News Release-- November 05, 2002

CSC REPORTS SECOND QUARTER EARNINGS PER SHARE OF 54 CENTS

EL SEGUNDO, Calif., November 5 -- Computer Sciences Corporation (NYSE: CSC) today reported results for its fiscal 2003 second quarter, ended September 27, 2002. Revenues were $2.7 billion, down 1.2%, and earnings per share (diluted) were 54 cents, up 35% over last year's comparable quarter.

Effective for fiscal 2003, the company adopted SFAS No. 142, which eliminates the amortization of goodwill and certain intangible assets. Earnings per share before goodwill and employee workforce amortization increased 5.9% over the same period last year.

CSC's U.S. federal government activities delivered strong revenue growth. The net revenue decrease reflects weaker commercial demand in the financial services vertical market and for project-oriented services. Earnings per share growth was driven primarily by improvements in year-over-year profitability from the company's U.S federal government and North American consulting and systems integration activities, and continued emphasis on tight discretionary cost controls.

For the second quarter (ended September 27):


• Revenues were $2.7 billion, a 1.2% decrease from fiscal 2002
  (down approximately 3.5% in constant currency);



• Net income was $92.9 million;



• Earnings per share (diluted) were 54 cents;



• and announced major new business awards were $964 million.

For the six months (ended September 27):


• Revenues were $5.5 billion, up 0.3% over the comparable six month period of fiscal 2002 (down approximately 1.5 % in constant currency);



• Net income was $171.9 million;



• Earnings per share (diluted) were $1.00;



• and announced major new business awards totaled $2.1 billion.

"Our global commercial outsourcing and U.S. federal government activities continue to comprise an important piece of our revenue, constituting approximately three-quarters of the total," said CSC Chairman and Chief Executive Officer Van B. Honeycutt. "The U.S. federal IT services market is growing well and industry sources are expecting the total IT budget for the government's fiscal 2003 to increase by about 10% over last year. We also continue to believe opportunities in the outsourcing sector are promising.

“The market for global IT services has been subject to a reduction in demand for several quarters, especially in the area of corporate discretionary spending," Honeycutt said. "During the quarter just ended, we continued our tight expense controls and focused on client engagement execution, resulting in continuing CSC operating efficiency improvement. We are pleased with the profitability progress made during our second quarter in a very challenging and difficult environment. Our results reflect the discipline we have applied.

"We have seen no significant improvement in demand for IT consulting and systems integration services in North America, but are recording improved profitability and win-rate levels compared with the comparable period last year," Honeycutt added. "We continue to experience weaker demand for short-term, project-related work in markets outside North America. The market in Europe continues to be challenging and we have organized our European operations into a regional structure to further reduce our cost base.

"The set of opportunities within the global commercial outsourcing and U.S. federal markets is robust. Our historical mission has been to reduce clients’ costs and improve their operating efficiencies, and this positions us positively as global organizations make critical decisions to improve their competitiveness.

"Our federal market pipeline, of nearly $26 billion stretching over the next 29 months, continues to present a strong set of opportunities," Honeycutt continued. "Our recently formed Enforcement, Security and Intelligence division was created to meet the needs of U.S. law enforcement, public safety and security, and intelligence agencies. This division has been awarded, as we announced this morning, eight intelligence community integration and consulting awards that bring more than $200 million in new wins and contract extensions to CSC. This activity highlights clients’ confidence in our work and recognition of the value and reach of this new organization. Principal areas of growth for our U.S. government activities continue to be modernization of systems and infrastructure, e-government initiatives, IT and business process outsourcing, and homeland security.

"For the third quarter to date, we have announced new awards in excess of $900 million, bringing our fiscal 2003 total to over $3 billion," Honeycutt added. "Yesterday, we announced that Bombardier Transportation, a division of Bombardier Inc., has selected CSC to negotiate an IT outsourcing agreement with a potential value estimated to be in excess of $670 million over seven years. Last month, we announced that Consignia, now called The Royal Mail Group, which is the United Kingdom government-owned mail delivery service, has selected CSC to negotiate a 10-year IT outsourcing agreement valued at approximately $2.3 billion. These two opportunities total nearly $3 billion and are not reflected in the year-to-date awards. Additionally, we have been downselected to negotiate a large outsourcing agreement with the German Defense Ministry.

"For the second half of fiscal 2003, given the conditions of the IT services demand environment, we expect revenue will grow in the 2% to 4% range -- with the fourth quarter anticipated to be stronger than the third," said Honeycutt. "Earnings per share for the fiscal year, considering the difficult and unsettled industry backdrop, are now anticipated to be in the low-to-mid $2.60 range."

BUSINESS RESULTS

For the second quarter, revenue derived from CSC’s U.S. federal government activities showed excellent growth, increasing to $772.1 million, up 16.9% from the $660.6 million recorded in last year’s comparable quarter. Department of Defense (DoD) activities rose 13.1% to $449.7 million from last year's $397.6 million, with significant contributions from intelligence community, U.S. Army related activities and several new awards. Civil agencies business rose to $322.4 million, up 22.6% from the $263.0 million reported last year, aided primarily by new awards and increased work from the IRS Modernization activity and additional tasking from the Immigration and Naturalization Service.

Global commercial revenues declined 6.9% (approximately 10% in constant currency), to $1.96 billion compared with $2.1 billion in last year’s second quarter. The continued slowdown in demand for global commercial consulting and systems integration project work was partially offset by growth in the company's global outsourcing activities. U.S. commercial revenue was $958.7 million, down 8.2%. European revenue was $706.7 million, down slightly from the same quarter a year ago (down approximately 11% in constant currency). CSC's non-European international revenue declined 11.8% (approximately 15% in constant currency) from last year's $334.4 million.

As announced in the company’s press release dated October 22, 2002, a teleconference will be held today at 5:00 p.m. EST, to discuss the second quarter results. This teleconference can be accessed from the CSC Web site at www.csc.com/investorrelations, in a listen only mode.

Founded in 1959, Computer Sciences Corporation is one of the world’s leading information technology (IT) services companies. CSC’s mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.

With more than 65,000 employees, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC’s own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $11.4 billion for the 12 months ended Sept. 27, 2002. For more information, visit the company’s Web site at www.csc.com.

All statements in this press release that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company’s intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, many of which are outside the Company’s control.

These factors could cause actual results to differ materially from such forward-looking statements. For a written description of these factors, see the section titled “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in CSC’s Form 10-Q for the quarter ended June 28, 2002.

Note to Analysts and Editors: Please see attached tables.

Revenue by Market Sector

Consolidated
Statements of Income

Additional Financial Information