Nevada
(State or Other Jurisdiction of
Incorporation or Organization)

95-2043126
(I.R.S. Employer
Identification No.)

2100 East Grand Avenue
El Segundo, California
(Address of Principal Executive Offices)

90245
(Zip Code)

   Second Quarter Ended   

    Six Months Ended    

(In millions except
per-share amounts)

Oct. 3,
  2003  

Sept. 27,
  2002  

Oct. 3,
  2003  

Sept. 27,
  2002  

Revenues

$3,591.2   

$2,720.1   

$7,146.0   

$5,473.8   

Costs of services

2,958.6   

2,185.1   

5,890.3   

4,416.8   

Selling, general and administrative

199.9   

174.3   

408.6   

356.9   

Depreciation and amortization

229.0   

197.5   

464.0   

393.1   

Interest expense

40.5   

35.7   

83.6   

70.0   

Interest income

(1.4)  

(2.0)  

(4.4)  

(3.7)  

Special items

    9.2   

     15.4   

Total costs and expenses

3,435.8   

2,590.6   

6,857.5   

5,233.1   

Income before taxes

155.4   

129.5   

288.5   

240.7   

Taxes on income

    47.3   

    36.6   

    88.1   

    68.8   

Net income

$ 108.1   
======   

$ 92.9   
=====   

$ 200.4   
======   

$ 171.9   
======   

Earnings per share:

Basic

 $     0.58   
=======   

 $     0.54   
=======   

 $     1.07   
=======   

 $     1.00   
=======   

Diluted

 $     0.57   
=======   

 $     0.54   
=======   

 $     1.06   
=======   

 $     1.00   
=======   

                   Six Months Ended                   

(In millions)

Oct. 3, 2003 

 Sept. 27, 2002 

Cash flows from operating activities:

  Net income

$  200.4       

$   171.9      

  Adjustments to reconcile net income to net
    cash provided by (used in) operating activities:

      Depreciation and amortization and other
        non-cash charges

494.9       

422.2      

      Changes in assets and liabilities, net of
        effects of acquisitions:

          Increase in assets

(238.3)      

(62.7)     

          Decrease in liabilities

   (80.0)      

     (273.8)     

Net cash provided by operating activities

   377.0       

       257.6     

Investing activities:

  Purchases of property and equipment

(350.7)      

(302.9)     

  Acquisitions, net of cash acquired

(7.7)     

  Dispositions

10.2       

73.6      

  Outsourcing contracts

(133.6)      

(56.4)     

  Software

(72.6)      

(73.0)     

  Other investing cash flows

  (15.4)      

       6.1      

Net cash used in investing activities

  (562.1)     

     (360.3)     

Financing activities:

  Repayment (borrowings) under commercial paper, net

(211.0)      

63.2      

  Borrowings under lines of credit, net

.4       

26.2      

  Proceeds from debt issuance

297.4       

.2      

  Principal payments on long-term debt

(25.9)      

(25.9)     

  Proceeds from stock option and other common stock      transactions

17.6       

18.6      

  Other financing cash flows

      4.8       

      (.7)     

Net cash provided by financing activities

     83.3       

     81.6     

Effect of exchange rate changes on cash
  and cash equivalents

      1.3       

      4.2      

Net decrease in cash and cash equivalents

(100.5)      

(16.9)     

Cash and cash equivalents at beginning of year

    299.6       

     149.1     

Cash and cash equivalents at end of period

$  199.1       
======      

$  132.2      
======     

(A)

Basic and diluted earnings per share are calculated as follows (in millions except per share amounts):

           Second Quarter Ended               

  Oct. 3, 2003  

  Sept. 27, 2002  

          Net income

$   108.1     
======     

$     92.9       
=======       

          Common share information:

            Average common shares outstanding for basic EPS

187.184     

171.618       

            Dilutive effect of stock options

    1.508     

      .663       

            Shares for diluted EPS

188.692     
======     

172.281       
======       

          Basic EPS

$    0.58     

$     0.54       

          Diluted EPS

0.57     

0.54       

        Six Months Ended              

  Oct. 3, 2003  

  Sept. 27, 2002  

          Net income

$   200.4     
=======     

$     171.9      
========      

          Common share information:

            Average common shares outstanding for basic EPS

187.038     

171.497      

            Dilutive effect of stock options

    1.199     

       1.087      

            Shares for diluted EPS

188.237     
======     

172.584      
======      

          Basic EPS

$   1.07     

$      1.00      

          Diluted EPS

1.06     

1.00      

      Second Quarter Ended      

(in millions except per share amounts)

Oct. 3, 2003

Sept. 27, 2002

Net income, as reported

$108.1     

$92.9    

Add: Stock-based employee compensation

  expense included in reported net income, net

  of related tax effects

1.6     

1.5    

Deduct: Total stock-based employee

  compensation expense determined under fair

  value based method for all awards, net of

  related tax effects

   (9.1)    

   (13.1)   

Pro forma net income

$100.6     
=====     

$81.3    
====    

Earnings per share:

     Basic - as reported

$0.58

$0.54

     Basic - pro forma

 0.54

 0.48

     Diluted - as reported

 0.57

 0.54

     Diluted pro forma

 0.53

 0.47

          Six Months Ended           

Oct. 3, 2003

Sept. 27, 2002

Net income, as reported

$200.4     

$171.9    

Add: Stock-based employee compensation

  expense included in reported net income, net

  of related tax effects

3.1    

2.9    

Deduct: Total stock-based employee

  compensation expense determined under fair

  value based method for all awards, net of

  related tax effects

  (22.2)   

   (27.7)   

Pro forma net income

$181.3    
=====    

$147.1    
======   

Earnings per share:

     Basic - as reported

$1.07

$1.00

     Basic pro forma

 0.97

 0.86

     Diluted as reported

 1.06

 1.00

     Diluted pro forma

 0.96

 0.85

(C)

Included in the consolidated condensed balance sheets are the following accumulated depreciation and amortization amounts (in millions):

 Oct. 3, 2003  

 March 28, 2003 

       Property and equipment

$2,533.0      

$2,184.6      

       Excess of cost of businesses acquired over
           related net assets ("goodwill")

321.0      

308.7      

(D)

No dividends were paid during the periods presented. At October 3, 2003 and March 28, 2003, there were 187,740,966 and 187,206,632 shares, respectively, of $1.00 par value common stock issued, and 452,257 and 449,249 shares of treasury stock, respectively.

(E)

Cash payments for interest on indebtedness were $76.6 million and $72.6 million for the six months ended October 3, 2003 and September 27, 2002, respectively. Cash payments for taxes on income were $28.7 million and $16.4 million for the six months ended October 3, 2003 and September 27, 2002, respectively.

(F)

The components of comprehensive income, net of tax, are as follows (in millions):

              Second Quarter Ended              

    Oct. 3, 2003    

   Sept. 27, 2002    

Net income

$ 108.1       

$  92.9      

Foreign currency translation adjustment

12.2       

7.0      

Unrealized (loss) gain on available for sale securities

       (.7)      

          1.2      

Comprehensive income

$ 119.6       
=====       

$ 101.1      
=====      

               Six Months Ended              

  Oct. 3, 2003  

  Sept. 27, 2002  

Net income

$ 200.4       

$ 171.9      

Foreign currency translation adjustment

147.2       

91.9      

Unrealized (loss) gain on available for sale securities

     (.4)      

           .7      

Comprehensive income

$ 347.2      
=====      

$ 264.5      
=====      

Accumulated other comprehensive income (loss) presented on the accompanying consolidated condensed balance sheets consists of accumulated foreign currency translation adjustments, minimum pension liability adjustments, and net unrealized gain (loss) on available for sale securities.

(G)

CSC provides management and information technology consulting, systems integration and outsourcing. Based on the criteria of SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," CSC aggregates operating segments into two reportable segments, the U.S. Federal sector and the Global Commercial sector. The U.S. Federal sector operates principally within a regulatory environment subject to governmental contracting and accounting requirements, including Federal Acquisition Regulations, Cost Accounting Standards and audits by various U.S. Federal agencies. The U.S. Federal sector revenues reported below will vary from U.S. Federal government revenue presented elsewhere in this report due to overlapping activities between segments. Information on reportable segments is as follows (in millions):

Additions to Global Commercial Sector goodwill during the six months ended October 3, 2003 related to an earnout payment associated with an acquisition made in Europe. Additions to U.S. Federal Sector goodwill relate to the March 2003 acquisition of DynCorp, see Note (J) for further details. The foreign currency translation amount relates to the impact of foreign currency adjustments in accordance with SFAS No. 52, "Foreign Currency Translation."

A summary of amortized intangible assets as of October 3, 2003 and March 28, 2003 is as follows (in millions):

(I)

As disclosed in the Company's fiscal 2003 Annual Report on Form 10-K, the Company reviewed its operations, product strategies and the carrying value of its assets to identify any potential exit or disposal activities in connection with the DynCorp acquisition during March 2003. As a result, during the second quarter and six months ended October 3, 2003, special items of $9.2 million and $15.4 million ($5.7 million and $9.6 million after tax) or 3 cents and 5 cents per share (diluted) were recorded, respectively. The charges include equipment and related disposal costs, that cannot accommodate the larger, integrated U.S. Federal sector business, and its use has been discontinued. In addition, after further review the Company determined that certain CSC facilities were no longer needed as a result of the acquisition and costs to exit those facilities are also included in the special items. Since its acquisition of DynCorp, the Company has recorded $20.6 million of special charges related to exit and disposal activities arising from the acquisition. Due to the complexities and volume of equipment involved, the Company presently expects to complete the exit and disposal activities related to the DynCorp acquisition by the end of fiscal 2004. The Company currently estimates any additional DynCorp related special charges will not exceed $7 million.

(J)

As previously disclosed in the Company's fiscal 2003 Annual Report on Form 10-K, the Company acquired all of the outstanding equity securities of DynCorp during March 2003 for a purchase price of $622.0 million and the assumption of $296.4 million of outstanding DynCorp debt. The acquisition was accounted for under the purchase method and accordingly, the purchase price of the acquisition was allocated to the net assets acquired based on estimates of the fair values at the date of the acquisition. Initial goodwill was $721.7 million and other identified intangible assets including customer contracts and related customer relationships acquired from DynCorp were valued at $185.0 million. During the second quarter ended October 3, 2003, the Company finalized the fair value of the other identified intangibles principally due to the completion of third party appraisals and has adjusted the purchase price allocation. These non-cash adjustments resulted in the intangible assets decreasing by $25. 7 million, with offsetting increases to goodwill and deferred tax asset by $15.7 million and $10.0 million, respectively. The $159.3 million of intangible assets for customer contracts and related customer relationships has a weighted-average useful life of approximately 10 years and is amortized based on the estimated timing of related cash flows.

The Company is continuing to review the preliminary fair value estimates of assets acquired and liabilities assumed as a result of the DynCorp acquisition, including valuations associated with exit and facility consolidation, litigation, assets and liabilities related to taxes and long-term contracts, and other matters unresolved at the time of acquisition. The Company continues to evaluate DynCorp's accounting treatment for conformance including accounting for long-term contracts. During the second quarter, aside from the adjustment for intangible assets noted above, the Company made other insignificant adjustments to assets acquired and liabilities assumed as information was received, with no resulting net change to goodwill. Adjustments, if any, to the purchase price are expected to be finalized during the fourth quarter of fiscal 2004. There can be no assurance that such adjustments will not be material.

9

In connection with the acquisition of DynCorp, the Company incurred costs to exit and consolidate activities, involuntarily terminate employees, and other costs to integrate DynCorp into the Company. As of October 3, 2003, 53 employees have been involuntarily terminated out of a total of 75 expected to be terminated. The components of the acquisition integration liabilities included in the purchase price allocation for DynCorp are presented in the following table. The liabilities have been adjusted from those included in the preliminary purchase price allocation based upon the receipt of information and more analysis conducted by the Company. Adjustments reduced the liability balances for facility consolidations and other by $4.4 million and $.3 million, respectively. As discussed in the preceding paragraph, adjustments to the liabilities were offset by changes to goodwill.

(in millions)

Acquisition Integration
 Liabilities 

Paid as of
Oct. 3, 2003

Balance Remaining at Oct. 3, 2003

Severance payments

$  7.4   

$  5.8    

$   1.6    

Facility consolidations

66.6   

7.1    

59.5    

Other

   6.1   

    .1    

     6.0    

$80.1   
====   

$13.0    
====    

$67.1    
=====    

(K)

The Company guarantees working capital credit lines established with local financial institutions for its foreign business units. Generally, guarantees have one-year terms and are renewed annually. CSC guarantees up to $438.4 million of such working capital lines; however, as of Oct. 3, 2003, the amount of the maximum potential payment is $53.1 million, the amount of the related outstanding subsidiary debt. The $53.1 million outstanding debt is reflected in the Company's consolidated financial statements.

The Company indemnifies its software license customers from claims of infringement on a United States patent, copyright, or trade secret. CSC's indemnification covers costs to defend customers from claims, court awards or related settlements. The Company maintains the right to modify or replace software in order to eliminate any infringement. Historically, CSC has not incurred any significant costs related to customer software license indemnification. Management considers the possibility likelihood of incurring future costs to be remote. Accordingly, the Company has not recorded a related liability.

(L)

In November 2002 and May 2003, the Emerging Issues Task Force (EITF) reached a consensus on Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables." EITF Issue No. 00-21 provides guidance and criteria for determining when a multiple deliverable arrangement contains more than one unit of accounting. The guidance also addresses methods of measuring and allocating arrangement consideration to separate units of accounting. The guidance became effective for all revenue arrangements entered into after July 4, 2003. Adoption of this statement did not have a significant effect on the Company's consolidated financial position or results of operations.

(M)

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement was effective for contracts entered into or modified after June 30, 2003. Adoption of this statement did not have a significant effect on the Company's consolidated financial position or results of operations.

(N)

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. This statement was effective for financial instruments entered into or modified after May 31, 2003. Adoption of this statement did not have a significant effect on the Company's consolidated financial position or results of operations.

(O)

In May 2003, the EITF reached a consensus on Issue No. 01-08, "Determining Whether an Arrangement Contains a Lease." EITF Issue No. 01-08 provides guidance on how to determine whether an arrangement contains a lease that is within the scope of FASB Statement No. 13, "Accounting for Leases" and is effective for arrangements entered into or modified after June 30, 2003. The guidance in Issue No. 01-08 is based on whether the arrangement conveys to the purchaser (lessee) the right to use a specific asset, and could require lease accounting for certain outsourcing contracts, for which it is not economically feasible or practical to deliver service using alternative assets. CSC anticipates that in situations where lease accounting is required, the leases would be classified as operating leases, and therefore would not have a significant effect on the Company's consolidated financial statements. However, this conclusion will be dependent upon on the facts and circumstances of each individual contract, including certain contracts that for security or proprietary reasons inhibit movement of equipment, in which case capital lease classification may be required. Adoption of this statement did not have a significant effect on the Company's consolidated financial position at October 3, 2003, or results of operations for the quarter and six months ended October 3, 2003.

(P)

The Company has prepared the unaudited consolidated condensed financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. It is recommended that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's annual report on Form 10-K for the fiscal year ended March 28, 2003. In the opinion of the Company, the unaudited consolidated condensed financial statements included herein reflect all adjustments necessary to present fairly the financial position, the results of operations and the cash flows for such interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the fu ll year. Certain amounts presented for prior periods have been rec