For the first quarter of 2007:

• Revenue was $590 million, an increase of 9% year-to-year over first quarter 2006 revenue of $542 million.
• Earnings per share (diluted) was $.19, which is equal to earnings per share (diluted) for the first quarter of 2006.
• New contract signings totaled $377 million for the quarter, bringing the total value of new contracts signed during the past twelve months to $1.8 billion.
• Operating Cash Flow and Capital Expenditures for the first quarter of 2007 totaled ($38) million and $21 million, respectively. Trailing twelve month Operating Cash Flow and Capital Expenditures were $172 million and $97 million, respectively. As of March 31, 2007, Cash and Cash Equivalents and Short-term Investments were $145 million and $21 million, respectively.

First Quarter 2007 Year-to-Year Comparisons

Affecting year-to-year comparisons for the first quarter of 2007 are two previously disclosed events: the acquisition of QSS Group, Inc. (QSS) and the expiration of the UBS infrastructure outsourcing contract. In addition, Perot Systems realized a tax benefit in the first quarter of 2007 related to its European operations. Details regarding these items are summarized in this section.

On January 1, 2007, Perot Systems' infrastructure outsourcing contract with UBS expired. For the first quarter of 2006, this contract contributed revenue, gross profit, and earnings per share (diluted) of $65 million, $14 million, and approximately $.07, respectively. For the first quarter of 2007, this contract produced $1 million of revenue related to certain shutdown activities and no gross profit. The expiration of the infrastructure outsourcing contract does not affect the Perot Systems applications management contract with UBS that is reported within the Consulting and Applications Solutions line of business.

On January 30, 2007, Perot Systems acquired QSS for $244 million, net of cash acquired. Perot Systems paid $169 million of the considerion of the consideration with cash. The remaining $75 million was financed with debt using its line of credit. In addition, Perot Systems will pay certain liabilities totaling $4 million during the second quarter. For the first quarter of 2007, QSS contributed $42 million of revenue and was approximately $.01 per share dilutive to earnings per share (diluted). This dilution was the result of acquisition-related intangible asset amortization and the net interest impact of the acquisition, including foregone interest income and interest expense.

In the first quarter of 2007, Perot Systems recorded a $2 million reduction to income tax expense, equal to approximately $.02 per share, associated with the reduction of an income tax valuation allowance. This reduction occurred because certain European operations have experienced a sustained improvement in profitability, have a favorable profitability outlook, and are expected to fully utilize existing deferred tax assets.

"Successfully transitioning past the expiration of the UBS infrastructure services contract is a major accomplishment for our team," said Peter Altabef, president and CEO for Perot Systems. "Despite this challenge, our successes over the past year allowed us to report revenue growth and flat earnings on a year-to-year basis in the first quarter. Our team is delivering state of the art solutions, while our company is being recognized as one of the most admired in our industry."

Trend Information and Business Outlook

The information contained within the following section and the accompanying footnotes to the financial statements are important to understanding current and future performance. Some of the statements included in this press release involve projections of Perot Systems' future financial performance. These statements, which are based on current expectations, are forward-looking, and actual results may differ materially. In formulating these projections, we have considered recent and potential sales, acquisitions, current market conditions and long-term opportunities and risks, with these factors being subject to risks and uncertainties, including those described within this press release.

For the second quarter of 2007, Perot Systems expects revenue to range from $620 million to $635 million. Contributing to the revenue increase between the first quarter and second quarter will be:

• The acquisition of QSS. For the first quarter of 2007, Perot Systems received a partial quarter of revenue from this acquisition. For the second quarter, QSS will contribute between $62 million and $67 million of revenue, which represents an increase as compared to the first quarter of between $20 million to $25 million.
• A broad-based revenue growth contribution of between $10 million and $20 million, net.

From an earnings perspective, Perot Systems expects sequential contract- related profit pressure within Industry Solutions, but believes it will realize profitability improvements in other parts of its business. Perot Systems expects second quarter 2007 earnings per share (diluted) to range from $.17 to $.19, with this range including approximately $.01 per share of severance expense associated with implementing further profit improvements. Perot Systems anticipates earnings per share (diluted) in the low-to-mid $.20's for the third quarter of 2007.

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