[May 24, 2018] |
|
DXC Technology Delivers Fourth Quarter Growth in Revenue, Earnings per Share, Margins, and Cash Flow
DXC
Technology (NYSE: DXC) today reported results for the three and twelve
months ended March 31, 2018.
"In fiscal 2018, DXC successfully executed on our strategic roadmap,
including the integration of CSC and HPE Enterprise Services,
achievement of our first-year financial objectives, and a strengthened
leadership position in digital transformation," said Mike Lawrie,
DXC's chairman, president and CEO. "Revenue in the quarter grew
year-over-year and sequentially, and we delivered more than $1.1 billion
dollars of in-year savings. We continue to invest in our digital
capabilities and strategic partnerships, and we achieved strong growth
in digital this year. Looking ahead, we expect to complete the Perspecta
transaction next week, and we have positioned DXC Technology to deliver
EPS and margin expansion in fiscal 2019."
Financial Highlights - Fourth Quarter Fiscal 2018
-
Diluted earnings per share was $1.93 in the fourth quarter,
including $(0.50) per share of restructuring costs, $(0.33) per share
of transaction, separation and integration-related costs, $(0.37) per
share of amortization of acquired intangible assets, $0.55 per share
of pension and OPEB actuarial and settlement gains, and $0.30 per
share of tax adjustment related to U.S. tax reform. This compares
with $(1.05) in the year ago period.
-
Non-GAAP diluted earnings per share was $2.28.
-
Revenue in the fourth quarter was $6,294 million compared with $1,889
million in the year ago period. Revenue grew 4.3% compared with $6,036
million in the prior year on a pro forma combined company basis.
-
Income before income taxes was $661 million for the fourth quarter,
including $(208) million of restructuring costs, $(124) million of
transaction, separation and integration-related costs, $(153)
million of amortization of acquired intangibles and $203 million of
pension and OPEB actuarial and settlement gains. This compares
with $(187) million in the year ago period.
-
Non-GAAP income before income taxes was $943 million compared with
$548 million in the year ago period on a pro forma combined company
basis.
-
Net income was $565 million for the fourth quarter, including $(145)
million of restructuring costs, $(97) million of transaction,
separation and integration-related costs, $(108) million of
amortization of acquired intangibles, $161 million of pension and OPEB
actuarial and settlement gains, and $88 million of tax adjustment
related to U.S. tax reform. This compares with $(138) million in the
prior year period.
-
Non-GAAP net income was $666 million.
-
Adjusted EBIT was $1,017 million in the fourth quarter compared with
$615 million in the prior year on a pro forma combined company basis.
Adjusted EBIT margin was 16.2% compared with 10.2% in the year ago
quarter which is presented on a pro forma combined company basis.
-
Net cash provided by operating activities was $701 million in the
fourth quarter, compared with $173 million in the year ago period.
-
Adjusted free cash flow was $557 million in the fourth quarter.
Financial Highlights - Fiscal 2018
-
Diluted earnings per share was $6.04 in fiscal 2018,
including $(2.06) per share of restructuring costs, $(1.00) per share
of transaction, separation and integration-related costs, $(1.37) per
share of amortization of acquired intangible assets, $0.60 per share
of pension and OPEB actuarial and settlement gains and $1.94 per share
of tax adjustment related to U.S. tax reform. This compares
with $(0.88) in the year ago period.
-
Non-GAAP diluted earnings per share was $7.94.
-
Revenue in fiscal 2018 was $24,556 million compared with $7,607
million in the year ago period. Revenue declined (3.3)% compared with
$25,394 million in the prior year on a pro forma combined company
basis, in line with fiscal 2018 targets.
-
Income before income taxes was $1,671 million for fiscal 2018,
including $(803) million of restructuring costs, $(408) million of
transaction, separation and integration-related costs, $(591)
million of amortization of acquired intangibles and $220 million of
pension and OPEB actuarial and settlement gains. This compares
with $(174) million in the year ago period.
-
Non-GAAP income before income taxes was $3,253 million compared with
$2,184 million in the prior year on a pro forma combined company basis.
-
Net income was $1,782 million for fiscal 2018, including $(597)
million of restructuring costs, $(291) million of transaction,
separation and integration-related costs, $(398) million of
amortization of acquired intangibles, $175 million of pension and OPEB
actuarial and settlement gains and $561 million of tax adjustment
related to U.S. tax reform. This compares with $(100) million in the
prior year period.
-
Non-GAAP net income was $2,332 million.
-
Adjusted EBIT was $3,499 million in fiscal 2018 compared with $2,445
million in the prior year on a pro forma combined company basis.
Adjusted EBIT margin was 14.2% compared with 9.6% in the prior year
which is presented on a pro forma combined company basis.
-
Net cash provided by operating activities was $3,243 million in fiscal
2018, compared with $978 million in the prior year.
-
Adjusted free cash flow was $2,427 million in fiscal 2018.
Global Business Services (GBS)
GBS revenue was $2,361 million in the quarter compared to $1,043
million for the prior year. GBS revenues grew 3.3% year-over-year on a
pro forma combined company basis, reflecting our clients' continued
shift from traditional application services to Enterprise Applications
and growth in our Business Process Services businesses. GBS profit
margin in the quarter was 19.9%, up from 12.4% in the prior year on a
pro forma combined company basis, reflecting ongoing cost actions in the
business. New business awards for GBS were $2,038 million in the fourth
quarter.
Global Infrastructure Services (GIS)
GIS revenue was $3,223 million in the quarter compared to $846
million for the prior year. GIS revenues grew 3.6% year-over-year on a
pro forma combined company basis. The GIS revenue reflects strong growth
in our Workplace and Mobility business as well as growth in Cloud and
Platform services as clients migrate to hybrid infrastructure
environments. GIS profit margin in the quarter was 14.8%, up
from 11.4% in the prior year on a pro forma combined company basis,
reflecting cost actions and process automation. New business awards for
GIS were $2,862 million in the fourth quarter.
United States Public Sector (USPS)
USPS revenue was $710 million in the quarter. USPS revenue grew 11.1%
year-over-year on a pro forma combined company basis, reflecting growth
in two of our largest contracts. USPS profit margin in the quarter was
17.0%, up from 9.9% in the prior year on a pro forma combined company
basis, reflecting ongoing cost actions in the business. New business
awards for USPS were $522 million in the fourth quarter.
Returning Capital to Shareholders
During the fourth quarter, DXC Technology returned $123 million to
shareholders in the form of common stock dividends and share repurchases.
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast
today at 5 p.m. EDT. The dial-in number for domestic callers is (800)
289-0438. Callers who reside outside of the United States should dial +1
(323) 794-2423. The passcode for all participants is 6166236. The
webcast audio and any presentation slides will be available on DXC
Technology's Investor Relations website.
A replay of the conference call will be available from approximately two
hours after the conclusion of the call until May 31, 2018. Replay
numbers can be found at the following link.
The replay passcode is also 6166236.
Non-GAAP Measures
In an effort to provide investors with supplemental financial
information, in addition to the preliminary and unaudited financial
information presented on a GAAP and pro forma basis, we have also
disclosed in this press release preliminary non-GAAP information
including: constant currency, earnings before interest and taxes
("EBIT"), EBIT margin, adjusted EBIT, adjusted EBIT margin, non-GAAP
income before income taxes, non-GAAP net income, non-GAAP EPS and
adjusted free cash flow. Reconciliations of the preliminary non-GAAP
measures to the respective most directly comparable measures calculated
on a GAAP or pro forma basis, as well as the rationale for management's
use of non-GAAP measures, are included below.
About DXC Technology
DXC Technology is the world's leading independent, end-to-end IT
services company, serving nearly 6,000 private and public-sector clients
from a diverse array of industries across 70 countries. The company's
technology independence, global talent and extensive partner network
deliver transformative digital offerings and solutions that help clients
harness the power of innovation to thrive on change. DXC Technology is
recognized among the best corporate citizens globally. For more
information, visit dxc.technology.
All statements in this press release that do not directly and
exclusively relate to historical facts constitute "forward-looking
statements." These statements represent current expectations and
beliefs, and no assurance can be given that the results described in
such statements will be achieved. Such statements are subject to
numerous assumptions, risks, uncertainties and other factors that could
cause actual results to differ materially from those described in such
statements, many of which are outside of our control. For a written
description of these factors, see the section titled "Risk Factors" in
DXC's Quarterly Reports on Form 10-Q for the quarters ended June 30,
2017, September 30, 2017, December 31, 2017 and any updating information
in subsequent SEC filings, including DXC's upcoming Form 10-K for the
fiscal year ended March 31, 2018. No assurance can be given that any
goal or plan set forth in any forward-looking statement can or will be
achieved, and readers are cautioned not to place undue reliance on such
statements which speak only as of the date they are made. We do not
undertake any obligation to update or release any revisions to any
forward-looking statement or to report any events or circumstances after
the date of this press release or to reflect the occurrence of
unanticipated events except as required by law.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Operations
(preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
(in millions, except per-share amounts)
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
$
|
6,294
|
|
|
|
$
|
1,889
|
|
|
|
$
|
24,556
|
|
|
|
$
|
7,607
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services
|
|
|
|
4,323
|
|
|
|
|
1,414
|
|
|
|
|
17,944
|
|
|
|
|
5,545
|
|
Selling, general and administrative
|
|
|
|
453
|
|
|
|
|
348
|
|
|
|
|
2,010
|
|
|
|
|
1,279
|
|
Depreciation and amortization
|
|
|
|
585
|
|
|
|
|
153
|
|
|
|
|
1,964
|
|
|
|
|
647
|
|
Restructuring costs
|
|
|
|
208
|
|
|
|
|
153
|
|
|
|
|
803
|
|
|
|
|
238
|
|
Interest expense
|
|
|
|
104
|
|
|
|
|
30
|
|
|
|
|
335
|
|
|
|
|
117
|
|
Interest income
|
|
|
|
(30
|
)
|
|
|
|
(9
|
)
|
|
|
|
(89
|
)
|
|
|
|
(35
|
)
|
Other income, net
|
|
|
|
(10
|
)
|
|
|
|
(13
|
)
|
|
|
|
(82
|
)
|
|
|
|
(10
|
)
|
Total costs and expenses
|
|
|
|
5,633
|
|
|
|
|
2,076
|
|
|
|
|
22,885
|
|
|
|
|
7,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss), before income taxes
|
|
|
|
661
|
|
|
|
|
(187
|
)
|
|
|
|
1,671
|
|
|
|
|
(174
|
)
|
Income tax expense (benefit)
|
|
|
|
96
|
|
|
|
|
(49
|
)
|
|
|
|
(111
|
)
|
|
|
|
(74
|
)
|
Net income (loss)
|
|
|
|
565
|
|
|
|
|
(138
|
)
|
|
|
|
1,782
|
|
|
|
|
(100
|
)
|
Less: net income attributable to non-controlling interest, net of tax
|
|
|
|
5
|
|
|
|
|
10
|
|
|
|
|
31
|
|
|
|
|
23
|
|
Net income (loss) attributable to DXC common stockholders
|
|
|
$
|
560
|
|
|
|
$
|
(148
|
)
|
|
|
$
|
1,751
|
|
|
|
$
|
(123
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
1.96
|
|
|
|
$
|
(1.05
|
)
|
|
|
$
|
6.15
|
|
|
|
$
|
(0.88
|
)
|
Diluted
|
|
|
$
|
1.93
|
|
|
|
$
|
(1.05
|
)
|
|
|
$
|
6.04
|
|
|
|
$
|
(0.88
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend per common share
|
|
|
$
|
0.18
|
|
|
|
$
|
0.14
|
|
|
|
$
|
0.72
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
285.64
|
|
|
|
|
141.16
|
|
|
|
|
284.93
|
|
|
|
|
140.39
|
|
Diluted EPS
|
|
|
|
290.20
|
|
|
|
|
141.16
|
|
|
|
|
289.77
|
|
|
|
|
140.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data
(preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
|
(in millions)
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
2,648
|
|
|
$
|
1,263
|
Receivables, net
|
|
|
|
5,913
|
|
|
|
1,643
|
Prepaid expenses
|
|
|
|
571
|
|
|
|
223
|
Other current assets
|
|
|
|
485
|
|
|
|
118
|
Total current assets
|
|
|
|
9,617
|
|
|
|
3,247
|
|
|
|
|
|
|
|
|
|
Intangible assets, net
|
|
|
|
8,091
|
|
|
|
1,794
|
Goodwill
|
|
|
|
9,652
|
|
|
|
1,855
|
Deferred income taxes, net
|
|
|
|
373
|
|
|
|
381
|
Property and equipment, net
|
|
|
|
3,646
|
|
|
|
903
|
Other assets
|
|
|
|
2,542
|
|
|
|
483
|
Total Assets
|
|
|
$
|
33,921
|
|
|
$
|
8,663
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt
|
|
|
$
|
2,073
|
|
|
$
|
738
|
Accounts payable
|
|
|
|
1,708
|
|
|
|
410
|
Accrued payroll and related costs
|
|
|
|
766
|
|
|
|
248
|
Accrued expenses and other current liabilities
|
|
|
|
3,466
|
|
|
|
998
|
Deferred revenue and advance contract payments
|
|
|
|
1,694
|
|
|
|
518
|
Income taxes payable
|
|
|
|
145
|
|
|
|
38
|
Total current liabilities
|
|
|
|
9,852
|
|
|
|
2,950
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current maturities
|
|
|
|
6,306
|
|
|
|
2,225
|
Non-current deferred revenue
|
|
|
|
802
|
|
|
|
286
|
Non-current pension obligations
|
|
|
|
879
|
|
|
|
342
|
Non-current income tax liabilities and deferred tax liabilities
|
|
|
|
1,329
|
|
|
|
423
|
Other long-term liabilities
|
|
|
|
916
|
|
|
|
271
|
Total Liabilities
|
|
|
|
20,084
|
|
|
|
6,497
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
|
13,837
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
|
$
|
33,921
|
|
|
$
|
8,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
(preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
(in millions)
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
$
|
1,782
|
|
|
|
$
|
(100
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
2,014
|
|
|
|
|
658
|
|
Pension & other post-employment benefits, actuarial & settlement
(gains) losses
|
|
|
|
(220
|
)
|
|
|
|
87
|
|
Share-based compensation
|
|
|
|
93
|
|
|
|
|
75
|
|
Deferred tax benefit
|
|
|
|
(842
|
)
|
|
|
|
(92
|
)
|
Loss on dispositions
|
|
|
|
4
|
|
|
|
|
6
|
|
Provision for losses on accounts receivable
|
|
|
|
45
|
|
|
|
|
4
|
|
Unrealized foreign currency exchange losses
|
|
|
|
22
|
|
|
|
|
24
|
|
Impairment losses and contract write-offs
|
|
|
|
41
|
|
|
|
|
8
|
|
Amortization of debt issuance costs and discount (premium)
|
|
|
|
(4
|
)
|
|
|
|
17
|
|
Cash surrender value in excess of premiums paid
|
|
|
|
(11
|
)
|
|
|
|
(7
|
)
|
Other non-cash charges, net
|
|
|
|
4
|
|
|
|
|
-
|
|
Changes in assets and liabilities, net of effects of acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
|
|
Decrease in receivables
|
|
|
|
202
|
|
|
|
|
586
|
|
Decrease (increase) in deferred purchase price receivable
|
|
|
|
19
|
|
|
|
|
(252
|
)
|
Increase in prepaid expenses and other current assets
|
|
|
|
(205
|
)
|
|
|
|
(29
|
)
|
(Decrease) increase in accounts payable and accruals
|
|
|
|
(96
|
)
|
|
|
|
54
|
|
Increase (decrease) in income taxes payable and income tax liability
|
|
|
|
303
|
|
|
|
|
(32
|
)
|
Increase (decrease) in advance contract payments and deferred revenue
|
|
|
|
130
|
|
|
|
|
(67
|
)
|
Other operating activities, net
|
|
|
|
(38
|
)
|
|
|
|
38
|
|
Net cash provided by operating activities
|
|
|
|
3,243
|
|
|
|
|
978
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
(224
|
)
|
|
|
|
(246
|
)
|
Payments for outsourcing contract costs
|
|
|
|
(328
|
)
|
|
|
|
(101
|
)
|
Software purchased and developed
|
|
|
|
(211
|
)
|
|
|
|
(140
|
)
|
Cash acquired through HPES Merger
|
|
|
|
938
|
|
|
|
|
-
|
|
Payments for acquisitions, net of cash acquired
|
|
|
|
(203
|
)
|
|
|
|
(434
|
)
|
Business dispositions
|
|
|
|
-
|
|
|
|
|
3
|
|
Proceeds from sale of assets
|
|
|
|
58
|
|
|
|
|
57
|
|
Restricted Cash
|
|
|
|
(67
|
)
|
|
|
|
(1
|
)
|
Other investing activities, net
|
|
|
|
4
|
|
|
|
|
(64
|
)
|
Net cash used in investing activities
|
|
|
|
(33
|
)
|
|
|
|
(926
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Borrowings of commercial paper
|
|
|
|
2,413
|
|
|
|
|
2,191
|
|
Repayments of commercial paper
|
|
|
|
(2,297
|
)
|
|
|
|
(2,086
|
)
|
Borrowings under lines of credit
|
|
|
|
-
|
|
|
|
|
920
|
|
Repayment of borrowings under lines of credit
|
|
|
|
(737
|
)
|
|
|
|
(789
|
)
|
Borrowings on long-term debt, net of discount
|
|
|
|
621
|
|
|
|
|
159
|
|
Principal payments on long-term debt
|
|
|
|
(1,547
|
)
|
|
|
|
(168
|
)
|
Payments on capital leases and borrowings for asset financing
|
|
|
|
(1,060
|
)
|
|
|
|
(145
|
)
|
Proceeds from bond issuance
|
|
|
|
989
|
|
|
|
|
-
|
|
Proceeds from structured sale of facility
|
|
|
|
-
|
|
|
|
|
85
|
|
Proceeds from stock options and other common stock transactions
|
|
|
|
138
|
|
|
|
|
54
|
|
Taxes paid related to net share settlements of share-based
compensation awards
|
|
|
|
(76
|
)
|
|
|
|
(13
|
)
|
Repurchase of common stock and advance payment for accelerated share
repurchase
|
|
|
|
(132
|
)
|
|
|
|
-
|
|
Dividend payments
|
|
|
|
(174
|
)
|
|
|
|
(78
|
)
|
Other financing activities, net
|
|
|
|
(28
|
)
|
|
|
|
(37
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
(1,890
|
)
|
|
|
|
93
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
65
|
|
|
|
|
(60
|
)
|
Net increase in cash and cash equivalents
|
|
|
|
1,385
|
|
|
|
|
85
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
1,263
|
|
|
|
|
1,178
|
|
Cash and cash equivalents at end of year
|
|
|
$
|
2,648
|
|
|
|
$
|
1,263
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited Pro Forma Combined Company Financial Information
In an effort to provide investors with additional information, we are
disclosing certain unaudited pro forma combined company financial
information of DXC for the three and twelve months ended March 31, 2017
(the "pro forma combined company" information) as supplemental
information herein. The following discussion includes comparisons of our
unaudited results of operations for the three and twelve months ended
March 31, 2017, to our pro forma combined company results. The pro forma
combined company results are based on the historical quarterly
statements of operations of each of CSC and the Enterprise Services
Business of Hewlett Packard Enterprise Company ("HPES"), giving effect
to the HPES Merger (defined below) as if it had been consummated on
April 2, 2016. The unaudited pro forma statement of operations, which
was previously filed with the SEC on June 14, 2017 as Exhibit 99.2 of
Form 8-K/A has been revised to reflect purchase price accounting ("PPA")
adjustments recorded subsequent to the Merger.
CSC reported its results based on a fiscal year convention that
comprised four thirteen-week quarters. Every fifth year included an
additional week in the first quarter to prevent the fiscal year moving
from an approximate end of March date. HPES reported its results on a
fiscal year basis ended October 31. As a consequence of CSC and HPES
having different fiscal year-end dates, all references to the pro forma
combined company information include the results of operations of CSC
for the fiscal year ended March 31, 2017 and of HPES for the fiscal year
ended January 31, 2017.
The historical financial information of HPES was "carved-out" from the
combined statement of operations of HPE and reflects assumptions and
allocations made by HPE. The combined statement of operations of HPES
included all revenues and costs directly attributable to HPES and an
allocation of expenses related to certain HPE corporate functions. The
results of operations in the HPES historical combined statement of
operations does not necessarily include all expenses that would have
been incurred by HPES had it been a separate, stand-alone entity. Actual
costs that may have been incurred if HPES had been a stand-alone company
would depend on a number of factors, including the chosen organizational
structure, functions outsourced or performed by employees and strategic
decisions made in areas such as information technology and
infrastructure. Consequently, HPES' historical financial information
does not necessarily reflect what HPES' results of operations would have
been had HPES operated as a stand-alone company during the periods
presented.
The pro forma combined company results have been prepared using the
acquisition method of accounting with CSC considered the accounting
acquirer of HPES. These pro forma combined company results include
historical results, reflecting PPA adjustments and aligning our
accounting policies for consolidated results and reportable segments.
These adjustments give effect to pro forma events that were (i) directly
attributable to the merger of CSC and HPES (the "HPES Merger"), (ii)
factually supportable, and (iii) expected to have a continuing impact on
the consolidated results of operations of DXC. The pro forma results do
not reflect the costs of integration activities or benefits that may
result from realization of first-year synergies.
The adjustments to historical results were based upon currently
available information and assumptions that management of DXC believes to
be reasonable. The pro forma combined company results are provided for
illustrative and informational purposes only and are not intended to
represent or be indicative of what DXC's results of operations would
have been had the HPES Merger occurred on April 2, 2016, and should not
be taken as being indicative of DXC's future consolidated financial
results.
Segment Results
The following tables summarize segment revenue for the three and twelve
months ended March 31, 2018 as compared to the three and twelve months
ended March 31, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis
|
|
|
Pro Forma Combined Company
|
(in millions)
|
|
|
Three
Months Ended
March 31,
2018
|
|
|
Historical CSC
for the Three
Months Ended
March 31, 2017
|
|
|
% Change (NM)
|
|
|
Three
Months Ended
March 31,
2017
|
|
|
% Change
|
|
|
% Adjusted
Change in
Constant
Currency(1)
|
GBS
|
|
|
$
|
2,361
|
|
|
$
|
1,043
|
|
|
-
|
|
|
$
|
2,285
|
|
|
3.3
|
%
|
|
|
(2.5
|
)%
|
GIS
|
|
|
|
3,223
|
|
|
|
846
|
|
|
-
|
|
|
|
3,112
|
|
|
3.6
|
%
|
|
|
(4.3
|
)%
|
USPS
|
|
|
|
710
|
|
|
|
-
|
|
|
-
|
|
|
|
639
|
|
|
11.1
|
%
|
|
|
11.1
|
%
|
Total Revenues
|
|
|
$
|
6,294
|
|
|
$
|
1,889
|
|
|
-
|
|
|
$
|
6,036
|
|
|
4.3
|
%
|
|
|
(2.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for PPA impact of $(8) million in GBS,
$(36) million in GIS and $0 million in USPS.
|
(NM) Not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis
|
|
|
Pro Forma Combined Company
|
(in millions)
|
|
|
Twelve
Months Ended
March 31,
2018
|
|
|
Historical CSC
for the Twelve
Months Ended
March 31, 2017
|
|
|
% Change (NM)
|
|
|
Twelve
Months Ended
March 31,
2017
|
|
|
% Change
|
|
|
% Adjusted
Change in
Constant
Currency(1)
|
GBS
|
|
|
$
|
9,254
|
|
|
$
|
4,173
|
|
|
-
|
|
|
$
|
9,530
|
|
|
(2.9
|
)%
|
|
|
(4.3
|
)%
|
GIS
|
|
|
|
12,479
|
|
|
|
3,434
|
|
|
-
|
|
|
|
13,018
|
|
|
(4.1
|
)%
|
|
|
(5.2
|
)%
|
USPS
|
|
|
|
2,823
|
|
|
|
-
|
|
|
-
|
|
|
|
2,846
|
|
|
(0.8
|
)%
|
|
|
(0.5
|
)%
|
Total Revenues
|
|
|
$
|
24,556
|
|
|
$
|
7,607
|
|
|
-
|
|
|
$
|
25,394
|
|
|
(3.3
|
)%
|
|
|
(4.3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for PPA impact of $24 million in GBS, $98
million in GIS and $8 million in USPS.
|
(NM) Not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
We define segment profit as segment revenues less segment cost of
services, selling, general and administrative, and depreciation and
amortization (excluding amortization of acquired intangible assets). We
do not allocate to our segments certain operating expenses managed at
the corporate level. These unallocated costs include certain corporate
function costs, stock-based compensation expense, pension and OPEB
actuarial and settlement gains and losses, restructuring costs,
transaction, separation and integration-related costs and amortization
of acquired intangible assets. The following table presents our segment
profit and segment profit margins:
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(in millions)
|
|
|
March 31, 2018
|
|
|
Historical CSC
March 31, 2017
|
|
|
Pro Forma
Combined Company
March 31, 2017
|
GBS profit
|
|
|
$
|
470
|
|
|
|
$
|
143
|
|
|
|
$
|
284
|
|
GIS profit
|
|
|
|
477
|
|
|
|
|
105
|
|
|
|
|
355
|
|
USPS profit
|
|
|
|
121
|
|
|
|
|
-
|
|
|
|
|
63
|
|
All other loss
|
|
|
|
(51
|
)
|
|
|
|
(32
|
)
|
|
|
|
(95
|
)
|
Interest income
|
|
|
|
30
|
|
|
|
|
9
|
|
|
|
|
22
|
|
Interest expense
|
|
|
|
(104
|
)
|
|
|
|
(30
|
)
|
|
|
|
(89
|
)
|
Restructuring costs
|
|
|
|
(208
|
)
|
|
|
|
(153
|
)
|
|
|
|
(214
|
)
|
Transaction, separation and integration-related costs
|
|
|
|
(124
|
)
|
|
|
|
(122
|
)
|
|
|
|
(116
|
)
|
Amortization of acquired intangibles
|
|
|
|
(153
|
)
|
|
|
|
(21
|
)
|
|
|
|
(148
|
)
|
Pension and OPEB actuarial and settlement gains (losses)
|
|
|
|
203
|
|
|
|
|
(86
|
)
|
|
|
|
173
|
|
Income (loss) from continuing operations before taxes
|
|
|
$
|
661
|
|
|
|
$
|
(187
|
)
|
|
|
$
|
235
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit margins
|
|
|
|
|
|
|
|
|
|
GBS
|
|
|
|
19.9
|
%
|
|
|
|
13.7
|
%
|
|
|
|
12.4
|
%
|
GIS
|
|
|
|
14.8
|
%
|
|
|
|
12.4
|
%
|
|
|
|
11.4
|
%
|
USPS
|
|
|
|
17.0
|
%
|
|
|
|
-
|
%
|
|
|
|
9.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
(in millions)
|
|
|
March 31, 2018
|
|
|
Historical CSC
March 31, 2017
|
|
|
Pro Forma
Combined Company
March 31, 2017
|
GBS profit
|
|
|
$
|
1,563
|
|
|
|
$
|
492
|
|
|
|
$
|
1,156
|
|
GIS profit
|
|
|
|
1,699
|
|
|
|
|
306
|
|
|
|
|
1,325
|
|
USPS profit
|
|
|
|
417
|
|
|
|
|
-
|
|
|
|
|
310
|
|
All other loss
|
|
|
|
(180
|
)
|
|
|
|
(180
|
)
|
|
|
|
(461
|
)
|
Interest income
|
|
|
|
89
|
|
|
|
|
35
|
|
|
|
|
81
|
|
Interest expense
|
|
|
|
(335
|
)
|
|
|
|
(117
|
)
|
|
|
|
(342
|
)
|
Restructuring costs
|
|
|
|
(803
|
)
|
|
|
|
(238
|
)
|
|
|
|
(860
|
)
|
Transaction, separation and integration-related costs
|
|
|
|
(408
|
)
|
|
|
|
(308
|
)
|
|
|
|
(398
|
)
|
Amortization of acquired intangibles
|
|
|
|
(591
|
)
|
|
|
|
(77
|
)
|
|
|
|
(576
|
)
|
Pension and OPEB actuarial and settlement gains (losses)
|
|
|
|
220
|
|
|
|
|
(87
|
)
|
|
|
|
(25
|
)
|
Income (loss) from continuing operations before taxes
|
|
|
$
|
1,671
|
|
|
|
$
|
(174
|
)
|
|
|
$
|
210
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit margins
|
|
|
|
|
|
|
|
|
|
GBS
|
|
|
|
16.9
|
%
|
|
|
|
11.8
|
%
|
|
|
|
12.1
|
%
|
GIS
|
|
|
|
13.6
|
%
|
|
|
|
8.9
|
%
|
|
|
|
10.2
|
%
|
USPS
|
|
|
|
14.8
|
%
|
|
|
|
-
|
|
|
|
|
10.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
We present non-GAAP financial measures of performance which are derived
from the unaudited condensed consolidated statements of operations and
unaudited pro forma combined company statement of operations of DXC.
These non-GAAP financial measures include earnings before interest and
taxes ("EBIT"), EBIT margin, adjusted EBIT, adjusted EBIT margin,
non-GAAP income before income taxes, non-GAAP net income, non-GAAP EPS
and adjusted free cash flow.
We present these non-GAAP financial measures to provide investors with
meaningful supplemental financial information, in addition to the
financial information presented on a GAAP or pro forma combined company
basis. Non-GAAP financial measures exclude certain items from GAAP and
pro forma combined company results which DXC management believes are not
indicative of core operating performance. DXC management believes these
non-GAAP measures provide investors supplemental information about the
financial performance of DXC exclusive of the impacts of corporate wide
strategic decisions. DXC management believes that adjusting for these
items provides investors with additional measures to evaluate the
financial performance of our core business operations on a comparable
basis from period to period. DXC management believes the non-GAAP
measures provided are also considered important measures by financial
analysts covering DXC as equity research analysts continue to publish
estimates and research notes based on our non-GAAP commentary, including
our guidance around non-GAAP EPS.
There are limitations to the use of the non-GAAP financial measures
presented in this report. One of the limitations is that they do not
reflect complete financial results. We compensate for this limitation by
providing a reconciliation between our non-GAAP financial measures and
the respective most directly comparable financial measure calculated and
presented in accordance with GAAP or on a pro forma combined company
basis. Additionally, other companies, including companies in our
industry, may calculate non-GAAP financial measures differently than we
do, limiting the usefulness of those measures for comparative purposes
between companies.
Reconciliation of Non-GAAP Financial Measures
Non-GAAP adjustments to our performance measures include:
-
Restructuring costs - reflects restructuring costs, net of reversals,
related to workforce optimization and real estate charges.
-
Transaction, separation and integration-related costs - reflects costs
related to integration planning, financing, and advisory fees
associated with the merger and other acquisitions and costs related to
the separation of USPS.
-
Amortization of acquired intangible assets - reflects amortization of
intangible assets acquired through business combinations.
-
Pension and OPEB actuarial and settlement gains and losses - reflects
pension and OPEB actuarial and settlement gains and losses.
-
Certain overhead costs - reflects certain fiscal 2017 HPE costs
allocated to HPES that are expected to be largely eliminated on a
prospective basis.
-
Tax adjustment - reflects the estimated special benefit of the Tax
Cuts and Jobs Act of 2017 for fiscal 2018 periods and the application
of an approximate 27.5% pro forma tax rate for fiscal 2017 periods,
which is the midpoint of prospective targeted effective tax rate range
of 25% to 30% and effectively excludes the impact of discrete tax
adjustments for those periods.
EBIT and Adjusted EBIT
Reconciliations of net income (loss) and pro forma net income (loss) to
adjusted EBIT and pro forma adjusted EBIT are as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
(in millions)
|
|
|
March 31, 2018
|
|
|
Pro Forma
Combined Company
March 31, 2017
|
|
|
March 31, 2018
|
|
|
Pro Forma
Combined Company
March 31, 2017
|
Net income (loss)
|
|
|
$
|
565
|
|
|
|
$
|
255
|
|
|
|
$
|
1,782
|
|
|
|
$
|
(23
|
)
|
Income tax expense (benefit)
|
|
|
|
96
|
|
|
|
|
(20
|
)
|
|
|
|
(111
|
)
|
|
|
|
233
|
|
Interest income
|
|
|
|
(30
|
)
|
|
|
|
(22
|
)
|
|
|
|
(89
|
)
|
|
|
|
(81
|
)
|
Interest expense
|
|
|
|
104
|
|
|
|
|
89
|
|
|
|
|
335
|
|
|
|
|
342
|
|
EBIT
|
|
|
|
735
|
|
|
|
|
302
|
|
|
|
|
1,917
|
|
|
|
|
471
|
|
Restructuring costs
|
|
|
|
208
|
|
|
|
|
214
|
|
|
|
|
803
|
|
|
|
|
860
|
|
Transaction, separation and integration-related costs
|
|
|
|
124
|
|
|
|
|
116
|
|
|
|
|
408
|
|
|
|
|
398
|
|
Amortization of acquired intangible assets
|
|
|
|
153
|
|
|
|
|
148
|
|
|
|
|
591
|
|
|
|
|
576
|
|
Pension and OPEB actuarial and settlement (gains) losses
|
|
|
|
(203
|
)
|
|
|
|
(173
|
)
|
|
|
|
(220
|
)
|
|
|
|
25
|
|
Certain overhead costs
|
|
|
|
-
|
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
115
|
|
Adjusted EBIT
|
|
|
$
|
1,017
|
|
|
|
$
|
615
|
|
|
|
$
|
3,499
|
|
|
|
$
|
2,445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT margin
|
|
|
|
16.2
|
%
|
|
|
|
10.2
|
%
|
|
|
|
14.2
|
%
|
|
|
|
9.6
|
%
|
EBIT margin
|
|
|
|
11.7
|
%
|
|
|
|
5.0
|
%
|
|
|
|
7.8
|
%
|
|
|
|
1.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow
A reconciliation of net cash provided by operating activities to
adjusted free cash flow is as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Twelve Months Ended
|
(in millions)
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
|
|
March 31, 2018
|
|
|
March 31, 2017
|
Net cash provided by operating activities
|
|
|
$
|
701
|
|
|
|
$
|
173
|
|
|
|
$
|
3,243
|
|
|
|
$
|
978
|
|
Net cash used in investing activities(1)
|
|
|
|
(246
|
)
|
|
|
|
(84
|
)
|
|
|
|
(26
|
)
|
|
|
|
(840
|
)
|
Acquisitions, net of cash acquired
|
|
|
|
46
|
|
|
|
|
-
|
|
|
|
|
(735
|
)
|
|
|
|
434
|
|
Business dispositions
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
|
|
|
-
|
|
|
|
|
(3
|
)
|
Payments on capital leases and other long-term asset financings
|
|
|
|
(328
|
)
|
|
|
|
(26
|
)
|
|
|
|
(1,060
|
)
|
|
|
|
(145
|
)
|
Payments on transaction, separation and integration-related costs
|
|
|
|
80
|
|
|
|
|
70
|
|
|
|
|
284
|
|
|
|
|
268
|
|
Payments on restructuring costs
|
|
|
|
223
|
|
|
|
|
56
|
|
|
|
|
792
|
|
|
|
|
141
|
|
Sale of accounts receivables, net DPP
|
|
|
|
(15
|
)
|
|
|
|
18
|
|
|
|
|
(19
|
)
|
|
|
|
(223
|
)
|
Sale of USPS accounts receivable
|
|
|
|
96
|
|
|
|
|
-
|
|
|
|
|
(52
|
)
|
|
|
|
-
|
|
Adjusted free cash flow
|
|
|
$
|
557
|
|
|
|
$
|
204
|
|
|
|
$
|
2,427
|
|
|
|
$
|
610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes capital expenditures financed
through our lease credit facility.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results
|
|
A reconciliation of reported results to non-GAAP results is as
follows:
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
(in millions, except per-share amounts)
|
|
|
As Reported
|
|
|
Restructuring Costs
|
|
|
Transaction, Separation and Integration- Related
Costs
|
|
|
Amortization of Acquired Intangible Assets
|
|
|
Pension and OPEB Actuarial and Settlement Gains
|
|
|
Tax Adjustment
|
|
|
Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
$
|
4,323
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
$
|
192
|
|
|
|
$
|
-
|
|
|
|
$
|
4,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
453
|
|
|
|
|
-
|
|
|
|
|
(124
|
)
|
|
|
|
-
|
|
|
|
11
|
|
|
|
|
-
|
|
|
|
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
$
|
661
|
|
|
|
$
|
208
|
|
|
|
$
|
124
|
|
|
|
$
|
153
|
|
|
$
|
(203
|
)
|
|
|
$
|
-
|
|
|
|
$
|
943
|
|
Income tax expense
|
|
|
96
|
|
|
|
63
|
|
|
|
27
|
|
|
|
|
45
|
|
|
(42
|
)
|
|
|
88
|
|
|
|
277
|
|
Net income
|
|
|
$
|
565
|
|
|
|
$
|
145
|
|
|
|
$
|
97
|
|
|
|
$
|
108
|
|
|
$
|
(161
|
)
|
|
|
$
|
(88
|
)
|
|
|
$
|
666
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
5
|
|
Net income attributable to DXC common stockholders
|
|
|
$
|
560
|
|
|
|
$
|
145
|
|
|
|
$
|
97
|
|
|
|
$
|
108
|
|
|
$
|
(161
|
)
|
|
|
$
|
(88
|
)
|
|
|
$
|
661
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
$
|
1.96
|
|
|
|
$
|
0.51
|
|
|
|
$
|
0.34
|
|
|
|
$
|
0.38
|
|
|
$
|
(0.56
|
)
|
|
|
$
|
(0.31
|
)
|
|
|
$
|
2.31
|
|
Diluted EPS
|
|
|
$
|
1.93
|
|
|
|
$
|
0.50
|
|
|
|
$
|
0.33
|
|
|
|
$
|
0.37
|
|
|
$
|
(0.55
|
)
|
|
|
$
|
(0.30
|
)
|
|
|
$
|
2.28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
285.64
|
|
|
|
285.64
|
|
|
|
285.64
|
|
|
|
|
285.64
|
|
|
285.64
|
|
|
|
285.64
|
|
|
|
285.64
|
|
Diluted EPS
|
|
|
290.20
|
|
|
|
290.20
|
|
|
|
290.20
|
|
|
|
|
290.20
|
|
|
290.20
|
|
|
|
290.20
|
|
|
|
290.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended March 31, 2018
|
(in millions, except per-share amounts)
|
|
|
As Reported
|
|
|
Restructuring Costs
|
|
|
Transaction, Separation and Integration- Related
Costs
|
|
|
Amortization of Acquired Intangible
Assets
|
|
|
Pension and OPEB Actuarial and
Settlement Gains
|
|
|
Tax Adjustment
|
|
|
Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
$
|
17,944
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
192
|
|
|
|
$
|
-
|
|
|
|
$
|
18,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
2,010
|
|
|
|
|
-
|
|
|
|
|
(408
|
)
|
|
|
|
-
|
|
|
|
|
28
|
|
|
|
|
-
|
|
|
|
|
1,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
$
|
1,671
|
|
|
|
$
|
803
|
|
|
|
$
|
408
|
|
|
|
$
|
591
|
|
|
|
$
|
(220
|
)
|
|
|
$
|
-
|
|
|
|
$
|
3,253
|
|
Income tax expense
|
|
|
(111
|
)
|
|
|
206
|
|
|
|
117
|
|
|
|
193
|
|
|
|
(45
|
)
|
|
|
|
561
|
|
|
|
921
|
|
Net income
|
|
|
$
|
1,782
|
|
|
|
$
|
597
|
|
|
|
$
|
291
|
|
|
|
$
|
398
|
|
|
|
$
|
(175
|
)
|
|
|
$
|
(561
|
)
|
|
|
$
|
2,332
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
31
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
31
|
|
Net income attributable to DXC common stockholders
|
|
|
$
|
1,751
|
|
|
|
$
|
597
|
|
|
|
$
|
291
|
|
|
|
$
|
398
|
|
|
|
$
|
(175
|
)
|
|
|
$
|
(561
|
)
|
|
|
$
|
2,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
(6.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
$
|
6.15
|
|
|
|
$
|
2.10
|
|
|
|
$
|
1.02
|
|
|
|
$
|
1.40
|
|
|
|
$
|
(0.61
|
)
|
|
|
$
|
(1.97
|
)
|
|
|
$
|
8.08
|
|
Diluted EPS
|
|
|
$
|
6.04
|
|
|
|
$
|
2.06
|
|
|
|
$
|
1.00
|
|
|
|
$
|
1.37
|
|
|
|
$
|
(0.60
|
)
|
|
|
$
|
(1.94
|
)
|
|
|
$
|
7.94
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
284.93
|
|
|
|
284.93
|
|
|
|
284.93
|
|
|
|
284.93
|
|
|
|
284.93
|
|
|
|
|
284.93
|
|
|
|
284.93
|
|
Diluted EPS
|
|
|
289.77
|
|
|
|
289.77
|
|
|
|
289.77
|
|
|
|
289.77
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
289.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A reconciliation of pro forma combined results to pro forma
non-GAAP results is as follows:
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
(in millions, except per-share amounts)
|
|
|
Pro Forma Combined Company
|
|
|
Restructuring Costs
|
|
|
Transaction, Separation and Integration- Related
Costs
|
|
|
Amortization of Acquired Intangible
Assets
|
|
|
Pension and OPEB Actuarial and Settlement Gains
|
|
|
Certain Overhead Costs
|
|
|
Tax Adjustment
|
|
|
Pro Forma Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
$
|
4,344
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
126
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
4,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
591
|
|
|
|
|
-
|
|
|
|
|
(116
|
)
|
|
|
|
-
|
|
|
|
|
47
|
|
|
|
|
(8
|
)
|
|
|
|
-
|
|
|
|
|
514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
$
|
235
|
|
|
|
$
|
214
|
|
|
|
$
|
116
|
|
|
|
$
|
148
|
|
|
|
$
|
(173
|
)
|
|
|
$
|
8
|
|
|
|
$
|
-
|
|
|
|
$
|
548
|
|
Income tax (benefit) expense
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
170
|
|
|
|
150
|
|
Net income
|
|
|
$
|
255
|
|
|
|
$
|
214
|
|
|
|
$
|
116
|
|
|
|
$
|
148
|
|
|
|
$
|
(173
|
)
|
|
|
$
|
8
|
|
|
|
$
|
(170
|
)
|
|
|
$
|
398
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
11
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11
|
|
Net income (loss) attributable to DXC common stockholders
|
|
|
$
|
244
|
|
|
|
$
|
214
|
|
|
|
$
|
116
|
|
|
|
$
|
148
|
|
|
|
$
|
(173
|
)
|
|
|
$
|
8
|
|
|
|
$
|
(170
|
)
|
|
|
$
|
387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
(8.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
$
|
0.86
|
|
|
|
$
|
0.76
|
|
|
|
$
|
0.41
|
|
|
|
$
|
0.52
|
|
|
|
$
|
(0.61
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.60
|
)
|
|
|
$
|
1.37
|
|
Diluted EPS
|
|
|
$
|
0.85
|
|
|
|
$
|
0.74
|
|
|
|
$
|
0.40
|
|
|
|
$
|
0.51
|
|
|
|
$
|
(0.60
|
)
|
|
|
$
|
0.03
|
|
|
|
$
|
(0.59
|
)
|
|
|
$
|
1.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
Diluted EPS
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
287.68
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended March 31, 2017
|
(in millions, except per-share amounts)
|
|
|
Pro Forma Combined Company
|
|
|
Restructuring Costs
|
|
|
Transaction, Separation and Integration- Related
Costs
|
|
|
Amortization of Acquired Intangible
Assets
|
|
|
Pension and OPEB Actuarial and Settlement Losses
|
|
|
Certain Overhead Costs
|
|
|
Tax Adjustment
|
|
|
Pro Forma Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
$
|
18,999
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
(24
|
)
|
|
|
$
|
-
|
|
|
|
$
|
-
|
|
|
|
$
|
18,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
2,638
|
|
|
|
|
-
|
|
|
|
|
(398
|
)
|
|
|
|
-
|
|
|
|
|
(1
|
)
|
|
|
|
(115
|
)
|
|
|
|
-
|
|
|
|
|
2,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
$
|
210
|
|
|
|
$
|
860
|
|
|
|
$
|
398
|
|
|
|
$
|
576
|
|
|
|
$
|
25
|
|
|
|
$
|
115
|
|
|
|
$
|
-
|
|
|
|
$
|
2,184
|
|
Income tax expense
|
|
|
233
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
367
|
|
|
|
600
|
|
Net (loss) income
|
|
|
$
|
(23
|
)
|
|
|
$
|
860
|
|
|
|
$
|
398
|
|
|
|
$
|
576
|
|
|
|
$
|
25
|
|
|
|
$
|
115
|
|
|
|
$
|
(367
|
)
|
|
|
$
|
1,584
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
28
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
28
|
|
Net (loss) income attributable to DXC common stockholders
|
|
|
$
|
(51
|
)
|
|
|
$
|
860
|
|
|
|
$
|
398
|
|
|
|
$
|
576
|
|
|
|
$
|
25
|
|
|
|
$
|
115
|
|
|
|
$
|
(367
|
)
|
|
|
$
|
1,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
111.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
$
|
(0.18
|
)
|
|
|
$
|
3.04
|
|
|
|
$
|
1.41
|
|
|
|
$
|
2.03
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.41
|
|
|
|
$
|
(1.30
|
)
|
|
|
$
|
5.50
|
|
Diluted EPS
|
|
|
$
|
(0.18
|
)
|
|
|
$
|
3.00
|
|
|
|
$
|
1.39
|
|
|
|
$
|
2.01
|
|
|
|
$
|
0.09
|
|
|
|
$
|
0.40
|
|
|
|
$
|
(1.28
|
)
|
|
|
$
|
5.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
|
|
283.16
|
|
Diluted EPS
|
|
|
283.16
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
287.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180524006311/en/
[ Back To TMCnet.com's Homepage ]
|