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Press release from Business Wire

CSC Reports Strong Q1 2014 Increase in Profitability

<p class='bwalignc'> <i><b>Diluted EPS from Continuing Operations of $0.91 Up $0.81 YoY</b></i> </p> <p class='bwalignc'> <i><b>Net Income of $159 Million Up $117 Million or 279% YoY</b></i> </p> <p class='bwalignc'> <i><b>Operating Income of $304 Million Up $158 Million or 108% YoY</b></i> </p> <p class='bwalignc'> <i><b>Operating Income Margin of 9.3% Up from 4.0% in Q1 2013</b></i> </p> <p class='bwalignc'> <i><b>Raising FY 2014 Target Range for EPS from Continuing Operations to $3.50 - $3.70</b></i> </p>

Tuesday, August 06, 2013

CSC Reports Strong Q1 2014 Increase in Profitability

16:15 EDT Tuesday, August 06, 2013

FALLS CHURCH, Va. (Business Wire) -- CSC (NYSE: CSC) today reported diluted earnings per share of $1.02 consisting of $0.91 from continuing operations and $0.11 from discontinued operations for the first quarter of 2014. During the quarter, CSC announced the sale of two businesses which are now included in discontinued operations. In the first quarter of 2013, CSC reported $0.26 of diluted earnings per share consisting of $0.10 from continuing operations and $0.16 from discontinued operations. Total revenue was $3.26 billion, a decline of 10% in constant currency when compared to $3.63 billion from the year ago period. However, on a more comparable basis, revenue declined by 6% in constant currency.

“We are encouraged with the pace of our turnaround. Our cost takeout actions are driving margin expansion and earnings growth,” said Mike Lawrie, president and CEO. “The company is beginning to pivot more towards growth and we are investing in offerings and partnerships that will enhance our differentiation and expand our market coverage. Based on our current progress, we are raising our target for EPS from continuing operations by 20 cents to $3.50 - $3.70.”

Financial Highlights

  • EPS from continuing operations of $0.91 compares with $0.10 in the year ago period.
  • Net income was $159 million for the first quarter, an increase of $117 million from net income of $42 million in the prior year.
  • Operating income was $304 million, an increase of $158 million as compared to $146 million for the first quarter of fiscal 2013. Operating income margin was 9.3%, an increase of 530 bps from 4.0% in the year ago period.
  • Earnings before interest and taxes (EBIT) was $241 million, an increase of $167 million as compared to $74 million for the first quarter of fiscal 2013. EBIT margin of 7.4% improved by 540 bps from 2.0% in the prior year.
  • Operating cash flow of $213 million in the quarter compares with the $221 million in the prior year.
  • Free cash flow of negative $9 million improved by $16 million when compared with negative $25 million for the year ago period.
  • Ending cash and cash equivalents were $1.93 billion as of June 28, 2013, an increase of $930 million over the prior year.

New Operating Model

As previously disclosed, CSC has implemented a new operating model to align the company's leadership and assets with its strategy of leading the next generation of IT services and solutions. The new operating model resulted in a change to the Company's reportable segments for fiscal 2014 which are now: Global Business Services (GBS), Global Infrastructure Services (GIS), and the North American Public Sector (NPS).

Global Business Services

GBS provides consulting, industry software & solutions, and applications services. GBS revenue was $1.08 billion in the quarter which compares with revenue of $1.28 billion in the year ago quarter. The revenue decline is primarily due to a net reduction of $72 million from a divested IT staffing business and $55 million from a one-time NHS milestone payment in the prior year. On a more comparable basis, revenue decreased by 4% in constant currency. Operating margin increased to 9.3% from 5.2% in the prior year, primarily due to the company's cost takeout efforts. New business awards for GBS were $1.2 billion in the quarter.

Global Infrastructure Services

GIS provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, as well as CSC's next generation Cloud offerings including secure Infrastructure as a Service (IaaS), private Cloud solutions, CloudMail and Storage as a Service (SaaS).

GIS revenue was $1.15 billion in the quarter, a 4% decrease in constant currency from the prior year primarily due to contract conclusions and contract scope changes in Europe. Operating margin was 7.1%, a significant increase from 1.3% in the prior year as the business benefitted from cost takeout initiatives and better contract performance. GIS reported new business awards of $900 million in the quarter.

North American Public Sector

NPS provides mission-specific IT services, infrastructure and business services primarily to the U.S. federal government and this segment has not changed as a result of the new operating model. NPS revenue was $1.05 billion in the quarter, a decline of 11% as compared to first quarter of fiscal 2013. Revenue in the quarter was impacted by a reduction in professional services at the Department of Defense and other government agencies as the result of sequestration, as well as contracts which are winding down. Operating margin was 11.5% versus 7.9% in the prior year and this improvement is due to the benefit of our cost takeout initiatives and better contract performance. New business awards were $700 million in the quarter.

Returning Capital to Shareholders

During the first quarter, CSC returned $157 million to shareholders consisting of $30 million in common stock dividends and $127 million of share repurchases. CSC repurchased 2.8 million shares at an average price of $44.78 per share during the quarter. CSC had 147,964,168 basic shares outstanding on June 28, 2013.

Conference Call and Webcast

CSC senior management will host a conference call and Webcast at 5:00 p.m. EDT today. The dial-in number for domestic callers is 800-533-7954. Callers who reside outside the United States or Canada should dial 785-830-1924. The passcode for all participants is 6393537. The Webcast audio and any presentation slides will be available at www.csc.com/investorrelations.

A replay of the conference call will be available from approximately two hours after the conclusion of the call until August 12, 2013. The replay dial-in number is 888-203-1112 for domestic callers and 719-457-0820 for callers who reside outside of the U.S. and Canada. The replay passcode is also 6393537. A replay of this Webcast will also be available on CSC's Web site.

Non-GAAP Measures

In an effort to provide investors with additional information regarding the Company's preliminary results as determined by generally accepted accounting principles (GAAP), the Company has also disclosed in this press release preliminary non-GAAP information which management believes provides useful information to investors, including: operating income, operating margin, earnings before interest and taxes (EBIT), EBIT margin, and free cash flow. Reconciliations of the preliminary non-GAAP measures to the respective and most directly comparable GAAP measures, as well as the rationale for management's use of non-GAAP measures, is included below.

About CSC

CSC is a global leader of next generation information technology (IT) services and solutions. The Company's mission is to enable superior returns on our client's technology investments through best-in-class industry solutions, domain expertise and global scale. CSC has approximately 87,000 employees and reported revenue of $13.8 billion for the 12 months ended June 28, 2013.

All statements in this press release and in all future press releases 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 intentions, plans, expectations and beliefs, and are subject to risks, uncertainties and other factors, many of which are outside the Company's control. These factors could cause actual results to differ materially from such forward-looking statements. For a written description of these factors, see the section titled “Risk Factors” in CSC's Form 10-K for the fiscal year ended March 29, 2013 and any updating information in subsequent SEC filings. The Company disclaims any intention or obligation to update these forward-looking statements whether as a result of subsequent event or otherwise, except as required by law.

Business Segment Revenues, Operating Income and Operating Margins

(preliminary and unaudited)

               

Revenues by Segment

Quarter Ended
(Amounts in millions) June 28, 2013 June 29, 2012 % Change

% Change in
Constant
Currency

Global Business Services $ 1,083 $ 1,278 (15.3 )% (14.8 )%
Global Infrastructure Services 1,150 1,203 (4.4 )% (3.7 )%
North American Public Sector 1,053 1,183 (11.0 )% (11.0 )%
Corporate & Eliminations   (26 )   (31 )
Total Revenues $ 3,260   $ 3,633   (10.3 )% (9.9 )%
 
 

Operating Income and Operating Margins by Segment

Quarter Ended
June 28, 2013 June 29, 2012
(Amounts in millions) Operating Income

Operating
Margin

Operating Income

Operating
Margin

Global Business Services $ 101 9.3 % $ 66 5.2 %
Global Infrastructure Services 82 7.1 % 16 1.3 %
North American Public Sector 121 11.5 % 93 7.9 %
Corporate & Eliminations       (29 )
Total Operating Income $ 304   9.3 % $ 146   4.0 %
 

Consolidated Condensed Statements of Operations

(preliminary and unaudited)

   
Quarter Ended
(Amounts in millions, except per-share amounts) June 28, 2013     June 29, 2012
   
Revenues $ 3,260   $ 3,633  
 
Costs of services (excludes depreciation and amortization and restructuring costs) 2,466 2,977
Selling, general and administrative 292 281
Depreciation and amortization 255 262
Restructuring costs 7 27
Interest expense 39 44
Interest income (4 ) (5 )
Other (income) expense, net (1 ) 12  
Total costs and expenses 3,054   3,598  
 
Income from continuing operations before taxes 206 35
Taxes on income 65   18  
Income from continuing operations 141 17
Income from discontinued operations, net of taxes 18   25  
Net income 159 42
Less: net income attributable to noncontrolling interest, net of tax 3   2  
Net income attributable to CSC common stockholders $ 156   $ 40  
 
Earnings per common share
Basic:
Continuing operations $ 0.92 $ 0.10
Discontinued operations 0.12   0.16  
$ 1.04   $ 0.26  
Diluted:
Continuing operations $ 0.91 $ 0.10
Discontinued operations 0.11   0.16  
$ 1.02   $ 0.26  
 
Cash dividend per common share $ 0.20 $ 0.20
 
Weighted average common shares outstanding for:
Basic EPS 149.854 155.227
Diluted 152.238 155.647
 

Selected Balance Sheet Data

(preliminary and unaudited)

   
As of
(Amounts in millions) June 28, 2013     March 29, 2013
 
Assets
Cash and cash equivalents $ 1,929 $ 2,054
Receivables, net 2,880 3,199
Prepaid expenses and other current assets 551   420  
Total current assets 5,360   5,673  
 
Property and equipment, net 2,114 2,184
Software, net 611 611
Outsourcing contract costs, net 487 505
Goodwill 1,444 1,516
Other assets 850   762  
Total Assets $ 10,866   $ 11,251  
 
Liabilities
Short-term debt and current maturities of long-term debt $ 243 $ 234
Accounts payable 316 373
Accrued payroll and related costs 605 653
Accrued expenses and other current liabilities 1,255 1,425
Deferred revenue and advance contract payments 629 630
Income taxes payable and deferred income taxes 31   34  
Total current liabilities 3,079   3,349  
 
Long-term debt, net of current maturities 2,461 2,498
Income tax liabilities and deferred income taxes 494 501
Other long-term liabilities 1,720 1,743
 
Total Equity 3,112 3,160
   
Total Liabilities and Equity $ 10,866   $ 11,251  
 
Debt as a percentage of total capitalization 46.5 % 46.4 %
 

Consolidated Condensed Statements of Cash Flows

(preliminary and unaudited)

   
Quarter ended
(Amounts in millions) June 28, 2013     June 29, 2012
Cash flows from operating activities:
Net income $ 159 $ 42
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 255 262
Stock-based compensation 17 7
(Gain) loss on dispositions (25 ) 3
Excess tax benefit from stock based compensation (3 )
Unrealized foreign currency exchange gain (12 ) (22 )
Other non cash charges, net 4 18
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in assets 34 (97 )
(Decrease) increase in liabilities (216 ) 8  
Net cash provided by operating activities 213   221  
 
Cash flows from investing activities:
Purchases of property and equipment (101 ) (122 )
Outsourcing contracts (20 ) (31 )
Business dispositions, net 56 2
Software purchased and developed (47 ) (46 )
Other investing activities, net 11   18  
Net cash used in investing activities (101 ) (179 )
 
Cash flows from financing activities:
Borrowings under lines of credit 54
Repayment of borrowings under lines of credit (48 )
Principal payments on long-term debt (60 ) (65 )
Proceeds from stock options and other common stock transactions 16
Excess tax benefit from stock-based compensation 3
Repurchase of common stock and acquisition of treasury stock (127 )
Dividend payments (30 ) (31 )
Other financing activities, net (9 ) (7 )
Net cash used in financing activities (207 ) (97 )
Effect of exchange rate changes on cash and cash equivalents (30 ) (38 )
Net decrease in cash and cash equivalents (125 ) (93 )
Cash and cash equivalents at beginning of year 2,054   1,093  
Cash and cash equivalents at end of period $ 1,929   $ 1,000  
 

Non-GAAP Financial Measures

The following tables reconcile non-GAAP financial measures of operating income, earnings before interest and taxes (EBIT) and free cash flow, to the respective most directly comparable financial measure calculated and presented in accordance with GAAP. CSC management believes that these non-GAAP financial measures provide useful information to investors regarding the Company's financial condition and results of operations as they provide another measure of the Company's profitability and ability to service its debt, and are considered important measures by financial analysts covering CSC and its peers.

Management uses operating income to evaluate financial performance and it is one of the measures used in assessing management performance. One of the limitations associated with the use of operating income (as compared to reported earnings) is that it does not reflect the complete financial results of the Company. CSC compensates for these limitations by providing reconciliation between operating income and income from continuing operations, before taxes. Management uses free cash flow as one of the factors 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.

GAAP Reconciliations

Operating Income

(preliminary and unaudited)

CSC defines operating income as revenue less costs of services, depreciation and amortization expense, restructuring costs and segment selling general and administrative (SG&A) expense, excluding corporate G&A. Operating margin is defined as operating income as a percentage of revenue. Pre-tax margin is defined as income from continuing operations, before taxes as a percentage of revenue. A reconciliation of consolidated operating income to income from continuing operations, before taxes is as follows:

   
Quarter Ended
(Amounts in millions) June 28, 2013     June 29, 2012
Operating income $ 304 $ 146
Corporate G&A (64 ) (60 )
Interest expense (39 ) (44 )
Interest income 4 5
Other income (expense), net 1   (12 )
Income from continuing operations before taxes $ 206   $ 35  
 
Operating margin 9.3 % 4.0 %
Pre-tax margin 6.3 % 1.0 %
 

Earnings Before Interest and Taxes

(preliminary and unaudited)

CSC defines EBIT as revenue less costs of services, selling, general and administrative expenses, depreciation and amortization, restructuring costs, and other income (expense). EBIT margin is defined as EBIT as a percentage of revenue. Reconciliation of EBIT to income from continuing operations is as follows:

   
Quarter Ended
(Amounts in millions) June 28, 2013     June 29, 2012
Earnings before interest and taxes $ 241 $ 74
Interest expense (39 ) (44 )
Interest income 4 5
Income taxes (65 ) (18 )
Income from continuing operations $ 141   $ 17  
 
EBIT margin 7.4 % 2.0 %
 

Free Cash Flow

(preliminary and unaudited)

CSC defines free cash flow as equal to the sum of (1) operating cash flows, (2) investing cash flows, excluding business acquisitions, dispositions and investments (including short-term investments and purchase or sale of available for sale securities), and (3) payments on capital leases and other long-term asset financings. A reconciliation of free cash flow to net cash provided by operating activities is as follows:

   
Quarter ended
(Amounts in millions) June 28, 2013     June 29, 2012
Net cash provided by operating activities $ 213 $ 221
Net cash used in investing activities (101 ) (179 )
Business dispositions (56 ) (2 )
Short-term investments (5 )
Payments on capital leases and other long-term asset financings (60 ) (65 )
Free cash flow $ (9 ) $ (25 )
 

Recast Fiscal 2013 and Fiscal 2012 Quarterly Revenues by Segment

(preliminary and unaudited)

Quarterly revenues have been recast to reflect CSC's new reportable segments and the impact of discontinued operations. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
(Amounts in millions) June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013 Total for
Fiscal 2013
Global Business Solutions $ 1,278 $ 1,207 $ 1,226 $ 1,230 $ 4,941
Global Infrastructure Services 1,203 1,163 1,191 1,186 4,743
North American Public Sector 1,183 1,190 1,157 1,132 4,662
Corporate & Eliminations (31 ) (25 ) (32 ) (39 ) (127 )
Total Revenues $ 3,633   $ 3,535   $ 3,542   $ 3,509   $ 14,219  
 
       
Fiscal 2012 Quarter Ended
(Amounts in millions) July 1, 2011    

September 30,
2011

   

December 30,
2011

    March 30, 2012 Total for
Fiscal 2012
Global Business Solutions $ 1,242 $ 1,230 $ 1,062 $ 1,359 $ 4,893
Global Infrastructure Services 1,184 1,195 1,216 1,245 4,840
North American Public Sector 1,260 1,219 1,185 1,216 4,880
Corporate & Eliminations (31 ) (34 ) (25 ) (31 ) (121 )
Total Revenues $ 3,655   $ 3,610   $ 3,438   $ 3,789   $ 14,492  
 

Recast Fiscal 2013 and 2012 Quarterly Operating Income (Loss) by Segment

(preliminary and unaudited)

Quarterly operating income (loss) has been recast to reflect CSC's new reportable segments and the impact of discontinued operations. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
(Amounts in millions) June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013 Total for
Fiscal 2013
Global Business Solutions $ 66 $ 78 $ 96 $ 123 $ 363
Global Infrastructure Services 16 42 58 9 125
North American Public Sector 93 143 131 123 490
Corporate & Eliminations (29 ) (4 ) (30 ) (53 ) (116 )
Total Operating Income $ 146   $ 259   $ 255   $ 202   $ 862  
 
       
Fiscal 2012 Quarter Ended
(Amounts in millions) July 1, 2011    

September 30,
2011

   

December 30,
2011

    March 30, 2012 Total for
Fiscal 2012
Global Business Solutions $ 73 $ 42 $ (1,375 ) $ (32 ) $ (1,292 )
Global Infrastructure Services (34 ) 2 18 (130 ) (144 )
North American Public Sector 110 (139 ) 60 73 104
Corporate & Eliminations (4 ) (22 ) (21 ) (18 ) (65 )
Total Operating Income (Loss) $ 145   $ (117 ) $ (1,318 ) $ (107 ) $ (1,397 )
 

Recast Fiscal 2013 and 2012 Quarterly Operating Margins by Segment

(preliminary and unaudited)

Quarterly operating income margins have been recast to reflect CSC's new reportable segments and the impact of discontinued operations. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013 Total for
Fiscal 2013
Global Business Solutions 5.2 % 6.5 % 7.8 % 10.0 % 7.3 %
Global Infrastructure Services 1.3 % 3.6 % 4.9 % 0.8 % 2.6 %
North American Public Sector 7.9 % 12.0 % 11.3 % 10.9 % 10.5 %
Total Operating Margins 4.0 % 7.3 % 7.2 % 5.8 % 6.1 %
 
 
Fiscal 2012 Quarter Ended
July 1, 2011

September 30,
2011

December 30,
2011

March 30, 2012 Total for
Fiscal 2012
Global Business Solutions 5.9 % 3.4 % (129.5 )% (2.4 )% (26.4 )%
Global Infrastructure Services (2.9 )% 0.2 % 1.5 % (10.4 )% (3.0 )%
North American Public Sector 8.7 % (11.4 )% 5.1 % 6.0 % 2.1 %
Total Operating Margins 4.0 % (3.2 )% (38.3 )% (2.8 )% (9.6 )%
 

Recast Fiscal 2013 and 2012 Quarterly Diluted Earnings (Loss) Per Share

(preliminary and unaudited)

Quarterly earnings (loss) per share have been recast to reflect the impact of CSC's divestitures. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013

Fiscal 2013 (1)

EPS from continuing operations $ 0.10 $ 0.68 $ 0.70 $ 1.54 $ 3.02
EPS from discontinued operations 0.16   0.15   2.57   0.27   3.16  
Total EPS $ 0.26   $ 0.83   $ 3.27   $ 1.81   $ 6.18  
 
 
Fiscal 2012 Quarter Ended
July 1, 2011

September 30,
2011

December 30,
2011

March 30, 2012

Fiscal 2012 (1)

EPS from continuing operations $ 0.48 $ (18.42 ) $ (9.28 ) $ (1.27 ) $ (28.50 )
EPS from discontinued operations 0.69   (0.14 ) 0.32   0.25   1.13  
Total EPS $ 1.17   $ (18.56 ) $ (8.96 ) $ (1.02 ) $ (27.37 )
 

1)

Quarterly earnings per share (EPS) amounts may not total to the full year EPS. EPS is calculated based on weighted average shares outstanding for the period. Quarterly weighted average shares may not equal the full year weighted average shares for the fiscal year.

 

Recast Fiscal 2013 and 2012 Quarterly GAAP Reconciliations of Consolidated Operating Income (Loss) to Income (Loss) from Continuing Operations before Taxes

(preliminary and unaudited)

The GAAP reconciliations of consolidated operating income (loss) to consolidated income (loss) from continuing operations, before taxes have been recast to reflect the impact of discontinued operations. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
(Amounts in millions) June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013

Total for
Fiscal 2013

Operating income $ 146 $ 259 $ 255 $ 202 $ 862
Corporate G&A (60 ) (70 ) (56 ) (107 ) (293 )
Interest expense (44 ) (46 ) (56 ) (37 ) (183 )
Interest income 5 5 4 8 22
Other (expense) income, net (12 ) 11   (6 ) 32   25  
Income from continuing operations before taxes $ 35   $ 159   $ 141   $ 98   $ 433  
 
 
Fiscal 2012 Quarter Ended
(Amounts in millions) July 1, 2011

September 30,
2011

December 30,
2011

March 30, 2012 Total for
Fiscal 2012
Operating income (loss) $ 145 $ (117 ) $ (1,318 ) $ (107 ) $ (1,397 )
Corporate G&A (54 ) (66 ) (46 ) (53 ) (219 )
Interest expense (42 ) (45 ) (42 ) (44 ) (173 )
Interest income 12 12 8 6 38
Goodwill impairment (2,685 ) (60 ) (2,745 )
Other income (expense), net 1   5   (15 ) 4   (5 )
Income (loss) from continuing operations before taxes $ 62   $ (2,896 ) $ (1,473 ) $ (194 ) $ (4,501 )
 

Recast Fiscal 2013 and 2012 Quarterly GAAP Reconciliations of Consolidated EBIT to Income (Loss) from Continuing Operations

(preliminary and unaudited)

Quarterly EBIT has been recast to reflect the impact of discontinued operations. During fiscal 2014, CSC divested the Applied Technology Division (ATD) from the NPS Segment and its flood-insurance business process outsourcing practice from the GBS segment. During fiscal 2013, CSC divested its U.S. credit services business, its Italian consulting and system integration business, and its enterprise system integration business in Malaysia and Singapore.

       
Fiscal 2013 Quarter Ended
(Amounts in millions) June 29, 2012    

September 28,
2012

   

December 28,
2012

    March 29, 2013 Total for
Fiscal 2013
Earnings before interest and taxes $ 74 $ 200 $ 193 $ 127 $ 594
Interest expense (44 ) (46 ) (56 ) (37 ) (183 )
Interest income 5 5 4 8 22
Taxes on income (18 ) (45 ) (29 ) 146   54  
Income from continuing operations $ 17   $ 114   $ 112   $ 244   $ 487  
 
EBIT margin 2.0% 5.7% 5.4% 3.6% 4.2%
 
 
Fiscal 2012 Quarter Ended
(Amounts in millions) July 1, 2011

September 30,
2011

December 30,
2011

March 30, 2012 Total for
Fiscal 2012
Earnings before interest and taxes $ 92 $ (2,863 ) $ (1,439 ) $ (156 ) $ (4,366 )
Interest expense (42 ) (45 ) (42 ) (44 ) (173 )
Interest income 12 12 8 6 38
Taxes on income 15   51   33   2   101  
Income (loss) from continuing operations $ 77   $ (2,845 ) $ (1,440 ) $ (192 ) $ (4,400 )
 
EBIT margin 2.5% (79.3)% (41.9)% (4.1)% (30.1)%
 

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CSC
Marcel Goldstein
Corporate Public Relations
703-641-3271
mgoldstein@csc.com
or
CSC
Steve Virostek
Investor Relations
703-641-3000
investorrelations@csc.com

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