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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 16, 1996
ELECTRONIC DATA SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 01-11779 75-2548221
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5400 Legacy Drive
Plano, Texas 75024-3105
(Address of principal executive offices,
including zip code)
Registrant's telephone number, including area code (214) 604-6000
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ITEM 5. OTHER EVENTS.
On July 16, 1996, Electronic Data Systems Corporation, a Delaware
corporation ("EDS"), announced results of operations for the quarter ended June
30, 1996. A copy of the press release is attached as Exhibit 99(a) hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ -----------------------
99(a) Press Release of Electronic Data Systems Corporation dated
July 16, 1996
2
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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 hereunto duly authorized.
ELECTRONIC DATA SYSTEMS
CORPORATION
By: /s/ Joseph M. Grant
-------------------------------------
Name: Joseph M. Grant
Title: Executive Vice President and
Chief Financial Officer
July 16, 1996
3
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EXHIBIT 99.(a)
CONTACT: Tony Good
(214) 605-6777
For immediate release at 6:30 a.m. CDT Tuesday, July 16, 1996
NEWLY INDEPENDENT EDS CONTINUES STRONG GROWTH,
POSTS 35TH STRAIGHT QUARTER OF REVENUE INCREASES
COMPANY BROADENS STRATEGIC SERVICE OFFERINGS, SIGNS
MAJOR NEW BUSINESS IN ASIA/PACIFIC, EUROPE, LATIN AMERICA
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PLANO, Texas -- Newly independent EDS today reported its 35th consecutive
quarter of year-over-year revenue growth, with operating revenues up nearly 19
percent to $3.5 billion for the three months ended June 30, 1996. Net income
increased nearly 9 percent to $246.6 million in the quarter, or $0.51 per share,
before adjusting for both a previously announced, one-time charge of $850
million and $45.5 million in one-time costs related to the company's recent
split-off from General Motors Corporation. Earnings per share for the six months
ended June 30, 1996, before the charge and split-off costs were $0.96.
The $850 million charge covers the cost of restructuring and other activities --
including an early retirement offer, a limited workforce realignment and a
computing infrastructure refreshment -- designed to maintain and improve
operating efficiencies and accelerate EDS' move to user-centered computing. EDS'
second-quarter charge breaks out as follows: $275 million for employee-related
costs, $515 million for technology refreshment and other asset write-downs and
$60 million in cost of revenues.
Including the charge and the split-off costs, EDS reported a net loss for the
second quarter of $326.5 million, or $0.67 per share. The charge and split-off
costs reduced earnings per share by $1.18 for the second quarter and the six
months ended June 30, 1996.
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NEWLY INDEPENDENT EDS CONTINUES STRONG GROWTH
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EDS expects that the restructuring actions will result in savings beginning in
the third quarter. The amount and timing of these savings, while difficult to
quantify precisely, are expected to gradually build to approximately $50 million
per quarter ($0.07 per share) by 1997 and continue at that approximate level
through 1998. During this period, these savings will be available to offset the
anticipated negative impact to earnings per share from the changes in the master
services agreement between EDS and GM and for reinvestment to position the
company for the future.
Statements about the effect of EDS' actions and savings from the charges are
forward-looking statements which by their nature are subject to numerous
uncertainties that could cause actual results to vary.
The second quarter was one of the most significant periods in EDS' 34-year
history as the global information services company completed its split-off from
GM and EDS common stock began trading on the New York Stock Exchange and the
London Stock Exchange.
EDS also signed more than $1.5 billion in new business during the quarter as the
company continued to win customers in new and existing markets around the world.
EDS differentiated itself from its competitors by offering a full spectrum of
information services, including management consulting through its A.T. Kearney
subsidiary, and by providing such innovative strategic offerings as
CoSourcing(SM) and SupplySource(SM) services.
EDS' CoSourcing offering is a collaborative, value-enhanced service that focuses
on improving the business performance of customers as measured by agreed-upon
business metrics. In addition, EDS introduced SupplySource, which is the first
service designed to improve bottom-line performance of a customer's procurement
processes and strengthen their buying power.
"EDS will continue to grow and change as an independent company, just as it has
throughout its entire history," said EDS Chairman Les Alberthal. "If anything,
our responsibilities now are even greater -- to our customers, our shareholders
and our employees -- and the need to be agile and creative is even more
imperative.
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NEWLY INDEPENDENT EDS CONTINUES STRONG GROWTH
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"EDS' 12-year subsidiary relationship with GM was tremendously beneficial to
both companies. But we are in a dynamic and rapidly changing business, and now
that we are independent, EDS is poised as never before to pursue new growth
opportunities -- in both new and established markets -- and to assist clients,
including GM, in achieving their business objectives virtually anywhere in the
world."
Among the highlights of the second quarter for EDS were the signing of a desktop
services contract with Citibank, a multi-year global master software license
agreement with Netscape and major new business in Europe, Asia/Pacific and Latin
America. In addition, EDS entered into a CoSourcing pact with the Kellwood
Company, an international marketer, merchandiser and manufacturer of apparel.
The CoSourcing arrangement is designed to heighten customer satisfaction, reduce
the cost of goods sold, improve product time-to-market performance, enhance the
management of inventory and, ultimately, increase Kellwood's overall margins.
EDS (NYSE:EDS) is a leader in the global information services industry. The
company's more than 95,000 employees specialize in applying a range of ideas and
technologies to help business and government customers improve their economics,
products, services and customer relationships. EDS, which serves customers in 42
countries, reported revenues of $12.4 billion in 1995. EDS can be visited via
the Internet at http://www.eds.com.
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NEWLY INDEPENDENT EDS CONTINUES STRONG GROWTH
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SUMMARY OF RESULTS OF OPERATIONS
(in millions, except per-share amounts)
<TABLE>
<CAPTION>
Second Quarter Ended Six Months Ended
-------------------- ----------------
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
SYSTEMS AND OTHER CONTRACTS
REVENUES (1) $3,497.8 $2,950.1 $6,864.7 $5,726.4
COSTS AND EXPENSES (2) 3,943.3 2,579.6 6,951.3 5,036.7
-------- -------- -------- --------
OPERATING INCOME (LOSS) (445.5) 370.5 (86.6) 689.7
INTEREST AND OTHER INCOME, NET (3) (64.7) (16.0) (81.7) (27.7)
-------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES (510.2) 354.5 (168.3) 662.0
PROVISION (BENEFIT) FOR INCOME TAXES (183.7) 127.6 (60.6) 238.3
-------- -------- -------- --------
NET INCOME (LOSS) $ (326.5) $ 226.9 $ (107.7) $ 423.7
======== ======== ======== ========
EARNINGS (LOSS) PER SHARE (4) $ (0.67) $ 0.47 $ (0.22) $ 0.89
CASH DIVIDENDS PER SHARE $ 0.15 $ 0.13 $ 0.30 $ 0.26
</TABLE>
(1) Revenues related to General Motors Corporation and its affiliates
amounted to $1,050.5 million and $982.5 million for the second quarter
ended June 30, 1996 and 1995, respectively, and $2,012.7 million and
$1,880.5 million for the six months ended June 30, 1996 and 1995,
respectively.
(2) Includes one-time charge of $850.0 million, or $1.12 per share, for
the three and six months ended June 30, 1996.
(3) Includes one-time split-off costs of $45.5 million, or $0.06 per
share, for the three and six months ended June 30, 1996.
(4) On June 7, 1996, GM Class E common stock was exchanged for EDS common
stock on a one-for-one basis. Earnings before June 7, 1996 are
attributable to GM Class E common stock. The computation of earnings
(loss) per share for EDS common stock is similar to that for GM Class
E common stock.
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NEWLY INDEPENDENT EDS CONTINUES STRONG GROWTH
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SUMMARY OF CONSOLIDATED BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
June 30, Dec. 31,
1996 1995
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<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and marketable securities $ 648.0 $ 638.6
Accounts receivable 3,194.5 3,169.0
Inventories 132.0 181.2
Prepaids and other 401.2 392.7
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TOTAL CURRENT ASSETS 4,375.7 4,381.5
PROPERTY AND EQUIPMENT, NET 2,963.2 3,242.4
OPERATING AND OTHER ASSETS 3,045.3 3,208.5
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TOTAL ASSETS $10,384.2 $10,832.4
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 502.5 $ 603.9
Accrued liabilities 1,726.7 1,704.5
Deferred revenue 595.5 629.3
Income taxes 71.1 75.9
Notes payable 243.7 247.8
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TOTAL CURRENT LIABILITIES 3,139.5 3,261.4
DEFERRED INCOME TAXES 493.1 739.7
NOTES PAYABLE 2,474.9 1,852.8
TOTAL STOCKHOLDERS' EQUITY 4,276.7 4,978.5
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TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY $10,384.2 $10,832.4
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</TABLE>
Editors note: For additional information on new business signed during the
second quarter, please call (214) 605-6795 and a list will be faxed to you.
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