February 4, 2003
Consolidated Statements of Income
(unaudited)
Third Quarter Nine Months Ended
Dec. 27,   Dec. 28,   Dec. 27,   Dec. 28,
In millions, except per-share amounts 2002   2001   2002   2001
Revenues (a)  $ 2,793.6  $ 2,893.5  $ 8,267.4  $ 8,344.1
Costs of services (a)    2,248.5    2,344.8    6,665.3    6,802.7
Selling, general and administrative (b)       167.6       184.0       524.5       548.0
Depreciation and amortization (c)       195.3       204.2       588.5       591.9
Interest, net         34.6         34.9       100.9       108.6
Total costs and expenses    2,646.0    2,767.9    7,879.2    8,051.2
Income before taxes       147.6       125.6       388.2       292.9
Taxes on income         41.9         38.5       110.7         89.9
Net income  $   105.7  $     87.1  $   277.5  $   203.0
Earnings per share:
          Basic  $     0.62  $     0.51    $     1.62  $     1.20
          Diluted  $     0.61  $     0.51  $     1.61  $     1.19
Common shares:
          Outstanding   171.669   170.475   171.553   169.754
          Assuming dilution   172.158   171.753   172.445   170.816
Notes to Consolidated Statements of Income
(a) During the third quarter of fiscal 2003, the Securities and Exchange Commission staff indicated the guidance in Emerging Issues Task Force (EITF) Issue No. 01-09, "Accounting for Consideration Given by a Vendor to a Customer (Including a Reseller of the Vendor's Products)" should be applied broadly to all forms of consideration in which an entity pays cash or other forms of consideration to its customers.  The Company acquires Information Technology assets from outsourcing clients and subsequently records the assets at their fair values.  Any excess paid over the fair value amounts (premium) is included in outsourcing contract costs and amortized over the contract life.  In accordance with EITF Issue No. 01-09, amortization of premiums have been treated as a reduction of revenue, rather than amortization expense.  Prior period amounts have been conformed with current year presentation.  The revenues and total costs and expenses were both reduced by less than 1%, with no impact on income.

(b) During the third quarter of fiscal 2003, the Company reclassified the provision for bad debt expense from costs of services to selling, general and administrative.  Prior period amounts have been conformed to current year presentation.

(c) The Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" effective March 30, 2002.  One of the SFAS No. 142 requirements is that, upon adoption of the new standard, goodwill and certain intangible assets must no longer be amortized.  Goodwill and employee workforce acquired amortization of  $19.5 million ($18.7 million after tax), or 11 cents per share (diluted) was recorded during the third quarter ended December 28, 2001.