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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2004

 

Commission File No. 01-11779

 

 

ELECTRONIC DATA SYSTEMS CORPORATION

(Exact name of registrant as specified in its charter)
 

 

Delaware
(State of incorporation)
 

  

75-2548221
(I.R.S. Employer Identification No.)

5400 Legacy Drive, Plano Texas
(Address of principal executive offices)

  

75024-3199
(ZIP code)

 

(972) 604-6000

(Registrant's telephone number)



 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X      No         .

 

Indicate by check mark whether the registrant is an accelerated filer. Yes     X     No         .

 

As of  July 30, 2004, there were 509,010,577 outstanding shares of the registrant's Common Stock, $.01 par value per share.

 

 

                                                                                                                                                          

INDEX

                                                                                                                                                              

Page No.

Part I - Financial Information (Unaudited)

Item 1. 

Financial Statements

                        

Unaudited Condensed Consolidated Statements of Operations 

3

                        

Unaudited Condensed Consolidated Balance Sheets 

4

                        

Unaudited Condensed Consolidated Statements of Cash Flows 

5

                        

Notes to Unaudited Condensed Consolidated Financial Statements 

6

      

Item 2.

Management's Discussion and Analysis of Financial Condition and Results

                      

of Operations

15

         

Item 4.

Controls and Procedures 

26

Part II - Other Information

         

Item 1.

Legal Proceedings 

27

         

Item 2.

Changes in Securities and Use of Proceeds 

27

         

Item 4.

Submission of Matters to a Vote of Security Holders 

27

    

Item 6.

Exhibits and Reports on Form 8-K 

28

Signatures 

29

 

 

2

 

PART I

 

ITEM 1.      FINANCIAL STATEMENTS

 

ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES
 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

 

Three Months Ended

Six Months Ended
   
June 30,
June 30,

  2004 2003 2004 2003

Revenues

$       5,238

$        5,061

$      10,436

$          10,078

Costs and expenses

Cost of revenues

         4,857

          4,437

          9,637

              8,973

Selling, general and administrative

            428

             397

             819

                 806

Restructuring and other

              37

               43

               29

                   91

Total costs and expenses

         5,322

          4,877

        10,485

              9,870

Operating income (loss)

            (84)

             184

             (49)

                 208

Other income (expense)

          (112)

              (70)

           (186)

                (130)

Income (loss) from continuing operations before income taxes

         
          (196)

                  

             114

          
           (235)

                 

                   78

Provision (benefit) for income taxes

            (64)

               41

             (65)

                   28

Income (loss) from continuing operations

          (132)

               73

           (170)

                   50

Income from discontinued operations, net of income taxes (including net gain on sale of $404 in 2004, net of income taxes)



            402



               15



             428



                   39

Income before cumulative effect of changes in accounting principles


            270


               88


             258


                   89

Cumulative effect on prior years of changes in accounting principles, net of income taxes


                -


                 -


                 -


             (1,432)

Net income (loss)

$          270

$             88

$           258

$           (1,343)

Basic earnings per share of common stock

Income (loss) from continuing operations

$       (0.27)

$         0.15

$       (0.34)

$               0.11

Income from discontinued operations

           0.81

           0.03

           0.87

                 0.08

Cumulative effect on prior years of changes in accounting principles


                -


                -


                -

              
               (3.00)

Net income (loss)

$        0.54

$         0.18

$         0.53

$             (2.81)

Diluted earnings per share of common stock

Income (loss) from continuing operations

$      (0.27)

$         0.15

$       (0.34)

$               0.11

Income from discontinued operations

          0.81

           0.03

           0.87

                 0.08

Cumulative effect on prior years of changes in accounting principles

              
               -

                
                -

               
                -

               
               (2.95)

Net income (loss)

$        0.54

$         0.18

$         0.53

$             (2.76)

Cash dividends per share

$        0.15

$         0.15

$         0.30

$               0.30


See accompanying notes to unaudited condensed consolidated financial statements.

 

 

3

 

 

ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

June 30,

December 31,

2004

2003

ASSETS

Current assets

Cash and cash equivalents

$       3,492 

$       2,197  

Marketable securities

488 

116  

Accounts receivable, net

2,991 

3,101  

Prepaids and other

903 

1,055  

Deferred income taxes

322 

108  

Assets held for sale

- 

1,539  

Total current assets

8,196 

8,116  

Property and equipment, net

2,536 

2,818  

Deferred contract costs, net

781 

870  

Investments and other assets

913 

1,051  

Goodwill

3,451 

3,472  

Other intangible assets, net

1,098 

1,231  

Deferred income taxes

                     511 

            722  

Total assets

$     17,486 

$     18,280  

     

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$          513 

$          572  

Accrued liabilities

2,863 

3,244  

Deferred revenue

1,015 

1,079  

Income taxes

161 

50  

Current portion of long-term debt and secured A/R facility

940 

2,275  

Liabilities held for sale

- 

262  

Total current liabilities

5,492 

7,482  

Pension benefit liability

1,043 

1,116  

Long-term debt, less current portion

3,376 

3,488  

Minority interests and other long-term liabilities

418 

480  

Commitments and contingencies

Shareholders' equity

Preferred stock, $.01 par value; authorized 200,000,000 shares; none issued

- 

-  

Common stock, $.01 par value; authorized 2,000,000,000 shares; 519,403,954 shares issued at June 30, 2004 and 495,604,217 shares issued at December 31, 2003


5 


5  

Additional paid-in capital

2,240 

917  

Retained earnings

5,781 

5,812  

Accumulated other comprehensive loss

(231)

(131)

Treasury stock, at cost, 10,946,854 shares at June 30, 2004 and 14,999,431 shares at December 31, 2003


(638)


(889)

Total shareholders' equity

7,157 

5,714  

Total liabilities and shareholders' equity

$     17,486 

$     18,280  


See accompanying notes to unaudited condensed consolidated financial statements.


 

4

 

ELECTRONIC DATA SYSTEMS CORPORATION AND SUBSIDIARIES

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Six Months Ended

June 30,