UNITED
STATES
|
||||
SECURITIES
AND EXCHANGE COMMISSION
|
||||
Washington,
D.C. 20549
|
||||
_________________
|
||||
FORM
10-Q
|
||||
(Mark
One)
|
||||
[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For
the quarter ended October 3, 2008
|
||||
OR
|
||||
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For
the transition period from _________________ to
_________________
|
||||
Commission
File No. 1-4850
|
![]() |
COMPUTER
SCIENCES CORPORATION
(Exact
name of registrant as specified in its charter)
|
Nevada
|
95-2043126
|
|||
(State
or Other Jurisdiction of
|
(I.R.S.
Employer
|
|||
Incorporation
or Organization)
|
Identification
No.)
|
|||
3170
Fairview Park Drive
|
||||
Falls
Church, VA
|
22042
|
|||
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|||
Registrant's
Telephone Number, Including Area Code: (703) 896-1000
|
||||
Indicate
by check mark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90
days. Yes [ X ] No [ ]
|
||||
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act (Check one).
|
||||
Large
accelerated filer
[X] Accelerated
filer
[ ] Non-accelerated
filer [ ]
Smaller
Reporting Company
[ ]
|
||||
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12-b of the Exchange
Act). Yes [ ] No [X]
|
||||
151,483,019
shares of Common Stock, $1.00 par value, were outstanding on October 31,
2008.
|
Page
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
|
Item
1.
|
Financial
Statements (unaudited)
|
|
Consolidated
Condensed Statements of Income, Second Quarter and Six
Months Ended October 3, 2008 and September 28, 2007
|
1
|
|
Consolidated
Condensed Balance Sheets October
3, 2008 and March 28, 2008
|
2
|
|
Consolidated
Condensed Statements of Cash Flows, Six
Months Ended October 3, 2008 and September 28, 2007
|
3
|
|
Notes
to Consolidated Condensed Financial Statements
|
4
|
|
Item
2.
|
Management's
Discussion and Analysis of Financial
Condition and Results of Operations
|
37
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
52
|
Item
4.
|
Controls
and Procedures
|
53
|
PART
II.
|
OTHER
INFORMATION
|
|
Item
1.
|
Legal
Proceedings
|
55
|
Item
1A.
|
Risk
Factors
|
60
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
60
|
Item
6.
|
Exhibits
|
61
|
Second
Quarter Ended
|
Six
Months Ended
|
|||||||||||||||
(In
millions except per-share amounts)
|
Oct.
3, 2008
|
Sept.
28, 2007
|
Oct.
3, 2008
|
Sept.
28, 2007
|
||||||||||||
Revenues
|
$ | 4,238.7 | $ | 4,017.2 | $ | 8,675.8 | $ | 7,855.1 | ||||||||
Costs
of services (excludes depreciation and amortization)
|
3,406.7 | 3,253.8 | 7,008.0 | 6,351.9 | ||||||||||||
Selling,
general and administrative
|
285.3 | 241.1 | 562.8 | 481.7 | ||||||||||||
Depreciation
and amortization
|
312.1 | 292.2 | 629.3 | 571.2 | ||||||||||||
Interest
expense
|
58.8 | 48.8 | 122.7 | 78.0 | ||||||||||||
Interest
income
|
(9.1 | ) | (8.8 | ) | (18.6 | ) | (18.3 | ) | ||||||||
Special
items
|
25.9 | 74.9 | ||||||||||||||
Other
(income) expense
|
(0.2 | ) | (7.4 | ) | 13.1 | (25.6 | ) | |||||||||
Total
costs and expenses
|
4,053.6 | 3,845.6 | 8,317.3 | 7,513.8 | ||||||||||||
Income
before taxes
|
185.1 | 171.6 | 358.5 | 341.3 | ||||||||||||
Taxes
on income
|
(266.6 | ) | 95.8 | (213.8 | ) | 157.4 | ||||||||||
Net
income
|
$ | 451.7 | $ | 75.8 | $ | 572.3 | $ | 183.9 | ||||||||
Earnings
per share:
|
||||||||||||||||
Basic
|
$ | 2.98 | $ | 0.44 | $ | 3.78 | $ | 1.06 | ||||||||
Diluted
|
$ | 2.95 | $ | 0.43 | $ | 3.74 | $ | 1.04 |
(In
millions except shares)
|
Oct.
3, 2008
|
Mar.
28, 2008
|
||||||
ASSETS
|
||||||||
Cash
and cash equivalents
|
$ | 741.6 | $ | 698.9 | ||||
Receivables
|
4,243.6 | 4,564.7 | ||||||
Prepaid
expenses and other current assets
|
1,818.0 | 1,764.5 | ||||||
Assets
held for sale
|
10.5 | |||||||
Total
current assets
|
6,813.7 | 7,028.1 | ||||||
Property
and equipment, net
|
2,576.8 | 2,764.6 | ||||||
Outsourcing
contract costs, net
|
792.5 | 925.4 | ||||||
Software,
net
|
516.3 | 527.4 | ||||||
Goodwill
|
3,867.6 | 3,975.2 | ||||||
Other
assets
|
611.0 | 659.0 | ||||||
Total
assets
|
$ | 15,177.9 | $ | 15,879.7 | ||||
LIABILITIES
|
||||||||
Short-term
debt and current maturities of long-term debt
|
$ | 1,108.2 | $ | 838.4 | ||||
Accounts
payable
|
539.1 | 798.1 | ||||||
Accrued
payroll and related costs
|
836.6 | 926.6 | ||||||
Other
accrued expenses
|
1,345.0 | 1,638.7 | ||||||
Deferred
revenue
|
928.0 | 1,078.5 | ||||||
Income
taxes payable and deferred income taxes
|
322.1 | 414.9 | ||||||
Total
current liabilities
|
5,079.0 | 5,695.2 | ||||||
Long-term
debt, net
|
2,665.1 | 2,635.3 | ||||||
Income
tax liabilities
|
852.0 | 1,235.6 | ||||||
Other
long-term liabilities
|
842.9 | 851.8 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common
stock, par value $1.00 per share; authorized 750,000,000 shares; issued
159,649,241 (2009) and 159,218,613 (2008)
|
159.6 | 159.2 | ||||||
Additional
paid-in capital
|
1,817.2 | 1,770.9 | ||||||
Retained
earnings
|
4,349.6 | 3,801.9 | ||||||
Accumulated
other comprehensive income (loss)
|
(213.5 | ) | 100.6 | |||||
6,112.9 | 5,832.6 | |||||||
Less
common stock in treasury, at cost, 8,170,495 shares (2009) and 8,101,652
shares (2008)
|
(374.0 | ) | (370.8 | ) | ||||
Total
stockholders' equity
|
5,738.9 | 5,461.8 | ||||||
Total
liabilities and stockholders' equity
|
$ | 15,177.9 | $ | 15,879.7 |
Six
Months Ended
|
||||||||
(In
millions)
|
Oct.
3, 2008
|
Sept.
28, 2007
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 572.3 | $ | 183.9 | ||||
Adjustments
to reconcile net income to net cash provided
by
(used in) operating activities:
|
||||||||
Depreciation
and amortization and other non-cash charges
|
680.9 | 604.4 | ||||||
Stock
based compensation
|
33.8 | 35.5 | ||||||
Provision
for losses on accounts receivable
|
11.8 | 2.1 | ||||||
Foreign
currency exchange loss
|
(19.0 | ) | (8.8 | ) | ||||
Gain
(loss) on dispositions, net of taxes
|
1.6 | (3.3 | ) | |||||
Changes
in assets and liabilities, net of effects of acquisitions:
|
||||||||
(Increase)
decrease in assets
|
159.0 | (441.4 | ) | |||||
Decrease
in liabilities
|
(1,095.4 | ) | (464.2 | ) | ||||
Net
cash provided by (used in) operating activities
|
345.0 | (91.8 | ) | |||||
Investing
activities:
|
||||||||
Purchases
of property and equipment
|
(362.1 | ) | (433.3 | ) | ||||
Outsourcing
contracts
|
(72.6 | ) | (61.4 | ) | ||||
Acquisitions
|
(62.8 | ) | (1,315.6 | ) | ||||
Software
|
(98.8 | ) | (78.3 | ) | ||||
Other
investing cash flows
|
39.5 | 8.2 | ||||||
Net
cash used in investing activities
|
(556.8 | ) | (1,880.4 | ) | ||||
Financing
activities:
|
||||||||
Net
borrowings (repayments) of commercial paper, net
|
472.1 | (.4 | ) | |||||
Borrowings
under lines of credit
|
280.2 | 305.6 | ||||||
Repayments
on lines of credit
|
(161.4 | ) | (215.9 | ) | ||||
Principal
payments on long-term debt
|
(316.1 | ) | (19.5 | ) | ||||
Proceeds
from debt issuance
|
1,391.3 | |||||||
Proceeds
from stock option and other common stock transactions
|
12.3 | 73.2 | ||||||
Repurchase
of common stock, net of settlement
|
(3.3 | ) | (153.1 | ) | ||||
Excess
tax benefit from stock-based compensation
|
1.3 | 8.9 | ||||||
Other
financing cash flows
|
2.1 | 2.9 | ||||||
Net
cash provided by financing activities
|
287.2 | 1,393.0 | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
(32.7 | ) | 19.9 | |||||
Net
increase (decrease) in cash and cash equivalents
|
42.7 | (559.3 | ) | |||||
Cash
and cash equivalents at beginning of year
|
698.9 | 1,050.1 | ||||||
Cash
and cash equivalents at end of period
|
$ | 741.6 | $ | 490.8 |
·
|
Level
1 – quoted prices unadjusted for identical assets or liabilities in an
active market;
|
·
|
Level
2 – inputs other than quoted prices that are observable, either directly
or indirectly, for similar assets or liabilities;
and
|
·
|
Level
3 – inputs that are unobservable. Unobservable inputs reflect
the entity’s own assumptions about the assumptions that market
participants would use in pricing the asset or
liability.
|
October
3, 2008
|
Fair
Value Hierarchy
|
|||||||||||||||
Fair
Value
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Money
Market Funds
|
$ | 126.3 | $ | 126.3 | - | - | ||||||||||
Derivative
assets
|
9.4 | - | $ | 9.4 | - | |||||||||||
Total
|
$ | 135.7 | $ | 126.3 | $ | 9.4 | - |
Second
Quarter Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Net
income
|
$ | 451.7 | $ | 75.8 | ||||
Common
share information:
|
||||||||
Average
common shares outstanding for basic EPS
|
151.396 | 172.018 | ||||||
Dilutive
effect of common stock equivalents
|
1.711 | 3.246 | ||||||
Shares
for diluted EPS
|
153.107 | 175.264 | ||||||
Basic
EPS
|
$ | 2.98 | $ | 0.44 | ||||
Diluted
EPS
|
$ | 2.95 | $ | 0.43 |
Six
Months Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Net
income
|
$ | 572.3 | $ | 183.9 | ||||
Common
share information:
|
||||||||
Average
common shares outstanding for basic EPS
|
151.288 | 172.947 | ||||||
Dilutive
effect of common stock equivalents
|
1.797 | 3.492 | ||||||
Shares
for diluted EPS
|
153.085 | 176.439 | ||||||
Basic
EPS
|
$ | 3.78 | $ | 1.06 | ||||
Diluted
EPS
|
$ | 3.74 | $ | 1.04 |
Second
Quarter Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Cost
of services
|
$ | 3.8 | $ | 3.7 | ||||
Selling,
general and administrative
|
12.6 | 8.7 | ||||||
Special
items
|
||||||||
Total
|
$ | 16.4 | $ | 12.4 | ||||
Total
net of tax
|
$ | 10.1 | $ | 7.6 |
Six
Months Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Cost
of services
|
$ | 8.1 | $ | 7.0 | ||||
Selling,
general and administrative
|
25.7 | 18.0 | ||||||
Special
items
|
10.4 | |||||||
Total
|
$ | 33.8 | $ | 35.4 | ||||
Total
net of tax
|
$ | 20.9 | $ | 21.6 |
Six
Months Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Risk-free
interest rate
|
3.23 | % | 4.68 | % | ||||
Expected
volatility
|
36 | % | 31 | % | ||||
Expected
lives
|
4.07 years
|
4.14 years
|
Six
Months Ended Oct. 3, 2008
|
||||||||||||||||
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual
Life
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding
at March 28, 2008
|
17,755,014 | $ | 47.38 | 5.79 | $ | 27.8 | ||||||||||
Granted
|
2,469,639 | $ | 48.37 | |||||||||||||
Exercised
|
(345,129 | ) | $ | 35.60 | ||||||||||||
Canceled/forfeited
|
(271,402 | ) | $ | 53.63 | ||||||||||||
Expired
|
(822,701 | ) | $ | 54.44 | ||||||||||||
Outstanding
at October 3, 2008
|
18,785,421 | $ | 47.33 | 6.02 | $ | 12.5 | ||||||||||
Vested
and expected to vest in the future at Oct. 3, 2008
|
18,458,627 | $ | 47.26 | 6.02 | $ | 12.5 | ||||||||||
Exercisable
at October 3, 2008
|
13,397,551 | $ | 45.56 | 4.82 | $ | 12.5 |
Six
Months Ended October 3, 2008
|
||||||||
Number
of Shares
|
Weighted
Average Fair Value
|
|||||||
Outstanding
at March 28, 2008
|
739,248 | $ | 50.03 | |||||
Granted
|
393,798 | $ | 48.46 | |||||
Released/Redeemed
|
(223,109 | ) | $ | 47.19 | ||||
Forfeited/Canceled
|
(25,786 | ) | $ | 55.29 | ||||
Outstanding
at October 3, 2008
|
884,151 | $ | 49.89 |
Six
Months Ended Oct. 3, 2008
|
||||||||
Number
of Shares
|
Weighted
Average Fair Value
|
|||||||
Outstanding
at March 28, 2008
|
92,021 | $ | 45.78 | |||||
Granted
|
21,600 | $ | 46.52 | |||||
Redeemed
|
(600 | ) | $ | 37.81 | ||||
Forfeited/canceled
|
||||||||
Outstanding
at Oct. 3, 2008
|
113,021 | $ | 45.96 |
Second
Quarter Ended
|
||||||||
Oct
3, 2008
|
Sept
28, 2007
|
|||||||
Foreign
exchange gains
|
- | $ | 7.4 | |||||
Gain
on sale of non-operating assets
|
$ | 0.2 | - | |||||
Total
Other Income
|
$ | 0.2 | $ | 7.4 |
Six
Months Ended
|
||||||||
Oct
3, 2008
|
Sept
28, 2007
|
|||||||
Foreign
exchange (loss)/gains
|
$ | (13.5 | ) | $ | 25.6 | |||
Gain
on sale of non-operating assets
|
.4 | - | ||||||
Total
Other (Expense)/Income
|
$ | (13.1 | ) | $ | 25.6 |
Oct.
3, 2008
|
Mar.
28, 2008
|
|||||||
Property
and equipment
|
$ | 3,574.5 | $ | 3,495.4 |
Second
Quarter Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Net
income
|
$ | 451.7 | $ | 75.8 | ||||
Foreign
currency translation adjustment
|
(340.1 | ) | 86.9 | |||||
Comprehensive
income
|
$ | 111.6 | $ | 162.7 |
Six
Months Ended
|
||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||
Net
income
|
$ | 572.3 | $ | 183.9 | ||||
Foreign
currency translation adjustment
|
(315.0 | ) | 141.4 | |||||
Unfunded
pension adjustment
|
.9 | 4.5 | ||||||
Unrealized
gain on available for sale securities
|
.4 | |||||||
Comprehensive
income
|
$ | 258.2 | $ | 330.2 |
Business
Solutions and Services
|
||||||||||||||||||||||||||||||||
North
American Public Sector
|
Global
Outsourcing Services
|
Consulting
|
Financial
Services Sector
|
Other
|
Corporate
|
Eliminations
|
Total
|
|||||||||||||||||||||||||
Three
Months Ended
October
3, 2008
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 1,494.9 | $ | 1,691.3 | $ | 477.8 | $ | 247.1 | $ | 354.9 | $ | 4.2 | $ | (31.5 | ) | $ | 4,238.7 | |||||||||||||||
Operating
Income (loss)
|
112.3 | 100.6 | 15.5 | 37.6 | 27.5 | (11.3 | ) | 282.2 | ||||||||||||||||||||||||
Three
Months Ended
September
28, 2007
|
||||||||||||||||||||||||||||||||
Revenues
|
1,450.7 | 1,595.9 | 395.5 | 261.6 | 340.9 | 4.6 | (32.0 | ) | 4,017.2 | |||||||||||||||||||||||
Operating
Income (loss)
|
78.7 | 120.1 | 10.8 | 58.4 | 20.2 | (15.7 | ) | (1.3 | ) | 271.2 |
Business
Solutions and Services
|
||||||||||||||||||||||||||||||||
North
American Public Sector
|
Global
Outsourcing Services
|
Consulting
|
Financial
Services Sector
|
Other
|
Corporate
|
Eliminations
|
Total
|
|||||||||||||||||||||||||
Six
Months Ended
October
3, 2008
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 2,987.6 | $ | 3,481.9 | $ | 1,019.7 | $ | 509.5 | $ | 731.2 | $ | 8.7 | $ | (62.8 | ) | $ | 8,675.8 | |||||||||||||||
Operating
Income (loss)
|
226.3 | 188.5 | 48.9 | 78.5 | 56.7 | (34.5 | ) | (.3 | ) | 564.1 | ||||||||||||||||||||||
Six
Months Ended
September
28, 2007
|
||||||||||||||||||||||||||||||||
Revenues
|
2,870.7 | 3,190.5 | 799.7 | 512.4 | 534.0 | 9.2 | (61.4 | ) | 7,855.1 | |||||||||||||||||||||||
Operating
Income (loss)
|
187.5 | 215.0 | 26.9 | 95.7 | 28.9 | (27.7 | ) | (3.7 | ) | 522.6 | ||||||||||||||||||||||
Second
Quarter Ended
|
Six
Months Ended
|
|||||||||||||||
Oct.
3, 2008
|
Sept.
28, 2007
|
Oct.
3, 2008
|
Sept.
28, 2007
|
|||||||||||||
Operating
income
|
$ | 282.2 | $ | 271.2 | $ | 564.1 | $ | 522.6 | ||||||||
Minority
interest expense
|
(0.7 | ) | (3.6 | ) | (5.3 | ) | (6.8 | ) | ||||||||
Equity
earnings
|
4.2 | 4.1 | 9.7 | 8.6 | ||||||||||||
Corporate
G&A
|
(51.1 | ) | (41.6 | ) | (92.8 | ) | (74.1 | ) | ||||||||
Interest
expense
|
(58.8 | ) | (48.8 | ) | (122.7 | ) | (78.0 | ) | ||||||||
Interest
income
|
9.1 | 8.8 | 18.6 | 18.3 | ||||||||||||
Special
items
|
(25.9 | ) | (74.9 | ) | ||||||||||||
Other
(expense)/income
|
0.2 | 7.4 | (13.1 | ) | 25.6 | |||||||||||
Income
before taxes
|
$ | 185.1 | $ | 171.6 | $ | 358.5 | $ | 341.3 |
Business
Solutions and Services
|
||||||||||||||||||||||||
North
American Public Sector
|
Global
Outsourcing Services
|
Consulting
|
Financial
Services Sector
|
Other
|
Total
|
|||||||||||||||||||
Balance
as of March 28, 2008 (1)
|
$ | 674.8 | $ | 1,388.1 | $ | 670.9 | $ | 493.8 | $ | 747.6 | $ | 3,975.2 | ||||||||||||
Additions
(adjustments)
|
(2.3 | ) | 9.2 | 10.9 | 8.3 | 26.1 | ||||||||||||||||||
Foreign
currency translation
|
(89.0 | ) | (35.9 | ) | (2.3 | ) | (6.5 | ) | (133.7 | ) | ||||||||||||||
Transfers
|
||||||||||||||||||||||||
Balance
as of October 3, 2008
|
$ | 672.5 | $ | 1,308.3 | $ | 635.0 | $ | 502.4 | $ | 749.4 | $ | 3,867.6 | ||||||||||||
October
3, 2008
|
||||||||||||
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
|
||||||||||
Software
|
$ | 1,587.9 | $ | 1,071.6 | $ | 516.3 | ||||||
Outsourcing
contract costs
|
2,035.6 | 1,243.1 | 792.5 | |||||||||
Other
intangible assets
|
387.5 | 172.0 | 215.5 | |||||||||
Total
intangible assets
|
$ | 4,011.0 | $ | 2,486.7 | $ | 1,524.3 |
March
28, 2008
|
||||||||||||
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
|
||||||||||
Software
|
$ | 1,532.6 | $ | 1,005.2 | $ | 527.4 | ||||||
Outsourcing
contract costs
|
2,144.4 | 1,219.0 | 925.4 | |||||||||
Other
intangible assets
|
387.5 | 147.9 | 239.6 | |||||||||
Total
intangible assets
|
$ | 4,064.5 | $ | 2,372.1 | $ | 1,692.4 |
Three
months ended October 3, 2008
|
||||||||||||||||
Liability
as of
July
4, 2008
|
Less
payments
|
Other(1)
|
Restructuring
liability as of Oct. 3, 2008
|
|||||||||||||
Workforce
Reductions
|
$ | 26.4 | $ | (6.5 | ) | $ | (2.2 | ) | $ | 17.7 | ||||||
Other
|
29.3 | (2.2 | ) | (2.7 | ) | 24.4 | ||||||||||
Total
|
$ | 55.7 | $ | (8.7 | ) | $ | (4.9 | ) | $ | 42.1 |
Liability
as of
March
30, 2008
|
Less
Payments
|
Other(1)
|
Restructuring
liability
as of
Oct.
3, 2008
|
|||||||||||||
Workforce
reductions
|
$ | 61.3 | $ | (41.7 | ) | $ | (1.9 | ) | $ | 17.7 | ||||||
Other
|
32.8 | (5.7 | ) | (2.7 | ) | 24.4 | ||||||||||
Total
|
$ | 94.1 | $ | (47.4 | ) | $ | (4.6 | ) | $ | 42.1 |
(1)
|
Foreign
currency translation adjustments.
|
As
Reported
|
Pro
forma
|
|||||||||||||||
Second
Quarter Ended
|
Second
Quarter Ended
|
|||||||||||||||
October
3, 2008
|
September
28,
2007
|
October
3, 2008
|
September
28,
2007
|
|||||||||||||
Revenue
|
$ | 4,238.7 | $ | 4,017.2 | $ | 4,238.7 | $ | 4,089.3 | ||||||||
Net
Income
|
$ | 451.7 | $ | 75.8 | $ | 451.7 | $ | 81.3 | ||||||||
Basic
Earnings Per Share
|
$ | 2.98 | $ | 0.44 | $ | 2.98 | $ | 0.47 | ||||||||
Diluted
Earnings Per Share
|
$ | 2.95 | $ | 0.43 | $ | 2.95 | $ | 0.46 | ||||||||
As
Reported
|
Pro
forma
|
|||||||||||||||
Six
Months Ended
|
Six
Months Ended
|
|||||||||||||||
October
3, 2008
|
September
28,
2007
|
October
3, 2008
|
September
28,
2007
|
|||||||||||||
Revenue
|
$ | 8,675.8 | $ | 7,855.1 | $ | 8,675.8 | $ | 7,998.5 | ||||||||
Net
Income
|
$ | 572.3 | $ | 183.9 | $ | 572.3 | $ | 188.0 | ||||||||
Basic
Earnings Per Share
|
$ | 3.78 | $ | 1.06 | $ | 3.78 | $ | 1.09 | ||||||||
Diluted
Earnings Per Share
|
$ | 3.74 | $ | 1.04 | $ | 3.74 | $ | 1.07 |
Acquisition
Integration Liabilities
|
Paid
as of October 3, 2008
|
Balance
Remaining at October 3, 2008
|
||||||||||
Facility
consolidations
|
$ | 3.1 | - | $ | 3.1 | |||||||
Severance
payments
|
4.6 | $ | 4.2 | .4 | ||||||||
Total
|
$ | 7.7 | $ | 4.2 | $ | 3.5 |
Acquisition
Integration Liabilities
|
Paid
as of October 3, 2008
|
Other
|
Balance
Remaining at October 3, 2008
|
|||||||||||||
Facility
consolidations
|
$ | 4.4 | $ | 1.6 | $ | 2.8 | ||||||||||
Severance
payments
|
4.9 | 3.9 | $ | 0.9 | 0.1 | |||||||||||
Other
|
0.1 | 0.1 | ||||||||||||||
Total
|
$ | 9.4 | $ | 5.6 | $ | 0.9 | $ | 2.9 |
Acquisition
Integration Liabilities
|
Paid
as of October 3, 2008
|
Balance
Remaining at October 3, 2008
|
|||||||
Facility
consolidations
|
$ | 1.5 | $ | 1.5 | |||||
Other
|
.1 | .1 | |||||||
Total
|
$ | 1.6 | $ | 1.6 |
Acquisition
Integration Liabilities
|
Paid
as of October 3, 2008
|
Balance
Remaining at October 3, 2008
|
||||||||||
Severance
payments
|
$ | 7.1 | $ | 7.1 | ||||||||
Facility
consolidations
|
66.7 | 62.6 | $ | 4.1 | ||||||||
Other
|
6.1 | 5.8 | .3 | |||||||||
Total
|
$ | 79.9 | $ | 75.5 | $ | 4.4 |
Second
Quarter Ended
|
||||||||||||||||
October
3, 2008
|
September
28, 2007
|
|||||||||||||||
Pensions
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | 28.9 | $ | 12.3 | $ | 29.9 | $ | 15.2 | ||||||||
Interest
cost
|
37.2 | 29.3 | 32.5 | 30.3 | ||||||||||||
Expected
return on assets
|
(42.8 | ) | (32.8 | ) | (38.2 | ) | (36.1 | ) | ||||||||
Amortization
of transition obligation
|
.3 | .3 | ||||||||||||||
Amortization
of prior service costs
|
.2 | .2 | .2 | .1 | ||||||||||||
Amortization
of unrecognized net loss
|
.8 | 2.9 | 3.7 | 5.4 | ||||||||||||
SFAS
No. 88 settlement/curtailment
|
(.2 | ) | .2 | |||||||||||||
Net
periodic pension cost
|
$ | 24.3 | $ | 12.0 | $ | 28.1 | $ | 15.4 |
Six
Months Ended
|
||||||||||||||||
October
3, 2008
|
September
28, 2007
|
|||||||||||||||
Pensions
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | 57.8 | $ | 24.6 | $ | 59.8 | $ | 30.0 | ||||||||
Interest
cost
|
74.4 | 59.6 | 65.0 | 60.0 | ||||||||||||
Expected
return on assets
|
(85.6 | ) | (66.8 | ) | (76.4 | ) | (71.5 | ) | ||||||||
Amortization
of transition obligation
|
.6 | .6 | ||||||||||||||
Amortization
of prior service costs
|
.4 | .4 | .4 | .2 | ||||||||||||
Amortization
of unrecognized net loss
|
1.6 | 5.9 | 7.4 | 10.7 | ||||||||||||
SFAS
No. 88 settlement/curtailment
|
.4 | |||||||||||||||
Net
periodic pension cost
|
$ | 48.6 | $ | 24.3 | $ | 56.2 | $ | 30.4 |
Second
Quarter Ended
|
||||||||||||||||
October
3, 2008
|
September
28, 2007
|
|||||||||||||||
Other
Postretirement Benefits
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | .6 | $ | .1 | $ | .7 | $ | .1 | ||||||||
Interest
cost
|
2.6 | .2 | 2.4 | .1 | ||||||||||||
Expected
return on assets
|
(1.8 | ) | (1.7 | ) | ||||||||||||
Amortization
of transition obligation
|
.4 | .4 | ||||||||||||||
Amortization
of prior service costs
|
.1 | .1 | ||||||||||||||
Amortization
of unrecognized net loss
|
.8 | 1.1 | ||||||||||||||
Net
provision for postretirement benefits
|
$ | 2.7 | $ | .3 | $ | 3.0 | $ | .2 |
Six
Months Ended
|
||||||||||||||||
October
3, 2008
|
September
28, 2007
|
|||||||||||||||
Other
Postretirement Benefits
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | 1.2 | $ | .2 | $ | 1.3 | $ | .2 | ||||||||
Interest
cost
|
5.2 | .4 | 4.9 | .2 | ||||||||||||
Expected
return on assets
|
(3.6 | ) | (3.4 | ) | ||||||||||||
Amortization
of transition obligation
|
.8 | .8 | ||||||||||||||
Amortization
of prior service costs
|
.2 | .3 | ||||||||||||||
Amortization
of unrecognized net loss
|
1.6 | 2.1 | ||||||||||||||
Net
provision for postretirement benefits
|
$ | 5.4 | $ | .6 | $ | 6.0 | $ | .4 |
·
|
SFAS
160 requires that minority interests be reported as part of the equity
section in the consolidated financial statements versus the current
presentation as a liability or in the mezzanine section between
liabilities and equity.
|
·
|
SFAS
160 also requires that the consolidated income statement include net
income of both the parent and the noncontrolling interest and that the net
income amounts related to both the parent and the noncontrolling interest
be disclosed on the face of the consolidated income statement, currently
noncontrolling interest net income is reported as an expense or other
deduction to arrive at consolidated net income. SFAS No. 128,
“Earnings per
Share,” will be amended to clarify that earnings-per-share data
will continue to be calculated based on amounts attributable to the
parent.
|
·
|
SFAS
160 establishes a single method of accounting for changes in a parent’s
ownership interest by clarifying that the following transactions are
equity transactions if the parent’s controlling interest is
maintained: the parent purchases additional ownership interests
in its subsidiary; the parent sells ownership interests in its subsidiary;
the subsidiary reacquires some of its ownership interests; and if the
subsidiary issues additional ownership interests. Previous
practice allowed parent ownership changes to be either accounted for as
equity transactions or as transactions with gain or loss recognition in
the income statement.
|
·
|
SFAS
160 eliminates the requirement to apply purchase accounting to a parent’s
acquisition of noncontrolling
interests.
|
·
|
When
a parent deconsolidates a subsidiary due to loss of controlling financial
interest SFAS 160 requires that the parent recognize a gain or loss in net
income. Additionally, if a parent retains a noncontrolling
equity investment that investment is measured at fair market value and
used in the calculation of the gain or loss. Previous to this
Statement any retained investments were not remeasured before use in
calculating the gain or loss.
|
·
|
SFAS
141R defines the acquirer as the entity that obtains control of one or
more businesses in the business combination and establishes the
acquisition date as the date the acquirer obtains
control.
|
·
|
SFAS
141R requires the recognition of the assets acquired, liabilities assumed
and any noncontrolling interests in the acquiree at the acquisition date,
be measured at their fair values, replacing the cost allocation process
under the previous SFAS No. 141 whereby the cost of the acquisition was
allocated to the assets and liabilities based on their estimated fair
market values.
|
·
|
Acquisition
related costs which were once included in the purchase price of the
combination and included in the cost allocation mentioned above will now
under SFAS No. 141(R) be recognized separately from the business
combination.
|
·
|
Restructuring
costs will also be required to be recognized separately from the business
combination, versus the old method of recording them as a liability at the
time of the acquisition.
|
·
|
SFAS
141R requires assets, liabilities and noncontrolling interests acquired in
stages (step acquisition) to be recognized at the full amounts of the fair
market values. Under the old method the acquirer identified the
cost of each investment, the fair value of the underlying identifiable net
assets acquired, and the goodwill on each step which resulted in measuring
the assets and liabilities at a blend of historical costs and fair values
which provided less relevant and comparable
information.
|
·
|
SFAS
141R requires an acquirer to recognize assets acquired and liabilities
assumed arising from contractual contingencies as of the acquisition date,
measured at their acquisition date fair values. SFAS No. 141
permitted deferred recognition of preacquisition contingencies under the
recognition criteria for SFAS No. 5, “Accounting for
Contingencies.”
|
·
|
Noncontractual
contingencies should be treated the same way only if it is more likely
than not that they meet the definition of an asset or liability in FASB
Concepts Statement No. 6, “Elements of Financial
Statements.” If this criterion is not met at the
acquisition date, the acquirer would account for the contingency using
other applicable GAAP.
|
·
|
Subsequent
accounting for assets and liabilities arising from contingencies acquired
includes keeping that asset or liability at the acquisition date fair
market value until new information becomes available, at which time the
new information will be evaluated and the liability will be
measured at the higher of its acquisition date fair value or the amount
that would be recognized if applying SFAS No. 5 and the asset would be measured
at the lower of its acquisition date fair value or the best estimate of
its future settlement amount.
|
·
|
Goodwill
will be measured as a residual and recognized as of the acquisition date.
Goodwill will usually equal the excess of the consideration transferred
plus the fair value of the noncontrolling interest less the fair values
allocated to the identifiable assets and liabilities
acquired.
|
·
|
SFAS
141R improves the measurement of goodwill in that it requires the
recognition of contingent consideration at the acquisition date, measured
at fair value versus the old method of recognizing contingent
consideration when the contingency was resolved and consideration was
issued or became issuable.
|
·
|
SFAS
141R requires the excess of the fair value of the identifiable net assets
acquired over the consideration transferred plus noncontrolling interest
in the acquiree to be recognized in earnings as a
gain. Currently, negative goodwill is allocated as a pro rata
reduction of the amounts that otherwise would have been assigned to
particular assets acquired.
|
·
|
Second
quarter revenues as reported rose 5.5%, and 4.4% on a constant currency
basis.
|
·
|
Six
months year-to-date revenue as reported increased 10.4%, and 8.1% on a
constant currency basis.
|
·
|
Net
income was $451.7 million (including a tax benefit of $266.6 million)
compared to $75.8 million for the prior year second quarter and $572.3
(including a tax benefit of $213.8 million) million compared to $183.9
million for the prior year six months year to
date.
|
·
|
Earnings
per share were $2.95 and $3.74 compared to 43 cents and $1.04 for the
three and six months year to date for fiscal 2009 and 2008,
respectively.
|
·
|
Business
awards of $4.6 billion and $10 billion were announced for the quarter and
six months year-to-date,
respectively.
|
·
|
DSO
of 91 days improved 11 days compared to the second quarter of fiscal 2008
and improved 6 days compared to the first quarter of fiscal 2009(1).
|
·
|
Debt-to-total
capitalization ratio at quarter-end increased to 39.7% from 38.9% at
fiscal 2008 year-end.
|
·
|
ROI
for the last twelve months ended October 3, 2008 was approximately
14.7%.
|
·
|
Cash
provided by operating activities was $345.0 million for the six months
year to date of fiscal 2009 versus cash used of $91.8 million for the
fiscal 2008 comparable period. Cash used in investing
activities was $556.8 million for the first six months of fiscal 2009
compared to $1.9 billion for fiscal 2008 comparable
period. Free cash outflow for the six months year to date was
$162.8 million for fiscal 2009 compared to $676.0 million for the fiscal
2008 comparable period.(2)
|
|
|
Six
Months Ended
|
||||||||
(in
millions)
|
Oct
3, 2008
|
Sept
28,2007
|
||||||
Free
cash flow
|
$ | (162.8 | ) | $ | (676.0 | ) | ||
Net
cash used in investing activities
|
556.8 | 1,880.4 | ||||||
Acquisitions
|
(62.8 | ) | (1,315.6 | ) | ||||
Capital
lease payments
|
13.8 | 19.4 | ||||||
Net
cash provided by (used in) operating activities
|
$ | 345.0 | $ | (91.8 | ) | |||
Net
cash used in investing activities
|
$ | (556.8 | ) | $ | (1,880.4 | ) | ||
Net
cash provided by financing activities
|
$ | 287.2 | $ | 1,393.0 |
Lines
of Business
|
Reportable
Segments
|
|
North
American Public Sector (NPS)
|
North
American Public Sector
|
|
Global
Outsourcing Services (GOS)
|
Global
Outsourcing Services
|
|
Business
Solutions and Services (BS&S)
|
BS&S
– Consulting
|
|
BS&S
- Financial Services Sector
|
||
BS&S-Other
|
Second
Quarter Ended
|
||||||||||||||||
Dollars
in millions
|
2009
|
2008
|
Change
|
Percent
|
||||||||||||
BS&S
– Consulting
|
$ | 477.8 | $ | 395.5 | $ | 82.3 | 20.8 | % | ||||||||
BS&S
– Financial Services Sector
|
247.1 | 261.6 | (14.5 | ) | (5.5 | ) | ||||||||||
BS&S
– Other
|
354.9 | 340.9 | 14.0 | 4.1 | ||||||||||||
Business
Solutions & Services
|
1,079.8 | 998.0 | 81.8 | 8.2 | ||||||||||||
Global
Outsourcing Services
|
1,691.3 | 1,595.9 | 95.4 | 6.0 | ||||||||||||
North
American Public Sector
|
1,494.9 | 1,450.7 | 44.2 | 3.0 | ||||||||||||
Corporate
|
4.2 | 4.6 | (.4 | ) | ||||||||||||
Subtotal
|
4,270.2 | 4,049.2 | 221.0 | 5.5 | ||||||||||||
Eliminations
|
(31.5 | ) | (32.0 | ) | .5 | |||||||||||
Total
Revenue
|
$ | 4,238.7 | $ | 4,017.2 | $ | 221.5 | 5.5 | % | ||||||||
Six
Months Year-to-Date
|
||||||||||||||||
Dollars
in millions
|
2009
|
2008
|
Change
|
Percent
|
||||||||||||
BS&S
– Consulting
|
$ | 1,019.7 | $ | 799.7 | $ | 220.0 | 27.5 | % | ||||||||
BS&S
– Financial Services Sector
|
509.5 | 512.4 | (2.9 | ) | (.6 | ) | ||||||||||
BS&S
– Other
|
731.2 | 534.0 | 197.2 | 36.9 | ||||||||||||
Business
Solutions & Services
|
2,260.4 | 1,846.1 | 414.3 | 22.4 | ||||||||||||
Global
Outsourcing Services
|
3,481.9 | 3,190.5 | 291.4 | 9.1 | ||||||||||||
North
American Public Sector
|
2,987.6 | 2,870.7 | 116.9 | 4.1 | ||||||||||||
Corporate
|
8.7 | 9.2 | (.5 | ) | ||||||||||||
Subtotal
|
8,738.6 | 7,916.5 | 822.1 | 10.4 | ||||||||||||
Eliminations
|
(62.8 | ) | (61.4 | ) | (1.4 | ) | ||||||||||
Total
Revenue
|
$ | 8,675.8 | $ | 7,855.1 | $ | 820.7 | 10.4 | % |
Acquisitions
|
Approximate
Impact of Currency Fluctuations
|
Net
Internal Growth
|
Total
|
|||||||||||||
Second
Quarter
|
||||||||||||||||
BS&S
– Consulting
|
12.6 | % | 3.3 | % | 4.9 | % | 20.8 | % | ||||||||
BS&S
– Financial Services Sector
|
(5.5 | ) | (5.5 | ) | ||||||||||||
BS&S
– Other
|
3.2 | .9 | 4.1 | |||||||||||||
Business
Solutions & Services
|
5.0 | 2.4 | .8 | 8.2 | ||||||||||||
Global
Outsourcing Services
|
.9 | 1.2 | 3.9 | 6.0 | ||||||||||||
North
American Public Sector
|
3.0 | 3.0 | ||||||||||||||
Eliminations
|
||||||||||||||||
Total
|
1.6 | % | 1.1 | % | 2.8 | % | 5.5 | % |
Acquisitions
|
Approximate
Impact of Currency Fluctuations
|
Net
Internal Growth
|
Total
|
|||||||||||||
Six
Months Year-to-Date
|
||||||||||||||||
BS&S
– Consulting
|
13.8 | % | 6.7 | % | 7.0 | % | 27.5 | % | ||||||||
BS&S
– Financial Services Sector
|
.8 | (1.4 | ) | (.6 | ) | |||||||||||
BS&S
– Other
|
24.9 | 6.3 | 5.7 | 36.9 | ||||||||||||
Business
Solutions & Services
|
13.2 | 4.9 | 4.3 | 22.4 | ||||||||||||
Global
Outsourcing Services
|
1.1 | 2.8 | 5.2 | 9.1 | ||||||||||||
North
American Public Sector
|
4.1 | 4.1 | ||||||||||||||
Eliminations
|
||||||||||||||||
Total
|
3.5 | % | 2.3 | % | 4.6 | % | 10.4 | % |
Second
Quarter Ended
|
||||||||||||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
Percent
|
||||||||||||
Department
of Defense
|
$ | 1,040.9 | $ | 968.6 | $ | 72.3 | 7.5 | % | ||||||||
Civil
agencies
|
417.7 | 432.2 | (14.5 | ) | (3.4 | ) | ||||||||||
Other
(1)
|
36.3 | 49.9 | (13.6 | ) | (27.3 | ) | ||||||||||
Total
North American Public Sector
|
$ | 1,494.9 | $ | 1,450.7 | $ | 44.2 | 3.0 | % |
Six
Months Year-to-Date
|
||||||||||||||||
(Dollars
in millions)
|
2009
|
2008
|
Change
|
Percent
|
||||||||||||
Department
of Defense
|
$ | 2,061.2 | $ | 1,912.0 | $ | 149.2 | 7.8 | % | ||||||||
Civil
agencies
|
843.7 | 872.7 | (29.0 | ) | (3.3 | ) | ||||||||||
Other
(1)
|
82.7 | 86.0 | (3.3 | ) | (3.8 | ) | ||||||||||
Total
North American Public Sector
|
$ | 2,987.6 | $ | 2,870.7 | $ | 116.9 | 4.1 | % |
(1)
|
Other
revenues consist of state and local government as well as commercial
contracts performed by the North American Public Sector reporting
segment.
|
Second
Quarter
|
||||||||||||||||||||
(Dollars
in millions)
|
Dollar
Amount
|
Percent
of Revenue
|
Percentage
Point Change
|
|||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||
Cost
of services(1)
|
$ | 3,406.7 | $ | 3,253.8 | 80.4 | % | 81.0 | % | (.6 | )% | ||||||||||
Selling,
general & administrative
|
285.3 | 241.1 | 6.7 | 6.0 | .7 | |||||||||||||||
Depreciation
and amortization
|
312.1 | 292.2 | 7.3 | 7.3 | ||||||||||||||||
Special
items
|
25.9 | .6 | (.6 | ) | ||||||||||||||||
Interest
expense, net
|
49.7 | 40.0 | 1.2 | 1.0 | .2 | |||||||||||||||
Other
(income)/expense
|
(.2 | ) | (7.4 | ) | (.2 | ) | .2 | |||||||||||||
Total
|
$ | 4,053.6 | $ | 3,845.6 | 95.6 | % | 95.7 | % | (.1 | )% |
Six
Months Year-to-Date
|
||||||||||||||||||||
(Dollars
in millions)
|
Dollar
Amount
|
Percent
of Revenue
|
Percentage
Point Change
|
|||||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||||||
Cost
of services(1)
|
$ | 7,008.0 | $ | 6,351.9 | 80.8 | % | 80.9 | % | (.1 | )% | ||||||||||
Selling,
general & administrative
|
562.8 | 481.7 | 6.5 | 6.1 | .4 | |||||||||||||||
Depreciation
and amortization
|
629.3 | 571.2 | 7.3 | 7.3 | ||||||||||||||||
Special
items
|
74.9 | .9 | (.9 | ) | ||||||||||||||||
Interest
expense, net
|
104.1 | 59.7 | 1.2 | .8 | .4 | |||||||||||||||
Other
(income)/expense
|
13.1 | (25.6 | ) | .2 | (.3 | ) | .5 | |||||||||||||
Total
|
$ | 8,317.3 | $ | 7,513.8 | 96.0 | % | 95.7 | % | .3 | % |
(1)
|
Excludes
depreciation and amortization.
|
Six
Months Year-to-Date
|
||||||||
(In
millions)
|
Fiscal
2009
|
Fiscal
2008
|
||||||
Net
cash provided by (used in) operations
|
$ | 345.0 | $ | (91.8 | ) | |||
Net
cash used in investing
|
(556.8 | ) | (1,880.4 | ) | ||||
Net
cash provided by financing
|
287.2 | 1,393.0 | ||||||
Effect
of exchange rate changes on cash and cash equivalents
|
(32.7 | ) | 19.9 | |||||
Net
increase (decrease) in cash and cash equivalents
|
42.7 | (559.3 | ) | |||||
Cash
and cash equivalents at beginning of year
|
698.9 | 1,050.1 | ||||||
Cash
and cash equivalents at quarter end
|
$ | 741.6 | $ | 490.8 |
·
|
Accounts
receivable decreased $321 million during the six months year to date
compared to an increase of $314 million in the prior year
period. DSO decreased to 91 days for the second quarter of
fiscal 2009 from 102 days for fiscal
2008.
|
·
|
Prepaid
expenses and other current assets increased $54 million compared to an
increase of $241 million for the six months year to date of fiscal 2009
compared to the prior year period. This increase was primarily
due to an increase in work-in-process related to the National Health
Service contract.
|
·
|
Accounts
payable, accrued payroll and other accrued expenses combined decreased
$642 million during the six months year to date compared to a $524 million
decrease in the prior year period. The fiscal 2009 decreases
were primarily in accounts payable and accrued expenses as a result of the
payment of management bonuses, the payment of $47.4 million under the
restructuring plan and the payment of other amounts accrued at year
end.
|
·
|
Net
cash tax payments for taxes was $155.6 million during the six months year
to date. Payments during the prior year period were $210.7
million.
|
·
|
Deferred
revenue and advanced payments decreased $150.5 million during the six
months year to date of fiscal 2009 compared to $138.5 million in the prior
year period. The decrease in fiscal 2009 was primarily from
utilization of contract advances on the National Health Service
contract.
|
(1)
|
Pertain
to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of the assets of the
issuer;
|
(2)
|
Provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the issuer
are being made only in accordance with authorizations of management and
directors of the issuer; and
|
(3)
|
Provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the issuer’s assets that
could have a material effect on the financial
statements.
|
(a)
|
None
|
(b)
|
None
|
(c)
|
Purchases
of Equity Securities
|
Period
|
Total
Number
of Shares Purchased(1)
|
Average
Price
Paid
Per
Share
|
Total
Number of Shares
Purchased
as Part of Publicly Announced
Plans
or Programs
|
Maximum
Number
(or
Approximate
Dollar
Value) of Shares
that
May Yet be
Purchased
Under
the
Plans or Programs
|
||||||
July
5, 2008 to August 1, 2008
|
||||||||||
August
2, 2008 to August 29, 2008
|
||||||||||
August
30, 2008 to October 3, 2008
|
7,362 | $ | 45.73 |
(1)
|
The
Company accepted 7,362 shares of its common stock in the second quarter
ended October 3, 2008 from employees in lieu of cash due to the Company in
connection with the exercise of stock options. Such shares of
common stock are stated at cost and held as treasury shares to be used for
general corporate purposes.
|
Exhibit
Number
|
Description of Exhibit
|
2.1
|
Agreement
and Plan of Merger, dated as of April 25, 2007, by and among Computer
Sciences Corporation, Surfside Acquisition Corp. and Covansys Corporation
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K dated April 30, 2007)
|
3.1
|
Restated
Articles of Incorporation filed with the Nevada Secretary of State on June
11, 2003 (incorporated by reference to Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the fiscal year ended March 28,
2003)
|
3.2
|
Certificate
of Amendment of Certificate of Designations of Series A Junior
Participating Preferred Stock (incorporated by reference to Exhibit 3.2 to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended
October 3, 2003)
|
3.3
|
Bylaws,
amended and restated effective October 17, 2008 (incorporated by reference
to Exhibit 3.2 to the Company's Current Report on Form 8-K dated October
17, 2008)
|
4.1
|
Indenture
dated as of March 3, 2008 for the 5.50% senior notes due 2013 and the
6.50% senior notes due 2018 (incorporated by reference to Exhibit 4.1 to
the company’s Current report on Form 8-K dated September 15,
2008).
|
10.1
|
1998
Stock Incentive Plan(1)
(incorporated by reference to Exhibit 10.10 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 3,
1998)
|
10.2
|
2001
Stock Incentive Plan(1)
(incorporated by reference to Appendix B to the Company's Proxy Statement
for the Annual Meeting of Stockholders held on August 13,
2001)
|
10.3
|
Schedule
to the 2001 Stock Incentive Plan for United Kingdom personnel(1)
(incorporated by reference to Exhibit 10.12 to the Company's Annual Report
on form 10-K for the fiscal year ended April 2, 2004)
|
10.4
|
2004
Incentive Plan(1)
(incorporated by reference to Appendix B to the Company's Proxy Statement
for the Annual Meeting of Stockholders held on August 9,
2004)
|
10.5
|
2007
Employee Incentive Plan(1) (incorporated
by reference to Appendix B to the Company Proxy Statement for the Annual
Meeting of Stockholders held on July 30, 2007)
|
10.6
|
Form
of Stock Option Agreement for employees(1)
(incorporated by reference to Exhibit 10.6 to the Company’s Annual Report
on Form 10-K for the fiscal year ended March 28, 2008)
|
10.7
|
Form
of Restricted Stock Agreements for employees(1)
(incorporated by reference to Exhibit 10.6 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 1,
2005)
|
10.8
|
Form
of Service-Based Restricted Stock Unit Agreement for Employees(1)
(incorporated by reference to Exhibit 10.8 to the Company’s Annual Report
on Form 10-K for the fiscal year ended March 28, 2008)
|
10.9
|
Form
of Performance-Based Restricted Stock Unit Agreement for Employees(1)
(incorporated by reference to Exhibit 10.9 to the Company’s Annual Report
on Form 10-K for the fiscal year ended March 28, 2008)
|
10.10
|
Form
of Career Shares Restricted Stock Unit Agreement for Employees(1)
(incorporated by reference to Exhibit 10.10 to the Company’s Annual Report
on Form 10-K for the fiscal year ended March 28, 2008)
|
10.11
|
Form
FY2006 Annual Management Incentive Plan 1 Worksheet(1) (incorporated by
reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended July 1, 2005)
|
10.12
|
Supplemental
Executive Retirement Plan, amended and restated effective December 3,
2007(1) (incorporated by reference to Exhibit 10.1 to the Company's
Current Report on Form 8-K dated December 4, 2007)
|
10.13
|
Supplemental
Executive Retirement Plan No. 2, effective December 3, 2007(1)
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K dated December 4, 2007)
|
10.14
|
Excess
Plan, effective December 3, 2007(1) (incorporated by reference to Exhibit
10.3 to the Company’s Current Report on Form 8-K dated December 4,
2007)
|
10.15
|
Deferred
Compensation Plan, amended and restated effective December 3, 2007(1)
(incorporated by reference to Exhibit 10.4 to the Company’s Current Report
on Form 8-K dated December 4, 2007)
|
10.16
|
Severance
Plan for Senior Management and Key Employees, amended and restated
effective October 28, 2007(1) (incorporated by reference to Exhibit 10.3
to the Company’s Current Report on Form 8-K dated November 1,
2007)
|
10.17
|
Severance
Agreement with Van B. Honeycutt, effective February 2, 1998(1)
(incorporated by reference to Exhibit 10.14 to the Company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended December 26,
1997)
|
10.18
|
Employment
Agreement with Van B. Honeycutt, effective May 1, 1999(1) (incorporated by
reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K for
the fiscal year ended April 2, 1999)
|
10.19
|
Amendment
of Employment Agreement with Van B. Honeycutt, effective February 3,
2003(1) (incorporated by reference to Exhibit 10.18 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended December 27,
2002)
|
10.20
|
Amendment
No. 2 to Employment Agreement with Van B. Honeycutt, effective December 5,
2005(1) (incorporated by reference to Exhibit 10.4 to the Company’s
Current Report on Form 8-K dated December 6, 2005)
|
10.21
|
Retirement
Agreement with Van B. Honeycutt, effective May 21, 2007(1) (incorporated
by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
dated May 25, 2007)
|
10.22
|
Management
Agreement with Michael W. Laphen, effective September 10, 2007(1)
(incorporated by reference to Exhibit 10.1 to the Company's Current Report
on Form 8-K dated September 10, 2007)
|
10.23
|
Senior
Management and Key Employee Severance Agreement dated August 11, 2003,
with Michael W. Laphen(1)
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report
on Form 8-K dated December 12, 2007)
|
10.24
|
Amendment
No. 1 to Senior Management and Key Employee Severance Agreement dated
December 10, 2007, with Michael W. Laphen(1)
(incorporated by reference to Exhibit 10.2 to the Company’s Current Report
on Form 8-K dated December 12, 2007)
|
10.25
|
General
Release of Claims, effective January 30, 2008, with Michael E. Keane(1)
(incorporated by reference to Exhibit 10.1 to the Company's Current Report
on Form 8-K dated January 31, 2008)
|
10.26
|
Form
of Indemnification Agreement for officers (incorporated by reference to
Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the fiscal
year ended March 31, 1995)
|
10.27
|
Form
of Indemnification Agreement for directors (incorporated by reference to
Exhibit X(xxvi) to the Company's Annual Report on Form 10-K for the fiscal
year ended April 1, 1988)
|
10.28
|
1997
Nonemployee Director Stock Incentive Plan (incorporated by reference to
Appendix A to the Company's Proxy Statement for the Annual Meeting of
Stockholders held on August 11, 1997)
|
10.29
|
2006
Nonemployee Director Incentive Plan (incorporated by reference to Appendix
B to the Company’s Proxy Statement for the Annual Meeting of Stockholders
held on July 31, 2006
|
10.30
|
Form
of Restricted Stock Unit Agreement for directors (incorporated by
reference to Exhibit 10.18 to the Company’s Quarterly Report on Form 10-Q
for the fiscal quarter ended July 1, 2005)
|
10.31
|
Form
of Amendment to Restricted Stock Unit Agreement with directors
(incorporated by reference to Exhibit 10.5 to the Company’s Current Report
on Form 8-K dated December 6, 2005)
|
10.32
|
Credit
Agreement dated as of July 12, 2007 (incorporated by reference
to Exhibit 10.27 to the Company’s Current Report on Form 8-K dated
September 5, 2007)
|
10.33
|
Accelerated
Share Repurchase Transaction – VWAP Pricing Agreement and Supplemental
confirmation dated June 29, 2006 between Goldman, Sachs & Co. and the
Company(2)
(incorporated by reference to Exhibit 10.24 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30,
2006)
|
10.34
|
Collared
Accelerated Share Repurchase Transaction Agreement and Supplemental
confirmation dated June 29, 2006 between Goldman, Sachs & Co. and the
Company(2)
(incorporated by reference to Exhibit 10.25 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended June 30,
2006)
|
21
|
Significant
Active Subsidiaries and Affiliates of the Registrant
|
31.1
|
Section
302 Certification of the Chief Executive Officer
|
31.2
|
Section
302 Certification of the Chief Financial Officer
|
32.1
|
Section
906 Certification of the Chief Executive Officer
|
32.2
|
Section
906 Certification of the Chief Financial Officer
|
(1) Management
contract or compensatory plan or agreement
|
|
(2) Confidential
treatment has been requested pursuant to Rule 24b-2 under the Securities
Exchange Act of 1934, as amended, for portions of this exhibit that
contain confidential commercial and financial
information.
|
COMPUTER
SCIENCES CORPORATION
|
||
Date:
November 12, 2008
|
By:
|
/s/ Donald G.
DeBuck
|
Donald
G. DeBuck
|
||
Vice
President and
|
||
Chief
Financial Officer
|
||