1. Quar terly Highlights
Third Quarter Fiscal 2006 (Ended December 30, 2005)
“Our third quarter results further demonstrated strong operational progress. We are pleased with fiscal 2006
About CSC
results to date as we enter the last quarter.”
Van B. Honeycutt
Founded in 1959, Chairman and Chief Executive Officer
Computer Sciences Computer Sciences Corporation
Corporation is a leading
Computer Sciences Corporation results for its fiscal 2006 third quarter included: revenue of $3.58 billion,
global IT services company.
up 2.5% over last year’s third quarter (approximately 5% in constant currency); net income of $203.5 million,
CSC’s mission is to provide
or $1.08 per share (diluted), including an after-tax gain reported from discontinued operations of $38.4
customers in industry
million, or 20 cents per share, for resolution of the working capital adjustment on the sale of certain DynCorp
and government with activities; earnings per share, diluted, from continuing operations of 88 cents, up 31.3%, compared with last
solutions crafted to meet year’s third quarter earnings per share (diluted) from continuing operations of 67 cents; and major business
their specific challenges announcements of $3.1 billion.
and enable them to profit The sources of revenue growth during the quarter were primarily CSC’s U.S. federal government and U.S.
commercial operations. U.S. commercial revenue growth again resulted from recent outsourcing engagements
from the advanced use
and the continuing improvement in North American consulting and systems integration activities. The U.S.
of technology.
federal revenue growth was led by gains within the company’s Department of Defense (DoD)-related activities.
The company’s Australia and Asia operations also contributed to the quarter’s revenue growth.
With approximately
The company is encouraged by strengthening demand in the United States for shorter-term project work,
80,000 employees support-
and there was improved market demand within the financial services vertical and within the Australian and
ing continuing operations, Asia-Pacific markets. Increased volumes on existing engagements contributed to constant currency revenue
CSC provides innovative growth in the company’s European operations.
solutions for customers The market for U.S. federal government information technology (IT) services continues to demonstrate
around the world by solid demand. CSC’s strong competitive position and historical win rate have enabled the company to continue
to be a leader in providing IT services to this large and growing market.
applying leading tech-
Over the next 14 months, through fiscal 2007, CSC’s U.S. federal pipeline of opportunities is approximately
nologies and CSC’s own
$28 billion, comprised of about 390 programs from a broad range of government agencies and departments.
advanced capabilities.
During the quarter, North American consulting and systems integration activities delivered higher average
These include systems
headcount, utilization and billing rates, compared to the year-ago quarter. The market for similar shorter-term
design and integration;
activities in Europe continued to be impacted negatively by persistent soft demand in certain country-specific
IT and business process markets.
outsourcing; applications Third quarter global commercial revenue was $2.35 billion, compared to $2.34 billion in the year-ago
software development; quarter. U.S. commercial revenue was $998.3 million, up 3.4%. European revenue was $1.02 billion, a decline
Web and application of 4.6% (up approximately 3% in constant currency). The contribution from recent outsourcing engagements
resulted in the quarter’s U.S. commercial revenue growth. CSC’s non-European international revenue was
hosting; and management
$334.9 million, up 8.3% (approximately 9% in constant currency).
consulting.
For the third quarter, CSC’s U.S. federal government revenue increased 6.9% to $1.22 billion from the
third quarter of fiscal 2005. Revenue derived from CSC’s DoD-related business was $820.1 million, up 12.0%.
Headquartered in
This growth was the result of incremental revenue from a combination of existing engagements and
El Segundo, California, recent new business awards. CSC’s civil agencies activities generated revenue of $366.3 million, down 3.3%,
CSC reported revenue compared to last year. The decline was primarily attributable to the recent successful deployment of the
of $14.6 billion for Financial Management System associated with the IRS Modernization activity. Other federal sector revenue,
the 12 months ended comprised of state, local and foreign government as well as commercial contracts performed by the U.S.
federal sector reporting segment, was $36.3 million, up from last year’s $32.7 million.
December 30, 2005.
FINANCIAL HIGHLIGHTS
3RD QUARTER FISCAL 2006 REVENUES
FROM CONTINUING OPERATIONS (unaudited)
BY BUSINESS SEGMENT Third Quarter Nine Months Ended
$ in millions,except
per-share amounts
Commercial U.S. Federal
12/31/04 12/31/04
12/30/05 12/30/05
66% 34% ($ in millions) Revenues
From Continuing
U.S. Commercial – $998.3 Operations $ 3,488.6 $10,732.1 $10,180.1
$ 3,557.0
23%
28% Europe – $1,021.1 $ 434.6 * $ 398.4
Net Income $ 157.5
$ 203.5
Other International – $334.9 Diluted Earnings
Per Share
10% U.S. DoD – $820.1
From Continuing
U.S. Civil Agencies – $366.3
Operations $ 0.67 1.99 * $ 1.73
$ 0.88 $
29% 9%
Other U.S. Federal – $36.3
1%
* Includes a $33.1 million (18 cents per share) after-tax non-cash asset impairment
Total – $3,577.0 special charge related to the Nortel Networks contract.

2. • U.S. Department of Defense (DoD) –
CSC’S SERVICES ENCOMPASS INVESTMENT DATA
CSC was awarded a contract to continue
SEVERAL BROAD AREAS NYSE: CSC
• Outsourcing – Involves operating all supporting the DoD’s Missile Defense Recent Closing Price: 54.28 (3/3/06)
Agency (MDA) with scientific, engineer-
or a portion of a customer’s technology 52-Week Range: 42.31 – 59.90
ing and technical assistance at the
infrastructure. CSC also provides Shares Outstanding: 186.5 million
Ground-based Midcourse Defense Joint
business process outsourcing, which is Registered Shareholders: 8,909
Program Office. The new agreement
the management of a client’s non-core Institutional Ownership: 84%
follows and is incremental to a contract
business functions. Average Daily Trading Volume:
signed with the MDA in 2002 under 3rd Quarter FY 2006 – 1,610,532
• which CSC provides similar services.
IT & Professional Services – Designing, Market Cap: $10.1 billion
developing, implementing and integrat-
• U.S. Department of Treasury – CSC
ing complete information systems, as RESEARCH COVERAGE
won a Total Information Processing
well as advising clients on the strategic A.G. Edwards (Timothy Willi)
Support Services-3 (TIPSS-3) contract
acquisition and utilization of IT. Banc of America Securities (Abhi Gami)
to provide a full range of IT and tech- Bear Stearns ( Jim Kissane)
nical services to the U.S. Department
RECENT ENGAGEMENTS INCLUDE: Bernstein (Rod Bourgeois)
• Pan-American Life Insurance – A lead- of Treasury and its bureaus. This new Citigroup (Pat Burton)
agreement follows and is incremental
ing international insurance company, Credit Suisse (Eric Sledgister)
to the TIPSS-2 contract, awarded
Pan-American Life Insurance, signed Deutsche Bank (Brandt Sakakeeny)
in 2000, under which CSC provides
an IT outsourcing agreement with CSC Goldman Sachs (Greg Gould)
a comprehensive range of IT services.
to support its U.S. and Latin American J.P. Morgan Securities (Tien-tsin Huang)
For more than a decade, CSC has
operations. Through outsourcing, Pan- Jefferies & Co. ( Joe Vafi)
provided comprehensive IT support
American gains access to the latest tech- Merrill Lynch (Greg Smith)
and information systems to the
nology and industry best practices, as Moors & Cabot Capital Markets
Treasury Department as it has moved
well as a more predictable and scalable (Cindy Shaw)
forward into world-class e-government
structure for its IT costs. Morgan Stanley (David Togut)
operations. Prudential Securities (Bryan Keane)
• Schroders – Schroders, a global asset SG Cowen & Co. (Moshe Katri)
• United Technologies Corporation (UTC)
management company, renewed its Standard & Poor’s ( Richard Stice)
– CSC expanded its IT outsourcing
existing IT outsourcing contract with Stifel, Nicolaus & Co. (Bill Loomis)
contract with United Technologies
CSC. Under the terms of the new Thomas Weisel Partners (David Grossman)
Corporation to include UTC operations
contract, CSC will provide Schroders UBS Warburg (Adam Frisch)
in the People’s Republic of China. Under
with infrastructure services for mid- Value Line (George Niemond)
the contract extension, CSC will provide
range, desktops and networks, and Wachovia Securities (Edward Caso)
infrastructure support for more than
support for key applications. The
1,000 desktop computers and help desk,
partnership between Schroders and SHAREHOLDER SERVICES
security and email services for UTC
CSC is an integral part of the provision For more information regarding CSC:
locations in China.
of IT services within Schroders.
• Shareholder services and literature
request line – (800)542-3070
CSC REVENUE GROWTH FIRST NINE MONTHS FISCAL 2006
•
FROM CONTINUING OPERATIONS REVENUES FROM CONTINUING Web site – www.csc.com
FY 2001-2005* OPERATIONS BY BUSINESS SERVICE*
• Registrar and transfer agent –
$ in billions
Mellon Investor Services
$ 14 23%
P.O. Box 3315
12
S. Hackensack, New Jersey 07606
43%
10 (800)676- 0654 or (201)329- 8660
31%
www.MellonInvestor.com
8
3% • CSC Investor Relations –
6 OUTSOURCING . . . . . . . . . . . . . . . . . . . . 46%
Bill Lackey
Global Commercial 43%
4
Director, Investor Relations
U.S. Federal Sector 3%
(310)615-1700
2 IT & PROFESSIONAL SERVICES . . . . . . . . 54%
Global Commercial 23%
Lisa Runge
U.S. Federal Sector 31%
FY01 FY02 FY03 FY04 FY05
Manager, Investor Relations
* CSC’s fiscal year ends the Friday closest to March 31. * Based on CSC estimates.
(310)615-1680
All statements in this document that do not directly and exclusively relate to historical facts
constitute “forward-looking statements” within the meaning of the Private Securities Litigation Email: InvestorRelations@csc.com
Reform Act of 1995. These statements represent the Company’s intentions, plans, expectations
•
and beliefs, and are subject to risks, uncertainties and other factors, many of which are outside Headquarters
the Company’s control. These factors could cause actual results to differ materially from such 2100 East Grand Avenue
forward-looking statements. For a description of these factors, see the section titled “Forward-
El Segundo, California 90245, USA
Looking Statements” in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter
(310)615-0311
ended December 30, 2005.
Printed in U.S.A. WH# CC-3Q06