1. Computer Sciences Corporation
QUARTERLY HIGHLIGHTS FIRST QUARTER FISCAL 2003 (ENDED JUNE 28, 2002)
ABOUT CSC Both our global commercial outsourcing and U.S. federal opportunity pipelines are healthy and provide a source
of confidence as we pursue a substantial set of potential client engagements. The difficult worldwide economy has
lengthened the global commercial outsourcing decision-making process, but it has not resulted in a diminished
Computer Sciences
pipeline. Our record of success in delivering cost savings and operational improvements to clients globally positions
Corporation, one of the
us to benefit from this expanding IT outsourcing market. We will continue our discipline around controlling our costs,
world’s leading consulting
improving operating efficiencies and aggressively pursuing those opportunities which will contribute to our long-term
and information technology
success and improve our return on investment.
(IT) services firms, helps
Van B. Honeycutt
clients in industry and
Chairman and Chief Executive Officer
government achieve
Computer Sciences Corporation
strategic and operational
results through the use of
Computer Sciences Corporation fiscal 2003 first quarter results include: revenues of $2.76 billion, a
technology. The company’s
2% increase over last year’s comparable quarter (approximately 1% in constant currency); net income
success is based on its
of $79.0 million; and earnings per share (diluted) of 46 cents; and announced major new business awards
culture of working collabo-
of $1.1 billion.
ratively with clients to
Effective March 30, 2002, the company adopted SFAS No. 142, which eliminates the amortization
develop innovative technol-
of goodwill and certain intangible assets. Earnings per share before goodwill and employee workforce
ogy strategies and solutions
amortization increased 18% over the same period last year. This year’s fiscal first quarter revenue increase
that address specific
was primarily driven by U.S. federal government activities. Earnings per share growth resulted from
business challenges.
continued profitability improvement.
With nearly 18% revenue growth, CSC’s U.S. federal government activities comprised 29% of quarterly
Having guided clients revenue. Global commercial outsourcing accounted for another 48% of CSC’s total revenue and, together,
through every major wave these two long-term contract revenue sources totaled approximately 77%.
of change in information CSC’s North American consulting and systems integration activities have been operating under a
technology since 1959, significant slowdown in demand for several quarters. Focus on specific vertical markets and a unique
CSC combines the newest plan-build-manage competency, along with structural and other strategic moves, has resulted in a stronger
technologies with its competitive position for the company. For the quarter just ended, North American consulting and systems
capabilities in consulting, integration revenues were ahead of the preceding quarter, ended March 29, 2002, and profitability
systems design and inte- improved compared to both the first quarter of last fiscal year and the preceding quarter.
gration, IT and business For the first quarter, revenue derived from CSC’s U.S. federal government activities showed excellent
process outsourcing, growth, increasing to $791.7 million, up 17.6% from the $673.2 million recorded in last year’s comparable
applications software, and quarter. Department of Defense (DoD) activities rose 15.2% to $472.9 million from last year’s $410.6
Web and application hosting million, with significant contributions from intelligence community activities and several new awards and
to meet the individual task orders. Civil agencies business rose to $318.8 million, up 21.4% from the $262.6 million reported last
needs of global corporations year, aided primarily by increased work from the IRS Modernization activity and additional tasking from
and organizations. NASA, the Environmental Protection Agency and the Immigration and Naturalization Service.
Global commercial revenues declined 3.3% (approximately 4.9% in constant currency), to $1.97
With more than 66,000 billion compared with $2.04 billion in last year’s first quarter. The continued slowdown in demand for
employees in locations global commercial consulting and systems integration project work was partially offset by growth in the
worldwide, CSC had company’s global outsourcing activities. U.S. commercial revenue was $1.0 billion, down 4.8%. European
revenues of $11.5 billion revenue was $681.9 million, essentially unchanged from the same quarter a year ago (down approximately
for the 12 months ended 3.5% in constant currency). CSC’s non-European international revenue declined 5.2% (approximately
June 28, 2002. 8.4% in constant currency) from last year’s $303.3 million.
FINANCIAL HIGHLIGHTS
1ST QUARTER FISCAL 2003
(unaudited)
Revenues By Major Market
First Quarter
U.S. Federal
Commercial
29%
71%
6/28/02
$ in millions, except per-share amounts 6/29/01
($ in millions)
$2,764.8
Revenues $2,713.7
U.S. Commercial – $1,003.7
17%
Europe – $681.9 $ 79.0
Net Income $ 47.7
36%
12%
Other International – $287.5
$ 0.46
Diluted Earnings Per Share $ 0.28
10% U.S. DoD – $472.9
Effective March 30, 2002, the Company adopted SFAS No. 142 which requires
25% U.S. Civil Agencies – $318.8 that upon adoption goodwill and certain other intangible assets must no longer
be amortized. Amortization of goodwill and acquired employee workforce
was $19.1 million ($18.3 million after tax), or 11 cents per share (diluted),
during the first quarter ended June 29, 2001.
Total – $2,764.8

2. • The United Kingdom Department
CSC’S SERVICES ENCOMPASS INVESTMENT DATA
of Health – The United Kingdom NY SE: CSC
SEVERAL BROAD AREAS
Department of Health awarded
• Outsourcing – Involves operating all Recent Closing Price: 37 (8/16/02)
CSC an IT outsourcing contract to
or a portion of a customer’s technology 52-Week Range: 30.96 – 53.47
support and enhance the Department’s
infrastructure. CSC also provides Shares Outstanding: 171.6 million
information and communications
business process outsourcing, which Registered Shareholders: 10,171
technology investments. Through the
is the management of a client’s non- Institutional Ownership: 79%
contract, the Department is looking
core business functions. Average Daily Trading Volume:
to gain an increase in effectiveness 1st Quarter F Y 2003 – 1,126,173
through remote and offsite working,
• Consulting, Systems Integration Market Cap: $6.3 billion
in addition to achieving greater
and Professional Services – Designing,
connectivity and communication
developing, implementing and RESEARCH COVERAGE
across networks with the National
integrating complete information A.G. Edwards (Greg Gieber)
Health Service and other partner
systems, as well as advising clients Banc of America (Prakash Parthasarathy)
institutions.
on the strategic acquisition and Bear, Stearns ( Jim Kissane)
utilization of IT. Bernstein (Rod Bourgeois)
• D&B – CSC and D&B, formerly known CS First Boston (Barry Chubrik)
as Dun & Bradstreet, signed an IT Deutsche Bank (William Zinsmeister)
RECENT ENGAGEMENTS INCLUDE:
outsourcing agreement whereby D&B
• Environmental Protection Agency Goldman Sachs (Greg Gould)
will transition to CSC data center
(EPA) – A task order was awarded to J.P. Morgan Securities (Dirk Godsey)
operations, technology help desk
CSC to assist the EPA in implementing Legg Mason (William Loomis)
and network management functions
and operating a Central Data Exchange Lehman Brothers (Karl Keirstead)
in the U.S. and the United Kingdom.
(CDX). The CDX will serve as an Merrill Lynch (Stephen McClellan)
D&B, the leading provider of business
enterprisewide portal, providing a Morgan Stanley (David Togut)
information and technology solutions,
single point of entry for required SG Cowen & Co. (Moshe Katri)
is outsourcing its technology operations
environmental reporting from federal, Salomon Smith Barney (Pat Burton)
to focus more of its resources on
state and local government agencies, SoundView ( John Jones, Jr.)
driving growth in its core business.
tribal communities and industry. Standard & Poor’s ( Richard Stice)
Thomas Weisel Partners (David Grossman)
• Raytheon Company -- Under three
• U.S. Department of State (DoS) – UBS Warburg (Adam Frisch)
agreements, Raytheon Company
Under an agreement with the DoS, U.S. Bancorp Piper Jaffray
extended and expanded its IT
CSC will provide the full spectrum of (T. Brett Manderfeld)
outsourcing contracts with CSC.
IT support services and professional/ Value Line (George Niemond)
One agreement calls for CSC to
technical services to DoS organizations,
manage Raytheon Aircraft Company’s
bureaus and U.S. embassies in more SHAREHOLDER SERVICES
IT infrastructure and under two
than 280 locations worldwide. The For more information regarding CSC:
new extended agreements, CSC will
contract is part of a long-term depart-
continue to provide engineering
ment effort to improve its IT capabili- • Shareholder services and literature
computing and applications support
ties supporting U.S. foreign policy request line – (800)542-3070
to Raytheon.
activities in more than 150 countries.
• Website – www.csc.com
CSC REVENUE GROWTH 1ST QUARTER FISCAL 2003
REVENUES BY BUSINESS SERVICES* • Registrar and transfer agent –
FY 1998- 2002*
Mellon Investor Services
$ in billions
$ 12 P.O. Box 3315
23% S. Hackensack, New Jersey 07606
48% (800)526 - 0801 or (201)329- 8660
www.mellon-investor.com
10 23%
• CSC Investor Relations –
6%
OUTSOURCING . . . . . . . . . . . . . . . . . . . . 54% Bill Lackey
8 Global Commercial 48% Director, Investor Relations
Federal Sector 6%
(310)615 -1700
CONSULTING, SYSTEMS INTEGRATION
AND PROFESSIONAL SERVICES . . . . . . . .46%
6 Lisa Runge
Global Commercial 23%
FY98 FY99 FY00 FY01 FY02
Federal Sector 23% 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
Email: InvestorRelations@csc.com
facts constitute “forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements represent the Company’s intentions,
plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, • Headquarters
many of which are outside the Company’s control. These factors could cause actual 2100 East Grand Avenue
results to differ materially from such forward-looking statements. For a description
El Segundo, California 90245, USA
of these factors, see the section titled “Forward-Looking Statements” in the Company’s
(310)615-0311
Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2002.
Printed in U.S.A. WH# CC -1Q03