GROWTH; "BASE BUSINESS" OPERATING REVENUES UP MORE THAN 35 PERCENT
PLANO, Texas--(BUSINESS WIRE)-- July 19, 1995--Spurred by
accelerating global expansion and marked by new contract awards of
more than $2.8 billion, EDS achieved continued strong double-digit
earnings and revenue growth in the second quarter. The information
technology company said it recorded a 15 percent increase in net
income and a nearly 27 percent boost in total revenues.
EDS, which is based in the United States and has operations in 41
countries, said that for the quarter ended June 30, 1995, net income
rose to $226.9 million, compared with $197.3 million in the
corresponding period last year. Second-quarter revenues increased to
$2.962 billion, from $2.334 billion in the second quarter of 1994.
New contract signings reached $2.81 billion in the second
quarter, bringing to $5.46 billion the total in new contracts for the
first half of 1995. EDS signed $9.08 billion in new business in all
of 1994 -- the best year in the company's 33-year history.
The earnings of EDS (Electronic Data Systems Corporation), a
wholly owned subsidiary of General Motors Corporation, are used to
calculate the earnings per share of General Motors Class E common
stock (NYSE symbol GME). Second-quarter earnings per share increased
$0.06, from $0.41 a year ago to $0.47 in 1995, a gain of nearly 15
Business from sources outside General Motors continued to grow at
a particularly rapid rate. EDS' "base," or non-G.M., operating
revenues rose more than 35 percent over 1994 second-quarter figures.
Non-G.M. revenues accounted for more than two-thirds of the EDS
total in the first half of 1995.
"EDS continues to seize new business opportunities by entering
new markets and expanding into new industries and geographical
areas," said EDS Chairman, President and CEO Les Alberthal. "Our
recent joint ventures in Israel and South Africa are just two
examples of EDS' broadening global reach as information technology
emerges as an increasingly critical force in people's lives around
The second quarter was highlighted by the winning of two major
contracts in Europe -- one with the Dutch national railway and the
other with the United Kingdom's Department of Social Security -- and
EDS' signing of a letter of intent to acquire A. T. Kearney, the
prestigious, global management consulting firm.
EDS and A.T. Kearney announced they had entered into a letter
of intent under which EDS would acquire the Chicago-based firm and
merge EDS' management consulting unit with A.T. Kearney. The
transaction, if completed, would create a new EDS-owned management
consulting subsidiary under the A.T. Kearney name. The combined
EDS-Kearney unit would be one of the largest management consulting
firms in the world, with more than 2,300 consulting professionals in
more than 40 countries. It would provide EDS with enhanced ability
to serve its rapidly growing client base in all major industries and
In the Netherlands, EDS was selected by the national railway,
Nederlandse Spoorwegen, to be the railway's preferred information
technology (IT) supplier for the next 10 years. The agreement is the
first outsourcing partnership in the European rail industry.
And in the United Kingdom, the Department of Social Security
(DSS) chose EDS to provide the agency with IT services. Under the
10-year agreement, EDS will be responsible for data center operations
and technical support functions to the DSS, the largest IT services
delivery organization in the U.K. government. Some 1,500 DSS
employees will transfer to EDS.
Also in the U.K., in the largest contract of its kind there in
the area of local government, EDS was awarded an eight-year agreement
to administer Brent Council's revenue and benefits service. The 240
Brent employees who ran the revenue collection and benefits
administration processes and associated IT systems transferred to EDS
in May. EDS is already a significant provider of services to the
central government in the U.K., and this contract marked EDS' entry
into the local government sector in that country.
Elsewhere in Europe, EDS signed an agreement with Spain's first
private-pay television channel, Canal+, to develop new
client/server-based applications. The new system, to be called the
Subscriber Management System, will give the broadcaster commercial
information about its customers, allowing for cross-selling and
better accounts-receivable management.
Also in Spain, EDS was awarded a contract by Editorial Salvat, a
major Spanish publisher. EDS will develop a CD-ROM-based multimedia
encyclopedia. The CD-ROM technology will enable Salvat to move its
product to market faster than with the traditional paper-based
encyclopedia, making the information more current and giving Salvat a
In France, EDS won a seven-year systems management contract with
a subsidiary of Continental Can Corporation, Ferembal, a specialist
in can production. EDS will implement and maintain new systems
designed to improve administrative functions and optimize inventory
In Germany, EDS was selected to support the entire IT process for
BDK Bucherdienst, a leading publisher. EDS will develop a
client/server application for all of the publishing company's process
chain. The new systems will give BDK up-to-date sales information
and increased flexibility for improving customer satisfaction.
Also in Germany, EDS was awarded a contract by the leading
manufacturer of refractory materials, Didier. EDS will operate and
maintain Didier's existing systems as well as develop new
applications and migrate operations to a distributed environment.
In Scandinavia, EDS signed an agreement with Norway's largest
bank, Den norske Bank (DnB), to provide systems integration, systems
development and management consulting services. The new systems will
help DnB quickly develop and adapt products and services in response
to changes in the financial services marketplace. This agreement is
the first long-term contract in the Nordic market between a financial
institution and an IT service provider. EDS began its relationship
with the bank with a management consulting engagement.
Meanwhile, the European Union, under the PHARE program (Poland
and Hungary Assistance for the Reconstruction of the Economy),
selected EDS to develop an environmental management system for the
Czech Republic. Working with the Czech Hydrometeorological Institute
and the Czech Ministry of Environment, EDS will implement a new
system that will allow scientists and Czech policymakers direct
access to the latest status regarding air quality.
In Israel, EDS announced the formation of a joint-venture company
with Kardan Technologies. The new company, which will do business
under the name EDS Israel, will provide a full spectrum of IT
services to the business and government sectors in Israel.
In Saudi Arabia, EDS won a multi-year consulting agreement with
Al Rajhi Bank of Riyadh. The bank has asked EDS to be its partner in
a major process-reengineering study designed to help the bank
establish a place as a major international financial force moving
into the 21st Century. It is one of the largest contracts ever
signed by EDS' Management Consulting Services.
In Asia, EDS signed a nine-year agreement to provide Rank Xerox
Hong Kong with information management outsourcing services and a new
integrated information system based on client/server technologies.
In Canada, EDS was awarded a five-year agreement with the
Canadian Imperial Bank of Commerce, the country's second-largest
financial institution. EDS will develop and support cash management
systems that offer the bank's clients access to a full range of
services by phone, fax or computer.
In the travel industry, Continental Airlines and EDS unveiled
E-Ticket -- electronic ticketing to expedite the airport check-in
process. EDS designed and implemented E-Ticket and fully integrated
the process into four of Continentals systems -- reservations,
OnePass frequent flyer, credit management and revenue accounting.
Also in the area of travel, EDS formed an alliance with
Continental and AMADEUS to form a National Marketing Company (NMC)
that will provide information management, marketing, distribution and
customer support services to travel agencies in the United States,
Mexico, Canada, Central America and the Caribbean. EDS owns
one-third equity in the NMC and will provide systems management
support to the new entity.
In the manufacturing arena, EDS was awarded a systems management
contract by Behr America, a manufacturer of complete cooling systems
for the transportation market. EDS will install and operate several
new systems and will implement an electronic mail system. EDS also
will consolidate all IT processes and provide on-site support.
In the U.S. financial services market, EDS signed a seven-year
agreement with Home Savings of America to support the institution's
new consumer lending operation. One of the nation's largest
residential mortgage lenders, Home Savings will begin offering a full
range of consumer loans including auto, home equity and personal
unsecured loans. EDS will provide loan servicing support, including
paperless application processing, customer service, loan payment
distribution and delinquent payment collections.
EDS strengthened its position in the global securities industry
through the acquisition of FCI Incorporated, a management and IT
services firm based in New York. The acquisition brings more than
100 securities industry experts to EDS.
EDS won a 10-year master agreement with First American Real
Estate Information Services, Inc., for IT and consulting services.
First American provides real estate tax reporting, credit reporting,
tax outsourcing and other services to mortgage lenders nationwide.
EDS also signed a five-year agreement with ProCard, Inc., a
developer of procurement card software, designating EDS as the global
processor for ProCard's 1.5 million annual procurement transactions.
ProCard software is currently used in more than 400 procurement
programs, including those at First Chicago Corp. and NationsBank.
EDS recently added procurement card processing services to its
commercial card processing offering.
Also in the second quarter, PhyCor, the nation's largest
management service organization for medical clinics, selected EDS'
InterPractice Systems (IPS) to transition its clinics to an automated
environment. The IPS system, which is a comprehensive
computer-based, patient-record system, records each medical encounter
from the time the patient walks through the door to the time the
visit is completed.
Meanwhile, EDS' Communications Industry Group, through a wholly
owned subsidiary, PremiTech Corporation, signed a 10-year agreement
with Holmes Protection Group, Inc., a leader in providing security
systems for the financial and jewelry districts in the Northeastern
U.S. PREMITECH will provide IT services for Holmes, including
maintaining the company's current systems, consolidating central
stations and supporting telecommunications activities.
In continued support of its parent, General Motors, EDS signed an
agreement to provide the GM tax staff with international trade
management services in support of the GM Customs Administration
Group. EDS will support the efforts of the group in the areas of
customs classifications, trade programs, duty drawback and valuation.
This is a new line of business for EDS.
EDS also reached a five-year agreement with the Buick Motor
Division to provide technology, facility and operational business
support services for the Buick Customer Assistance Center. EDS will
be responsible for answering and responding to customer inquiries and
concerns about Buick products while capturing the customer
information in a database for future relationship-marketing
EDS also was awarded a contract to develop the next-generation
Manufacturing Information System, which will be deployed at all Delco
Electronics production sites. The system incorporates tools to
monitor and report performance at all sites globally, which, in turn,
allows best practices to be identified and communicated.
Client/server technology will be utilized to distribute the
processing load and provide hardware independence, as well as to
provide a consistent user interface. Ten pilot sites have been
selected at locations in Europe, the Pacific Rim and North America.
Also in the second quarter, EDS opened what is believed to be the
first commercial virtual reality center in the world. The center,
which is located in Detroit, will be used to demonstrate, on a
business-to-business basis, a variety of applications for rapidly
evolving technologies that can simulate three-dimensional
And the French Organizing Committee for the 1998 World Cup soccer
tournament announced it had chosen EDS as one of the two official IT
suppliers for the 1998 games, which will be held in France. EDS
served as the official IT partner for the 1994 World Cup, which was
held in the U.S.
SUMMARY OF RESULTS OF OPERATIONS
(in millions, except per share amounts)
Second Quarter Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
---- ---- ---- ----
Systems and other
contracts $ 2,950.1 $ 2,309.5 $5,726.4 $4,526.7
Interest and other income 12.0 24.5 20.7 46.6
--------- --------- -------- --------
Total Revenues 2,962.1 2,334.0 5,747.1 4,573.3
Total Costs and Expenses 2,607.6 2,025.8 5,085.1 3,996.8
--------- --------- -------- --------
Income Before Income Taxes 354.5 308.2 662.0 576.5
Provision for Income Taxes 127.6 110.9 238.3 207.5
--------- --------- -------- --------
Net Income $ 226.9 $ 197.3 $ 423.7 $ 369.0
========= ========= ======== ========
Earnings Attributable to
GM Class E Common Stock
on a Per Share Basis $ 0.47 $ 0.41 $ 0.89 $ 0.77
Cash Dividends Per Share of
GM Class E Common Stock $ 0.13 $ 0.12 $ 0.26 $ 0.24
Revenues related to GM and subsidiaries amounted to $982.5 and
$856.2 million for the second quarter ended June 30, 1995 and 1994,
respectively, and $1,880.5 and $1,697.9 million for the six months
ended June 30, 1995 and 1994, respectively.
SUMMARY OF CONSOLIDATED BALANCE SHEETS
June 30, Dec. 31,
ASSETS 1995 1994
Cash and marketable securities $ 709.5 $ 757.8
Accounts receivable 2,473.6 2,147.5
Inventories 169.7 137.8
Prepaids and other 355.2 311.0
Total Current Assets 3,708.0 3,354.1
Property and Equipment, Net 3,043.3 2,756.6
Operating and Other Assets 2,909.7 2,675.8
Total Assets $9,661.0 $8,786.5
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable $ 553.5 $ 571.1
Accrued liabilities 1,338.0 1,451.0
Deferred revenue 617.4 536.7
Income taxes 119.7 111.0
Notes payable 283.1 203.4
Total Current Liabilities 2,911.7 2,873.2
Deferred Income Taxes 630.9 659.8
Notes Payable 1,528.3 1,021.0
Total Stockholder's Equity 4,590.1 4,232.5
and Stockholder's Equity $9,661.0 $8,786.5
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