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 Computer Business Has Been Named Control Data Systems, Inc.;
 Services and Government Businesses to Become Ceridian Corporation
 Silicon Graphics Intends to Buy Interest in Control Data Systems;
 NEC Is Considering Interest
 Significant Restructuring Charge Will Be Taken
 MINNEAPOLIS, May 27 /PRNewswire/ -- Control Data Corporation (NYSE: CDA) announced today that it intends to divide into two independent companies: Control Data Systems, Inc., a newly formed entity which will consist of Control Data's Computer Products business; and Ceridian Corporation (NYSE: CEN), the new name for Control Data Corporation's remaining businesses, which provide services and other information management products to business and government customers. The name change from Control Data Corporation to Ceridian Corporation will become effective June 1; the Control Data Systems name is effective immediately.
 The separation will be accomplished by incorporating Control Data Systems and distributing its stock as a dividend to holders of Control Data Corporation's common stock in the next several months.
 Control Data Corporation has signed a letter of intent with Silicon Graphics Inc. (NYSE: SGI) in which Silicon Graphics has indicated it intends to purchase a 10 percent interest in Control Data Systems once it becomes an independent company; NEC Corporation (NASDAQ: NIPNY) is considering buying a five percent interest in the new company.
 The separation is contingent upon the agreement of Control Data Corporation's banks. The company is currently seeking such an agreement, as well as an extension of its credit agreement beyond the current June 30 expiration date. The transaction must also be approved by the company's board of directors. The separation is expected to occur after completion of other reshaping initiatives, including the previously announced sale of the Automated Wagering business.
 Lawrence Perlman, president and chief executive officer of Control Data Corporation, will be Ceridian's president and chief executive officer. James E. Ousley, who has headed the Computer Products business for three years, will be president and chief executive officer of Control Data Systems.
 Control Data Corporation plans to capitalize Control Data Systems with $50 million in cash, payable when the spin-off occurs, and another $45 million in cash, payable in December 1992. There will be no ongoing material ownership or management relationship between the two companies after the spin-off, although they will continue to provide products and services to each other over a transition period.
 Control Data Corporation expects to record charges of approximately $400 million in the second quarter. Of this amount, approximately $130 million relates to Control Data Systems and includes $115 million of restructuring charges and $15 million of inventory-related charges. The restructuring charges reflect actions to be taken by Control Data Systems in 1992 and beyond as part of its continuing transition from proprietary CYBER systems to the integration of open systems and applications solutions.
 The approximately $270 million balance of the charges Control Data Corporation expects to record primarily includes an expected loss and related accruals totaling $55 million in connection with the sale of the Automated Wagering business; provisions of approximately $55 million for lease and other obligations associated with excess or under-utilized facilities, principally the company's headquarters building (which, in connection with the separation, the company has decided to sublet in its entirety); $80 million of anticipated losses and expenses related to other reshaping actions being pursued by the company; and a charge of approximately $50 million associated with the decision to adopt Financial Accounting Standard No. 106, effective July 1, 1992, and record the past service cost of post-retirement welfare benefits as a single charge. Other charges totaling approximately $30 million primarily relate to charges and expenses associated with the separation.
 "The separation of Control Data Corporation into Control Data Systems and Ceridian is a major step in the effort to strengthen the businesses and help them grow faster," said Perlman. "Control Data Systems will be a significant factor in the expanding worldwide open systems market, and Ceridian will be a leading services company in business and government markets. Each will have the ability to move rapidly in a fast changing, competitive world environment.
 "We expect the separation to provide each company with increased flexibility and ability to pursue cooperative ventures, business combinations and other actions to grow and to improve their competitive positions," Perlman said. "The ability of Control Data Systems and Ceridian to attract capital should be enhanced because potential investors and lenders will better understand the nature and strengths of each company, and be able to value each entity more in line with its performance and potential."
 Holders of Control Data Corporation common stock will receive a dividend distribution of one share of Control Data Systems common stock for every four shares of Control Data Corporation common stock. The distribution is expected to be a tax-free transaction. Stockholders will not be required to take any action to receive the dividend distribution or in connection with Control Data Corporation's name change.
 Bear, Stearns and Co. Inc. is advising Control Data Corporation in connection with the spin-off and strategic relationships.
 In connection with the spin-off, Control Data Corporation intends to redeem its 4-1/2 percent cumulative preferred stock. The redemption will occur only at such time as the spin-off occurs. The New Control Data
 Control Data Systems, which will be known as Control Data in its markets, integrates open systems solutions that satisfy customers' requirements for manufacturing engineering and information management systems. Control Data Systems has applied for listing on the NASDAQ National Market System.
 The business will take the Control Data name because Control Data has always been most closely associated with computers, not only by the financial community in the United States, but in major global markets. For more than two decades, the computer business has competed prominently in the international arena.
 "As an independent company focused solely on the rapidly changing computer marketplace, the new Control Data is in a much better position to accelerate its transition to open systems, gain access to capital markets, and form strategic relationships that will help it penetrate new markets and excel at new technologies," said Ousley. "Important new relationships we plan to establish with Silicon Graphics and NEC Corporation attest to the significance of our independent status."
 Control Data Systems announced today that (see companion press release):
 -- Silicon Graphics has signed a letter of intent to purchase a 10 percent share of Control Data Systems. The two companies also announced new joint marketing and technology sharing agreements. Under the joint marketing agreement, Control Data Systems will continue to sell and support Silicon Graphics and MIPS Computer Systems workstations and servers as part of its systems integration activities.
 -- NEC and Control Data Systems announced their intent to expand their current supercomputer marketing agreement to include joint marketing and technical activities in the UNIX/RISC area, and NEC indicated it will consider making an equity investment of five percent in Control Data Systems.
 "In the past two years, Control Data Systems' open systems revenue has grown dramatically, and we are enthusiastic about our prospects in the open systems integration marketplace," Ousley said. "We are pleased to bear the Control Data name because of its excellent reputation in the markets we serve."
 In the proprietary computing arena, Control Data Systems will continue to support customers' investment in CYBER systems and provide a strategy that helps CYBER customers migrate to high-performance open computing systems. It will continue to supply and fully support all installed CYBER systems, including those systems operated by the Automated Wagering business following completion of the sale of Automated Wagering. Ceridian Corporation
 Ceridian Corporation is a services company. It provides payroll processing and other employer services, media and market research, and network services, as well as technology-based services and products to government markets worldwide. Ceridian's stock will be listed on the New York Stock Exchange.
 Ceridian businesses serving business customers include Ceridian Employer Services (currently Control Data Business Management Services), a leader in the U.S. employer services market, which includes payroll processing; the Arbitron Company, the world's largest syndicated audience measurement service and a leading market research firm; and Ceridian Network Services (currently Network Information Services), a supplier of electronic network and transaction services that is best known for its TeleMoney business, which provides point-of-sale authorization of checks and credit cards.
 The Government Systems Group of Control Data will be separately incorporated and operated as a wholly owned subsidiary of Ceridian. Effective June 1, this business will be renamed Computing Devices International. It provides electronic information solutions to defense and civil government agencies worldwide.
 Through Empros Systems International, Ceridian will continue to provide turnkey energy management systems to the electric utilities industry.
 "Ceridian Corporation's name will be new, but its businesses have been earning fine reputations for many years," said Perlman. "Each is known for outstanding service, quality and technology, and we intend to be a premier services company for customers, investors and employees. We have an aggressive plan for profitability and growth, and with a significant portion of the reshaping effort soon to be behind us, Ceridian's focus will be on satisfying customers and creating sustained shareholder value."
 -0- 5/27/92
 /CONTACT: Nancy Foltz of Control Data Corporation, 612-853-5229; or Charlotte Fransen of Control Data Systems, 612-482-4857/
 (CDA CEN SGI NIPNY) CO: Control Data Corporation; Control Data Systems, Inc.;
 Ceridian Corporation; Silicon Graphics; NEC Corporation ST: Minnesota, California IN: CPR SU: TNM

KH -- MN001 -- 4087 05/27/92 08:40 EDT
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Publication:PR Newswire
Date:May 27, 1992

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