x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
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|
EXCHANGE
ACT OF 1934
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For
the fiscal year ended April 3, 2009,
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OR
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o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
|
|
EXCHANGE
ACT OF 1934
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||
For
the transition period from
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to
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Commission
File No.: 1-4850
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COMPUTER
SCIENCES CORPORATION
(Exact name
of Registrant as specified in its charter)
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Nevada
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95-2043126
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(State
of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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3170
Fairview Park Drive
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Falls
Church, Virginia
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22042
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(Address
of principal executive offices)
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(zip
code)
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Registrant's
telephone number, including area code: (703) 876-1000
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of
each class:
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Name of each exchange on which
registered
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Common
Stock, $1.00 par value per share
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New
York Stock Exchange
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Preferred
Stock Purchase Rights
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Securities
registered pursuant to Section 12(g) of the Act: None
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Item
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Page
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Part
I
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|||||||
1. |
Business
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1 | |||||
1A. |
Risk
Factors
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6 | |||||
1B. |
Unresolved
Staff Comments
|
11 | |||||
2. |
Properties
|
12 | |||||
3. |
Legal
Proceedings
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13 | |||||
4. |
Submission of
Matters to a Vote of Security Holders
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17 | |||||
Part
II
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|||||||
5. |
Market for
the Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
|
19 | |||||
6. |
Selected
Financial Data
|
21 | |||||
7. |
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
23 | |||||
7A. |
Quantitative
and Qualitative Disclosures About Market Risk
|
52 | |||||
8. |
Consolidated
Financial Statements and Supplementary Data
|
54 | |||||
9. |
Changes in
and Disagreements with Accountants on Accounting and Financial
Disclosure
|
117 | |||||
9A. |
Controls and
Procedures
|
117 | |||||
Report of
Independent Registered Public Accounting Firm
|
119 | ||||||
9B. |
Other
Information
|
121 | |||||
Part
III
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|||||||
10. |
Directors, Executive Officers
and Corporate Governance
|
122 | |||||
11. |
Executive
Compensation
|
122 | |||||
12. |
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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123 | |||||
13. |
Certain
Relationships, Related Transactions, and Director
Independence
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124 | |||||
14. |
Principal
Accountant Fees and Services
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124 | |||||
Part
IV
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|||||||
15. |
Exhibits,
Financial Statement Schedule
|
125 |
2009
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2008
|
2007
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||||||||||
BS&S –
Consulting
|
12 | % | 11 | % | 11 | % | ||||||
BS&S –
Financial Services Sector
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6 | 6 | 7 | |||||||||
BS&S –
Other
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8 | 8 | 4 | |||||||||
Business
Solutions and Services
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26 | 25 | 22 | |||||||||
Global
Outsourcing Services
|
39 | 41 | 43 | |||||||||
North
American Public Sector
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36 | 35 | 36 | |||||||||
Subtotal
|
101 | 101 | 101 | |||||||||
Eliminations
|
(1 | ) | (1 | ) | (1 | ) | ||||||
Total
Revenues
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100 | % | 100 | % | 100 | % |
1.
|
Providing
industry-specific offerings including business solutions, consulting
services and business process outsourcing services for the Financial
Services, Healthcare, Manufacturing, Public Sector, Chemical, Energy &
Natural Resources and Technology and Consumer Products
industries. In support of this initiative, the Company acquired
First Consulting Group during the fourth quarter of fiscal 2008 expanding
its offerings to the Healthcare
industry.
|
2.
|
Growing and
utilizing offshore capabilities, particularly in India. As part
of this initiative the Company acquired Covansys Corporation (Covansys)
during fiscal 2008. Covansys provides the Company with
the capability to sell low cost offshore solutions directly to existing
and potential clients. The Company has consolidated its
existing operations in India with those acquired from
Covansys. The Company’s acquisition of First Consulting Group
provided additional resources in India as well as operational capabilities
in Vietnam.
|
3.
|
Further
expanding the Company’s ability to provide business solutions, consulting
services and business process outsourcing services
internationally. To this end the Company has focused on
expanding its capabilities in Asia, Latin America and Eastern
Europe.
|
4.
|
Enhancing the
Company’s ability to deliver outsourcing services to its clients
throughout their global organizations on a consistent basis and provide
the full range of the Company’s technical service offerings to its
outsourcing clients. The Company has expanded its offerings and
its marketing and sales efforts for mid-size outsourcing
deals.
|
5.
|
Strengthening
the service offerings to the public sector and continuing to improve the
Company’s ability to effectively compete for contracts with the U.S.
federal government.
|
1.
|
Our
business may be adversely impacted as a result of changes in demand, both
globally and in individual market segments, for information technology
outsourcing, business process outsourcing and consulting and systems
integration services.
|
2.
|
Our
ability to continue to develop and expand our service offerings to address
emerging business demands and technological trends will impact our future
growth. If we are not successful in meeting these business
challenges, our results of operations and cash flows will be materially
and adversely affected.
|
3.
|
Our
primary markets, technology outsourcing and consulting and systems
integration, are
highly competitive markets. If we are unable to compete in
these highly competitive markets, our results of operations will be
materially and adversely affected.
|
4.
|
Our
ability to raise additional capital for future needs will impact our
ability to compete in the markets we
serve.
|
5.
|
Our
ability to consummate and integrate acquisitions may materially and
adversely affect our profitability if we fail to achieve anticipated
revenue improvements and cost
reductions.
|
6.
|
We
could suffer losses due to asset impairment
charges.
|
7.
|
Our
customers may experience financial difficulties and we may not be able to
collect our receivables, materially and adversely affecting our
profitability.
|
8.
|
If
we are unable to accurately estimate the cost of services and the timeline
for completion of contracts, the profitability of our contracts may be
materially and adversely affected.
|
9.
|
We
are defendants in pending litigation which may have a material and adverse
impact on our profitability.
|
10.
|
Our
ability to provide our customers with competitive services is dependent on
our ability to attract and retain qualified
personnel.
|
11.
|
Our
international operations are exposed to risks, including fluctuations in
exchange rates, which may be beyond our
control.
|
12.
|
Our
ability to compete in certain markets we serve is dependent on our ability
to continue to expand our capacity in certain offshore
locations. However, as our presence in these locations
increases, we are exposed to risks inherent to these locations which may
adversely impact our revenue and
profitability.
|
13.
|
In
the course of providing services to customers, we may inadvertently
infringe on the intellectual property rights of others and be exposed to
claims for damages.
|
14.
|
Generally
our contracts contain provisions under which a customer may terminate the
contract prior to completion. Early contract terminations may
materially and adversely affect our revenues and
profitability.
|
15.
|
We
may be exposed to negative publicity and other potential risks if we are
unable to maintain effective internal
controls.
|
16.
|
Our
largest customer, the U.S. federal government, accounts for a significant
portion of our revenue and earnings. Inherent in the government
contracting process are various risks which may materially and adversely
affect our business and
profitability.
|
17.
|
Our
performance on contracts on which we have partnered with third parties may
be adversely affected if the third parties fail to deliver on their
commitments.
|
18.
|
Our
inability to protect client information could impair our reputation, and
we could suffer significant financial
loss.
|
19.
|
Changes
in the Company’s tax rates could affect its future
results.
|
20.
|
We
may be adversely affected by disruptions in the credit markets, including
reduced access to credit and higher costs of obtaining
credit.
|
21.
|
Our
foreign currency hedging program is subject to counterparty default
risk.
|
Item
1B. Unresolved Staff Comments
|
None.
|
Item
2. Properties
Owned
properties as of April 3 ,2009
|
Approximate
Square Footage
|
General
Usage
|
||
Copenhagen,
Denmark
|
525,000
|
Computer and
General Office
|
||
Blythewood,
South Carolina
|
456,000
|
Computer and
General Office
|
||
Falls Church,
Virginia
|
401,000
|
General
Office
|
||
Aldershot,
United Kingdom
|
211,000
|
General
Office
|
||
El Segundo,
California
|
206,000
|
General
Office
|
||
Newark,
Delaware
|
176,000
|
Computer and
General Office
|
||
Norwich,
Connecticut
|
144,000
|
Computer and
General Office
|
||
Daleville,
Alabama
|
137,000
|
General
Office
|
||
Petaling
Jaya, Malaysia
|
126,000
|
Computer and
General Office
|
||
Berkeley
Heights, New Jersey
|
119,000
|
Computer and
General Office
|
||
Meriden,
Connecticut
|
118,000
|
Computer and
General Office
|
||
Aaurus,
Denmark
|
101,000
|
Computer and
General Office
|
||
Moorestown,
New Jersey
|
99,000
|
General
Office
|
||
Chesterfield,
United Kingdom
|
79,000
|
General
Office
|
||
Maidstone,
United Kingdom
|
79,000
|
Computer and
General Office
|
||
Hong Kong,
China
Jacksonville,
Illinois
Bangalore,
India
|
73,000
60,000
50,000
|
General
Office
General
Office
Computer and
General Office
|
||
Singapore
|
46,000
|
General
Office
|
||
Turnbridge,
United Kingdom
|
43,000
|
General
Office
|
||
Sterling,
Virginia
|
41,000
|
General
Office
|
||
Various other
U.S. and foreign locations
|
76,000
|
General
Office
|
||
Leased
properties as of April 3, 2009
|
||||
Washington,
D.C. area
|
3,114,000
|
Computer and
General Office
|
||
India
|
1,658,000
|
Warehouse and
General Office
|
||
Texas
|
827,000
|
Computer and
General Office
|
||
Australia
& other Pacific Rim locations
|
628,000
|
Computer and
General Office
|
||
Germany
|
600,000
|
General
Office
|
||
Denmark
|
530,000
|
General
Office
|
||
Ohio
|
521,000
|
General
Office
|
||
Georgia
|
509,000
|
General
Office
|
||
England
|
488,000
|
General
Office
|
||
Tennessee
|
438,000
|
General
Office
|
||
New
York
|
397,000
|
General
Office
|
||
New
Jersey
|
351,000
|
General
Office
|
||
Florida
|
262,000
|
General
Office
|
||
Illinois
|
260,000
|
General
Office
|
||
Connecticut
|
232,000
|
General
Office
|
||
Delaware
|
217,000
|
General
Office
|
||
Arizona
|
216,000
|
General
Office
|
||
Wisconsin
|
208,000
|
General
Office
|
||
Massachusetts
|
207,000
|
General
Office
|
||
France
|
189,000
|
Industrial/Warehouse
|
||
California
|
181,000
|
General
Office
|
||
Italy
|
175,000
|
General
Office
|
||
Sweden
|
169,000
|
General
Office
|
||
Various other
U.S. and foreign locations
|
2,095,000
|
Computer and
General Office
|
Name
|
Age
|
Year
First
Elected
as
an
Officer
|
Term
as an
Officer
|
Position
Held With the Registrant
|
Family
Relationship
|
|||||
Michael W.
Laphen*
|
58
|
2001
|
Indefinite
|
Chairman,
President and Chief Executive Officer
|
None
|
|||||
Michael J.
Mancuso
|
66
|
2008
|
Indefinite
|
Vice
President and Chief Financial Officer
|
None
|
|||||
Donald G.
DeBuck
|
51
|
2001
|
Indefinite
|
Vice
President and Controller
|
None
|
|||||
William L.
Deckelman, Jr.
|
51
|
2008
|
Indefinite
|
Vice
President, General Counsel and Secretary
|
None
|
|||||
Randy E.
Phillips
|
50
|
2008
|
Indefinite
|
Vice
President, Corporate Development
|
None
|
|||||
Nathan G.
Siekierka
|
60
|
2008
|
Indefinite
|
Vice
President, Human Resources
|
None
|
|||||
|
Item
5. Market for the Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity
Securities
|
2009
|
2008
|
2007
|
||||||||||||||||||||||
Calendar
Quarter
|
High
|
Low
|
High
|
Low
|
High
|
Low
|
||||||||||||||||||
1st
|
40.88 | 31.11 | $ | 49.50 | $ | 36.91 | $ | 56.25 | $ | 50.38 | ||||||||||||||
2nd
|
40.51 | * | 35.95 | * | 50.52 | 37.99 | 60.00 | 51.55 | ||||||||||||||||
3rd
|
49.37 | 38.52 | 63.76 | 46.95 | ||||||||||||||||||||
4th
|
40.30 | 23.93 | 60.00 | 49.21 |
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
|
||||||
January 3,
2009 - January
30, 2009
|
||||||||||
January 31,
2009 - February
27, 2009
|
||||||||||
February 28,
2009 - April 3,
2009
|
6,046 | $ | 34.19 |
(1)
|
The Company
accepted 6,046 shares of its common stock in the quarter ended April 3,
2009, from
employees in lieu of cash due to the Company in connection with the
release of shares of common stock. Such shares of common stock
are stated at cost and held as treasury shares to be used for general
corporate purposes.
|
|
Performance
Graph
|
Indexed
Return Chart (2004 = 100)
|
||||||||||||||||||||||||
Return
2005
|
Return
2006
|
Return
2007
|
Return
2008
|
Return
2009
|
CAGR
|
|||||||||||||||||||
CSC Common
Stock
|
11.42 | % | 22.30 | % | -6.16 | % | -21.73 | % | -4.77 | % | -0.96 | % | ||||||||||||
S&P 500
Index
|
6.69 | % | 11.73 | % | 11.83 | % | -5.62 | % | -36.87 | % | -4.50 | % | ||||||||||||
S&P North
American Technology Services Index
|
3.06 | % | 21.75 | % | 7.42 | % | -11.33 | % | -19.86 | % | -0.86 | % | ||||||||||||
Assumes $100
invested on April 1, 2004, in Computer Sciences
Corporation Common Stock, the S&P 500 Index, and the S&P North
American Technology Services Index, formerly the Goldman Sachs Technology
Services Index. Indexed amounts and return percentages assume a March
31 fiscal year end.
|
||||||||||||||||||||||||
Five
Year Review
|
||||||||||||||||||||
In millions except per-share
amounts
|
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
March
31, 2006
|
April
1, 2005
|
|||||||||||||||
Total
Assets
|
$ | 15,618.7 | $ | 15,879.7 | $ | 13,740.2 | $ | 12,963.5 | $ | 12,522.3 | ||||||||||
Debt:
|
||||||||||||||||||||
Long-term
|
4,172.6 | 2,635.3 | 1,412.2 | 1,376.8 | 1,303.0 | |||||||||||||||
Short-term
|
32.1 | 309.5 | 51.9 | 56.6 | 78.4 | |||||||||||||||
Current maturities
|
29.8 | 528.9 | 41.8 | 28.7 | 7.3 | |||||||||||||||
Total
|
4,234.5 | 3,473.7 | 1,505.9 | 1,462.1 | 1,388.7 | |||||||||||||||
Stockholders'
equity
|
5,509.9 | 5,461.8 | 5,540.0 | 6,195.7 | 6,019.3 | |||||||||||||||
Working
capital
|
3,691.0 | 1,332.9 | 1,045.4 | 1,582.9 | 1,128.9 | |||||||||||||||
Property and
equipment:
|
||||||||||||||||||||
At cost
|
5,770.2 | 6,260.0 | 5,612.9 | 5,367.9 | 5,520.3 | |||||||||||||||
Accumulated depreciation
and
|
||||||||||||||||||||
amortization
|
3,417.2 | 3,495.4 | 3,073.8 | 3,047.8 | 3,154.9 | |||||||||||||||
Property
and equipment, net
|
2,353.0 | 2,764.6 | 2,539.1 | 2,320.1 | 2,365.4 | |||||||||||||||
Current
assets to current liabilities
|
1.9:1
|
1.2:1
|
1.2:1
|
1.3:1
|
1.2:1
|
|||||||||||||||
Debt to total
capitalization
|
43.5 | % | 38.9 | % | 21.4 | % | 19.1 | % | 18.7 | % | ||||||||||
Book value
per share
|
$ | 36.37 | $ | 36.14 | $ | 31.96 | $ | 33.09 | $ | 31.48 | ||||||||||
Stock price
range (high)
|
50.52 | 63.76 | 60.39 | 59.90 | 58.00 | |||||||||||||||
(low)
|
23.93 | 36.91 | 46.23 | 42.31 | 38.07 |
|
Five-Year
Review (continued)
|
Five
Year Review
|
||||||||||||||||||||
Fiscal
Year
|
||||||||||||||||||||
In millions except per-share
amounts
|
2009
|
2008
|
2007
|
2006
|
2005
|
|||||||||||||||
Revenues
|
$ | 16,739.9 | $ | 16,499.5 | $ | 14,854.9 | $ | 14,644.8 | $ | 14,060.8 | ||||||||||
Costs of
services (excludes depreciation and amortization)
|
13,260.7 | 13,151.9 | 11,813.5 | 11,724.5 | 11,318.6 | |||||||||||||||
Selling,
general and administrative
|
1,082.8 | 975.4 | 918.3 | 863.8 | 826.3 | |||||||||||||||
Depreciation
and amortization
|
1,185.5 | 1,198.6 | 1,073.6 | 1,091.8 | 1,051.0 | |||||||||||||||
Goodwill
impairment
|
18.9 | |||||||||||||||||||
Interest,
net
|
219.5 | 148.3 | 168.4 | 104.3 | 157.4 | |||||||||||||||
Special
items
|
155.8 | 316.1 | 77.3 | 28.6 | ||||||||||||||||
Other
(income)/expense
|
23.4 | (48.4 | ) | (41.3 | ) | 21.3 | (21.8 | ) | ||||||||||||
Total costs
and expenses
|
15,790.8 | 15,581.6 | 14,248.6 | 13,883.0 | 13,360.1 | |||||||||||||||
Income before
taxes
|
949.1 | 917.9 | 606.3 | 761.8 | 700.7 | |||||||||||||||
Taxes on
income (benefit)
|
(166.1 | ) | 373.3 | 209.0 | 319.5 | 237.4 | ||||||||||||||
Income from
continuing operations
|
$ | 1,115.2 | $ | 544.6 | $ | 397.3 | $ | 442.3 | $ | 463.3 | ||||||||||
Basic
earnings per common share,
continuing
operations
|
$ | 7.37 | $ | 3.26 | $ | 2.25 | $ | 2.38 | $ | 2.44 | ||||||||||
Diluted
earnings per common share,
continuing
operations
|
$ | 7.31 | $ | 3.20 | $ | 2.21 | $ | 2.35 | $ | 2.41 | ||||||||||
Average
common shares outstanding
|
151.388 | 167.233 | 176.263 | 185.693 | 189.575 | |||||||||||||||
Average
common shares outstanding
assuming
dilution
|
152.614 | 170.168 | 179.733 | 187.984 | 191.936 |
|
1)
|
Provide a
narrative explanation of the consolidated financial statements, as
presented through the eyes of
management;
|
|
2)
|
Enhance the
disclosures in the consolidated financial statements and footnotes,
providing context within which the consolidated financial statements
should be analyzed; and
|
|
3)
|
Provide
information to assist the reader in ascertaining the predictive value of
the reported financial results.
|
1.
|
North
American Public Sector. The North American Public Sector segment operates
principally within a regulatory environment subject to governmental
contracting and accounting requirements, including Federal Acquisition
Regulations, Cost Accounting Standards and audits by various U.S. federal
agencies. The North American Public Sector operating segment
represents a separate reportable
segment.
|
2.
|
Global
Outsourcing Services. The Global Outsourcing Services segment provides
large-scale outsourcing solutions offerings as well as midsize services
delivery to customers globally. The Global Outsourcing Services
operating segment represents a separate reportable segment.
|
3.
|
Business
Solutions and Services – Consulting. In the BS&S −
Consulting segment, the
Company provides industry specific consulting and systems integration
services, business process outsourcing, and intellectual property
(IP)-based software solutions. These service offerings and
clientele overlap and the Company draws on multiple operating segments
within BS&S – Consulting to serve clients. These operating
segments have similar economic characteristics, products, services,
customers and methods of operations and, as a result, are aggregated for
segment reporting purposes.
|
4.
|
Business
Solutions and Services – Financial Services Sector. The BS&S −
Financial Services Sector segment primarily provides IP-based software
solutions and business process outsourcing services to financial services
companies in domestic and international
markets.
|
5.
|
Business
Solutions and Services – Other. The Company’s remaining operating segments
do not meet the quantitative thresholds for separate disclosure and do not
meet the aggregation criteria as indicated in SFAS No. 131. As
a result, these operating segments are reported as “other” as indicated by
SFAS No. 131. Because each of these other operating segments
are within the Company’s BS&S service line, the Company has labeled
this group of operating segments as BS&S − Other. The operating
segments comprising BS&S − Other include the Company’s non-GOS
operations in Australia and Asia and the Company’s India
operations.
|
Lines
of Business
|
Reportable
Segments
|
|
Business
Solutions and Services
|
BS&S –
Consulting
|
|
BS&S −
Financial Services Sector
|
||
BS&S –
Other
|
||
Global
Outsourcing Services
|
Global
Outsourcing Services
|
|
North
American Public Sector
|
North
American Public Sector
|
·
|
the Company’s
ability to successfully bid on and win new contract
awards,
|
·
|
the ability
to satisfy existing customers and obtain add-on business and win contract
re-competes,
|
·
|
the ability
to compete on services offered, technical ability, experience and
flexibility,
|
·
|
the ability
to successfully identify and integrate acquisitions and leverage them to
generate new revenues, and
|
·
|
currency
fluctuations related to international
operations.
|
·
|
the ability
to control costs, particularly labor costs, subcontractor expenses and
overhead costs including healthcare, pension and general and
administrative costs,
|
·
|
the ability
to anticipate headcount needs to avoid staff shortages or
excesses,
|
·
|
the ability
to accurately estimate various factors incorporated in contract bids and
proposals, and
|
·
|
the ability
to develop offshore capabilities and migrate compatible service offerings
offshore.
|
·
|
timely
management of receivables and
payables,
|
·
|
investment
opportunities available, particularly related to business acquisitions and
dispositions and large outsourcing contracts,
and
|
·
|
the ability
to efficiently manage capital including debt and equity
instruments.
|
·
|
Revenues
improved $240.4 million or 1.5%, while increasing 4.3% on a constant
currency basis.
|
·
|
Net income
increased 104% to $1.11 billion, reflecting significant tax benefits from
resolutions and adjustments in the U.S. federal and state, as well as
international tax jurisdictions.
|
·
|
Earnings
per share were up 128% on a diluted
basis.
|
·
|
The Company
announced contract awards of $16.2 billion including new NPS segment
awards of $7.3 billion, BS&S segments awards of $4.4 billion, and GOS
segment awards of $4.5 billion.
|
·
|
Free cash
flow of $1,020.6 million increased $845.4 million from fiscal 2008, driven
by improved operating cash flows and lower capital expenditures.(1)
|
·
|
DSO was 84
days at April 3, 2009, versus 90 days at March 28,
2008.
|
·
|
Debt-to-total
capitalization ratio was 43.5% at year-end, an increase of 4.6% from 38.9%
in fiscal 2008 ratio.
|
·
|
ROI was 14.9%
for the year, up from 9.2% in fiscal 2008, driven significantly by fiscal
2009 tax benefits.
|
(1)
|
The following is a reconciliation
of free cash flow to the most directly comparable U.S. GAAP financial
measure:
|
Fiscal
Year Ended
|
||||||||||||
(In
millions)
|
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
|||||||||
Free cash
flow
|
$ | 1,020.6 | $ | 175.2 | $ | 671.5 | ||||||
Net cash used
in investing activities
|
1,038.0 | 2,718.7 | 872.7 | |||||||||
Proceeds from
redemption of investment in preferred stock
|
126.5 | |||||||||||
Acquisitions,
net of cash acquired
|
(100.3 | ) | (1,591.1 | ) | (134.3 | ) | ||||||
Business
dispositions
|
2.8 | |||||||||||
Capital lease
payments
|
28.1 | 40.1 | 39.4 | |||||||||
Net cash
provided by operating activities
|
$ | 1,986.4 | $ | 1,342.9 | $ | 1,578.6 | ||||||
Net cash used
in investing activities
|
$ | (1,038.0 | ) | $ | (2,718.7 | ) | $ | (872.7 | ) | |||
Net cash
provided by/(used in) financing activities
|
$ | 742.1 | $ | 997.9 | $ | (955.5 | ) |
·
|
Bombardier
($944 million),
|
·
|
Zurich Omni
($399 million),
|
·
|
TDC
Applications ($413 million),
|
·
|
Exelon ($150
million).
|
·
|
U.S. Air and
Missile Contracts ($341 million),
|
·
|
U.S. Army
($1.5 billion),
|
·
|
U.S. Navy and
NAVSEA ($570 million),
|
·
|
State of
North Carolina ($265 million),
|
·
|
eMED New York
($322 million), and
|
·
|
Department of
Health Services (DHS) ($475
million).
|
Fiscal
2009
|
Fiscal
2008
|
Fiscal
2007
|
||||||||||||||||||
Dollars in millions
|
Amount
|
Percent
Change
|
Amount
|
Percent Change
|
Amount
|
|||||||||||||||
BS&S − Consulting
|
$ | 2,034.3 | 11.1 | % | $ | 1,831.5 | 16.1 | % | $ | 1,577.1 | ||||||||||
BS&S − Financial
Services
|
990.8 | (2.6 | ) | 1,017.3 | 4.4 | 974.1 | ||||||||||||||
BS&S
− Other
|
1,384.6 | 12.9 | 1,225.9 | 79.8 | 681.7 | |||||||||||||||
Business
Solutions and Services
|
4,409.7 | 8.2 | 4,074.7 | 26.0 | 3,232.9 | |||||||||||||||
Global
Outsourcing Services
|
6,458.5 | (4.4 | ) | 6,756.0 | 6.7 | 6,333.5 | ||||||||||||||
North
American Public Sector
|
5,977.4 | 3.4 | 5,781.1 | 6.1 | 5,446.5 | |||||||||||||||
Corporate
|
17.4 | 17.6 | 35.8 | |||||||||||||||||
Subtotal
|
16,863.0 | 1.4 | 16,629.4 | 10.5 | 15,048.7 | |||||||||||||||
Eliminations
|
(123.1 | ) | (129.9 | ) | (193.8 | ) | ||||||||||||||
Total
Revenue
|
$ | 16,739.9 | 1.5 | $ | 16,499.5 | 11.1 | $ | 14,854.9 |
Fiscal
2009 vs. Fiscal 2008
|
Acquisitions
|
Approximate
Impact
of
Currency
Fluctuations
|
Net
Internal
Growth
|
Total
|
||||||||||||
BS&S −
Consulting
|
8.1 | % | (5.7 | )% | 8.7 | % | 11.1 | % | ||||||||
BS&S − Financial
Services Sector
|
(1.2 | ) | (1.4 | ) | (2.6 | ) | ||||||||||
BS&S −
Other
|
10.7 | (3.0 | ) | 5.2 | 12.9 | |||||||||||
Business
Solutions and Services
|
6.9 | (3.7 | ) | 5.0 | 8.2 | |||||||||||
Global
Outsourcing Services
|
.7 | (4.6 | ) | (.5 | ) | (4.4 | ) | |||||||||
North
American Public Sector
|
3.4 | 3.4 | ||||||||||||||
Total
Revenue
|
2.0 | (2.8 | ) | 2.3 | 1.5 |
Fiscal
2008 vs. Fiscal 2007
|
Acquisitions
|
Approximate
Impact
of
Currency
Fluctuations
|
Net
Internal
Growth
|
Total
|
||||||||||||
BS&S − Consulting
|
2.3 | % | 6.9 | % | 6.9 | % | 16.1 | % | ||||||||
BS&S − Financial
Services Sector
|
1.4 | 3.0 | 4.4 | |||||||||||||
BS&S − Other
|
56.6 | 12.4 | 10.8 | 79.8 | ||||||||||||
Business
Solutions and Services
|
13.1 | 6.5 | 6.4 | 26.0 | ||||||||||||
Global
Outsourcing Services
|
.3 | 5.2 | 1.2 | 6.7 | ||||||||||||
North
American Public Sector
|
1.8 | 4.3 | 6.1 | |||||||||||||
Total
Revenue
|
3.6 | 3.6 | 3.9 | 11.1 |
Fiscal
2009 vs. Fiscal 2008
|
Acquisitions
|
Approximate
Impact
of
Currency
Fluctuations
|
Net
Internal
Growth
|
Total
|
||||||||||||
BS&S −
Consulting
|
8.1 | % | (5.7 | )% | 8.7 | % | 11.1 | % | ||||||||
|
(1.2 | ) | (1.4 | ) | (2.6 | ) | ||||||||||
BS&S −
Other
|
10.7 | (3.0 | ) | 5.2 | 12.9 | |||||||||||
Business
Solutions and Services
|
6.9 | (3.7 | ) | 5.0 | 8.2 | |||||||||||
Global
Outsourcing Services
|
.7 | (4.6 | ) | (.5 | ) | (4.4 | ) | |||||||||
North
American Public Sector
|
3.4 | 3.4 | ||||||||||||||
Total
Revenue
|
2.0 | (2.8 | ) | 2.3 | 1.5 | |||||||||||
Fiscal
2008 vs. Fiscal 2007
|
Acquisitions
|
Approximate
Impact
of
Currency
Fluctuations
|
Net
Internal
Growth
|
Total
|
||||||||||||
BS&S − Consulting
|
2.3 | % | 6.9 | % | 6.9 | % | 16.1 | % | ||||||||
BS&S − Financial
Services Sector
|
1.4 | 3.0 | 4.4 | |||||||||||||
BS&S − Other
|
56.6 | 12.4 | 10.8 | 79.8 | ||||||||||||
Business
Solutions and Services
|
13.1 | 6.5 | 6.4 | 26.0 | ||||||||||||
Global
Outsourcing Services
|
.3 | 5.2 | 1.2 | 6.7 | ||||||||||||
North
American Public Sector
|
1.8 | 4.3 | 6.1 | |||||||||||||
Total
Revenue
|
3.6 | 3.6 | 3.9 | 11.1 |
Fiscal
2009
|
Fiscal
2008
|
Fiscal
2007
|
||||||||||||||||||
Dollars in millions
|
Amount
|
Percent
Change
|
Amount
|
Percent
Change
|
Amount
|
|||||||||||||||
Department of
Defense
|
$ | 4,203.3 | 8.9 | % | $ | 3,859.7 | 7.1 | % | $ | 3,603.3 | ||||||||||
Civil
agencies
|
1,615.3 | (6.9 | ) | 1,734.0 | 2.8 | 1,686.8 | ||||||||||||||
Other (1)
|
158.8 | (15.3 | ) | 187.4 | 19.8 | 156.4 | ||||||||||||||
Total North
American Public Sector
|
$ | 5,977.4 | 3.4 | $ | 5,781.1 | 6.1 | $ | 5,446.5 |
(1)
|
Other
revenues consist of foreign, state and local government work as well as
commercial contracts performed by the North American Public Sector
segment.
|
Dollar
Amount
|
Percentage
of Revenue
|
|||||||||||||||||||||||
Dollars in millions
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||||||||||
Costs of
services (excludes
depreciation
and amortization)
|
$ | 13,260.7 | $ | 13,151.9 | $ | 11,813.5 | 79.2 | % | 79.7 | % | 79.5 | % | ||||||||||||
Selling,
general and administrative
|
1,082.8 | 975.4 | 918.3 | 6.5 | 5.9 | 6.2 | ||||||||||||||||||
Depreciation
and amortization
|
1,185.5 | 1,198.6 | 1,073.6 | 7.1 | 7.3 | 7.2 | ||||||||||||||||||
Goodwill
impairment
|
18.9 | .1 | ||||||||||||||||||||||
Interest
expense, net
|
219.5 | 148.3 | 168.4 | 1.3 | .9 | 1.1 | ||||||||||||||||||
Special
items
|
155.8 | 316.1 | .9 | 2.1 | ||||||||||||||||||||
Other
expense/(income)
|
23.4 | (48.4 | ) | (41.3 | ) | .1 | (.3 | ) | (.2 | ) | ||||||||||||||
Total
|
$ | 15,790.8 | $ | 15,581.6 | $ | 14,248.6 | 94.3 | % | 94.4 | % | 95.9 | % |
Liability
as of
March
28, 2008
|
Less
Payments
|
Other(1)
|
Restructuring
liability
as of
April
3, 2009
|
|||||||||||||
Workforce
reductions
|
$ | 61.3 | $ | (57.4 | ) | $ | (1.7 | ) | $ | 2.2 | ||||||
Other
|
32.8 | (10.2 | ) | (4.6 | ) | 18.0 | ||||||||||
Total
|
$ | 94.1 | $ | (67.6 | ) | $ | (6.3 | ) | $ | 20.2 |
(1)
|
Primarily
foreign currency translation
adjustments.
|
Liability
as of March 30, 2007
|
Total
Pre-tax Charges
|
Less
Payments
|
Other(1)
|
Restructuring
liability
as of
March
28, 2008
|
||||||||||||||||
Workforce
reductions
|
$ | 93.5 | $ | 110.7 | $ | (150.9 | ) | $ | 8.0 | $ | 61.3 | |||||||||
Other
|
38.8 | 22.7 | (29.5 | ) | 0.8 | 32.8 | ||||||||||||||
Total
|
$ | 132.3 | $ | 133.4 | $ | (180.4 | ) | $ | 8.8 | $ | 94.1 |
(1)
|
Primarily
foreign currency translation
adjustments.
|
Dollars in
millions
|
2009
|
2008
|
2007
|
|||||||||
Foreign
currency loss /(gain)
|
$ | 25.2 | $ | (31.2 | ) | $ | (45.5 | ) | ||||
(Gain)/loss
on sale of non-operating assets
|
(1.8 | ) | (17.2 | ) | 4.2 | |||||||
Total Other
Expense /(Income)
|
$ | 23.4 | $ | (48.4 | ) | $ | (41.3 | ) |
Dollars in millions
|
Fiscal
2009
|
Fiscal
2008
|
Fiscal
2007
|
|||||||||
Net cash from
operations
|
$ | 1,986.4 | $ | 1,342.9 | $ | 1,578.6 | ||||||
Net cash used
in investing
|
(1,038.0 | ) | (2,718.7 | ) | (872.7 | ) | ||||||
Net cash
from/(used) in financing
|
742.1 | 997.9 | (955.5 | ) | ||||||||
Effect of
exchange rate changes on cash and cash equivalents
|
(92.1 | ) | 26.7 | 9.0 | ||||||||
Net increase
(decrease) in cash and cash equivalents
|
1,598.4 | (351.2 | ) | (240.6 | ) | |||||||
Cash and cash
equivalents at beginning of year
|
698.9 | 1,050.1 | 1,290.7 | |||||||||
Cash and cash equivalents at end of
year
|
$ | 2,297.3 | $ | 698.9 | $ | 1,050.1 |
·
|
A $570.6
million increase in net income.
|
·
|
A reduction
in receivables provided cash of $224.0 million in 2009. The
reduction is primarily attributable to the Company’s NPS and GOS
operations resulting from a fiscal 2009 initiative to reduce DSO, as well
as resolution of certain contract disputes and several contract
completions.
|
·
|
Increases in
prepaid expenses and other assets required a use of cash of $164.1 million
in 2009. The increase was primarily due to work in progress on the
Company’s significant contract with the UK National Health Service
(NHS).
|
·
|
Decreases in
accounts payable and accruals required use of cash in fiscal 2009 of
$322.5 million. The decrease primarily resulted from timing of
BS&S – Consulting subcontractor payments, and vendor payments in
BS&S – Other regions.
|
·
|
Increases in
deferred income and advance payments provided cash of $235.5 million for
fiscal 2009. The increases primarily resulted from higher advances on the
Company’s engagement with NHS tied to expected activity
levels.
|
·
|
A decrease in
income taxes payable and liability of cash of $820.1 million, included a
non-cash component for fiscal 2009. During fiscal 2009, the Company
reached resolutions with the IRS and various state and foreign
jurisdictions. As a result of these settlements, the Company’s
income tax payments decreased $172.7 million in fiscal 2009 to $323.1
million. Additionally, the settlements resulted in a non-cash
benefit related to the reduction of uncertain tax
liabilities.
|
·
|
Also
impacting the fiscal 2009 comparison of operating cash flows to the prior
year was $97.9 million of unrealized foreign currency losses compared to
$27.3 million of gains for fiscal
2008.
|
·
|
For 2008,
increases in receivables required a use of cash of $217.0 million,
primarily from increases in unbilled receivables resulting from timing of
work performed in GOS and long-term contracts. A five day
increase in Days Sales Outstanding for 2008 from 2007 was due to new
business awards in Europe, increased unbilled on the NHS contract, and the
dilutive nature of the mid-year acquisitions during
2008.
|
·
|
The cash flow
impact of changes in prepaid expenses and other assets was a use of cash
of $368.0 million for fiscal 2008. The increase in prepaid
expenses and other current assets was the result of increases in work-in
process balances for fiscal 2008 of $189 million, primarily in Europe and
the payment of a $100 million bond to the IRS to stop the accrual of
interest on certain tax
liabilities.
|
·
|
Activity in
accounts payable and certain accrued expenses resulted in a use of cash of
approximately $110 million during fiscal 2008. Accounts payable
and certain accrued expenses decreased $381 million from the prior year
due to the reversal of income tax related interest and penalties accrued
under FAS 5 prior to fiscal 2008 and the accrual of the income tax related
interest and penalties as a tax liability as a result of the adoption of
FIN 48. The decrease in accounts payable and accrued expenses
was partially offset in cash flow by an increase in accrued payroll of
approximately $155.0 million primarily due to timing of
payments.
|
·
|
Activity in
deferred income and advance payments provided cash inflow of approximately
$87 million for fiscal 2008. The increase was related to
advance contract payments in Europe and the United States as well as sales
of software licenses.
|
·
|
The cash flow
impact from changes in income tax liabilities and assets was a cash inflow
of approximately $130.0 million for fiscal 2008. Additions to
taxes payable during fiscal 2008 were somewhat offset by payments to tax
authorities during the year of approximately $496.0
million.
|
Dollars in millions
|
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
|||||||||
Debt
|
$ | 4,234.5 | $ | 3,473.7 | $ | 1,505.9 | ||||||
Equity
|
5,509.9 | 5,461.8 | 5,540.0 | |||||||||
Total
capitalization
|
$ | 9,744.4 | $ | 8,935.5 | $ | 7,045.9 | ||||||
Debt to total
capitalization
|
43.5 | % | 38.9 | % | 21.4 | % |
Dollars in millions
|
Fiscal
2010
|
Fiscal
2011
|
Fiscal
2012
&
thereafter
|
Total
|
||||||||||||
Performance
guarantees:
|
||||||||||||||||
Surety
bonds
|
$ | 32.5 | $ | 0.1 | $ | 32.6 | ||||||||||
Letters
of credit
|
558.6 | 15.4 | 2.4 | 576.4 | ||||||||||||
Standby
letters of credit
|
72.1 | 0.2 | 4.4 | 76.7 | ||||||||||||
Foreign
subsidiary debt guarantees
|
639.5 | 639.5 | ||||||||||||||
Total
|
$ | 1,302.7 | $ | 15.6 | $ | 6.9 | $ | 1,325.2 |
Dollars in millions
|
Less
than
1
year
|
1-3
years
|
3-5
years
|
More
than
5
years
|
Total
|
|||||||||||||||
Long-term
debt
|
$ | 1,999.2 | $ | 995.8 | $ | 996.2 | $ | 3,991.2 | ||||||||||||
Interest on
fixed rate debt
|
$ | 155.4 | 281.5 | 179.9 | 257.3 | 874.1 | ||||||||||||||
Capital lease
obligations
|
26.9 | 45.1 | 21.0 | 101.4 | 194.4 | |||||||||||||||
Bank
debt
|
32.1 | 32.1 | ||||||||||||||||||
Operating
leases
|
282.3 | 352.6 | 194.1 | 76.9 | 905.9 | |||||||||||||||
Minimum
purchase obligations
|
296.6 | 287.1 | 583.7 | |||||||||||||||||
Other
long-term liabilities
|
2.9 | 7.6 | 4.5 | 1.8 | 16.8 | |||||||||||||||
Total
|
$ | 796.2 | $ | 2,973.1 | $ | 1,395.3 | $ | 1,433.6 | $ | 6,598.2 |
Page
|
||||
Consolidated
Financial Statements
|
||||
Report of
Independent Registered Public Accounting
Firm
|
55 | |||
Consolidated
Balance Sheets as of April 3, 2009, and March 28,
2008
|
56 | |||
Consolidated
Statements of Income for the years ended April 3, 2009, March 28, 2008 and
March 30, 2007
|
58 | |||
Consolidated
Statements of Cash Flows for the years ended April 3, 2009, March 28, 2008
and March 30, 2007
|
59 | |||
Consolidated
Statements of Stockholders’ Equity for the years ended April 3, 2009,
March 28, 2008 and March 30, 2007
|
60 | |||
Notes to
Consolidated Financial
Statements
|
61 | |||
Quarterly
Financial Information
(Unaudited)
|
115 | |||
Schedule
|
||||
Schedule II,
Valuation and Qualifying Accounts for the years ended April 3, 2009, March
28, 2008 and
March 30,
2007
|
116 |
In millions
|
April
3, 2009
|
March
28, 2008
|
||||||
Current
assets:
|
||||||||
Cash and cash
equivalents
|
$ | 2,297.3 | $ | 698.9 | ||||
Receivables,
net of allowance for doubtful accounts of $55.4 (2009)
and
$43.1 (2008)
|
3,786.4 | 4,564.7 | ||||||
Prepaid expenses and other current
assets
|
1,623.5 | 1,764.5 | ||||||
Total current assets
|
7,707.2 | 7,028.1 | ||||||
Intangible
and other assets:
|
||||||||
Software, net of accumulated
amortization of $1,081.7 (2009) and
$1,005.2 (2008)
|
476.0 | 527.4 | ||||||
Outsourcing contract costs, net of
accumulated amortization of
$1,241.0 (2009) and $1,219.0
(2008)
|
683.8 | 925.4 | ||||||
Goodwill
|
3,783.6 | 3,975.2 | ||||||
Other assets
|
615.1 | 659.0 | ||||||
Total intangible and other
assets
|
5,558.5 | 6,087.0 | ||||||
Property and
equipment—at cost:
|
||||||||
Land, buildings and leasehold
improvements
|
1,131.9 | 1,208.5 | ||||||
Computers and related
equipment
|
4,176.1 | 4,546.9 | ||||||
Furniture and other
equipment
|
462.2 | 504.6 | ||||||
5,770.2 | 6,260.0 | |||||||
Less accumulated depreciation and
amortization
|
3,417.2 | 3,495.4 | ||||||
Property and equipment,
net
|
2,353.0 | 2,764.6 | ||||||
$ | 15,618.7 | $ | 15,879.7 |
In millions (except share
amounts)
|
April
3, 2009
|
March
28, 2008
|
||||||
Current
liabilities:
|
||||||||
Short-term debt and current maturities
of long-term debt
|
$ | 61.9 | $ | 838.4 | ||||
Accounts payable
|
636.5 | 798.1 | ||||||
Accrued payroll and related
costs
|
821.5 | 926.6 | ||||||
Other accrued expenses
|
1,263.8 | 1,638.7 | ||||||
Deferred revenue
|
915.3 | 1,078.5 | ||||||
Income taxes payable and deferred
income taxes
|
317.2 | 414.9 | ||||||
Total current liabilities
|
4,016.2 | 5,695.2 | ||||||
Long-term
debt, net of current maturities
|
4,172.6 | 2,635.3 | ||||||
Income tax
liabilities and deferred income taxes
|
485.6 | 1,235.6 | ||||||
Other
long-term liabilities
|
1,434.4 | 851.8 | ||||||
Commitments
and contingencies
|
||||||||
Stockholders’
equity:
|
||||||||
Preferred stock par value $1 per
share; authorized 1,000,000 shares;
none issued
|
||||||||
Common stock, par value $1 per share;
authorized 750,000,000
shares; issued 159,688,820 (2009) and
159,218,613 (2008)
|
159.7 | 159.2 | ||||||
Additional paid-in
capital
|
1,836.3 | 1,770.9 | ||||||
Earnings retained for use in
business
|
4,892.4 | 3,801.9 | ||||||
Accumulated other comprehensive income
(loss)
|
(1,003.9 | ) | 100.6 | |||||
5,884.5 | 5,832.6 | |||||||
Less common stock in treasury, at
cost, 8,190,333 (2009) and
8,101,652 shares
(2008)
|
(374.6 | ) | (370.8 | ) | ||||
Stockholders’ equity, net
|
5,509.9 | 5,461.8 | ||||||
$ | 15,618.7 | $ | 15,879.7 |
Fiscal
Year Ended
|
||||||||||||
In millions (except per-share
amounts)
|
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
|||||||||
Revenues
|
$ | 16,739.9 | $ | 16,499.5 | $ | 14,854.9 | ||||||
Costs of
services (excludes depreciation and amortization)
|
13,260.7 | 13,151.9 | 11,813.5 | |||||||||
Selling,
general and administrative
|
1,082.8 | 975.4 | 918.3 | |||||||||
Depreciation
and amortization
|
1,185.5 | 1,198.6 | 1,073.6 | |||||||||
Goodwill
impairment
|
18.9 | |||||||||||
Interest
expense
|
260.5 | 185.4 | 217.9 | |||||||||
Interest
income
|
(41.0 | ) | (37.1 | ) | (49.5 | ) | ||||||
Special
items
|
155.8 | 316.1 | ||||||||||
Other
expense/(income)
|
23.4 | (48.4 | ) | (41.3 | ) | |||||||
Total costs
and expenses
|
15,790.8 | 15,581.6 | 14,248.6 | |||||||||
Income before
taxes
|
949.1 | 917.9 | 606.3 | |||||||||
Taxes on
income
|
(166.1 | ) | 373.3 | 209.0 | ||||||||
Net
income
|
$ | 1,115.2 | $ | 544.6 | $ | 397.3 | ||||||
Earnings per
common share:
|
||||||||||||
Basic
|
$ | 7.37 | $ | 3.26 | $ | 2.25 | ||||||
Diluted
|
$ | 7.31 | $ | 3.20 | $ | 2.21 | ||||||
Fiscal
Year Ended
|
||||||||||||
In millions
|
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
|||||||||
Cash flows
from operating activities:
|
||||||||||||
Net income
|
$ | 1,115.2 | $ | 544.6 | $ | 397.3 | ||||||
Adjustments to reconcile net income to
net cash provided by
operating activities:
|
||||||||||||
Depreciation
and amortization
|
1,270.0 | 1,286.4 | 1,162.0 | |||||||||
Stock based
compensation
|
54.4 | 60.3 | 58.7 | |||||||||
Deferred
taxes
|
247.1 | (65.3 | ) | (207.8 | ) | |||||||
Special
items
|
2.3 | |||||||||||
(Gain)/loss
on dispositions, net of tax
|
(.7 | ) | 2.5 | (23.2 | ) | |||||||
Provision for
losses on accounts receivable
|
33.2 | 3.1 | 5.5 | |||||||||
Excess tax
benefit from stock based compensation
|
(1.3 | ) | (10.7 | ) | (12.1 | ) | ||||||
Foreign
currency exchange loss/(gain)
|
97.9 | (27.3 | ) | (45.5 | ) | |||||||
Impairment
losses and contract write-offs
|
52.8 | 38.7 | ||||||||||
Cash
surrender value in excess of premiums paid
|
(5.3 | ) | (3.9 | ) | ||||||||
Changes in
assets and liabilities, net of effects of acquisitions
and
dispositions:
|
||||||||||||
Decrease
(increase) in receivables
|
224.0 | (216.7 | ) | (238.9 | ) | |||||||
Increase in prepaid expenses and other
current assets
|
(164.1 | ) | (367.6 | ) | (324.1 | ) | ||||||
(Decrease) increase in
accounts payable and accruals
|
(322.5 | ) | (110.2 | ) | 395.1 | |||||||
(Decrease)increase in income taxes
payable and income tax liability
|
(820.1 | ) | 130.3 | 70.9 | ||||||||
Increase
in deferred revenue
|
235.5 | 86.6 | 340.1 | |||||||||
Other operating activities,
net
|
(29.7 | ) | (7.9 | ) | (1.7 | ) | ||||||
Net cash provided by operating
activities
|
1,986.4 | 1,342.9 | 1,578.6 | |||||||||
Cash flows
from investing activities:
|
||||||||||||
Purchases of property and
equipment
|
(698.7 | ) | (876.6 | ) | (685.9 | ) | ||||||
Outsourcing contracts
|
(165.5 | ) | (165.3 | ) | (112.7 | ) | ||||||
Acquisitions, net of cash
acquired
|
(100.3 | ) | (1,591.1 | ) | (134.3 | ) | ||||||
Business dispositions
|
2.8 | |||||||||||
Software
|
(162.7 | ) | (171.7 | ) | (154.2 | ) | ||||||
Other investing activities,
net
|
89.2 | 86.0 | 211.6 | |||||||||
Net cash used in investing
activities
|
(1,038.0 | ) | (2,718.7 | ) | (872.7 | ) | ||||||
Cash flows
from financing activities:
|
||||||||||||
Net
(repayment) borrowing of commercial paper
|
(263.4 | ) | 255.2 | |||||||||
Borrowings under lines of
credit
|
1,848.3 | 304.7 | 542.9 | |||||||||
Repayment of borrowings under lines of
credit
|
(320.2 | ) | (317.0 | ) | (564.4 | ) | ||||||
Proceeds
from debt issuance
|
3,100.0 | |||||||||||
Principal payments on long-term
debt
|
(532.2 | ) | (1,440.3 | ) | (40.8 | ) | ||||||
Proceeds
from stock options, and other common
stock
transactions
|
12.7 | 86.0 | 94.8 | |||||||||
Excess
tax benefit from stock based compensation
|
1.3 | 10.7 | 12.1 | |||||||||
Repurchase
of common stock and acquisition of
treasury
stock
|
(3.8 | ) | (1,013.2 | ) | (1,000.0 | ) | ||||||
Other
financing activities, net
|
(.6 | ) | 11.8 | (.1 | ) | |||||||
Net cash
provided by/(used in) financing activities
|
742.1 | 997.9 | (955.5 | ) | ||||||||
Effect of
exchange rate changes on cash and cash equivalents
|
(92.1 | ) | 26.7 | 9.0 | ||||||||
Net increase
(decrease) in cash and cash equivalents
|
1,598.4 | (351.2 | ) | (240.6 | ) | |||||||
Cash and cash
equivalents at beginning of year
|
698.9 | 1,050.1 | 1,290.7 | |||||||||
Cash and cash
equivalents at end of year
|
$ | 2,297.3 | $ | 698.9 | $ | 1,050.1 |
Earnings
|
Accumulated
|
|||||||||||||||||||||||||||||||
Additional
|
Retained
|
Other
|
Common
|
Unearned
|
||||||||||||||||||||||||||||
In
millions except shares in
|
Common
Stock
|
Paid-In
|
For
Use in
|
Comprehensive
|
Stock
in
|
Restricted
|
||||||||||||||||||||||||||
thousands
|
Shares
|
Amount
|
Capital
|
Business
|
Income
(Loss)
|
Treasury
|
Stock
|
Total
|
||||||||||||||||||||||||
Balance at
March 31, 2006
|
194,904.3 | $ | 194.9 | $ | 1,882.0 | $ | 4,574.6 | $ | (84.7 | ) | $ | (347.1 | ) | $ | (24.0 | ) | $ | 6,195.7 | ||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
397.3 | 397.3 | ||||||||||||||||||||||||||||||
Currency
translation adjustment
|
204.0 | 204.0 | ||||||||||||||||||||||||||||||
Unfunded
pension obligation
|
58.8 | 58.8 | ||||||||||||||||||||||||||||||
Unrealized
gain on available for sale securities
|
1.0 | 1.0 | ||||||||||||||||||||||||||||||
Reclassification
adjustment for gains realized in net
income
|
(6.9 | ) | (6.9 | ) | ||||||||||||||||||||||||||||
Comprehensive
income
|
654.2 | |||||||||||||||||||||||||||||||
Acquisition
of treasury stock
|
(6.9 | ) | (6.9 | ) | ||||||||||||||||||||||||||||
Stock based
compensation expense and option exercises
|
2,603.0 | 2.6 | 146.9 | 149.5 | ||||||||||||||||||||||||||||
Amortization
and forfeitures of restricted stock
|
24.0 | 24.0 | ||||||||||||||||||||||||||||||
Repurchase
common stock
|
(16,402.2 | ) | (16.4 | ) | (152.6 | ) | (831.0 | ) | (1,000.0 | ) | ||||||||||||||||||||||
Adjustment to
initially apply FASB Statement No. 158,
net
of taxes
|
(476.5 | ) | (476.5 | ) | ||||||||||||||||||||||||||||
Balance at
March 30, 2007
|
181,105.1 | 181.1 | 1,876.3 | 4,140.9 | (304.3 | ) | (354.0 | ) | 5,540.0 | |||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
544.6 | 544.6 | ||||||||||||||||||||||||||||||
Currency
translation adjustment
|
225.8 | 225.8 | ||||||||||||||||||||||||||||||
Unfunded
pension obligation
|
180.8 | 180.8 | ||||||||||||||||||||||||||||||
Unrealized
gain on available for sale securities
|
.5 | .5 | ||||||||||||||||||||||||||||||
Reclassification
adjustment for gains realized in net
income
|
(2.2 | ) | (2.2 | ) | ||||||||||||||||||||||||||||
Comprehensive
income
|
949.5 | |||||||||||||||||||||||||||||||
Acquisition
of treasury stock
|
(16.8 | ) | (16.8 | ) | ||||||||||||||||||||||||||||
Stock based
compensation expense and option exercises
|
2,425.0 | 2.4 | 159.4 | 161.8 | ||||||||||||||||||||||||||||
Repurchase
common stock
|
(24,311.5 | ) | (24.3 | ) | (263.3 | ) | (712.2 | ) | (999.8 | ) | ||||||||||||||||||||||
Adjustment to
initially apply FASB Interpretation No. 48,
net
of taxes
|
(1.5 | ) | (171.4 | ) | (172.9 | ) | ||||||||||||||||||||||||||
Balance at
March 28, 2008
|
159,218.6 | 159.2 | 1,770.9 | 3,801.9 | 100.6 | (370.8 | ) | 5,461.8 | ||||||||||||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||||||
Net
income
|
1,115.2 | 1,115.2 | ||||||||||||||||||||||||||||||
Currency
translation adjustment
|
(637.5 | ) | (637.5 | ) | ||||||||||||||||||||||||||||
Unfunded
pension obligation
|
(467.0 | ) | (467.0 | ) | ||||||||||||||||||||||||||||
Comprehensive
income
|
10.7 | |||||||||||||||||||||||||||||||
Acquisition
of treasury stock
|
(3.8 | ) | (3.8 | ) | ||||||||||||||||||||||||||||
Stock based
compensation expense and option exercises
|
470.2 | .5 | 65.4 | 65.9 | ||||||||||||||||||||||||||||
Adjustment
related to adoption of FASB Statement No. 158
|
(24.7 | ) | (24.7 | ) | ||||||||||||||||||||||||||||
Balance at
April 3, 2009
|
159,688.8 | $ | 159.7 | $ | 1,836.3 | $ | 4,892.4 | $ | (1,003.9 | ) | $ | (374.6 | ) | $ | 5,509.9 |
Before
Adoption of SFAS No. 158
|
Adjustments
|
After
Adoption of SFAS No. 158
|
||||||||||
Other
assets
|
$ | 603.2 | $ | (146.5 | ) | $ | 456.7 | |||||
Total
assets
|
13,886.7 | (146.5 | ) | 13,740.2 | ||||||||
Other accrued
expense
|
1,998.1 | 16.0 | 2,014.1 | |||||||||
Income taxes
payable/deferred income taxes
|
1,163.2 | (228.6 | ) | 934.6 | ||||||||
Total current
liabilities
|
5,868.7 | (212.6 | ) | 5,656.1 | ||||||||
Other
long-term liabilities
|
589.3 | 542.6 | 1,131.9 | |||||||||
Accumulated
other comprehensive income
|
172.2 | (476.5 | ) | (304.3 | ) | |||||||
Total
stockholders’ equity
|
6,016.5 | (476.5 | ) | 5,540.0 | ||||||||
Total
liabilities and stockholders’ equity
|
13,886.7 | (146.5 | ) | 13,740.2 |
Fiscal
Year Ended
|
||||||||||||
April
3, 2009
|
March
28, 2008
|
March
30, 2007
|
||||||||||
Cost of
services
|
$ | 13.4 | $ | 14.0 | $ | 13.8 | ||||||
Selling,
general and administrative
|
41.0 | 35.9 | 44.9 | |||||||||
Special
items
|
10.4 | |||||||||||
Total
|
$ | 54.4 | $ | 60.3 | $ | 58.7 | ||||||
Total net of
tax
|
$ | 33.6 | $ | 37.7 | $ | 41.8 |
Fiscal
Year
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Risk-free
interest rate
|
3.17 | % | 4.58 | % | 4.84 | % | ||||||
Expected
volatility
|
36 | % | 32 | % | 28 | % | ||||||
Expected
lives
|
4.08
years
|
4.15
years
|
4.09
years
|
Property and
Equipment:
|
|
Buildings
|
10 to 40
years
|
Computers and related
equipment
|
3 to 5
years
|
Furniture and other
equipment
|
2 to 10
years
|
Leasehold improvements
|
Shorter of
lease term or useful life
|
Software
|
2 to 10
years
|
Credit
information files
|
10 to 20
years
|
Acquired
contract related intangibles
|
Contract life
and first contract renewal
|
Customer
related intangibles
|
Expected
customer service life
|
Outsourcing
contract costs
|
Contract
life, excluding option years
|
Fiscal
Year
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Interest
|
$ | 257.6 | $ | 176.0 | $ | 144.4 | ||||||
Taxes on
income, net of refunds
|
323.1 | 495.8 | 304.8 |
April
3, 2009
|
March
28, 2008
|
|||||||||||||||||||||||
Notional Amount
|
Carrying
Amount
|
Estimated
Fair Value Amount
|
Notional
Amount
|
Carrying
Amount
|
Estimated
Fair Value Amount
|
|||||||||||||||||||
Long-term
debt (Note 9)
|
- | $ | 4,172.6 | $ | 4,154.5 | - | $ | 2,635.3 | $ | 3,055.4 | ||||||||||||||
Foreign
currency forward contracts, net asset
|
$ | 951.2 | 0.5 | 0.5 | $ | 982.8 | 1.1 | 1.1 | ||||||||||||||||
$ | 951.2 | $ | 4,173.1 | $ | 4,155.0 | $ | 982.8 | $ | 2,636.4 | $ | 3,056.5 |
|
Level
1—
|
quoted prices
unadjusted for identical assets or liability 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—
|
unobservable
inputs that reflect the entity’s own assumptions which market participants
would use in pricing the asset or
liability.
|
April
3, 2009
|
Fair
Value Hierarchy
|
||||||||||||
Fair
Value
|
Level
1
|
Level
2
|
Level
3
|
||||||||||
Money market
funds
|
$ | 1,190.3 | $ | 1,190.3 | |||||||||
Time
deposits
|
549.3 | 549.3 | |||||||||||
Derivative
assets
|
0.5 | $ | 0.5 | ||||||||||
Total
|
$ | 1,740.1 | $ | 1,739.6 | $ | 0.5 |
$
|
Fiscal
Year
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Net
income
|
$ | 1,115.2 | $ | 544.6 | $ | 397.3 | ||||||
Common share
information (in millions):
|
||||||||||||
Average common shares outstanding for
basic EPS
|
151.388 | 167.233 | 176.263 | |||||||||
Dilutive effect of stock options and
equity awards
|
1.226 | 2.935 | 3.470 | |||||||||
Shares for
diluted EPS
|
152.614 | 170.168 | 179.733 | |||||||||
Basic EPS
|
$ | 7.37 | $ | 3.26 | $ | 2.25 | ||||||
Diluted EPS
|
$ | 7.31 | $ | 3.20 | $ | 2.21 | ||||||
Estimated
Fair Values
|
||||
Accounts
receivable
|
$ | 39 | ||
Pre-paid and other current
assets
|
10 | |||
Other
assets
|
29 | |||
Net property,
plant and equipment
|
7 | |||
Identifiable
intangible assets
|
27 | |||
Goodwill
|
221 | |||
Accounts
payable and accrued expenses
|
(31 | ) | ||
Other
liabilities
|
(27 | ) | ||
Net
assets acquired and goodwill
|
$ | 275 | ||
Purchase
price
|
$ | 369 | ||
Less
cash acquired
|
(94 | ) | ||
Purchase
price net of cash acquired
|
$ | 275 | ||
As
Reported
|
Pro
forma
|
|||||||||||||||
Twelve
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
March
28, 2008
|
March
30, 2007
|
March
28, 2008
|
March
30, 2007
|
|||||||||||||
Revenue
|
$ | 16,499.5 | $ | 14,854.9 | $ | 16,721.2 | $ | 15,136.2 | ||||||||
Net
Income
|
$ | 544.6 | $ | 397.3 | $ | 544.0 | $ | 398.4 | ||||||||
Basic
Earnings Per Share
|
$ | 3.26 | $ | 2.25 | $ | 3.26 | $ | 2.26 | ||||||||
Diluted
Earnings Per Share
|
$ | 3.20 | $ | 2.21 | $ | 3.20 | $ | 2.22 |
Acquisition
Integration Liabilities
|
Paid
as of
April
3, 2009
|
Balance
Remaining at April 3, 2009
|
||||||||||
Facility
consolidations
|
$ | 3.4 | $ | 3.4 | ||||||||
Severance
payments
|
4.6 | $ | 4.6 | |||||||||
Total
|
$ | 8.0 | $ | 4.6 | $ | 3.4 |
Estimated
Fair
Values
|
||||
Accounts
receivable
|
$ | 117 | ||
Prepaids and
other current assets
|
18 | |||
Other
assets
|
5 | |||
Net property,
plant and equipment
|
35 | |||
Identifiable
intangible assets
|
176 | |||
Goodwill
|
1,099 | |||
Accounts
payable and accrued expenses
|
(47 | ) | ||
Other
liabilities
|
(87 | ) | ||
Net
assets acquired and goodwill
|
$ | 1,316 | ||
Purchase
price
|
$ | 1,437 | ||
Less
cash acquired
|
(121 | ) | ||
Purchase
price net of cash acquired
|
$ | 1,316 |
As
Reported
|
Pro
Forma
|
|||||||||||||||
Twelve
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
March
28, 2008
|
March
30, 2007
|
March
28, 2008
|
March
30, 2007
|
|||||||||||||
Revenue
|
$ | 16,499.5 | $ | 14,854.9 | $ | 16,619.1 | $ | 15,318.5 | ||||||||
Net
Income
|
$ | 544.6 | $ | 397.3 | $ | 531.5 | $ | 372.0 | ||||||||
Basic
Earnings Per Share
|
$ | 3.26 | $ | 2.25 | $ | 3.18 | $ | 2.11 | ||||||||
Diluted
Earnings Per Share
|
$ | 3.20 | $ | 2.21 | $ | 3.12 | $ | 2.07 |
Acquisition
Integration
Liabilities
|
Paid
as of
April
3, 2009
|
Other
|
Balance
Remaining
at
April 3, 2009
|
|||||||||||||
Facility
consolidations
|
$ | 4.4 | $ | (1.7 | ) | $ | (0.3 | ) | $ | 2.4 | ||||||
Severance
payments
|
4.9 | (3.9 | ) | (1.0 | ) | |||||||||||
Other
|
0.1 | (0.1 | ) | |||||||||||||
Total
|
$ | 9.4 | $ | (5.7 | ) | $ | (1.3 | ) | $ | 2.4 |
North
American Public Sector
|
Global Outsourcing Services
|
BS&S
− Consulting
|
BS&S
− Financial Services Sector
|
BS&S −
Other
|
Total
|
|||||||||||||||||||
Balance as of
March 30, 2007
|
$ | 645.8 | $ | 830.9 | $ | 463.9 | $ | 488.2 | $ | 71.3 | $ | 2,500.1 | ||||||||||||
Additions
(Adjustments)
|
(4.6 | ) | 452.4 | 195.1 | 2.7 | 671.0 | 1,316.6 | |||||||||||||||||
Foreign
currency translation
|
104.8 | 45.5 | 2.9 | 5.3 | 158.5 | |||||||||||||||||||
Transfers
|
33.6 | (33.6 | ) | |||||||||||||||||||||
Balance as of
March 28, 2008
|
674.8 | 1,388.1 | 670.9 | 493.8 | 747.6 | 3,975.2 | ||||||||||||||||||
Additions
(Adjustments)
|
17.2 | 9.2 | 10.1 | 10.8 | 8.3 | 55.6 | ||||||||||||||||||
Foreign
currency translation
|
(152.1 | ) | (60.7 | ) | (3.8 | ) | (11.7 | ) | (228.3 | ) | ||||||||||||||
Impairment
|
(18.9 | ) | (18.9 | ) | ||||||||||||||||||||
Balance as of
April 3, 2009
|
$ | 692.0 | $ | 1,245.2 | $ | 620.3 | $ | 500.8 | $ | 725.3 | $ | 3,783.6 |
April
3, 2009,
|
||||||||||||
Gross Carrying Value
|
AccumulatedAmortization
|
Net
|
||||||||||
Software
|
$ | 1,557.7 | $ | 1,081.7 | $ | 476.0 | ||||||
Outsourcing
contract costs
|
1,924.8 | 1,241.0 | 683.8 | |||||||||
Customer and
other intangible assets
|
402.3 | 200.4 | 201.9 | |||||||||
Total intangible assets
|
$ | 3,884.8 | $ | 2,523.1 | $ | 1,361.7 |
March
28, 2008
|
||||||||||||
Gross Carrying Value
|
AccumulatedAmortization
|
Net
|
||||||||||
Software
|
$ | 1,532.6 | $ | 1,005.2 | $ | 527.4 | ||||||
Outsourcing
contract costs
|
2,144.4 | 1,219.0 | 925.4 | |||||||||
Customer and
other intangible assets
|
387.5 | 147.9 | 239.6 | |||||||||
Total intangible assets
|
$ | 4,064.5 | $ | 2,372.1 | $ | 1,692.4 |
April
3, 2009
|
March
28, 2008
|
|||||||
Commercial
software products
|
$ | 178.7 | $ | 181.2 | ||||
Internal-use
software
|
18.9 | 26.1 | ||||||
Purchased
software
|
278.4 | 320.1 | ||||||
Total
|
$ | 476.0 | $ | 527.4 |
Liability
as of March 28, 2008
|
Less
Payments
|
Other(1)
|
Liability
as of
April
3, 2009
|
|||||||||||||
Workforce
reductions
|
$ | 61.3 | $ | (57.4 | ) | $ | (1.7 | ) | $ | 2.2 | ||||||
Other
|
32.8 | (10.2 | ) | (4.6 | ) | 18.0 | ||||||||||
Total
|
$ | 94.1 | $ | (67.6 | ) | $ | (6.3 | ) | $ | 20.2 |
|
Liability
as of March 30, 2008
|
Total
pre-tax
charges
recorded
fiscal 2008
|
Less
Payments
|
Other(1)
|
Liability
as of
March
28, 2008
|
|||||||||||||||
Workforce
reductions
|
$ | 93.5 | $ | 110.7 | $ | (150.9 | ) | $ | 8.0 | $ | 61.3 | |||||||||
Other
|
38.8 | 22.7 | (29.5 | ) | 0.8 | 32.8 | ||||||||||||||
Total
|
$ | 132.3 | $ | 133.4 | $ | (180.4 | ) | $ | 8.8 | $ | 94.1 |
|
(1)
|
Primarily
consist of foreign currency translation
adjustments.
|
Fiscal
Year Ended
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Domestic
entities
|
$ | 504.3 | $ | 578.3 | $ | 640.6 | ||||||
Entities
outside the United States
|
444.8 | 339.6 | (34.3 | ) | ||||||||
Total
|
$ | 949.1 | $ | 917.9 | $ | 606.3 |
Fiscal
Year Ended
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Current
|
||||||||||||
Federal
|
$ | (391.2 | ) | $ | 339.3 | 271.4 | ||||||
State
|
(133.6 | ) | 33.5 | 26.3 | ||||||||
Foreign
|
111.6 | 65.8 | 119.1 | |||||||||
(413.2 | ) | 438.6 | 416.8 | |||||||||
Deferred
|
||||||||||||
Federal
|
270.1 | (85.5 | ) | (88.9 | ) | |||||||
State
|
7.0 | (18.3 | ) | (20.9 | ) | |||||||
Foreign
|
(30.0 | ) | 38.5 | (98.0 | ) | |||||||
247.1 | (65.3 | ) | (207.8 | ) | ||||||||
Total income
tax expense (benefit)
|
$ | (166.1 | ) | $ | 373.3 | $ | 209.0 |
Fiscal
Year Ended
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Statutory
rate
|
35.0 | % | 35.0 | % | 35.0 | % | ||||||
State income
tax, net of federal tax
|
1.6 | 0.6 | 0.6 | |||||||||
Change in
uncertain tax positions
|
7.6 | 3.4 | 1.2 | |||||||||
Foreign tax
rate differential
|
(2.6 | ) | 1.0 | 5.4 | ||||||||
Income tax
credits
|
(1.0 | ) | (0.7 | ) | (7.8 | ) | ||||||
Tax audit
settlements
|
(56.6 | ) | ||||||||||
Other items,
net
|
(1.5 | ) | 1.4 | 0.1 | ||||||||
Effective tax
rate
|
(17.5 | %) | 40.7 | % | 34.5 | % | ||||||
April
3, 2009
|
March
28, 2008
|
|||||||
Deferred tax
assets (liabilities)
|
||||||||
Employee benefits
|
$ | 523.9 | $ | 367.8 | ||||
Tax loss/credit
carryforwards
|
263.2 | 260.9 | ||||||
Depreciation and
amortization
|
(397.5 | ) | (348.5 | ) | ||||
Contract accounting
|
(365.7 | ) | (373.8 | ) | ||||
Investment basis
differences
|
(90.6 | ) | (51.3 | ) | ||||
Accrued Interest
|
20.4 | 114.9 | ||||||
Foreign
Currency
|
29.2 | (79.8 | ) | |||||
State
Taxes
|
24.0 | 79.8 | ||||||
Other Assets
|
103.0 | 216.8 | ||||||
Other
Liabilities
|
(43.3 | ) | (133.6 | ) | ||||
Subtotal
|
66.6 | 53.2 | ||||||
Valuation allowance
|
(147.2 | ) | (129.5 | ) | ||||
Total
deferred tax assets (liabilities)
|
$ | (80.6 | ) | $ | (76.3 | ) | ||
Fiscal
Year Ended
|
||||||||
2009
|
2008
|
|||||||
Balance at
beginning of fiscal year
|
$ | 1,350.3 | $ | 1,293.7 | ||||
Gross
increases related to prior year tax positions
|
88.2 | 60.3 | ||||||
Gross
decreases related to prior year tax positions
|
(797.4 | ) | (229.0 | ) | ||||
Gross
increases related to current year tax positions
|
39.8 | 162.2 | ||||||
Settlements
|
(211.1 | ) | (4.7 | ) | ||||
Foreign
exchange and others
|
(28.0 | ) | 67.8 | |||||
Balance at
end of fiscal year
|
$ | 441.8 | $ | 1,350.3 |
Jurisdiction:
|
Tax Years Subject to Examination
(Fiscal Year Ending):
|
|
United States
– federal
|
2005 and
forward
|
|
United States
– Various States
|
2001 and
forward
|
|
Canada
|
2004 and
forward
|
|
France
|
2005 and
forward
|
|
Germany
|
2001 and
forward
|
|
United
Kingdom
|
2007 and
forward
|
April
3, 2009
|
March
28, 2008
|
|||||||
Billed trade
accounts
|
$ | 2,233.1 | $ | 2,516.2 | ||||
Unbilled
recoverable amounts under contracts in progress
|
1,478.9 | 1,799.8 | ||||||
Other
receivables
|
74.4 | 248.7 | ||||||
Total
|
$ | 3,786.4 | $ | 4,564.7 |
April
3, 2009
|
March
28, 2008
|
Effective
Rate
|
||||||||||
6.25% term
notes, due March 2009
|
$ | 200.0 | 6.32 | % | ||||||||
7.375% term
notes, due June 2011
|
$ | 499.2 | 498.8 | 7.48 | ||||||||
5.00% term
notes, due February 2013
|
298.5 | 298.2 | 5.16 | |||||||||
3.50% term
notes, due April 2008
|
300.0 | 3.77 | ||||||||||
6.50% term
notes, due 2018
|
996.2 | 995.8 | 6.56 | |||||||||
5.50% term
notes, due 2013
|
697.3 | 696.6 | 5.61 | |||||||||
Credit
Facility, due 2012
|
1,500.0 | |||||||||||
Capitalized
lease liabilities
|
194.4 | 153.8 | ||||||||||
Notes
payable
|
16.8 | 21.0 | ||||||||||
Total
long-term debt
|
4,202.4 | 3,164.2 | ||||||||||
Less current
maturities
|
29.8 | 528.9 | ||||||||||
Total
|
$ | 4,172.6 | $ | 2,635.3 |
|
|||||
2010………………………………………………. | $ | 29.8 | |||
2011………………………………………………. | 533.9 | ||||
2012………………………………………………. | 1,517.9 | ||||
2013………………………………………………. | 1,008.1 | ||||
2014………………………………………………. | 13.3 | ||||
Thereafter
|
1,099.4 | ||||
Total
|
$ | 4,202.4 |
Fiscal
2010
|
Fiscal
2011
|
Fiscal
2012 and thereafter
|
Total
|
|||||||||||||
Performance
guarantees:
|
||||||||||||||||
Surety bonds
|
$ | 32.5 | $ | 0.1 | $ | 32.6 | ||||||||||
Letters of credit
|
558.6 | $ | 15.4 | 2.4 | 576.4 | |||||||||||
Standby
letters of credit
|
72.1 | 0.2 | 4.4 | 76.7 | ||||||||||||
Foreign
subsidiary debt guarantees
|
639.5 | 639.5 | ||||||||||||||
Total
|
$ | 1,302.7 | $ | 15.6 | $ | 6.9 | $ | 1,325.2 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Reconciliation
of Projected Benefit Obligation
|
||||||||||||||||
Projected
benefit obligation at beginning of year
|
$ | 2,284.5 | $ | 2,202.9 | $ | 2,177.4 | $ | 2,346.3 | ||||||||
Service
cost
|
115.6 | 119.6 | 49.3 | 57.9 | ||||||||||||
Interest
cost
|
148.8 | 130.0 | 106.4 | 120.7 | ||||||||||||
Plan
participants' contributions
|
55.3 | 47.5 | 8.2 | 9.6 | ||||||||||||
Amendments
|
13.6 | .9 | ||||||||||||||
Business
(dispositions)/contract acquisitions
|
16.5 | (184.5 | ) | |||||||||||||
Settlement/curtailment
|
(1.1 | ) | (2.9 | ) | (32.3 | ) | ||||||||||
Actuarial
loss
|
(351.0 | ) | (147.2 | ) | (355.2 | ) | (150.8 | ) | ||||||||
Benefits
paid
|
(103.1 | ) | (79.0 | ) | (76.5 | ) | (72.3 | ) | ||||||||
Adoption of
SFAS No. 158 measurement date provisions
|
55.9 | 31.0 | ||||||||||||||
Foreign
currency exchange rate changes
|
(492.8 | ) | 81.9 | |||||||||||||
Projected
benefit obligation at end of year
|
$ | 2,204.9 | $ | 2,284.5 | $ | 1,464.3 | $ | 2,177.4 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Reconciliation
of Fair Value of Plan Assets
|
||||||||||||||||
Fair value of
plan assets at beginning of year
|
$ | 2,082.5 | $ | 1,892.6 | $ | 1,937.7 | $ | 1,902.2 | ||||||||
Actual return
on plan assets
|
(746.3 | ) | 98.0 | (384.9 | ) | 99.3 | ||||||||||
Employer
contribution
|
120.5 | 126.0 | 92.9 | 114.5 | ||||||||||||
Plan
participants' contributions
|
55.3 | 47.5 | 8.2 | 9.6 | ||||||||||||
Benefits
paid
|
(103.1 | ) | (79.0 | ) | (76.5 | ) | (72.3 | ) | ||||||||
Business/contract
acquisitions (disposition)
|
.3 | 13.1 | (141.3 | ) | ||||||||||||
Plan
settlement
|
(1.1 | ) | (2.9 | ) | (29.6 | ) | ||||||||||
Adoption of
SFAS No. 158 measurement date provisions
|
60.1 | (3.4 | ) | |||||||||||||
Foreign
currency exchange rate changes
|
(431.4 | ) | 55.3 | |||||||||||||
Fair
value of plan assets at end of year
|
$ | 1,467.9 | $ | 2,082.5 | $ | 1,155.7 | $ | 1,937.7 | ||||||||
Funded
status
|
$ | (737.0 | ) | $ | (202.0 | ) | $ | (308.6 | ) | $ | (239.7 | ) | ||||
Contribution
adjustment
|
27.4 | 17.2 | ||||||||||||||
Funded status
at End of Year
|
$ | (737.0 | ) | $ | (174.6 | ) | $ | (308.6 | ) | $ | (222.5 | ) |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Non-current
assets
|
$ | 4.4 | $ | 1.4 | $ | 18.8 | ||||||||||
Current
liabilities
|
$ | (6.6 | ) | (6.2 | ) | (7.6 | ) | (5.8 | ) | |||||||
Non-current
liabilities
|
(730.4 | ) | (172.8 | ) | (302.5 | ) | (235.5 | ) | ||||||||
Accumulated
other comprehensive loss
|
669.8 | 107.7 | 453.7 | 328.9 | ||||||||||||
Net amount
recorded
|
$ | (67.2 | ) | $ | (66.9 | ) | $ | 145.0 | $ | 106.4 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Net
transition obligation
|
$ | (6.8 | ) | $ | (8.5 | ) | ||||||||||
Prior service
credit (cost)
|
$ | 2.0 | $ | 1.1 | (1.6 | ) | (3.1 | ) | ||||||||
Net actuarial
loss
|
(671.8 | ) | (108.8 | ) | (445.3 | ) | (317.3 | ) | ||||||||
Accumulated
other comprehensive loss
|
$ | (669.8 | ) | $ | (107.7 | ) | $ | (453.7 | ) | $ | (328.9 | ) |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Discount
rate
|
7.9 | % | 6.6 | % | 6.7 | % | 5.6 | % | ||||||||
Rates of
increase in compensation levels
|
4.3 | % | 4.2 | % | 3.4 | % | 3.5 | % |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
End of Year
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Projected
benefit obligation
|
$ | 2,204.9 | $ | 2,284.5 | $ | 1,464.3 | $ | 2,177.4 | ||||||||
Accumulated
benefit obligation
|
2,084.0 | 2,138.8 | 1,259.8 | 1,803.6 | ||||||||||||
Fair value of
plan assets
|
1,467.9 | 2,082.5 | 1,155.7 | 1,937.7 |
Plans
with Projected
|
Plans
with Accumulated
|
|||||||||||||||
Benefit
Obligation in
|
Benefit
Obligation in
|
|||||||||||||||
Excess
of Plan Assets
|
Excess
of Plan Assets
|
|||||||||||||||
(U.S.
and Non-U.S.)
|
(U.S.
and Non-U.S.)
|
|||||||||||||||
End of Year
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Projected
benefit obligation
|
$ | 3,649.3 | $ | 4,171.0 | $ | 3,496.9 | $ | 467.6 | ||||||||
Accumulated
benefit obligation
|
3,328.9 | 3,688.7 | 3,216.2 | 429.0 | ||||||||||||
Fair value of
plan assets
|
2,606.7 | 3,711.2 | 2,460.0 | 220.8 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||||||||
Service
cost
|
$ | 115.6 | $ | 119.6 | $ | 128.2 | $ | 49.3 | $ | 57.9 | $ | 64.2 | ||||||||||||
Interest
cost
|
148.8 | 130.0 | 115.4 | 106.4 | 120.7 | 102.2 | ||||||||||||||||||
Expected
return on assets
|
(171.4 | ) | (152.6 | ) | (132.6 | ) | (119.1 | ) | (143.7 | ) | (121.4 | ) | ||||||||||||
Amortization
of transition obligation
|
1.2 | 1.3 | 1.2 | |||||||||||||||||||||
Amortization
of prior service costs
|
.9 | .4 | 3.4 | .7 | .8 | (1.1 | ) | |||||||||||||||||
Amortization
of unrecognized net loss
|
3.4 | 14.6 | 16.0 | 11.3 | 21.2 | 15.4 | ||||||||||||||||||
Settlement/curtailment
|
(.8 | ) | (.5 | ) | 3.0 | .7 | ||||||||||||||||||
Special
termination benefits/other costs
|
5.7 | 5.7 | ||||||||||||||||||||||
Net periodic
pension cost
|
$ | 96.5 | $ | 112.0 | $ | 129.9 | $ | 49.8 | $ | 66.9 | $ | 66.9 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||||||||||
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
|||||||||||||||||||
Discount or
settlement rates
|
6.6 | % | 6.0 | % | 5.9 | % | 5.5 | % | 5.0 | % | 4.9 | % | ||||||||||||
Expected
long-term rates of return on assets
|
8.5 | % | 8.5 | % | 8.5 | % | 6.8 | % | 7.2 | % | 7.0 | % | ||||||||||||
Rates of
increase in compensation levels
|
4.3 | % | 4.2 | % | 4.4 | % | 3.4 | % | 3.6 | % | 3.5 | % |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
Asset Category
|
April
3, 2009
|
Dec.
31, 2007
|
April
3, 2009
|
Dec.
31, 2007
|
||||||||||||
Equity
securities
|
74 | % | 72 | % | 59 | % | 63 | % | ||||||||
Debt
securities
|
26 | % | 28 | % | 31 | % | 26 | % | ||||||||
Other
|
10 | % | 11 | % | ||||||||||||
Total
|
100 | % | 100 | % | 100 | % | 100 | % |
Pension
Plans
|
||||||||
U.S.
|
Non-U.S.
|
|||||||
Plans
|
Plans
|
|||||||
Employer
contributions
|
||||||||
2010
|
$ | 95 | $ | 70 | ||||
Expected
Benefit Payments
|
||||||||
2010
|
$ | 110 | $ | 60 | ||||
2011
|
115 | 65 | ||||||
2012
|
120 | 70 | ||||||
2013
|
130 | 75 | ||||||
2014
|
140 | 85 | ||||||
2015-2019
|
830 | 505 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Reconciliation
of Accumulated Benefit Obligation
|
||||||||||||||||
Accumulated
benefit obligation at beginning of year
|
$ | 165.6 | $ | 173.0 | $ | 11.5 | $ | 9.6 | ||||||||
Service
cost
|
2.3 | 2.4 | .2 | .2 | ||||||||||||
Interest
cost
|
10.4 | 10.0 | .6 | .5 | ||||||||||||
Plan
participants' contributions
|
1.5 | 2.0 | ||||||||||||||
Business
combination
|
.4 | |||||||||||||||
Curtailment/settlement
|
(.4 | ) | ||||||||||||||
Actuarial
gain
|
12.8 | (12.7 | ) | (4.8 | ) | (.2 | ) | |||||||||
Benefits
paid
|
(14.1 | ) | (9.5 | ) | (.2 | ) | (.1 | ) | ||||||||
Other
adjustments
|
3.0 | .2 | ||||||||||||||
Foreign
currency exchange rate changes
|
(2.0 | ) | 1.5 | |||||||||||||
Accumulated
benefit obligation at end of year
|
$ | 181.5 | $ | 165.6 | $ | 5.1 | $ | 11.5 | ||||||||
Reconciliation
of Fair Value of Plan Assets
|
||||||||||||||||
Fair value of
plan assets at beginning of year
|
$ | 84.8 | $ | 83.2 | ||||||||||||
Actual return
on plan assets
|
(26.0 | ) | 4.2 | |||||||||||||
Employer
contribution
|
7.8 | 4.9 | $ | .2 | $ | .1 | ||||||||||
Plan
participants' contributions
|
1.5 | 2.0 | ||||||||||||||
Benefits
paid
|
(14.1 | ) | (9.5 | ) | (.2 | ) | (.1 | ) | ||||||||
Other
adjustments
|
1.8 | |||||||||||||||
Fair
value of plan assets at end of year
|
$ | 55.8 | $ | 84.8 | $ | - | $ | - | ||||||||
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Funded
status
|
$ | (125.7 | ) | $ | (80.8 | ) | $ | (5.1 | ) | $ | (11.5 | ) | ||||
Contribution
adjustment
|
1.3 | |||||||||||||||
Funded status
at end of year
|
$ | (125.7 | ) | $ | (79.5 | ) | $ | (5.1 | ) | $ | (11.5 | ) |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
April
3, 2009
|
March
28, 2008
|
April
3, 2009
|
March
28, 2008
|
|||||||||||||
Current
liabilities
|
$ | (5.0 | ) | $ | (5.3 | ) | $ | (.2 | ) | $ | (.2 | ) | ||||
Non-current
liabilities
|
(120.7 | ) | (74.2 | ) | (4.9 | ) | (11.3 | ) | ||||||||
Accumulated
other comprehensive loss
|
93.4 | 54.1 | (3.4 | ) | 1.5 | |||||||||||
Net amount
recorded
|
$ | (32.3 | ) | $ | (25.4 | ) | $ | (8.5 | ) | $ | (10.0 | ) |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||
April
3, 2009
|
March
28, 2008
|
April
3, 2009
|
March
28, 2008
|
|||||||||||||
Net
transition obligation
|
$ | (5.3 | ) | $ | (7.4 | ) | $ | (.2 | ) | $ | (.4 | ) | ||||
Prior service
cost
|
(1.0 | ) | (1.6 | ) | ||||||||||||
Net actuarial
(loss ) gain
|
(87.1 | ) | (45.1 | ) | 3.6 | (1.1 | ) | |||||||||
Accumulated
other comprehensive (loss) gain
|
$ | (93.4 | ) | $ | (54.1 | ) | $ | 3.4 | $ | (1.5 | ) |
Plans
with Accumulated
|
||||||||||||||||||||||||
Postretirement
Benefit
|
||||||||||||||||||||||||
Obligation
in Excess
|
||||||||||||||||||||||||
of
the Fair Value of
|
||||||||||||||||||||||||
Plan
Assets
|
||||||||||||||||||||||||
U.S.
Plans
|
Non-U.S.
Plans
|
(U.S.
and Non-U.S.)
|
||||||||||||||||||||||
End of Fiscal Year
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
||||||||||||||||||
Accumulated
postretirement benefit obligation
|
$ | 181.5 | $ | 165.6 | $ | 5.1 | $ | 11.5 | $ | 186.6 | $ | 177.1 | ||||||||||||
Fair value of
plan assets
|
55.8 | 84.8 | 55.8 | 84.8 |
One
Percentage Point
|
||||||||
Increase
|
Decrease
|
|||||||
Effect on
accumulated postretirement benefit obligation as of April 3,
2009
|
$ | 9.7 | $ | (9.6 | ) | |||
Effect on net
periodic postretirement benefit cost for fiscal 2009
|
$ | 1.0 | $ | (1.2 | ) |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||||||||||
Fiscal
Year End
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||||||||||
Service
cost
|
$ | 2.3 | $ | 2.4 | $ | 2.2 | $ | .2 | $ | .2 | $ | .3 | ||||||||||||
Interest
cost
|
10.4 | 10.0 | 8.8 | .5 | .5 | .5 | ||||||||||||||||||
Expected
return on assets
|
(7.2 | ) | (6.9 | ) | (6.4 | ) | ||||||||||||||||||
Amortization
of transition obligation
|
1.6 | 1.6 | 1.6 | .1 | .1 | .1 | ||||||||||||||||||
Amortization
of prior service costs
|
.4 | .7 | .7 | |||||||||||||||||||||
Recognized
actuarial loss
|
3.2 | 4.3 | 3.6 | .1 | .1 | .1 | ||||||||||||||||||
Settlement/curtailment
|
(.2 | ) | ||||||||||||||||||||||
Net provision
for postretirement benefits
|
$ | 10.7 | $ | 12.1 | $ | 10.3 | $ | .9 | $ | .9 | $ | 1.0 |
U.S.
Plans
|
Non-U.S.
Plans
|
|||||||||||||||||||||||
Fiscal
Year End
|
2009
|
2008
|
2007
|
2009
|
2008
|
2007
|
||||||||||||||||||
Discount or
settlement rates
|
6.5 | % | 5.9 | % | 5.9 | % | 5.7 | % | 5.5 | % | 5.2 | % | ||||||||||||
Expected
long-term rates of return on assets (1)
|
8.5 | % | 8.5 | % | 8.5 | % |
Percentage
of Plan Assets at Year End
|
|||||||||
Asset
Category
|
April
3, 2009
|
Dec.
31, 2007
|
|||||||
Equity
securities
|
65 | % | 66 | % | |||||
Debt
securities
|
26 | % | 27 | % | |||||
Cash
|
9 | % | 7 | % | |||||
Total
|
100 | % | 100 | % |
Employer
contributions
|
|
2010
(expected)
|
$10
|
Expected
Benefit Payments
|
|
2010
|
15
|
2011
|
15
|
2012
|
20
|
2013
|
20
|
2014
|
20
|
2015-2019
|
95
|
Fiscal Year
|
Real
Estate
|
Equipment
|
||||||
2010
|
$ | 217.6 | $ | 64.6 | ||||
2011
|
172.8 | 33.4 | ||||||
2012
|
130.5 | 16.0 | ||||||
2013
|
106.7 | 5.7 | ||||||
2014
|
79.5 | 2.2 | ||||||
Thereafter
|
76.0 | 0.9 | ||||||
$ | 783.1 | $ | 122.8 |
Number
of
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding
at March 31, 2006
|
17,249,441 | $ | 42.36 | 6.11 | $ | 185.3 | ||||||||||
Granted
|
3,164,075 | 55.20 | ||||||||||||||
Exercised
|
(2,567,074 | ) | 36.97 | |||||||||||||
Canceled/Forfeited
|
(488,658 | ) | 47.64 | |||||||||||||
Expired
|
(297,702 | ) | 52.33 | |||||||||||||
Outstanding
at March 30, 2007
|
17,060,082 | 45.23 | 5.86 | 140.2 | ||||||||||||
Granted
|
3,553,466 | 54.68 | ||||||||||||||
Exercised
|
(2,141,400 | ) | 40.18 | |||||||||||||
Canceled/Forfeited
|
(465,562 | ) | 52.53 | |||||||||||||
Expired
|
(251,572 | ) | 54.03 | |||||||||||||
Outstanding
at March 28, 2008
|
17,755,014 | 47.38 | 5.79 | 27.8 | ||||||||||||
Granted
|
2,596,730 | 47.71 | ||||||||||||||
Exercised
|
(368,170 | ) | 34.52 | |||||||||||||
Canceled/Forfeited
|
(466,357 | ) | 53.23 | |||||||||||||
Expired
|
(1,222,655 | ) | 53.11 | |||||||||||||
Outstanding
at April 3, 2009
|
18,294,562 | 47.15 | 5.53 | 22.8 | ||||||||||||
Vested and
expected to vest in the future at April 3, 2009
|
18,021,985 | 47.11 | 5.53 | 22.7 | ||||||||||||
Exercisable
at April 3, 2009
|
13,126,785 | 45.50 | 4.35 | 22.1 |
April
3, 2009
|
||||||||||||||||||||||
Options
Outstanding
|
Options
Exercisable
|
|||||||||||||||||||||
Range
of Option Exercise Price
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Number
Exercisable
|
Weighted
Average
Exercise
Price
|
|||||||||||||||||
$ | 8.29 – $44.30 | 6,369,156 | $ | 37.84 | 4.64 | 6,121,769 | $ | 37.83 | ||||||||||||||
$ | 44.37 – $48.61 | 5,130,871 | 47.19 | 5.57 | 2,811,201 | 46.13 | ||||||||||||||||
$ | 48.69 – $55.35 | 5,336,495 | 54.99 | 7.68 | 2,846,450 | 54.96 | ||||||||||||||||
$ | 55.88 – $78.94 | 1,458,040 | 59.01 | 1.45 | 1,347,365 | 59.03 |
Number
of
Shares
|
Weighted
Average
Fair
Value
|
|||||||
Outstanding
at March 31, 2006
|
795,991 | $ | 42.48 | |||||
Granted
|
560,752 | 55.35 | ||||||
Released/Redeemed
|
(193,584 | ) | 45.13 | |||||
Forfeited/Canceled
|
(20,142 | ) | 45.22 | |||||
Outstanding
at March 30, 2007
|
1,143,017 | 48.30 | ||||||
Granted
|
234,462 | 52.51 | ||||||
Released/Redeemed
|
(594,025 | ) | 47.69 | |||||
Forfeited/Canceled
|
(44,206 | ) | 49.95 | |||||
Outstanding
at March 28, 2008
|
739,248 | 50.03 | ||||||
Granted
|
426,780 | 47.55 | ||||||
Released/Redeemed
|
(258,738 | ) | 47.50 | |||||
Forfeited/Canceled
|
(25,786 | ) | 55.29 | |||||
Outstanding
at April 3, 2009
|
881,504 | 49.41 |
Number
of
Shares
|
Weighted
Average
Fair
Value
|
|||||||
Outstanding
at March 31, 2006
|
59,521 | $ | 42.45 | |||||
Granted
|
14,400 | 52.39 | ||||||
Redeemed
|
(600 | ) | 37.81 | |||||
Forfeited/Canceled
|
||||||||
Outstanding
at March 30, 2007
|
73,321 | 44.44 | ||||||
Granted
|
19,300 | 50.61 | ||||||
Released/Redeemed
|
(600 | ) | 37.81 | |||||
Forfeited/Canceled
|
||||||||
Outstanding
at March 28, 2008
|
92,021 | 45.78 | ||||||
Granted
|
21,600 | 46.52 | ||||||
Released/Redeemed
|
(600 | ) | 37.81 | |||||
Forfeited/Canceled
|
||||||||
Outstanding
at April 3, 2009
|
113,021 | 45.96 |
Fiscal
2009
|
Fiscal
2008
|
Fiscal
2007
|
||||||||||
Foreign
currency losses/(gains)
|
$ | 25.2 | $ | (31.2 | ) | $ | (45.5 | ) | ||||
(Gain)/loss
on sale of non-operating assets
|
(1.8 | ) | (17.2 | ) | 4.2 | |||||||
Total Other
Expense/(Income)
|
$ | 23.4 | $ | (48.4 | ) | $ | (41.3 | ) |
·
|
North
American Public Sector. The North American Public Sector segment operates
principally within a regulatory environment subject to governmental
contracting and accounting requirements, including federal Acquisition
Regulations, Cost Accounting Standards and audits by various U.S. federal
agencies. The North American Public Sector operating segment
represents a separate reportable
segment.
|
·
|
Global
Outsourcing Services. The Global Outsourcing Services segment provides
large-scale outsourcing solutions offerings as well as midsize services
delivery to customers globally. The Global Outsourcing Services
operating segment represents a separate reportable segment under the
Company’s new operating structure.
|
·
|
Business
Solutions and Services – Consulting. The BS&S − Consulting
segment enables the Company to provide industry specific consulting and
systems integration services, business process outsourcing, and
intellectual property (IP)-based software solutions. These
service offerings and clientele overlap and the Company draws on multiple
operating segments within BS&S – Consulting to serve
clients. These operating segments have similar economic
characteristics, products, services, customers and methods of operations
and, as a result, are aggregated for segment reporting
purposes.
|
·
|
Business
Solutions and Services – Financial Services Sector. The BS&S −
Financial Services Sector segment primarily provides information
technology and business process outsourcing services to financial services
companies in domestic and international
markets.
|
·
|
Business
Solutions and Services – Other. The Company’s remaining operating segments
do not meet the quantitative thresholds for separate disclosure and do not
meet the aggregation criteria as indicated in SFAS No. 131. As
a result, these operating segments are reported as “other” as provided
under by SFAS No. 131. Because each of these other operating
segments are within the Company’s BS&S service line, the Company has
labeled this group of operating segments as BS&S − Other. The
operating segments comprising BS&S − Other include the Company’s
non-GOS operations in Australia and Asia and the Company’s India
operations.
|
Business
Solutions and Services
|
||||||||||||||||||||||||||||||||
North
American Public Sector
|
Global
Outsourcing Services
|
Consulting
|
Financial
Services Sector
|
Other
|
Corporate
|
Eliminations
|
Total
|
|||||||||||||||||||||||||
2009
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 5,977.4 | $ | 6,458.5 | $ | 2,034.3 | $ | 990.8 | $ | 1,384.6 | $ | 17.4 | $ | (123.1 | ) | $ | 16,739.9 | |||||||||||||||
Operating
Income
(loss)
|
481.9 | 502.6 | 146.7 | 182.7 | 133.1 | (64.6 | ) | (.6 | ) | 1,381.8 | ||||||||||||||||||||||
Depreciation
and amortization
|
138.9 | 801.5 | 118.3 | 41.5 | 71.8 | 13.5 | 1,185.5 | |||||||||||||||||||||||||
2008
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 5,781.1 | $ | 6,756.0 | $ | 1,831.5 | $ | 1,017.3 | $ | 1,225.9 | $ | 17.6 | $ | (129.9 | ) | $ | 16,499.5 | |||||||||||||||
Operating
Income
(loss)
|
408.7 | 576.2 | 128.0 | 194.9 | 65.2 | (54.4 | ) | (2.2 | ) | 1,316.4 | ||||||||||||||||||||||
Depreciation
and amortization
|
152.3 | 810.3 | 102.7 | 54.1 | 65.5 | 13.7 | 1,198.6 | |||||||||||||||||||||||||
2007
|
||||||||||||||||||||||||||||||||
Revenues
|
$ | 5,446.5 | $ | 6,333.5 | $ | 1,577.1 | $ | 974.1 | $ | 681.7 | $ | 35.8 | $ | (193.8 | ) | $ | 14,854.9 | |||||||||||||||
Operating
Income
(loss)
|
437.3 | 519.0 | 77.8 | 196.9 | 27.5 | (11.8 | ) | (59.5 | ) | 1,187.2 | ||||||||||||||||||||||
Depreciation
and amortization
|
141.4 | 767.1 | 62.2 | 57.7 | 27.8 | 17.4 | 1,073.6 | |||||||||||||||||||||||||
Fiscal
Year
|
||||||||||||
2009
|
2008
|
2007
|
||||||||||
Operating
income
|
$ | 1,381.8 | $ | 1,316.4 | $ | 1,187.2 | ||||||
Corporate
G&A
|
(177.9 | ) | (141.2 | ) | (136.0 | ) | ||||||
Minority
interest expense
|
(8.4 | ) | (14.3 | ) | (14.8 | ) | ||||||
Earnings from
equity method investments
|
15.4 | 12.7 | 13.1 | |||||||||
Interest
expense
|
(260.5 | ) | (185.4 | ) | (217.9 | ) | ||||||
Interest
income
|
41.0 | 37.1 | 49.5 | |||||||||
Special
items
|
(155.8 | ) | (316.1 | ) | ||||||||
Goodwill
impairment
|
(18.9 | ) | ||||||||||
Other
income/(expense)
|
(23.4 | ) | 48.4 | 41.3 | ||||||||
Income before taxes
|
$ | 949.1 | $ | 917.9 | $ | 606.3 |
Fiscal
Year
|
||||||||||||||||||||||||
2009
|
2008
|
2007
|
||||||||||||||||||||||
Revenues
|
Property
and Equipment, Net
|
Revenues
|
Property
and Equipment, Net
|
Revenues
|
Property
and Equipment, Net
|
|||||||||||||||||||
United
States
|
$ | 10,333.6 | $ | 1,350.5 | $ | 9,909.7 | $ | 1,370.7 | $ | 9,223.2 | $ | 1,392.8 | ||||||||||||
Europe:
|
||||||||||||||||||||||||
United Kingdom
|
1,890.8 | 372.1 | 2,189.4 | 571.7 | 1,900.3 | 533.2 | ||||||||||||||||||
Other Europe
|
2,775.4 | 300.6 | 2,635.2 | 355.9 | 2,244.3 | 281.1 | ||||||||||||||||||
Other
International
|
1,740.1 | 329.8 | 1,765.2 | 466.3 | 1,487.1 | 332.0 | ||||||||||||||||||
Total
|
$ | 16,739.9 | $ | 2,353.0 | $ | 16,499.5 | $ | 2,764.6 | $ | 14,854.9 | $ | 2,539.1 |
Fiscal
2009
|
||||||||||||||||
In millions except per-share
amount
|
1st
Quarter
|
2nd
Quarter(4)
|
3rd
Quarter
|
4th
Quarter(3)(4)
|
||||||||||||
Revenues
|
$ | 4,437.1 | $ | 4,238.7 | $ | 3,952.4 | $ | 4,111.7 | ||||||||
Cost of
services (excluding depreciation and
amortization)
|
3,601.3 | 3,406.7 | 3,083.4 | 3,169.3 | ||||||||||||
Income before
taxes
|
173.4 | 185.1 | 260.1 | 330.5 | ||||||||||||
Net
Income
|
120.6 | 451.7 | 160.6 | 382.3 | ||||||||||||
Earnings per
common share:
|
||||||||||||||||
Basic
|
$ | 0.80 | $ | 2.98 | $ | 1.06 | $ | 2.52 | ||||||||
Diluted
|
$ | 0.79 | $ | 2.95 | $ | 1.06 | $ | 2.51 |
Fiscal
2008
|
||||||||||||||||
In
millions except per-share
amount
|
1st
Quarter (1)(2)
|
2nd
Quarter(1)
|
3rd
Quarter(1)
|
4th
Quarter(1)
|
||||||||||||
Revenues
|
$ | 3,837.9 | $ | 4,017.2 | $ | 4,160.0 | $ | 4,484.4 | ||||||||
Cost of
services (excluding depreciation and
amortization)
|
3,098.1 | 3,253.8 | 3,301.6 | 3,498.4 | ||||||||||||
Income before
taxes
|
169.7 | 171.6 | 266.3 | 310.2 | ||||||||||||
Net
Income
|
108.1 | 75.8 | 179.0 | 181.7 | ||||||||||||
Earnings per
common share:
|
||||||||||||||||
Basic
|
$ | 0.62 | $ | 0.44 | $ | 1.07 | $ | 1.16 | ||||||||
Diluted
|
$ | 0.61 | $ | 0.43 | $ | 1.05 | $ | 1.15 |
(1)
|
Includes
pre-tax restructuring charges of $26.6, $25.9, $17.5, and $63.5 for the
1st,
2nd,
3rd,
and 4th
quarters, respectively.
|
|
(2)
|
Includes a
pre-tax $22.4 charge related to the retirement of the Company’s former
Chairman and Chief Executive Officer.
|
|
(3)
|
Includes
goodwill impairment of $18.9.
|
|
(4)
|
Includes tax
benefits of $370.5 in 2nd
quarter associated with the IRS settlement and $169.0 in 4th
quarter primarily associated with state and foreign jurisdiction
audits. Also included in 4th
quarter is a charge of $18.3 for prior years income tax-related
amounts.
|
In millions
|
Balance,
beginning of period
|
Charged
to cost and expenses
|
Other
(1)
|
Deductions
|
Balance,
end of period
|
|||||||||||||||
Year ended
April 3, 2009 allowance for doubtful receivables
|
$ | 43.1 | $ | 33.2 | $ | (8.4 | ) | $ | (12.5 | ) | $ | 55.4 | ||||||||
Year ended
March 28, 2008 allowance for doubtful receivables
|
58.0 | 3.1 | 2.4 | (20.4 | ) | 43.1 | ||||||||||||||
Year ended
March 30, 2007 allowance for doubtful receivables
|
68.4 | 5.5 | .1 | (16.0 | ) | 58.0 |
(1)
|
Includes
balances from acquisitions, changes in balances due to foreign currency
exchange rates and recovery of prior-year
charges.
|
|
(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 consolidated financial statements in accordance with
generally accepted accounting principles, and that receipts and
expenditures of the issuer are being made only in accordance with
authorization 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 consolidated financial
statements.
|
Item
12.
|
Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
|
Plan
category (a)(1)
|
Number
of securities to be issued upon exercise of outstanding options,
warrants and rights (b)
|
Weighted-average
exercise price of outstanding options, warrants and
rights (c)
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in
column (b))
|
|||||||||
Equity
compensation plans approved by security holders
|
19,192,199 | $ | 44.95 | 11,995,8271 | ||||||||
Equity
compensation plans not approved by security holders
|
||||||||||||
Total
|
19,192,199 | 11,995,827 |
|
1
|
Includes
shares issuable under the 2001 Stock Incentive Plan. This plan
permits shares to be issued pursuant to any type of arrangement that by
its terms involves or might involve the issuance of Common Stock or
derivative securities with an exercise or conversion privilege at a price
related to the Common Stock or with a value derived from the value of the
Common Stock, including, without limitation, sales, bonuses and other
transfers of stock, restricted stock, stock options, reload stock options,
stock purchase warrants, other rights to acquire stock, RSUs, other
securities convertible into or redeemable for stock, stock appreciation
rights, limited stock appreciation rights, phantom stock, dividend
equivalents, performance units and performance shares, and any two or more
of the foregoing in tandem or in the
alternative.
|
|
Also includes
shares issuable under the 2006 Nonemployee Director Incentive Plan, and
the 2007 and 2004 Incentive Plans. Each of these plans permits
shares to be issued pursuant to stock options, restricted
stock or RSUs, or pursuant to performance awards
payable in shares of CSC stock, restricted stock, RSUs, or any combination
of the foregoing.
|
|
Other
information required by this Item will appear in the Proxy Statement under
the heading “Stock Ownership,” which section is incorporated herein by
reference.
|
|
Item
13. Certain Relationships and Related Transactions, and Director
Independence
|
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
|
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)
|
10.18
|
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)
|
10.19
|
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)
|
10.20
|
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)
|
10.21
|
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)
|
10.22
|
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)
|
10.23
|
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)
|
10.24
|
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)
|
10.25
|
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)
|
10.26
|
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)
|
10.27
|
Intentionally
omitted
|
10.28
|
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)
|
10.29
|
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)
|
10.30
|
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)
|
10.31
|
Form of
Senior Management and Key Employee Severance Agreement, as amended and
restated effective May 20, 2009(1)
|
12
|
Ratio of
Earnings to Fixed Charges
|
21 | Significant Active Subsidiaries and Affiliates of the Registrant |
23
|
Consent of
Independent Registered Public Accounting Firm
|
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
|
99.1
|
Revised
Financial Information Disclosure as a result of the Company’s
restructuring (incorporated by reference to exhibits 99.01, 99.02 and
99.03 to the Company’s Current Report on Form 8-K filed December 16,
2008.)
|
(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
|
||
Dated: May
28, 2009
|
||
/s/
|
||
Michael
W. Laphen,
Chairman,
President and Chief Executive
Officer
|
Signature
|
Title
|
Date
|
||
/s/
|
||||
Michael
W. Laphen
|
Chairman,
President and Chief Executive Officer
(Principal
Executive Officer)
|
May 28,
2009
|
||
/s/
|
||||
Michael
J. Mancuso
|
Vice
President and Chief Financial Officer
(Principal
Financial Officer)
|
May 28,
2009
|
||
/s/
|
||||
Donald
G. DeBuck
|
Vice
President and Controller
(Principal
Accounting Officer)
|
May 28,
2009
|
||
/s/
|
||||
Irving
W. Bailey, II
|
Director
|
May 28,
2009
|
||
/s/
|
||||
David
J. Barram
|
Director
|
May 28,
2009
|
||
/s/
|
||||
Stephen
L. Baum
|
Director
|
May 28,
2009
|
||
/s/
|
||||
Rodney
F. Chase
|
Director
|
May 28,
2009
|
||
/s/
|
||||
Judith
R. Haberkorn
|
Director
|
May 28,
2009
|
||
/s/
|
||||
F.
Warren McFarlan
|
Director
|
May 28,
2009
|
||
/s/
|
||||
Chong
Sup Park
|
Director
|
May 28,
2009
|
||
/s/
|
||||
Thomas
H. Patrick
|
Director
|
May 28,
2009
|