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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) April 24, 1997
ELECTRONIC DATA SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 01-11779 75-2548221
(State or Other (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Incorporation)
5400 Legacy Drive
Plano, Texas 75024-3105
(Address of principal executive offices,
including zip code)
Registrant's telephone number, including area code (972) 604-6000
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Item 5. Other Events.
On April 24, 1997, Electronic Data Systems Corporation, a
Delaware corporation, issued the press release attached as Exhibit
99(a) hereto announcing the first quarter 1997 earnings.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description of Document
99(a) Press Release of Electronic Data Systems
Corporation dated April 24, 1997.
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/ D. Gilbert Friedlander
--------------------------
Name: D. Gilbert Friedlander
Title: Senior Vice President
April 24, 1997
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EXHIBIT 99(a)
CONTACT: Jon Senderling - EDS
(972)605-6790
[email protected]
For release 3:05 p.m. CDT Thursday, April 24, 1997
EDS REVENUES INCREASE, NET INCOME DECLINES; COMPANY ESTIMATES
1997 EPS OF $2.30 TO $2.35
Business transformation initiative to reposition company for future
growth
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PLANO, Texas -- EDS on April 24, 1997 reported that its operating
revenues rose 6.7 percent in the first quarter of 1997 over year-
ago levels but that net income declined 11 percent.
The global information services company said that it registered
operating revenues of $3.592 billion for the quarter ended March
31, 1997, compared with $3.367 billion in the corresponding period
last year, and recorded net income of $194.1 million, compared
with $218.8 million in the first quarter of 1996. The company
also said that first-quarter earnings per share declined 11
percent, from $0.45 cents in 1996 to $0.40 this year.
EDS reported that it signed $2.9 billion in new business in the
first quarter. It was the third quarter in a row in which the
company recorded strong new contract signings.
Despite the first-quarter earnings decline, EDS said that it
believes it can achieve earnings for 1997 in the range of $2.30 to
$2.35 per share, before a possible one-time charge later in the
year.
EDS announced it is implementing an enterprise-wide business
transformation initiative to reduce its costs, streamline its
organizational structure and align its strategy, services and
delivery with market opportunities.
EDS said the initiative, which was designed with the assistance of
the company's management consulting subsidiary, A.T. Kearney, will
set the stage for sustained growth going forward as well as
enhance EDS' ability to reach its 1997 earnings target.
As a result of the transformation initiative, which is expected to
extend into next year, the company expects to take a one-time
charge, possibly as early as the second quarter of 1997. EDS
anticipates that the cash savings that result from the initiative
in 1997 will offset amounts paid for people-related charges.
-1-
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"Obviously, I am not pleased with our earnings performance in the
first quarter," said Les Alberthal, EDS chairman and CEO.
"However, we have designed an aggressive plan to improve our
business, and we see reasons for optimism for the remainder of the
year.
"The combination of growth in new contract signings and the
undertaking of a major business transformation effort makes us
confident in our ability to continue both our historically solid
earnings performance and our position of industry leadership. We
are committed to taking the actions necessary to produce results
in line with the expectations of our stakeholders while at the
same time continuing to provide the highest possible level of
service to our thousands of customers around the globe."
EDS also said that it had completed an extensive reassessment of
the "Year 2000" issue -- preparing computer systems for the new
millenium -- and confirmed that it would be a "net positive" for
EDS. The company said that although it does have some Year 2000
exposure among existing clients, it believes that such exposure
will be more than offset by new business opportunities with both
new and existing clients.
In the first quarter, EDS won substantial new business around the
globe. Highlights included a 10-year agreement with the British
Broadcasting Corporation and a four-year joint venture contract
with the Italian Ministry of Education. In addition, EDS won a
major 11-year contract with the U.S. Postal Service.
The statements in this news release that are not historical facts,
including those regarding 1997 earnings estimates, EDS' business
transformation initiative and related savings and one-time
charges, Year 2000 exposure and the value of new contract
signings, are forward-looking statements within the meaning of the
federal securities laws. These statements are subject to numerous
risks and uncertainties, many of which are beyond EDS' control,
that could cause actual results to differ materially from such
statements. For information concerning these risks and
uncertainties, please see EDS' filings with the Securities and
Exchange Commission. EDS disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
EDS is a leader in the global information services industry. The
company's approximately 100,000 employees specialize in applying a
range of ideas and technologies to help business and government
customers improve their economics, products, services and
relationships. EDS, which serves customers in 42 countries,
reported revenues of $14.4 billion in 1996. The company is
independent and publicly owned, and its stock is traded on the New
York Stock Exchange and the London Stock Exchange under the symbol
EDS. EDS can be visited via the Internet at http://www.eds.com.
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SUMMARY OF RESULTS OF OPERATIONS
(in millions except per-share amounts)
<TABLE>
<CAPTION>
First Quarter Ended
March 31,
--------
1997 1996
------ ------
<S> <C> <C>
Systems and Other Contracts
Revenues <F1> $ 3,591.6 $ 3,366.9
Costs and Expenses 3,264.3 3,008.0
-------- --------
Operating Income 327.3 358.9
Interest Expense and Other, Net 24.0 17.0
-------- --------
Income Before Income Taxes 303.3 341.9
Provision for Income Taxes 109.2 123.1
-------- --------
Net Income $ 194.1 $ 218.8
Earnings Per Share <F2> $ 0.40 $ 0.45
Cash Dividends Per Share $ 0.15 $ 0.15
<FN>
<F1>
(1) Revenues related to General Motors Corporation and its
affiliates amounted to $1,019.0 million and $962.2 million for
the first quarter ended March 31, 1997 and 1996, respectively.
<F2>
(2) On June 7, 1996, GM Class E common stock was exchanged
for EDS common stock on a one-for-one basis. Earnings and
cash dividends before June 7, 1996, are attributable to GM
Class E common stock. Amounts computed as earnings
attributable to GM Class E common stock are not materially
different than amounts computed as earnings per share of EDS
common stock.
</FN>
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</TABLE>
SUMMARY OF CONSOLIDATED BALANCE SHEETS
(in millions)
<TABLE>
<CAPTION>
March 31, Dec. 31,
ASSETS 1997 1996
<S> <C> <C>
Current Assets
Cash and marketable securities $ 964.7 $ 962.5
Accounts receivable 3,267.3 3,513.0
Inventories 144.6 141.6
Prepaids and other 294.7 391.2
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Total Current Assets 4,671.3 5,008.3
Property and Equipment, Net 3,028.0 3,097.0
Operating and Other Assets 3,138.8 3,087.6
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Total Assets $ 10,838.1 $ 11,192.9
-------- --------
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 430.8 $ 465.8
Accrued liabilities 1,679.4 1,843.6
Deferred revenue 551.5 592.6
Income taxes 121.6 127.5
Current portion of long-
term debt 123.5 133.3
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Total Current Liabilities 2,906.8 3,162.8
Deferred Income Taxes 517.4 429.4
Long-term Debt 1,727.0 2,324.3
Redeemable Preferred Stock of
Subsidiaries and
Minority Interest 792.7 493.3
Total Stockholders' Equity 4,894.2 4,783.1
-------- --------
Total Liabilities
and Stockholders' Equity $ 10,838.1 $ 11,192.9
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</TABLE>
