EL SEGUNDO, Calif., Nov. 3 -- Computer Sciences Corporation (NYSE: CSC) today reported results for its fiscal 2006 second quarter, ended September 30, 2005. Revenue was $3.57 billion, up 5.3% over last year’s second quarter. Net earnings per share (diluted) were 53 cents, including a current period non-cash asset impairment special charge related to the Nortel Networks contract of $33.1 million after taxes, or 18 cents per share. (Excluding the special charge, non-GAAP earnings per share, diluted, from continuing operations were 71 cents, up 26.8%, compared with last year’s second quarter earnings per share, diluted, from continuing operations of 56 cents).

The drivers of revenue growth during the quarter were CSC’s U.S. commercial activities and federal government operations. Significant contributors to the U.S. commercial revenue growth were recent outsourcing engagements along with the continuing improvement in the North American consulting and systems integration activities. The U.S. federal revenue growth was led by gains within the company’s Department of Defense (DoD)-related business. The company’s operations in Australia and Asia also contributed to the quarter’s revenue growth.

For the second quarter (ended Sept. 30):

• Revenue was $3.57 billion, up 5.3% (approximately 5% in constant currency);
• Net income was $99.5 million, or 53 cents per share (diluted), including a $33.1 million current period after-tax non-cash asset impairment special charge ($52.0 million pre-tax) related to the Nortel Networks contract;
• Earnings per share excluding the special charge were 71 cents;
• and major business awards were $2.5 billion.

For the six months (ended Sept. 30):

• Revenue was $7.16 billion, up 6.9% over the comparable six-month period of fiscal 2005 (approximately 6% in constant currency);
• Net income was $231.1 million, or $1.24 per share (diluted), including a $22.9 million, or 12 cents per share after-tax gain on sale of discontinued operations and the current period non-cash asset impairment after-tax special charge of $33.1 million, or 18 cents per share, related to the Nortel Networks contract;
• Earnings per share excluding the gain on sale of discontinued operations and the current period non-cash asset impairment special charge were $1.29;
• and major business awards totaled $6.2 billion.

“We are pleased with our second quarter results, and as we enter the second half of fiscal 2006 we are encouraged with the IT services environment,” said CSC Chairman and Chief Executive Officer Van B. Honeycutt. “Our North American consulting and systems integration activities continue to deliver improving results and we believe the demand in that market for shorter-term projects is strengthening. The pipelines for both large commercial and U.S. federal government awards remain solid and are anticipated to provide us with ample opportunity for success going forward.

“We have continued our discipline around contract execution, cost management and opportunity qualification -- pursuing only those engagements which provide the appropriate returns to our investors. This quarter’s operating metrics reflect our progress.

“Our recent success in bringing on additional global commercial business awards has positioned us to grow our revenue and improve our competitive position in the commercial marketplace,” Honeycutt said. “Furthermore, with approximately 35% of our revenue being derived from the U.S. federal government, we believe our position as one of the top federal IT services providers will enhance our ability to compete and continue our track record of success in that growing market.

“The U.S. federal government opportunity pipeline over the next 17 months is approximately $30 billion, comprised of over 350 programs distributed over a wide array of government agencies and departments. About one-third of those opportunities are scheduled for award during the remainder of this fiscal year.

“In North America, revenue derived from shorter-term consulting and systems integration services grew year-over-year, aided by improved demand and utilization,” continued Honeycutt. “Our similar shorter-term activities in Europe continued to be impacted by lingering soft demand in certain country-specific markets, particularly Italy and Germany, with France showing improvement.

“Major business awards for the second quarter were $2.5 billion, bringing our six-month total to approximately $6.2 billion. The six-month total is split approximately 60% federal and 40% commercial.”

As previously disclosed, the company has anticipated a working capital adjustment resulting from the February 14, 2005, divestiture of certain DynCorp activities. Under an agreement finalized on October 27, 2005, between CSC and the buyer, the company will receive $65.5 million in additional proceeds. These proceeds are payable in 13% preferred stock and will be recorded as a gain on sale of discontinued operations subject to a valuation allowance during the third fiscal quarter.

“For the third quarter, ending December 30, 2005, we anticipate revenue to be in the $3.8 billion range and earnings per share in the mid 80 cent range,” Honeycutt said. “Expectations for the full year are for revenue to be approximately $15 billion, which is at the lower end of previous guidance due to an estimated $200 million to $300 million adverse impact of currency fluctuation. Earnings per share for the year are anticipated to be in the $3.25 to $3.30 range, within the upper half of the previous guidance. Our third quarter and fiscal year 2006 assumptions exclude the favorable impacts from the additional gain on the divestiture of certain DynCorp activities and the gain on the disposition of Health Plans Solutions, as well as any impairment charges related to previously disclosed outsourcing contract terminations.”

BUSINESS RESULTS

Second quarter global commercial revenue was up 4.1% to $2.33 billion from $2.24 billion in the year-ago quarter. U.S. commercial revenue was $1.01 billion, up 11.3%, compared with $903.8 million last year. European revenue was $983.7 million, a decline of 4.9% (down approximately 4% in constant currency), from $1.03 billion in the second quarter last year. U.S. commercial revenue was the beneficiary of meaningful recent IT services engagements. CSC's non-European international revenue was $339.1 million, up 13.9% (approximately 8% in constant currency), compared with last year’s $297.8 million.

For the second quarter, CSC’s U.S. federal government revenue increased 7.5% to $1.24 billion from $1.16 billion for the second quarter of fiscal 2005. Revenue derived from CSC’s DoD-related business was $835.4 million, up 19.9% from last year’s $696.5 million. This growth was the result of incremental revenue from several existing engagements and the contribution of recent new business awards, including Rapid Response, Naval Sea System Command’s Multiple Award Contracts and the U.S. Strategic Command. CSC’s civil agencies activities generated revenue of $383.4 million, declining 8.7%, compared to $419.8 million last year. The decline is attributable to the end of the Asset Forfeiture program and the reduced scope associated with the Internal Revenue Service Modernization activity. Other federal revenue, comprised of state and local government as well as commercial contracts performed by the U.S. federal sector reporting segment, was $25.3 million, down from last year’s $41.2 million.

As announced in the company’s press release dated Oct.11, 2005, a teleconference will be held today at 5:00 p.m. EST to discuss the second quarter results. This teleconference can be accessed from the CSC Web site at www.csc.com/investorrelations, in a listen-only mode.

Founded in 1959, Computer Sciences Corporation is a leading global IT services company. CSC’s mission is to provide customers in industry and government with solutions crafted to meet their specific challenges and enable them to profit from the advanced use of technology.

With approximately 78,000 employees supporting continuing operations, CSC provides innovative solutions for customers around the world by applying leading technologies and CSC’s own advanced capabilities. These include systems design and integration; IT and business process outsourcing; applications software development; Web and application hosting; and management consulting. Headquartered in El Segundo, Calif., CSC reported revenue of $14.5 billion for the 12 months ended Sept. 30, 2005. For more information, visit the company’s Web site at www.csc.com.

All statements in this press release 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 “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in CSC’s Form 10-Q for the quarter ended July 1, 2005. The Company disclaims any intention or obligation to update these forward-looking statements whether as a result of subsequent events or otherwise except as required by law.

Note to Analysts and Editors: Please see attached tables.