computer sciences FY 2004 Q1

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computer sciences FY 2004 Q1

  1. 1. Quar terly Highlights First Quarter Fiscal 2004 (Ended July 4, 2003) The $4.3 billion in announced new awards for our first quarter – with nearly 90% in the commercial About CSC sector – represents the largest quarterly total in a year and a half. The last two quarters’ new award announcements have been very positive, totaling in excess of $8 billion, with 79% coming from the Founded in 1959, commercial sector. These recent new business awards and first-quarter performance reinforce our confidence Computer Sciences in the remainder of fiscal 2004. Van B. Honeycutt Corporation is a leading Chairman and Chief Executive Officer information technology Computer Sciences Corporation (IT) services company. Computer Sciences Corporation results for its fiscal 2004 first quarter included: Revenue of $3.55 billion, CSC’s mission is to provide up 29.1% (approximately 23% in constant currency) over last year’s comparable quarter, including an impact of customers in industry approximately 4% from the additional week in this quarter; Net income of $92.3 million after the pre-tax special and government with charge of $6.2 million ($3.9 million after-tax) related to the March 7, 2003, acquisition of DynCorp; Net earnings solutions crafted to meet per share (diluted) of 49 cents after the approximately 2 cents per-share after-tax impact of the special charge. their specific challenges CSC’s U.S. federal government revenue was up 87.1%. This increase, attributable to the DynCorp acquisi- and enable them to profit tion, was the primary driver of the quarter’s revenue performance. Revenues of $1.48 billion derived from the from the advanced use U.S. federal government exceeded $1 billion during a quarter for the first time in the company’s history and of technology. comprised 42% of the total quarterly revenue. CSC’s European revenue, benefiting from favorable currency exchange rate movements, also contributed to the quarter’s revenue growth. With approximately The ongoing integration of DynCorp has been proceeding on target. Coupled with CSC’s legacy position as a leading IT services provider to the U.S. federal government, the DynCorp acquisition has further solidified 92,000 employees, CSC the company’s role as a qualified, dependable, competent and experienced choice to support the federal provides innovative government’s efforts to modernize and improve the efficiencies of its agencies and departments. The current solutions for customers 32-month federal pipeline of opportunities is approximately $38 billion. around the world by The demand continues to be solid for global commercial IT infrastructure outsourcing. CSC’s efforts and applying leading tech- emphasis are directed toward providing creative solutions which enhance the competitiveness and operating nologies and CSC’s own efficiencies of its global commercial and government clients. advanced capabilities. CSC’s consulting and systems integration activities in North America, while not showing a significant These include systems uplift, seem to have stabilized with a slight revenue increase in the first quarter, both sequentially and year- design and integration; over-year. However, the demand for similar short-term commercial IT services in Europe and Asia remains IT and business process soft. Recent outsourcing wins in Europe have served to offset that softness, and solid European outsourcing outsourcing; applications opportunities continue to provide encouragement. For the fiscal second quarter, ending October 3, 2003, CSC anticipates revenues will be up approximately software development; 27% to 29%, and earnings per share (diluted) will be in the 58 cents to 60 cents range. For the rest of the Web and application hosting; and management year, CSC management is comfortable with the consensus revenue and earnings-per-share estimates. These quarterly and yearly estimates exclude any DynCorp acquisition-related special charge. consulting. For the first quarter, CSC’s U.S. federal government revenue growth reflected the recent DynCorp acquisition impact. Revenues increased 87.1% to $1.48 billion; DoD revenues nearly doubled to $904.6 million; Headquartered in Revenue from CSC’s Civil agencies business rose to $575.6 million, up 80.6%. El Segundo, California, Global commercial revenues were up 5.7% (down approximately 2% in constant currency): U.S. commer- CSC reported revenue cial revenue was $962.1 million, down 3.4%; European revenue was $819.2 million, up 20.7% (approximately of $12.1 billion for the 12 2% in constant currency; CSC’s non-European international revenue was up 2.0% (down approximately months ended July 4, 2003. 8% in constant currency) to $293.3 million. FINANCIAL HIGHLIGHTS 1ST QUARTER FISCAL 2004 REVENUES BY MAJOR MARKET (unaudited) First Quarter Commercial U.S. Federal 58% 42% 6/28/02 $ in millions, except per-share amounts 7/4/03 ($ in millions) U.S. Commercial – $962.1 $ 2,753.7 Revenues* $ 3,554.8 27% 26% Europe – $819.2 Other International – $293.3 $ 79.0 Net Income $ 92.3 16% U.S. DoD – $904.6 23% U.S. Civil Agencies – $575.6 8% $ 0.46 Diluted Earnings Per Share $ 0.49 Total – $3,554.8 * Figures have been adjusted to conform to CSC’s current presentation.
  2. 2. • CSC’S SERVICES ENCOMPASS INVESTMENT DATA Marconi Corporation – Marconi, a SEVERAL BROAD AREAS NYSE: CSC global telecommunications equipment, • Outsourcing – Involves operating all Recent Closing Price: 42.64 (8/22/03) services and solutions company, has or a portion of a customer’s technology 52-Week Range: 24.30 – 44.08 selected CSC for an IT outsourcing infrastructure. CSC also provides Shares Outstanding: 187.1 million agreement. CSC will support and business process outsourcing, which is Registered Shareholders: 11,280 manage Marconi’s IT help desk, the management of a client’s non-core Institutional Ownership: 81% desktop computing, networking and business functions. Average Daily Trading Volume: midrange operations; develop and 1st Quarter FY 2003 – 1,695,197 maintain software applications; and • Consulting, Systems Integration Market Cap: $8.0 billion provide telecommunications services. and Professional Services – Designing, • developing, implementing and integrat- RESEARCH COVERAGE Royal Mail Group – Royal Mail ing complete information systems, as A.G. Edwards (Greg Gieber) Group, a UK government-owned well as advising clients on the strategic Bear, Stearns ( Jim Kissane) public limited company providing acquisition and utilization of IT. Bernstein (Rod Bourgeois) mail, parcels and express services, CS First Boston (Dris Upitis) has outsourced its data centers, data RECENT ENGAGEMENTS INCLUDE: Deutsche Bank (Bill Zinsmeister) networks and more than 600 business • The Boeing Company – CSC has been Goldman Sachs (Greg Gould) application systems to the CSC-led awarded a contract to provide mainframe J.P. Morgan Securities (Dirk Godsey) Prism alliance. This contract under- computing operations services to Boeing. Jefferies & Co. ( Joe Vafi) scores CSC’s experience and history Beginning in 2004, CSC will provide Legg Mason (Bill Loomis) of providing operational and financial services to selected Boeing facilities in Lehman Brothers (Louis Miscioscia) results for clients in managing highly support of the Boeing Integrated Defense McDonald Investments (Michael Keller) complex, large-scale outsourcing Systems business unit, one of the world’s Morgan Stanley (David Togut) programs. largest defense and space businesses. Prudential Securities (Bryan Keane) • This award underscores CSC’s position Scotia Capital (Peter Misek) U.S. State Department – DynCorp as the most experienced, results-driven SG Cowen & Co. (Moshe Katri) International, a CSC company, was IT services provider of choice in the Smith Barney Citigroup (Pat Burton) awarded a contract from the United aerospace and defense market. SoundView ( John Jones, Jr.) States Department of State to provide Standard & Poor’s ( Richard Stice) up to 1,000 civilian advisors to help • ISS A/S – CSC has signed an IT Thomas Weisel Partners (David Grossman) the government of Iraq organize outsourcing agreement with ISS A/S, UBS Warburg (Adam Frisch) effective civilian law enforcement, a global leader in facility services. U.S. Bancorp Piper Jaffray judicial and correctional agencies. Under the terms of the agreement, (T. Brett Manderfeld) The company will also provide all CSC will assume responsibility for the Value Line (George Niemond) logistical, technical and administrative full range of IT services at more than support necessary to accomplish the 800 ISS sites throughout Europe. SHAREHOLDER SERVICES advisors’ mission. For more information regarding CSC: • Shareholder services and literature CSC REVENUE GROWTH 1ST QUARTER FISCAL 2004 request line – (800)542-3070 FY 1999-2003* REVENUES BY BUSINESS SERVICES* • Website – www.csc.com $ in billions $ 12 • 17% Registrar and transfer agent – 39% Mellon Investor Services P.O. Box 3315 37% 10 S. Hackensack, New Jersey 07606 7% (800)526 - 0801 or (201)329- 8660 www.melloninvestor.com OUTSOURCING . . . . . . . . . . . . . . . . . . . 46% 8 • Global Commercial 39% CSC Investor Relations – Federal Sector 7% Bill Lackey CONSULTING, SYSTEMS INTEGRATION Director, Investor Relations AND PROFESSIONAL SERVICES . . . . . . . 54% 6 (310)615-1700 Global Commercial 17% FY99 FY00 FY01 FY02 FY03 Federal Sector 37% Lisa Runge * CSC’s fiscal year ends the Friday closest to March 31. * Based on CSC estimates. Manager, Investor Relations (310)615-1680 All statements in this document that do not directly and exclusively relate to historical facts constitute “forward-looking statements” within the meaning of the Private Securities Litigation Email: InvestorRelations@csc.com 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 • Headquarters the Company’s control. These factors could cause actual results to differ materially from such 2100 East Grand Avenue forward-looking statements. For a description of these factors, see the section titled “Forward- El Segundo, California 90245, USA Looking Statements” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter (310)615-0311 ended July 4, 2003. Printed in U.S.A. WH# CC-1Q04

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