Note 13-Segment Information

CSC provides information technology (IT) and business process outsourcing, consulting, systems integration and other IT services to its customers. The Company targets the delivery of these services within three broad lines of business or sectors: North American Public Sector, Managed Services Sector, and Business Solutions and Services.

The Company's reportable segments are as follows:

·	North American Public Sector (NPS) – The NPS segment operates principally within a regulatory environment subject to governmental contracting and accounting requirements, including Federal Acquisition Regulations, Cost Accounting Standards and audits by various U.S. federal agencies.

·	Managed Services Sector (MSS) – The MSS segment provides large-scale and mid-size outsourcing solutions and services to customers globally.

·	Business Solutions & Services (BSS) – The BSS segment provides industry specific consulting and systems integration services, business process outsourcing, and intellectual property-based software solutions.

The following table summarizes operating results by reportable segment:

(Amounts in millions)	NPS(1)			MSS		BSS		Corporate			Eliminations			Total

Fiscal 2012
Quarter Ended September 30, 2011
Revenues	$	1,436		$	1,619	$	945	$	3		$	(37	)	$	3,966
Operating income (loss)		(132	)		45		34		(22	)		-			(75	)
Depreciation and amortization		40			206		38		6			-			290

Fiscal 2011
Quarter Ended October 1, 2010
Revenues	$	1,509		$	1,581	$	869	$	3		$	(27	)	$	3,935
Operating income (loss)		153			88		84		(20	)		-			305
Depreciation and amortization		31			199		35		7			-			272

(Amounts in millions)	NPS(1)			MSS		BSS		Corporate			Eliminations			Total

Fiscal 2012
Six Months Ended September 30, 2011
Revenues	$	2,920		$	3,238	$	1,906	$	6		$	(71	)	$	7,999
Operating income (loss)		(14	)		54		91		(26	)		-			105
Depreciation and amortization		76			407		71		14			-			568

Fiscal 2011
Six Months Ended October 1, 2010
Revenues	$	3,029		$	3,179	$	1,690	$	7		$	(60	)	$	7,845
Operating income (loss)		281			196		140		(35	)		-			582
Depreciation and amortization		64			382		68		14			-			528

(1) The second quarter and six months amounts include $42 million reduction of revenue and $269 million in reduction in operating income as a result of the settlement of claims with the U.S. government (see Note 16)

The operating results of NPS for fiscal 2011 have been recast from the results presented in the previously filed Form 10-Q to reflect the discontinued operations of a business sold in the second quarter of fiscal 2011.

Operating income (loss) provides useful information to the Company's management for assessment of the Company's performance and results of operations. Components of the measure are utilized to determine executive compensation along with other measures.

A reconciliation of consolidated operating (loss) income from continuing operations to income before taxes is as follows:

	Quarter Ended						Six Months Ended
(Amounts in millions)	September 30, 2011			October 1, 2010			September 30, 2011			October 1, 2010

Operating (loss) income	$	(75	)	$	305		$	105		$	582
Corporate G&A		(66	)		(36	)		(120	)		(72	)
Interest expense		(46	)		(42	)		(88	)		(83	)
Interest income		12			9			24			17
Goodwill impairment		(2,685	)		-			(2,685	)		-
Other income (expense)		6			9			11			12
(Loss) income from continuing operations before taxes	$	(2,854	)	$	245		$	(2,753	)	$	456

During the quarter and six months ended September 30, 2011, the Company recorded certain out of period adjustments related to its MSS segment which should have been recorded in prior fiscal years (see Note 4). The following table summarizes the effect of the out of period adjustments on the MSS segment results for the quarter and six months ended September 30, 2011, as if the adjustments were recorded in the appropriate period.

	Quarter Ended September 30, 2011
(Amounts in millions)	As Reported		Increase/ (Decrease)		As Adjusted

Revenues	$	1,619	$	3	$	1,622
Operating income		45		18		63
Depreciation and amortization		206		-		206

	Six Months Ended September 30, 2011
(Amounts in millions)	As Reported		Increase/ (Decrease)			As Adjusted

Revenues	$	3,238	$	7		$	3,245
Operating income		54		23			77
Depreciation and amortization		407		(2	)		405

During the quarter and six months ended October 1, 2010 and September 30, 2011, the Company recorded certain out of period adjustments primarily related to its MSS segment (see Note 4). The following table summarizes the effect of the out of period adjustments, including those identified in fiscal 2012, on the MSS segment results for the quarter and six months ended October 1, 2010, as if the adjustments were recorded in the appropriate periods.

	Quarter Ended October 1, 2010
(Amounts in millions)	As Reported		Increase/ (Decrease)			As Adjusted

Revenues	$	1,581	$	34		$	1,615
Operating income		88		32			120
Depreciation and amortization		199		(1	)		198

	Six Months Ended October 1, 2010
(Amounts in millions)	As Reported		Increase/ (Decrease)			As Adjusted

Revenues	$	3,179	$	27		$	3,206
Operating income		196		41			237
Depreciation and amortization		382		(2	)		380

Further out of period adjustments were identified in subsequent quarters of fiscal 2011. The total out of period adjustments recorded in fiscal 2011 and in fiscal 2012 that were attributable to the MSS Segment resulted in a decrease of $29 million in revenue and a decrease of $53 million in operating income of the MSS segment.