[February 08, 2018] |
|
DXC Technology Delivers Third Quarter Growth in Earnings per Share, Margins, and Cash Flow
DXC
Technology Company (NYSE: DXC) today reported results for the third
quarter of fiscal year 2018, representing the period from October 1
through December 31, 2017.
"DXC continued to execute on our strategic roadmap during the third
quarter, during which the company delivered year-over-year and
sequential growth in earnings per share, margins and cash flow," said
Mike Lawrie,
chairman, president and CEO of DXC Technology. "Revenue was up
sequentially, reflecting strong project sales in the quarter. We are
also on track to achieve our year-one cost savings targets. The
separation of our U.S. Public Sector business and combination with
Vencore and KeyPoint Government Solutions continues to progress with the
filing of the Form 10 with the U.S. Securities and Exchange Commission."
Financial Highlights - Third Quarter Fiscal 2018
-
Diluted earnings per share was $2.68 in the third quarter, including
$(0.56) per share of restructuring costs, $0.05 per share of pension
and OPEB actuarial and settlement gains, $(0.23) per share of
transaction and integration-related costs, $(0.36) per share of
amortization of acquired intangible assets and $1.63 per share of tax
adjustment related to U.S. tax reform. This compares with $0.21 in the
year ago period.
-
Non-GAAP diluted earnings per share was $2.15.
-
Income before income taxes was $438 million in the third quarter,
including $(213) million of restructuring costs, $17 million of
pension and OPEB actuarial and settlement gains, $(94) million of
transaction and integration-related costs, and $(149) million of
amortization of acquired intangibles. This compares with $50 million
in the year ago period.
-
Non-GAAP income before income taxes was $877 million compared with
$589 million in the year ago period on a pro forma combined company
basis.
-
Net income was $779 million for the third quarter, including $(161)
million of restructuring costs, $14 million of pension and OPEB
actuarial and settlement gains, $(68) million of transaction and
integration-related costs, $(104) million of amortization of acquired
intangibles and $473 million of tax adjustment related to U.S. tax
reform. This compares with $37 million in the prior year period.
-
Adjusted EBIT was $927 million in the third quarter compared with $626
million in the prior year on a pro forma combined company basis.
Adjusted EBIT margin was 15.0% compared with 9.5% in the year ago
quarter which is presented on a pro forma combined company basis.
-
Net cash provided by operating activities was $999 million in the
third quarter, compared with $563 million in the year ago period.
-
Adjusted free cash flow was $686 million in the third quarter.
Global Business Services (GBS)
GBS revenue was $2,315 million in the quarter as compared to $1,046
million for the prior year. Excluding the impact of purchase price
accounting, GBS revenue decreased 6.6% year-over-year in constant
currency on a pro forma combined company basis, reflecting headwinds in
traditional application services, partially offset by growth in our
Enterprise Applications and Business Process Services businesses. GBS
profit margin in the quarter was 18.6%, up from 13.9% in the prior year
on a pro forma combined company basis, reflecting ongoing cost actions
in the business. New business awards for GBS were $3.3 billion in the
third quarter.
Global Infrastructure Services (GIS)
GIS revenue was $3,145 million in the quarter as compared to $871
million for the prior year. Excluding the impact of purchase price
accounting, GIS revenue decreased 6.8% year-over-year in constant
currency on a pro forma combined company basis. The GIS revenue reflects
headwinds in the legacy infrastructure business, partially offset by
client transformations leveraging digital offerings in Cloud and
Security. GIS profit margin in the quarter was 14.7%, up from 9.5% in
the prior year on a pro forma combined company basis, reflecting cost
actions and process automation. New business awards for GIS were $2.2
billion in the third quarter.
United States Public Sector (USPS)
USPS revenue was $726 million in the quarter. Excluding the impact of
purchase price accounting, USPS revenue decreased 11.9% year-over-year
on a pro forma combined company basis, reflecting the benefit of a large
one-time contract reset during the third quarter last year. USPS profit
margin in the quarter was 15.2%, up from 11.6% in the prior year on a
pro forma combined company basis, reflecting ongoing cost actions in the
business. New business awards for USPS were $527 million in the third
quarter.
Returning Capital to Shareholders
During the third quarter, DXC Technology returned $51 million to
shareholders consisting of common stock dividends.
Earnings Conference Call
DXC Technology senior management will host a conference call to discuss
these results today at 5 p.m. EST. The dial-in number for domestic
callers is 888-394-8218. Callers who reside outside of the United States
or Canada should dial +1-323-794-2149. The passcode for all participants
is 5950692. The webcast 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 February 15, 2018. Replay
numbers can be found at the following link.
The replay passcode is also 5950692.
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"), 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, helping clients harness the power of innovation to
thrive on change. Created by the merger of CSC and the Enterprise
Services business of Hewlett Packard Enterprise, DXC Technology serves
nearly 6,000 private and public sector clients across 70 countries. The
company's technology independence, global talent and extensive partner
network combine to deliver powerful next-generation IT services and
solutions. DXC Technology is recognized among the best corporate
citizens globally. For more information, visit DXC Technology's website
at www.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 and September 30, 2017 and any updating information in subsequent
SEC filings, including DXC's upcoming Form 10-Q for the quarter ended
December 31, 2017. 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.
|
Condensed Consolidated Statements of Operations
|
(preliminary and unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Nine Months Ended
|
(in millions, except per-share amounts)
|
|
|
|
December 31, 2017
|
|
|
|
December 30, 2016
|
|
|
|
December 31, 2017
|
|
|
|
December 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
$
|
6,186
|
|
|
|
|
$
|
1,917
|
|
|
|
|
$
|
18,262
|
|
|
|
|
$
|
5,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services
|
|
|
|
|
4,521
|
|
|
|
|
|
1,347
|
|
|
|
|
|
13,621
|
|
|
|
|
|
4,131
|
|
Selling, general and administrative
|
|
|
|
|
475
|
|
|
|
|
|
333
|
|
|
|
|
|
1,557
|
|
|
|
|
|
931
|
|
Depreciation and amortization
|
|
|
|
|
481
|
|
|
|
|
|
161
|
|
|
|
|
|
1,379
|
|
|
|
|
|
494
|
|
Restructuring costs
|
|
|
|
|
213
|
|
|
|
|
|
3
|
|
|
|
|
|
595
|
|
|
|
|
|
85
|
|
Interest expense
|
|
|
|
|
77
|
|
|
|
|
|
33
|
|
|
|
|
|
231
|
|
|
|
|
|
87
|
|
Interest income
|
|
|
|
|
(27
|
)
|
|
|
|
|
(8
|
)
|
|
|
|
|
(59
|
)
|
|
|
|
|
(26
|
)
|
Other expense (income), net
|
|
|
|
|
8
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
(72
|
)
|
|
|
|
|
3
|
|
Total costs and expenses
|
|
|
|
|
5,748
|
|
|
|
|
|
1,867
|
|
|
|
|
|
17,252
|
|
|
|
|
|
5,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
438
|
|
|
|
|
|
50
|
|
|
|
|
|
1,010
|
|
|
|
|
|
13
|
|
Income tax (benefit) expense
|
|
|
|
|
(341
|
)
|
|
|
|
|
13
|
|
|
|
|
|
(207
|
)
|
|
|
|
|
(25
|
)
|
Net income
|
|
|
|
|
779
|
|
|
|
|
|
37
|
|
|
|
|
|
1,217
|
|
|
|
|
|
38
|
|
Less: net income attributable to non-controlling interest, net of tax
|
|
|
|
|
3
|
|
|
|
|
|
6
|
|
|
|
|
|
26
|
|
|
|
|
|
13
|
|
Net income attributable to DXC common stockholders
|
|
|
|
$
|
776
|
|
|
|
|
$
|
31
|
|
|
|
|
$
|
1,191
|
|
|
|
|
$
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
$
|
2.72
|
|
|
|
|
$
|
0.22
|
|
|
|
|
$
|
4.18
|
|
|
|
|
$
|
0.18
|
|
Diluted:
|
|
|
|
$
|
2.68
|
|
|
|
|
$
|
0.21
|
|
|
|
|
$
|
4.11
|
|
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividend per common share
|
|
|
|
$
|
0.18
|
|
|
|
|
$
|
0.14
|
|
|
|
|
$
|
0.54
|
|
|
|
|
$
|
0.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
|
285.38
|
|
|
|
|
|
140.88
|
|
|
|
|
|
284.70
|
|
|
|
|
|
140.13
|
|
Diluted EPS
|
|
|
|
|
289.77
|
|
|
|
|
|
144.81
|
|
|
|
|
|
289.53
|
|
|
|
|
|
143.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Consolidated Balance Sheet Data
|
(preliminary and unaudited)
|
|
|
|
|
|
|
|
|
|
As of
|
(in millions)
|
|
|
|
December 31, 2017
|
|
|
|
March 31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
2,926
|
|
|
|
$
|
1,263
|
Receivables, net
|
|
|
|
|
5,611
|
|
|
|
|
1,643
|
Prepaid expenses
|
|
|
|
|
540
|
|
|
|
|
223
|
Other current assets
|
|
|
|
|
444
|
|
|
|
|
118
|
Total current assets
|
|
|
|
|
9,521
|
|
|
|
|
3,247
|
|
|
|
|
|
|
|
|
|
Intangible assets, net
|
|
|
|
|
7,927
|
|
|
|
|
1,794
|
Goodwill
|
|
|
|
|
9,320
|
|
|
|
|
1,855
|
Deferred income taxes, net
|
|
|
|
|
458
|
|
|
|
|
381
|
Property and equipment, net
|
|
|
|
|
3,812
|
|
|
|
|
903
|
Other assets
|
|
|
|
|
2,544
|
|
|
|
|
483
|
Total Assets
|
|
|
|
$
|
33,582
|
|
|
|
$
|
8,663
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt
|
|
|
|
$
|
2,173
|
|
|
|
$
|
738
|
Accounts payable
|
|
|
|
|
1,510
|
|
|
|
|
410
|
Accrued payroll and related costs
|
|
|
|
|
813
|
|
|
|
|
248
|
Accrued expenses and other current liabilities
|
|
|
|
|
3,403
|
|
|
|
|
998
|
Deferred revenue and advance contract payments
|
|
|
|
|
1,524
|
|
|
|
|
518
|
Income taxes payable
|
|
|
|
|
215
|
|
|
|
|
38
|
Total current liabilities
|
|
|
|
|
9,638
|
|
|
|
|
2,950
|
|
|
|
|
|
|
|
|
|
Long-term debt, net of current maturities
|
|
|
|
|
6,367
|
|
|
|
|
2,225
|
Non-current deferred revenue
|
|
|
|
|
856
|
|
|
|
|
286
|
Non-current income tax liabilities and deferred tax liabilities
|
|
|
|
|
1,523
|
|
|
|
|
423
|
Other long-term liabilities
|
|
|
|
|
1,996
|
|
|
|
|
613
|
Total Liabilities
|
|
|
|
|
20,380
|
|
|
|
|
6,497
|
|
|
|
|
|
|
|
|
|
Total Equity
|
|
|
|
|
13,202
|
|
|
|
|
2,166
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
|
|
$
|
33,582
|
|
|
|
$
|
8,663
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
(preliminary and unaudited)
|
|
|
|
|
|
Nine Months Ended
|
(in millions)
|
|
|
|
December 31, 2017
|
|
|
|
December 30, 2016
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
1,217
|
|
|
|
|
$
|
38
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
1,387
|
|
|
|
|
|
503
|
|
Share-based compensation
|
|
|
|
|
76
|
|
|
|
|
|
56
|
|
(Gain) on dispositions
|
|
|
|
|
-
|
|
|
|
|
|
(1
|
)
|
Unrealized foreign currency exchange losses
|
|
|
|
|
44
|
|
|
|
|
|
20
|
|
Other non-cash charges, net
|
|
|
|
|
23
|
|
|
|
|
|
16
|
|
Changes in assets and liabilities, net of effects of acquisitions
and dispositions:
|
|
|
|
|
|
|
|
|
Increase in assets
|
|
|
|
|
167
|
|
|
|
|
|
296
|
|
Decrease in liabilities
|
|
|
|
|
(372
|
)
|
|
|
|
|
(123
|
)
|
Net cash provided by operating activities
|
|
|
|
|
2,542
|
|
|
|
|
|
805
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
(175
|
)
|
|
|
|
|
(199
|
)
|
Payments for outsourcing contract costs
|
|
|
|
|
(259
|
)
|
|
|
|
|
(59
|
)
|
Software purchased and developed
|
|
|
|
|
(157
|
)
|
|
|
|
|
(124
|
)
|
Cash acquired through Merger
|
|
|
|
|
974
|
|
|
|
|
|
-
|
|
Payments for acquisitions, net of cash acquired
|
|
|
|
|
(193
|
)
|
|
|
|
|
(434
|
)
|
Proceeds from sale of assets
|
|
|
|
|
29
|
|
|
|
|
|
26
|
|
Other investing activities, net
|
|
|
|
|
(6
|
)
|
|
|
|
|
(35
|
)
|
Net cash provided by (used in) investing activities
|
|
|
|
|
213
|
|
|
|
|
|
(825
|
)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Borrowings of commercial paper
|
|
|
|
|
1,822
|
|
|
|
|
|
1,667
|
|
Repayments of commercial paper
|
|
|
|
|
(1,706
|
)
|
|
|
|
|
(1,562
|
)
|
Borrowings under lines of credit
|
|
|
|
|
-
|
|
|
|
|
|
920
|
|
Repayment of borrowings under lines of credit
|
|
|
|
|
(335
|
)
|
|
|
|
|
(773
|
)
|
Borrowings on long-term debt, net of discount
|
|
|
|
|
621
|
|
|
|
|
|
157
|
|
Principal payments on long-term debt
|
|
|
|
|
(2,023
|
)
|
|
|
|
|
(282
|
)
|
Proceeds from bond issuance
|
|
|
|
|
647
|
|
|
|
|
|
-
|
|
Proceeds from stock options and other common stock transactions
|
|
|
|
|
107
|
|
|
|
|
|
47
|
|
Taxes paid related to net share settlements of share-based
compensation awards
|
|
|
|
|
(75
|
)
|
|
|
|
|
(12
|
)
|
Repurchase of common stock
|
|
|
|
|
(66
|
)
|
|
|
|
|
-
|
|
Dividend payments
|
|
|
|
|
(123
|
)
|
|
|
|
|
(59
|
)
|
Other financing activities, net
|
|
|
|
|
(5
|
)
|
|
|
|
|
(31
|
)
|
Net cash (used in) provided by financing activities
|
|
|
|
|
(1,136
|
)
|
|
|
|
|
72
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
|
44
|
|
|
|
|
|
(119
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
|
1,663
|
|
|
|
|
|
(67
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
1,263
|
|
|
|
|
|
1,178
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
2,926
|
|
|
|
|
$
|
1,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 nine months ended December 31, 2016
("pro forma combined company" information) as supplemental information
herein. The following discussion includes comparisons of our unaudited
results of operations for the three and nine months of fiscal 2018 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 merger as if it had
been consummated on April 2, 2016.
CSC reported its results based on a fiscal year convention that
comprised four thirteen-week quarters, while 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, the pro forma combined
company results include the historical unaudited condensed combined
statements of operations of CSC for the three and nine months ended
December 30, 2016 and of HPES for the three and nine months ended
October 31, 2016.
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 and only includes revenue and costs directly
attributable to HPES and an allocation of expenses related to certain
HPE corporate functions and does not necessarily include all expenses
that would have been incurred by HPES had it been a separate,
stand-alone entity and therefore, does not necessarily reflect what
HPES' results of operations would have been had HPES operated as a
stand-alone company during the period presented. 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.
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 preliminary purchase accounting ("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, (ii) factually supportable, and (iii) expected to have a
continuing impact on the consolidated results of operations of DXC. The
pro forma combined company results do not reflect the costs of
integration activities or benefits that may result from realization of
synergies. No assurances of the timing or the amount of cost synergies,
or the costs necessary to achieve those cost synergies, can be provided.
The adjustments to historical results included 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 merger occurred on April 2, 2016, and should not be
taken as being indicative of DXC's future consolidated financial
results. The pro forma combined company results should be read in
conjunction with Exhibit 99.2 of the previously filed to Form 8-K/A that
was filed on June 14, 2017, including the accompanying notes.
Subsequent to the June 14, 2017 8-K/A filing referenced above, we
adjusted the preliminary purchase price allocation and related fair
value estimates, which would have decreased pro forma combined net loss
and loss per common share by $96 million and $0.34, respectively, for
the three months ended December 30, 2016, and $292 million and $1.03,
respectively, for the nine months ended December 30, 2016.
Segment Results
The following tables summarize segment revenue for the three and nine
months ended December 31, 2017 as compared to the three and nine months
ended December 30, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis
|
|
|
|
Pro Forma Combined Company Basis
|
(in millions)
|
|
|
|
Three Months Ended December 31, 2017
|
|
|
|
Historical CSC for the Three Months
Ended December 30, 2016
|
|
|
|
% Change (NC)
|
|
|
|
Three Months Ended December 30, 2016
|
|
|
|
% Change
|
|
|
|
% Adjusted Change in Constant Currency(1)
|
GBS
|
|
|
|
$
|
2,315
|
|
|
|
$
|
1,046
|
|
|
|
-
|
|
|
|
$
|
2,432
|
|
|
|
(4.8
|
)%
|
|
|
|
(6.6
|
)%
|
GIS
|
|
|
|
|
3,145
|
|
|
|
|
871
|
|
|
|
-
|
|
|
|
|
3,327
|
|
|
|
(5.5
|
)%
|
|
|
|
(6.8
|
)%
|
USPS
|
|
|
|
|
726
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
826
|
|
|
|
(12.1
|
)%
|
|
|
|
(11.9
|
)%
|
Total Revenues
|
|
|
|
$
|
6,186
|
|
|
|
$
|
1,917
|
|
|
|
-
|
|
|
|
$
|
6,585
|
|
|
|
(6.1
|
)%
|
|
|
|
(7.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for PPA impact of $6 million
in GBS, $26 million in GIS and $2 million in USPS.
|
(NC) Not comparable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Basis
|
|
|
|
Pro Forma Combined Company Basis
|
(in millions)
|
|
|
|
Nine Months Ended December 31, 2017
|
|
|
|
Historical CSC for the Nine Months Ended December
30, 2016
|
|
|
|
% Change (NC)
|
|
|
|
Nine Months Ended December 30, 2016
|
|
|
|
% Change
|
|
|
|
% Adjusted Change in Constant Currency(1)
|
GBS
|
|
|
|
$
|
6,893
|
|
|
|
$
|
3,130
|
|
|
|
-
|
|
|
|
$
|
7,245
|
|
|
|
(4.9
|
)%
|
|
|
|
(4.9
|
)%
|
GIS
|
|
|
|
|
9,256
|
|
|
|
|
2,588
|
|
|
|
-
|
|
|
|
|
9,906
|
|
|
|
(6.6
|
)%
|
|
|
|
(5.4
|
)%
|
USPS
|
|
|
|
|
2,113
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,207
|
|
|
|
(4.3
|
)%
|
|
|
|
(3.9
|
)%
|
Total Revenues
|
|
|
|
$
|
18,262
|
|
|
|
$
|
5,718
|
|
|
|
-
|
|
|
|
$
|
19,358
|
|
|
|
(5.7
|
)%
|
|
|
|
(5.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted for PPA impact of $32
million in GBS, $134 million in GIS and $8 million in USPS.
|
(NC) Not comparable
|
|
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 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)
|
|
|
|
December 31, 2017
|
|
|
|
Historical CSC December 31, 2016
|
|
|
|
Pro Forma Combined Company December 31,
2016
|
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS profit
|
|
|
|
$
|
431
|
|
|
|
|
$
|
134
|
|
|
|
|
$
|
338
|
|
GIS profit
|
|
|
|
|
463
|
|
|
|
|
|
84
|
|
|
|
|
|
317
|
|
USPS profit
|
|
|
|
|
110
|
|
|
|
|
|
-
|
|
|
|
|
|
96
|
|
All other loss
|
|
|
|
|
(77
|
)
|
|
|
|
|
(42
|
)
|
|
|
|
|
(144
|
)
|
Interest income
|
|
|
|
|
27
|
|
|
|
|
|
8
|
|
|
|
|
|
18
|
|
Interest expense
|
|
|
|
|
(77
|
)
|
|
|
|
|
(33
|
)
|
|
|
|
|
(55
|
)
|
Restructuring costs
|
|
|
|
|
(213
|
)
|
|
|
|
|
(3
|
)
|
|
|
|
|
(214
|
)
|
Pension and OPEB actuarial and settlement gains
|
|
|
|
|
17
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Amortization of acquired intangible assets
|
|
|
|
|
(149
|
)
|
|
|
|
|
(20
|
)
|
|
|
|
|
(119
|
)
|
Transaction and integration-related costs
|
|
|
|
|
(94
|
)
|
|
|
|
|
(78
|
)
|
|
|
|
|
(126
|
)
|
Income before income taxes
|
|
|
|
$
|
438
|
|
|
|
|
$
|
50
|
|
|
|
|
$
|
111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit margins
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS
|
|
|
|
|
18.6
|
%
|
|
|
|
|
12.8
|
%
|
|
|
|
|
13.9
|
%
|
GIS
|
|
|
|
|
14.7
|
%
|
|
|
|
|
9.6
|
%
|
|
|
|
|
9.5
|
%
|
USPS
|
|
|
|
|
15.2
|
%
|
|
|
|
|
-
|
%
|
|
|
|
|
11.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
(in millions)
|
|
|
|
December 31, 2017
|
|
|
|
Historical CSC December 30, 2016
|
|
|
|
Pro Forma Combined Company December 30,
2016
|
Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS profit
|
|
|
|
$
|
1,093
|
|
|
|
|
$
|
349
|
|
|
|
|
$
|
889
|
|
GIS profit
|
|
|
|
|
1,222
|
|
|
|
|
|
201
|
|
|
|
|
|
540
|
|
USPS profit
|
|
|
|
|
296
|
|
|
|
|
|
-
|
|
|
|
|
|
245
|
|
All other loss
|
|
|
|
|
(129
|
)
|
|
|
|
|
(148
|
)
|
|
|
|
|
(465
|
)
|
Interest income
|
|
|
|
|
59
|
|
|
|
|
|
26
|
|
|
|
|
|
59
|
|
Interest expense
|
|
|
|
|
(231
|
)
|
|
|
|
|
(87
|
)
|
|
|
|
|
(232
|
)
|
Restructuring costs
|
|
|
|
|
(595
|
)
|
|
|
|
|
(85
|
)
|
|
|
|
|
(646
|
)
|
Pension and OPEB actuarial and settlement gains
|
|
|
|
|
17
|
|
|
|
|
|
-
|
|
|
|
|
|
(198
|
)
|
Amortization of acquired intangible assets
|
|
|
|
|
(438
|
)
|
|
|
|
|
(56
|
)
|
|
|
|
|
(352
|
)
|
Transaction and integration-related costs
|
|
|
|
|
(284
|
)
|
|
|
|
|
(187
|
)
|
|
|
|
|
(282
|
)
|
Income (loss) before income taxes
|
|
|
|
$
|
1,010
|
|
|
|
|
$
|
13
|
|
|
|
|
$
|
(442
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit margins
|
|
|
|
|
|
|
|
|
|
|
|
|
GBS
|
|
|
|
|
15.9
|
%
|
|
|
|
|
11.2
|
%
|
|
|
|
|
12.3
|
%
|
GIS
|
|
|
|
|
13.2
|
%
|
|
|
|
|
7.8
|
%
|
|
|
|
|
5.5
|
%
|
USPS
|
|
|
|
|
14.0
|
%
|
|
|
|
|
-
|
%
|
|
|
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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"), 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 basis. Non-GAAP financial
measures exclude certain items from GAAP 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
DXC's non-GAAP adjustments to its performance measures include:
-
Restructuring costs - reflects restructuring costs, net of reversals,
related to workforce optimization and real estate charges.
-
Transaction and integration-related costs - reflects costs related to
integration planning, financing, and advisory fees associated with the
merger and other acquisitions.
-
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
|
|
A reconciliation of net income (loss) to EBIT and adjusted EBIT is
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months ended
|
|
|
|
Nine Months Ended
|
(in millions)
|
|
|
|
December 31, 2017
|
|
|
|
Pro Forma Combined Company December
30, 2016
|
|
|
|
December 31, 2017
|
|
|
|
Pro Forma Combined Company December
30, 2016
|
Net income (loss)
|
|
|
|
$
|
779
|
|
|
|
|
$
|
(166
|
)
|
|
|
|
$
|
1,217
|
|
|
|
|
$
|
(570
|
)
|
Income tax (benefit) expense
|
|
|
|
(341
|
)
|
|
|
|
277
|
|
|
|
|
(207
|
)
|
|
|
|
128
|
|
Interest income
|
|
|
|
(27
|
)
|
|
|
|
(18
|
)
|
|
|
|
(59
|
)
|
|
|
|
(59
|
)
|
Interest expense
|
|
|
|
77
|
|
|
|
|
55
|
|
|
|
|
231
|
|
|
|
|
232
|
|
EBIT
|
|
|
|
488
|
|
|
|
|
148
|
|
|
|
|
1,182
|
|
|
|
|
(269
|
)
|
Restructuring costs
|
|
|
|
213
|
|
|
|
|
214
|
|
|
|
|
595
|
|
|
|
|
646
|
|
Transaction and integration-related costs
|
|
|
|
94
|
|
|
|
|
126
|
|
|
|
|
284
|
|
|
|
|
282
|
|
Amortization of acquired intangible assets
|
|
|
|
149
|
|
|
|
|
119
|
|
|
|
|
438
|
|
|
|
|
352
|
|
Pension and OPEB actuarial and settlement (gains) losses
|
|
|
|
(17
|
)
|
|
|
|
-
|
|
|
|
|
(17
|
)
|
|
|
|
198
|
|
Certain overhead costs
|
|
|
|
-
|
|
|
|
|
19
|
|
|
|
|
-
|
|
|
|
|
107
|
|
Adjusted EBIT
|
|
|
|
$
|
927
|
|
|
|
|
$
|
626
|
|
|
|
|
$
|
2,482
|
|
|
|
|
$
|
1,316
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBIT margin
|
|
|
|
15.0
|
%
|
|
|
|
9.5
|
%
|
|
|
|
13.6
|
%
|
|
|
|
6.8
|
%
|
EBIT margin
|
|
|
|
7.9
|
%
|
|
|
|
2.2
|
%
|
|
|
|
6.5
|
%
|
|
|
|
(1.4
|
)%
|
|
|
|
|
|
|
|
|
|
Adjusted Free Cash Flow
|
|
A reconciliation of net cash provided by operating activities to
adjusted free cash flow is as follows:
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
|
|
Three Months Ended December 31, 2017
|
|
|
|
Nine Months Ended December 31, 2017
|
Net cash provided by operating activities
|
|
|
|
$
|
999
|
|
|
|
|
$
|
2,542
|
|
Net cash used in investing activities(1)
|
|
|
|
(217
|
)
|
|
|
|
220
|
|
Acquisitions, net of cash acquired
|
|
|
|
41
|
|
|
|
|
(781
|
)
|
Payments on capital leases and other long-term asset financings
|
|
|
|
(289
|
)
|
|
|
|
(732
|
)
|
Payments on transaction and integration-related costs
|
|
|
|
61
|
|
|
|
|
204
|
|
Payments on restructuring costs
|
|
|
|
176
|
|
|
|
|
569
|
|
Sale of accounts receivables, net DPP
|
|
|
|
(24
|
)
|
|
|
|
(4
|
)
|
Sale of USPS accounts receivables
|
|
|
|
(61
|
)
|
|
|
|
(148
|
)
|
Adjusted free cash flow
|
|
|
|
$
|
686
|
|
|
|
|
$
|
1,870
|
|
|
|
|
(1)
|
|
Excludes capital expenditures financed through our lease credit
facility.
|
|
|
|
|
|
Non-GAAP Performance Measures
|
|
A reconciliation of non-GAAP performance measures to the
respective most directly comparable financial measure calculated
and presented in accordance with GAAP or on a pro forma basis is
as follows:
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2017
|
(in millions, except per-share amounts)
|
|
|
|
As Reported
|
|
|
|
Restructuring Costs
|
|
|
|
Pension and OPEB Actuarial and
Settlement Gains
|
|
|
|
Transaction and Integration- related
Costs
|
|
|
|
Amortization of Acquired Intangible
Assets
|
|
|
|
Tax adjustment
|
|
|
|
Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
|
$
|
4,521
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
4,521
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
475
|
|
|
|
|
-
|
|
|
|
|
17
|
|
|
|
|
(94
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
398
|
|
Income before income taxes
|
|
|
|
438
|
|
|
|
|
213
|
|
|
|
|
(17
|
)
|
|
|
|
94
|
|
|
|
|
149
|
|
|
|
|
-
|
|
|
|
|
877
|
|
Income tax (benefit) expense
|
|
|
|
(341
|
)
|
|
|
|
52
|
|
|
|
|
(3
|
)
|
|
|
|
26
|
|
|
|
|
45
|
|
|
|
|
473
|
|
|
|
|
252
|
|
Net income
|
|
|
|
$
|
779
|
|
|
|
|
$
|
161
|
|
|
|
|
$
|
(14
|
)
|
|
|
|
$
|
68
|
|
|
|
|
$
|
104
|
|
|
|
|
$
|
(473
|
)
|
|
|
|
$
|
625
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
|
3
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
3
|
|
Net income attributable to DXC common stockholders
|
|
|
|
$
|
776
|
|
|
|
|
$
|
161
|
|
|
|
|
$
|
(14
|
)
|
|
|
|
$
|
68
|
|
|
|
|
$
|
104
|
|
|
|
|
$
|
(473
|
)
|
|
|
|
$
|
622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
(77.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
$
|
2.72
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
$
|
0.24
|
|
|
|
|
$
|
0.36
|
|
|
|
|
$
|
(1.66
|
)
|
|
|
|
$
|
2.18
|
|
Diluted EPS
|
|
|
|
$
|
2.68
|
|
|
|
|
$
|
0.56
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
$
|
0.23
|
|
|
|
|
$
|
0.36
|
|
|
|
|
$
|
(1.63
|
)
|
|
|
|
$
|
2.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
|
|
|
285.38
|
|
Diluted EPS
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
289.77
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended December 31, 2017
|
(in millions, except per-share amounts)
|
|
|
|
As Reported
|
|
|
|
Restructuring Costs
|
|
|
|
Pension and OPEB Actuarial and
Settlement Gains
|
|
|
|
Transaction and Integration- related
Costs
|
|
|
|
Amortization of Acquired Intangible
Assets
|
|
|
|
Tax adjustment
|
|
|
|
Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
|
$
|
13,621
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
13,621
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
1,557
|
|
|
|
|
-
|
|
|
|
|
17
|
|
|
|
|
(284
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,290
|
|
Income before income taxes
|
|
|
|
1,010
|
|
|
|
|
595
|
|
|
|
|
(17
|
)
|
|
|
|
284
|
|
|
|
|
438
|
|
|
|
|
-
|
|
|
|
|
2,310
|
|
Income tax (benefit) expense
|
|
|
|
(207
|
)
|
|
|
|
143
|
|
|
|
|
(3
|
)
|
|
|
|
90
|
|
|
|
|
148
|
|
|
|
|
473
|
|
|
|
|
644
|
|
Net income
|
|
|
|
$
|
1,217
|
|
|
|
|
$
|
452
|
|
|
|
|
$
|
(14
|
)
|
|
|
|
$
|
194
|
|
|
|
|
$
|
290
|
|
|
|
|
$
|
(473
|
)
|
|
|
|
$
|
1,666
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
|
26
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
26
|
|
Net income attributable to DXC common stockholders
|
|
|
|
$
|
1,191
|
|
|
|
|
$
|
452
|
|
|
|
|
$
|
(14
|
)
|
|
|
|
$
|
194
|
|
|
|
|
$
|
290
|
|
|
|
|
$
|
(473
|
)
|
|
|
|
$
|
1,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax rate
|
|
|
|
(20.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
$
|
4.18
|
|
|
|
|
$
|
1.59
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
$
|
0.68
|
|
|
|
|
$
|
1.02
|
|
|
|
|
$
|
(1.66
|
)
|
|
|
|
$
|
5.76
|
|
Diluted EPS
|
|
|
|
$
|
4.11
|
|
|
|
|
$
|
1.56
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
$
|
0.67
|
|
|
|
|
$
|
1.00
|
|
|
|
|
$
|
(1.63
|
)
|
|
|
|
$
|
5.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
|
|
|
284.70
|
|
Diluted EPS
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
289.53
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Combined Company Three Months Ended December 30, 2016
|
(in millions, except per-share amounts)
|
|
|
|
Pro Forma Combined Company
|
|
|
|
Restructuring Costs
|
|
|
|
Transaction and Integration- related Costs
|
|
|
|
Amortization of Acquired Intangibles
|
|
|
|
Certain Overhead Costs
|
|
|
|
Tax Adjustment
|
|
|
|
Non-GAAP Results
|
Costs of services (excludes depreciation and amortization and
restructuring costs)
|
|
|
|
$
|
5,015
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
5,015
|
|
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
689
|
|
|
|
|
-
|
|
|
|
|
(126
|
)
|
|
|
|
-
|
|
|
|
|
(19
|
)
|
|
|
|
-
|
|
|
|
|
544
|
|
Income before income taxes
|
|
|
|
111
|
|
|
|
|
214
|
|
|
|
|
126
|
|
|
|
|
119
|
|
|
|
|
19
|
|
|
|
|
-
|
|
|
|
|
589
|
|
Income tax (benefit) expense
|
|
|
|
277
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(112
|
)
|
|
|
|
165
|
|
Net (loss) income
|
|
|
|
$
|
(166
|
)
|
|
|
|
$
|
214
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
119
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
112
|
|
|
|
|
$
|
424
|
|
Less: net income attributable to noncontrolling interest, net of tax
|
|
|
|
8
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
8
|
|
Net (loss) income attributable to DXC common stockholders
|
|
|
|
$
|
(174
|
)
|
|
|
|
$
|
214
|
|
|
|
|
$
|
126
|
|
|
|
|
$
|
119
|
|
|
|
|
$
|
19
|
|
|
|
|
$
|
112
|
|
|
|
|
$
|
416
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
|
249.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
$
|
(0.61
|
)
|
|
|
|
$
|
0.76
|
|
|
|
|
$
|
0.44
|
|
|
|
|
$
|
0.42
|
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.40
|
|
|
|
|
$
|
1.47
|
|
Diluted EPS
|
|
|
|
$
|
(0.61
|
)
|
|
|
|
$
|
0.75
|
|
|
|
|
$
|
0.44
|
|
|
|
|
$
|
0.41
|
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.39
|
|
|
|
|
$
|
1.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
|
|
|
283.16
|
|
Diluted EPS
|
|
|
|
283.16
|
|
|
|
|
287.09
|
|
|
|
|
287.09
|
|
|
|
|
287.09
|
|
|
|
|
287.09
|
|
|
|
|
287.09
|
|
|
|
|
287.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro Forma Combined Company Nine Months Ended December 30, 2016
|
(in millions, except per-share amounts)
|
|
|
|
Pro Forma Combined Company
|
|
|
|
Restructuring Costs
|
|
|
|
Transaction and Integration- related Costs
|
|
|
|
Amortization of Acquired Intangibles
|
|
|
|
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)
|
|
|
|
$
|
15,293
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
(150
|
)
|
|
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
$
|
15,143
|
|
Selling, general, and administrative (excludes depreciation and
amortization and restructuring costs)
|
|
|
|
2,059
|
|
|
|
|
-
|
|
|
|
|
(282
|
)
|
|
|
|
-
|
|
|
|
|
(48
|
)
|
|
|
|
(107
|
)
|
|
|
|
-
|
|
|
|
|
$
|
1,622
|
|
(Loss) income, before income taxes
|
|
|
|
(442
|
)
|
|
|
|
646
|
|
|
|
|
282
|
|
|
|
|
352
|
|
|
|
|
198
|
|
|
|
|
107
|
|
|
|
|
-
|
|
|
|
|
1,143
|
|
Income tax expense
|
|
|
|
128
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
190
|
|
|
|
|
318
|
|
Net (loss) income
|
|
|
|
(570
|
)
|
|
|
|
646
|
|
|
|
|
282
|
|
|
|
|
352
|
|
|
|
|
198
|
|
|
|
|
107
|
|
|
|
|
(190
|
)
|
|
|
|
825
|
|
Less: net income attributable to non-controlling interest, net of tax
|
|
|
|
17
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
17
|
|
Net (loss) income attributable to DXC common stockholders
|
|
|
|
$
|
(587
|
)
|
|
|
|
$
|
646
|
|
|
|
|
$
|
282
|
|
|
|
|
$
|
352
|
|
|
|
|
$
|
198
|
|
|
|
|
$
|
107
|
|
|
|
|
$
|
(190
|
)
|
|
|
|
$
|
808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax Rate
|
|
|
|
(29.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
|
|
$
|
(2.07
|
)
|
|
|
|
$
|
2.28
|
|
|
|
|
$
|
1.00
|
|
|
|
|
$
|
1.24
|
|
|
|
|
$
|
0.70
|
|
|
|
|
$
|
0.38
|
|
|
|
|
$
|
(0.67
|
)
|
|
|
|
$
|
2.85
|
|
Diluted EPS
|
|
|
|
$
|
(2.07
|
)
|
|
|
|
$
|
2.25
|
|
|
|
|
$
|
0.98
|
|
|
|
|
$
|
1.23
|
|
|
|
|
$
|
0.69
|
|
|
|
|
$
|
0.37
|
|
|
|
|
$
|
(0.66
|
)
|
|
|
|
$
|
2.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
286.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180208006407/en/
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