Exhibit 99.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended: December 31, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from __________ to __________
Commission file number: 1-4850
A. Full title of plan and the address of the plan, if different from that of
the issuer named below: Computer Sciences Corporation Matched Asset Plan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: Computer Sciences Corporation
2100 East Grand Avenue
El Segundo, California 90245
1
TABLE OF CONTENTS
-----------------
Description Page
- ----------- ----
(a) Financial Statements:
Independent Auditors' Report ........................................ 3
Statements of Net Assets Available for Benefits
As of December 31, 1998 and 1997 .................................... 4
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1998 and 1997 ...................... 5
Notes to Financial Statements ....................................... 6
(b) Exhibit:
Independent Auditors' Consent ....................................... E-1
(c) Supplemental Schedules:
Schedule of Assets Held for Investment Purposes ..................... S-1
Schedule of Reportable Transactions ................................. S-2
2
INDEPENDENT AUDITORS' REPORT
Employee Retirement Plan Committee
Computer Sciences Corporation
El Segundo, California
We have audited the accompanying statements of net assets available for benefits
of the Computer Sciences Corporation Matched Asset Plan (the "Plan") as of
December 31, 1998 and 1997, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998 and 1997, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules listed in
Section C of the table of contents are presented for the purpose of additional
analysis and are not a required part of the basic financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of
the Plan's management. Such schedules have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/Deloitte & Touche LLP
June 11, 1999
3
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
STATEMENTS OF NET ASSETS
AVAILABLE FOR BENEFITS
December 31
-----------------------------
1998 1997
-------------- ------------
ASSETS
Investments (Notes 2, 5, 9 and 10):
Short-term investments $ 10,297,485 $ 14,812,841
Long-term investments--at fair value:
Interest in registered investment companies
Brinson U.S. Balanced Fund 71,679,904 84,332,245
Mellon Enhanced Asset Fund 77,207,126 40,159,408
Brinson U.S. Equity Fund 263,161,997 249,786,910
Mellon Stock Index Funds 179,469,818 110,042,765
CSC Company stock 380,378,825 238,770,004
Employee loans (Note 6) 21,042,106 20,422,664
Plan interest in Master Trust 174,961,001 142,956,868
Guaranteed investment contracts
-at contract value 15,231,349
Cash 508,529
-------------- ------------
Total investments 1,178,706,791 916,515,054
Receivables:
Employer contribution 293,000 452,287
Participants' contribution 1,565,285 3,900,688
Accrued income 16,760 15,259
Unsettled Trades 864,521
-------------- ------------
Total Receivables 2,739,566 4,368,234
-------------- ------------
Total Assets 1,181,446,357 920,883,288
-------------- ------------
LIABILITIES
Accounts Payable 1,914,407 1,482,254
Accrued Expenses 693,068 325,925
Unsettled Trade Payables 2,791,900
--------------
Total Liabilities 5,399,375 1,808,179
-------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $1,176,046,982 $919,075,109
============== ============
See Notes to Financial Statements
4
COMPUTECR SCIENCES CORPORATION
MATCHED ASSET PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years Ended December 31
-------------------------------
1998 1997
-------------- ------------
ADDITIONS
Investment Income:
Net appreciation in fair value of
investments (Note 9) $ 190,408,299 $ 65,905,291
Interest 927,110 3,031,996
Dividends 19,529,963 15,217,887
Plan interest in Master Trust investment
income 11,827,691 7,283,958
-------------- ------------
222,693,063 91,439,132
Less Investment Management Fees (1,454,871) (972,982)
-------------- ------------
221,238,192 90,466,150
Contributions:
Employee 98,450,484 88,006,055
Employer 16,139,568 14,800,519
Employee Rollovers 9,782,838 18,922,266
Transfers From Other Plans (Note 8) 13,861,524 23,324,149
-------------- ------------
138,234,414 145,052,989
-------------- ------------
Total Additions 359,472,606 235,519,139
-------------- ------------
DEDUCTIONS
Distributions to Participants
(Notes 1 and 7) 102,500,733 70,914,853
-------------- ------------
Total Deductions 102,500,733 70,914,853
-------------- ------------
Net Increase 256,971,873 164,604,286
Net Assets Available for Benefits at
Beginning of Year 919,075,109 754,470,823
-------------- ------------
NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $1,176,046,982 $919,075,109
============== ============
See Notes to Financial Statements
5
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 1 Description of the Plan
-----------------------
The following brief description of the Computer Sciences Corporation Matched
Asset Plan (the "Plan") is provided for general information purposes only.
Participants should refer to the Plan documents for more complete information.
The Plan was adopted by the action of the Board of Directors of Computer
Sciences Corporation (the "Company") taken on November 3, 1986, and constitutes
an amendment and restatement of the Employee Stock Purchase Plan ("the Prior
Plan").
The Plan is a continuation of the Prior Plan and is qualified under the Internal
Revenue Code (the "Code"), as amended, Section 401(a) and, effective as of
January 1, 1987, with respect to the portion thereof that qualifies as a
qualified cash or deferred arrangement, to satisfy the requirement of Code
Section 401(k). It is also subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
The Company reserves the right to discontinue its contributions and terminate
the Plan subject to the provisions of ERISA. Upon such termination, the
participants' rights to the Company's contributions vest immediately and the
account balances are fully paid to the participants.
Eligibility and Participation
- -----------------------------
Any eligible employee who has satisfied the Plan's age and service requirements,
and is employed by the Company, and who receives a stated compensation in
respect of employment on the payroll of the Company, is eligible to become a
participant, with the exception of a person who is represented by a collective
bargaining unit and whose benefits have been the subject of good faith
bargaining under a contract that does not specify that such person is eligible
to participate in the Plan. In addition, the Company may determine to exempt
all employees of any division, unit, facility or class from coverage under the
Plan. Any person who leaves the employ of the Company and, at a later time
becomes re-employed, must reapply to participate in the Plan, provided he or she
otherwise meets the eligibility requirements.
There were approximately 25,005 and 18,755 participating employees at December
31, 1998 and 1997, respectively.
6
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Employee and Company Contributions
- ----------------------------------
Subject to certain limitations described below, an eligible employee who elects
to become a participant may authorize any whole percentage (at least 1% but not
more than 15%) of such employee's monthly compensation (as defined in the Plan)
to be deferred and contributed to the trust fund on his or her behalf, up to a
maximum amount of $10,000 and $9,500 for 1998 and 1997, respectively. Any
compensation deferral in excess of $10,000 and $9,500 in 1998 and 1997,
respectively, together with income allocable to that excess, will be returned to
a participant. Any matching Company contributions attributable to any excess
contribution, and income allocable thereto, will either be returned to the
Company or applied to reduce future matching Company contributions.
In order to qualify for the special tax treatment accorded to plans by Section
401(k) of the Code, contributions on behalf of participants under the Plan must
meet two nondiscrimination tests designed to prevent a disproportionate
compensation deferral election by employees who are highly compensated in
relation to other employees. The Committee may cause the percentage authorized
by the highly compensated participants to be reduced if the Plan does not meet
both of the nondiscrimination tests.
A participant is not permitted to make voluntary after-tax contributions to the
Plan.
The Company will contribute and forward to the trust fund, together with a
compensation deferral contribution equal to each participant's qualifying
compensation deferral, an amount equal to 50% of the first 3% of the
participant's compensation deferral (except for three groups of employees: the
first group is a small number of employees to whom under the terms of their
contract agreement the Company will contribute an amount equal to 50% of the
first 4% of the participant's compensation deferral; the second group to whom
under the terms of their contract agreement the Company will contribute an
amount equal to 100% of the first 7% of the participant's compensation deferral;
and the third group to whom under the terms of their contract agreement the
Company will contribute an amount equal to 50% of the first 6% of the
participant's compensation deferral). Matching contributions will be invested
in the Company Stock Fund, which invests in the common stock of Computer
Sciences Corporation.
7
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Participant Accounts
- --------------------
Each participant's account is credited with the participant's contribution and
the Company's matching contribution and allocations of Plan earnings, and is
charged with an allocation of investment management fees. Allocations are based
on participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting of Participants' Interests/Forfeitures
- ----------------------------------------------
A participant's interest in his or her Compensation Deferral Account, Retirement
Account, After Tax Account, and Rollover Account is at all times fully vested in
the participant or, when appropriate, in the participant's beneficiary or legal
representative.
Each participant has a vested interest in the value of his or her Matching
Contribution Account equal to twenty-five percent (25%) after completing two
full years of service and increasing by twenty-five percent (25%) for each
additional full year of service (except for a small number of participants who,
under the terms of their contract agreement, will vest 100% after 2 years).
Vesting accelerates to 100% in the event of reaching age 65 while employed by
the Company or upon severance by reason of death or total and permanent
disability.
Any nonvested portion of the Matching Contributions Account will be forfeited
upon withdrawal from the Plan. Forfeitures may be applied to reduce future
matching contributions by the Company. Such forfeitures during 1998 and 1997
amounted to $2,186,594 and $1,410,024, respectively.
Distributable Amounts, Withdrawals and Refunds
- ----------------------------------------------
A participant may become entitled to a distribution of his or her distributable
benefit by reason of retirement, death, total and permanent disability,
voluntary termination of employment, or dismissal. The rules of payment of a
participant's distributable benefit depend upon age of the participant, the
number of years of service completed by the participant and the type of
severance. The total amounts distributed during 1998 and 1997 were $101,578,143
and $70,097,198, respectively.
While still an employee, a participant may, upon at least a 30 day written
notice to the Committee, make a withdrawal of his or her compensation deferral
contributions if the Committee finds, after considering the participant's
request, that an adequate financial hardship and resulting need for such amount
has been demonstrated by the participant. These withdrawals during 1998 and 1997
totaled $922,590 and $817,655, respectively.
8
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
In order for the Plan to meet the nondiscrimination tests, the Committee has
caused the compensation deferral percentage for certain highly compensated
employees to be reduced, which has also resulted in the return of excess
compensation deferrals.
Note 2 Summary of Significant Accounting Policies
------------------------------------------
The accounting and reporting policies followed in preparation of the financial
statements of the Plan of the Company conform with generally accepted accounting
principles. The following is a summary of the significant policies.
Use of Estimates
- ----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reported period.
Actual results could differ from those estimates.
Assets of the Plan
- ------------------
The assets of the Plan are held in a trust with five sub-accounts representing
the investment options. The investment income in the respective sub-accounts is
allocated to the participants. Contributions to, and payments from, the Plan
are specifically identified to the applicable sub-accounts within the trust.
Security Transactions
- ---------------------
Security transactions are accounted for on a trade-date basis. Dividend income
is recorded on the ex-dividend date. Interest income is accounted for on the
accrual basis.
In general, participants in the Company Stock Fund receive distributions in
certificates for shares of the common stock of the Company.
Valuation of Investment Securities
- ----------------------------------
Investments in common stocks and institutional investment vehicles are stated at
fair value based upon closing sales prices reported on recognized securities
exchanges on the last business day of the plan year or, for the listed
securities having no sales reported and for unlisted securities, upon
9
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
last reported bid prices on that date. Investments in short-term investments
are stated at cost which approximates fair value.
Valuation of Guaranteed Investment Contracts
- --------------------------------------------
At December 31, 1997, the Plan held guaranteed investment contracts, which are
considered to be fully benefit responsive as access to the funds of these
contracts is not restricted. The guaranteed investment contracts are valued at
contract value in accordance with SOP 94-4. Contract value represents
contributions made by participants, plus interest at the contract rates, less
withdrawals or transfers by participants. No guaranteed investment contracts
were held by the plan at December 31, 1998.
Based on the treasury yield curve for similar types of investments, the fair
value of the guaranteed investment contracts at December 31, 1997 was
approximately $15,294,818. The average yield and average crediting interest
rate was approximately 6.79% for 1997. The crediting interest rate is based on
an agreed-upon formula with the issuer, but cannot be less than zero.
Payment of Benefits
- -------------------
Benefits are recorded when paid.
Note 3 Income Tax Status
-----------------
The Internal Revenue Service has determined and informed the Company by a letter
dated July 18, 1996, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC).
The Committee believes that the Plan is designed and operated to qualify under
Section 401(a) of the Code and, with respect to its qualified cash or deferred
arrangement, under Section 401(k) of the Code. When the requirements of Section
401(k) of the Code are satisfied, the following tax consequences result:
(i) A participant is not subject to federal income tax on Company
contributions to the Plan or on income or realized gains in Plan Accounts
attributable to the participant until a distribution from the Plan is made to
him or her.
(ii) The participant is able to exclude from his or her income for federal
income tax purposes, the amount of his or her compensation deferral
contributions, subject to a maximum exclusion of $10,000 and $9,500 for the 1998
and 1997 taxable years of the participant, respectively.
10
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
(iii) On distribution of a participant's vested interest in the Plan, the
participant generally is subject to federal income taxation, except that: (1)
tax on "net unrealized appreciation" on any Company stock distributed as a part
of a "lump sum distribution" generally is deferred until the participant
disposes of such stock, and (2) tax may be deferred to the extent the
participant is eligible for and complies with certain rules permitting the
"rollover" of a qualifying distribution to another retirement plan, or
individual retirement account.
Note 4 Reconciliation of Financial Statements to Form 5500
-----------------------------------------------------
December 31,
-----------------------------------------
1998 1997
-------------- --------------
Net assets available for benefits
per the financial statements $1,176,046,982 $919,075,109
Amounts allocated to withdrawing
participants (8,055,721) (11,552,858)
-------------- --------------
Net assets available for benefits
per Form 5500 $1,167,991,261 $907,522,251
============== =============
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 1998
-----------------
Benefits paid to participants per the
financial statements $102,500,733
Add: Amounts allocated to withdrawing
participants at December 31, 1998 8,055,721
Less: Amounts allocated to withdrawing
participants at December 31, 1997 (11,552,858)
--------------
Benefits paid to participants per the Form 5500 $ 99,003,596
==============
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31, 1998 but not paid as of that date.
11
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 5 Investment Funds
----------------
Participant contributions - Subject to rules the Committee may from time to time
adopt, each participant has the right to designate one or more of the following
investment funds established by the Committee for the investment of his or her
compensation deferral contributions, in increments of 10%. After an initial
election has been made, a participant may designate a different Fund into which
future compensation deferral contributions shall be invested as of the first day
of any payroll period that coincides with or immediately follows the first day
of any month once within a calendar quarter. In addition, a participant may
elect to redesignate any amounts in his or her accounts as of the last business
day of any month once within a calendar quarter to be invested in a different
Fund. These elections may be made by giving such advance notice as may be
required by the Plan administrator.
Following are the investment funds available for participant contributions:
The Fixed Income Fund
- ---------------------
The Fixed Income Fund represents holdings of units in a Master Trust investment
vehicle and is managed by BlackRock Financial Management. The investment
portfolio is actively managed and consists of short-term (1-3 year) fixed income
instruments which include: U.S. Treasury and agency securities, corporate bonds,
mortgage-backed securities and asset-backed fixed income securities. All of the
Fund's assets are rated single-A or better at the time of purchase and all
securities must be U.S. dollar denominated. All new cash flows into the Fund are
invested in this actively managed bond fund. At December 31, 1998 and 1997, the
Plan's interest in the net assets of the Master Trust was approximately 89% for
both years. Investment income and administrative expenses relating to the
Master Trust are allocated to individual plans based upon average monthly
balances invested by each plan.
12
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
The following table represents the fair value of investments for the Master
Trust.
December 31,
----------------------------
1998 1997
------------ ------------
Investments at fair value:
Corporate bonds $118,380,288 $105,242,979
U.S. government securities 57,684,732 46,459,080
Other bonds 16,164,613 6,446,213
Short-term investments 3,777,721 1,371,261
Accrued income 966,721 1,198,486
------------ ------------
$196,974,075 $160,718,019
============ ============
Investment income for the Master Trust is as follows:
December 31,
----------------------------
1998 1997
------------ ------------
Investment income:
Net appreciation (depreciation) in
fair value of investments $ 1,731,522 $ 450,257
Interest:
Corporate bonds 6,710,396 4,037,722
U.S. government securities 3,786,462 3,243,205
Other bonds 691,664 366,303
Short-term investments 365,214 485,226
------------ ------------
13,285,258 8,582,713
Less investment management fees (227,349) (208,306)
------------ ------------
$ 13,057,909 $ 8,374,407
============ ============
The Balanced Fund
- -----------------
The Balanced Fund is co-managed by Mellon Capital Management (51% as of December
31, 1998) and Brinson Partners, Inc. (49% as of December 31, 1998). The
Balanced Fund is invested in an actively managed combination of U.S. equity
securities, U.S. fixed income securities and cash equivalents. The U.S. equity
portfolio consists of large, intermediate and small company stocks. The bond
portfolio consists primarily of U.S. Treasury, government agency and corporate
issues. This Fund's objective is to maximize risk-adjusted total returns
relative to the U.S. Balanced Index over a full economic cycle.
13
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
The Active Equity Fund
- ----------------------
The Active Equity Fund is managed by Brinson Partners, Inc. The Fund is broadly
diversified by issue and industry relative to the Wilshire 5000 index. The Fund
is typically invested in 70% large capitalization and 30% intermediate and small
capitalization stocks. The Fund may hold up to 50% in cash equivalents for
portfolio risk management purposes. The Fund's objective is to maximize risk-
adjusted total returns relative to the Wilshire 5000 index over a full economic
cycle.
The Stock Index Fund
- --------------------
The fund is managed by Mellon Capital Management. The objective of the fund is
to modestly exceed the performance of the Standard & Poor's 500 Stock Index.
The Stock Index Fund either invests in a stock portfolio designed to track the
performance of the S&P Stock Index and/or creates a synthetic S&P 500 portfolio
using (unleveraged) financial futures and options. Assets used as collateral
for futures/options positions are comprised of various market or debt
instruments.
The Company Stock Fund
- ----------------------
Amounts allocated to this investment alternative will be used to purchase shares
of Computer Sciences Corporation common stock which will be held for the benefit
of the participant. The performance of this fund will depend upon the
performance of Computer Sciences Corporation stock. The Bank of New York (the
"Trustee") may purchase Company stock on national securities exchanges or
elsewhere.
Company contributions - In accordance with the provisions of the Plan, the
Trustee must promptly invest matching Company contributions paid into the trust
fund in the Company Stock Fund. An exception is in the case of a participant who
has (i) attained at least age 59 1/2, or (ii) has been credited with at least
five years of service and has attained at least age 55 and has made an election
to designate different Funds.
14
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 6 Participant Loans
-----------------
The Plan allows participants to borrow from their vested account balances from a
minimum of $1,000 up to a maximum of $50,000 or 50% of their vested account
balances, subject to certain limitations. The loans bear interest at the prime
rate quoted in the Wall Street Journal plus 1%, which is set on a quarterly
basis. Loan terms range from 1-5 years or up to 15 years for purchase of a
primary residence. Loans are recorded at cost, which approximate fair value, on
the Statement of Net Assets Available for Benefits.
The loans (which are accounted for in the Loan Fund) are deducted from the
participants' accounts according to a priority specified in the Plan's loan
rules and, within each account, pro rata from the funds based on their balances
at the time. Loan repayments are reinvested in the participants' funds according
to their current investment election. The repayments are similarly allocated
among participants' accounts according to the priority specified in the Plan's
rules.
Note 7 Benefits Payable
----------------
As of December 31, 1998 and 1997, net assets available for benefits included
benefits of $8,055,721 and $11,552,858 respectively, due to participants who
have withdrawn from participation in the Plan.
Note 8 Transfers from Other Plans
--------------------------
During the two years ended December 31, 1998, the Plan had several transfers
from other plans. The asset values of these transfers were as follows:
$7,380,010 in 1998 from APM; $2,816,617 in 1998 from BDM; $1,736,677 in 1998
from Security Life; $776,503 in 1998 from Heller; $637,478 and $15,612,395 in
1998 and 1997, respectively from Dupont Conoco; $224,931 in 1998 from Liberty;
$206,213 in 1998 from Statistica; $75,615 and $8,168,573 in 1998 and 1997,
respectively from CNA Employees' Saving Plan; $66,426 in 1998 from Electronic
Data Systems; $53,500 in 1998 from Volpe; $5,079 and $128,350 in 1998 and 1997,
respectively from Credit Services; $2,394,153 in 1997 from Bath Iron Works
Corporation Tax Deferred Savings Plan; $1,371,171 in 1997 from Planmetrics, Inc.
Savings and Profit Sharing Plan; and $355,773 in 1997 from SunBeam-Oster
Company, Inc. 401(K) Savings and Profit Sharing Plan.
The Plan also had several transfers to other plans in 1998 and 1997 as a result
of spin-offs. The asset values of these transfers were as follows: $80,399 in
1998 to Faxnet; $33,046 in 1998 to ITDS; $3,343 and $740,644 in 1998 and 1997,
respectively to Artemis Holding; $737 in 1998 to
15
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Planmetrics, Inc. Savings and Profit Sharing Plan; $3,270,348 in 1997 to Mutual
of New York; $609,053 in 1997 to ST Research; and $86,221 in 1997 to CTI.
16
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 9 Statements of Net Assets Available for Benefits by Fund
-------------------------------------------------------
December 31, 1998
----------------------------------------------------------------------------------------------------
Fixed Active Stock Company Employee
Income Balanced Equity Index Stock Loans Total
------------ ------------ ------------ ------------ ------------- ----------- --------------
Assets
Investments
Short-term investments $ 419,934 $ 1,305,353 $ 3,204,113 $ 1,921,866 $ 3,446,219 $ 10,297,485
Long-term investments
At fair value
Interest in registered
investment companies: 148,887,030 263,161,997 179,469,818 591,518,845
CSC Company stock 380,378,825 380,378,825
Employee loans $21,042,106 21,042,106
Plan interest in
Master Trust 174,961,001 174,961,001
Guaranteed investment
contracts--at
contract value -
Receivables
Employer contribution 1,000 1,000 1,000 290,000 293,000
Participants' contribution 163,697 232,000 482,000 424,000 263,045 543 1,565,285
Accrued Income 2,540 1,222 5,074 2,843 5,081 16,760
Plan to plan transfers -
Interfund Transfers 621,209 (82,682) (1,048,277) (420,511) 930,261 -
Unsettled Trades 322,520 542,001 864,521
Cash 508,529 508,529
------------ ------------ ------------ ------------ ------------- ----------- --------------
Total Assets 176,169,381 151,173,972 266,347,908 181,399,016 385,313,431 21,042,649 1,181,446,357
Liabilities
Accounts Payable 68,028 82,191 104,103 104,440 762,078 793,567 1,914,407
Accrued Expenses 156,741 177,790 315,243 42,800 494 693,068
Unsettled Trades 829,539 542,001 1,420,360 2,791,900
------------ ------------ ------------ ------------ ------------- ----------- --------------
Total Liabilities 224,769 1,089,520 961,347 147,240 2,182,932 793,567 5,399,375
------------ ------------ ------------ ------------ ------------- ----------- --------------
Net Assets Available
for Benefits $175,944,612 $150,084,452 $265,386,561 $181,251,776 $383,130,499 $20,249,082 $1,176,046,982
============ ============ ============ ============ ============= =========== ==============
17
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 9 Statements of Net Assets Available for Benefits by Fund
-------------------------------------------------------
December 31, 1997
------------------------------------------------------------------------------------------------------
Fixed Active Stock Company Employee
Income Balanced Equity Index Stock Loans Total
------------ ------------ ------------ ------------ ------------ ----------- -------------
Assets
Investments
Short-term investments $ 6,176,886 $ 7,192,178 $ 885,362 $ 460,515 $ 97,900 $ 14,812,841
Long-term investments
At fair value
Interest in registered
investment companies: 124,491,653 249,786,910 110,042,765 484,321,328
CSC Company stock 238,770,004 238,770,004
Employee loans $ 20,422,664 20,422,664
Plan interest in
Master Trust 142,956,868 142,956,868
Guaranteed investment
contracts--at
contract value 15,231,349 15,231,349
Receivables -
Employer contribution 3,649 2,568 6,006 3,887 436,177 452,287
Participants' contribution 619,957 500,627 1,155,151 779,456 845,624 (127) 3,900,688
Accrued Income 3,207 2,140 5,575 2,125 2,212 15,259
Plan to plan transfers -
Interfund Transfers 480,752 (43,101) (240,573) 2,237,379 (2,434,457) -
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Assets 165,472,668 132,146,065 251,598,431 113,526,127 237,717,460 20,422,537 920,883,288
Liabilities
Accounts Payable 324,067 74,935 155,307 136,793 809,105 (17,953) 1,482,254
Accrued Expenses 70,786 80,935 154,190 19,265 749 325,925
------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Liabilities 394,853 155,870 309,497 156,058 809,854 (17,953) 1,808,179
------------ ------------ ------------ ------------ ------------ ------------ ------------
Net Assets Available
for Benefits $165,077,815 $131,990,195 $251,288,934 $113,370,069 $236,907,606 $ 20,440,490 $919,075,109
============ ============ ============ ============ ============ ============ ============
18
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 9 Statements of Changes in Net Assets Available for Benefits by Fund
------------------------------------------------------------------
Year Ended December 31, 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Fixed Active Stock Company Employee
Income Balanced Equity Index Stock Loans Total
------------ ------------ ------------ ------------ ------------ ----------- --------------
Additions to Net Assets
Attributable to:
Investment Income
Net Appreciation in
Fair Value of
Investments $ 11,917,119 $ 20,288,161 $ 28,706,995 $129,496,024 $ 190,408,299
Interest $ 418,548 300,456 82,123 62,848 63,135 927,110
Dividend 6,675,426 4,715,321 8,139,216 19,529,963
Plan interest in Master
Trust Investment
Income 11,827,691 11,827,691
Investment Mgmt/Admin.
Fees (330,895) (357,012) (644,731) (116,952) (5,281) (1,454,871)
------------ ------------ ------------ ------------ ------------ ----------- --------------
11,915,344 18,535,989 24,440,874 36,792,107 129,553,878 221,238,192
------------ ------------ ------------ ------------ ------------ ----------- --------------
Contributions:
Employee 14,938,449 14,327,240 31,052,917 25,066,123 21,319,413 $ (8,253,658) 98,450,484
Employer 81,177 56,332 135,876 90,174 15,776,009 16,139,568
Employee Rollovers 1,139,099 1,339,920 2,497,846 3,242,117 1,563,856 9,782,838
Transfers From
Other Plans 5,624,438 948,568 2,467,909 3,691,630 846,182 282,797 13,861,524
Interfund Transfers 317,725 (2,267,708) (18,821,620) 12,699,474 8,072,129 -
------------ ------------ ------------ ------------ ------------ ----------- --------------
22,100,888 14,404,352 17,332,928 44,789,518 47,577,589 (7,970,861) 138,234,414
------------ ------------ ------------ ------------ ------------ ----------- --------------
TOTAL ADDITIONS 34,016,232 32,940,341 41,773,802 81,581,625 177,131,467 (7,970,861) 359,472,606
------------ ------------ ------------ ------------ ------------ ----------- --------------
Deductions to Net Assets
Attributable to:
Distributions to
Participants 23,149,435 14,846,084 27,676,175 13,699,918 30,908,574 (7,779,453) 102,500,733
------------ ------------ ------------ ------------ ------------ ----------- --------------
TOTAL DEDUCTIONS 23,149,435 14,846,084 27,676,175 13,699,918 30,908,574 (7,779,453) 102,500,733
------------ ------------ ------------ ------------ ------------ ----------- --------------
NET INCREASE 10,866,797 18,094,257 14,097,627 67,881,707 146,222,893 (191,408) 256,971,873
------------ ------------ ------------ ------------ ------------ ----------- --------------
Net Assets Available
for Benefits:
Beginning of Year 165,077,815 131,990,195 251,288,934 113,370,069 236,907,606 20,440,490 919,075,109
------------ ------------ ------------ ------------ ------------ ----------- --------------
End of Year $175,944,612 $150,084,452 $265,386,561 $181,251,776 $383,130,499 $20,249,082 $1,176,046,982
============ ============ ============ ============ ============ =========== ==============
19
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 9 Statements of Changes in Net Assets Available for Benefits by Fund
------------------------------------------------------------------
Year Ended December 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Fixed Active Stock Company Employee
Income Balanced Equity Index Stock Loans Total
------------ ----------- ----------- ----------- ----------- ---------- -----------
Additions to Net Assets
Attributable to:
Investment Income:
Net Appreciation in
Fair Value of
Investments $ 206,077 $ 10,812,740 $ 31,087,793 $ 18,326,612 $ 5,472,069 $ 65,905,291
Interest 2,838,297 34,120 75,383 41,929 42,267 3,031,996
Dividend 6,101,150 4,585,948 4,530,789 15,217,887
Plan interest in Master
Trust investment income 7,283,958 7,283,958
Investment Management Fees (70,280) (303,570) (551,674) (43,349) (4,109) (972,982)
------------ ----------- ----------- ----------- ----------- ---------- -----------
10,258,052 16,644,440 35,197,450 22,855,981 5,510,227 90,466,150
------------ ----------- ----------- ----------- ----------- ---------- ------------
Contributions
Employee 15,787,189 13,765,687 29,150,336 15,921,012 20,266,502 (6,884,671) 88,006,055
Employer 104,254 72,544 183,292 96,929 14,343,500 14,800,519
Employee Rollovers 3,337,470 2,596,418 6,213,624 3,969,856 2,804,898 18,922,266
Transfers From Other Plans 13,215,479 1,247,156 3,005,062 3,283,548 (165,934) 2,738,838
Interfund Transfers (11,683,241) (1,195,825) 3,818,292 15,708,532 (6,647,758)
------------ ----------- ----------- ----------- ----------- ---------- -----------
20,761,151 16,485,980 42,370,606 38,979,877 30,601,208 (4,145,833)
145,052,989
TOTAL ADDITIONS 31,019,203 33,130,420 77,568,056 61,835,858 36,111,435 (4,145,833) 235,519,139
------------ ----------- ----------- ----------- ----------- ---------- -----------
Deductions to Net Assets
Attributable to:
Distributions to
Participants 19,506,618 10,772,788 20,503,101 8,132,543 20,265,818 (8,266,015) 70,914,853
------------ ----------- ----------- ----------- ----------- ---------- -----------
TOTAL DEDUCTIONS 19,506,618 10,772,788 20,503,101 8,132,543 20,265,818 (8,266,015) 70,914,853
------------ ----------- ----------- ----------- ----------- ---------- -----------
NET INCREASE 11,512,585 22,357,632 57,064,955 53,703,315 15,845,617 4,120,182 164,604,286
------------ ----------- ----------- ----------- ----------- ---------- -----------
Net Assets Available for
Benefits:
Beginning of Year 153,565,230 109,632,563 194,223,979 59,666,754 221,061,989 16,320,308 754,470,823
------------ ------------ ------------ ------------ ------------ ---------- ------------
End of Year $165,077,815 $131,990,195 $251,288,934 $113,370,069 $236,907,606 $20,440,490 $919,075,109
20
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 10 Investments 1998
----------------
Principal
Amount or Fair Value or
Shares Cost Contract Value
---------------- ------------ --------------
Fixed Income Fund
Interest in Master Trust* sh. 282,086,762 $174,339,624 $ 174,961,001
BNY Collective Short-Term
Invst. Fund sh. 419,934 419,934 419,934
Balanced Fund
Brinson Partners Inc.:
U.S. Bond Fund* sh. 377,098 47,231,044 49,321,216
U.S. Stock Equity Fund sh. 54,362 13,335,155 22,358,688
Mellon Bank Enhanced
Asset Fund* sh. 718,239 72,377,700 77,207,126
BNY Collective Short-Term
Invst. Fund sh. 1,305,353 1,305,353 1,305,353
Cash $ 508,529 508,529 508,529
Active Equity Fund
Brinson Partners Inc.:
U.S. Equity Portfolio* sh. 686,993 156,058,114 263,161,997
U.S. Cash Management Fund sh. 2 2 2
BNY Collective Short-Term
Invst. Fund sh. 3,204,111 3,204,111 3,204,111
Stock Index Fund
Mellon Capital:
Mellon Capital Mgmt.
Stock Index Fund* sh. 451,193 118,174,427 178,136,929
Mellon EB Daily Opening
Stock Index Fund sh. 4,429 1,260,964 1,332,889
Mellon Temporary
Investment Fund sh. 71,688 71,688 71,688
BNY Collective Short-Term
Invst. Fund sh. 1,850,178 1,850,178 1,850,178
Company Stock Fund
Computer Sciences
Common Stock* sh. 5,920,293 119,007,404 380,378,825
BNY Collective Short-Term
Invst. Fund sh. 3,446,219 3,446,219 3,446,219
Employee Loan Fund
Participant Loans $ 21,042,106 $ 21,042,106 21,042,106
------------ -------------
$733,632,552 $1,178,706,791
============= ==============
Total Long-Term Investments $722,826,538 $1,167,900,777
Total Short-Term Investments 10,806,014 10,806,014
------------ --------------
$733,632,552 $1,178,706,791
============= ==============
*represents investments greater than 5% of net assets
21
COMPUTER SCIENCES CORPORATION
MATCHED ASSET PLAN
NOTES TO FINANCIAL STATEMENTS
For the two years ended December 31, 1998
Note 10 Investments 1997
----------------
Principal
Amount or Fair Value or
Shares Cost Contract Value
---------------- ------------ --------------
Fixed Income Fund
Guaranteed Investment
Contracts $ 15,231,349 $ 15,231,349 $ 15,231,349
Interest in Master Trust* sh. 234,665,405 142,864,685 142,956,868
BNY Collective Short-Term
Invst. Fund sh. 6,176,886 6,176,886 6,176,886
Balanced Fund
Brinson Partners Inc.:
U.S. Bond Fund* sh. 698,494 81,072,821 84,332,245
U.S. Stock Only Fund* sh. 113,806 25,472,338 40,159,408
U.S. Cash Management Fund sh. 6,569,237 6,569,237 6,569,237
BNY Collective Short-Term
Invst. Fund sh. 622,941 622,941 622,941
Active Equity Fund
Brinson Partners Inc.:
U.S. Equity Portfolio* sh. 719,179 152,634,615 249,786,910
U.S. Cash Management Fund sh. 2 2 2
BNY Collective Short-Term
Invst. Fund sh. 885,360 885,360 885,360
Stock Index Fund
Mellon Capital:
Mellon Capital Mgmt.
Stock Index Fund* sh. 350,600 76,226,631 107,371,946
Mellon EB Daily Opening
Stock Index Fund sh. 11,230 2,628,795 2,670,819
Mellon Temporary
Investment Fund sh. 465 465 465
BNY Collective Short-Term
Invst. Fund sh. 460,050 460,050 460,050
Company Stock Fund
Computer Sciences
Common Stock* sh. 2,859,521 96,856,806 238,770,004
BNY Collective Short-Term
Invst. Fund sh. 97,900 97,900 97,900
Employee Loan Fund
Participant Loans $ 20,422,664 20,422,664 20,422,664
------------ ------------
$ 628,223,545 $916,515,054
============ ============
Total Long-Term Investments $613,410,704 $901,702,213
Total Short-Term Investments 14,812,841 14,812,841
------------ ------------
$628,223,545 $916,515,054
============ ============
*represents investments greater than 5% of net assets
22
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Act of 1934, the
Computer Sciences Corporation Retirement Plans Committee has duly caused this
annual report to be signed on its behalf by the undersigned thereunto duly
authorized.
Computer Sciences Corporation
MATCHED ASSET PLAN
Date: June 25, 1999 By: /s/ LEON J. LEVEL
----------------------------------
Leon J. Level
Chairman,
Computer Sciences Corporation
Retirement Plans Committee
23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Computer Sciences Corporation
Registration Statement No. 333-00755 on Form S-8 of our report dated June 11,
1999, appearing in this Annual Report on Form 11-K of the Computer Sciences
Corporation Matched Asset Plan for the year ended December 31, 1998.
/s/ DELOITTE & TOUCHE LLP
Los Angeles, California
June 25, 1999
E-1
1998
Form 5500 Item 27(a)
Computer Sciences Corporation
EIN 95-2043126
Matched Asset Plan 001
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
- ----------------------------------------------
(a) (b) Identity of issue, (c) Description of investment including (d) Cost (e) Current Value
borrower, lessor maturity date, rate of interest,
or similar party collateral, par or maturity value
- ------------------------------------------------------------------------------------------------------------------------------------
Mellon Capital Management Corp. Mutual Fund - EB Daily Liquidity Enhanced $ 72,377,700 $ 77,207,126
Brinson Trust Company, Inc. Mutual Fund - U.S. Bond Fund 47,231,044 49,321,216
Brinson Trust Company, Inc. Mutual Fund - U.S. Stock Fund 13,335,155 22,358,688
Brinson Trust Company, Inc. Mutual Fund - U.S. Equity Portfolio 156,058,114 263,161,997
Mellon Capital Management Corp. Mutual Fund - Stock Index Fund 118,174,427 178,136,929
Mellon Capital Management Corp. Mutual Fund - EB Daily Opening Stock Index Fund 1,260,964 1,332,889
* Computer Sciences Corporation Common Stock 119,007,404 380,378,825
* Computer Sciences Corporation Employee Loan Fund (8.75%-10%) (1/25/13) 21,042,106 21,042,106
Brinson Trust Company, Inc. U.S. Cash Management Fund 2 2
Mellon Capital Management Corp. Mellon Temporary Investment Fund 71,688 71,688
* Bank of New York BNY Collective Short-Term Invst. Fund 10,225,795 10,225,795
Cash Cash 508,529 508,520
------------ --------------
Total Assets Held for Investment Purposes $559,292,928 $1,003,745,790
============ ==============
*represents party in interest
S-1
1998
Form 5500 Item 27(d)
Computer Sciences Corporation
EIN 95-2043126
Matched Asset Plan 001
SCHEDULE OF REPORTABLE TRANSACTIONS
-----------------------------------
Series Transactions in the Aggregate in Excess of 5%
- ----------------------------------------------------
(h) Current Value
(a) Identity of (b) Description (c) Purchase (d) Selling (g) Cost of of Asset on (i) Net Gain
Party Involved of Asset Price Price Asset Transaction Date or (Loss)
- -------------------------------------------------------------------------------------------------------------------------------
Brinson Trust Mutual Fund -
Company U.S. Bond Fund
- Sales $49,094,329 $46,959,112 $49,094,329 $2,135,217
Mellon Capital Mutual Fund -
Management EB Liquidity
Enhanced
- Purchases $ 72,377,700 72,377,700 72,377,700
Mellon Capital Mutual Fund -
Management EB Enhanced Asset
Allocation Fund
- Purchases 55,431,826 55,431,826 55,431,826
- Sales 55,987,747 55,431,826 55,987,747 555,921
Bank of New York BNY Short - Term
Money Market Fund
- Purchases 296,193,238 296,193,238 296,193,238
- Sales 294,210,580 294,210,580 294,210,580