SEC Filing | DXC Technology

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 quarterly period ended July 2, 1999 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.) 2100 East Grand Avenue El Segundo, California 90245 (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (310) 615-0311 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 [ ] 159,987,078 shares of Common Stock, $1.00 par value, were outstanding on July 30, 1999.

COMPUTER SCIENCES CORPORATION Index to Form 10-Q Page ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Statements of Income, First Quarter Ended July 2, 1999 and July 3, 1998 .............. 3 Consolidated Condensed Balance Sheets, July 2, 1999 and April 2, 1999 ................................. 4 Consolidated Condensed Statements of Cash Flows, First Quarter Ended July 2, 1999 and July 3, 1998 .............. 5 Notes to Consolidated Condensed Financial Statements .............. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ............ 9 Item 3. Quantitative and Qualitative Disclosures About Market Risk .............................................. 15 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K ............................. 16 2

PART I, ITEM 1. FINANCIAL STATEMENTS COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (unaudited) First Quarter Ended ----------------------------- (In thousands except per-share amounts) July 2, 1999 July 3, 1998 ------------ ------------ Revenues $2,063,380 $1,753,928 ---------- ---------- Costs of services 1,635,637 1,382,050 Selling, general and administrative 187,287 162,824 Depreciation and amortization 114,629 104,102 Interest expense 13,283 11,901 Interest income (4,924) (3,384) ---------- ---------- Total costs and expenses 1,945,912 1,657,493 ---------- ---------- Income before taxes 117,468 96,435 Taxes on income 39,200 32,100 ---------- ---------- Net income $ 78,268 $ 64,335 ========== ========== Earnings per share (note A): Basic $ 0.49 $ 0.41 ========== ========== Diluted $ 0.48 $ 0.40 ========== ========== [FN] See accompanying notes. 3

COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS July 2, April 2, (In thousands) 1999 1999 ----------- ----------- (unaudited) ASSETS Cash and cash equivalents $ 233,378 $ 602,593 Receivables 1,932,921 1,777,262 Prepaid expenses and other current assets 319,586 289,130 ----------- ----------- Total current assets 2,485,885 2,668,985 ----------- ----------- Goodwill 702,381 653,034 Software and other assets 652,886 598,815 Property and equipment, net of accumulated depreciation and amortization of $1,293,141 and $1,226,569 1,154,429 1,086,875 ----------- ----------- Total assets $4,995,581 $5,007,709 =========== =========== LIABILITIES Short-term debt and current maturities of long-term debt $ 455,967 $ 592,942 Accounts payable 349,389 374,978 Accrued payroll and related costs 409,303 386,788 Other accrued expenses 435,010 459,821 Deferred revenue 155,282 137,378 Income taxes payable 139,948 129,505 ----------- ----------- Total current liabilities 1,944,899 2,081,412 ----------- ----------- Long-term debt, net 420,841 397,860 ----------- ----------- Other long-term liabilities 132,504 128,583 ----------- ----------- STOCKHOLDERS' EQUITY (note B) Common stock issued, par value $1.00 per share 160,214 159,510 Additional paid in capital 758,447 730,238 Earnings retained for use in business 1,656,393 1,578,125 Accumulated other comprehensive income (note D) (62,738) (53,235) Less common stock in treasury (14,685) (14,413) Unearned restricted stock and other (294) (371) ----------- ----------- Total stockholders' equity 2,497,337 2,399,854 ----------- ----------- Total liabilities and stockholders' equity $4,995,581 $5,007,709 =========== =========== [FN] See accompanying notes. 4

COMPUTER SCIENCES CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (unaudited) First Quarter Ended ----------------------- (In thousands, increase (decrease) July 2, July 3, in cash and cash equivalents) 1999 1998 ---------- ---------- Cash flows from operating activities: Net income $ 78,268 $ 64,335 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 114,629 104,102 Provision for losses on accounts receivable (2,090) (921) Changes in assets and liabilities, net of effects of acquisitions: Increase in assets (144,600) (126,639) (Decrease)increase in liabilities (20,596) 1,617 ---------- ---------- Net cash provided by operating activities 25,611 42,494 ---------- ---------- Investing activities: Purchases of property and equipment (135,160) (92,372) Acquisitions, net of cash acquired (61,092) (22,200) Dispositions 37,947 Outsourcing contracts (60,094) (20,182) Software (14,611) (18,117) Other investing cash flows 5,790 (15,356) ---------- ---------- Net cash used in investing activities (265,167) (130,280) ---------- ---------- Financing activities: Borrowings(repayments) under commercial paper, net 16,502 (1,131) (Borrowings)repayments under lines of credit, net (7,985) 5,924 Principal payments on long-term debt (158,719) (7,211) Proceeds from stock option transactions 19,942 14,508 Other financing cash flows 302 684 ---------- ---------- Net cash (used in) provided by financing activities (129,958) 12,774 ---------- ---------- Effect of exchange rate changes on cash and cash equivalents 299 307 ---------- ---------- Net decrease in cash and cash equivalents (369,215) (74,705) Cash and cash equivalents at beginning of year 602,593 274,688 ---------- ---------- Cash and cash equivalents at end of period $ 233,378 $ 199,983 ========== ========== [FN] See accompanying notes. 5

COMPUTER SCIENCES CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) (A) Basic and diluted earnings per share are calculated as follows (in thousands except per share amounts): First Quarter Ended -------------------------------- July 2, 1999 July 3, 1998 ------------ ------------ Net income for basic and diluted EPS $ 78,268 $ 64,335 ======== ======== Common share information: Average common shares outstanding for basic EPS 159,389 157,327 Dilutive effect of stock options 3,288 3,878 -------- -------- 162,677 161,205 ======== ======== Basic EPS $ 0.49 $ 0.41 Diluted EPS 0.48 0.40 In accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, the computation of diluted EPS did not include stock options which were antidilutive, as their exercise price was greater than the average market price of the common stock of Computer Sciences Corporation ("CSC" or the "Company") during the year. The number of such options was 196,561 and 1,220 for the three months ended July 2, 1999 and July 3, 1998, respectively. (B) No dividends were paid during the periods presented. At July 2, 1999 and April 2, 1999, there were 160,214,174 and 159,510,065 shares, respectively, of $1.00 par value common stock issued, and 374,262 and 369,607 shares, respectively, of treasury stock. (C) Cash payments for interest on indebtedness were $18 million and $14 million for the three months ended July 2, 1999 and July 3, 1998, respectively. Cash payments (refunds) for taxes on income were $11.5 million and $(56.5) million for the three months ended July 2, 1999 and July 3, 1998, respectively. 6

(D) The components of comprehensive income, net of tax, are as follows (in thousands): First Quarter Ended -------------------------------- July 2, 1999 July 3, 1998 ------------ ------------ Net income $ 78,268 $ 64,335 Foreign currency translation adjustment (9,503) (9,102) --------- --------- Comprehensive income $ 68,765 $ 55,233 ========= ========= Accumulated other comprehensive income presented on the accompanying consolidated condensed balance sheets consists of the accumulated foreign currency translation adjustment and the minimum pension liability adjustment. (E) CSC's business involves operations which provide management and information technology consulting, systems integration and outsourcing. Based on the criteria of SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," CSC has two reportable segments: the U.S. Federal Sector and the Global Commercial Sector. The U.S. Federal Sector 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 U.S. Federal Sector revenues reported below will vary from U.S. Federal government revenue presented elsewhere in this report due to overlapping activities between segments. Information on reportable segments is as follows (in thousands): Global U.S. Commercial Federal Sector Sector Corporate Total ---------- -------- --------- ---------- First Quarter Ended July 2,1999 Revenues $1,586,812 $476,486 $ 82 $2,063,380 Earnings (loss) before interest and taxes 101,488 28,257 (3,918) 125,827 First Quarter Ended July 3,1998 Revenues $1,294,205 $459,681 $ 42 $1,753,928 Earnings (loss) before interest and taxes 79,592 26,394 (1,034) 104,952 7

(F) CSC adopted the American Institute of Certified Public Accountants Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" as of the first quarter of fiscal 2000. This statement requires the capitalization of internal use computer software costs provided that certain criteria are met. These capitalized software costs are amortized on a straight-line basis over the useful life of the software. The adoption of SOP 98-1 had no material impact on the Company's consolidated financial position, results of operations or cash flows. (G) In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires all derivatives to be recorded on the balance sheet at fair value and establishes accounting standards for hedging activities. In June 1999, the FASB issued SFAS No. 137, which amends SFAS No. 133 by deferring its effective date one year to fiscal years beginning after June 15, 2000. The Company is currently assessing the impact this statement will have and, based on preliminary estimates, does not expect the adoption to have a material impact on its consolidated financial position or results of operations. (H) The financial information reported, which is not necessarily indicative of the results for a full year, is unaudited but includes all adjustments which the Company considers necessary for a fair presentation. All such adjustments are normal recurring adjustments. 8

PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS First Quarter of Fiscal 2000 versus First Quarter of Fiscal 1999 Revenues During the first quarter ended July 2, 1999, the Company's total revenue increased 17.6%, or $309 million, over the same period last year. Global commercial sector revenues, which consist of U.S. Commercial, European, and other international revenue, grew 22.6%, or $293 million over the same quarter of last year. U.S. Commercial revenue grew 16.1% or $114 million during the first quarter of fiscal 2000 over the same period last year. Over half of the growth was generated from information technology outsourcing contracts. The balance was due to increased demand for services related to enterprise-wide solutions, e-business, supply chain and systems integration, and growth within the Company's financial services and healthcare vertical markets. European revenues grew $80.4 million or 16.4% during the first quarter. The growth was provided principally from increases in outsourcing services, additional demand for consulting and systems integration activities and revenue generated by acquisitions made last year in France, Italy and the Netherlands. Other international revenue for the first quarter nearly doubled to $198.7 million. The increase was the result of last year's fourth quarter acquisition of CSA Holdings, Ltd. and expansion of CSC's Australia operations. U.S. Federal sector revenue increased 3.7% or $17 million during the first quarter. Revenue gains generated from civil agencies were partially offset by reductions in work performed on several Department of Defense and NASA contracts. The Company announced new business awards of over $4.7 billion during the first quarter, including $2.7 billion related to Global Commercial activities and $2 billion in new federal contract awards. The Company's continued growth has created a broad global revenue base across numerous customers, industries, geographic regions and service regions. 9

Costs and Expenses The Company's costs and expenses as a percentage of revenue are as follows (dollars in millions): Dollar Amount Percentage of Revenue -------------- --------------------- First Quarter First Quarter -------------- -------------- Fiscal Fiscal -------------- -------------- 2000 1999 2000 1999 ------ ------ ------ ------ Costs of services $1,636 $1,382 79.3% 78.8% Selling, general & admin. 187 163 9.1 9.3 Depreciation and amort. 115 104 5.5 5.9 Interest expense, net 8 9 0.4 0.5 ------ ------ ------ ------ Total $1,946 $1,658 94.3% 94.5% ====== ====== ====== ====== Comparing the first quarter of fiscal 2000 and fiscal 1999, total costs and expenses improved as a percentage of revenue, with improvements registered in each component with the exception of costs of services. Lower selling, general and administrative expenses as a percentage of revenue was principally related to performance improvements within both the Company's Global Commercial and U.S Federal Sectors. Lower depreciation and amortization expenses as a percentage of revenue were related primarily to reduced depreciation expenses recorded in the Company's European operations due to certain customer assets being fully depreciated. The increase in costs of services as percentage of revenue was principally associated with the Company's CSA Singapore operation which has a higher ratio of costs of services to total costs and expenses than most of the Company's operations. 10

Income Before Taxes Income before taxes increased $21 million to $117.5 million, up 21.8% over the same quarter last year. The resulting margin was 5.7% compared to 5.5% for last year's first quarter. Net Income Net income was up $14 million to $78.3 million for the first quarter of fiscal 2000, up 21.7% over last year's first quarter. This year's first quarter diluted earnings per share of 48 cents increased 20% over last year's first quarter diluted earnings per share of 40 cents. Cash Flows Cash provided by operating activities was $25.6 million for the first quarter compared with $42.5 million during the same period last year. The decrease of $16.9 million resulted from changes in working capital partially offset by higher earnings and non-cash depreciation and amortization expenses. The Company's cash expenditures for investing activities totaled $265.2 million for the most recent quarter versus $130.3 million during the same period of last year. The increase principally relates to acquisitions in Italy and Austria and increases in property and equipment, and outsourcing assets. Cash used for financing activities was $130 million for the most recent quarter versus cash provided by financing activities of $12.8 million for the same period last year. Repayment of the Company's $150 million 6.80% notes due April 1999 was the principal cause. Financial Condition During the first quarter of fiscal 2000, the Company's capital outlays included $256.3 million of business investments in the form of fixed asset purchases, acquisitions and outsourcing contracts. These amounts were funded from operating cash flows, additional borrowings and existing cash balances, which decreased from $602.6 million to $233.4 million. The Company's debt-to- total capitalization ratio improved to 26% at July 2, 1999 from 29.2% at fiscal 1999 year end, principally due to the repayment of the Company's 6.80% notes due April 1999. The Company has an option to require a subsidiary of Equifax Inc. to purchase the Company's credit reporting business as further described in Note 11 of the Company's Annual Report on Form 10-K for fiscal 1999. The exercise price of this put option is equal to the appraised value of the business. 11

It is management's opinion that the Company will be able to meet its liquidity and cash needs for the foreseeable future through a combination of cash flows from operating activities, cash balances, unused borrowing capacity and other financing activities, including the issuance of debt and/or equity securities, and/or the exercise of the put option described above. New Accounting Pronouncements The Company has adopted the American Institute of Certified Public Accountants Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or Obtained for Internal Use" as of the first quarter of fiscal 2000. This statement requires the capitalization of internal use computer software costs provided that certain criteria are met. These capitalized software costs are amortized on a straight-line basis over the useful life of the software. The adoption of SOP 98-1 had no material impact on the Company's consolidated financial position, results of operations or cash flows. In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires all derivatives to be recorded on the balance sheet at fair value and establishes accounting standards for hedging activities. In June 1999, the FASB issued SFAS No. 137, which amends SFAS No. 133 by deferring its effective date one year to fiscal years beginning after June 15, 2000. The Company is currently assessing the impact this statement will have and, based on preliminary estimates, does not expect the adoption to have a material impact on its consolidated financial position or results of operations. Year 2000 Readiness Disclosure Since its inception, CSC has dealt with significant changes in the information technology industry. As a result, resources are constantly being employed to modify, upgrade and enhance systems and infrastructure on behalf of clients and for internal needs. The Year 2000 issue represents another one of these changes. It is the result of computer systems that represent years as a two- digit rather than a four-digit field. Any of such systems that utilize date sensitive data may not properly recognize a date field of 00 as the year 2000, but as some other date, typically the year 1900. This could result in possible system failure, miscalculations, or data corruption, thereby affecting normal business activity. The Company has established a two-phase Year 2000 program to ensure that its proprietary products, computer systems and facilities are Year 2000 ready. The initial phase, which included planning, inventory and assessment, has been completed with respect to CSC and all subsidiaries existing as of December 31, 1998, with the final phase, which consists of correction, testing, deployment and acceptance, expected to be substantially completed by the end of the Company's second fiscal quarter ending October 1, 1999. The very small percentage of final phase activities which may not be completed by October 1, 1999, is primarily related to certain clients which have not yet upgraded applications for which they are responsible, thereby delaying their migration to a Year 2000 ready system. 12

From January 1, 1999, through the end of the first quarter of Fiscal 2000, CSC acquired several information technology companies. The existing Year 2000 readiness programs of the acquired companies have been integrated into CSC's program and subjected to the same progress monitoring and control procedures. All critical Year 2000 remediation tasks for these newly-acquired business operations are expected to be substantially completed by December 1, 1999. CSC's Year 2000 program is directed by its Year 2000 Assurance Office, which monitors progress and coordinates the Company's Year 2000 activities. The Year 2000 Assurance Office reports directly to the Chairman, President, and Chief Executive Officer. The Company expects that its Year 2000 preparation efforts will not have a material effect on its overall financial position or results of operations. The Company currently estimates that the total fiscal 1999 and 2000 operating costs associated with making its proprietary products, systems and infrastructure Year 2000 ready, as well as estimates for contingency planning and monitoring, including the cost of Company personnel diverted to Year 2000 assignments, will total approximately $51 million, of which $32 million had been incurred as of the end of the first quarter of fiscal 2000. In addition, the Company currently estimates that related capital expenditures for fiscal 1999 and 2000 will be approximately $13 million, of which $9 million had been incurred as of the end of the first quarter of fiscal 2000. Some of these capital expenditures represent equipment replacements that have been or will be accelerated due to Year 2000 issues. The operating costs described above are generally not incremental, but reflect the reallocation of existing resources. The Company has not deferred any significant information technology projects as a result of the Year 2000 efforts. As of the end of the first quarter of fiscal 2000, (a) the Company had completed approximately 86% of all items it has identified as necessary to be Year 2000 ready, including activities to correct Year 2000 issues, contingency planning and ancillary efforts, and (b) the Company had completed approximately 98% of all items it has identified as necessary to correct critical Year 2000 items. The Company has completed an assessment of its obligations and responsibilities to its customers in respect of Year 2000 issues arising from contractual engagements for computer goods and services, including obligations arising from the licensing of the Company's proprietary software products. As a result of this assessment, it is management's opinion that these obligations will not have a material effect on the Company. The Company has initiated formal communications with all of its crucial suppliers to determine whether they are or will be Year 2000 ready. By November 1, 1999, the Company expects to have identified and replaced any such suppliers that will not be Year 2000 ready. The Company is also contacting property owners to determine the readiness of its leased facilities with respect to facility infrastructure systems. As of the end of the first quarter of fiscal 2000, over 75% of the company's crucial suppliers, property owners, and landlords have been determined to have adequate programs in place to be Year 2000 ready before the end of 1999. Evaluation and, as appropriate, replacement of the remaining 25% should be completed by November 1, 1999. In 13

the Company's Annual Report on Form 10-K for the fiscal year ended April 2, 1999, it was reported that 80% of the company's crucial suppliers, property owners, and landlords had been determined to have adequate programs in place and that the remaining evaluation and replacement should be completed by October 1, 1999. The 75% figure reported above and the change in expected completion date are the result of new suppliers requiring evaluation due to recent acquisitions. In the opinion of the Company's management, the most reasonably likely worst case scenario includes the possibility that the Company and/or its crucial suppliers are unable to complete their Year 2000 readiness efforts prior to the onset of failures, the effects of which could have a material adverse impact on the Company's operations. The Company could also be impacted materially by any significant economic, financial market or infrastructure disruption attributable to the Year 2000 issue. The Company has developed initial drafts of Year 2000 transition, contingency and crisis management plans. These plans include the use of exercises and drills with various relevant scenarios. As a result of lessons learned from the exercises, the plans may be modified. Plans will be finalized in November of 1999 following the conclusion of the exercises and drills. The Company has also established the infrastructure for a Year 2000 corporate command center that will be fully operable beginning November 1999. This command center will be linked to each business unit's Year 2000 crisis management center, which will be connected to internal and client-support help desks. The discussion above contains forward-looking statements which should be read in conjunction with the following section. Forward-Looking Statements All statements contained in this quarterly report, or in any document filed by the Company with the Securities and Exchange Commission, or in any press release or other written or oral communication by or on behalf of the Company, that do not directly and exclusively relate to historical facts constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements represent the Company's expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. These statements are subject to risks, uncertainties and other factors, many of which are outside of the Company's control, that could cause actual results to differ materially from the results described in such statements. These factors include, without limitation, the following: (i) competitive pressures; (ii) the Company's ability to attract and retain key personnel; (iii) changes in the demand for information technology outsourcing and business process outsourcing; (iv) changes in the financial condition of the Company's major commercial customers; (v) changes in U.S. federal government spending levels for information technology services; (vi) the Company's ability to consummate strategic acquisitions and alliances; (vii) the future profitability of the Company's customer contracts; (viii) the Company's ability to continue to develop and expand its service offerings to address emerging business demand and technological trends; (ix) general economic conditions in countries in which the Company does business; and (x) the ability of the Company, its customers and suppliers to become Year 2000 ready. 14

PART I, ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For a discussion of the Company's market-risk associated with interest rates and foreign currencies as of April 2, 1999, see "Quantitative and Qualitative Disclosures about Market Risk" in the Part II, Item 7A, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the Company's Annual Report on Form 10-K for the fiscal year then ended. For the three months ended July 2, 1999, there has been no significant change in related market risk factors. 15

Part II. Other Information Item 6. Exhibits and Reports on Form 8-K a. Exhibits 3.1 Restated Articles of Incorporation, effective October 31, 1988 (c) 3.2 Amendment to Restated Articles of Incorporation, effective August 10, 1992 (j) 3.3 Amendment to Restated Articles of Incorporation, effective July 31, 1996 (l) 3.4 Certificate of Amendment of Certificate of Designations of Series A Junior Participating Preferred Stock, effective August 1, 1996 (n) 3.5 Bylaws, amended and restated effective May 4, 1998 (f) 10.1 1978 Stock Option Plan, amended and restated effective March 31, 1988* (m) 10.2 1980 Stock Option Plan, amended and restated effective March 31, 1988* (m) 10.3 1984 Stock Option Plan, amended and restated effective March 31, 1988* (m) 10.4 1987 Stock Incentive Plan* (b) 10.5 Schedule to the 1987 Stock Incentive Plan for United Kingdom personnel* (b) 10.6 1990 Stock Incentive Plan* (h) 10.7 1992 Stock Incentive Plan, amended and restated effective August 9, 1993* (q) 10.8 Schedule to the 1992 Stock Incentive Plan for United Kingdom personnel* (p) 10.9 1995 Stock Incentive Plan* (k) 10.10 1998 Stock Incentive Plan* (u) 10.11 Form of Stock Option Agreement* (t) 10.12 Form of Restricted Stock Agreement* (t) 10.13 Annual Management Incentive Plan, effective April 2, 1983* (a) 10.14 Supplemental Executive Retirement Plan, amended and restated effective February 27, 1998* (t) 10.15 Deferred Compensation Plan, amended and restated effective February 2, 1998* (r) 10.16 Severance Plan for Senior Management and Key Employees, amended and restated effective February 18, 1998 (s) 10.17 Severance Agreement with Van B. Honeycutt, effective February 2, 1998* (r) 10.18 Employee Agreement with Van B. Honeycutt, effective May 1, 1999* (g) 10.19 Form of Indemnification Agreement for Officers (e) 10.20 Form of Indemnification Agreement for Directors (d) 10.21 1997 Nonemployee Director Stock Incentive Plan (q) 10.22 Form of Restricted Stock Unit Agreement (f) 10.23 1990 Nonemployee Director Retirement Plan, amended and restated effective February 2, 1998 (r) 16

10.24 Information Technology Services Agreements with General Dynamics Corporation, dated as of November 4, 1991 (i) 10.25 Rights Agreement dated February 18, 1998 (s) 10.26 $350 million Credit Agreement dated as of September 6, 1995 (k) 10.27 First Amendment to $350 million Credit Agreement dated September 23, 1996 (o) 27 Financial Data Schedule 28 Revenues by Market Sector 99.1 Annual Report on Form 11-K for the Matched Asset Plan of the Registrant for the fiscal year ended December 31, 1998 (g) 99.2 Annual Report on Form 11-K for the Hourly Savings Plan of CSC Outsourcing, Inc. for the fiscal year ended December 31, 1998 (g) 99.3 Annual Report on Form 11-K for the CUTW Hourly Savings Plan of CSC Outsourcing, Inc. for the fiscal year ended December 31, 1998 (g) 17

Notes to Exhibit Index: *Management contract or compensatory plan or agreement (a)-(g) These exhibits are incorporated herein by reference to the Company's Annual Report on Form 10-K for the fiscal years ended on the respective dates indicated below: (a) March 30, 1984 (e) March 31, 1995 (b) April 1, 1988 (f) April 3, 1998 (c) March 31, 1989 (g) April 2, 1999 (d) April 3, 1992 (h) Incorporated herein by reference to the Registrant's Registration Statement on Form S-8 filed on August 15, 1990. (i) Incorporated herein by reference to the Registrant's Current Report on Form 8-K dated November 4, 1991. (j) Incorporated herein by reference to the Registrant's Proxy Statement for its August 10, 1992 Annual Meeting of Stockholders. (k) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on November 13, 1995. (l) Incorporated herein by reference to the Registrant's Proxy Statement for its July 31, 1996 Annual Meeting of Stockholders. (m) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on August 12, 1996. (n) Incorporated herein by reference to the Registrant's Current Report of Form 8-K dated August 1, 1996. (o) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on November 12, 1996. (p) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on February 10, 1997. (q) Incorporated herein by reference to the Registrant's Proxy Statement for its August 11, 1997 Annual Meeting of Stockholders. (r) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on February 9, 1998. (s) Incorporated herein by reference to the Registrant's Solicitation/Recommendation Statement on Schedule 14D-9 filed on February 26, 1998. (t) Incorporated herein by reference to Amendment No. 2 to the Registrant's Solicitation/Recommendation Statement on Schedule 14D-9 filed on March 2, 1998. (u) Incorporated herein by reference to the Registrant's Quarterly Report on Form 10-Q filed on August 14, 1998 b. Reports on Form 8-K: There were no reports on Form 8-K filed during the first quarter of fiscal 2000. 18

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMPUTER SCIENCES CORPORATION Date: August 13, 1999 By: /s/ Scott M. Delanty ----------------------------- Scott M. Delanty Vice President and Controller Chief Accounting Officer 19

INDEX TO EXHIBITS Exhibit Number Description of Exhibit - ------- ---------------------- 27 Financial Data Schedule 28 Revenues by Market Sector 20

5 1000 Mar-31-2000 Apr-02-1999 Jul-02-1999 3-MOS 233,378 0 2,006,436 73,515 0 2,485,885 2,447,570 1,293,141 4,995,581 1,944,899 420,841 160,214 0 0 2,337,123 4,995,581 0 2,063,380 0 1,752,356 187,287 (2,090) 8,359 117,468 39,200 78,268 0 0 0 78,268 .49 .48

EXHIBIT 28 COMPUTER SCIENCES CORPORATION REVENUES BY MARKET SECTOR (In millions) First Quarter Ended % of Total --------------------- --------------------- July 2, July 3, July 2, July 3, 1999 1998 1999 1998 -------- -------- -------- -------- Global commercial: U.S. commercial $ 836.2 $ 717.9 40% 41% Europe 569.3 488.9 28 28 Other International 207.5 103.6 10 6 -------- -------- -------- -------- Total 1,613.0 1,310.4 78 75 U.S. federal government: Department of Defense 279.1 288.5 14 16 Civil agencies 171.3 155.0 8 4 -------- -------- -------- -------- Total 450.4 443.5 22 25 -------- -------- -------- -------- Total revenues $2,063.5 $1,753.9 100% 100% ======== ======== ======== ========