DXC Technology Delivers Strong Second Quarter Results with

DXC Technology Delivers Strong Second Quarter Results with Growth in Earnings per Share, Margins, and Cash Flow

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 proforma basis is as follows:


	Three Months Ended September 30, 2017
(in millions, except per-share amounts)	As Reported			Restructuring Costs		Transaction and Integration- related Costs			Amortization of Acquired Intangible Assets		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	4,312		$	—	$	—		$	—	$	4,312
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)	672			—		(66		)	—		606
Income before income taxes	387			192		66			169		814
Income tax expense	122			46		23			57		248
Net income	$	265		$	146	$	43		$	112	$	566
Less: net income attributable to noncontrolling interest, net of tax	9			—		—			—		9
Net income attributable to DXC common stockholders	$	256		$	146	$	43		$	112	$	557

Effective tax rate	31.5		%								30.5		%

Basic EPS	$	0.90		$	0.51	$	0.15		$	0.39	$	1.96
Diluted EPS	$	0.88		$	0.50	$	0.15		$	0.39	$	1.93

Weighted average common shares outstanding for:
Basic EPS	284.87			284.87		284.87			284.87		284.87
Diluted EPS	289.29			289.29		289.29			289.29		289.29


	Six Months Ended September 30, 2017
(in millions, except per-share amounts)	As Reported			Restructuring C osts		Transaction and Integration- related Costs			Amortization of Acquired Intangible Assets		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	9,100		$	—	$	—		$	—	$	9,100
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)	1,082			—		(190		)	—		892
Income before income taxes	572			382		190			289		1,433
Income tax expense	134			91		64			103		392
Net income	$	438		$	291	$	126		$	186	$	1,041
Less: net income attributable to noncontrolling interest, net of tax	23			—		—			—		23
Net income attributable to DXC common stockholders	$	415		$	291	$	126		$	186	$	1,018

Effective tax rate	23.4		%								27.4		%

Basic EPS	$	1.46		$	1.02	$	0.44		$	0.65	$	3.58
Diluted EPS	$	1.43		$	1.01	$	0.44		$	0.64	$	3.52

Weighted average common shares outstanding for:
Basic EPS	284.35			284.35		284.35			284.35		284.35
Diluted EPS	289.38			289.38		289.38			289.38		289.38


	Pro Forma Combined Company Three Months Ended September 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)	$	5,008		$	—	$	—		$	—	$	—		$	—		$	5,008
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)	660			—		(70		)	—		(51		)	—			539
(Loss) income before income taxes	(231		)	301		70			120		51			—			311
Income tax (benefit) expense	(108		)	—		—			—		—			194			86
Net (loss) income	$	(123	)	$	301	$	70		$	120	$	51		$	(194	)	$	225
Less: net income attributable to noncontrolling interest, net of tax	7			—		—					—			—			7
Net (loss) income attributable to DXC common stockholders	$	(130	)	$	301	$	70		$	120	$	51		$	(194	)	$	218

Effective Tax Rate	46.8		%														27.7		%

Basic EPS	$	(0.46	)	$	1.06	$	0.25		$	0.42	$	0.18		$	(0.69	)	$	0.77
Diluted EPS	$	(0.46	)	$	1.05	$	0.24		$	0.42	$	0.18		$	(0.68	)	$	0.76

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			286.41		286.41			286.41		286.41			286.41			286.41


	Pro Forma Combined Company Six Months Ended September 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)	$	10,278		$	—	$	—		$	—	$	(150	)	$	—		$	—		$	10,128
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	1,370			—		(156		)	—		(48		)	(88		)	—			$	1,078
(Loss) income, before income taxes	(553		)	432		156			233		198			88			—			554
Income tax (benefit) expense	(149		)	—		—			—		—			—			302			153
Net (loss) income	(404		)	432		156			233		198			88			(302		)	401
Less: net income attributable to non-controlling interest, net of tax	9			—		—					—			—			—			9
Net (loss) income attributable to DXC common stockholders	$	(413	)	$	432	$	156		$	233	$	198		$	88		$	(302	)	$	392

Effective Tax Rate	26.9		%																	27.6		%

Basic EPS	$	(1.46	)	$	1.53	$	0.55		$	0.82	$	0.70		$	0.31		$	(1.07	)	$	1.38
Diluted EPS	$	(1.46	)	$	1.51	$	0.54		$	0.81	$	0.69		$	0.31		$	(1.05	)	$	1.37

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			286.54		286.54			286.54		286.54			286.54			286.54			286.54

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