Good day, everyone, and welcome to the CSC FY 2009 fourth quarter and year-end earnings conference call. Today’s conference is being recorded. For opening remarks and introductions, I would like to turn the call over to Mr. Bryan Brady, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Operator and good afternoon, everyone. Welcome to CSC’s earnings call for the fourth quarter and fiscal year 2009. We hope you have had a chance to review our financial results, which were issued earlier this afternoon. With me today are Mike Laphen, our Chairman and Chief Executive Officer; and Mike Mancuso, our Chief Financial Officer. As usual, this call is being webcast at csc.com and we’ve also posted slides to our website to accompany our discussion. On slide two, there’s a reminder that statements made during this call that are not historical facts may be considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to know and unknown risks and uncertainties which could cause actual results to differ materially. Additional information concerning these risks and uncertainties is contained in the company’s filings with the SEC and copies of these filings are available from the SEC, from our website, and from our investor relations department. Slide number three acknowledges that CSC's presentation includes certain non-GAAP financial measures. In accordance with SEC rules, a reconciliation of these metrics to GAAP metrics is included in the tables of the earnings release and in an appendix to our slides. Both documents are available for your review at the investor relations section of the CSC website. Finally, I would like to remind our listeners that CSC assumes no obligation to update the information presented on this conference call except as required by law. Now if you will please move to slide number four, I am pleased to turn the call over to Mike Laphen.

Thank you, Bryan and good afternoon, everyone. First I would like to welcome Bryan to this inaugural earnings call in his new IR role, and also express my thanks to Bill [Wackie] for his many years of service to CSC. Last month CSC celebrated its 50th year, a significant milestone for any business. We believe that CSC's strategic direction, competitive position, and our current results provide a strong foundation for our next 50 years, and so I am especially pleased to have the opportunity today to speak with you about our 2009 fiscal year and fourth quarter results. As slide five summarizes, our fiscal 2009 and its fourth quarter were successful and important steps in our drive to improve our financial performance. For the full fiscal year, we delivered GAAP EPS of $7.31, including tax benefits; accomplished unprecedented cash performance; achieved our margin improvement goal; successfully completed our NHS milestones; and remediated our tax accounting related material weakness, while delivering a major tax benefit to our bottom line results. Mike Mancuso will provide further details in his remarks no our EPS performance, as well as our positive tax result. Our cash flow performance speaks to our commitment to manage all our cash levers. Additionally, given the importance of cash to every company in this current economic environment, this result is indicative of the quality of our delivery performance for our customers. Importantly, our fourth quarter results provide CSC with a cash balance of approximately $2.3 billion, which enables continuing flexibility to fund our foreseeable business needs. As slide six depicts, we plan to sustain our financial performance in fiscal year ’10. In particular, we plan to continue to position CSC for new business opportunities and profitable growth, and achieve earnings improvement despite an anticipated modest overall revenue decline by maintaining…

Thanks, Mike and a good afternoon to all. I want to echo the sentiment and characterization of the fourth quarter and full year results that Mike Laphem expressed during his opening remarks. I believe by any standard we recorded a very solid quarter, particularly in light of the difficult worldwide economic environment. In addition to our strong performance in the quarter, we have also fixed some things that needed fixing and eliminated near-term and potential long-term volatility surrounding asset performance and funding uncertainty in our major benefit plan, and I will talk more about this in a few minutes. So if you will turn to slide 14, cash is the big story for the quarter. Free cash flow in the quarter totaled $850 million, bringing the full-year total to just over $1 billion, an increase of almost $850 million. Days outstanding, or DSOs, improved by six days and free cash flow for the year is 92% of net earnings. Frankly, we did much better in the quarter than our previous guidance suggested and as Mike said, we did achieve the major NHS milestones and collected the payments we had anticipated. But NHS is not the full story, as many of our other businesses were significant contributors. Last quarter in our press release, our revenue guidance for the year was $16.8 billion, which implied $4.2 billion for the fourth quarter. For the full year, we recorded $16.74 billion, which resulted in a $4.1 billion achievement in the fourth quarter. Of the rounded one-tenth of a billion that we were off, roughly $50 million was currency related. Reported EPS of $7.31 for the year and $2.51 in the quarter significantly exceeded our guidance of $6.30 for the year and $1.50 for the quarter. You may recall that we did note in the…

Thank you very much, Mike. Operator, we are now ready to being the Q&A session. If you could please advise the callers for the protocol.

(Operator Instructions) We’ll take our first question from Karl Keirstead with Kaufman Brothers.

Good afternoon. Thanks for taking my call. Mike, the quarterly EPS guidance you just provided, if I heard you correctly, you mentioned $0.50 for the first quarter. If I’m right, that’s kind of a slow start to the full year. I’m wondering if you might add a little color.

It is, Karl. I think last year, as a matter of fact, we were up around $0.75, $0.79 for the first quarter. To remind you, last year we had -- overall we had an extra fiscal week in the quarter. Of course, what you are looking at now are the impacts of currency. I think roughly we are projecting a decrease in revenue in the quarter in round numbers of about $600 million, of which $300 million or so is related to currency declines and the other 300 rounded is a result of just a seasonal step-down among other things and a slow start in some of the new awards that we have. So what you should see for the year going forward is we expect the second quarter to pick up a little bit relative to obviously the first quarter, then the third quarter should exceed last year and by the fourth quarter, we should be in the neighborhood of $4.5 billion in sales for hitting the midpoint in the range that Mike talked about.

Okay, and I haven’t run this through the model yet obviously but on a year-over-year basis, would you expect in the first fiscal quarter that the margins would be flat or perhaps given that revenue pressure you just outlined, maybe they would be somewhat down year over year?

You know, Karl, I haven’t honestly looked at that so I really don’t have a good answer for you but I am happy to provide it to you afterwards.

Okay, great. Thank you.

We’ll hear our next question from Julio Quinteros with Goldman Sachs.

Thank you for the time here. One real quick question on the tax rate that’s implied in your fiscal year 2010 guidance, and then would you mind just rehashing the pension impact for fiscal year ‘010, both from the U.S. and the international side?

The first part of your question on the tax rate, you should plan on about 37.5% to be the nominal tax rate to use in your model for the year.

Got it. Okay.

And as far as pension contributions are concerned, we normally would have contributed something in the neighborhood of an overall $160 million to $200 million of pension contributions next year if we hadn’t frozen the U.S. plan. Now that 160 is all plans, including international plans. That number should drop this year to the tune of about a $30 million benefit cash flow wise in the quarter after the freeze. The absolute pension contribution number isn’t going to drop to 30 but the benefit, if you will, from the freeze would be $30 million for the year -- I’m sorry, not the quarter.

Okay. And then the international part, there’s no -- there was no comment on that?

We’re not adjusting contributions or expense or the plan internationally at this point. We are looking at it. We haven’t gotten to a point where we are prepared to comment on that. So overall pension contributions probably for total CSC for FY10 should be in the neighborhood of about $100 million, round numbers.

Got it. Great. Thank you.

We’ll hear next from Jason Kupferberg with UBS.

Thanks. I just wanted to start off with a question I guess on the EPS guidance and understand what the impact of lower pension expense might be here. I mean, and the guidance range I guess is really tight for the year and there’s still a fair amount of uncertainty in the macro environment, so can you talk about the visibility on the guidance and maybe as part of that, the big step up from Q1 to Q2 -- I think there’s a doubling of EPS there. And then as I mentioned, just highlight for us kind of year over year delta in pension expense so we can isolate that impact on the P&L. Thanks.

Total pension, as I said, pension expense year over year should be about $100 million decrease year over year -- that’s total pension expense. The benefit from the action we’ve taken in FY10, keep in mind that that action, that change will not be effective until the second quarter, so you are looking at three quarters worth of benefit, so it’s roughly a $30 million improvement over three quarters, so factor $7 million pretax into each quarter, both in cash flow effect and P&L effect, pretax.

Okay, and then just the tightness of the range here? I mean, you’re I guess only a couple of percent here from the low-end to the high-end looking a year out.

Jason, we could have said between 420 and 480 or for 390 to 470 -- this is an awful economy to try and stick your neck out and start to give broad guidance. We are commenting on the things we think we know and have nailed down, so beyond that, your guess is as good as ours as to what’s going to happen in a macro economy.

Okay, and just one clarification on the cash contribution -- total CSC pension wise, I think last quarter at the time you had hypothesized that that number might increase $100 million, maybe even $150 million year over year and that would have put you kind of in the 300 to 350 range, if I’m not mistaken. Now if I heard the answer to the last question correctly, you’re talking about only 160 to 200, so actually being down year over year -- did I get those numbers right?

Well look -- let’s go back to fiscal year ’09 and in the fourth quarter, we contributed overall $50 million to the pension plan and it was fairly linear in FY09, so a rounded $200 million of contributions in ’09. We expected that to go up. We based it on the asset values at the end of December and projections we had then. As it turned out, the expected contributions were not going to be quite as high as we had anticipated back then, so the effect of the -- so the contributions, all other things being equal and no action taken, would probably have been somewhere in the neighborhood of 200 to 250 overall, for where our -- all of our pension plans.

And now instead they are going to be what with the actions? I’m sorry.

We are going to improve the contributions to a net benefit in the U.S. of the action we took of $30 million, so you can reduce the pension contributions by $30 million because as I said, we are taking some of the pension contribution for the defined benefit plan and putting it into the defined contribution plan.

Right. Okay, so you are basically flattish year over year -- I think I got it. Okay, thanks, guys.

We’ll hear next from Rod Bourgeois with Bernstein.

Yes, I wanted to inquire about the NHS and the impact that NHS had on the financials and on the year-over-year change in the financials. I guess specifically what would be helpful, can you specify for the March ’09 quarter what the revenue, EPS, and free cash flow contribution was from NHS? And then if you can juxtapose that with how that changed over the last year, that would help us understand the impact of that important contract. Thanks.

We don’t give contract specific data, whether it be NHS or any other contract, so we are not going to respond to that specific request.

Okay. Can you give us an idea of what percentage of revenue that is now? I mean, it appears that in your BS&S segment that that contract had a meaningful change, or a meaningful impact on the year-over-year changes in the revenues and probably in the margins as well, if I’m reading that correctly.

Again, Rod, we really don’t want to get down into that level of detail for the NHS contract.

Okay. Is there lumpiness in your year-over-year change in financials because of the NHS deal? Can you give us that amount of detail? Because if we look at the BS&S segment, which is in large part systems integration and software, it had a meaningful year-over-year improvement in the margins and the revenues, which sort of defies the logic that’s happening in the market, so it raises a question as to where that came from and I’m assuming NHS might have had an impact.

It may have had an impact but again, we’re not going to get contract specific or quantify the NHS impact.

Okay, got it. And then can you talk about on NHS kind of the outlook for fiscal 2010? You’ve given us guidance -- I mean, are there certain milestones that are critical in fiscal 2010 that are assumed in your guidance? Could you give us any specificity on that front?

I can talk a little bit about that, Rod. First of all, we would expect, given the profile we see at this point in time, some up-tick in revenue and the corresponding profit that would go along with it on the program. Our next major Lorenzo delivery phase is expected in the November timeframe, so we are working towards that and that success on that milestone is incorporated into the numbers.

Right. Okay, and some of the comments in the press and coming out of the NHS leadership suggest that November is a critical milestone where they will make a determination on whether to consider alternative approaches. Do you think it’s highly unlikely that they would have to go down the path of looking at alternative approaches based on how you expect your progress to be playing out over the next several months?

Well, we are continuing to work with the NHS jointly and in I think a very strong partnership fashion to achieve success in November. We anticipate success in November, as we anticipated success in March. And again, I would say that you have to put some of the press remarks in a bit of a context, so we continued to have favorable feedback from the customer. The customer I expect will continue to put pressure on us to continue with successful delivers, as do most customers, and we will continue to march down that path.

Okay. And can you give us an update on the under-funded status of your pension and other post-retirement benefit plans? A year ago it was at $488 million. It’s clearly higher than that now. Can you give us the total under-funded status on your pension and other post-retirement benefit plans?

I said in my earlier comments it grew by $600 million, so I think it’s $1 billion is roughly the round number.

But is that just the U.S. portion or does that include international and pension plus other benefit plans?

It’s all plans.

So that’s everything inclusive -- now was that amount reduced because of the freezing of the U.S. plan?

Prospectively it will come down, since we won’t have to be chasing a growing liability. It isn’t reduced at this moment.

Okay, so the March quarter ending balance was not affected by the freezing -- okay, I got it.

The freeze isn’t effective until July.

Got it. Perfect. Thanks, guys.

(Operator Instructions) We’ll hear our next question from Bryan Keane with Credit Suisse.

Good afternoon. I just wanted to get back to the BS&S margins. I know they were at 15.4% and that’s up from 12.8 -- that’s a pretty considerable margin expansion. Can you just detail for us what the reasons for the margin expansion were?

Better cost structure, better performance.

And also it’s the -- the fourth quarter is the highest utilization of all four quarters for us in that line of business, so it is always a higher quarter for us.

Yeah, well, I’m just looking at it -- year over year it went to 15.4 to 12.8, or -- so better cost structure, so you guys are reducing costs and considered going forward when you are looking at the margin expansion of 25 bps to 50 bps -- should we see most of that expansion in the BS&S or should GOS come back a little?

I would expect GOS would come back some as well.

Okay, and then just a last question for me -- the $0.50 to $1.00, it’s still not clear to me, the big jump in operating margin that we are expecting -- I assume it’s in operating margin to get to the dollar. Is that just better cost control between the first and second quarters? Because it’s a considerable increase than we’ve seen in the past for margins between first and second quarter.

The one thing that I would add to the items that Mike already listed is during the first quarter, we typically do our workforce rationalization as well, so we would be taking some impact at the earnings level as part of that rationalization.

And Bryan, just to elaborate further on the answer to your question about the margin rate year over year, and particularly in the fourth quarter, licenses have an impact and they tend to be -- to stack up toward the end of the year, so that’s another contributing factor.

Okay. Thanks, guys.

We’ll take our next question from Ashwin Shirvaikar with Citi.

My question is about the slower bookings that you guys and everyone else in the industry are seeing and to what extent has that affected your margin profile, because you are spending less on ramps? I believe in the last quarter there was some kind of benefit. And to what extent -- because that is cost that eventually comes back -- to what extent is that factored into your guidance? If you could comment on that.

Actually, our new business expense was not down. We did cut back on some advertising but our pursuit expense was not cut back. We are quite active on the pipeline so the margin improvement did not come at the expense of the new business expenditures.

I meant the ramp of the existing contracts because that tends to be the slower, you’re ramping fewer contracts and so on and that has had some benefit in the past.

I’m sorry, I’m having a hard time hearing you. You’ve got a lot of background noise.

Sorry about that. I’m at an airport. What I was talking about was not so much the pursuit costs but I was talking about the ramp costs, the ramping of existing contracts.

Ashwin, could you try again with your question?

Well, I was talking about the ramping of existing contracts -- to what extent that has been a benefit to your cost structure and will continue to be a benefit because you have signed fewer contracts. I’m not talking about the pursuit costs -- I’m talking about contracts you already signed.

Ashwin, go back to what Mike said -- first of all, to the extent that there is business pruning actions being taken, they will be taken in the first quarter so you will see an effect on that. New business generally starts out with lower margins and ramps up as we get some experience under our belt, so volume in the second quarter is higher than it was in the first quarter. That’s a contributing factor, so there’s a lot of things, a lot of moving parts, all of them in a positive direction.

But when we budget the new business, we budget the corresponding ramp-up costs, I think you called it -- start-up costs, as we would call it, so that’s factored into the budget numbers when we construct the budget.

Okay, and could you just sort of separate out the cash flow and EPS impact from the pensions? Is it timing on both of those going to be similar or is the timing on both of those different?

Assume they are similar.

Okay. Thank you.

The next question comes from Shlomo Rosenbaum with Stifel Nicolaus.

Thank you very much for taking my questions. Are there any benefits to the cash flow in the quarter from tax settlements? Were there any deferral of cash taxes? And a follow-up with that is are there any large pre-payments that popped up in the quarter from NHS or anyone else? I’m just trying to find out what was sort of one-time-ish in the quarter.

The answer is no, no, and no to your three questions. There were no cash tax payments abnormal related to the tax settlements, et cetera, so -- the improvement in the quarter was as we talked about. Receivables, among other things, came down significantly in the quarter, as I said. Days for the year, days outstanding were down for the year. There was a big receivable improvement in the quarter. That’s a big contributor. Lower CapEx spending in the quarter, and the net earnings effect in the quarter.

Could you just elaborate a little bit more about what the good will impairment was for?

It was for one of our Asian businesses. It started to appear that it might be impaired so rather than wait until the normally in the second quarter, we undertook an impairment analysis of three or four of our businesses. This one -- if you are familiar with good will impairment testing, you go through a phase one, you pass phase one, you move on. This particular business didn’t pass phase one, so we did a full-up phase two evaluation of the business and -- which resulted in an impairment charge of $19 million. In other words, good will was written down by $19 million.

But what type of business was it?

It’s a fix and repair business located out in Hong Kong or wherever.

Yeah, it’s a break-and-fix business and a reseller business.

Okay.

That just fell off with the economic situation.

Okay, and then the BS&S signings are pretty stable and it’s pretty surprising, given what’s going on in the macro side of things. Can you just comment a little on the discretionary demand, what you saw in the March quarter and what you think the outlook is for the June quarter?

What we are seeing at this point I guess is some stabilization in that market, so our early looks at this quarter are pretty much consistent with the utilizations we saw in the fourth quarter and the billing rates are almost exactly on target as well, so we are seeing very little variability between fourth quarter and the early start of this quarter. So I would say stabilizing but I wouldn’t characterize it as up-ticking at this point.

And then lastly, I just wanted to ask about the tax benefit in the quarter again -- can you give me the actual dollar amount of that? And if you could give me what the pro forma tax rate was excluding the benefit and the good will impairment?

The total number is about $166 million in the quarter. And the tax rate exclusive of that is about 38%, round numbers.

Okay. Thank you very much.

We’ll take our next question from Melissa [Moran] with Thomas Weisel Partners.

Thanks for taking my question. Could you tell us how much the first consulting group acquisition added to revenue growth in the quarter?

We can in one second, Melissa, if you bear with us.

Sure. And also, could you remind me which segment that gets recorded in?

That’s in BSS.

Okay, and also if you could just call out how much that added to BSS in addition to total revenue growth.

Zero.

The acquisition didn’t add anything to revenue growth?

It anniversaried in the fourth quarter, so it didn’t -- there was no effect in terms of the acquired growth.

Oh it did -- okay, I thought it was partially through 1Q. Okay. Okay, great. Thank you.

Our last question comes from Moshe Katri with Cowen & Company. Moshe Katri - Cowen & Company: Thanks. Going back to Rob’s question, again without having to go in and provide us with specific numbers regarding to NHS, if we exclude the NHS contributions to free cash flow in fiscal 2009 and fiscal 2008, is cash flows from your core business up year over year or flat --

We lost you, Moshe. Moshe Katri - Cowen & Company: Can you hear me?

Say again the question? Moshe Katri - Cowen & Company: If we exclude NHS contributions to free cash in fiscal ’09 and in fiscal ’08, would you say that the free cash flows from your core business is up, down, or flat year over year? Thanks.

Up. Moshe Katri - Cowen & Company: It is up?

It is up. Moshe Katri - Cowen & Company: Okay, great. And then can you talk briefly about your views on federal funding for IT, given the recent new budgets and maybe you can talk about what you are seeing out there in your bid and proposal pipeline, what sort of mix do you have there between DOD and civil and some of the other areas? Thanks.

Well first of all, I would say that there’s been a slow-down in awards and that impacted us somewhat in the fourth quarter, particularly in a couple of major task order contracts. However, they have popped out in the first quarter so we are pleased about that. We are not expecting a significant impact from the new budget profile for this fiscal year. We believe there’s some very good opportunities as we move forward into next year and as the new budget is constructed for next year and is rolled out, so we are particularly focused on healthcare, where we think we have some great offerings that can assist President Obama in his, one of his major initiatives. Again, cyber security and identity management is an area that’s of particular interest to us. You know, as I’ve said on a number of calls, we are particularly fortunate because our footprint runs across essentially the complete breadth of both the civilian and the defense agencies, so I think it’s realistic to expect that we’ll see some of the IT shifting, the spending shifting to the civilian space but we are very well-positioned with that customer base.

Thank you. I would like to turn the conference back over to Bryan Brady for any additional or closing remarks.

Thank you very much, Operator and thank you, everyone, for joining us. Mike, do you want close it down?

Yes, just thank you for joining us today. We look forward to updating you with our first quarter results in a couple of months and we are, as we said, we are extremely pleased with where we are sitting today and our opportunity for the future, so thank you very much.

This does conclude today’s conference call. We thank you for your participation.