UNITED
STATES
|
||||
SECURITIES
AND EXCHANGE COMMISSION
|
||||
Washington,
D.C. 20549
|
||||
_________________
|
||||
FORM
10-Q
|
(Mark
One)
|
||||
[X]
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For
the quarter ended January 1, 2010
|
||||
OR
|
||||
[ ]
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|||
For the
transition period from _________________ to
_________________
|
||||
Commission
File No. 1-4850
|
![]() |
COMPUTER
SCIENCES CORPORATION
(Exact name
of registrant as specified in its charter)
|
Nevada
|
95-2043126
|
|||
(State or
Other Jurisdiction of
|
(I.R.S.
Employer
|
|||
Incorporation
or Organization)
|
Identification
No.)
|
|||
3170
Fairview Park Drive
|
||||
Falls
Church, VA
|
22042
|
|||
(Address of
Principal Executive Offices)
|
(Zip
Code)
|
|||
Registrant's
Telephone Number, Including Area Code: (703) 896-1000
|
||||
Indicate
by check mark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90
days. Yes [ X ] No [ ]
|
||||
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the
Exchange Act (Check one).
|
||||
Large
accelerated filer
[X] Accelerated
filer
[ ] Non-accelerated
filer [ ]
Smaller
Reporting Company
[ ]
|
||||
Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12-b of the Exchange
Act). Yes [ ] No [X]
|
||||
153,615,200
shares of Common Stock, $1.00 par value, were outstanding on January 25,
2010.
|
Page
|
|||||
PART
I.
|
FINANCIAL
INFORMATION
|
||||
Item
1.
|
Financial
Statements (unaudited)
|
||||
Consolidated
Condensed Statements of Income, Quarters and Nine Months
Ended January 1, 2010, and January 2, 2009
|
1 | ||||
Consolidated
Condensed Balance Sheets as of January
1, 2010, and April 3, 2009
|
2 | ||||
Consolidated
Condensed Statements of Cash Flows, Nine Months
Ended January 1, 2010, and January 2, 2009
|
3 | ||||
Notes to
Consolidated Condensed Financial Statements
|
4 | ||||
Item
2.
|
Management's
Discussion and Analysis of Financial
Condition and Results of Operations
|
33 | |||
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
48 | |||
Item
4.
|
Controls and
Procedures
|
49 | |||
PART
II.
|
OTHER
INFORMATION
|
||||
Item
1.
|
Legal
Proceedings
|
50 | |||
Item
1A.
|
Risk
Factors
|
53 | |||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
54 | |||
Item
6.
|
Exhibits
|
55 |
Quarter
Ended
|
Nine
Months Ended
|
|||||||||||||||
(Amounts in
millions except per-share amounts)
|
January
1, 2010
|
January
2, 2009
|
January
1, 2010
|
January
2, 2009
|
||||||||||||
Revenues
|
$ | 3,953 | $ | 3,952 | $ | 11,892 | $ | 12,628 | ||||||||
Costs of
services (excludes depreciation and amortization)
|
3,105 | 3,085 | 9,476 | 10,097 | ||||||||||||
Selling,
general and administrative
|
239 | 261 | 732 | 824 | ||||||||||||
Depreciation
and amortization
|
280 | 282 | 825 | 912 | ||||||||||||
Interest
expense
|
50 | 68 | 158 | 191 | ||||||||||||
Interest
income
|
(6 | ) | (12 | ) | (20 | ) | (31 | ) | ||||||||
Other
(income)/expense
|
(6 | ) | 5 | (15 | ) | 9 | ||||||||||
Total costs
and expenses
|
3,662 | 3,689 | 11,156 | 12,002 | ||||||||||||
Income before
taxes
|
291 | 263 | 736 | 626 | ||||||||||||
Taxes on
income
|
75 | 100 | 166 | (114 | ) | |||||||||||
Net
income
|
216 | 163 | 570 | 740 | ||||||||||||
Less:
|
||||||||||||||||
Net income
attributable to noncontrolling interest, net of tax
|
5 | 2 | 12 | 7 | ||||||||||||
Net income
attributable to CSC common shareholders
|
$ | 211 | $ | 161 | $ | 558 | $ | 733 | ||||||||
Earnings per
share:
|
||||||||||||||||
Basic
|
$ | 1.38 | $ | 1.06 | $ | 3.67 | $ | 4.84 | ||||||||
Diluted
|
$ | 1.36 | $ | 1.06 | $ | 3.62 | $ | 4.80 |
As
of
|
As
of
|
|||||||
(Amounts in
millions except shares)
|
January
1, 2010
|
April
3, 2009
|
||||||
ASSETS
|
||||||||
Cash and cash
equivalents
|
$ | 2,427 | $ | 2,297 | ||||
Receivables,
net of allowance for doubtful accounts of $55 (fiscal 2010) and $55
(fiscal 2009)
|
3,935 | 3,786 | ||||||
Prepaid
expenses and other current assets
|
1,935 | 1,624 | ||||||
Total current
assets
|
8,297 | 7,707 | ||||||
Property and
equipment, net of accumulated depreciation of $3,843 (fiscal 2010) and
$3,417 (fiscal 2009)
|
2,330 | 2,353 | ||||||
Outsourcing
contract costs, net
|
651 | 684 | ||||||
Software,
net
|
469 | 476 | ||||||
Goodwill
|
3,921 | 3,784 | ||||||
Other
assets
|
528 | 615 | ||||||
Total
assets
|
$ | 16,196 | $ | 15,619 | ||||
LIABILITIES
|
||||||||
Short-term
debt and current maturities of long-term debt
|
$ | 131 | $ | 62 | ||||
Accounts
payable
|
415 | 636 | ||||||
Accrued
payroll and related costs
|
765 | 822 | ||||||
Other accrued
expenses
|
1,176 | 1,264 | ||||||
Deferred
revenue
|
795 | 915 | ||||||
Income taxes
payable and deferred income taxes
|
280 | 317 | ||||||
Total current
liabilities
|
3,562 | 4,016 | ||||||
Long-term
debt, net of current maturities
|
4,176 | 4,173 | ||||||
Income tax
liabilities and deferred income taxes
|
476 | 486 | ||||||
Other
long-term liabilities
|
1,302 | 1,326 | ||||||
STOCKHOLDERS'
EQUITY
|
||||||||
Common stock,
par value $1.00 per share; authorized 750,000,000 shares; issued
161,758,003 (fiscal 2010) and 159,688,820 (fiscal 2009)
|
162 | 160 | ||||||
Additional
paid-in capital
|
1,969 | 1,836 | ||||||
Retained
earnings
|
5,450 | 4,893 | ||||||
Accumulated
other comprehensive loss
|
(582 | ) | (1,004 | ) | ||||
Less common
stock in treasury, at cost, 8,270,397 shares (fiscal 2010) and 8,190,333
shares (fiscal 2009)
|
(378 | ) | (375 | ) | ||||
Total
CSC stockholders’ equity
|
6,621 | 5,510 | ||||||
Noncontrolling
interest in subsidiaries
|
59 | 108 | ||||||
Total
stockholders' equity
|
6,680 | 5,618 | ||||||
Total
liabilities and stockholders' equity
|
$ | 16,196 | $ | 15,619 |
Nine
Months Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Cash flows
from operating activities:
|
||||||||
Net
income
|
$ | 570 | $ | 740 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization and other non-cash charges
|
878 | 987 | ||||||
Stock
based compensation
|
49 | 47 | ||||||
Provision
for losses on accounts receivable
|
17 | 20 | ||||||
Unrealized
foreign currency exchange (gain)/loss, net
|
(44 | ) | 93 | |||||
Gain
on dispositions
|
(7 | ) | (2 | ) | ||||
Changes
in operating assets and liabilities, net of acquisition
effects:
|
||||||||
Increase
in assets
|
(173 | ) | (125 | ) | ||||
Decrease
in liabilities
|
(883 | ) | (832 | ) | ||||
Net cash
provided by operating activities
|
407 | 928 | ||||||
Investing
activities:
|
||||||||
Purchases
of property and equipment
|
(437 | ) | (557 | ) | ||||
Outsourcing
contracts
|
(106 | ) | (114 | ) | ||||
Acquisitions
|
(5 | ) | (100 | ) | ||||
Software
|
(106 | ) | (129 | ) | ||||
Other
investing cash flows
|
140 | 62 | ||||||
Net cash used
in investing activities
|
(514 | ) | (838 | ) | ||||
Financing
activities:
|
||||||||
Net
repayments of commercial paper
|
(1 | ) | (263 | ) | ||||
Borrowings
under lines of credit
|
101 | 1,647 | ||||||
Repayments
on lines of credit
|
(43 | ) | (119 | ) | ||||
Principal
payments on long-term debt
|
(27 | ) | (324 | ) | ||||
Proceeds
from stock option and other common stock transactions
|
79 | 12 | ||||||
Repurchase
of common stock, net of settlement
|
(2 | ) | (4 | ) | ||||
Excess
tax benefit from stock-based compensation
|
7 | 1 | ||||||
Other
financing cash flows
|
- | 3 | ||||||
Net cash
provided by financing activities
|
114 | 953 | ||||||
Effect of
exchange rate changes on cash and cash equivalents
|
123 | (69 | ) | |||||
Net increase
in cash and cash equivalents
|
130 | 974 | ||||||
Cash and cash
equivalents at beginning of year
|
2,297 | 699 | ||||||
Cash and cash
equivalents at end of period
|
$ | 2,427 | $ | 1,673 |
1)
|
A valuation
technique that uses the quoted price of the identical liability when
traded as an asset or quoted prices for similar liabilities;
and
|
2)
|
Another
valuation technique that is consistent with the principles of Topic
820.
|
Quarter
Ended
|
||||||||
(Amounts in
millions, except per share data)
|
January
1, 2010
|
January
2, 2009
|
||||||
Net income
attributable to CSC common shareholders
|
$ | 211 | $ | 161 | ||||
Common share
information:
|
||||||||
Average
common shares outstanding for basic
EPS
|
152.784 | 151.485 | ||||||
Dilutive
effect of stock options and equity awards
common
stock equivalents
|
2.646 | 0.372 | ||||||
Shares for
diluted EPS
|
155.430 | 151.857 | ||||||
Basic
EPS
|
$ | 1.38 | $ | 1.06 | ||||
Diluted
EPS
|
$ | 1.36 | $ | 1.06 |
Nine
Months Ended
|
||||||||
(Amounts in
millions, except per share data)
|
January
1, 2010
|
January
2, 2009
|
||||||
Net income
attributable to CSC common shareholders
|
$ | 558 | $ | 733 | ||||
Common share
information:
|
||||||||
Average
common shares outstanding for
basic
EPS
|
152.052 | 151.352 | ||||||
Dilutive
effect of common stock equivalents
|
2.227 | 1.267 | ||||||
Shares
for diluted EPS
|
154.279 | 152.619 | ||||||
Basic
EPS
|
$ | 3.67 | $ | 4.84 | ||||
Diluted
EPS
|
$ | 3.62 | $ | 4.80 |
As
of
|
||||||||||||||||
(Amounts in
millions)
|
January
1, 2010
|
Fair
Value Hierarchy
|
||||||||||||||
Fair
Value
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Money market
funds
|
$ | 1,630 | $ | 1,630 | $ | - | $ | - | ||||||||
Time
deposits
|
117 | 117 | - | - | ||||||||||||
Derivative
assets, net
|
2 | - | 2 | - | ||||||||||||
Total
|
$ | 1,749 | $ | 1,747 | $ | 2 | $ | - |
As
of
|
||||||||||||||||
(Amounts in
millions)
|
April
3, 2009
|
Fair
Value Hierarchy
|
||||||||||||||
Fair
Value
|
Level
1
|
Level
2
|
Level
3
|
|||||||||||||
Money market
funds
|
$ | 1,190 | $ | 1,190 | $ | - | $ | - | ||||||||
Time
deposits
|
549 | 549 | - | - | ||||||||||||
Derivative
assets, net
|
1 | - | 1 | - | ||||||||||||
Total
|
$ | 1,740 | $ | 1,739 | $ | 1 | $ | - |
Quarter
Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2,
2009
|
||||||
Foreign
exchange (gains)/losses, net
|
$ | (2 | ) | $ | 10 | |||
Equity in
earnings of unconsolidated affiliates
|
(3 | ) | (3 | ) | ||||
Gain on sale
of non-operating assets
|
(1 | ) | (2 | ) | ||||
Total
Other (Income)/Expense
|
$ | (6 | ) | $ | 5 |
Nine
Months Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2,
2009
|
||||||
Foreign
exchange losses, net
|
$ | 3 | $ | 24 | ||||
Equity in
earnings of unconsolidated affiliates
|
(12 | ) | (13 | ) | ||||
Gain on sale
of non-operating assets
|
(6 | ) | (2 | ) | ||||
Total
Other (Income)/Expense
|
$ | (15 | ) | $ | 9 |
Quarter
Ended
|
||||||||||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||||||||||
Pensions
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | 2 | $ | 9 | $ | 29 | $ | 11 | ||||||||
Interest
cost
|
42 | 27 | 37 | 24 | ||||||||||||
Expected
return on assets
|
(40 | ) | (23 | ) | (42 | ) | (27 | ) | ||||||||
Amortization
of unrecognized net loss and other
|
1 | 6 | - | 4 | ||||||||||||
Net periodic
pension cost
|
$ | 5 | $ | 19 | $ | 24 | $ | 12 |
Nine
Months Ended
|
||||||||||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||||||||||
Pensions
|
U.S.
Plans
|
Non-U.S.
Plans
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | 30 | $ | 25 | $ | 87 | $ | 35 | ||||||||
Interest cost | 125 | 81 | 111 | 84 | ||||||||||||
Expected
return on assets
|
(118 | ) | (68 | ) | (128 | ) | (94 | ) | ||||||||
Amortization
of unrecognized net loss and other
|
5 | 17 | 3 | 11 | ||||||||||||
Pension
curtailment
|
(13 | ) | - | - | - | |||||||||||
Net periodic
pension cost
|
$ | 29 | $ | 55 | $ | 73 | $ | 36 |
(Amounts in
millions)
|
Quarter
Ended
|
|||||||||||||||
January
1, 2010
|
January
2, 2009
|
|||||||||||||||
Other
Postretirement Benefits
|
U.S.
Plans
|
Non-U.S.
Plans(a)
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Interest
cost
|
3 | - | 2 | - | ||||||||||||
Expected
return on assets
|
(1 | ) | - | (1 | ) | - | ||||||||||
Amortization
of unrecognized net loss
|
2 | - | 2 | - | ||||||||||||
Net provision
for postretirement benefits
|
$ | 4 | $ | - | $ | 3 | $ | - |
(Amounts in
millions)
|
Nine
Months Ended
|
|||||||||||||||
January
1, 2010
|
January
2, 2009
|
|||||||||||||||
Other
Postretirement Benefits
|
U.S.
Plans
|
Non-U.S.
Plans(a)
|
U.S.
Plans
|
Non-U.S.
Plans
|
||||||||||||
Service
cost
|
$ | - | $ | - | $ | 2 | $ | - | ||||||||
Interest
cost
|
9 | - | 8 | 1 | ||||||||||||
Expected
return on assets
|
(3 | ) | - | (5 | ) | - | ||||||||||
Amortization
of unrecognized net loss and other
|
6 | - | 3 | - | ||||||||||||
Net provision
for postretirement benefits
|
$ | 12 | $ | - | $ | 8 | $ | 1 |
Jurisdiction:
|
Tax Years
that Remain 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
|
2006 and
forward
|
United
Kingdom
|
2008 and
forward
|
Quarter
Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Cost of
services
|
$ | 3 | $ | 3 | ||||
Selling,
general and administrative
|
12 | 10 | ||||||
Total
|
$ | 15 | $ | 13 | ||||
Total net of
tax
|
$ | 9 | $ | 8 |
Nine
Months Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Cost of
services
|
$ | 11 | $ | 11 | ||||
Selling,
general and administrative
|
38 | 36 | ||||||
Total
|
$ | 49 | $ | 47 | ||||
Total net of
tax
|
$ | 30 | $ | 29 |
Nine
Months Ended
|
|||
January
1, 2010
|
January
2, 2009
|
||
Risk-free
interest rate
|
2.20%
|
3.21%
|
|
Expected
volatility
|
41%
|
36%
|
|
Expected
lives
|
4.14
years
|
4.07
years
|
As
of January 1, 2010
|
||||||||||||||||
Number
of Shares
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual
Life
|
Aggregate
Intrinsic Value
|
|||||||||||||
Outstanding
as of April 3, 2009
|
18,294,562 | $ | 47.15 | 5.53 | $ | 23 | ||||||||||
Granted
|
2,856,430 | 42.53 | ||||||||||||||
Exercised
|
(1,972,472 | ) | 40.89 | |||||||||||||
Canceled/forfeited
|
(245,909 | ) | 49.91 | |||||||||||||
Expired
|
(1,363,336 | ) | 57.09 | |||||||||||||
Outstanding
as of January 1, 2010
|
17,569,275 | 46.29 | 6.05 | 198 | ||||||||||||
Vested and
expected to vest in the future as of January 1, 2010
|
17,225,695 | 46.32 | 6.05 | 194 | ||||||||||||
Exercisable
as of January 1, 2010
|
12,124,330 | 46.34 | 4.83 | 136 |
As
of January 1, 2010
|
||||||||
Number
of Shares
|
Weighted
Average Fair Value
|
|||||||
Outstanding
as of April 3, 2009
|
881,504 | $ | 49.41 | |||||
Granted
|
627,542 | 42.31 | ||||||
Released/Redeemed
|
(164,553 | ) | 49.52 | |||||
Forfeited/Canceled
|
(189,825 | ) | 47.34 | |||||
Outstanding
as of January 1, 2010
|
1,154,668 | $ | 45.88 |
As
of January 1, 2010
|
||||||||
Number
of Shares
|
Weighted
Average
Fair
Value
|
|||||||
Outstanding
as of April 3, 2009
|
113,021 | $ | 45.96 | |||||
Granted
|
20,800 | 48.97 | ||||||
Redeemed
|
(600 | ) | 37.81 | |||||
Forfeited/canceled
|
- | - | ||||||
Outstanding
as of January 1, 2010
|
133,221 | $ | 46.47 |
(Amounts in
millions)
|
Total
Equity
|
CSC
Equity
|
Noncontrolling
Interest
Equity
|
|||||||||
Balance at
March 28, 2008
|
$ | 5,621 | $ | 5,462 | $ | 159 | ||||||
Net
income
|
740 | 733 | 7 | |||||||||
Common
stock
|
1 | 1 | - | |||||||||
Additional
paid in capital
|
59 | 59 | - | |||||||||
Foreign
currency translation adjustment
|
(552 | ) | (552 | ) | - | |||||||
Unfunded
pension adjustment
|
1 | 1 | - | |||||||||
Common stock
in treasury
|
(3 | ) | (3 | ) | - | |||||||
Distributions
and other (proceeds on sale)
|
(84 | ) | (26 | ) | (58 | ) | ||||||
Balance at
January 2, 2009
|
$ | 5,783 | $ | 5,675 | $ | 108 | ||||||
(Amounts in
millions)
|
Total
Equity
|
CSC
Equity
|
Noncontrolling
Interest
Equity
|
|||||||||
Balance at
April 3, 2009
|
$ | 5,618 | $ | 5,510 | $ | 108 | ||||||
Net
income
|
570 | 558 | 12 | |||||||||
Common
stock
|
2 | 2 | - | |||||||||
Additional
paid in capital
|
133 | 133 | - | |||||||||
Foreign
currency translation adjustment
|
374 | 374 | - | |||||||||
Unfunded
pension adjustment
|
48 | 48 | - | |||||||||
Common stock
in treasury
|
(3 | ) | (3 | ) | - | |||||||
Distributions
and other (proceeds on sale)
|
(62 | ) | (1 | ) | (61 | ) | ||||||
Balance at
January 1, 2010
|
$ | 6,680 | $ | 6,621 | $ | 59 |
Quarter
Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Net income
attributable to CSC common shareholders
|
$ | 211 | $ | 161 | ||||
Foreign
currency translation adjustment
|
19 | (237 | ) | |||||
Comprehensive
income (loss)
|
$ | 230 | $ | (76 | ) |
Nine
Months Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Net income
attributable to CSC common shareholders
|
$ | 558 | $ | 733 | ||||
Foreign
currency translation adjustment
|
374 | (552 | ) | |||||
Unfunded
pension adjustment
|
48 | 1 | ||||||
Comprehensive
income
|
$ | 980 | $ | 182 |
As
of
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
April
3, 2009
|
||||||
Foreign
currency translation adjustment
|
155 | (219 | ) | |||||
Unfunded
pension adjustment
|
(737 | ) | (785 | ) | ||||
Accumulated
Other Comprehensive Loss
|
$ | (582 | ) | $ | (1,004 | ) |
·
|
North
American Public Sector (NPS) – The NPS 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. In fiscal 2009, NPS was treated as a
reportable segment and continues to be a reportable segment in fiscal
2010.
|
·
|
Managed
Services Sector (MSS) – The MSS segment provides large-scale outsourcing
solutions offerings as well as midsize services delivery to customers
globally. In fiscal 2009, Global Outsourcing Services (GOS) was
considered a separate operating and reportable segment. In
fiscal 2010, the name of the segment was changed to Managed Services
Sector; and the Applications and Technology Services (ATS) unit was moved
from the Business Solutions & Services – Other (BS&S - Other)
segment to MSS due to the fact that its services, particularly its
applications management, are more aligned with the Company’s outsourcing
services rather than consulting services. ATS results are no longer
reported separately to the Chief Operating Decision Maker (CODM) but are
included with the MSS segment.
|
·
|
Business
Solutions & Services (BSS) – The BSS segment provides industry
specific consulting and systems integration services, business process
outsourcing, and intellectual property (IP) – based software
solutions. These service offerings and clientele
overlap. In fiscal 2009, there were three reportable segments:
BS&S - Consulting, BS&S - Financial Services and BS&S -
Other. As a result of the reorganization in fiscal 2010,
the BSS line of service is now a single operating segment with one sector
president reporting to the CODM, and financial information is provided on
a sector level only. Based on this change, BSS is considered a
reportable segment in fiscal 2010. Furthermore, most of the India
operating segment, which was part of the BS&S – Other segment in
fiscal 2009, has been moved to the MSS operating segment and renamed ATS
as discussed above.
|
NPS
|
MSS
|
BSS
|
Corporate
|
Eliminations
|
Total
|
|||||||||||||||||||
(Amounts
in millions)
|
||||||||||||||||||||||||
Fiscal
2010
|
||||||||||||||||||||||||
Quarter Ended
January 1, 2010
|
||||||||||||||||||||||||
Revenues
|
$ | 1,477 | $ | 1,618 | $ | 887 | $ | 4 | $ | (33 | ) | $ | 3,953 | |||||||||||
Operating
income (loss)
|
140 | 175 | 81 | (19 | ) | - | 377 | |||||||||||||||||
Depreciation
and amortization
|
33 | 207 | 37 | 3 | - | 280 | ||||||||||||||||||
Fiscal
2009
|
||||||||||||||||||||||||
Quarter Ended
January 2, 2009
|
||||||||||||||||||||||||
Revenues
|
$ | 1,476 | $ | 1,607 | $ | 893 | $ | 4 | $ | (28 | ) | $ | 3,952 | |||||||||||
Operating
income (loss)
|
118 | 180 | 83 | (10 | ) | - | 371 | |||||||||||||||||
Depreciation
and amortization
|
33 | 210 | 36 | 3 | - | 282 |
NPS
|
MSS
|
BSS
|
Corporate
|
Eliminations
|
Total
|
|||||||||||||||||||
(Amounts
in millions)
|
||||||||||||||||||||||||
Fiscal
2010
|
||||||||||||||||||||||||
Nine Months
Ended January 1, 2010
|
||||||||||||||||||||||||
Revenues
|
$ | 4,617 | $ | 4,761 | $ | 2,589 | $ | 13 | $ | (88 | ) | $ | 11,892 | |||||||||||
Operating
income (loss)
|
403 | 435 | 205 | (60 | ) | (1 | ) | 982 | ||||||||||||||||
Depreciation
and amortization
|
99 | 606 | 110 | 10 | - | 825 | ||||||||||||||||||
Fiscal
2009
|
||||||||||||||||||||||||
Nine Months
Ended January 2, 2009
|
||||||||||||||||||||||||
Revenues
|
$ | 4,464 | $ | 5,308 | $ | 2,934 | $ | 12 | $ | (90 | ) | $ | 12,628 | |||||||||||
Operating
income (loss)
|
344 | 405 | 229 | (44 | ) | 1 | 935 | |||||||||||||||||
Depreciation
and amortization
|
105 | 671 | 126 | 10 | - | 912 |
Quarter
Ended
|
Nine
Months Ended
|
|||||||||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
January
1, 2010
|
January
2, 2009
|
||||||||||||
Operating
income
|
$ | 377 | $ | 371 | $ | 982 | $ | 935 | ||||||||
Corporate
G&A
|
(48 | ) | (47 | ) | (123 | ) | (140 | ) | ||||||||
Interest
expense
|
(50 | ) | (68 | ) | (158 | ) | (191 | ) | ||||||||
Interest
income
|
6 | 12 | 20 | 31 | ||||||||||||
Other
income/(expense)
|
6 | (5 | ) | 15 | (9 | ) | ||||||||||
Income before
taxes
|
$ | 291 | $ | 263 | $ | 736 | $ | 626 |
(Amounts in
millions)
|
NPS
|
MSS
|
BSS
|
Total
|
||||||||||||
Balance as of
April 3, 2009
|
$ | 692 | $ | 1,871 | $ | 1,221 | $ | 3,784 | ||||||||
Additions
|
2 | - | 10 | 12 | ||||||||||||
Foreign
currency translation
|
- | 84 | 41 | 125 | ||||||||||||
Balance as of
January 1, 2010
|
$ | 694 | $ | 1,955 | $ | 1,272 | $ | 3,921 |
As
of January 1, 2010
|
||||||||||||
(Amounts in
millions)
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
|
|||||||||
Software
|
$ | 1,677 | $ | 1,208 | $ | 469 | ||||||
Outsourcing
contract costs
|
2,101 | 1,450 | 651 | |||||||||
Customer and
other intangible assets
|
397 | 225 | 172 | |||||||||
Total
intangible assets
|
$ | 4,175 | $ | 2,883 | $ | 1,292 |
As
of April 3, 2009
|
||||||||||||
(Amounts
in millions)
|
Gross
Carrying Value
|
Accumulated Amortization
|
Net
|
|||||||||
Software
|
$ | 1,558 | $ | 1,082 | $ | 476 | ||||||
Outsourcing
contract costs
|
1,925 | 1,241 | 684 | |||||||||
Customer and
other intangible assets
|
402 | 200 | 202 | |||||||||
Total
intangible assets
|
$ | 3,885 | $ | 2,523 | $ | 1,362 |
·
|
A reporting
entity should disclose separately the amounts of significant transfers in
and out of Level 1 and Level 2 fair value measurements and describe the
reasons for the transfers; and
|
·
|
In the
reconciliation for fair value measurements using significant unobservable
inputs, a reporting entity should present separately information about
purchases, sales, issuances and
settlements.
|
·
|
A reporting
entity should provide fair value measurement disclosures for each class of
assets and liabilities, where a class is a subset of assets or
liabilities within a line item in the statement of financial position;
and
|
·
|
A reporting
entity should provide disclosures about the valuation techniques and
inputs used to measure fair value for both recurring and nonrecurring fair
value measurements.
|
·
|
Third quarter
revenues were approximately flat at $4.0 billion compared to the prior
year and down 4.1% on a constant currency basis. Revenues were down 5.8%,
to $11.9 billion for the first nine months, and also down 4.1% in constant
currency as compared to the prior
year.
|
·
|
Net income
attributable to CSC common shareholders for the third quarter was $211
million, an increase of 31.1% or $50 million as compared to the prior
year. For the nine months, net income attributable to CSC
common shareholders was $558 million, a decrease of 23.9% or $175 million
as compared to the prior year period. The prior year nine month
results include a net $370 million reduction to income tax expense as a
result of the conclusion of the IRS examination of the Company’s
consolidated U.S. tax returns for fiscal years 2000 through
2004.
|
·
|
Diluted
earnings per share were $1.36 for the fiscal 2010 third quarter, an
increase from $1.06 in the prior year. Diluted earnings per share were
$3.62 for the fiscal 2010 nine months year to date, a decrease from $4.80
for the nine months of fiscal 2009, which contained significant tax
benefits.
|
·
|
Business
awards of $6.8 billion and $14.9 billion were announced for the third
quarter and nine months of fiscal 2010, compared to $2.7 billion and $12.7
billion for the prior fiscal year periods. For the third quarters of
fiscal 2010 and 2009, respectively, NPS was awarded $.8 billion and
$1.2 billion, MSS was awarded $5.2 billion and $.7 billion, and BSS was
awarded $.8 billion and $.8 billion. During the fiscal 2010 fourth
quarter, a protest against the awarding to CSC of a $493 million second
quarter award by the Transportation Security Administration (TSA) was
upheld, which is included in NPS' year-to-date awards. The Company
is currently under a stop work order on this contract. TSA has
decided to re-open discussions to all offerors within the competitive
range.
|
·
|
DSO of 88
days improved 5 days compared to 93 days at the end of the third quarter
of the prior fiscal year.(1)
|
·
|
Debt-to-total
capitalization ratio(2)
at fiscal 2010 third quarter-end improved to 39.2% compared to
43.0% at fiscal year-end 2009.
|
·
|
ROI for the
four quarters ended January 1, 2010, was 11.1%, down from 12.9% for the
comparable prior fiscal period driven by reduced investment base turnover
as a result of higher average debt.(3)
|
·
|
Cash provided
by operating activities was $407 million for the nine months, compared to
cash provided of $928 million for the first nine months of fiscal
2009.
|
·
|
Cash used in
investing activities was $514 million for the nine months, compared to
cash used of $838 million for the first nine months of fiscal year
2009.
|
·
|
Cash provided
by financing activities was $114 million for the nine months, compared to
cash provided of $953 million for the first nine months of fiscal year
2009.
|
·
|
Free cash
flow for the nine months was $140 million outflow as compared to $170
million inflow for the first nine months of fiscal 2009,(4)
a decrease of $310 million.
|
(1)
|
DSO
for the quarter is calculated as total receivables at quarter-end divided
by revenue-per-day. Revenue-per-day equals total revenues for
the last quarter divided by the number of days in the fiscal quarter.
Total receivables includes unbilled receivables but excludes tax
receivables.
|
(2)
|
Debt-to-total
capitalization is defined as total current and long-term debt divided by
total debt and equity, including noncontrolling
interest.
|
(3)
|
ROI
is calculated by multiplying profit margin by the investment base
turnover. The profit margin used is a) the last four quarters’
adjusted net income available to CSC common shareholders (net income
available to CSC common shareholders adjusted to exclude interest expense
and special items, net of their corresponding tax effects), divided by b)
the last four quarters’ revenues. Investment base turnover
equals the last four quarters’ revenues divided by average debt and equity
during the last four quarters. It should be noted that the
adjusted net income figure available to CSC common shareholders is not
identical to net income available to CSC common shareholders as determined
in accordance with U.S. Generally Accepted Accounting Principles (GAAP)
and is therefore reconciled to the GAAP measure in the table
below. The Company’s calculation of ROI may not be comparable
with other companies’ measures using the same or similar
terms. Management compensates for any limitations of this
non-GAAP measure by reviewing a number of metrics, including GAAP measures
such as EPS, operating and investing cash flows, and the debt-to-total
capitalization ratio.
|
Adjusted
Net Income Reconciliation
|
Twelve
Months Ended
|
|||||||
(Amounts
in millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Adjusted
Net Income
|
$ | 1,143 | $ | 1,200 | ||||
Less:
|
||||||||
Interest
expense
|
227 | 248 | ||||||
Special
items
|
63 | |||||||
Taxes
(excluding effect of Interest Expense and Special Items)
|
(24 | ) | (26 | ) | ||||
Income
Before Taxes as Reported
|
$ | 940 | 915 |
(4)
|
The
following is a reconciliation of free cash flow to the most directly
comparable GAAP financial
measure:
|
Nine
Months Ended
|
||||||||
(Amount
in millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Free
cash flow
|
$ | (140 | ) | $ | 170 | |||
Net
cash used in investing activities
|
514 | 838 | ||||||
Acquisitions
|
(5 | ) | (100 | ) | ||||
Business
dispositions
|
14 | - | ||||||
Capital
lease payments
|
24 | 20 | ||||||
Net
cash provided by operating activities
|
$ | 407 | $ | 928 | ||||
Net
cash used in investing activities
|
$ | (514 | ) | $ | (838 | ) | ||
Net
cash provided by financing activities
|
$ | 114 | $ | 953 |
|
However,
CSC’s free cash flow measure does not distinguish operating cash flows
from investing cash flows as they are required to be presented in
accordance with GAAP, and should not be considered a substitute for
operating and investing cash flows as determined in accordance with
GAAP. Free cash flow is one of the factors CSC management uses
in reviewing the overall performance of the
business. Management compensates for the limitations of this
non-GAAP measure by also reviewing the GAAP measures of operating,
investing and financing cash flows as well as debt levels measured by the
debt-to-total capitalization ratio.
|
·
|
North
American Public Sector – The NPS 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. In fiscal 2009, NPS was treated as a
reportable segment and continues to be a reportable segment in fiscal
2010.
|
·
|
Managed
Services Sector – The MSS segment provides large-scale outsourcing
solutions offerings as well as midsize services delivery to customers
globally. In fiscal 2009, Global Outsourcing Services (GOS) was
considered a separate operating and reportable segment. In
fiscal 2010, the name of the segment was changed to Managed Services
Sector; and the Applications & Technology Services (ATS) unit was
moved from the Business Solutions & Services – Other (BS&S -
Other) segment to MSS due to the fact that its services, particularly its
applications management, are more aligned with the Company’s outsourcing
services rather than consulting services. ATS results are no longer
reported separately to the Chief Operating Decision Maker (CODM) and are
included with the MSS segment.
|
·
|
Business
Solutions & Services – The BSS segment provides industry specific
consulting and systems integration services, business process outsourcing,
and intellectual property (IP) – based software
solutions. These service offerings and clientele
overlap. In fiscal 2009, multiple operating segments that
reported directly into the CODM were aggregated into three reportable
segments: BS&S- Consulting, BS&S- Financial Services and BS&S-
Other. As a result of the reorganization for fiscal 2010, the
BSS line of service is now a single operating segment with one sector
president reporting directly to the CODM with financial information
provided at the consolidated BSS sector level. Based on this
change, BSS is considered a reportable segment in fiscal 2010.
Furthermore, most of the India operating segment, which was part of the
BS&S – Other reportable segment in fiscal 2009, has been moved to the
MSS operating segment and renamed ATS as noted
above.
|
Quarter
Ended
|
||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
Change
|
Percent
|
||||||||||||
NPS
|
$ | 1,477 | $ | 1,476 | $ | 1 | 0.1 | % | ||||||||
MSS
|
1,618 | 1,607 | 11 | 0.7 | ||||||||||||
BSS
|
887 | 893 | (6 | ) | (0.7 | ) | ||||||||||
Corporate
|
4 | 4 | - | - | ||||||||||||
Subtotal
|
3,986 | 3,980 | 6 | 0.2 | ||||||||||||
Eliminations
|
(33 | ) | (28 | ) | (5 | ) | 17.9 | |||||||||
Total
Revenue
|
$ | 3,953 | $ | 3,952 | $ | 1 | - | % |
Nine
Months Ended
|
||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
Change
|
Percent
|
||||||||||||
NPS
|
$ | 4,617 | $ | 4,464 | $ | 153 | 3.4 | % | ||||||||
MSS
|
4,761 | 5,308 | (547 | ) | (10.3 | ) | ||||||||||
BSS
|
2,589 | 2,934 | (345 | ) | (11.8 | ) | ||||||||||
Corporate
|
13 | 12 | 1 | 8.3 | ||||||||||||
Subtotal
|
11,980 | 12,718 | (738 | ) | (5.8 | ) | ||||||||||
Eliminations
|
(88 | ) | (90 | ) | 2 | (2.2 | ) | |||||||||
Total
Revenue
|
$ | 11,892 | $ | 12,628 | $ | (736 | ) | (5.8 | )% |
Quarter
Ended
|
||||||||||||||||
Acquisitions
|
Approximate
Impact of Currency Fluctuations
|
Net
Internal Growth
|
Total
|
|||||||||||||
NPS
|
0.5 | % | - | (0.4 | )% | 0.1 | % | |||||||||
MSS
|
- | 5.9 | % | (5.2 | ) | 0.7 | ||||||||||
BSS
|
1.0 | 7.8 | (9.5 | ) | (0.7 | ) | ||||||||||
Cumulative
Net Percentage
|
0.4 | % | 4.2 | % | (4.6 | )% | - |
Nine
Months Ended
|
||||||||||||||||
Acquisitions
|
Approximate
Impact of Currency Fluctuations
|
Net
Internal Growth
|
Total
|
|||||||||||||
NPS
|
0.7 | % | 0.0 | % | 2.7 | % | 3.4 | % | ||||||||
MSS
|
- | (3.4 | ) | (6.9 | ) | (10.3 | ) | |||||||||
BSS
|
0.6 | (1.4 | ) | (11.0 | ) | (11.8 | ) | |||||||||
Cumulative
Net Percentage
|
0.4 | % | (1.7 | )% | (4.5 | )% | (5.8 | )% |
Quarter
Ended
|
||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
Change
|
Percent
|
||||||||||||
Department
of Defense
|
$ | 1,074 | $ | 1,069 | $ | 5 | 0.5 | % | ||||||||
Civil
agencies
|
353 | 373 | (20 | ) | (5.4 | ) | ||||||||||
Other
(1)
|
50 | 34 | 16 | 47.1 | ||||||||||||
Total
North American Public Sector
|
$ | 1,477 | $ | 1,476 | $ | 1 | 0.1 | % |
Nine
Months Ended
|
||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
Change
|
Percent
|
||||||||||||
Department
of Defense
|
$ | 3,405 | $ | 3,130 | $ | 275 | 8.8 | % | ||||||||
Civil
agencies
|
1,062 | 1,217 | (155 | ) | (12.7 | ) | ||||||||||
Other
(1)
|
150 | 117 | 33 | 28.2 | ||||||||||||
Total
North American Public Sector
|
$ | 4,617 | $ | 4,464 | $ | 153 | 3.4 | % |
(1)
|
Other
revenues consist of state, local and select foreign government as well as
commercial contracts performed by the North American Public Sector
reporting segment.
|
Quarter
Ended
|
||||||||||||||||||||
Amount
|
Percentage
Of
Revenue
|
Percentage
Point
Change
|
||||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
January
1, 2010
|
January
2, 2009
|
||||||||||||||||
Cost of
services (excludes
depreciation and amortization)
|
$ | 3,105 | $ | 3,085 | 78.5 | % | 78.1 | % | 0.4 | % | ||||||||||
Selling,
general and administrative
|
239 | 261 | 6.0 | 6.6 | (0.6 | ) | ||||||||||||||
Depreciation
and amortization
|
280 | 282 | 7.1 | 7.1 | - | |||||||||||||||
Interest
expense, net
|
44 | 56 | 1.1 | 1.4 | (0.3 | ) | ||||||||||||||
Other
income
|
(6 | ) | 5 | (0.2 | ) | 0.1 | (0.3 | ) | ||||||||||||
Total
|
$ | 3,662 | $ | 3,689 | 92.5 | % | 93.3 | % | (0.8 | )% |
Nine
Months Ended
|
||||||||||||||||||||
Amount
|
Percentage
Of
Revenue
|
Percentage
Point
Change
|
||||||||||||||||||
(Dollars in
millions)
|
January
1, 2010
|
January
2, 2009
|
January
1, 2010
|
January
2, 2009
|
||||||||||||||||
Cost of
services (excludes
depreciation and amortization)
|
$ | 9,476 | $ | 10,097 | 79.7 | % | 80.0 | % | (0.3 | ) | ||||||||||
Selling,
general and administrative
|
732 | 824 | 6.1 | 6.5 | (0.4 | ) | ||||||||||||||
Depreciation
and amortization
|
825 | 912 | 6.9 | 7.2 | (0.3 | ) | ||||||||||||||
Interest
expense, net
|
138 | 160 | 1.2 | 1.3 | (0.1 | ) | ||||||||||||||
Other
income
|
(15 | ) | 9 | (0.1 | ) | 0.1 | (0.2 | ) | ||||||||||||
Total
|
$ | 11,156 | $ | 12,002 | 93.8 | % | 95.0 | % | (1.2 | ) |
Nine
Months Ended
|
||||||||
(Amounts in
millions)
|
January
1, 2010
|
January
2, 2009
|
||||||
Net cash
provided by operating activities
|
$ | 407 | $ | 928 | ||||
Net cash used
in investing activities
|
(514 | ) | (838 | ) | ||||
Net cash
provided by financing activities
|
114 | 953 | ||||||
Effect of
exchange rate changes on cash and cash equivalents
|
123 | (69 | ) | |||||
Net increase
in cash and cash equivalents
|
130 | 974 | ||||||
Cash and cash
equivalents at beginning of year
|
2,297 | 699 | ||||||
Cash
and cash equivalents at quarter end
|
$ | 2,427 | $ | 1,673 |
·
|
Net income
decreased $170 million in the first nine months of fiscal 2010 compared to
the prior fiscal period.
|
·
|
Depreciation
and other non-cash charges of $878 million were $109
million lower than the prior year period. Decreases were seen
in all segments, led by MSS which reports approximately two-thirds of the
Company’s depreciation and amortization. By asset type,
slightly over half of the decrease was in amortization of intangible
assets, including deferred contract costs and acquired customer-related
intangibles, as normal amortization outweighed the impact of new
additions. The remainder of the decrease was in depreciation of
property and equipment, reflecting the Company’s overall efforts to limit
capital spending.
|
·
|
Unrealized
foreign currency gains of $44 million reflect foreign currency exchange
rate trends. The Company continues to execute a hedging program
and, for income statement purposes, had largely offsetting realized
losses.
|
·
|
Net outflows
for operating assets of $173 million for the first nine months of fiscal
2010 versus the prior year nine months of $125 million were driven by
increased accounts receivable and other current assets, primarily work in
process.
|
·
|
Decreases in
operating liabilities of $883 million were $51 million greater than the
prior year nine months decrease of $832 million, driven primarily by lower
decreases for the period in deferred income and accounts
payable.
|
As
of
|
||||||||
Dollars
in millions
|
January
1, 2010
|
April
3, 2009
|
||||||
Debt
|
$ | 4,307 | $ | 4,235 | ||||
Equity
|
6,680 | 5,618 | ||||||
Total
capitalization
|
$ | 10,987 | $ | 9,853 | ||||
Debt to total
capitalization
|
39.2 | % | 43.0 | % |
(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.
|
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
|
||||
October 3,
2009 to October 30, 2009
|
2,734
|
$51.78
|
-
|
$ -
|
||||
October 31,
2009 to November 27, 2009
|
-
|
$ -
|
||||||
November 28,
2009 to January 1, 2010
|
11,755
|
$56.34
|
-
|
$ -
|
(1)
|
The Company
accepted 3,902 shares of its common stock in the quarter ended January 1,
2010, 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.
|
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)
|
Exhibit
Number
|
Description of Exhibit
|
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)
|
Exhibit
Number
|
Description of Exhibit
|
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
|
Form of
Performance-Based Restricted Stock Unit Agreement (Replacement Grant)
(incorporated by reference to the Company’s Quarterly Report on Form 10-Q
for the fiscal quarter ended July 3, 2009)
|
Exhibit
Number
|
Description of Exhibit
|
10.31
|
Form of
Senior Management and Key Employee Severance Agreement, as amended and
restated effective May 20, 2009(1)
|
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.)
|
101.INS
|
XBRL Instance
(3)
|
101.SCH
|
XBRL Taxonomy
Extension Schema (3)
|
101.CAL
|
XBRL Taxonomy
Extension Calculation (3)
|
101.LAB
|
XBRL Taxonomy
Extension Labels (3)
|
101.PRE
|
XBRL Taxonomy
Extension Presentation (3)
|
(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.
|
|
(3) Furnished,
not filed.
|
|
COMPUTER
SCIENCES CORPORATION
|
||
Date:
February 10, 2010
|
By:
|
/s/ Donald G. DeBuck |
Donald
G. DeBuck
|
||
Vice
President and Controller
|
||
(Principal
Accounting Officer)
|
||