- Q3 Earnings per Share from
Continuing Operations of $0.21 includes Cumulative Impact of
Certain Items of $(0.60) per Share
- Q3 Non-GAAP Earnings per Share from
Continuing Operations were $0.81, compared with $0.73 in prior
year
- Income from Continuing Operations of
$37 Million includes Certain Items of $(86) Million
- Consolidated Segment Commercial
Operating Income of $177 Million, adjusted for Certain Items is
$227 Million and Consolidated Segment Commercial Operating Margin
on the same basis is 11.8%, compared with 11.1% in the prior
year
- Q3 Net Cash from Operating
Activities of $563 Million
- Adjusted Free Cash Flow of $299
Million for Q3 2017
- FY17 Non-GAAP EPS from Continuing
Operations Target Remains $2.75 to $3.00
CSC (NYSE: CSC) today reported results for the third quarter of
fiscal year 2017.
“CSC continued to execute on our strategic roadmap in the third
quarter, in which CSC delivered revenue growth, year-over-year and
sequential margin improvement, and record adjusted free cash flow,”
said Mike Lawrie, chairman, president and CEO. "Revenue was up
nearly 14 percent in constant currency driven by growth in next
generation and Business Process Services offerings, as well as the
contributions of our recent acquisitions. In addition, we remain on
track to complete our proposed merger with the Enterprise Services
business of Hewlett Packard Enterprise on or about April 1.”
Financial Highlights
- Diluted earnings per share from
continuing operations were $0.21 in the third quarter, compared
with $0.15 in the year-ago period. Diluted earnings per share from
continuing operations included $(0.06) per share of restructuring
costs and $(0.54) per share of transaction and other
integration-related costs.
- Non-GAAP diluted earnings per share
from continuing operations excluding these items were $0.81,
compared with $0.73 in the prior period.
- Income from continuing operations
before taxes was $50 million for the third quarter, compared with
$78 million in the prior year and includes $(12) million of
restructuring and $(109) million of transaction and other
integration-related costs. Excluding the impact of these items,
non-GAAP income from continuing operations, before taxes was $171
million compared with $124 million a year ago.
- Consolidated segment commercial
operating income, which includes GBS and GIS, excluding certain
items, was $227 million compared with $195 million in the third
quarter of fiscal 2016. Consolidated segment commercial operating
margin on the same basis was 11.8% compared to 11.1% in the prior
year.
- Net cash provided by operating
activities was $563 million in the third quarter, compared to $258
million in the prior year.
- Adjusted free cash flow was $299
million in the third quarter, compared to $169 million in the prior
year.
Global Business Services
GBS revenue of $1,046 million in the quarter compares with $886
million in the year ago quarter, an increase of 18.1%. GBS revenue
increased 22.3% year-over-year in constant currency. GBS revenue
growth was driven by momentum in our Business Process Services
offerings, as well as the contributions of our recent acquisitions.
GBS consolidated segment operating margin in the quarter, excluding
the impact of certain items, was 13.3% up from 13.1% in the prior
year. New business awards for GBS were $1.1 billion in the third
quarter.
Global Infrastructure Services
GIS revenue of $871 million in the quarter compares with $864
million in the year-ago quarter, an increase of 0.8%. GIS revenue
increased 4.9% year-over-year in constant currency. The GIS revenue
increase was driven by the growth in our next generation offerings
and the contributions of our recent acquisitions. GIS consolidated
segment operating margin in the quarter, excluding the impact of
certain items, was 10.1% up from to 9.1% in the prior year,
reflecting a shift in mix toward cloud-based software solutions.
New business awards for GIS were $1.3 billion in the third
quarter.
Returning Capital to Shareholders
During the third quarter, CSC returned $20 million to
shareholders consisting of common stock dividends.
CSC had 140,984,524 basic shares outstanding on December 30,
2016.
Earnings Conference Call and Webcast
CSC senior management will host a conference call and webcast
today at 5 p.m. EST. The dial-in number for domestic callers is
877-852-6583. Callers who reside outside of the United States or
Canada should dial +1-719-325-4771. The passcode for all
participants is 6790196. The webcast audio and any presentation
slides will be available on CSC’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 9, 2016. 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 and Canada. The replay passcode is also
6790196. A replay of this webcast will also be available on CSC’s
Investor Relations website.
Non-GAAP Measures
In an effort to provide investors with additional information
regarding the Company’s preliminary and unaudited results as
determined by U.S. generally accepted accounting principles (GAAP),
the Company has also disclosed in this press release preliminary
non-GAAP information and certain further adjustments thereto, which
management believes provides useful information to investors,
including: constant currency, consolidated segment operating
income, consolidated segment commercial operating income,
consolidated segment commercial operating margin, consolidated
segment adjusted operating income, consolidated segment operating
and adjusted operating margin, earnings before interest and taxes
(EBIT), adjusted EBIT, EBIT and adjusted EBIT margin, adjusted free
cash flow and non-GAAP results including non-GAAP income from
continuing operations and non-GAAP diluted earnings per share from
continuing operations. Reconciliations of the preliminary non-GAAP
measures to the respective and most directly comparable GAAP
measures, as well as the rationale for management’s use of non-GAAP
measures are included below.
About CSC
CSC (NYSE: CSC) leads clients on their digital transformation
journeys. The company provides innovative next-generation
technology services and solutions that leverage deep industry
expertise, global scale, technology independence and an extensive
partner community. CSC serves leading commercial and international
public sector organizations throughout the world. CSC is a Fortune
500 company and ranked among the best corporate citizens. For more
information, visit the company's website at www.csc.com.
All statements in this press release and in all future press
releases that do not directly and exclusively relate to historical
facts constitute “forward-looking statements.” These statements
represent the Company’s intentions, plans, expectations and
beliefs, and are subject to risks, uncertainties and other factors,
many of which are outside the Company’s control. These factors
could cause actual results to differ materially from such forward
looking statements. For a written description of these factors, see
the section titled “Risk Factors” in CSC’s Form 10-K for the fiscal
year ended April 1, 2016 and any updating information in subsequent
SEC filings. The Company disclaims any intention or obligation to
update these forward-looking statements whether as a result of
subsequent events or otherwise, except as required by law.
Note: On November 27, 2015, CSC completed the
separation of CSRA. The Company’s results of operations for the
third quarter and first nine months of fiscal 2016 have been
adjusted to reflect the separation.
Business Segment Revenues, Consolidated
Segment Operating Income and Consolidated Segment Operating
Margins
(preliminary and unaudited)
Revenues by
Segment
Three Months Ended (in millions)
December 30,2016
January 1,2016
% Change
% Change
atConstantCurrency(1)
Global Business Services $ 1,046 $ 886 18.1 % 22.3 % Global
Infrastructure Services 871 864 0.8 % 4.9 % Total
Revenues $ 1,917 $ 1,750 9.5 % 13.7 %
Revenues by
Segment
Nine Months Ended (in millions)
December 30,2016
January 1,2016
% Change
% Change
atConstantCurrency(1)
Global Business Services $ 3,130 $ 2,696 16.1 % 19.3 % Global
Infrastructure Services 2,588 2,603 (0.6 )% 2.5 %
Total Revenues $ 5,718 $ 5,299 7.9 % 11.1 %
(1) Selected references are made on a
“constant currency basis” so that certain financial results can be
viewed without the impact of fluctuations in foreign currency
rates, thereby providing comparisons of operating performance from
period to period. Financial results on a “constant currency basis”
are non-U.S. GAAP measures calculated by translating current period
activity into U.S. dollars using the comparable prior period’s
currency conversion rates. This approach is used for all results
where the functional currency is not the U.S. dollar.
Consolidated
Segment Operating Income and Consolidated Segment Operating Margins
by Segment
Three Months Ended December 30,
2016 January 1, 2016 (in
millions)
ConsolidatedSegmentOperatingIncome
ConsolidatedSegmentOperatingMargin
ConsolidatedSegmentOperatingIncome
ConsolidatedSegmentOperatingMargin
Global Business Services $ 113 10.8 % $ 101 11.4 % Global
Infrastructure Services 64 7.3 % 70 8.1
% Consolidated Segment Commercial Operating Income 177 9.2 % 171
9.8 % Corporate (12 ) — (23 ) — Total Consolidated
Segment Operating Income $ 165 8.6 % $ 148 8.5 %
Nine Months Ended December 30, 2016 January
1, 2016 (in millions)
ConsolidatedSegmentOperatingIncome
ConsolidatedSegmentOperatingMargin
ConsolidatedSegmentOperatingIncome
ConsolidatedSegmentOperatingMargin
Global Business Services 269 8.6 % $ 299 11.1 % Global
Infrastructure Services 86 3.3 % 187
7.2 % Consolidated Segment Commercial Operating Income 355 6.2 %
486 9.2 % Corporate (40 ) — (64 ) — Total
Consolidated Segment Operating Income $ 315 5.5 % $ 422
8.0 %
Condensed Consolidated Statements of
Operations
(preliminary and unaudited)
Three months ended
Nine months ended (in millions, except per-share
amounts)
December 30,2016
January 1,2016
December 30,2016
January 1,2016
Revenues $ 1,917 $ 1,750 $ 5,718 $
5,299 Costs of services (excludes depreciation and
amortization and restructuring costs) 1,347 1,216 4,131 3,725
Selling, general and administrative (excludes depreciation and
amortization and restructuring costs) 333 259 931 799 Depreciation
and amortization 161 161 494 503 Restructuring costs 3 7 85 12
Interest expense 33 33 87 92 Interest income (8 ) (8 ) (26 ) (26 )
Other (income) expense, net (2 ) 4 3
(3 ) Total costs and expenses 1,867
1,672 5,705 5,102
Income from continuing operations, before taxes 50 78 13 197 Income
tax expense (benefit) 13 56 (25
) 17 Income from continuing operations 37 22 38 180
Income from discontinued operations, net of taxes —
30 — 216 Net income 37 52
38 396 Less: net income attributable to noncontrolling interest,
net of tax 6 2 13
12 Net income attributable to CSC common stockholders $ 31
$ 50 $ 25 $ 384 Earnings per
common share Basic: Continuing operations $ 0.22 $ 0.16 $ 0.18 $
1.29 Discontinued operations — 0.20
— 1.49 $ 0.22 $ 0.36 $
0.18 $ 2.78 Diluted: Continuing operations $ 0.21 $
0.15 $ 0.17 $ 1.27 Discontinued operations —
0.20 — 1.45 $ 0.21 $ 0.35
$ 0.17 $ 2.72 Cash dividend per common
share $ 0.14 $ 2.39 $ 0.42 $ 2.85 Weighted average common
shares outstanding for: Basic EPS 140.88 138.86 140.13 138.36
Diluted EPS 144.81 141.57 143.80 141.39
Selected Balance Sheet Data
(preliminary and unaudited)
As of (in millions)
December 30, 2016 April 1, 2016
Assets Cash and cash equivalents $ 1,111 $ 1,178
Receivables, net 1,627 1,831 Prepaid expenses and other current
assets 310 403 Total current assets 3,048
3,412 Intangible assets, net 1,784 1,328 Goodwill
1,780 1,277 Deferred income taxes, net 293 345 Property and
equipment, net 917 1,025 Other assets 480 349 Total
Assets $ 8,302 $ 7,736 Liabilities Short-term debt and
current maturities of long-term debt 706 710 Accounts payable 367
341 Accrued payroll and related costs 270 288 Accrued expenses and
other current liabilities 844 720 Deferred revenue and advance
contract payments 453 509 Income taxes payable 16 40
Total current liabilities 2,656 2,608
Long-term debt, net of current maturities 2,217 1,934 Non-current
deferred revenue 310 348 Deferred tax liabilities 181 181
Non-current income tax liabilities 183 175 Other liabilities
561 458 Total Liabilities 6,108 5,704
Total Equity 2,194 2,032 Total Liabilities and Equity
$ 8,302 $ 7,736
Condensed Consolidated Statements of
Cash Flows
(preliminary and unaudited)
Nine months ended (in
millions) December 30, 2016
January 1, 2016 Cash flows from operating activities: Net
income $ 38 $ 396 Adjustments to reconcile net loss income to net
cash provided by operating activities: Depreciation and
amortization 503 608 Pension & OPEB actuarial & settlement
gains — (28 ) Stock-based compensation 56 28 Gain on dispositions
(1 ) (44 ) Unrealized foreign currency exchange loss 20 39 Other
non-cash charges, net 16 (2 ) Changes in assets and liabilities,
net of acquisitions and dispositions: Decrease in assets 296 213
Decrease in liabilities (123 ) (468 ) Net cash
provided by operating activities 805 742
Cash flows from investing activities: Purchases of
property and equipment (199 ) (277 ) Payments for outsourcing
contract costs (59 ) (74 ) Short-term investing — (71 ) Software
purchased and developed (124 ) (155 ) Payments for acquisitions,
net of cash acquired (434 ) (265 ) Business dispositions — 37
Proceeds from sale of assets 26 67 Other investing activities, net
(35 ) 8 Net cash used in investing activities
(825 ) (730 ) Cash flows from financing
activities: Borrowings of commercial paper 1,667 821 Repayments of
commercial paper (1,562 ) (263 ) Borrowings under lines of credit
920 1,300 Repayment of borrowings under lines of credit (773 )
(1,300 ) Debt borrowings 157 350 Debt repayments (282 ) (819 )
Proceeds from stock options 47 72 Taxes paid related to net share
settlements of stock-based compensation awards (12 ) (28 )
Repurchase of common stock — (28 ) Dividend payments (59 ) (409 )
Borrowings for CSRA spin transaction — 1,508 Transfers of cash to
CSRA upon spin — (1,440 ) Other financing activities, net
(31 ) — Net cash provided by (used in) financing
activities 72 (236 ) Effect of exchange rate
changes on cash and cash equivalents (119 ) (44 ) Net
decrease in cash and cash equivalents (67 ) (268 ) Cash and cash
equivalents at beginning of year 1,178 2,098
Cash and cash equivalents at end of period $ 1,111 $
1,830
Non-GAAP Financial Measures
We present non-GAAP financial measures of performance which are
derived from the condensed consolidated financial information of
CSC. These non-GAAP financial measures include constant currency,
consolidated segment operating income and margin, consolidated
segment adjusted operating income and margin, consolidated segment
commercial operating income and margin, earnings before interest
and taxes (EBIT), adjusted EBIT, EBIT and adjusted EBIT margin,
non-GAAP income from continuing operations before taxes, non-GAAP
net income from continuing operations, non-GAAP EPS from continuing
operations 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 otherwise
required by GAAP which management believes are not indicative of
core operating performance. We believe these non-GAAP measures
allow investors to better understand the financial performance of
CSC exclusive of the impacts of corporate wide strategic decisions.
We believe 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. We believe the non-GAAP measures provided are also
considered important measures by financial analysts covering CSC 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 we present. 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. Consolidated segment operating income and
consolidated segment adjusted operating income are useful measures
in evaluating the financial performance of our core segment
business operations on a more comparable basis year-over-year.
However, these measures could limit one’s ability to assess our
financial performance by excluding corporate G&A and certain
other items. To compensate for this limitation, we provide a
reconciliation between these measure and income from continuing
operations, before taxes, which is the most directly comparable
financial measure calculated and presented in accordance with
GAAP.
Reconciliation of Non-GAAP Financial Measures
Our non-GAAP adjustments include:
- Restructuring costs - Reflects
restructuring costs related to workforce optimization and real
estate charges.
- Transaction and other
integration-related costs - Reflects costs related to (1) the
Separation, (2) integration planning, financing and advisory fees
associated with the proposed merger with the Enterprise Services
segment of Hewlett Packard Enterprise Company, and (3) acquisitions
and related amortization.
- Certain overhead costs - Reflects costs
historically allocated to CSRA but not included in discontinued
operations due to accounting rules. These costs are expected to be
largely eliminated on a prospective basis.
- U.S. Pension and OPEB - Reflects the
impact of certain U.S. pension and other postretirement benefit
(OPEB) plans historically included in CSC financial results that
have been transferred to CSRA as part of the separation.
- Pension and OPEB actuarial and
settlement gains - Reflects pension and OPEB actuarial and
settlement gains from mark-to-market accounting.
- SEC settlement-related items - Reflects
costs associated with certain SEC charges and settlements.
- Tax adjustment - Reflects the adoption
of a new accounting standard in fiscal 2016 changing excess tax
benefits on stock-based compensation to be recorded as a reduction
to income tax expense, the release of tax valuation allowances in
certain jurisdictions, and the application of an approximate 20%
tax rate for fiscal 2016 periods, which is at the low end of the
prospective targeted effective tax rate range of 20% to 25% and
effectively excludes the impact of discrete tax adjustments for
those periods.
Reconciliation of Non-GAAP Financial Measures(preliminary
and unaudited)
Consolidated Segment Operating Income
and Consolidated Segment Adjusted Operating Income
We define consolidated segment operating income as revenue less
costs of services, associated depreciation and amortization
expense, restructuring costs, and segment SG&A expenses.
Consolidated segment operating income excludes pension and OPEB
actuarial and settlement gains (losses) and corporate G&A,
which is largely associated with centrally managed overhead and
shared-services functions which are not controlled by segment level
leadership nor directly related to our core segment business
operations. Consolidated segment adjusted operating income further
excludes the impacts of corporate wide strategic decisions, such as
segment related restructuring and other transaction costs. We
define consolidated segment operating margin and consolidated
segment adjusted operating margin as consolidated segment operating
income and consolidated segment adjusted operating income as a
percentage of revenue. A reconciliation of consolidated segment
operating income and consolidated segment adjusted operating income
to income from continuing operations, before taxes is as
follows:
Three months ended
Nine months ended (in millions)
December 30,2016
January 1,2016
December 30,2016
January 1,2016
Consolidated segment adjusted operating income $ 216 $ 190 $ 520 $
494 Restructuring costs (12 ) (25 ) (94 ) (45 ) Transaction and
integration-related costs (39 ) (15 ) (111 ) (17 ) Certain overhead
costs — (12 ) — (48 ) U.S. Pension and OPEB — 10 —
38 Consolidated segment operating income 165 148 315
422 Corporate G&A (92 ) (60 ) (237 ) (181 ) Pension and OPEB
actuarial and settlement gains (losses) — 19 (1 ) 19 Interest
expense (33 ) (33 ) (87 ) (92 ) Interest income 8 8 26 26 Other
income (expense), net 2 (4 ) (3 ) 3 Income from
continuing operations, before taxes $ 50 $ 78 $ 13
$ 197 Consolidated segment adjusted operating
margin 11.3 % 10.9 % 9.1 % 9.3 % Consolidated segment operating
margin 8.6 % 8.5 % 5.5 % 8.0 %
Earnings Before
Interest and Taxes and Adjusted Earnings Before Interest and
Taxes
A reconciliation of EBIT and adjusted EBIT to net income is
as follows:
Three
months ended Nine months ended (in millions)
December 30,2016
January 1,2016
December 30,2016
January 1,2016
Adjusted EBIT $ 185 $ 147 $ 411 $ 380 Restructuring costs (12 ) (25
) (94 ) (45 ) Transaction and integration-related costs (98 ) (26 )
(243 ) (36 ) Certain overhead costs — (22 ) — (88 ) U.S. Pension
and OPEB — 10 — 38 SEC settlement-related items — — — (5 ) Pension
and OPEB actuarial and settlement gains — 19 —
19 EBIT $ 75 $ 103 $ 74 $ 263 Interest expense (33 ) (33 )
(87 ) (92 ) Interest income 8 8 26 26 Income tax (expense) benefit
(13 ) (56 ) 25 (17 ) Income from continuing operations $ 37
$ 22 $ 38 $ 180 Income from discontinued operations, net of taxes —
30 — 216 Net income $ 37 $ 52
$ 38 $ 396 Adjusted EBIT margin 9.7 %
8.4 % 7.2 % 7.2 % EBIT margin 3.9 % 5.9 % 1.3 % 5.0 %
Adjusted Free
Cash Flow
(preliminary and unaudited) A reconciliation of net cash
provided by operating activities to adjusted free cash flow is as
follows:
Three months
ended
Nine months ended
(in millions)
December 30,2016
January 1,2016
December 30,2016
January 1,2016
Net cash provided by operating activities $ 563 $ 258 $ 805 $ 742
Net cash used in investing activities(1) (78 ) (198 ) (756 ) (679 )
Acquisitions, net of cash acquired — 29 434 265 Business
dispositions — (3 ) — (37 ) Short-term investments — 71 — 71
Payments on capital leases and other long-term asset financings (24
) (24 ) (119 ) (135 ) Payments on separation and other transaction
costs 55 11 198 71 Payments on special restructuring costs 24 66 85
117 SEC settlement-related payments — — — 187 Sale of accounts
receivables (241 ) (63 ) (241 ) (239 ) Certain overhead costs —
22 — 22 Adjusted free cash flow $ 299
$ 169 $ 406 $ 385
(1)
Excludes capital expenditures financed
through CSC Finco and other investments.
Consolidated
Segment Adjusted Operating Income and Consolidated Segment Adjusted
Operating Margin
A reconciliation of consolidated segment operating income to
consolidated segment adjusted operating income is as follows:
Three months ended December 30, 2016
(in millions)
Consolidatedsegmentoperatingincome
Restructuringcosts
Transaction
andintegration-related costs
Consolidatedsegmentadjustedoperatingincome
Consolidatedsegmentadjustedoperatingmargin
Global Business Services $ 113 $ (6 ) $ (20 ) $ 139 13.3 % Global
Infrastructure Services 64 (6 ) (18 ) 88 10.1 % Total
Commercial 177 (12 ) (38 ) 227 11.8 % Corporate and Eliminations
(12 ) — (1 ) (11 ) — Total $ 165 $ (12 ) $ (39 ) $
216 11.3 %
Nine months ended
December 30, 2016 (in millions)
Operatingincome
Restructuringcosts
Transaction
andintegration-related costs
Consolidatedsegmentadjustedoperatingincome
Consolidatedsegmentadjustedoperatingmargin
Global Business Services $ 269 $ (28 ) $ (57 ) $ 354 11.3 % Global
Infrastructure Services 86 (66 ) (53 ) 205 7.9 %
Total Commercial 355 (94 ) (110 ) 559 9.8 % Corporate and
Eliminations (40 ) — (1 ) (39 ) — Total $ 315 $ (94 )
$ (111 ) $ 520 9.1 %
Three
months ended January 1, 2016 (in millions)
Operatingincome
Certainoverheadcosts
U.S. Pensionand OPEB
Restructuringcosts
Transactionandintegration-related
costs
Consolidatedsegmentadjustedoperatingincome
Consolidatedsegmentadjustedoperatingmargin
Global Business Services $ 101 — 3 (15 ) (3 ) $ 116
13.1 % Global Infrastructure Services 70 — 7 (9 ) (7
) 79 9.1 % Total Commercial 171 — 10 (24 ) (10 ) 195 11.1 %
Corporate and Eliminations (23 ) (12 ) — (1 ) (5 ) (5 ) — Total $
148 $ (12 ) $ 10 $ (25 ) $ (15 ) $ 190 10.9 %
Nine months ended January 1, 2016
(in millions)
Operatingincome
Certainoverheadcosts
U.S. Pensionand OPEB
Restructuringcosts
Transactionandintegration-related
costs
Consolidatedsegmentadjustedoperatingincome
Consolidatedsegmentadjustedoperatingmargin
Global Business Services $ 299 — 11 (27 ) (4 ) $ 319 11.8 % Global
Infrastructure Services 187 — 27 (17 ) (8 )
185
7.1 % Total Commercial 486 — 38 (44 ) (12 ) 504 9.5 %
Corporate and Eliminations (64 ) (48 ) — (1 ) (5 ) (10 ) — Total $
422 $ (48 ) $ 38 $ (45 ) $ (17 ) $ 494 9.3 %
Non-GAAP Results
A reconciliation of non-GAAP results to the respective most
directly comparable financial measure calculated and presented in
accordance with GAAP is as follows:
Three months ended December 30, 2016
(in millions, except per-share amounts) As reported
Restructuringcosts
Transactionandintegration-related
costs
Non-GAAPresults
Costs of services (excludes depreciation and amortization and
restructuring costs) $ 1,347 $ — $ — $ 1,347 Selling,
general and administrative (excludes depreciation and amortization,
restructuring costs and transaction costs) 333 — (78 ) 255
Income from continuing operations, before taxes 50 (12 ) (109 ) 171
Income tax (benefit) expense 13 (4 ) (31 ) 48 Income
from continuing operations 37 (8 ) (78 ) 123 Net income 37
(8 ) (78 ) 123 Less: net income attributable to noncontrolling
interest, net of tax 6 — — 6 Net income
attributable to CSC common stockholders $ 31 $ (8 ) $ (78 )
$ 117 Effective Tax Rate 26.0 % 28.1 % Basic
EPS from continuing operations $ 0.22 $ (0.06 ) $ (0.55 ) $ 0.83
Diluted EPS from continuing operations $ 0.21 $ (0.06 ) $ (0.54 ) $
0.81 Weighted average common shares outstanding for: Basic
EPS 140.88 140.88 140.88 140.88 Diluted EPS 144.81 144.81 144.81
144.81
Nine months ended December 30,
2016 (in millions, except per-share amounts) As
reported
Restructuringcosts
Transactionandintegration-related
costs
Non-GAAPresults
Costs of services (excludes depreciation and amortization
and restructuring costs) 4,131 $ — $ — $ 4,131 Selling,
general and administrative (excludes depreciation and amortization,
restructuring costs and transaction costs) 931 — (187 ) 744
Income from continuing operations, before taxes 13 (94 ) (257 ) 364
Income tax (benefit) expense (25 ) (22 ) (74 ) 71 Income
from continuing operations 38 (72 ) (183 ) 293 Net income 38
(72 ) (183 ) 293 Less: net income attributable to noncontrolling
interest, net of tax 13 — — 13 Net
income attributable to CSC common stockholders $ 25 $ (72 )
$ (183 ) $ 280 Effective Tax Rate (192.3 )% 19.5 %
Basic EPS from continuing operations $ 0.18 $ (0.51 ) $
(1.31 ) $ 2.00 Diluted EPS from continuing operations $ 0.17 $
(0.50 ) $ (1.27 ) $ 1.95 Weighted average common shares
outstanding for: Basic EPS 140.13 140.13 140.13 140.13 Diluted EPS
143.80 143.80 143.80 143.80
Three months
ended January 1, 2016 (in millions, except per-share
amounts)
Asreported
Certainoverheadcosts
U.S.PensionandOPEB
Restructuringcosts
Transactionandintegration-related
costs
Pensionand
OPEBactuarialandsettlementgains
Taxadjustment
Non-GAAPresults
Costs of services (excludes depreciation and amortization
and restructuring costs) $ 1,216 $ (7 ) $ 8 $ — $ (5 ) $ 16 $ — $
1,228 Selling, general and administrative (excludes
depreciation and amortization and restructuring costs) 259 (15 ) 2
— (15 ) 3 — 234 Income from continuing operations, before
taxes 78 (22 ) 10 (25 ) (28 ) 19 — 124 Income tax expense 56
(8 ) 4 (8 ) (9 ) 6 50 21 Income from
continuing operations 22 (14 ) 6 (17 ) (19 ) 13 (50 ) 103
Net income 52 (14 ) 6 (17 ) (19 ) 13 (50 ) 133 Less: net income
attributable to noncontrolling interest, net of tax 2 —
— — — — — 2 Net
income attributable to CSC common stockholders $ 50 $ (14 )
$ 6 $ (17 ) $ (19 ) $ 13 $ (50 ) $ 131
Effective Tax Rate 71.8 % 16.9 % Basic EPS from continuing
operations $ 0.16 $ (0.10 ) $ 0.04 $ (0.12 ) $ (0.14 ) $ 0.09 $
(0.36 ) $ 0.74 Diluted EPS from continuing operations $ 0.15 $
(0.10 ) $ 0.04 $ (0.12 ) $ (0.13 ) $ 0.09 $ (0.35 ) $ 0.73
Weighted average common shares outstanding for: Basic EPS 138.86
138.86 138.86 138.86 138.86 138.86 138.86 138.86 Diluted EPS 141.57
141.57 141.57 141.57 141.57 141.57 141.57 141.57
Nine months ended January 1, 2016 (in millions,
except per-share amounts)
Asreported
Certainoverheadcosts
U.S.Pensionand
OPEB
Restructuringcosts
Transactionandintegration-related
costs
Pensionand
OPEBactuarialandsettlementgains
SECsettlement-relateditems
Taxadjustment
Non-GAAPresults
Costs of services (excludes depreciation and amortization
and restructuring costs) $ 3,725 $ (41 ) $ 32 $ — $ (5 ) $ 16 $ — $
— $ 3,727 Selling, general and administrative (excludes
depreciation and amortization and restructuring costs) 799 (47 ) 6
— (25 ) 3 (5 ) — 731 Income from continuing operations,
before taxes 197 (88 ) 38 (45 ) (38 ) 19 (5 ) — 316 Income tax
expense 17 (34 ) 15 (14 ) (13 ) 6 (2 ) (10 )
69 Income from continuing operations 180 (54 ) 23 (31 ) (25
) 13 (3 ) 10 247 Net income 396 (54 ) 23 (31 ) (25 ) 13 (3 )
10 463 Less: net income attributable to noncontrolling interest,
net of tax 12 — — — — — —
— 12 Net income attributable to CSC common
stockholders $ 384 $ (54 ) $ 23 $ (31 ) $ (25 ) $ 13
$ (3 ) $ 10 $ 451 Effective Tax Rate
8.6 % 21.8 % Basic EPS from continuing operations $ 1.29 $
(0.39 ) $ 0.17 $ (0.22 ) $ (0.18 ) $ 0.09 $ (0.02 ) $ 0.07 $ 1.78
Diluted EPS from continuing operations $ 1.27 $ (0.38 ) $ 0.16 $
(0.22 ) $ (0.18 ) $ 0.09 $ (0.02 ) $ 0.07 $ 1.74 Weighted
average common shares outstanding for: Basic EPS 138.36 138.36
138.36 138.36 138.36 138.36 138.36 138.36 138.36 Diluted EPS 141.39
141.39 141.39 141.39 141.39 141.39 141.39 141.39 141.39
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170202006253/en/
CSCRichard Adamonis, Corporate Media
Relations+1-862-228-3481radamonis@csc.comorNeil DeSilva, Global
M&A and Investor
Relations+1-703-245-9700neildesilva@csc.com
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