EDS: US Airways Owes Us $70 Million

In a release Monday, EDS said it has had a long-term agreement with US Airways since July 2001 when it acquired the contract as part of its acquisition of Sabre's IT outsourcing business. As part of that contract, US Airways pays EDS about $200 million a year to manage its IT operations.

At the time of US Airway's bankruptcy filing, the company had an outstanding balance of about $70 million in invoiced work and work in progress. Including assets and intangibles, the total balance sheet exposure is approximately $140 million, the company said.

According to US Airways' filing, EDS is listed as the second-largest unsecured creditor, with a $46.9 million trade claim, after bank trustees.

EDS said in a statement it has been discussing restructuring the agreement with the airline and does not expect to discontinue its services to US Airways in light of the filing.

This is the second time in recent months that EDS has been impacted by the bankruptcy filing of a major client. Last month, EDS said exposure to WorldCom, would reduce third quarter earnings estimates by 8 or 9 cents

By Monday afternoon, EDS stock was down about 4 percent, or $1.46 a share, to just under $35.