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Computer Sciences Corporation provides information technology (IT) and business process outsourcing, and IT and professional services to the commercial and government markets. The company's outsourcing services include the operation of customer's technology infrastructure, including systems analysis, applications development, network operations, desktop computing, and data center management. It also offers various business process outsourcing services, such as procurement and supply chain, call centers and customer relationship management, credit services, claims processing, and logistics. In addition, it provides various IT and professional services, including systems integration that comprises designing, developing, implementing, and integrating complete information systems; and consulting and professional services, such as advising clients on the strategic acquisition and utilization of IT and business strategy, security, modeling, simulation, engineering, operations, change management, and business process re-engineering. Further, the company licenses software systems for the financial services and other industry-specific markets, as well as provides various end-to-end business solutions. Computer Sciences offers its services to various customers in the aerospace/defense, automotive, chemical and resources, consumer goods, financial services, healthcare, manufacturing, retail/distribution, telecommunications, and technology industries, as well as to foreign government clients, civil departments and branches of the military, and the department of homeland security. It has operations in North America, Europe, and the Asia-Pacific region. The company has a strategic agreement with Riviere Servicing. Computer Sciences was founded in 1959 and is headquartered in Falls Church, Virginia.
Company Description Computer Sciences Corporation was founded in 1959. It is in the information technology and professional services industry. Since it founding, the Company has helped clients use I/T more efficiently in order to improve their operations and profitability, achieve business results and focus on core competencies. CSC offers an array of services to clients in the Global Commercial and government markets and specializes in the application of complex I/T to achieve its customers strategic objectives. Its service offerings include information technology and business process outsourcing, and I/T and professional services. Outsourcing involves operating all or a portion of a customer's technology infrastructure, including systems analysis, applications development, network operations, desktop computing and data center management. CSC also provides business process outsourcing, managing key functions for clients, such as procurement and supply chain, call centers and customer relationship management, credit services, claims processing and logistics. I/T and professional services include systems integration, consulting and other professional services. Systems integration encompasses designing, developing, implementing and integrating complete information systems. Consulting and professional services includes advising clients on the strategic acquisition and utilization of I/T and on business strategy, security, modeling, simulation, engineering, operations, change management and business process reengineering. The Company also licenses software systems for the financial services markets and provides an array of end-to-end e-business solutions that meet the needs of large commercial and government clients. The Company focuses on delivering results by combining business innovation skills with seasoned delivery expertise to provide flexible and scalable solutions. CSC provides its services to clients in Global Commercial industries and to the U.S. federal government. In the Global Commercial market sector, CSC's service offerings are delivered to clients in an array of industries including aerospace/defense, automotive, chemical and energy, consumer goods, financial services, healthcare, manufacturing, retail/distribution, telecommunications, and utilities. The Company's Global Commercial market sector also includes U.S. state and local and foreign government clients. The Company has provided I/T services to the U.S. federal government since 1961, is a federal contractor and is one of its I/T service providers. CSC serves a federal customer base, including most civil departments and branches of the military, as well as the Department of Homeland Security. The Company provides a spectrum of services to the U.S. federal government, ranging from traditional systems integration and outsourcing to complex project management and technical services. Geographically, CSC has major operations throughout North America, Europe and the Asia-Pacific region, including India.
COMPANY VIEW A statement by Van B. Honeycutt, chairman and CEO of Computer Sciences Corporation (CSC), follows. This statement has been taken from the company's 2004 Annual Report:
In fiscal year 2004 CSC set new records for revenue, net income, business awards, operating cash flow and earnings per share. We gained significant share in the global information technology (IT) services market and extended our lead in the global aerospace and defense, insurance and U.S. federal sectors. We successfully integrated the largest acquisition in our history, established the industry's first global organization to develop business transformation solutions, and launched new offerings that are among the most innovative and advanced on the market today.
Revenues for the year were $14.8 billion, an increase of 30% over last year. Net income grew by $79.2 million to a record $519.4 million, and cash flow from operations increased 46% to $1.7 billion. CSC won a record $17.2 billion in business awards during fiscal 2004, more than double last year's amount and 51% higher than the previous record. Global commercial IT services and U.S. federal government awards accounted for this growth. Approximately 83% of CSC's revenues came from long-term agreements, up from 78% last year. CSC reduced its debt by $113 million during fiscal 2004 and ended the year with an all-time high cash balance of $610 million. CSC's debt-to-total-capitalization ratio now stands at 30%, an eight percentage point reduction from two years ago and the lowest in over three years.
Return on investment (ROI) improved slightly last year, a result of our continuing focus on controlling expenses and making more efficient use of capital, especially on outsourcing engagements. We improved the effectiveness and efficiency of our global operations and strengthened our ability to develop new business and drive future revenue. Our efforts are proving effective: fiscal 2004 was the single most successful year for business awards in CSC's history. Of these awards, five exceeded $1 billion in value each, and 29 had values of at least $100 million.
Among these are:
-A 10-year, $2.4 billion agreement to manage the IT operations of the Royal Mail Group, a government-owned public limited company in the United Kingdom.
-A 10-year, $1.7 billion agreement with the United Kingdom's National Health Service to help that agency provide improved healthcare services.
-A nine-year, $1.5 billion IT services agreement with SAS Group, one of Europe's leading airlines.
-A 20-year, $1.1 billion award to provide simulator-based flight training and related support to the U.S. Army Aviation Center at Fort Rucker, Alabama.
-A 10-year, $700 million business process outsourcing agreement with Swiss Re Life & Health, one of the world's largest life and health reinsurers.
-A seven-year, $470 million agreement to manage the IT infrastructure of National Grid Transco, a global energy company based in London.
-A 10-year, $450 million IT services agreement with ISS A/S, a European-based provider of facility services.
-A 10-year, $250 million agreement to provide IT services to Providian Financial Corporation, one of the leading financial services companies in the United States.
CSC has been a leader in the U.S. federal market for more than 40 years. During fiscal 2004 we significantly extended our lead with the integration of DynCorp, acquired in March 2003. Revenues from U.S. federal clients exceeded $6 billion, and our pipeline of federal opportunities through fiscal 2006 is approximately $32 billion; almost $20 billion of that is scheduled for award during fiscal 2005. CSC now ranks number three on Washington Technology's Top 100 providers of IT services to the government.
CSC continued to strengthen its position in the commercial sector, including the financial services, aerospace, telecommunications, transportation, energy, and healthcare industries. In addition to our UK National Health Service win, we were awarded a seven-year, $200 million IT services agreement with Ascension Health, the largest nonprofit health system in the United States.
CSC also strengthened its global presence.We won a number of large, long-term agreements in Europe 'in both the private and public sectors 'and increased our presence in Asia, most notably with a 10-year, $342 million agreement to manage the large, complex IT operations of Maybank, Malaysia's largest banking group. The economic recovery in North America is well underway and its impact on the information technology sector is apparent. Clients and prospects are expressing greater optimism; they are focusing on growth, and their demand for 'and expectations of 'information technology services are increasing. One aspect of this demand is especially significant: the drive by clients to contain IT costs and to demonstrate clear, quantified business benefit from technology investment 'a characteristic of the environment for the last two years 'is stronger than ever.
Thus, the new market imperative is: exploit new technology, but measure results; grow, but control costs; invest, but contain risk; innovate, but do so practically. CSC is ideally positioned in the market to serve this new demand and to thrive in this new environment.
In fiscal 2004, CSC launched some of the most advanced, innovative new service offerings in our industry. With CSC's XtendedOfficeSM, for example, workers can have the power of all their office systems delivered to them remotely 'wirelessly 'and securely anywhere in the world and for a fraction of the cost of conventional access. CSC's new Results-Driven ComputingSM provides clients with instant access to only those services they need 'and allows them to pay for only those they use. And with our new Global Security Solutions unit, CSC brings to both the commercial and government markets one of most innovative and advanced approaches to security available today. At least 10 times throughout the year, industry analysts rated CSC services as among our industry�s best.
Business transformation is a relatively new term, but it refers to work CSC has done for years: enabling clients to achieve significant business results by changing key aspects of their organization, processes, technology, skills and behavior. What is new is an emerging technology � called Business Process Management (BPM) � that greatly reduces the time and resources needed for this. Exploiting this new technology, CSC has developed an entirely new approach to business change that clients are using to achieve � and sustain � transformation benefits.
To bring the full power of CSC�s transformation capabilities to market, we formed Global Transformation Solutions (GTS), the industry�s very first global organization to develop and deliver business transformation solutions to clients worldwide. CSC is now more focused on the highest-value segments of our market � applications, business processes and business transformation.
GTS also is responsible for developing and executing our world sourcing strategy. That strategy is to provide the best global support to our global clients. That means accessing specialized skills � in BPO and infrastructure support as well as in applications management � and providing standardized service in every time zone, 24 hours a day, 365 days a year.
That requires we develop pools of talent around the world, not in any one locale. Today, CSC has world sourcing centers in Canada, Mexico, Ireland, Spain, Bulgaria, South Africa, India, Singapore, Malaysia and Australia.
Fiscal 2005 is off to a very strong start. We�ve announced $3.3 billion in business awards in just the first nine weeks of the year, including a 10-year, $1.6 billion agreement with Sears, Roebuck and Co. to provide state-of-the-art IT infrastructure support services. I would like to acknowledge two individuals for their contributions to CSC. Thomas A. McDonnell and William P. Rutledge, who have each served on the company�s board of directors since 1997, will not seek re-election to the board this year. On behalf of our shareholders, I am grateful for their wise counsel, leadership and valued service.
In May, CSC celebrated 45 years of delivering practical innovation to our clients. In that time, we�ve grown to 90,000 employees serving clients across 15 industries in 80 countries. Those employees are the finest in our industry, and our success � and that of our clients � is due to their skill and dedication.
CSC�s offerings today are broader, more integrated and more advanced. Our technical expertise is stronger and our industry knowledge is deeper. Our experience is greater, and our ability to use that experience to deliver results for clients is more valuable than ever.