Perot Systems Reports a 56% Increase in Third Quarter EPS

Dallas (PROTEXT) - Perot Systems Corporation (NYSE: PER)reported its third consecutive quarter with 50% or higher EPSgrowth. For its third quarter, ended September 30, 1999, PerotSystems reported Earnings per share (diluted) of $.18, whichincludes a pretax contract gain of $8.0 million, or $.04 pershare. Excluding this gain, EPS (diluted) was $.14 per share, 56%higher than $.09 per share for the same quarter in 1998. For the third quarter ended September 30, 1999, Perot Systemsreported: -- Revenue of $304.8 million, an increase of 12% over revenueof $271.5 million reported in the same period for 1998. -- EBIT grew to $30.8 million and 10.1% of revenue, anincrease of 78% over the same period in the prior year. -- Net income for the quarter of $20.1 million versus $9.1million for the same period in the prior year, an increase of121%. -- Net cash flow was $55.3 million, up 63% over cash flow of$33.9 million reported in the same period for 1998. -- Cash balances grew to $263.2 million from $102.2 millionas of September 30, 1998, an increase of $161.0 million or 158%. For the nine months ended September 30, 1999, Perot Systemsreported: -- Earnings per share (diluted) of $.47 as compared to $.29per share for the same period in 1998, an increase of 62%. -- Revenue of $861.4 million, an increase of 19% over revenueof $724.2 million reported in the same period for 1998. -- EBIT grew 66% over the same period in 1998 to $81.4million ending the first nine months of 1999 at 9.4% of revenue. -- Net income of $53.2 million versus $28.2 million for thesame period in the prior year, an increase of 89%. Business Update "My primary focus is on building and strengthening our salesforce," said Ross Perot, Chairman and CEO of Perot Systems. "Weare making great progress and expect the new sales momentum fromthe third quarter to continue into the fourth quarter. Our goalis to have repeatable and predictable new sales growth in everyquarter." Perot Systems signed the second largest contract in itshistory, a 10-year contract with Harvard Pilgrim Health Care thatshould exceed $700 million of revenue. Perot Systems has beenworking with Harvard Pilgrim on its turnaround plan since June.Perot Systems entered into the next phase of the relationship,where they will team with Harvard Pilgrim on strategic systemsintegration and health services initiatives. The plan includesnew technology, Internet, and e-commerce initiatives focused onincreasing operational efficiencies, improving financialperformance, and streamlining healthcare provider services.Additionally, Perot Systems signed a five-year technologyservices agreement worth approximately $50 million with a majorNasdaq listed healthcare services firm. "We are pleased with our earnings growth and the direction ourbusiness is going," said Perot. "Our high value e-commerce andbusiness consulting units are generating opportunities for long-term relationships like Harvard Pilgrim. Their growing presencein the marketplace has been a factor in growing our salespipeline to an all-time high." Time0, Perot Systems' business-to-business e-commerce unit,hosted its second annual CEO Roundtable in September. Theconference, which brought together numerous top executives fromleading companies, focused on the economic vitality of digitalmarketplaces and their ability to create and sustain customervalue. Time0, formed in mid-1997, focuses entirely on the nextgeneration of high-value, high growth businesses known as digitalmarketplaces. Time0 has already been instrumental in thedevelopment of leading digital marketplaces such asMetalsite.com, Industry.net, and Orderzone.com, and is currentlyworking with clients in many industries. "Opportunities in the business-to-business marketplace arevast," said Perot. "We currently have projects or prospectsworldwide in areas such as logistics and trade finance,electronic bill presentment and payment, travel and hospitality,and transaction-enabled content. These and relationships likeHarvard Pilgrim, based on high-value services, are the kind ofopportunities which are increasingly responsible for our long-term growth." Perot Systems Corporation Income Statement Quarter and Nine Months Ended September 30 (Millions of USD, except per share amounts)

Quarter Ended September 30,

1998

1999

% Change Revenue

$271.5

$304.8

12% Direct Cost of Services

215.2

231.2

7%

Gross Profit

56.3

73.6

31% Selling, General & Admin.

40.9

44.4

9% Other Income/(Expense)

1.9

1.6

(16%)

EBIT

17.3

30.8

78% Interest, net

1.3

2.7

108%

Pretax Income

18.6

33.5

80% Taxes

9.5

13.4

41%

Net Income

$9.1

$20.1

121% EPS (diluted)

$.09

$.18

100%

Nine Months Ended September 30

1998

1999

% Change Revenue

$724.2 $861.4

19% Direct Cost of Services

575.1

660.5

15%

Gross Profit

149.1

200.9

35% Selling, General & Admin.

107.0

125.4

17% Other Income/(Expense)

7.0

5.9

(16%)

EBIT

49.1

81.4

66% Interest, net

2.8

7.3

161%

Pretax Income

51.9

88.7

71% Taxes

23.7

35.5

50%

Net Income

$28.2

$53.2

89% EPS (diluted)

$.29

$.47

62% Perot Systems Corporation Balance Sheet Highlights As of September 30 (Millions of USD)

As of September 30

1998

1999

% Change Cash

$102.2

$263.2

158% Total Assets

390.5

592.0

52% Total Liabilities

261.4

235.4

(10%) Stockholders' Equity

129.1

356.6

176% Perot Systems, based in Dallas, TX, is a leading globalinformation technology services and business solutions company.Perot Systems offers clients custom business solutions thattransform the way they conduct business by integrating servicesthat draw upon three core disciplines: business integration,systems integration and application development, and informationtechnology infrastructure services. Perot Systems, with revenueof approximately one billion dollars, has more than 7,000employees in North America, Europe, and Asia serving clients inthe financial services, healthcare, energy, and travel andtransportation industries. Additional information on PerotSystems is located at http://www.perotsystems.com. Statements contained within this press release may containforward-looking statements, which involve risks anduncertainties. Among many factors that could affect our businessand cause actual results to differ materially are the following:the loss of major clients; the company's ability to achievefuture sales; changes in our relationship with our largestcustomer, UBS, and variability of profits from UBS; our abilityto recruit, train, and retain skilled personnel; the loss of keypersonnel; our ability to manage growth; the highly competitivemarket in which we operate; the variability of quarterlyoperating results; changes in technology; possible challenges toproprietary rights or intellectual property rights; risks relatedto international operations; risks related to potential Year 2000problems; and general economic conditions. Perot Systemsdisclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, futuredevelopments or otherwise. Please refer to Perot SystemsProspectus dated February 1, 1999, Perot Systems Annual Report onForm 10-K for the fiscal year ended December 31, 1998, andQuarterly Report on Form 10-Q for the fiscal quarter ended June30, 1999 as filed with the U.S. Securities and ExchangeCommission for risk factors that may cause actual events todiffer from those contained in the forward-looking statements.ots Original Text Service: Perot Systems Corporation Internet:http://www.newsaktuell.de Contact: Investors, John Lyon (USA)972-340-6132, or fax, 972-340-6100, or email, John.Lyon@ps.net,or Press, Kim Testa (USA) 972-340-6727, or fax, 972-340-6788, oremail, Kim.Testa@ps.net, both of Perot Systems Corporation Website: http://www.perotsystems.com

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