Computer Sciences (CSC) Settles with U.S.; to Receive $277M Lump-Sum, $1B Contract Extension
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Price: $69.01 --0%
Financial Fact:
Discontinued operations: 0
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Discontinued operations: 0
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Computer Sciences Corp. (NYSE: CSC) has reached an agreement in principle with the United States Government in its dispute of contract claims asserted under the Contract Disputes Act of 1978.
The case has been pending before the Armed Services Board of Contract Appeals. On November 19, 2010 the Government and the Company entered into a formal agreement to stay the claims litigation and engage in a non-binding alternate dispute resolution process to resolve all outstanding claims and other issues associated with the contract.
Under the terms of the agreement in principle, the Company would receive a lump sum upfront cash payment of $277 million and a five-year contract extension (four base years plus one option year) with an estimated value of $1 billion to continue to support and expand the capabilities of the systems covered by the original contract scheduled to expire in December 2011.
The Company currently anticipates that the settlement will result in a non-cash pre-tax charge to earnings in Q211 of approximately $250 millon reducing EPS by an estimated $1.15.
The case has been pending before the Armed Services Board of Contract Appeals. On November 19, 2010 the Government and the Company entered into a formal agreement to stay the claims litigation and engage in a non-binding alternate dispute resolution process to resolve all outstanding claims and other issues associated with the contract.
Under the terms of the agreement in principle, the Company would receive a lump sum upfront cash payment of $277 million and a five-year contract extension (four base years plus one option year) with an estimated value of $1 billion to continue to support and expand the capabilities of the systems covered by the original contract scheduled to expire in December 2011.
The Company currently anticipates that the settlement will result in a non-cash pre-tax charge to earnings in Q211 of approximately $250 millon reducing EPS by an estimated $1.15.
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