Revenues by Segment
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Computer Sciences Corporation |
August 4, 2005 |
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Revenues by Segment |
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(unaudited) |
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First Quarter Ended |
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July 1, |
July 2, |
% of Total |
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(In millions) |
2005 |
2004 |
Fiscal 2005 |
Fiscal 2004 |
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U.S. Commercial |
$ 1,007.1 |
$ 884.5 |
28% |
27% |
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Europe |
1,037.0 |
940.1 |
29 |
29 |
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Other International |
317.5 |
304.1 |
9 |
9 |
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Global Commercial segment |
2,361.6 |
2,128.7 |
66 |
65 |
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Department of Defense |
793.9 |
725.8 |
22 |
22 |
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Civil agencies |
376.7 |
402.8 |
11 |
12 |
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Other (1) |
50.3 |
40.2 |
1 |
1 |
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U.S. Federal segment |
1,220.9 |
1,168.8 |
34 |
35 |
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$ 3,582.5 |
$ 3,297.5 |
100% |
100% |
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(1) |
Other revenues consist of state, local and foreign government as well as commercial contracts performed by the U.S. Federal reporting segment. |
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Computer Sciences Corporation |
August 4, 2005 |
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Consolidated Statements of Income |
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(unaudited) |
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(In millions except per-share amounts) |
First Quarter Ended |
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July 1, 2005 |
July 2, 2004 |
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Revenues |
$3,582.5 |
$3,297.5 |
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Costs of services |
2,926.7 |
2,663.8 |
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Selling, general and administrative |
205.1 |
210.7 |
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Depreciation and amortization |
269.7 |
251.8 |
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Interest expense |
24.1 |
39.2 |
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Interest income |
(5.3) |
(2.3) |
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Total costs and expenses |
3,420.3 |
3,163.2 |
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Income before taxes |
162.2 |
134.3 |
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Taxes on income |
53.5 |
41.4 |
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Income from continuing operations |
108.7 |
92.9 |
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Discontinued operations, net of taxes |
22.9 |
17.5 |
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Net income |
$ 131.6 |
$ 110.4 |
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Earnings per share: |
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Continuing operations |
$ 0.59 |
$ 0.49 |
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Discontinued operations |
0.12 |
0.09 |
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Basic* |
$ 0.71 |
$ 0.59 |
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Continuing operations |
$ 0.58 |
$ 0.49 |
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Discontinued operations |
0.12 |
0.09 |
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Diluted |
$ 0.70 |
$ 0.58 |
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*Amounts may not add due to rounding |
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Average common shares outstanding for: |
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Basic EPS |
185.510 |
188.185 |
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Diluted EPS |
187.152 |
189.896 |
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Computer Sciences Corporation |
August 4, 2005 |
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Balance Sheet |
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(unaudited) |
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(In millions) |
July 1, 2005 |
April 1, 2005 |
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Assets |
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Cash and cash equivalents |
$ 427.3 |
$ 1,010.3 |
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Receivables, net of allowance for doubtful accounts |
3,722.9 |
3,537.7 |
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Prepaid expenses and other current assets |
1,157.8 |
1,058.0 |
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Assets of operations held for sale |
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83.8 |
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Total current assets |
5,308.0 |
5,689.8 |
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Property and equipment, net |
2,368.7 |
2,365.4 |
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Outsourcing contract costs, net |
1,288.5 |
1,279.6 |
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Software, net |
459.4 |
461.3 |
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Goodwill, net |
2,297.2 |
2,343.4 |
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Other assets |
475.2 |
494.4 |
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Total assets |
$12,197.0 |
$12,633.9 |
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Liabilities |
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Short-term debt and current maturities of long-term debt |
$ 67.5 |
$ 85.7 |
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Accounts payable |
692.3 |
836.0 |
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Accrued payroll and related costs |
716.8 |
660.4 |
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Other accrued expenses |
1,296.1 |
1,320.4 |
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Deferred revenue |
600.1 |
562.7 |
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Federal, state and foreign income taxes |
403.2 |
395.8 |
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Liabilities of operations held for sale |
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16.9 |
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Total current liabilities |
3,776.0 |
3,877.9 |
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Long-term debt, net |
1,301.6 |
1,303.0 |
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Other long-term liabilities |
924.4 |
958.3 |
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Stockholders' equity |
6,195.0 |
6,494.7 |
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Total liabilities and stockholders' equity |
$12,197.0 |
$12,633.9 |
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Computer Sciences Corporation |
August 4, 2005 |
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Consolidated Statements of Cash Flows |
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(unaudited) |
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Three Months Ended |
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(In millions) |
July 1, 2005 |
July 2, 2004 |
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Cash flows from operating activities: |
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Net income |
$ 131.6 |
$ 110.4 |
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Adjustments to reconcile net income to net |
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cash provided by operating activities: |
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Depreciation and amortization and other non-cash charges |
296.3 |
274.0 |
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Gain on disposition |
(22.9) |
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Changes in assets and liabilities, net of effects of acquisitions: |
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Increase in assets |
(286.8) |
(216.0) |
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Decrease in liabilities |
(108.7) |
(48.5) |
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Net cash provided by operating activities |
9.5 |
119.9 |
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Investing activities: |
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Purchases of property and equipment |
(235.4) |
(234.0) |
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Acquisitions, net of cash acquired |
(20.5) |
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Dispositions |
1.0 |
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Outsourcing contracts |
(98.0) |
(58.6) |
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Software |
(40.4) |
(81.4) |
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Other investing cash flows |
18.2 |
56.3 |
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Net cash used in investing activities |
(355.6) |
(337.2) |
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Financing activities: |
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Borrowings under commercial paper, net |
.6 |
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(Repayment) borrowings under lines of credit, net |
(15.2) |
.3 |
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Principal payments on long-term debt |
(2.0) |
(1.3) |
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Proceeds from stock option and other common stock transactions |
8.7 |
16.9 |
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Acquisition of treasury stock |
(227.6) |
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Other financing cash flows |
1.6 |
.2 |
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Net cash provided by (used in) financing activities |
(234.5) |
16.7 |
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Effect of exchange rate changes on cash and cash equivalents |
(2.4) |
(2.3) |
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Net decrease in cash and cash equivalents |
(583.0) |
(202.9) |
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Cash and cash equivalents at beginning of year |
1,010.3 |
562.8 |
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Cash and cash equivalents at end of period |
$ 427.3 |
$ 359.9 |
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Computer Sciences Corporation |
August 4, 2005 |
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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. |
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GAAP Reconciliations |
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(In millions) |
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EBITDA / EBIT (unaudited) |
First Quarter Ended |
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July 1, 2005 |
July 2, 2004 |
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EBITDA |
$ 450.7 |
$ 423.0 |
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Depreciation and Amortization |
269.7 |
251.8 |
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EBIT |
181.0 |
171.2 |
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Interest, net |
18.8 |
36.9 |
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Income Before Taxes |
162.2 |
134.3 |
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Taxes on income |
53.5 |
41.4 |
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Income from continuing operations |
108.7 |
92.9 |
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Discontinued operations, net of taxes |
22.9 |
17.5 |
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Net Income |
$ 131.6 |
$ 110.4 |
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Free Cash Flow (unaudited) |
First Quarter Ended |
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July 1, 2005 |
July 2, 2004 |
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Free Cash Flow |
$ (346.1) |
$ (244.7) |
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Net cash used in investing activities |
355.6 |
337.2 |
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Acquisition, net of cash acquired |
(20.5) |
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Dispositions |
1.0 |
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Decrease in available-for-sale securities* |
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46.9 |
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Net cash provided by operating activities |
$ 9.5 |
$ 119.9 |
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*As a result of guidance issued by the SEC in its March 4, 2005, "Current Accounting and Disclosure Issues" the Company reclassified certain securities held on April 2, 2004 from cash to available-for-sale investments. This reclassification increased cash used in investing activities for the 3 months ended July 2, 2004. The Company believes it is appropriate to exclude such cash flows from its measurement of free cash flows. |