|
Computer
Sciences Corporation |
February
4, 2008 |
|||||||||||||||
|
Revenues
by Segment |
||||||||||||||||
|
(preliminary and
unaudited) |
||||||||||||||||
|
Third
Quarter Ended |
||||||||||||||||
|
|
|
%
of Total |
||||||||||||||
|
(In
millions) |
Dec.
28, 2007 |
Dec.
29, 2006 |
Fiscal
2008 |
Fiscal
2007 |
||||||||||||
|
(As
Restated) |
||||||||||||||||
|
U.S.
Commercial |
$ | 1,031.3 | $ | 924.8 | 25 | % | 26 | % | ||||||||
|
Europe |
1,239.3 | 1,026.9 | 30 | 28 | ||||||||||||
|
Other
International |
454.4 | 368.1 | 11 | 10 | ||||||||||||
|
Global
Commercial |
2,725.0 | 2,319.8 | 66 | 64 | ||||||||||||
|
Department
of Defense |
970.1 | 881.3 | 23 | 25 | ||||||||||||
|
Civil
agencies |
419.6 | 393.8 | 10 | 10 | ||||||||||||
|
Other
(1) |
45.3 | 45.7 | 1 | 1 | ||||||||||||
|
North
American Public Sector |
1,435.0 | 1,320.8 | 34 | 36 | ||||||||||||
| $ | 4,160.0 | $ | 3,640.6 | 100 | % | 100 | % | |||||||||
|
Nine
Months Ended |
||||||||||||||||
|
%
of Total |
||||||||||||||||
|
(In
millions) |
Dec.
28, 2007 |
Dec.
29, 2006 |
Fiscal
2008 |
Fiscal
2007 |
||||||||||||
|
(As
Restated) |
||||||||||||||||
|
U.S.
Commercial |
$ | 2,977.1 | $ | 2,813.0 | 24 | % | 26 | % | ||||||||
|
Europe |
3,441.0 | 2,911.6 | 29 | 27 | ||||||||||||
|
Other
International |
1,291.3 | 1,098.6 | 11 | 10 | ||||||||||||
|
Global
Commercial |
7,709.4 | 6,823.2 | 64 | 63 | ||||||||||||
|
Department
of Defense |
2,882.1 | 2,643.9 | 24 | 25 | ||||||||||||
|
Civil
agencies |
1,292.3 | 1,225.3 | 11 | 11 | ||||||||||||
|
Other
(1) |
131.3 | 118.4 | 1 | 1 | ||||||||||||
|
North
American Public Sector |
4,305.7 | 3,987.6 | 36 | 37 | ||||||||||||
| $ | 12,015.1 | $ | 10,810.8 | 100 | % | 100 | % | |||||||||
|
(1) |
Other
revenues consist of state, local and foreign government as well as
commercial contracts performed by the North American Public
Sector. |
|
Computer
Sciences Corporation |
February
4, 2008 |
|
Consolidated Statements of
Income | |
|
(preliminary and
unaudited) | |
|
Third Quarter
Ended |
Nine Months
Ended |
|||||||||||||||
| (In millions except per-share amounts) |
Dec.
28,
2007 |
Dec.
29,
2006 |
Dec.
28,
2007 |
Dec.
29,
2006 |
||||||||||||
|
(As
Restated) |
(As
Restated) |
|||||||||||||||
|
Revenues |
$ | 4,160.0 | $ | 3,640.6 | $ | 12,015.1 | $ | 10,810.8 | ||||||||
|
Costs of services (excludes
depreciation and amortization) |
3,301.6 | 2,901.0 | 9,653.5 | 8,674.0 | ||||||||||||
|
Selling, general and
administrative |
240.2 | 227.9 | 721.9 | 682.0 | ||||||||||||
|
Depreciation and
amortization |
307.1 | 262.0 | 878.3 | 789.2 | ||||||||||||
|
Interest
expense |
51.1 | 56.3 | 129.1 | 160.2 | ||||||||||||
|
Interest
income |
(7.5 | ) | (8.3 | ) | (25.8 | ) | (41.8 | ) | ||||||||
|
Special
items |
17.5 | 42.0 | 92.4 | 279.9 | ||||||||||||
|
Other
income |
(16.3 | ) | (14.5 | ) | (41.9 | ) | (27.2 | ) | ||||||||
|
Total costs and
expenses |
3,893.7 | 3,466.4 | 11,407.5 | 10,516.3 | ||||||||||||
|
Income before
taxes |
266.3 | 174.2 | 607.6 | 294.5 | ||||||||||||
|
Taxes on
income |
87.3 | 60.7 | 244.7 | 151.4 | ||||||||||||
|
Net income |
$ | 179.0 | $ | 113.5 | $ | 362.9 | $ | 143.1 | ||||||||
|
Basic |
$ | 1.07 | $ | 0.66 | $ | 2.12 | $ | 0.81 | ||||||||
|
Diluted |
$ | 1.05 | $ | 0.65 | $ | 2.08 | $ | 0.79 | ||||||||
|
Average common shares outstanding
for: |
||||||||||||||||
|
Basic
EPS |
166.826 | 172.362 | 170.907 | 177.330 | ||||||||||||
|
Diluted
EPS |
169.793 | 175.746 | 174.240 | 180.873 | ||||||||||||
|
Earnings before special items, interest and
taxes |
$ | 327.4 | $ | 264.2 | $ | 803.3 | $ | 692.8 | ||||||||
|
Computer
Sciences Corporation |
February
4, 2008 |
|||||||
|
Selected Balance Sheet
Data |
||||||||
|
(preliminary and
unaudited) |
||||||||
|
Dec. 28, |
March 30, |
|||||||
|
(In
millions) |
2007 |
2007 |
||||||
|
Assets |
||||||||
|
Cash and cash
equivalents |
$ | 589.1 | $ | 1,050.1 | ||||
|
Receivables, net
of allowance for doubtful accounts |
4,608.4 | 4,187.4 | ||||||
|
Prepaid expenses
and other current assets |
1,793.6 | 1,464.0 | ||||||
|
Total
current assets |
6,991.1 | 6,701.5 | ||||||
|
Property and
equipment, net |
2,656.7 | 2,539.1 | ||||||
|
Outsourcing
contract costs, net |
941.5 | 1,029.5 | ||||||
|
Software,
net |
527.0 | 513.3 | ||||||
|
Goodwill |
3,697.4 | 2,500.1 | ||||||
|
Other
assets |
547.8 | 456.7 | ||||||
|
Total
assets |
$ | 15,361.5 | $ | 13,740.2 | ||||
|
Liabilities |
||||||||
|
Short-term debt
and current maturities of long-term debt |
$ | 571.4 | $ | 93.7 | ||||
|
Accounts
payable |
659.1 | 855.7 | ||||||
|
Accrued payroll
and related costs |
820.7 | 732.5 | ||||||
|
Other accrued
expenses |
1,759.3 | 2,014.1 | ||||||
|
Deferred
revenue |
1,025.7 | 1,025.5 | ||||||
|
Income taxes
payable and deferred income taxes |
210.2 | 934.6 | ||||||
|
Total
current liabilities |
5,046.4 | 5,656.1 | ||||||
|
Long-term debt,
net |
2,515.1 | 1,412.2 | ||||||
|
Income tax
liabilities and deferred income taxes |
1,127.4 | |||||||
|
Other long-term
liabilities |
1,121.4 | 1,131.9 | ||||||
|
Stockholders'
Equity |
5,551.2 | 5,540.0 | ||||||
|
Total
liabilities and stockholders' equity |
$ | 15,361.5 | $ | 13,740.2 | ||||
|
Computer
Sciences Corporation |
February
4, 2008 |
|||||||
|
Consolidated Statements of Cash
Flows |
||||||||
|
(preliminary and
unaudited) |
||||||||
|
Nine Months
Ended |
||||||||
| (In millions) |
Dec.
28, 2007 |
Dec.
29, 2006 |
||||||
|
(As
Restated) |
||||||||
|
Cash
flows from operating activities: |
||||||||
|
Net
income |
$ | 362.9 | $ | 143.1 | ||||
|
Adjustments
to reconcile net income to net cash used in operating
activities: |
||||||||
|
Depreciation
and amortization and other non-cash charges |
994.3 | 908.1 | ||||||
|
Gain
on dispositions |
(6.3 | ) | (20.7 | ) | ||||
|
Changes
in assets and liabilities, net of effects of acquisitions: |
||||||||
|
Increase
in assets |
(639.1 | ) | (488.8 | ) | ||||
|
Decrease
in liabilities |
(213.3 | ) | (4.5 | ) | ||||
|
Net
cash provided by operating activities |
498.5 | 537.2 | ||||||
|
Investing
activities: |
||||||||
|
Purchases
of property and equipment |
(644.2 | ) | (550.6 | ) | ||||
|
Acquisitions,
net of cash acquired |
(1,315.6 | ) | (131.3 | ) | ||||
|
Outsourcing
contracts |
(87.7 | ) | (69.4 | ) | ||||
|
Software |
(129.6 | ) | (114.1 | ) | ||||
|
Other
investing cash flows |
18.0 | 227.1 | ||||||
|
Net
cash used in investing activities |
(2,159.1 | ) | (638.3 | ) | ||||
|
Financing
activities: |
||||||||
|
Borrowings
of commercial paper, net |
205.1 | 497.4 | ||||||
|
Borrowings
under lines of credit |
456.6 | 440.7 | ||||||
|
Repayment
on lines of credit |
(472.2 | ) | (452.1 | ) | ||||
|
Principal
payments on long-term debt |
(29.3 | ) | (25.8 | ) | ||||
|
Proceeds
from debt issuance |
1,400.0 | |||||||
|
Proceeds
from stock option and other common stock transactions |
82.4 | 72.6 | ||||||
|
Excess
tax benefit from stock-based compensation |
10.6 | 3.1 | ||||||
|
Repurchase
of common stock, net of settlement |
(474.9 | ) | (1,000.0 | ) | ||||
|
Other
financing cash flows |
1.8 | (2.3 | ) | |||||
|
Net
cash provided by (used in) financing activities |
1,180.1 | (466.4 | ) | |||||
|
Effect
of exchange rate changes on cash and cash equivalents |
19.5 | 2.8 | ||||||
|
Net
decrease in cash and cash equivalents |
(461.0 | ) | (564.7 | ) | ||||
|
Cash
and cash equivalents at beginning of year |
1,050.1 | 1,290.7 | ||||||
|
Cash
and cash equivalents at end of period |
$ | 589.1 | $ | 726.0 | ||||
|
Computer
Sciences Corporation |
February
4, 2008 |
|
Non-GAAP Financial
Measures | |
|
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 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. Management uses earnings before special
items to evaluate business unit financial performance and it is one of the
measures used in assessing management performance. One of the
limitations associated with the use of earnings before special items (as
compared to reported earnings) is that it does not reflect the complete
financial results of the Company. CSC compensates for these
limitations by providing a reconciliation between earnings before special
items and reported earnings. | |
|
GAAP
Reconciliations |
||||||||||||||||
|
(In
millions) |
||||||||||||||||
|
EBITDA / EBIT(preliminary and
unaudited) |
Third Quarter
Ended |
Nine Months
Ended |
||||||||||||||
|
Dec.
28, 2007 |
Dec.
29, 2006 |
Dec.
28, 2007 |
Dec. 29,
2006 |
|||||||||||||
|
(As
Restated) |
(As
Restated) |
|||||||||||||||
|
EBITDA and special
items |
$ | 634.5 | $ | 526.2 | $ | 1,681.6 | $ | 1,482.0 | ||||||||
|
Special
items |
17.5 | 42.0 | 92.4 | 279.9 | ||||||||||||
|
EBITDA |
617.0 | 484.2 | 1,589.2 | 1,202.1 | ||||||||||||
|
Depreciation and
amortization |
307.1 | 262.0 | 878.3 | 789.2 | ||||||||||||
|
EBIT |
309.9 | 222.2 | 710.9 | 412.9 | ||||||||||||
|
Interest,
net |
43.6 | 48.0 | 103.3 | 118.4 | ||||||||||||
|
Income before
taxes |
266.3 | 174.2 | 607.6 | 294.5 | ||||||||||||
|
Taxes on
income |
87.3 | 60.7 | 244.7 | 151.4 | ||||||||||||
|
Net income |
$ | 179.0 | $ | 113.5 | $ | 362.9 | $ | 143.1 | ||||||||
|
Free Cash Flow (preliminary and
unaudited) |
Nine Months
Ended |
|||||||
|
Dec.
28,
2007 |
Dec.
29, 2006 |
|||||||
|
(As
Restated) |
||||||||
|
Free cash
flow |
$ | (374.2 | ) | $ | (121.1 | ) | ||
|
Net cash used in investing
activities |
2,159.1 | 638.3 | ||||||
|
Proceeds from redemption of
preferred stock |
126.5 | |||||||
|
Acquisitions, net of cash
acquired |
(1,315.6 | ) | (131.3 | ) | ||||
|
Capital lease
payments |
29.2 | 24.8 | ||||||
|
Net cash provided by operating
activities |
$ | 498.5 | $ | 537.2 | ||||
|
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. Proceeds from the redemption of DynCorp preferred
stock is included in other investing activities and is being excluded from
the calculation of free cash
flow. |
|
Computer
Sciences Corporation |
February
4, 2008 |
|
Earnings per Share
Reconciliation(preliminary and
unaudited) | |
|
The following table is presented
to illustrate the impact of the special items on earnings per
share. It also provides a reconciliation of the earnings per
share amount relating 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. CSC management believes that these
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. Management uses earnings
before special items to evaluate business unit financial performance and
it is one of the measures used in assessing management
performance. One of the limitations associated with the use of
earnings before special items (as compared to reported earnings) is that
it does not reflect the complete financial results of the
Company. CSC compensates for these limitations by providing a
reconciliation between earnings before special items and reported
earnings. | |
|
Third Quarter
Ended |
||||||||||||||||
|
December 28, 2007 |
December 29, 2006 |
|||||||||||||||
|
(As
Restated) |
||||||||||||||||
|
EPS |
EPS |
|||||||||||||||
|
Amount |
(diluted) |
Amount |
(diluted) |
|||||||||||||
|
Net income and EPS (diluted), as
reported |
$ | 179.0 | $ | 1.05 | $ | 113.5 | $ | 0.65 | ||||||||
|
Income from total
operations |
179.0 | 1.05 | 113.5 | 0.65 | ||||||||||||
|
Add back: Special
items |
9.9 | 0.06 | 35.6 | 0.20 | ||||||||||||
|
Income
before special items |
$ | 188.9 | $ | 1.11 | $ | 149.1 | $ | 0.85 | ||||||||
|
Average common shares outstanding
for diluted EPS |
169.793 | 175.746 | ||||||||||||||
|
Nine Months
Ended |
||||||||||||||||
|
December 28, 2007 |
December 29, 2006 |
|||||||||||||||
|
(As
Restated) |
||||||||||||||||
|
EPS |
EPS |
|||||||||||||||
|
Amount |
(diluted) |
Amount |
(diluted) |
|||||||||||||
|
Net income and EPS (diluted), as
reported |
$ | 362.9 | $ | 2.08 | $ | 143.1 | $ | 0.79 | ||||||||
|
Income from total
operations |
362.9 | 2.08 | 143.1 | 0.79 | ||||||||||||
|
Add back: Special
items |
62.7 | 0.36 | 237.0 | 1.31 | ||||||||||||
|
Income
before special items |
$ | 425.6 | $ | 2.44 | $ | 380.1 | $ | 2.10 | ||||||||
|
Average common shares outstanding
for diluted EPS |
174.240 | 180.873 | ||||||||||||||
|
Notes: |
All amounts are net of
taxes. |
|
Amounts are in millions except
per-share amounts. |