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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 29, 1999
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: (972) 604-6000
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Item 5. Other Events.
On April 29, 1999, Electronic Data Systems Corporation, a Delaware
corporation ("EDS"), issued the press release attached as Exhibit 99(a) hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Description of Document
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99(a) Press Release of Electronic Data Systems Corporation
dated April 29, 1999.
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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
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Name: D. Gilbert Friedlander
Title: Senior Vice President and
Secretary
April 29, 1999
2
Exhibit 99(a)
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CONTACT:
Reed Byrum - EDS
(+1) (972) 605-6790
[email protected]
FOR RELEASE 3:05 P.M. CDT, THURSDAY, APRIL 29, 1999
EDS ANNOUNCES FIRST-QUARTER RESULTS
Revenues 10 percent higher than last year
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PLANO, Texas - EDS reported today that revenues for the first quarter of 1999
reached $4.3 billion, exceeding the first quarter 1998 level of $3.9 billion by
10 percent. Excluding certain pre-tax charges and gains totaling a negative
$316.3 million, net income for the quarter was $181.8 million and diluted
earnings per share were $0.36. Including these items, the company recorded a net
loss of $20.6 million and a diluted loss per share of $0.04.
During the first quarter of 1999, the company recorded restructuring and other
pre-tax charges totaling $379.8 million. These charges resulted primarily from
costs associated with approximately 5,200 employee separations, asset
writedowns, the consolidation of certain operations, and the discontinuation and
exit of certain service offerings. These charges were partially offset by a
pre-tax gain of $63.5 million related to the sale of a portion of the company's
limited partnership investments. Net income for the first quarter of 1998,
excluding a pre-tax charge of $42.5 million associated with acquired in-process
research and development, was $211.3 million and diluted earnings per share were
$0.43. Including this charge, net income was $184.2 million and diluted earnings
per share were $0.37.
Management's Comments
"While results for the first quarter were as expected, we have established the
momentum for cost-cutting and growth-enhancing changes at EDS," said Dick Brown,
chairman and chief executive officer of EDS. "We expect this to be a year of
transformation for EDS and plan to regain our
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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core market position as a result of the changes we are making. We have the basic
elements for success--a strong balance sheet, positive cash flows, a robust and
growing marketplace, and a strong customer base."
New Business
EDS reported new contract signings totaling $3.0 billion during the first
quarter, including 39 contracts valued at greater than $10.0 million each. These
signings included two major international agreements. In Italy, EDS and ENI,
Italy's largest energy company, signed an agreement for about $500 million to
provide an array of information technology services to ENI over the next five
years.
In Australia, EDS signed a five-year contract for approximately $300 million
with the Australian Taxation Office (ATO). The contract is part of the federal
government's program to outsource most of its information technology activities.
Under the terms of the agreement, EDS will provide ATO with cost-effective and
scalable mainframe services, a standardized desktop/LAN environment, integrated
voice/data network, data warehouse services, document delivery and service
request, and problem and management process through a new help desk.
Alliances
EDS and NCR Corporation formed a partnership in the first quarter to deliver
business intelligence services that create information arsenals by bundling
management and solutions consulting with technical delivery across the extended
enterprise. Also during the quarter, EDS and SAP America, Inc. formed a
partnership to offer enterprise resource planning applications to mid-size and
small businesses throughout the country.
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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News Highlights
During the first quarter, EDS and MCI WorldCom agreed to the largest outsourcing
framework ever in the telecommunications industry. Under the terms being
discussed, EDS will provide MCI with major information technology services and
will outsource the bulk of its global network to MCI WorldCom. Additionally,
during April, EDS acquired MCI Systemhouse for $1.65 billion, an information
technology services provider that generated $1.7 billion in revenue in 1998. The
two companies will also go to market together by capitalizing on the
fast-growing demand for global communications and data services.
Also during the first quarter, EDS named to its executive management roster a
new executive vice president and chief financial officer, Jim Daley. Daley spent
35 years at Price Waterhouse, L.L.P. in a variety of executive positions,
including co-chairman and chief operating officer, vice chairman-international
and the global accounting business services leader for the firm's financial
services practice.
Troy Todd joined EDS in April as executive vice president, leadership and change
management. A former chief executive officer of three services corporations,
Todd brings to EDS a wealth of human resources, employee development and
operations experience.
Corporate Information
EDS has been a leader in the global information services industry for more than
35 years. The company delivers systems and technology expertise, management
consulting, business process management and electronic business leadership. EDS,
which reported revenues of $16.9 billion in 1998, offers solutions to improve
the performance of more than 9,000 business and government clients in about 50
countries. The company's stock is traded on the New York Stock Exchange
(NYSE:EDS) and the London Stock Exchange. Visit EDS via the Internet at
www.eds.com.
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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The statements in this news release regarding the amount of new-contract
signings and EDS' 1999 performance 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, 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.
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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<TABLE>
<CAPTION>
SUMMARY OF RESULTS OF OPERATIONS
(in millions, except per-share amounts)
First Quarter Ended
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March 31,
1999 1998
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<S> <C> <C>
Revenues (1) $ 4,326.3 $ 3,942.0
Costs and Expenses
Cost of revenues 3,608.7 3,228.2
Selling, general & administrative 443.9 410.6
Restructuring and other charges 379.8 42.5
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Total Costs and Expenses 4,432.4 3,681.3
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Operating Income (Loss) (106.1) 260.7
Interest Expense and Other, Net (2) 73.9 27.0
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Income (Loss) Before Income Taxes (32.2) 287.7
Provision (Benefit) for Income Taxes (11.6) 103.5
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Net Income (Loss) $ (20.6) $ 184.2
========= =========
Earnings Per Share (3)
Basic $ (0.04) $ 0.37
Diluted (0.04) 0.37
Weighted Average Number of
Shares Outstanding
Basic 492.2 491.5
Diluted 492.2 496.2
Cash Dividends Per Share $ 0.15 $ 0.15
</TABLE>
(1) Revenues related to General Motors and its affiliates amounted to $1,035.3
million and $995.3 million for the quarters ended March 31, 1999 and 1998,
respectively.
(2) Includes a pre-tax gain of $63.5 million recorded in the first quarter of
1999 related to the sale of a portion of the Company's limited partnership
investments.
(3) Excluding the pre-tax charge of $379.8 million ($0.48 per share, after-tax)
for restructuring and other charges, and the $63.5 million pre-tax gain
($0.08 per share, after-tax), diluted earnings per share would have been
$0.36 for the first quarter of 1999. For purposes of the preceding
calculations, the weighted average number of shares outstanding was 501.9
million. Excluding a $42.5 million pre-tax charge ($0.06 per share,
after-tax) for acquired in-process research and development, diluted
earnings per share for the first quarter of 1998 would have been $0.43.
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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<TABLE>
<CAPTION>
SUMMARY OF CONSOLIDATED BALANCE SHEETS
(in millions)
March 31, Dec 31,
1999 1998
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<S> <C> <C>
ASSETS
Current Assets
Cash and marketable securities $ 1,470.7 $ 1,311.7
Accounts receivable 3,901.2 3,835.0
Prepaids and other 455.7 486.6
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Total Current Assets 5,827.6 5,633.3
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Property and Equipment, Net 2,597.3 2,708.1
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Operating and Other Assets
Investments and other assets 1,493.6 1,717.6
Software, goodwill, and other intangibles, net 1,401.6 1,467.1
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Total Operating and Other Assets 2,895.2 3,184.7
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Total Assets $11,320.1 $11,526.1
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 322.6 $ 329.8
Accrued liabilities 2,719.4 2,511.1
Deferred revenue 617.0 593.3
Income taxes 72.2 174.9
Current portion of long-term debt 44.5 47.7
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Total Current Liabilities 3,775.7 3,656.8
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Deferred Income Taxes 342.7 362.6
Long-term Debt 1,188.5 1,184.3
Redeemable Preferred Stock of Subsidiaries
and Minority Interests 403.2 405.9
Total Stockholders' Equity 5,610.0 5,916.5
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Total Liabilities
and Stockholders' Equity $11,320.1 $11,526.1
======== ========
</TABLE>
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EDS ANNOUNCES FIRST-QUARTER EARNINGS
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<TABLE>
<CAPTION>
SUMMARY OF CONSOLIDATED CASH FLOWS
(in millions)
Three Months Ended
March 31,
1999 1998
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<S> <C> <C>
Net Cash provided by Operating Activities (1) $ 369.0 $ 623.6
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Cash Flows from Investing Activities
Proceeds from sales of marketable securities 69.2 54.3
Proceeds from investments and other assets 270.7 125.9
Payments for purchases of property and equipment (148.5) (189.9)
Payments for investments and other assets (53.5) (110.1)
Payments related to acquisitions, net of cash acquired (12.1) (89.7)
Payments for purchases of software and other intangibles (30.0) (37.2)
Payments for purchases of marketable securities (25.1) (37.1)
Other 32.4 22.1
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Net cash provided by (used in) investing activities 103.1 (261.7)
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Cash Flows from Financing Activities
Proceeds from long-term debt 19.0 1,278.8
Payments on long-term debt (23.0) (1,424.3)
Purchase of treasury stock (144.9) (77.0)
Employee stock transactions and related tax benefits (3.0) 29.2
Dividends paid (73.6) (73.8)
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Net cash used in financing activities (225.5) (267.1)
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Effect of Exchange Rate Changes on Cash
and Cash Equivalents (39.8) (3.2)
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Net Increase in Cash and Cash Equivalents 206.8 91.6
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Cash and Cash Equivalents at Beginning of Period 1,038.8 677.4
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Cash and Cash Equivalents at End of Period $ 1,245.6 $ 769.0
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</TABLE>
(1) Depreciation and amortization for the three months ended March 31, 1999 and
1998, was $312.0 million and $321.3 million, respectively.