`BASE BUSINESS' OPERATING REVENUES UP MORE THAN 35 PERCENT
PLANO, Texas, July 19 /PRNewswire/ -- 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: 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 percent.
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 world."
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 geographic markets.
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 levels.
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
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
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 initiatives.
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 environments.
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
ELECTRONIC DATA SYSTEMS CORPORATION
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
/CONTACT: Ken Smalling of EDS, 214-605-6792/
CO: Electronic Data Systems Corporation
-0- (PRN) Jul/19/95 9:34
EOS (PRN) Jul/19/95 09:34 86
-0- (PRN) Jul/19/95 9:49
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