Sept 6 - Standard & Poor's Ratings Services said today that Computer
Sciences Corp.'s (BBB/Negative/A-2) recent announcement that it has
entered into a binding interim agreement with the U.K. National Health Service
(NHS) will not currently affect our ratings or outlook on the company.
The interim agreement solidifies CSC's ongoing relationship with the NHS, and
removes a significant component of operational and contract uncertainty.
However, the negative outlook continues to reflect currently weak EBITDA
levels, with limited realized benefits from recently announced cost-reduction
actions. Additional concerns include the potential impact of incremental or
prolonged weakness in European economic conditions and CSC's federal sector.
Nevertheless, we could revise the outlook to stable within the next couple of
quarters if CSC demonstrates continued margin improvements and progresses
toward its $1 billion cost-reduction goal, while maintaining leverage at or
The ratings on CSC reflect the company's "satisfactory" business profile,
supported by its diversified business and geographic mix and expected
organizational and cost improvements. We believe CSC will maintain an
"intermediate" financial risk profile, incorporating solidly positive free
operating cash flow, "adequate" liquidity, and expected operating margin