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) June 23, 1997
COMPUTER SCIENCES CORPORATION
(Exact name of Registrant as specified in its charter)
NEVADA 1-4850 95-2043126
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
2100 East Grand Avenue
El Segundo, California 90245
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (310) 615-0311
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
On June 23, 1997, the Registrant filed with the Securities and Exchange
Commission its Annual Report on Form 10-K for the year ended March 28, 1997.
As described in a footnote to the financial statements included within such
Annual Report, and in a press release issued on June 23, 1997, the Registrant
expects to recognize a net tax credit in the fiscal quarter ending June 27,
1997. A copy of the press release is included as Exhibit 99.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The exhibit listed below is filed as a part of this report:
99.1 Press Release of the Registrant dated June 23, 1997
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 thereto duly authorized.
COMPUTER SCIENCES CORPORATION
Dated: June 23, 1997 By /s/ Denis M. Crane
--------------------------
Denis M. Crane
Vice President and Controller
Chief Accounting Officer
EXHIBIT 99.1
Contact: Bruce Plowman or FOR IMMEDIATE RELEASE
Spencer Davis Moved On Business Wire
310.615.0311 June 23, 1997
CSC TO RECOGNIZE NET SPECIAL CREDIT
EL SEGUNDO, Calif., June 23 - Computer Sciences Corporation (NYSE:CSC)
expects to recognize a net special credit of $2 million, or 2 cents per share,
in the quarter ending June 27, 1997, it was announced by Van B. Honeycutt,
CSC's chief executive officer. The net credit will result from a tax benefit,
estimated at $135 million, and an after-tax special charge, estimated at $133
million, both of which are related to recent developments at an affiliated
joint venture.
"These developments will significantly benefit CSC's cash flow for the
current year and beyond," Honeycutt said, "and will add substantially to CSC's
financial strength."
The joint venture, known as CSC Enterprises, was formed in 1990 to
operate CSC's credit services operations and to carry out other business
strategies through acquisition and investment. The original members of the
venture included affiliates of CSC, affiliates of Equifax Inc., and Merel
Corporation.
During the current fiscal quarter, the Equifax affiliates withdrew from
CSC Enterprises. As a result of these withdrawals, CSC Enterprises took
actions with respect to its remaining assets that will cause CSC to recognize
an increase in the tax basis of certain of these assets. As required by
Financial Accounting Standard No. 109, this tax basis increase will result in
a deferred tax asset, estimated at $135 million, and a corresponding reduction
of the company's provision for income taxes during the current fiscal quarter.
Through related income tax deductions, the $135 million should be realized as
cash savings over the next three to five years.
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Computer Sciences Corporation - page 2 June 23, 1997
In connection with these developments, CSC Enterprises reviewed its
operations, its market opportunities and the carrying value of its assets.
Based on this review, plans were initiated during the current fiscal quarter
to eliminate certain offerings and write down assets, primarily within its
telecommunications operations.
"When we completed this review, it became clear that some of our
telecommunications software, products and services required greater levels of
future investment than we were prepared to make," said Leon J. Level, CSC's
chief financial officer. "Consequently, we decided it would be prudent to
stop offering them."
As a result of these plans, the company, through CSC Enterprises, will
recognize an after-tax special charge, estimated at $133 million, during the
current fiscal quarter. This special charge, which is principally non-cash,
includes goodwill of $35 million, contract termination costs of $29 million,
deferred contract costs and other assets of $24 million, telecommunications
software and accruals of $21 million, telecommunications property, equipment
and intangible assets of $14 million and other costs of $10 million.
CSC Enterprises is currently comprised of affiliates of CSC, one of which
is the managing general partner, and Merel Corporation. The joint venture,
the tax credit and the special charge are described in footnotes to CSC's
financial statements for the year ended March 28, 1997, which were filed with
the Securities and Exchange Commission today.
CSC had $5.6 billion in revenues for the 12 months ended March 28, 1997.
The company is headquartered in El Segundo, Calif., and has nearly 44,000
employees in more than 600 offices worldwide providing clients with management
consulting, information systems consulting and integration, and operations
support.
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