shares 170,746,889 162,468,876
Additional Shares Assuming Exercise of Stock Options 1,498,461 2,411,870
----------- ----------
Average Number of Outstanding Common Shares and
Common Share Equivalents 172,245,350 164,880,746
=========== ===========
Net Income $ 49.9 $103.0
Dividends on Series A, B and C Preferred Stock (30.0) (30.6)
------ ------
Primary Earnings on Common Shares $ 19.9 $ 72.4
====== ======
Primary Earnings Per Common Share $ .12 $ .44
====== ======
Fully Diluted Earnings Per Common Share
Average Number of Outstanding Common
Shares and Common Share Equivalents 172,245,350 164,880,746
Additional Shares:
Assuming Conversion of 8 1/4% Convertible Notes 33,697,762 33,699,634
Attributable to Stock Options 40,403
----------- -----------
Common Shares Outstanding Assuming Full Dilution 205,943,112 198,620,783
=========== ===========
Primary Earnings on Common Shares $ 19.9 $ 72.4
Interest Expense on 8 1/4% Convertible Notes,
Net of Applicable Tax 4.5 4.5
------ ------
Fully Diluted Earnings on Common Shares $ 24.4 $ 76.9
====== ======
Fully Diluted Earnings Per Common Share $ .12 $ .39
====== ======
EXHIBIT 12
UNISYS CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (UNAUDITED)
($ in millions)
Six
Months
Ended
June 30 Years Ended December 31
------- ----------------------------------------------
1994 1993 1992 1991 1990 1989
------- ----------------------------------------------
Income (loss) before income taxes $165.5 $503.4 $435.6 $(1,288.3) $(337.3) $(554.3)
Add (deduct) share of loss (income)
of associated companies (9.3) 14.5 3.2 (6.5) (51.8) (50.0)
------ ------ ------ --------- ------- -------
Subtotal 156.2 517.9 438.8 (1,294.8) (389.1) (604.3)
------ ------ ------ --------- ------- -------
Interest expense (net of interest
capitalized) 102.9 241.7 340.6 407.6 446.7 425.7
Amortization of debt issuance
expenses 3.1 6.6 4.8 1.8 1.5 1.6
Portion of rental expense
representative of interest 38.0 76.0 84.3 86.4 82.5 78.8
------ ------ ------ --------- ------- -------
Total Fixed Charges 144.0 324.3 429.7 495.8 530.7 506.1
------ ------ ------ --------- ------- -------
Earnings (loss) before estimated
income taxes and fixed charges $300.2 $842.2 $868.5 $(799.0) $ 141.6 $( 98.2)
====== ====== ====== ========= ======= =======
Ratio of earnings to fixed charges 2.08 2.60 2.02 (a) (a) (a)
====== ====== ====== ========= ======= =======
(a) Earnings in 1991, 1990 and 1989 were inadequate to cover fixed charges by $1,294.8 million,
$389.1 million and $604.3 million, respectively.
