Exhibit 99.2
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, 1996
/ / 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: CSC Outsourcing, Inc. Hourly
Savings 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
TABLE OF CONTENTS
Description Page
- ----------- ----
(a) Financial Statements:
Independent Auditors' Report.................................. 3
Statements of Net Assets Available for Benefits
As of December 31, 1996 and 1995.............................. 4
Statements of Changes in Net Assets Available for Benefits
For the Years Ended December 31, 1996 and 1995................ 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 Outsourcing, Inc. Hourly
Savings Plan (the "Plan") as of December 31, 1996 and 1995, 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, 1996 and 1995, 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
May 30, 1997
3
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
STATEMENTS OF NET ASSETS
AVAILABLE FOR BENEFITS
DECEMBER 31
----------------------
1996 1995
----------- ----------
ASSETS
Investments (Notes 2, 5, 8 and 9)
Short-term $ 4,359 $ 8,135
Long-term--at fair value
Interest in registered investment companies
Mellon Capital Government Fund 986,754 993,410
Brinson U.S. Equity Fund 1,304,881 1,048,069
CSC common stock 427,707 340,923
Interest in Master Trust 120,628 131,597
Guaranteed investment contracts--at contract value 2,428,333 2,257,557
----------- ----------
Total investments 5,272,662 4,779,691
Receivables:
Participants' Contributions 5,498 7,916
Accrued income 20 119
Other 10,371
----------- ----------
Total receivables 5,518 18,406
----------- ----------
Total assets 5,278,180 4,798,097
----------- ----------
LIABILITIES
Accrued expenses 921 875
Forfeitures payable 1,165 1,488
Other 552 3,952
----------- ----------
Total Liabilities 2,638 6,315
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $ 5,275,542 $4,791,782
----------- ----------
----------- ----------
4
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED
DECEMBER 31
--------------------------
1996 1995
------------- -----------
ADDITIONS
Investment Income:
Net appreciation in fair value of investments $ 237,527 $ 413,589
Interest 172,628 189,243
Dividends 92,518 111,139
Plan interest in Master Trust investment income 7,543 4,359
------------- -----------
510,216 718,330
Investment Management Fees (3,639) (3,581)
------------- -----------
506,577 714,749
Contributions:
Employee 176,912 235,970
Employer 80,725 106,302
------------- -----------
257,637 342,272
------------- -----------
Total Additions 764,214 1,057,021
------------- -----------
DEDUCTIONS
Distributions to Participants (Notes 1 and 7) 280,454 1,235,284
------------- -----------
Total Deductions 280,454 1,235,284
------------- -----------
Net Increase (Decrease) 483,760 (178,263)
Net assets available for benefits at beginning of year 4,791,782 4,970,045
------------- -----------
NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $ 5,275,542 $ 4,791,782
------------- -----------
------------- -----------
5
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 1 DESCRIPTION OF THE PLAN
The following brief description of the Computer Sciences Corporation
Outsourcing Inc. Hourly Savings Plan (the "Plan"), formerly the TMD Hourly
Savings Plan, of Computer Sciences Corporation (the "Company") is provided for
general information purposes only. Participants should refer to the Plan
document for more complete information.
The Plan became effective May 2, 1992, as a result of the Company acquiring
the Data Systems Division of General Dynamics Corporation. The Plan is
administered by a committee consisting of four officers who are appointed by
the Board of Directors of the Company and serve without compensation, being
reimbursed by the Company for all expenditures incurred in the discharge of
their duties as members of the committee. The committee has the power to
interpret, construe and administer the Plan and to decide any dispute which
may arise under the Plan. The Trustee, The Bank of New York, administers the
Plan pursuant to a Trust Agreement entered into with the Company. Certain
administrative expenses (including Trustee fees) incurred for services
rendered to the Plan are paid by the Company.
The Plan is a voluntary, contributory, defined contribution plan and is
intended to satisfy the requirements of Section 401(a) and 401(k) of the
Internal Revenue Code (the "Code"). It is also subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
The Company reserves the right to discontinue contributions and to 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
Employees are eligible to participate on specified enrollment dates if they
satisfy the Plan's service requirements, are an hourly paid employee of
Computer Sciences Corporation Outsourcing Inc. and are a member of a
collective bargaining unit for which participation in this Plan has been
provided by negotiated agreement. A rehired eligible employee may receive
service credit for his or her previous employment and is eligible to rejoin
the Plan on the next enrollment date.
There were approximately 120 participating employees at December 31, 1996.
6
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
EMPLOYEE AND COMPANY CONTRIBUTIONS
A participant may authorize before-tax and after-tax contributions to the Plan
subject to a maximum level of contributions (a certain percentage of base
earnings), as specified by the bargaining agreement covering the employee.
Depending on the investment election option the participant elects, the
Company will contribute, and forward to the Trust fund $0.50 for each $1.00
of the employee matched contribution together with the participant's before-
tax and after-tax contribution.
Participants in certain bargaining units who direct 100 percent of their
contributions to the Plan's stock fund will receive a monthly matching
contribution of $1.00 for each $1.00 of employee matched contributions.
Participants under certain bargaining units may contribute additional
unmatched contributions at various percentages of base earnings to a maximum
specified by the union agreement covering the employee but only if a
participant contributes the maximum matched percentage for which he or she is
eligible. The employees' base earnings deferred and contributed to the Trust
fund cannot exceed $9,500 for calendar year 1996, the maximum allowable under
the Code. Annual after-tax contributions to the Plan (including employee and
Company matching contributions) are limited to $30,000 for each participant.
Any compensation deferral in excess of $9,500 and any after-tax contributions
with matching Company contributions in excess of $30,000, together with income
allocable to those excess contributions 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.
Participants may change their investment elections as of any enrollment date
if at least a 30 day prior notice is given. However, participants under
certain circumstances may be eligible to change their investment elections
within a 30 day window period. Participants may transfer their existing
account balances in 25 percent increments. Transfer elections are effective
on the first quarterly enrollment date following receipt of a 30 day prior
notice from the participant.
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 same fund as the participant contributions.
The Plan does not permit employees to rollover a qualified distribution from
another Plan.
7
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contribution and
allocations of the Company's contribution and 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
Participants are 100 percent vested at all times in their before-tax and
after-tax contribution accounts. Company matching contributions and
investment earnings thereon vest according to a five-year cliff vesting
schedule as shown in the following table:
Number of Full Years of Service Vested Interest in Matching Contribution
------------------------------- ----------------------------------------
1 ................................... 0%
2 ................................... 0%
3 .................... .............. 0%
4 .................................... 0%
5 or more ............................ 100%
The vesting schedule is overridden under extraordinary circumstances as
specified in the Plan document, in which the participant (or beneficiary(ies))
immediately becomes fully vested in all employer contributions and earnings,
regardless of his or her number of years of service.
Any nonvested balances will be immediately forfeited from the participant's
account at termination.
DISTRIBUTABLE AMOUNTS, WITHDRAWALS AND REFUNDS
The entire balance in all accounts is distributed to participants who retire,
die, become disabled, are laid-off for four consecutive weeks, are discharged
without fault, or who involuntarily enter military service. Participants who
terminate for other reasons receive their vested balances. Nonvested balances
are forfeited immediately. The amounts distributed during 1996 and 1995
totaled $280,454 and $1,235,284, respectively.
8
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
While still an employee, a participant may make an in-service withdrawal of
all or a portion of his or her after-tax contributions, subject to frequency
of withdrawal penalties, as well as vested Company matching contributions,
plus the earnings on those amounts. Upon at least a 30 day written notice to
the Committee, a participant may make a hardship withdrawal of his or her
before-tax and after-tax contributions, as well as vested Company matching
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. Both types of withdrawals
are subject to certain restrictions as described in the Plan document. No
hardship withdrawals were made in 1996 and 1995.
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 four sub-accounts. 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 Stock Fund receive distributions in
certificates for shares of the common stock of the Company.
9
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
VALUATION OF INVESTMENT SECURITIES
Investments in common stocks and mutual funds 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 last reported bid prices on
that date. Investments in short-term securities are stated at cost which
approximates fair value.
VALUATION OF GUARANTEED INVESTMENT CONTRACTS
The Plan holds 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.
Based on treasury yield curves for similar type investments, the fair value of
guaranteed investment contracts at December 31, 1996 and 1995, was
approximately $2,480,000 and $2,360,000, respectively. The average yield and
crediting interest rates were approximately at 7.62% and 7.60% for 1996 and
1995, respectively. 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 June 1, 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. Since the requirements of
Section 401(k) of the Code are satisfied, the following tax consequences
result:
10
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
(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 $9,500 and $9,240 for 1996
and 1995 taxable years of the participant, respectively.
(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 would be 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 STATEMENT TO FORM 5500
December 31,
1996 1995
-------------- --------------
Net assets available for benefits per
the financial statements $ 5,275,542 $ 4,791,782
Amounts allocated to withdrawing participants (19,591) (32,278)
-------------- --------------
Net assets available for benefits per Form 5500 5,255,951 $ 4,759,504
-------------- --------------
-------------- --------------
11
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year Ended
December 31, 1996
-----------------
Benefits paid to participants per the financial statements $ 280,454
Add: Amounts allocated to withdrawing participants at
December 31, 1996 19,591
Less: Amounts allocated to withdrawing participants at
December 31, 1995 (32,278)
-----------------
Benefits paid to participants per the Form 5500 $ 267,767
-----------------
-----------------
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, 1996 but not yet paid as of that date.
Note 5 INVESTMENT FUNDS
Participant contributions - Subject to rules the bargaining units have
adopted, 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 and after-tax contributions in
percentages determined by the bargaining units.
THE FIXED INCOME FUND
The fund is invested in contracts with insurance companies and other financial
institutions. These institutions agree to repay principal with interest at a
fixed rate of return for the life of each contract. This is a commitment by
the insurance company or the financial institution to make agreed upon
payments and that agreement is not secured, insured or guaranteed by the
Company or any other third party.
12
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
The remainder of the fund (including the proceeds from maturing insurance
contracts, newly invested money and interest from insurance contracts) is in
the Master Trust which was established for the investment of assets of the
Plan and several other Company sponsored benefit plans. The Master Trust is
an actively managed, short-term (1-3 years) U.S. Bond Fund managed by Payden
& Rygel. Each participating plan has an undivided interest in the Master
Trust. The assets of the Master Trust are held by the Trustee. At December
31, 1996 and 1995, the Plan's interest in the net assets of the Master Trust
was approximately 0.12% and 0.21%, respectively. Investment income and
administrative expenses relating to the Master Trust are allocated to
individual plans based upon average monthly balances invested by each plan.
The following table represents the fair value of investments for the Master
Trust.
December 31,
1996 1995
-------------- --------------
Investments at fair value:
Corporate bonds $ 20,904,676 $ 15,709,394
U.S. government securities 56,633,626 44,628,463
Other bonds 2,112,040 2,085,848
Short-term investments 21,131,915 0
Accrued income 1,061,097 648,263
-------------- --------------
$ 101,843,354 $ 63,071,968
-------------- --------------
-------------- --------------
Investment income for the Master Trust is as follows:
December 31,
1996 1995
-------------- --------------
Investment income:
Net (depreciation) appreciation in fair value
of investments $ (1,007,670) $ 2,230,357
Corporate bonds 1,180,044 659,260
U.S. government securities 2,485,788 2,234,361
Other bonds 139,500 0
Short-term investments 627,305 241,759
-------------- --------------
3,424,967 5,365,737
Less investment management fees (61,373) (17,548)
-------------- --------------
$ 3,363,594 $ 5,348,189
-------------- --------------
-------------- --------------
GOVERNMENT BOND FUND
13
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
This fund is invested in bonds issued or guaranteed by the U.S. Government or
U.S. Government agencies. The fund is managed by Mellon Capital with the
objective of tracking to the Intermediate Government Bond Index.
THE ACTIVE EQUITY FUND
The fund is invested with Brinson Partners Inc. The Brinson Partners Inc.
U.S. Equity Portfolio is invested in common stocks traded in the U.S. The
fund's objective is to maximize total return which consists of capital
appreciation and current income.
THE COMPANY STOCK FUND
Amounts allocated to this investment alternative will be used to purchase
shares of Computer Sciences Corporation common stock that are held for the
benefit of the participant. The performance of this investment depends upon
the performance of Computer Sciences Corporation's stock. The Trustee may
purchase Company stock on national securities exchanges or elsewhere.
NUMBER OF PARTICIPANTS
The approximate number of participants having account balances in each of the
four separate funds at December 31, 1996 were as follows:
Investment Fund Number of Participants
--------------- ----------------------
The Fixed Income Fund ............................. 124
The Government Bond Fund .......................... 67
The Active Equity Fund ............................ 84
The Company Stock Fund ............................ 54
The sum of the number of participants shown above is greater than the total
number of participants in the Plan because many are participating in more than
one fund.
14
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 6 PARTICIPANT LOANS
The Plan has a loan provision in place which is available to participants
covered by certain bargaining units. No loans were outstanding as of December
31, 1996.
Note 7 BENEFITS PAYABLE
As of December 31, 1996 and 1995, net assets available for benefits included
benefits of $19,591 and $32,278, respectively, due to participants who have
withdrawn from participation in the Plan.
15
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 8 INVESTMENTS 1996 PRINCIPAL FAIR VALUE
AMOUNT OR CONTRACT
OR SHARES COST VALUE
------------- -------------- --------------
FIXED INCOME FUND
Guaranteed Investment Contracts:
Hartford Life* $ 1,467,392 $ 1,467,392 $ 1,467,392
Canada Life Insurance Company 49,963 49,963 49,963
Providian Corporation 285 285 285
Pacific Mutual Life Insurance 125,125 125,125 125,125
Provident National Assurance* 671,914 671,914 671,914
Protective Life 39,352 39,352 39,352
Prudential Life Insurance Company 74,302 74,302 74,302
Interest in Master Trust sh. 94,264 124,382 120,628
GOVERNMENT BOND FUND
Mellon Capital:
Government Bond Fund* sh. 8,156 990,814 986,754
Temporary Investment Fund sh. 90 90 90
BNY Short-Term Money Market Fund sh. 2,575 2,575 2,575
ACTIVE EQUITY FUND
Brinson Partners Inc.:
U.S. Equity Portfolio* sh. 4,423 768,825 1,304,881
U.S. Cash Management Fund sh. 2 2 2
BNY Short-Term Money Market Fund sh. 1,638 1,638 1,638
COMPANY STOCK FUND
Computer Sciences Common Stock* sh. 5,208 177,468 427,707
BNY Short-Term Money Market Fund sh. 54 54 54
-------------- --------------
$ 4,494,181 $ 5,272,662
-------------- --------------
-------------- --------------
TOTAL LONG-TERM INVESTMENTS $ 4,489,822 $ 5,268,303
TOTAL SHORT-TERM INVESTMENTS 4,359 4,359
-------------- --------------
$ 4,494,181 $ 5,272,662
-------------- --------------
-------------- --------------
*represents investments greater than 5% of net assets
16
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 8 INVESTMENTS 1995 PRINCIPAL FAIR VALUE
AMOUNT OR CONTRACT
OR SHARES COST VALUE
------------- -------------- ---------------
FIXED INCOME FUND
Guaranteed Investment Contracts:
Hartford Life* $ 1,361,217 $ 1,361,217 $ 1,361,217
Canada Life Insurance Company 48,285 48,285 48,285
Providian Corporation 272 272 272
Pacific Mutual Life Insurance 117,103 117,103 117,103
Provident National Assurance* 623,190 623,190 623,190
Protective Life 37,242 37,242 37,242
Prudential Life Insurance Company 70,248 70,248 70,248
Interest in Master Trust sh. 128,093 131,987 131,597
BNY Short-Term Money Market Fund sh. 3,700 3,700 3,700
GOVERNMENT BOND FUND
Mellon Capital:
Government Bond Fund* sh. 8,553 968,620 993,410
Cash Management Fund sh. 23 23 23
ACTIVE EQUITY FUND
Brinson Partners Inc.:
U.S. Equity Portfolio* sh. 4,332 712,141 1,048,069
U.S. Cash Management Fund sh. 2 2 2
BNY Short-Term Money Market Fund sh. 2,625 2,625 2,625
COMPANY STOCK FUND
Computer Sciences Common Stock* sh. 4,853 144,613 340,923
BNY Short-Term Money Market Fund sh. 1,785 1,785 1,785
----------- -----------
$ 4,223,053 $ 4,779,691
----------- -----------
----------- -----------
TOTAL LONG-TERM INVESTMENTS $ 4,214,918 $ 4,771,556
TOTAL SHORT-TERM INVESTMENTS 8,135 8,135
----------- -----------
$ 4,223,053 $ 4,779,691
----------- -----------
----------- -----------
*represents investments greater than 5% of
net assets
17
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 9 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1996
---------------------------------------------------------------------
FIXED GOVERNMENT ACTIVE COMPANY
INCOME BOND EQUITY STOCK TOTAL
---------------------------------------------------------------------
ASSETS
Investments
Long-term Investments
At fair value
Interest in investment registered companies $ 986,754 $ 1,304,881 $ 2,291,635
Interest in Master Trust $ 120,628 120,628
Common Stock $ 427,707 427,707
At contract value
Guarantee Investment Contracts 2,428,333 2,428,333
Short-term Investments 2,665 1,640 54 4,359
Receivables
Participants' Contribution 3,045 316 356 1,781 5,498
Accrued Income 8 8 4 20
Interfund Transfers (258) 306 946 (994) -
-------------------------------------------------------------------
TOTAL ASSETS 2,551,748 990,049 1,307,831 428,552 5,278,180
LIABILITIES
Accrued Expenses 39 97 785 921
Forfeitures Payable 811 354 1,165
Other 463 101 (57) 45 552
-------------------------------------------------------------------
TOTAL LIABILITIES 1,313 198 728 399 2,638
-------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,550,435 $ 989,851 $ 1,307,103 $ 428,153 $ 5,275,542
-------------------------------------------------------------------
-------------------------------------------------------------------
18
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 9 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1996
---------------------------------------------------------------------
FIXED GOVERNMENT ACTIVE COMPANY
INCOME BOND EQUITY STOCK TOTAL
---------------------------------------------------------------------
ASSETS
Investments
Long-term Investments
At fair value
Interest in investment registered companies $ 993,410 $ 1,048,069 $ 2,041,479
Interest in Master Trust $ 131,597 131,597
Common Stock $ 340,923 340,923
At contract value
Guarantee Investment Contracts 2,257,557 2,257,557
Short-term Investments 3,700 23 2,627 1,785 8,135
Receivables
Participants' Contribution 4,150 826 2,095 845 7,916
Accrued Income 96 6 12 5 119
Other 10,371 10,371
Interfund Transfers (1,564) 61 135 1,368 -
-------------------------------------------------------------------
Total Assets 2,395,536 994,326 1,052,938 355,297 4,798,097
Liabilities
Accrued Expenses 51 157 667 875
Forfeitures Payable 1,065 423 1,488
Other 2,843 551 454 104 3,952
-------------------------------------------------------------------
TOTAL LIABILITIES 3,959 708 1,544 104 6,315
-------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 2,391,577 $ 993,618 $ 1,051,394 $ 355,193 $ 4,791,782
-------------------------------------------------------------------
-------------------------------------------------------------------
19
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 9 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1996
-------------------------------------------------------------
FIXED GOVERNMENT ACTIVE COMPANY
INCOME BOND EQUITY STOCK TOTAL
-------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment Income
Net (Depreciation) Appreciation
in Fair Value of Investments $ (2,500) $ (28,215) $ 208,203 $ 60,039 $ 237,527
Interest in Master Trust Investment Income 7,543 7,543
Interest Income 172,227 137 193 71 172,628
Dividend Income 68,601 23,917 92,518
Investment Management Fees (185) (455) (2,999) (3,639)
----------- --------- ----------- --------- -----------
177,085 40,068 229,314 60,110 506,577
Contributions
Employee 82,094 20,647 46,123 28,048 176,912
Employer 37,052 9,604 21,693 12,376 80,725
Interfund Transfers (2,217) 869 892 456 -
----------- --------- ----------- --------- -----------
116,929 31,120 68,708 40,880 257,637
----------- --------- ----------- --------- -----------
TOTAL ADDITIONS 294,014 71,188 298,022 100,990 764,214
DEDUCTIONS TO NET ASSETS ATTRIBUTABLE TO:
Distributions to Participants 135,156 74,955 42,313 28,030 280,454
----------- --------- ----------- --------- -----------
TOTAL DEDUCTIONS 135,156 74,955 42,313 28,030 280,454
----------- --------- ----------- --------- -----------
NET INCREASE 158,858 (3,767) 255,709 72,960 483,760
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of Year 2,391,577 993,618 1,051,394 355,193 4,791,782
----------- --------- ----------- --------- -----------
End of Year $ 2,550,435 $ 989,851 $ 1,307,103 $ 428,153 $ 5,275,542
----------- --------- ----------- --------- -----------
----------- --------- ----------- --------- -----------
20
COMPUTER SCIENCES CORPORATION
OUTSOURCING, INC. HOURLY SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE TWO YEARS ENDED DECEMBER 31, 1996
Note 9 STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS BY FUND
DECEMBER 31, 1995
-------------------------------------------------------------
FIXED GOVERNMENT ACTIVE COMPANY
INCOME BOND EQUITY STOCK TOTAL
-------------------------------------------------------------
ADDITIONS TO NET ASSETS ATTRIBUTABLE TO:
Investment Income
Net Appreciation in Fair Value of Investments $ 74,509 $ 242,798 $ 96,282 $ 413,589
Interest in Master Trust Investment Income $ 4,359 4,359
Interest Income 188,419 361 316 147 189,243
Dividend Income 88,980 22,159 111,139
Investment Management Fees (133) (996) (2,452) (3,581)
----------- ---------- ----------- --------- -----------
192,645 162,854 262,821 96,429 714,749
Contributions
Employee 130,083 20,997 58,852 26,038 235,970
Employer 58,398 12,371 24,897 10,636 106,302
Interfund Transfers (18,753) 2,111 15,722 920
----------- ---------- ----------- --------- -----------
169,728 35,479 99,471 37,594 342,272
----------- ---------- ----------- --------- -----------
Total Additions 362,373 198,333 362,292 134,023 1,057,021
Deductions to Net Assets Attributable to:
Distributions to Participants 615,029 462,996 66,677 90,582 1,235,284
----------- ---------- ----------- --------- -----------
Total Deductions 615,029 462,996 66,677 90,582 1,235,284
----------- ---------- ----------- --------- -----------
Net Increase (252,656) (264,663) 295,615 43,441 (178,263)
Net Assets Available for Benefits:
Beginning of Year 2,644,233 1,258,281 755,779 311,752 4,970,045
----------- ---------- ----------- --------- -----------
End of Year $ 2,391,577 $ 993,618 $ 1,051,394 $ 355,193 $ 4,791,782
----------- ---------- ----------- --------- -----------
----------- ---------- ----------- --------- -----------
21
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1934, the
Computer Sciences Corporation Retirement Committee has duly caused this annual
report to be signed on its behalf by the undersigned thereunto duly
authorized.
CSC OUTSOURCING, INC. HOURLY SAVINGS PLAN
Date: June 23, 1997 By: /s/ Leon J. Level
--------------------------------------
Leon J. Level
Chairman,
Computer Sciences Corporation
Retirement Plans Committee
22
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Computer Sciences Corporation
Registration Statement No. 333-00757 on Form S-8 of our report dated May 30,
1997, appearing in this Annual Report on Form 11-K of the Computer Sciences
Corporation Outsourcing Inc. Hourly Savings Plan for the year ended
December 31, 1996.
Deloitte & Touche LLP
Los Angeles, California
June 20, 1997
E-1
1996
FORM 5500 ITEM 27(a)
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
EIN 88-0276684
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
(a) (b) Identity of issue, borrower, lessor or (c) Description of investment, including maturity date, (d) Cost (e) Current
similar party rate of interest, collateral, par or maturity value Value
- -------------------------------------------------------------------------------------------------------- ------------ ------------
Provident Life & Accident Insurance Guaranteed Investment Contract 7.80% 9/30/97 $ 671,914 $ 671,914
The Hartford Life Insurance Company Guaranteed Investment Contract 7.80% 6/30/98 1,467,392 1,467,392
Providian Corporation Guaranteed Investment Contract 5.08% 12/31/97 285 285
Pacific Mutual Life Insurance Guaranteed Investment Contract 6.85% 3/31/98 125,125 125,125
Prudential Life Insurance Company Guaranteed Investment Contract 5.77% 3/31/98 74,302 74,302
Canada Life Insurance Co. Guaranteed Investment Contract 5.75% 3/31/98 49,963 49,963
Protective Life Insurance Co. Guaranteed Investment Contract 5.66% 9/30/98 39,352 39,352
Mellon Intermediate Mutual Fund - Government Bond
Fund 990,814 986,754
Brinson Trust Company, Inc. Mutual Fund - U.S. Equity
Portfolio 768,825 1,304,881
* Computer Sciences Corporation Common Stock 177,468 427,707
Brinson Trust Company, Inc. U.S. Cash Management Fund 2 2
Mellon Bank N.A. Mellon Bank Temporary Investment
Fund 90 90
* Bank of New York BNY Short-Term Money Market Fund 4,267 4,267
------------ ------------
TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $ 4,369,799 $ 5,152,034
------------ ------------
------------ ------------
* represents party in interest
S-1
1996
FORM 5500 ITEM 27(d)
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
EIN 88-0276684
SCHEDULE OF REPORTABLE TRANSACTIONS
SINGLE TRANSACTIONS IN EXCESS OF 5%
(h) Current
Value
of Asset on
(a) Identity of Party Involved (b) Description of Asset (c) Purchase (d) Selling (g) Cost of Asset Transaction (i) Net Gain or
Price Price Date (Loss)
- ------------------------------ ------------------------ ------------ ----------- ----------------- ----------- -----------
None to Report
S-2
1996
FORM 5500 ITEM 27(d)
COMPUTER SCIENCES CORPORATION
OUTSOURCING INC. HOURLY SAVINGS PLAN
EIN 88-0276684
SCHEDULE OF REPORTABLE TRANSACTIONS
SERIES TRANSACTIONS IN THE AGGREGATE IN EXCESS OF 5%
(h) Current
Value
of Asset on
(a) Identity of Party Involved (b) Description of Asset (c) Purchase (d) Selling (g) Cost of Asset Transaction (i) Net Gain or
Price Price Date (Loss)
- ------------------------------ ------------------------ ------------ ----------- ----------------- ----------- ---------------
Bank of New York BNY Short-Term Money
Market Fund
- Purchases $ 562,587 $ 562,587 $ 562,587
- Sales $ 566,430 566,430 566,430
S-3