EX-99.1 2 dxcfy20q3pressrelease.htm EXHIBIT 99.1 Exhibit






Exhibit 99.1
 
Moved on Business Wire
 
February 6, 2020



DXC Technology Reports Third Quarter Fiscal 2020 Results


Q3 earnings per share from continuing operations was $0.32, including the cumulative impact of certain items of $(0.93) per share, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and a tax adjustment
Q3 non-GAAP earnings per share was $1.25
Q3 income from continuing operations was $90 million, including the cumulative impact of certain items of $(238) million, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and a tax adjustment
Q3 non-GAAP income from continuing operations was $328 million
Q3 EBIT of $187 million, adjusted for certain items is $528 million and adjusted EBIT margin was 10.5%, compared with 16.2% in the prior year
Q3 net cash provided by operating activities was $477 million
Q3 adjusted free cash flow was $397 million

TYSONS, Va., February 6, 2020 - DXC Technology (NYSE: DXC) today reported results for the third quarter of fiscal year 2020, representing the period from October 1 through December 31, 2019.

"We delivered third quarter results that are in-line with our plan. I am pleased with the initial progress we have made on our two key priorities, running the business and unlocking value,” said Mike Salvino, president and CEO. “We are executing on our focused strategy centered on the enterprise technology stack. Our third quarter performance is a positive first step in positioning DXC for long-term success."
 
Financial Highlights - Third Quarter Fiscal 2020
Diluted earnings per share from continuing operations was $0.32 in the third quarter, including $(0.25) per share of restructuring costs, $(0.20) per share of transaction, separation and integration-related costs, $(0.44) per share of amortization of acquired intangible assets, and $(0.04) per share of tax adjustment. This compares with $1.66 in the year ago period.
Non-GAAP diluted earnings per share from continuing operations was $1.25. This compares with $2.23 in the year ago period.
Revenue in the third quarter was $5,021 million. Revenue decreased 3.0% compared with $5,178 million in the prior year.
Income from continuing operations before income taxes was $127 million in the third quarter, including $(53) million of goodwill impairment, $(74) million of restructuring costs, $(68) million of transaction, separation and integration-related costs, and $(146) million of amortization of acquired intangibles. This compares with $469 million in the year ago period.
Non-GAAP income from continuing operations before income taxes was $468 million compared with $786 million in the year ago period.
Net income was $90 million for the third quarter, including $(64) million of restructuring costs, $(52) million of transaction, separation and integration-related costs, $(112) million of amortization of acquired intangibles, and $(10) million of tax adjustment. This compares with $466 million in the prior year period.
Non-GAAP net income was $328 million.
Adjusted EBIT was $528 million in the third quarter compared with $840 million in the prior year. Adjusted EBIT margin was 10.5% compared with 16.2% in the year ago quarter.
Net cash provided by operating activities was $477 million in the third quarter, compared with $186 million in the year ago period.
Adjusted free cash flow was $397 million in the third quarter.

1








Global Business Services (GBS)
GBS revenue was $2,359 million in the quarter compared with $2,169 million for the prior year. GBS revenue increased 8.8% year-over-year, including an unfavorable foreign currency exchange rate impact of 1.1%. GBS revenues increased 9.9% year-over-year at constant currency including the acquisition of Luxoft. GBS profit margin in the quarter was 15.0%, compared with 18.2% in the prior year, reflecting investments we are making in digital hiring as well as the slower pace of cost takeout. New business awards for GBS were $2.5 billion in the third quarter.

Global Infrastructure Services (GIS)
GIS revenue was $2,662 million in the quarter compared with $3,009 million for the prior year. GIS revenues decreased 11.5% year-over-year, including an unfavorable foreign currency exchange rate impact of 0.9%. GIS revenues decreased 10.6% year-over-year at constant currency, reflecting declines in our infrastructure businesses due to run-off from a few accounts. GIS profit margin in the quarter was 8.7%, compared with 17.5% in the prior year, reflecting a slowdown in delivery cost take-out actions and the investments we are making in select customer accounts. New business awards for GIS were $2.8 billion in the third quarter.

Returning Capital to Shareholders
During the third quarter, DXC Technology returned $140 million to shareholders, consisting of $54 million in common stock dividends and $86 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 4:45 p.m. EST. The dial-in number for domestic callers is 888-204-4368. Callers who reside outside of the United States should dial +1-929-477-0402. The passcode for all participants is 6955326. 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 13, 2020. 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 6955326. 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
DXC Technology (NYSE: DXC) helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to deploy our enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences. Learn more about the DXC story and our focus on people, customers and operational execution at www.dxc.technology.
.


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, 2019, and any updating information in subsequent SEC filings including DXC's upcoming Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2019. 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:
Richard Adamonis, Corporate Media Relations, +1-862-228-3481, radamonis@dxc.com
Shailesh Murali, M&A and Investor Relations, +1-703-245-9700, shailesh.murali@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, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
 
 
 
 
 
 
 
 
Revenues
 
$
5,021

 
$
5,178

 
$
14,762

 
$
15,473

 
 
 
 
 
 
 
 
 
Costs of services
 
3,827

 
3,725

 
11,128

 
11,110

Selling, general and administrative
 
518

 
491

 
1,514

 
1,500

Depreciation and amortization
 
479

 
508

 
1,416

 
1,463

Goodwill impairment losses
 
53

 

 
2,940

 

Restructuring costs
 
74

 
76

 
248

 
418

Interest expense
 
93

 
81

 
288

 
249

Interest income
 
(33
)
 
(27
)
 
(130
)
 
(92
)
Gain on arbitration award
 

 

 
(632
)
 

Other income, net
 
(117
)
 
(145
)
 
(344
)
 
(336
)
Total costs and expenses
 
4,894

 
4,709

 
16,428

 
14,312

 
 
 
 
 
 
 
 
 
Income (loss) from continuing operations before income taxes
 
127

 
469

 
(1,666
)
 
1,161

Income tax expense
 
37

 
3

 
191

 
205

Income (loss) from continuing operations
 
90

 
466

 
(1,857
)
 
956

Income from discontinued operations, net of tax
 

 

 

 
35

Net income (loss)
 
90

 
466

 
(1,857
)
 
991

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

 
4

 
17

 
8

Net income (loss) attributable to DXC common stockholders
 
$
82

 
$
462

 
$
(1,874
)
 
$
983

 
 
 
 
 
 
 
 
 
Income (loss) per common share:
 
 
 
 
 
 
 
 
Basic:
 
 
 
 
 
 
 
 
     Continuing operations
 
$
0.32

 
$
1.68

 
$
(7.20
)
 
$
3.38

     Discontinued operations
 

 

 

 
0.12

 
 
$
0.32

 
$
1.68

 
$
(7.20
)
 
$
3.50

Diluted:
 
 
 
 
 
 
 
 
     Continuing operations
 
$
0.32

 
$
1.66

 
$
(7.20
)
 
$
3.33

     Discontinued operations
 

 

 

 
0.12

 
 
$
0.32

 
$
1.66

 
$
(7.20
)
 
$
3.45

 
 
 
 
 
 
 
 
 
Cash dividend per common share
 
$
0.21

 
$
0.19

 
$
0.63

 
$
0.57

 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
   Basic EPS
 
255.09

 
275.66

 
260.24

 
280.47

   Diluted EPS
 
256.05

 
278.99

 
260.24

 
284.70



4








Selected Consolidated Balance Sheet Data
(preliminary and unaudited)
 
 
As of
(in millions)
 
December 31, 2019
 
March 31, 2019
Assets
 
 
 
 
Cash and cash equivalents
 
$
2,560

 
$
2,899

Receivables, net
 
4,619

 
5,181

Prepaid expenses
 
660

 
627

Other current assets
 
344

 
359

Total current assets
 
8,183

 
9,066

 
 
 
 
 
Intangible assets, net
 
6,140

 
5,939

Operating right-of-use assets, net
 
1,484

 

Goodwill
 
6,003

 
7,606

Deferred income taxes, net
 
372

 
355

Property and equipment, net
 
3,631

 
3,179

Other assets
 
3,786

 
3,429

Total Assets
 
$
29,599

 
$
29,574

 
 
 
 
 
Liabilities
 
 
 
 
Short-term debt and current maturities of long-term debt
 
$
1,581

 
$
1,942

Accounts payable
 
1,576

 
1,666

Accrued payroll and related costs
 
678

 
652

Current operating lease liabilities
 
498

 

Accrued expenses and other current liabilities
 
3,139

 
3,355

Deferred revenue and advance contract payments
 
1,069

 
1,630

Income taxes payable
 
243

 
208

Total current liabilities
 
8,784

 
9,453

 
 
 
 
 
Long-term debt, net of current maturities
 
7,315

 
5,470

Non-current deferred revenue
 
747

 
256

Non-current operating lease liabilities
 
1,097

 

Non-current income tax liabilities and deferred tax liabilities
 
1,189

 
1,184

Other long-term liabilities
 
1,366

 
1,486

Total Liabilities
 
20,498

 
17,849

 
 
 
 
 
Total Equity
 
9,101

 
11,725

 
 
 
 
 
Total Liabilities and Equity
 
$
29,599

 
$
29,574



5







Condensed Consolidated Statements of Cash Flows
(preliminary and unaudited)
 
 
Nine Months Ended
(in millions)
 
December 31, 2019
 
December 31, 2018
Cash flows from operating activities:
 
 
 
 
Net (loss) income
 
$
(1,857
)
 
$
991

Adjustments to reconcile net income to net cash provided by operating activities:
 


 


Depreciation and amortization
 
1,429

 
1,514

Goodwill impairment losses
 
2,940

 

Operating right-of-use expense
 
506

 

Share-based compensation
 
57

 
57

Loss (gain) on dispositions
 
6

 
(137
)
Unrealized foreign currency exchange loss (gain)
 
14

 
(32
)
Other non-cash charges, net
 
7

 
(21
)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
 
 
 
 
Decrease (increase) in assets
 
141

 
(1,012
)
Decrease in operating lease liability
 
(506
)
 

Decrease in other liabilities
 
(675
)
 
(325
)
Net cash provided by operating activities
 
2,062

 
1,035

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of property and equipment
 
(240
)
 
(219
)
Payments for transition and transformation contract costs
 
(220
)
 
(294
)
Software purchased and developed
 
(178
)
 
(183
)
Payments for acquisitions, net of cash acquired
 
(1,997
)
 
(332
)
Business dispositions
 

 
(65
)
Cash collections related to deferred purchase price receivable
 
513

 
761

Proceeds from sale of assets
 
55

 
283

Short-term investing
 
(75
)
 

Other investing activities, net
 
20

 
9

Net cash used in investing activities
 
(2,122
)
 
(40
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Borrowings of commercial paper
 
4,010

 
1,853

Repayments of commercial paper
 
(3,893
)
 
(1,853
)
Borrowings on long-term debt, net of discount
 
2,198

 
1,646

Principal payments on long-term debt
 
(1,029
)
 
(2,619
)
Payments on finance leases and borrowings for asset financing
 
(646
)
 
(710
)
Borrowings for USPS spin transaction
 

 
1,114

Proceeds from bond issuance
 

 
753

Proceeds from stock options and other common stock transactions
 
11

 
40

Taxes paid related to net share settlements of share-based compensation awards
 
(15
)
 
(52
)
Repurchase of common stock and advance payment for accelerated share repurchase
 
(736
)
 
(1,253
)
Dividend payments
 
(161
)
 
(159
)
Other financing activities, net
 
(44
)
 
57

Net cash used in financing activities
 
(305
)
 
(1,183
)
Effect of exchange rate changes on cash and cash equivalents
 
26

 
(66
)
Net decrease in cash and cash equivalents
 
(339
)
 
(254
)
Cash and cash equivalents at beginning of year
 
2,899

 
2,729

Cash and cash equivalents at end of period
 
$
2,560

 
$
2,475



6







Segment Results

The following table summarizes segment revenue for the third quarter and first nine months of fiscal 2020 and 2019:
Segment Revenue
 
 
 
 
 
 
 
 
 
 
Three Months Ended
(in millions)
 
December 31, 2019
 
December 31, 2018
 
% Change
 
% Change in Constant Currency
Global Business Services
 
$
2,359

 
$
2,169

 
8.8
 %
 
9.9%
Global Infrastructure Services
 
2,662

 
3,009

 
(11.5
)%
 
(10.6)%
Total Revenues
 
$
5,021

 
$
5,178

 
(3.0
)%
 
(2.0)%

 
 
Nine Months Ended
(in millions)
 
December 31, 2019
 
December 31, 2018
 
% Change
 
% Change in Constant Currency
Global Business Services
 
$
6,803

 
$
6,493

 
4.8
 %
 
6.9%
Global Infrastructure Services
 
7,959

 
8,980

 
(11.4
)%
 
(9.1)%
Total Revenues
 
$
14,762

 
$
15,473

 
(4.6
)%
 
(2.4)%



7







We define segment profit as segment revenues 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). The Company does not allocate to its 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.

Segment Profit
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in millions)
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Profit
 

 
 
 
 
 
 
GBS profit
 
$
353

 
$
395

 
$
1,078

 
$
1,198

GIS profit
 
232

 
528

 
815

 
1,475

All other loss
 
(57
)
 
(83
)
 
(184
)
 
(231
)
Interest income
 
33

 
27

 
130

 
92

Interest expense
 
(93
)
 
(81
)
 
(288
)
 
(249
)
Restructuring costs
 
(74
)
 
(76
)
 
(248
)
 
(418
)
Transaction, separation and integration-related costs
 
(68
)
 
(107
)
 
(226
)
 
(305
)
Amortization of acquired intangible assets
 
(146
)
 
(134
)
 
(435
)
 
(401
)
Goodwill impairment losses
 
(53
)
 

 
(2,940
)
 

Gain on arbitration award
 

 

 
632

 

Income (loss) from continuing operations before income taxes
 
$
127

 
$
469

 
$
(1,666
)
 
$
1,161

 
 
 
 
 
 
 
 
 
Segment profit margins
 
 
 
 
 
 
 
 
GBS
 
15.0
%
 
18.2
%
 
15.8
%
 
18.5
%
GIS
 
8.7
%
 
17.5
%
 
10.2
%
 
16.4
%


8








Non-GAAP Financial Measures

We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes ("EBIT"), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income and non-GAAP EPS, constant currency revenues, net debt and net debt-to-total capitalization.

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 targets.

Non-GAAP financial measures exclude certain items from GAAP results which DXC management believes are not indicative of operating performance such as the amortization of acquired intangible assets and transaction, separation and integration-related costs.

Incremental amortization of intangible assets acquired through business combinations may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangibles assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets, primarily customer related intangible assets from its non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.

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.
Goodwill impairment losses - reflects impairment losses on goodwill.
Gain on arbitration award - reflects a gain related to the HPES merger arbitration award.
Tax adjustment - for fiscal 2020 periods include the impact of Transition Tax (affecting the three and nine months ended December 31, 2019) and tax entries related to prior restructuring charges (affecting the nine months ended December 31, 2019). Fiscal 2019 periods reflect the estimated non-recurring benefit of the Tax Cuts and Jobs Act of 2017. Income tax expense of other non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.




9












EBIT and Adjusted EBIT

A reconciliation of net income (loss) to adjusted EBIT is as follows:
 
 
Three Months Ended
 
Nine Months Ended
(in millions)
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
Net income (loss)
 
$
90

 
$
466

 
$
(1,857
)
 
$
991

Income from discontinued operations, net of taxes
 

 

 

 
(35
)
Income tax expense
 
37

 
3

 
191

 
205

Interest income
 
(33
)
 
(27
)
 
(130
)
 
(92
)
Interest expense
 
93

 
81

 
288

 
249

EBIT
 
187

 
523

 
(1,508
)
 
1,318

Restructuring costs
 
74

 
76

 
248

 
418

Transaction, separation, and integration-related costs
 
68

 
107

 
226

 
305

Amortization of acquired intangible assets
 
146

 
134

 
435

 
401

Goodwill impairment losses
 
53

 

 
2,940

 

Gain on arbitration award
 

 

 
(632
)
 

Adjusted EBIT
 
$
528

 
$
840

 
$
1,709

 
$
2,442

 
 
 
 
 
 
 
 
 
Adjusted EBIT margin
 
10.5
%
 
16.2
%
 
11.6
 %
 
15.8
%
EBIT margin
 
3.7
%
 
10.1
%
 
(10.2
)%
 
8.5
%

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, 2019
 
Nine Months Ended December 31, 2019
Net cash provided by operating activities
 
$
477

 
$
2,062

Net cash used in investing activities (1)
 
(75
)
 
(2,047
)
Acquisitions, net of cash acquired
 
76

 
1,997

Payments on capital leases and other long-term asset financings
 
(225
)
 
(646
)
Payments on transaction, separation and integration-related costs
 
68

 
203

Payments on restructuring costs
 
76

 
273

Gain on arbitration award
 

 
(632
)
Adjusted free cash flow
 
$
397

 
$
1,210

        

(1) Excludes short-term investments.





10







Non-GAAP Results

A reconciliation of reported results to non-GAAP results is as follows:
 
 
Three Months Ended December 31, 2019
(in millions, except per-share amounts)
 
As Reported
 
Restructuring Costs
 
Transaction, Separation and Integration-Related Costs
 
Amortization of Acquired Intangible Assets
 
Goodwill Impairment Losses
 
Tax Adjustment
 
Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)
 
$
3,827

 
$

 
$

 
$

 
$

 
$

 
$
3,827

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)
 
518

 

 
(68
)
 

 

 

 
450

Income from continuing operations before income taxes
 
127

 
74

 
68

 
146

 
53

 

 
468

Income tax expense
 
37

 
10

 
16

 
34

 
53

 
(10
)
 
140

Net income
 
90

 
64

 
52

 
112

 

 
10

 
328

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

 

 

 

 

 

 
8

Net income attributable to DXC common stockholders
 
$
82

 
$
64

 
$
52

 
$
112

 
$

 
$
10

 
$
320

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective tax rate
 
29.1
%
 
 
 
 
 
 
 
 
 
 
 
29.9
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
0.32

 
$
0.25

 
$
0.20

 
$
0.44

 
$

 
$
0.04

 
$
1.25

Diluted EPS from continuing operations
 
$
0.32

 
$
0.25

 
$
0.20

 
$
0.44

 
$

 
$
0.04

 
$
1.25

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
255.09

 
255.09

 
255.09

 
255.09

 
255.09

 
255.09

 
255.09

Diluted EPS
 
256.05

 
256.05

 
256.05

 
256.05

 
256.05

 
256.05

 
256.05



11







 
 
Nine Months Ended December 31, 2019
(in millions, except per-share amounts)
 
As Reported
 
Restructuring Costs
 
Transaction, Separation and Integration-Related Costs
 
Amortization of Acquired Intangible Assets
 
Goodwill Impairment Losses
 
Gain on Arbitration Award
 
Tax Adjustment
 
Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)
 
$
11,128

 
$

 
$

 
$

 
$

 
$

 
$

 
$
11,128

Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
 
1,514

 

 
(226
)
 

 

 

 

 
1,288

(Loss) income from continuing operations before income taxes
 
(1,666
)
 
248

 
226

 
435

 
2,940

 
(632
)
 

 
1,551

Income tax expense
 
191

 
42

 
43

 
99

 
53

 

 
(39
)
 
389

Net (loss) income
 
(1,857
)
 
206

 
183

 
336

 
2,887

 
(632
)
 
39

 
1,162

Less: net income attributable to non-controlling interest, net of tax
 
17

 

 

 

 

 

 

 
17

Net (loss) income attributable to DXC common stockholders
 
$
(1,874
)
 
$
206

 
$
183

 
$
336

 
$
2,887

 
$
(632
)
 
$
39

 
$
1,145

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Effective Tax Rate
 
(11.5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
25.1
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS from continuing operations
 
$
(7.20
)
 
$
0.79

 
$
0.70

 
$
1.29

 
$
11.09

 
$
(2.43
)
 
$
0.15

 
$
4.40

Diluted EPS from continuing operations
 
$
(7.20
)
 
$
0.79

 
$
0.70

 
$
1.28

 
$
11.03

 
$
(2.42
)
 
$
0.15

 
$
4.38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic EPS
 
260.24

 
260.24

 
260.24

 
260.24

 
260.24

 
260.24

 
260.24

 
260.24

Diluted EPS
 
260.24

 
261.69

 
261.69

 
261.69

 
261.69

 
261.69

 
261.69

 
261.69












12







 
 
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




13







 
 
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





14