EX-99.1 2 earningsrelease.htm EXHIBIT 99.1 Exhibit






Exhibit 99.1
 
Moved on Business Wire
 
February 7, 2019



DXC Technology Delivers Sequential Growth in
Revenue, Bookings, EBIT and Earnings per Share


Q3 earnings per share from continuing operations was $1.66, including the cumulative impact of certain items of $(0.57) per share, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and a tax adjustment related to the U.S. tax reform
Q3 non-GAAP earnings per share was $2.23
Q3 income from continuing operations was $466 million, including the cumulative impact of certain items of $(160) million, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and a tax adjustment related to the U.S. tax reform
Q3 non-GAAP income from continuing operations was $626 million
Q3 EBIT of $523 million, adjusted for certain items is $840 million and adjusted EBIT margin was 16.2%, compared with 14.6% in the prior year
Q3 net cash from operating activities was $186 million
Q3 adjusted free cash flow was $503 million
Q3 capital returned to shareholders included $54 million in dividends and $797 million in share repurchases

TYSONS, Va. February 7, 2019 - DXC Technology (NYSE: DXC) today reported results for the third quarter of fiscal year 2019, representing the period from October 1 through December 31, 2018.

“In the third quarter, DXC Technology delivered sequential growth in revenue, bookings, EBIT and earnings per share,” said Mike Lawrie, chairman, president and CEO. “We are executing on the accelerated hiring plans we discussed last quarter, and our third-quarter revenue reflects the strong digital bookings from the first half of the year. We continue to invest in growth businesses, including the recently announced acquisition of Luxoft, a global, at-scale digital innovator. During the quarter, we also completed the acquisition of Molina Medicaid Solutions to expand our healthcare position in the Americas, and we acquired BusinessNow and TESM to increase our global reach in ServiceNow.”
 
Financial Highlights - Third Quarter Fiscal 2019
Diluted earnings per share from continuing operations was $1.66 in the third quarter, including $(0.21) per share of restructuring costs, $(0.29) per share of transaction, separation and integration-related costs, $(0.35) per share of amortization of acquired intangible assets, and $0.28 per share of tax adjustment related to U.S. tax reform. This compares with $2.43 in the year ago period.
Non-GAAP diluted earnings per share from continuing operations was $2.23. This compares with $1.86 in the year ago period.
Revenue in the third quarter was $5,178 million. Revenue decreased 5.2% compared with $5,460 million in the prior year, and increased 3.3% compared with $5,013 million in the prior quarter.
Income from continuing operations before income taxes was $469 million in the third quarter, including $(76) million of restructuring costs, $(107) million of transaction, separation and integration-related costs, and $(134) million of amortization of acquired intangibles. This compares with $341 million in the year ago period.
Non-GAAP income from continuing operations before income taxes was $786 million compared with $751 million in the year ago period.
Income from continuing operations was $466 million in the third quarter, including $(58) million of restructuring costs, $(81) million of transaction, separation and integration-related costs, $(98) million of amortization of acquired intangibles, and $77 million of tax adjustment related to U.S. tax reform. This compares with $706 million in the year ago period.

1







Non-GAAP income from continuing operations was $626 million compared with $541 million in the year ago period.
Adjusted EBIT was $840 million in the third quarter compared with $797 million in the prior year. Adjusted EBIT margin was 16.2% compared with 14.6% in the year ago quarter.
Net cash provided by operating activities was $186 million in the third quarter, compared with $910 million in the year ago period.
Adjusted free cash flow was $503 million in the third quarter.

Global Business Services (GBS)
GBS revenue was $2,169 million in the quarter compared with $2,315 million for the prior year. GBS revenue decreased 6.3% year-over-year, driven by the ongoing headwinds in the traditional Applications Services business. GBS profit margin in the quarter was 18.2%, which was roughly flat year-over-year, reflecting the investments DXC is making to drive Digital growth. New business awards for GBS were $2.3 billion in the third quarter.

Global Infrastructure Services (GIS)
GIS revenue was $3,009 million in the quarter compared to $3,145 million for the prior year. GIS revenues decreased 4.3% year-over-year, reflecting the completion of several large transformation projects and the ongoing decline in legacy infrastructure services. GIS profit margin in the quarter was 17.5%, up from 14.3% in the prior year, reflecting actions DXC has taken to drive greater operating efficiencies, including our Bionix automation program, labor pyramid improvements, supply chain actions, and delivery center rationalization. It also reflects the benefit of final milestone achievement on several contracts. New business awards for GIS were $3.4 billion in the third quarter.

Returning Capital to Shareholders
During the third quarter, DXC Technology returned $851 million to shareholders, consisting of $54 million in common stock dividends and $797 million in share repurchases.

Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and webcast to discuss these results today at 5 p.m. EDT. The dial-in number for domestic callers is 888-254-3590. Callers who reside outside of the United States should dial +1-323-994-2093. The passcode for all participants is 6249774. 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 February 14, 2019. The replay dial-in number is 888-203-1112 for domestic callers and +1-719-457-0820 for callers who reside outside of the United States. The replay passcode is also 6249774. A replay of this webcast will also be available on DXC Technology’s Investor Relations website.

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 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, adjusted free cash flow, and non-GAAP results including non-GAAP income from continuing operations before taxes, non-GAAP income from continuing operations and non-GAAP EPS from continuing operations.

About DXC Technology
As the world's leading independent, end-to-end IT services company, DXC Technology (NYSE: DXC) leads digital transformations for clients by modernizing and integrating their mainstream IT, and by deploying digital solutions at scale to produce better business outcomes. The company’s technology independence, global talent, and extensive partner network enable 6,000 private and public-sector clients in 70 countries to thrive on change. DXC is a recognized leader in corporate responsibility. For more information, visit dxc.technology and explore THRIVE, DXC’s digital destination for changemakers and innovators.

2








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 Annual Report on Form 10-K for the fiscal year ended March 31, 2018, and DXC's Form 10-Q for the quarterly periods ended June 30 and September 30, 2018 and any updating information in subsequent SEC filings, including DXC's upcoming Form 10-Q for the quarter ended December 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.






# # #

Contact:
Rich Adamonis, Corporate Media Relations, +1-862-228-3481, radamonis@dxc.com
Jonathan Ford, Investor Relations, +1-703-245-9700, jonathan.ford@dxc.com



3








Condensed Consolidated Statements of Operations
(preliminary and unaudited)
 
 
Three Months Ended
 
Nine Months Ended
(in millions, except per-share amounts)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2018
 
December 31, 2017
 
 
 
 
 
 
 
 
 
Revenues
 
$
5,178

 
$
5,460

 
$
15,473

 
$
16,149

 
 
 
 
 
 
 
 
 
Costs of services
 
3,725

 
4,051

 
11,110

 
12,230

Selling, general and administrative
 
491

 
447

 
1,500

 
1,484

Depreciation and amortization
 
508

 
440

 
1,463

 
1,264

Restructuring costs
 
76

 
210

 
418

 
585

Interest expense
 
81

 
73

 
249

 
220

Interest income
 
(27
)
 
(27
)
 
(92
)
 
(59
)
Other income, net
 
(145
)
 
(75
)
 
(336
)
 
(291
)
Total costs and expenses
 
4,709

 
5,119

 
14,312

 
15,433

 
 
 
 
 
 
 
 
 
Income from continuing operations before income taxes
 
469

 
341

 
1,161

 
716

Income tax expense (benefit)
 
3

 
(365
)
 
205

 
(303
)
Income from continuing operations
 
466

 
706

 
956

 
1,019

Income from discontinued operations, net of tax
 

 
73

 
35

 
198

Net income
 
466

 
779

 
991

 
1,217

Less: net income attributable to non-controlling interest, net of tax
 
4

 
3

 
8

 
26

Net income attributable to DXC common stockholders
 
$
462

 
$
776

 
$
983

 
$
1,191

 
 
 
 
 
 
 
 
 
Income per common share:
 
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
 
     Continuing operations
 
$
1.68

 
$
2.46

 
$
3.38

 
$
3.48

     Discontinued operations
 

 
0.26

 
0.12

 
0.70

 
 
$
1.68

 
$
2.72

 
$
3.50

 
$
4.18

Diluted:
 
 
 
 
 
 
 
 
     Continuing operations
 
$
1.66

 
$
2.43

 
$
3.33

 
$
3.43

     Discontinued operations
 

 
0.25

 
0.12

 
0.68

 
 
$
1.66

 
$
2.68

 
$
3.45

 
$
4.11

 
 
 
 
 
 
 
 
 
Cash dividend per common share
 
$
0.19

 
$
0.18

 
$
0.57

 
$
0.54

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
   Basic EPS
 
275.66

 
285.38

 
280.47

 
284.70

   Diluted EPS
 
278.99

 
289.77

 
284.70

 
289.53



4








Selected Consolidated Balance Sheet Data
(preliminary and unaudited)
 
 
As of
(in millions)
 
December 31, 2018
 
March 31, 2018
Assets
 
 
 
 
Cash and cash equivalents
 
$
2,475

 
$
2,593

Receivables and contract assets, net
 
5,096

 
5,481

Prepaid expenses
 
626

 
496

Other current assets
 
325

 
469

Assets of discontinued operations
 

 
581

Total current assets
 
8,522

 
9,620

 
 
 
 
 
Intangible assets, net
 
6,770

 
7,179

Goodwill
 
7,593

 
7,619

Deferred income taxes, net
 
407

 
373

Property and equipment, net
 
3,186

 
3,363

Other assets
 
2,393

 
2,404

Assets of discontinued operations - non-current
 

 
3,363

Total Assets
 
$
28,871

 
$
33,921

 
 
 
 
 
Liabilities
 
 
 
 
Short-term debt and current maturities of long-term debt
 
$
1,580

 
$
1,918

Accounts payable
 
1,345

 
1,513

Accrued payroll and related costs
 
705

 
744

Accrued expenses and other current liabilities
 
3,228

 
3,120

Deferred revenue and advance contract payments
 
1,542

 
1,641

Income taxes payable
 
122

 
127

Liabilities of discontinued operations
 

 
789

Total current liabilities
 
8,522

 
9,852

 
 
 
 
 
Long-term debt, net of current maturities
 
5,980

 
6,092

Non-current deferred revenue
 
273

 
795

Non-current income tax liabilities and deferred tax liabilities
 
1,171

 
1,166

Other long-term liabilities
 
1,569

 
1,723

Liabilities of discontinued operations - long-term
 

 
456

Total Liabilities
 
17,515

 
20,084

 
 
 
 
 
Total Equity
 
11,356

 
13,837

 
 
 
 
 
Total Liabilities and Equity
 
$
28,871

 
$
33,921



5







Condensed Consolidated Statements of Cash Flows
(preliminary and unaudited)
 
 
Nine Months Ended
(in millions)
 
December 31, 2018
 
December 31, 2017
Cash flows from operating activities:
 
 
 
 
Net income
 
$
991

 
$
1,217

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
1,514

 
1,387

Share-based compensation
 
57

 
76

Gain on dispositions
 
(137
)
 

Unrealized foreign currency exchange (gains) losses
 
(32
)
 
44

Other non-cash charges, net
 
(21
)
 
23

Changes in assets and liabilities, net of effects of acquisitions and dispositions:
 
 
 
 
Increase in assets(1)
 
(1,012
)
 
(365
)
Decrease in liabilities
 
(325
)
 
(372
)
Net cash provided by operating activities
 
1,035

 
2,010

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(219
)
 
(175
)
Payments for transition and transformation contract costs
 
(294
)
 
(259
)
Software purchased and developed
 
(183
)
 
(157
)
Cash acquired through Merger
 

 
974

Payments for acquisitions, net of cash acquired
 
(332
)
 
(193
)
Business dispositions
 
(65
)
 

Cash collections related to deferred purchase price receivable (1)
 
761

 
531

Proceeds from sale of assets
 
283

 
29

Other investing activities, net
 
9

 
20

Net cash (used in) provided by investing activities
 
(40
)
 
770

 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Borrowings of commercial paper
 
1,853

 
1,822

Repayments of commercial paper
 
(1,853
)
 
(1,706
)
Repayment of borrowings under lines of credit
 

 
(335
)
Borrowings on long-term debt, net of discount
 
1,646

 
621

Principal payments on long-term debt
 
(2,619
)
 
(1,291
)
Payments on capital leases and borrowings for asset financing
 
(710
)
 
(732
)
Borrowings for USPS spin transaction
 
1,114

 

Proceeds from bond issuance
 
753

 
647

Proceeds from stock options and other common stock transactions
 
40

 
107

Taxes paid related to net share settlements of share-based compensation awards
 
(52
)
 
(75
)
Repurchase of common stock
 
(1,253
)
 
(66
)
Dividend payments
 
(159
)
 
(123
)
Other financing activities, net
 
57

 
(5
)
Net cash used in financing activities
 
(1,183
)
 
(1,136
)
Effect of exchange rate changes on cash and cash equivalents
 
(66
)
 
44

Net (decrease) increase in cash and cash equivalents
 
(254
)
 
1,688

Cash and cash equivalents at beginning of year
 
2,729

 
1,268

Cash and cash equivalents at end of period
 
$
2,475

 
$
2,956

        

(1) Upon adoption of ASU 2016-15, cash proceeds from the collection of deferred purchase price receivables (DPP) are classified in investing activities in the Company’s consolidated statement of cash flows.  Previously, those proceeds were included in cash flows from operating activities.


6







Segment Results

The following table summarizes segment revenue for the third quarter and first nine months of fiscal 2019 and fiscal 2018:
Segment Revenue
 
 
 
 
 
 
 
 
 
 
Three Months Ended
(in millions)
 
December 31, 2018
 
December 31, 2017
 
% Change
 
% Change in Constant Currency
Global Business Services
 
$
2,169

 
$
2,315

 
(6.3
)%
 
(4.0)%
Global Infrastructure Services
 
3,009

 
3,145

 
(4.3
)%
 
(1.5)%
Total Revenues
 
$
5,178

 
$
5,460

 
(5.2
)%
 
(2.6)%

 
 
Nine Months Ended
(in millions)
 
December 31, 2018
 
December 31, 2017
 
% Change
 
% Change in Constant Currency
Global Business Services
 
$
6,493

 
$
6,893

 
(5.8
)%
 
(5.2)%
Global Infrastructure Services
 
8,980

 
9,256

 
(3.0
)%
 
(2.4)%
Total Revenues
 
$
15,473

 
$
16,149

 
(4.2
)%
 
(3.6)%

Segment Profit

We define segment profit as segment revenue less costs of services, segment selling, general and administrative, depreciation and amortization, and other income (excluding the movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges). 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.

 
 
Three Months Ended
 
Nine Months Ended
(in millions)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2018
 
December 31, 2017
Profit
 
 
 
 
 
 
 
 
GBS profit
 
$
395

 
$
423

 
$
1,198

 
$
1,066

GIS profit
 
528

 
450

 
1,475

 
1,171

All other loss
 
(83
)
 
(76
)
 
(231
)
 
(130
)
Interest income
 
27

 
27

 
92

 
59

Interest expense
 
(81
)
 
(73
)
 
(249
)
 
(220
)
Restructuring costs
 
(76
)
 
(210
)
 
(418
)
 
(585
)
Transaction, separation and integration-related costs
 
(107
)
 
(83
)
 
(305
)
 
(273
)
Amortization of acquired intangible assets
 
(134
)
 
(134
)
 
(401
)
 
(389
)
Pension and OPEB actuarial and settlement losses

 

 
17

 

 
17

Income from continuing operations before income taxes
 
$
469

 
$
341

 
$
1,161

 
$
716

 
 
 
 
 
 
 
 
 
Segment profit margins
 
 
 
 
 
 
 
 
GBS
 
18.2
%
 
18.3
%
 
18.5
%
 
15.5
%
GIS
 
17.5
%
 
14.3
%
 
16.4
%
 
12.7
%



7








Non-GAAP Financial Measures

We present non-GAAP financial measures of performance which are derived from the unaudited condensed consolidated statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), EBIT margin, adjusted EBIT, adjusted EBIT margin, adjusted free cash flow, and non-GAAP results including non-GAAP income from continuing operations before taxes, non-GAAP income from continuing operations and non-GAAP EPS from continuing operations.

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 allow investors to better understand 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. 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 include:

Restructuring costs - reflects 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 HPES 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.
Tax adjustment - reflects the estimated non-recurring benefit of the Tax Cuts and Jobs Act of 2017 for fiscal 2019, and the application of an approximate 28% tax rate for fiscal 2018, which is within the targeted effective tax rate range for the prior year.




8








EBIT and Adjusted EBIT

A reconciliation of net income to adjusted EBIT is as follows:
 
 
Three Months Ended
 
Nine Months Ended
(in millions)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2018
 
December 31, 2017
Net income
 
$
466

 
$
779

 
$
991

 
$
1,217

Income from discontinued operations, net of taxes
 

 
(73
)
 
(35
)
 
(198
)
Income tax expense (benefit)
 
3

 
(365
)
 
205

 
(303
)
Interest income
 
(27
)
 
(27
)
 
(92
)
 
(59
)
Interest expense
 
81

 
73

 
249

 
220

EBIT
 
523

 
387

 
1,318

 
877

Restructuring costs
 
76

 
210

 
418

 
585

Transaction, separation, and integration-related costs
 
107

 
83

 
305

 
273

Amortization of acquired intangible assets
 
134

 
134

 
401

 
389

Pension and OPEB actuarial and settlement losses
 

 
(17
)
 

 
(17
)
Adjusted EBIT
 
$
840

 
$
797

 
$
2,442

 
$
2,107

 
 
 
 
 
 
 
 
 
Adjusted EBIT margin
 
16.2
%
 
14.6
%
 
15.8
%
 
13.0
%
EBIT margin
 
10.1
%
 
7.1
%
 
8.5
%
 
5.4
%

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, 2018
 
Nine Months Ended December 31, 2018
 
Net cash provided by operating activities
 
$
186

 
$
1,035

 
Net cash provided by (used in) investing activities
 
8

 
(40
)
 
Acquisitions, net of cash acquired
 
289

 
332

 
Business dispositions
 

 
65

 
Payments on capital leases and other long-term asset financings
 
(235
)
 
(710
)
 
Payments on transaction, separation and integration-related costs
 
86

 
277

 
Payments on restructuring costs
 
152

 
422

 
Sale of accounts receivables
 
17

 
(193
)
(1) 
Adjusted free cash flow
 
$
503

 
$
1,188

 
        

(1) Adjusted free cash flow, which is a non-GAAP financial measure, for the nine months ended December 31, 2018, includes a $(223) million net cumulative correction to previously reported free cash flow to reflect the appropriate impact of the Receivables Securitization Facility. On the same basis, adjusted free cash flow for the prior fiscal year would have increased by $55 million. This correction does not impact our consolidated statement of cash flows or any other financial measures presented in accordance with GAAP.





9







Non-GAAP Results

A reconciliation of reported results to non-GAAP results is as follows:


 
 
Three Months Ended December 31, 2018
(in millions, except per-share amounts)
 
As Reported
 
Restructuring Costs
 
Transaction, Separation and Integration-Related Costs
 
Amortization of Acquired Intangible Assets
 
Tax Adjustment
 
Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)
 
$
3,725

 
$

 
$

 
$

 
$

 
$
3,725

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)
 
491

 

 
(107
)
 

 

 
384

Income from continuing operations before income taxes
 
469

 
76

 
107

 
134

 

 
786

Income tax expense
 
3

 
18

 
26

 
36

 
77

 
160

Income from continuing operations
 
466

 
58

 
81

 
98

 
(77
)
 
626

Income from discontinued operations, net of tax
 

 

 

 

 

 

Net income
 
466

 
58

 
81

 
98

 
(77
)
 
626

Less: net income attributable to non-controlling interest, net of tax
 
4

 

 

 

 

 
4

Net income attributable to DXC common stockholders
 
$
462

 
$
58

 
$
81

 
$
98

 
$
(77
)
 
$
622

 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
0.6
%
 
 
 
 
 
 
 
 
 
20.4
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
1.68

 
$
0.21

 
$
0.29

 
$
0.36

 
$
(0.28
)
 
$
2.26

Diluted EPS from continuing operations
 
$
1.66

 
$
0.21

 
$
0.29

 
$
0.35

 
$
(0.28
)
 
$
2.23

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
275.66

 
275.66

 
275.66

 
275.66

 
275.66

 
275.66

Diluted EPS
 
278.99

 
278.99

 
278.99

 
278.99

 
278.99

 
278.99











10







 
 
Nine Months Ended December 31, 2018
(in millions, except per-share amounts)
 
As Reported
 
Restructuring Costs
 
Transaction, Separation and Integration-Related Costs
 
Amortization of Acquired Intangible Assets
 
Tax Adjustment
 
Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)
 
$
11,110

 
$

 
$

 
$

 
$

 
$
11,110

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)
 
1,500

 

 
(305
)
 

 

 
1,195

Income from continuing operations before income taxes
 
1,161

 
418

 
305

 
401

 

 
2,285

Income tax expense
 
205

 
100

 
72

 
101

 
44

 
522

Income from continuing operations
 
956

 
318

 
233

 
300

 
(44
)
 
1,763

Income from discontinued operations, net of tax
 
35

 

 

 

 

 
35

Net income
 
991

 
318

 
233

 
300

 
(44
)
 
1,798

Less: net income attributable to non-controlling interest, net of tax
 
8

 

 

 

 

 
8

Net income attributable to DXC common stockholders
 
$
983

 
$
318

 
$
233

 
$
300

 
$
(44
)
 
$
1,790

 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate
 
17.7
%
 
 
 
 
 
 
 
 
 
22.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
3.38

 
$
1.13

 
$
0.83

 
$
1.07

 
$
(0.16
)
 
$
6.26

Diluted EPS from continuing operations
 
$
3.33

 
$
1.12

 
$
0.82

 
$
1.05

 
$
(0.15
)
 
$
6.16

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
280.47

 
280.47

 
280.47

 
280.47

 
280.47

 
280.47

Diluted EPS
 
284.70

 
284.70

 
284.70

 
284.70

 
284.70

 
284.70



11







 
 
Three Months Ended December 31, 2017
(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)
 
$
4,051

 
$

 
$

 
$

 
$

 
$

 
$
4,051

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)
 
447

 

 
(83
)
 

 

 

 
364

Income from continuing operations before income taxes
 
341

 
210

 
83

 
134

 
(17
)
 

 
751

Income tax (benefit) expense
 
(365
)
 

 

 

 

 
575

 
210

Income from continuing operations
 
706

 
210

 
83

 
134

 
(17
)
 
(575
)
 
541

Income from discontinued operations, net of tax
 
73

 

 

 

 

 

 
73

Net income
 
779

 
210

 
83

 
134

 
(17
)
 
(575
)
 
614

Less: net income attributable to non-controlling interest, net of tax
 
3

 
 
 
 
 

 

 

 
3

Net income attributable to DXC common stockholders
 
$
776

 
$
210

 
$
83

 
$
134

 
$
(17
)
 
$
(575
)
 
$
611

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate
 
(107.0
)%
 
 
 
 
 
 
 
 
 
 
 
28.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
2.46

 
$
0.74

 
$
0.29

 
$
0.47

 
$
(0.06
)
 
$
(2.01
)
 
$
1.89

Diluted EPS from continuing operations
 
$
2.43

 
$
0.72

 
$
0.29

 
$
0.46

 
$
(0.06
)
 
$
(1.98
)
 
$
1.86

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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



12







 
 
Nine Months Ended December 31, 2017
(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)
 
$
12,230

 
$

 
$

 
$

 
$

 
$

 
$
12,230

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)
 
1,484

 

 
(273
)
 

 

 

 
1,211

Income from continuing operations before income taxes
 
716

 
585

 
273

 
389

 
(17
)
 

 
1,946

Income tax (benefit) expense
 
(303
)
 

 

 

 

 
847

 
544

Income from continuing operations
 
1,019

 
585

 
273

 
389

 
(17
)
 
(847
)
 
1,402

Income from discontinued operations, net of tax
 
198

 

 

 

 

 

 
198

Net income
 
1,217

 
585

 
273

 
389

 
(17
)
 
(847
)
 
1,600

Less: net income attributable to non-controlling interest, net of tax
 
26

 

 

 

 

 

 
26

Net income attributable to DXC common stockholders
 
$
1,191

 
$
585

 
$
273

 
$
389

 
$
(17
)
 
$
(847
)
 
$
1,574

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate
 
(42.3
)%
 
 
 
 
 
 
 
 
 
 
 
28.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
3.48

 
$
2.05

 
$
0.96

 
$
1.37

 
$
(0.06
)
 
$
(2.98
)
 
$
4.83

Diluted EPS from continuing operations
 
$
3.43

 
$
2.02

 
$
0.94

 
$
1.34

 
$
(0.06
)
 
$
(2.93
)
 
$
4.75

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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







13