Revenues by Segment
|
|
|||||||
|
Revenues by Segment |
|||||||
|
(unaudited) |
|||||||
|
|
|||||||
|
|
Fourth Quarter Ended |
||||||
|
|
March 31, |
|
April 1, |
|
% of Total |
||
|
(In millions) |
2006 |
|
2005 |
|
Fiscal 2006 |
|
Fiscal 2005 |
|
|
|
|
|
|
|
|
|
|
U.S. Commercial |
$1,013.2 |
|
$1,075.8 |
|
26% |
|
28% |
|
Europe |
1,135.0 |
|
1,280.8 |
|
29 |
|
33 |
|
Other International |
369.0 |
|
316.1 |
|
10 |
|
8 |
|
Global Commercial segment |
2,517.2 |
|
2,672.7 |
|
65 |
|
69 |
|
|
|
|
|
|
|
|
|
|
Department of Defense |
919.5 |
|
755.3 |
|
23 |
|
19 |
|
Civil agencies |
417.9 |
|
411.4 |
|
11 |
|
11 |
|
Other (1) |
28.9 |
|
39.1 |
|
1 |
|
1 |
|
U.S. Federal segment |
1,366.3 |
|
1,205.8 |
|
35 |
|
31 |
|
|
|
|
|
|
|
|
|
|
|
$3,883.5 |
|
$3,878.5 |
|
100% |
|
100% |
|
|
|||||||
|
|
|||||||
|
|
Twelve Months Ended |
||||||
|
|
March 31, |
|
April 1, |
|
% of Total |
||
|
(In millions) |
2006 |
|
2005 |
|
Fiscal 2006 |
|
Fiscal 2005 |
|
|
|
|
|
|
|
|
|
|
U.S. Commercial |
$ 4,024.3 |
|
$ 3,829.7 |
|
28% |
|
27% |
|
Europe |
4,176.8 |
|
4,325.7 |
|
28 |
|
31 |
|
Other International |
1,360.5 |
|
1,227.3 |
|
9 |
|
9 |
|
Global Commercial segment |
9,561.6 |
|
9,382.7 |
|
65 |
|
67 |
|
|
|
|
|
|
|
|
|
|
Department of Defense |
3,368.9 |
|
2,909.8 |
|
23 |
|
21 |
|
Civil agencies |
1,544.3 |
|
1,612.9 |
|
11 |
|
11 |
|
Other (1) |
140.8 |
|
153.2 |
|
1 |
|
1 |
|
U.S. Federal segment |
5,054.0 |
|
4,675.9 |
|
35 |
|
33 |
|
|
|
|
|
|
|
|
|
|
|
$14,615.6 |
|
$14,058.6 |
|
100% |
|
100% |
|
|
|||||||
|
|
|
|
(1) |
Other revenues consist of state, local and foreign government as well as commercial contracts performed by the U.S. Federal reporting segment. |
|
|
|
Consolidated Statements of Income |
|
(unaudited) |
|
(In millions except per-share amounts) |
Fourth Quarter Ended |
|
Twelve Months Ended |
||||
|
|
March 31, |
|
April 1, |
|
March 31, |
|
April 1, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
|
|
|
|
|
|
|
|
Revenues |
$3,883.5 |
|
$3,878.5 |
|
$14,615.6 |
|
$14,058.6 |
|
|
|
|
|
|
|
|
|
|
Costs of services |
3,066.4 |
|
3,094.8 |
|
11,719.8 |
|
11,315.1 |
|
Selling, general and administrative |
221.6 |
|
209.8 |
|
842.2 |
|
807.8 |
|
Depreciation and amortization |
279.5 |
|
271.9 |
|
1,091.8 |
|
1,051.0 |
|
Interest expense |
29.6 |
|
37.2 |
|
104.2 |
|
156.8 |
|
Interest income |
(12.7) |
|
(7.8) |
|
(40.8) |
|
(16.1) |
|
Special items |
25.3 |
|
28.6 |
|
77.3 |
|
28.6 |
|
|
|
|
|
|
|
|
|
|
Total costs and expenses |
3,609.7 |
|
3,634.5 |
|
13,794.5 |
|
13,343.2 |
|
|
|
|
|
|
|
|
|
|
Income before taxes |
273.8 |
|
244.0 |
|
821.1 |
|
715.4 |
|
Taxes on income |
70.1 |
|
77.4 |
|
244.1 |
|
219.0 |
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
203.7 |
|
166.6 |
|
577.0 |
|
496.4 |
|
Discontinued operations, net of taxes |
|
|
245.2 |
|
61.3 |
|
313.8 |
|
|
|
|
|
|
|
|
|
|
Cumulative effect of accounting change |
(4.3) |
|
|
|
(4.3) |
|
|
|
Net income |
$ 199.4 |
|
$ 411.8 |
|
$ 634.0 |
|
$ 810.2 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Continuing operations |
$ 1.09 |
|
$ 0.87 |
|
$ 3.11 |
|
$ 2.62 |
|
Discontinued operations |
|
|
1.28 |
|
0.33 |
|
1.66 |
|
Cumulative effect of accounting change |
(0.02) |
|
|
|
(0.02) |
|
|
|
Basic* |
$ 1.07 |
|
$ 2.15 |
|
$ 3.41 |
|
$ 4.27 |
|
|
|
|
|
|
|
|
|
|
Continuing operations |
$ 1.08 |
|
$ 0.86 |
|
$ 3.07 |
|
$ 2.59 |
|
Discontinued operations |
|
|
1.27 |
|
0.33 |
|
1.64 |
|
Cumulative effect of accounting change |
(0.02) |
|
|
|
(0.02) |
|
|
|
Diluted* |
$ 1.05 |
|
$ 2.13 |
|
$ 3.38 |
|
$ 4.22 |
|
|
|
|
|
|
|
|
|
|
Average common shares outstanding for: |
|
|
|
|
|
|
|
|
Basic EPS |
186.711 |
|
191.143 |
|
185.693 |
|
189.575 |
|
Diluted EPS |
189.238 |
|
193.342 |
|
187.695 |
|
191.799 |
|
|
|
|
|
|
|
|
|
|
*Amounts may not add due to rounding |
|
|
|
|
|
|
|
|
|
|||
|
Selected Balance Sheet Data |
|||
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
April 1, |
|
(In millions) |
2006 |
|
2005 |
|
Assets |
|
|
|
|
Cash and cash equivalents |
$ 1,290.7 |
|
$ 1,010.3 |
|
Receivables, net of allowance for doubtful accounts |
3,746.3 |
|
3,537.7 |
|
Assets of operations held for sale |
|
|
83.8 |
|
|
|
|
|
|
Property and equipment, net |
2,320.1 |
|
2,365.4 |
|
Outsourcing contract costs, net |
1,175.3 |
|
1,279.6 |
|
Software, net |
453.3 |
|
461.3 |
|
Goodwill, net |
2,306.3 |
|
2,343.4 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Short-term debt and current maturities of long-term debt |
$ 85.3 |
|
$ 85.7 |
|
Accounts payable and other accrued expenses |
2,771.3 |
|
2,816.8 |
|
Deferred revenue |
629.1 |
|
562.7 |
|
Liabilities of operations held for sale |
|
|
16.9 |
|
|
|
|
|
|
Long-term debt, net |
1,376.8 |
|
1,303.0 |
|
|
|
|
|
|
Stockholders' equity |
6,771.9 |
|
6,494.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
Consolidated Statements of Cash Flows |
|
||
|
(unaudited) |
|
||
|
|
|
||
|
|
Twelve Months Ended |
||
|
(In millions) |
March 31, |
|
April 1, |
|
|
2006 |
|
2005 |
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ 634.0 |
|
$ 810.2 |
|
Adjustments to reconcile net income to net |
|
|
|
|
cash provided by operating activities: |
|
|
|
|
Depreciation and amortization and other non-cash charges |
1,236.9 |
|
1,147.8 |
|
Changes in assets and liabilities, net of effects of acquisitions: |
|
|
|
|
Increase in assets |
(433.9) |
|
(695.9) |
|
Increase in liabilities |
114.3 |
|
679.4 |
|
|
|
|
|
|
Net cash provided by operating activities |
1,551.3 |
|
1,941.5 |
|
|
|
|
|
|
Investing activities: |
|
|
|
|
Purchases of property and equipment |
(826.9) |
|
(855.2) |
|
Acquisitions, net of cash acquired |
(44.1) |
|
(20.5) |
|
Dispositions |
.5 |
|
819.1 |
|
Outsourcing contracts |
(242.5) |
|
(416.5) |
|
Software |
(151.1) |
|
(205.1) |
|
Other investing cash flows |
140.1 |
|
82.8 |
|
|
|
|
|
|
Net cash used in investing activities |
(1,124.0) |
|
(595.4) |
|
|
|
|
|
|
Financing activities: |
|
|
|
|
Borrowings under lines of credit, net |
(22.4) |
|
22.1 |
|
Principal payments on long-term debt |
(8.5) |
|
(1,032.6) |
|
Proceeds from stock option and other common stock transactions |
101.1 |
|
107.8 |
|
Acquisition of treasury stock |
(227.7) |
|
|
|
Other financing cash flows |
6.8 |
|
2.1 |
|
|
|
|
|
|
Net cash provided by (used in) financing activities |
(150.7) |
|
(900.6) |
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
3.8 |
|
2.0 |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
280.4 |
|
447.5 |
|
Cash and cash equivalents at beginning of year |
1,010.3 |
|
562.8 |
|
|
|
|
|
|
Cash and cash equivalents at end of period |
$1,290.7 |
|
$1,010.3 |
|
|
|
The following tables reconcile Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA); Earnings Before Interest and Taxes (EBIT); and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with accounting principles generally accepted in the United States (GAAP). CSC management believes that these three non-GAAP financial measures provide useful information to investors regarding the Company's financial condition and results of operations as they provide another measure of the Company's profitability and ability to service its debt, and are considered important measures by financial analysts covering CSC and its peers. |
|
|
|
GAAP Reconciliations |
|
|
|
|
|
|
|
|
(In millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA / EBIT (unaudited) |
Fourth Quarter Ended |
|
Twelve Months Ended |
||||
|
|
March 31, |
|
April 1, |
|
March 31, |
|
April 1, |
|
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
EBITDA and special items |
$ 595.5 |
|
$ 573.9 |
|
$2,053.6 |
|
$1,935.7 |
|
Special items |
25.3 |
|
28.6 |
|
77.3 |
|
28.6 |
|
EBITDA |
570.2 |
|
545.3 |
|
1,976.3 |
|
1,907.1 |
|
Depreciation and amortization |
279.5 |
|
271.9 |
|
1,091.8 |
|
1,051.0 |
|
EBIT |
290.7 |
|
273.4 |
|
884.5 |
|
856.1 |
|
Interest, net |
16.9 |
|
29.4 |
|
63.4 |
|
140.7 |
|
Income before taxes |
273.8 |
|
244.0 |
|
821.1 |
|
715.4 |
|
Taxes on income |
70.1 |
|
77.4 |
|
244.1 |
|
219.0 |
|
Income from continuing operations |
203.7 |
|
166.6 |
|
577.0 |
|
496.4 |
|
Discontinued operations, net of taxes |
|
|
245.2 |
|
61.3 |
|
313.8 |
|
Cumulative effect of accounting change |
(4.3) |
|
|
|
(4.3) |
|
|
|
Net Income |
$ 199.4 |
|
$ 411.8 |
|
$ 634.0 |
|
$ 810.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (unaudited) |
Twelve Months Ended |
|
|
|
|
||
|
|
March 31, |
|
April 1, |
|
|
|
|
|
|
2006 |
|
2005 |
|
|
|
|
|
Free cash flow |
$ 462.9 |
|
$ 493.9 |
|
|
|
|
|
Net cash used in investing activities |
1,124.0 |
|
595.4 |
|
|
|
|
|
Acquisitions, net of cash acquired |
(44.1) |
|
(20.5) |
|
|
|
|
|
Business dispositions |
.5 |
|
819.1 |
|
|
|
|
|
Capital lease payments |
8.0 |
|
6.7 |
|
|
|
|
|
Available-for-sale securities |
|
|
46.9 |
|
|
|
|
|
Net cash provided by operating activities |
$1,551.3 |
|
$1,941.5 |
|
|
|
|
|
Note: |
Capital lease payments and proceeds from the sale of property and equipment (included in investing activities) are included in the calculation of free cash flow. Prior periods have been adjusted to conform with this presentation. |
|
|
|
Earnings per Share Reconciliation (unaudited) |
|
|
|
The following table is presented to illustrate the impact of the Nortel Networks (2006) and debt redemption (2005) special charges on earnings per share. It also provides a reconciliation of the earnings per share amount relating to this item to earnings per share for continuing operations. The earnings per share amounts presented below include non-GAAP measures. This table should be read in conjunction with the Consolidated Statements of Income within this release on which the GAAP earnings per share measures are presented. Earnings per share before special items provides a basis for comparing current operating performance to past and future operating performance. |
|
|
|
|
Fourth Quarter Ended |
|
Fourth Quarter Ended |
||||
|
|
March 31, 2006 |
|
April 1, 2005 |
||||
|
|
|
|
EPS |
|
|
|
EPS |
|
|
Amount |
|
(diluted) |
|
Amount |
|
(diluted) |
|
Net income and EPS (diluted), as reported |
$ 199.4 |
|
$ 1.05 |
|
$ 411.8 |
|
$ 2.13 |
|
Less: Discontinued operations |
|
|
|
|
(245.2) |
|
(1.27) |
|
Add: Cumulative change in accounting principle |
4.3 |
|
0.02 |
|
|
|
|
|
Income from continuing operations, as reported |
203.7 |
|
1.08 |
|
166.6 |
|
0.86 |
|
Add back: Special items |
15.2 |
|
0.08 |
|
18.4 |
|
0.10 |
|
Income from continuing operations before |
|
|
|
|
|
|
|
|
special items |
$ 218.9 |
|
$ 1.16 |
|
$ 185.0 |
|
$ 0.96 |
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended |
|
Twelve Months Ended |
||||
|
|
March 31, 2006 |
|
April 1, 2005 |
||||
|
|
|
|
EPS |
|
|
|
EPS |
|
|
Amount |
|
(diluted) |
|
Amount |
|
(diluted) |
|
Net income and EPS (diluted), as reported |
$ 634.0 |
|
$ 3.38 |
|
$ 810.2 |
|
$ 4.22 |
|
Less: Discontinued operations |
(61.3) |
|
(0.33) |
|
(313.8) |
|
(1.64) |
|
Add: Cumulative change in accounting principle |
4.3 |
|
0.02 |
|
|
|
|
|
Income from continuing operations, as reported |
577.0 |
|
3.07 |
|
496.4 |
|
2.59 |
|
Add back: Special items |
48.3 |
|
0.26 |
|
18.4 |
|
0.10 |
|
Income from continuing operations before |
|
|
|
|
|
|
|
|
special items |
$ 625.3 |
|
$ 3.33 |
|
$ 514.9 |
|
$ 2.68 |
|
|
|
|
|
|
|
|
|
|
Notes: |
All figures are net of taxes. |
|
|
Figures are in millions except per-share amounts. |
|
|
Amounts may not add due to rounding. |
|
|
|
Earnings per Share (unaudited)* |
|
|
|
The following table is presented to reconcile earnings per share amounts to earnings per share for continuing operations and total earnings per share. The earnings per share amounts presented below include non-GAAP measures. This table should be read in conjunction with the Consolidated Statements of Income within this release on which the GAAP earnings per share measures are presented. Earnings per share before special items provides a basis for comparing current operating performance to past and future operating performance. |
|
|
|
|
Fiscal 2006 |
||||||||
|
|
First |
|
Second |
|
Third |
|
Fourth |
|
Total |
|
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Year |
|
Continuing operations, |
|
|
|
|
|
|
|
|
|
|
before special items |
$ 0.58 |
|
$ 0.71 |
|
$ 0.88 |
|
$ 1.16 |
|
$ 3.33 |
|
|
|
|
|
|
|
|
|
|
|
|
Special items |
|
|
(0.18) |
|
|
|
(0.08) |
|
(0.26) |
|
|
|
|
|
|
|
|
|
|
|
|
EPS continuing operations, as reported |
0.58 |
|
0.53 |
|
0.88 |
|
1.08 |
|
3.07 |
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
0.12 |
|
|
|
0.20 |
|
|
|
0.33 |
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of accounting change |
|
|
|
|
|
|
(0.02) |
|
(0.02) |
|
|
|
|
|
|
|
|
|
|
|
|
EPS as reported |
$ 0.70 |
|
$ 0.53 |
|
$ 1.08 |
|
$ 1.05 |
|
$ 3.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2005 |
||||||||
|
|
First |
|
Second |
|
Third |
|
Fourth |
|
Total |
|
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Year |
|
Continuing operations, |
|
|
|
|
|
|
|
|
|
|
before special items |
$ 0.49 |
|
$ 0.56 |
|
$ 0.67 |
|
$ 0.96 |
|
$ 2.68 |
|
|
|
|
|
|
|
|
|
|
|
|
Special items |
|
|
|
|
|
|
(0.10) |
|
(0.10) |
|
|
|
|
|
|
|
|
|
|
|
|
EPS continuing operations, as reported |
0.49 |
|
0.56 |
|
0.67 |
|
0.86 |
|
2.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations |
0.09 |
|
0.12 |
|
0.15 |
|
1.27 |
|
1.64 |
|
|
|
|
|
|
|
|
|
|
|
|
EPS as reported |
$ 0.58 |
|
$ 0.68 |
|
$ 0.82 |
|
$ 2.13 |
|
$ 4.22 |
|
|
|
|
|
|
|
|
|
|
|
|
*Note: |
Amounts may not add due to rounding |