Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Dec. 31, 2017 | Jan. 22, 2018 | |
Document Information [Abstract] | ||
Entity Registrant Name | DXC Technology Co | |
Entity Central Index Key | 1,688,568 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 285,687,865 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Income Statement [Abstract] | ||||
Revenues | $ 6,186 | $ 1,917 | $ 18,262 | $ 5,718 |
Costs of services (excludes depreciation and amortization and restructuring costs) | 4,521 | 1,347 | 13,621 | 4,131 |
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs) | 475 | 333 | 1,557 | 931 |
Depreciation and amortization | 481 | 161 | 1,379 | 494 |
Restructuring costs | 213 | 3 | 595 | 85 |
Interest expense | 77 | 33 | 231 | 87 |
Interest income | (27) | (8) | (59) | (26) |
Other expense (income), net | 8 | (2) | (72) | 3 |
Total costs and expenses | 5,748 | 1,867 | 17,252 | 5,705 |
Income before income taxes | 438 | 50 | 1,010 | 13 |
Income tax (benefit) expense | (341) | 13 | (207) | (25) |
Net income | 779 | 37 | 1,217 | 38 |
Less: net income attributable to non-controlling interest, net of tax | 3 | 6 | 26 | 13 |
Net income attributable to DXC common stockholders | $ 776 | $ 31 | $ 1,191 | $ 25 |
Income per common share: | ||||
Basic (in dollars per share) | $ 2.72 | $ 0.22 | $ 4.18 | $ 0.18 |
Diluted (in dollars per share) | 2.68 | 0.21 | 4.11 | 0.17 |
Cash dividend per common share (in dollars per share) | $ 0.18 | $ 0.14 | $ 0.54 | $ 0.42 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | ||
Statement of Comprehensive Income [Abstract] | |||||
Net income | $ 779 | $ 37 | $ 1,217 | $ 38 | |
Other comprehensive income, net of taxes: | |||||
Foreign currency translation adjustments, net of tax | [1] | (47) | (174) | 62 | (180) |
Cash flow hedges adjustments, net of tax | [2] | 5 | 6 | 0 | 15 |
Pension and other post-retirement benefit plans, net of tax: | |||||
Amortization of prior service cost, net of tax | [3] | (3) | (3) | (10) | (10) |
Pension and other post-retirement benefit plans, net of tax | (3) | (3) | (10) | (10) | |
Other comprehensive income (loss), net of taxes | (45) | (171) | 52 | (175) | |
Comprehensive income (loss) | 734 | (134) | 1,269 | (137) | |
Less: comprehensive income attributable to non-controlling interest | 6 | 6 | 34 | 13 | |
Comprehensive income (loss) attributable to DXC common stockholders | $ 728 | $ (140) | $ 1,235 | $ (150) | |
[1] | Tax expense related to foreign currency translation adjustments was $14 and $77, respectively, for the three and nine months ended December 31, 2017, and $0 and $1 for the three and nine months ended December 30, 2016, respectively. | ||||
[2] | Tax expense related to cash flow hedge adjustments was $3 and $0, respectively, for the three and nine months ended December 31, 2017. | ||||
[3] | Tax benefit related to amortization of prior service costs was $2 and $3, respectively, for the three and nine months ended December 31, 2017, and $2 and $5 for the three and nine months ended December 30, 2016. |
CONDENSED CONSOLIDATED STATEME4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, tax expense (benefit) | $ 14 | $ 0 | $ 77 | $ 1 |
Cash flow hedge adjustments, tax expense | 3 | 0 | ||
Amortization of prior service cost, tax (benefit) expense | $ 2 | $ 2 | $ 3 | $ 5 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Dec. 31, 2017 | Mar. 31, 2017 | [1] |
Current assets: | |||
Cash and cash equivalents | $ 2,926 | $ 1,263 | |
Receivables, net of allowance for doubtful accounts of $39 and $26 | 5,611 | 1,643 | |
Prepaid expenses | 540 | 223 | |
Other current assets | 444 | 118 | |
Total current assets | 9,521 | 3,247 | |
Intangible assets, net of accumulated amortization of $3,005 and $2,293 | 7,927 | 1,794 | |
Goodwill | 9,320 | 1,855 | |
Deferred income taxes, net | 458 | 381 | |
Property and equipment, net of accumulated depreciation of $3,659 and $2,816 | 3,812 | 903 | |
Other assets | 2,544 | 483 | |
Total Assets | 33,582 | 8,663 | |
Current liabilities: | |||
Short-term debt and current maturities of long-term debt | 2,173 | 738 | |
Accounts payable | 1,510 | 410 | |
Accrued payroll and related costs | 813 | 248 | |
Accrued expenses and other current liabilities | 3,403 | 998 | |
Deferred revenue and advance contract payments | 1,524 | 518 | |
Income taxes payable | 215 | 38 | |
Total current liabilities | 9,638 | 2,950 | |
Long-term debt, net of current maturities | 6,367 | 2,225 | |
Non-current deferred revenue | 856 | 286 | |
Non-current income tax liabilities and deferred tax liabilities | 1,523 | 423 | |
Other long-term liabilities | 1,996 | 613 | |
Total Liabilities | 20,380 | 6,497 | |
Commitments and contingencies | |||
DXC stockholders’ equity: | |||
Preferred stock, par value $.01 per share, authorized 1,000,000 shares, none issued as of December 31, 2017 and March 31, 2017 | 0 | 0 | |
Common stock, par value $.01 per share, authorized 750,000,000 shares, issued 286,553,833 as of December 31, 2017 and 141,298,797 as of March 31, 2017 | 3 | 1 | |
Additional paid-in capital | 12,201 | 2,219 | |
Retained earnings (accumulated deficit) | 834 | (170) | |
Accumulated other comprehensive loss | (118) | (162) | |
Treasury stock, at cost, 1,000,856 and 0 shares as of December 31, 2017 and March 31, 2017 | (83) | 0 | |
Total DXC stockholders’ equity | 12,837 | 1,888 | |
Non-controlling interest in subsidiaries | 365 | 278 | |
Total Equity | 13,202 | 2,166 | |
Total Liabilities and Equity | $ 33,582 | $ 8,663 | |
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
CONDENSED CONSOLIDATED BALANCE6
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2017 | Mar. 31, 2017 | [1] |
Current assets: | |||
Allowance for doubtful accounts | $ 39 | $ 26 | |
Intangible and other assets: | |||
Accumulated Amortization | 3,005 | 2,293 | |
Less: accumulated depreciation and amortization | $ 3,659 | $ 2,816 | |
CSC stockholders' equity: | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 | |
Common stock, issued (in shares) | 286,553,833 | 141,298,797 | |
Common stock in treasury, at cost (in shares) | 1,000,856 | 0 | |
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 9 Months Ended | |
Dec. 31, 2017 | Dec. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 1,217 | $ 38 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 1,387 | 503 |
Share-based compensation | 76 | 56 |
(Gain) on dispositions | 0 | (1) |
Unrealized foreign currency exchange losses | 44 | 20 |
Other non-cash charges, net | 23 | 16 |
Changes in assets and liabilities, net of effects of acquisitions and dispositions: | ||
Increase in assets | 167 | 296 |
Decrease in liabilities | (372) | (123) |
Net cash provided by operating activities | 2,542 | 805 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (175) | (199) |
Payments for outsourcing contract costs | (259) | (59) |
Software purchased and developed | (157) | (124) |
Cash acquired through Merger | 974 | 0 |
Payments for acquisitions, net of cash acquired | (193) | (434) |
Proceeds from sale of assets | 29 | 26 |
Other investing activities, net | (6) | (35) |
Net cash provided by (used in) investing activities | 213 | (825) |
Cash flows from financing activities: | ||
Borrowings of commercial paper | 1,822 | 1,667 |
Repayments of commercial paper | (1,706) | (1,562) |
Borrowings under lines of credit | 0 | 920 |
Repayment of borrowings under lines of credit | (335) | (773) |
Borrowings on long-term debt, net of discount | 621 | 157 |
Principal payments on long-term debt | (2,023) | (282) |
Proceeds from bond issuance | 647 | 0 |
Proceeds from stock options and other common stock transactions | 107 | 47 |
Taxes paid related to net share settlements of share-based compensation awards | (75) | (12) |
Repurchase of common stock | (66) | 0 |
Dividend payments | (123) | (59) |
Other financing activities, net | (5) | (31) |
Net cash (used in) provided by financing activities | (1,136) | 72 |
Effect of exchange rate changes on cash and cash equivalents | 44 | (119) |
Net increase (decrease) in cash and cash equivalents | 1,663 | (67) |
Cash and cash equivalents at beginning of year | 1,263 | 1,178 |
Cash and cash equivalents at end of period | $ 2,926 | $ 1,111 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total DXC Equity | Non-Controlling Interest | |||
Balance (in shares) (As Previously Reported) at Apr. 01, 2016 | 148,747,000 | ||||||||||
Balance (in shares) at Apr. 01, 2016 | 148,747,000 | ||||||||||
Balance, beginning (As Previously Reported) at Apr. 01, 2016 | $ 2,032 | $ 149 | $ 2,439 | $ 33 | $ (111) | $ (485) | $ 2,025 | $ 7 | |||
Balance, beginning (Adjustment) at Apr. 01, 2016 | [1] | 0 | (147) | 147 | |||||||
Balance, beginning at Apr. 01, 2016 | 2,032 | $ 2 | 2,586 | 33 | (111) | (485) | 2,025 | 7 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net income | 38 | 25 | 25 | 13 | |||||||
Other comprehensive income (loss) | (175) | (175) | (175) | ||||||||
Share-based compensation expense | 54 | 54 | 54 | ||||||||
Acquisition of treasury stock | (11) | (11) | (11) | ||||||||
Stock option exercises and other common stock transactions (in shares) | 2,855,000 | ||||||||||
Stock option exercises and other common stock transactions | 49 | 49 | 49 | ||||||||
Dividends declared | (59) | (59) | (59) | ||||||||
Non-controlling interest distributions and other | (13) | (13) | |||||||||
Non-controlling interest from acquisition | 281 | 281 | |||||||||
Divestiture of NPS | (2) | (2) | (2) | ||||||||
Balance (in shares) at Dec. 30, 2016 | 151,602,000 | ||||||||||
Balance, ending at Dec. 30, 2016 | $ 2,194 | $ 2 | 2,689 | (3) | (286) | (496) | 1,906 | 288 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Treasury shares | [2] | 0 | |||||||||
Balance (in shares) (As Previously Reported) at Mar. 31, 2017 | 151,932,000 | ||||||||||
Balance (in shares) (Adjustment) at Mar. 31, 2017 | [1] | (10,633,000) | |||||||||
Balance (in shares) at Mar. 31, 2017 | 141,299,000 | ||||||||||
Balance, beginning (As Previously Reported) at Mar. 31, 2017 | $ 2,166 | $ 152 | 2,565 | (170) | (162) | (497) | [3] | 1,888 | 278 | ||
Balance, beginning (Adjustment) at Mar. 31, 2017 | [1] | 0 | (151) | (346) | 497 | [3] | |||||
Balance, beginning at Mar. 31, 2017 | 2,166 | [2] | $ 1 | 2,219 | (170) | (162) | 0 | [3] | 1,888 | 278 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Business acquired in purchase, net of issuance costs (in shares) | [4] | 141,741,000 | |||||||||
Business acquired in purchase, net of issuance costs | [4] | 9,905 | $ 2 | 9,848 | 9,850 | 55 | |||||
Net income | 1,217 | 1,191 | 1,191 | 26 | |||||||
Other comprehensive income (loss) | 52 | 44 | 44 | 8 | |||||||
Share-based compensation expense | 74 | 74 | 74 | ||||||||
Acquisition of treasury stock | (83) | (83) | [3] | (83) | |||||||
Share repurchase program (in shares) | (842,000) | ||||||||||
Share repurchase program | (66) | (36) | (30) | (66) | |||||||
Stock option exercises and other common stock transactions (in shares) | 4,356,000 | ||||||||||
Stock option exercises and other common stock transactions | 96 | 96 | 96 | ||||||||
Dividends declared | (157) | (157) | (157) | ||||||||
Non-controlling interest distributions and other | (2) | (2) | |||||||||
Balance (in shares) at Dec. 31, 2017 | 286,554,000 | ||||||||||
Balance, ending at Dec. 31, 2017 | $ 13,202 | $ 3 | $ 12,201 | $ 834 | $ (118) | $ (83) | [3] | $ 12,837 | $ 365 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Treasury shares | 1,000,856 | ||||||||||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. | ||||||||||
[2] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. | ||||||||||
[3] | 1,000,856 treasury shares as of December 31, 2017 | ||||||||||
[4] | See Note 3 - "Acquisitions" |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Business DXC Technology Company (“DXC” or the "Company") is the world's leading independent, end-to-end IT services company. DXC’s mission is to enable superior returns on its clients' technology investments through best-in-class vertical industry solutions, domain expertise, strategic partnerships with key technology leaders and global scale. The Company helps lead its clients through their digital transformations to meet new business demands and customer expectations in a market of escalating complexity, interconnectivity, mobility, and opportunity. DXC strives to be a trusted IT partner to its clients by addressing their requirements and providing next-generation IT services that include applications modernization, cloud infrastructure, cyber security, and big data solutions. On October 11, 2017, the Company announced that it had entered into an Agreement and Plan of Merger with Ultra SC Inc., Ultra First VMS Inc., Ultra Second VMS LLC, Ultra KMS Inc., Vencore Holding Corp. (“Vencore”), KGS Holding Corp (“KeyPoint”), The SI Organization Holdings LLC and KGS Holding LLC (the “Ultra Merger Agreement”). The Ultra Merger Agreement provides that the Company will spin off its U.S. public sector business and combine it with Vencore and KeyPoint to form a separate, independent publicly traded company to serve U.S. public sector clients. The formation of the new company is subject to regulatory and other approvals. Basis of Presentation The accompanying interim unaudited condensed consolidated financial statements (the "financial statements") include the accounts of DXC, its consolidated subsidiaries, and those business entities in which DXC maintains a controlling interest. Investments in business entities in which the Company does not have control, but has the ability to exercise significant influence over operating and financial policies, are accounted for by the equity method. Other investments are accounted for by the cost method. Non-controlling interests are presented as a separate component within equity in the condensed consolidated balance sheets. Net earnings attributable to the non-controlling interests are presented separately in the condensed consolidated statements of operations, and comprehensive income attributable to non-controlling interests are presented separately in the condensed consolidated statements of comprehensive income (loss). All intercompany transactions and balances have been eliminated. As previously disclosed, effective April 1, 2017, Computer Sciences Corporation ("CSC") completed its previously announced combination with the Enterprise Services business of Hewlett Packard Enterprise Company ("HPES"), which resulted in CSC becoming a wholly owned subsidiary of DXC (the "Merger"). See Note 3 - " Acquisitions " for further information. DXC common stock began regular-way trading under the symbol "DXC" on the New York Stock Exchange on April 3, 2017. Because CSC was deemed the accounting acquirer in this combination for accounting purposes under GAAP (defined below), CSC is considered DXC's predecessor and the historical financial statements of CSC prior to April 1, 2017, are reflected in this Quarterly Report on Form 10-Q as DXC's historical financial statements. Accordingly, the financial results of DXC as of and for any periods ending prior to April 1, 2017 do not include the financial results of HPES, and therefore, are not directly comparable. Additionally, "prepaid expenses" and "other current assets" previously aggregated within "prepaid expenses and other current assets" have been separately disclosed, and prior year amounts have been reclassified to conform to the current year presentation. CSC used to report its results based on a fiscal year convention that comprises four thirteen-week quarters. However, effective April 1, 2017, DXC's fiscal year was modified to end on March 31 of each year with each quarter ending on the last calendar day. The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States ("GAAP"). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in CSC's Annual Report on Form 10-K for the fiscal year ended March 31, 2017 ("fiscal 2017"), included in DXC's Annual Report on Form ARS for fiscal 2017. In the opinion of management, the accompanying financial statements of DXC contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following Accounting Standards Updates ("ASU") were recently issued but have not yet been adopted by DXC: In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815).” This amendment was issued to improve the financial reporting of hedge relationships to better portray the economic results of an entity’s risk management activities in its financial statements and to make certain improvements to simplify the application of hedge accounting. ASU 2017-12 will be effective for DXC in fiscal 2020 and early adoption is permitted. The ASU must be adopted by applying the standard to existing hedge instruments at the adoption date. DXC is currently evaluating the effect the adoption of ASU 2017-12 will have on its consolidated financial statements and notes thereto. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This amendment is intended to increase transparency and comparability among organizations by recognizing virtually all lease assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements. ASU 2016-02 will be effective for DXC in fiscal 2020 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition and provides for certain practical expedients. DXC is currently evaluating the effect the adoption of ASU 2016-02 will have on its existing accounting policies and the consolidated financial statements in future reporting periods, but expects there will be an increase in assets and liabilities on its balance sheets at adoption due to the recording of right-of-use assets and corresponding lease liabilities, which may be significant. Refer to Note 18 - " Commitments and Contingencies " for information about its operating lease obligations. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which, along with amendments issued in 2015 and 2016, will replace most existing revenue recognition guidance under U.S. GAAP and eliminate industry specific guidance. The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which DXC expects to be entitled in exchange for those goods or services. The guidance also addresses the timing of recognition of certain costs incurred to obtain or fulfill a customer contract. Further, it requires the disclosure of sufficient information to enable readers of DXC’s financial statements to understand the nature, amount, timing and uncertainty of revenues, and cash flows arising from customer contracts, and information regarding significant judgments and changes in judgments made. ASU 2014-09 provides two methods of adoption: full retrospective and modified retrospective. Under the full retrospective method, the standard would be applied to all periods presented with previously disclosed periods restated under the new guidance. Under the modified retrospective method, prior periods would not be restated but rather a cumulative catch-up adjustment would be recorded on the adoption date. The Company will adopt this standard in the first quarter of Fiscal 2019 and expects to adopt using the modified retrospective method. DXC has performed an initial assessment of the impact of the standard and continues to assess the impact that the guidance will have on accounting policies, processes, systems and internal controls. The Company is currently in the process of implementing the new standard. Based on the implementation efforts to-date, including the assessment of contracts acquired through the combination with HPES, the Company expects the primary accounting impacts to include the following: • The Company’s IT and business process outsourcing arrangements comprise a series of distinct services, for which revenue is expected to be recognized as the services are provided in a manner that is generally consistent with current practices. • The Company has certain arrangements involving the sale of proprietary software and related services for which vendor-specific objective evidence of fair value may not exist, resulting in the deferral of revenues. Under the new standard, estimates of standalone selling price will be necessary for all software performance obligations, which may result in the acceleration of revenues. • The Company currently does not capitalize commission costs, which will be required in certain cases under the new standard and amortized over the period that services or goods are transferred to the customer. However, the Company is currently assessing the impact of the standard on commission plans of the combined company. As the quantitative impact of adopting the standard may be significantly impacted by arrangements contracted before the adoption date, the Company has not yet reached a conclusion about whether the accounting impact of the new standard will be material to its consolidated financial statements. However, the Company expects continuing significant implementation efforts to accumulate and report additional disclosures required by the standard. Other recently issued ASUs effective after December 31, 2017 are not expected to have a material effect on DXC's consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Fiscal 2018 Acquisitions HPES Merger On April 1, 2017, CSC, Hewlett Packard Enterprise Company (“HPE”), Everett SpinCo, Inc.(“Everett”), and New Everett Merger Sub Inc., a wholly-owned subsidiary of Everett (“Merger Sub”), completed the strategic combination of CSC with the Enterprise Services business of HPE to form DXC. The combination was accomplished through a series of transactions that included the transfer by HPE of its Enterprise Services business, HPES, to Everett, and spin-off by HPE of Everett on March 31, 2017, and the merger of Merger Sub with and into CSC on April 1, 2017 (the “Merger”). At the time of the Merger, Everett was renamed DXC, and as a result of the Merger, CSC became a direct wholly owned subsidiary of DXC. DXC common stock began regular-way trading on the New York Stock Exchange on April 3, 2017. The strategic combination of the two complementary businesses was to create a versatile global technology services business, well positioned to innovate, compete and serve clients in a rapidly changing marketplace. The transaction involving HPES and CSC is a reverse merger acquisition, in which DXC is considered the legal acquirer of the business and CSC is considered the accounting acquirer. While purchase consideration transferred in a business combination is typically measured by reference to the fair value of equity issued or other assets transferred by the accounting acquirer, CSC did not issue any consideration in the Merger. CSC stockholders received one share of DXC common stock for every one share of CSC common stock held immediately prior to the Merger. DXC issued a total of 141,298,797 shares of DXC common stock to CSC stockholders, representing approximately 49.9% of the outstanding shares of DXC common stock immediately following the Merger. All share and per share information has been restated to reflect the effects of the Merger. The reverse merger is deemed a capital transaction and the net assets of CSC (the accounting acquirer) are carried forward to DXC (the legal acquirer and the reporting entity) at their carrying value before the combination. The acquisition process utilizes the capital structure of the Company and the assets and liabilities of CSC, which are recorded at historical cost. The equity of the Company is the historical equity of CSC, retroactively restated to reflect the number of shares issued by DXC in the transaction. In connection with the Merger, the Company entered into a number of agreements with HPE including the following: • Information Technology Services Agreement - The Company and HPE have entered into an Agreement pursuant to which the Company will provide information technology services to HPE. This agreement terminates on the fifth anniversary of its effective date, unless earlier terminated by the parties in accordance with its terms. • Preferred Vendor Agreements - The Company and HPE have entered into Preferred Vendor Agreements, pursuant to which HPE and Micro Focus International, the acquirer of HPE's software business, will: (1) make available to DXC for purchase hardware products sold by HPE and technology services provided by HPE and (2) make available to DXC for purchase and license software products sold or licensed by HPE and Micro Focus, and technology (including SaaS), support, professional and other services provided by HPE and Micro Focus. • Certain other additional agreements were entered into, including a Separation and Distribution Agreement, as amended (the "Separation Agreement"), an employee matters agreement, a tax matters agreement, a transition services agreement, an intellectual property matters agreement, and certain real estate related agreements. Subsequent to the Merger, HPE settled certain obligations as required under the Separation Agreement. In accordance with the provisions of the agreement, a calculation was performed to make certain adjustments required to complete the separation and standup of legacy HPES and achieve accurate cut off for intercompany transactions with its former parent. The aggregate adjustment to settle the obligations was $203 million . In May 2016, CSC, HPE and DXC (f/k/a Everett Spinco, Inc.) entered into an agreement and plan of merger, as amended (the “Merger Agreement”), and HPE and DXC entered into a Separation Agreement, in each case relating to the combination of HPES and CSC. At the time the Merger Agreement and the Separation Agreement were executed, HPES was a party to several thousand leases with Hewlett-Packard Financial Services that were classified as capital leases. Under the terms of the Separation Agreement the balance of long-term capital leases for which HPES would be liable at the time of the spin-off was not to exceed $250 million . The Separation Agreement provided HPE an opportunity to modify the terms of the long-term leases to reduce the balance classified as capital leases. Between late May 2016 and the end of March 2017, Hewlett-Packard Financial Services entered into lease amendments that purported to modify most of the leases between HPES and Hewlett-Packard Financial Services in a manner that would cause those leases to be classified as operating leases. After the closing of the Merger, the Company began assessing the terms of the leases (including the amendments described above). During the Company’s second fiscal quarter, the Company concluded that the long-term capital leases that were amended by Hewlett-Packard Financial Services did not satisfy the requirements for classification as operating leases and as a result should be classified as capital leases as of the closing of the spin-off. Accordingly, as part of the process of determining fair value of these leases as of April 1, 2017, the Company recorded a lease liability of $977 million , fixed assets under capital leases of $594 million , and a $383 million increase to goodwill. The Company is addressing this matter with HPE in a manner consistent with the terms of the Separation Agreement, with any disagreement being treated in a confidential manner under the Separation Agreement, including dispute resolution through executive escalation, mediation and binding arbitration. Under the acquisition method of accounting, total consideration exchanged was: (in millions) Amount Preliminary fair value of purchase consideration received by HPE stockholders (1) $ 9,782 Preliminary fair value of HPES options assumed by CSC (2) 68 Total estimated consideration transferred $ 9,850 (1) Represents the fair value of consideration received by HPE stockholders to give them 50.1% ownership in the combined company. The fair value of the purchase consideration transferred was based on a total of 141,865,656 shares of DXC common stock distributed to HPE stockholders as of the close of business on the record date ( 141,741,712 after the effect of 123,944 cancelled shares) at CSC's closing price of $69.01 per share on March 31, 2017. (2) Represents the fair value of certain stock-based awards of HPES employees that were unexercised on March 31, 2017, which HPE, HPES and CSC agreed would be converted to DXC stock-based awards. Due to the complexity of the Merger, the Company recorded the assets acquired and liabilities assumed at their preliminary fair values. The Company's preliminary estimates of the fair values of the assets acquired and the liabilities assumed, as well as the fair value of non-controlling interest, are based on the information that was available as of the Merger date, and the Company is continuing to evaluate the underlying inputs and assumptions used in its valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the Merger date. The cumulative impact of any subsequent changes resulting from the facts and circumstances that existed as of the Merger date will be adjusted in the reporting period in which the adjustment amount is determined. The preliminary estimated purchase price is allocated as follows: (in millions) Estimated Fair Value Cash and cash equivalents $ 974 Accounts receivable (1) 4,092 Other current assets 535 Total current assets 5,601 Property and equipment 2,799 Intangible assets 6,169 Other assets 1,614 Total assets acquired 16,183 Accounts payable, accrued payroll, accrued expenses, and other current liabilities (4,496 ) Deferred revenue (1,267 ) Long-term debt, net of current maturities (4,817 ) Long-term deferred tax liabilities and income tax payable (1,570 ) Other liabilities (1,336 ) Total liabilities assumed (13,486 ) Net identifiable assets acquired 2,697 Add: Fair value of non-controlling interests (55 ) Goodwill 7,208 Total estimated consideration transferred $ 9,850 (1) Includes aggregate adjustments received from HPE, in accordance with the provisions of the Separation Agreement, of $203 million . As of December 31, 2017, DXC has not finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to: receivables; property and equipment; deferred income taxes, net; deferred revenue and advanced contract payments; deferred costs; intangible assets; accounts payable and accrued liabilities; lease obligations; loss contracts; non-controlling interest; and goodwill. As of the period ended December 31, 2017, the Company made a number of refinements to the April 1, 2017 preliminary purchase price allocation as reported June 30, 2017 . These refinements were primarily driven by the Company recording valuation adjustments to certain preliminary estimates of fair values which resulted in a decrease in net assets of $450 million . Total assets increased by $1.2 billion , primarily driven by a $127 million increase of accounts receivable; $317 million increase in property and equipment primarily arising from the recognition of $594 million of fixed assets under capital lease, offset by a $277 million reduction in the preliminary fair value of assets related to data centers and land; and a $1.1 billion increase in intangible assets, primarily driven by a $1.3 billion increase in the preliminary fair value assessment for customer relationships. Liabilities increased by $1.7 billion primarily driven by an increase in capital lease obligations of $1.0 billion , a $343 million adjustment to deferred revenue primarily related to a valuation adjustment for outsourcing and other customer contracts taking into account continuing performance obligation, an increase of $106 million of debt, and an increase in long-term tax related liabilities of $200 million . In accordance with ASU 2015-16, "Business Combinations (Topic 805)," Simplifying the Accounting for Measurement-period Adjustments, during the three months ended December 31, 2017, the Company continued to refine its fair value assessment of assets acquired and liabilities assumed. As a result, a $16 million increase in income before income taxes related to six months ended September 30, 2017 was recognized in the condensed consolidated statement of operations for the three months ended December 31, 2017. The change in income before income taxes was primarily attributed to a decrease of $9 million of interest expense related to capital leases and a decrease of $7 million in cost of services. Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the Merger date. The goodwill recognized with the Merger was attributable to the synergies expected to be achieved by combining the businesses of CSC and HPES, expected future contracts and the acquired workforce. The cost-saving opportunities are expected to include improved operating efficiencies and asset optimization. During the three months ended December 31, 2017, the Company refined its preliminary allocation of goodwill by reportable segment, resulting in an allocation to the Company's reportable segments of $2.7 billion to the Global Business Services ("GBS") segment, $2.5 billion to the Global Infrastructure Services ("GIS") segment and $2.0 billion to the United States Public Sector ("USPS") segment. A portion of the total goodwill is expected to be deductible for tax purposes. See Note 9 - " Goodwill ." Current Assets and Liabilities For the preliminary fair value estimates reported in the three months ended December 31, 2017, the Company valued current assets and liabilities, with the exception of the current portion of deferred revenue and capital leases, using existing carrying values as an estimate for the fair value of those items as of the Merger date. Property and Equipment The acquired property and equipment are summarized in the following table: (in millions) Amount Land, buildings, and leasehold improvements $ 1,500 Computers and related equipment 1,122 Furniture and other equipment 45 Construction in progress 132 Total $ 2,799 The Company estimated the value of acquired property and equipment using predominately the market method and in certain specific cases, the cost method. Identified Intangible Assets The acquired identifiable intangible assets are summarized in the following table: (in millions) Amount Estimated Useful Lives (Years) Customer relationships $ 5,200 10-13 Developed technology 141 2-7 Third-party purchased software 508 2-7 Deferred contract costs 320 n/a Total $ 6,169 The Company estimated the value of customer relationships and developed technology using the multi-period excess earnings and relief from royalty methods, respectively. Deferred contract costs were fair valued taking into account continuing performance obligation. Restructuring Liabilities The Company acquired approximately $328 million of restructuring liabilities incurred under HPES' restructuring plans, which are expected to be paid out through 2029. Approximately $256 million relates to workforce reductions and $72 million relates mainly to facilities costs. Long-Term Debt Assumed indebtedness included senior notes in the principal amount of $1.5 billion issued in 2017 and $0.3 billion issued in 1999 for total principal amount of $1.8 billion ; a term loan with three tranches all borrowed on March 31, 2017 in an aggregate principal equivalent of $2.0 billion ; as well as capitalized lease liabilities and other debt. Subsequent to the initial preliminary purchase price allocation as reported June 30, 2017 , there was a fair value assessment of the senior notes and term loans as of the Merger date, which resulted in a purchase accounting adjustment that increased debt by $94 million , including $12 million to eliminate historical deferred debt issuance costs, premium, and discounts. Converted capital leases were recorded on the balance sheet at preliminary fair value as of April 1, 2017 resulting in a total capital lease obligation of $1.6 billion . Additionally, the Company completed its fair value assessment of certain debt and accrued interest with a carrying value of $87 million as of the Merger date, which resulted in a purchase accounting adjustment that increased debt by $12 million . The Company will continue to assess the fair value of assumed debt, including capital leases, during the measurement period. Deferred Tax Liabilities The Company preliminarily valued deferred tax assets and liabilities based on statutory tax rates in the jurisdictions of the legal entities where the acquired non-current assets and liabilities are taxed. Defined Benefit Pension Plans Certain eligible employees, retirees and other former employees of HPES participated in certain U.S. and international defined benefit pension plans offered by HPE. The plans whose participants were exclusively HPES employees were acquired, while the plans whose participants included both HPES employees and HPE employees were replicated to allow separation of HPES and HPE employees. The resulting separate plans containing only HPES were acquired. HPES pension obligations depend on various assumptions. The Company's actuaries remeasured all of the acquired HPES plan obligations as of March 31, 2017. The following table summarizes the balance sheet impact of the pension plans assumed from HPES as a result of the Merger. (in millions) Amount Other assets $ 558 Accrued expenses and other current liabilities (13 ) Other long-term liabilities (547 ) Net amount recorded $ (2 ) The following table summarizes the projected benefit obligation, fair value of the plan assets and the funded status assumed from HPES as a result of the Merger. (in millions) Amount Projected benefit obligation $ (7,413 ) Fair value of plan assets 7,411 Funded status $ (2 ) The following table summarizes the plan asset allocations by asset category for HPES pension plans assumed by the Company as a result of the Merger. Equity securities 22 % Debt securities (1) 72 % Alternatives 5 % Cash and other 1 % Total 100 % (1) Includes liability-driven investments The following table summarizes the estimated future benefit payments due to the pension and benefit plans assumed from HPES as a result of the Merger. (in millions) Amount Employer contributions: 2018 $ 39 Benefit payments: 2018 $ 225 2019 $ 151 2020 $ 163 2021 $ 224 2022 $ 180 2023 through 2027 $ 1,132 Unaudited and Pro Forma Results of Operations The Company's condensed consolidated statements of operations includes the following revenues and net income attributable to HPES since the Merger date: (in millions) Three Months Ended December 31, 2017 Nine Months Ended December 31, 2017 Revenues $ 4,374 $ 12,942 Net income $ 422 $ 1,199 The following table provides unaudited pro forma results of operations for the Company for the three and nine months ended December 31, 2016, as if the Merger had been consummated on April 2, 2016, the first day of DXC's fiscal year ended March 31, 2017. These unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies. In addition, the unaudited pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analyses are performed during the measurement period. Accordingly, the Company presents these unaudited pro forma results for informational purposes only, and they are not necessarily indicative of what the actual results of operations of DXC would have been if the Merger had occurred at the beginning of the period presented, nor are they indicative of future results of operations. CSC reported its results based on a fiscal year convention that comprised four thirteen-week quarters. HPES reported its results on a fiscal year basis ended October 31. As a consequence of CSC and HPES having different fiscal year-end dates, all references to the unaudited pro forma statement of operations include the results of operations of CSC for the three and nine months ended December 31, 2016 and of HPES for the three and nine months ended October 31, 2016. (in millions, except per-share amounts) Three Months Ended December 30, 2016 (1) Nine Months Ended December 30, 2016 (1) Revenues $ 6,585 $ 19,358 Net loss (166 ) (570 ) Loss attributable to the Company (174 ) (587 ) Loss per common share: Basic $ (0.61 ) $ (2.07 ) Diluted $ (0.61 ) $ (2.07 ) (1) The unaudited pro forma information is based on legacy CSC results for the three and nine months ended December 31, 2016 and legacy HPES results for the three and nine months ended October 31, 2016. The unaudited pro forma information above is based on events that are (i) directly attributable to the Merger, (ii) factually supportable, and (iii) with respect to the unaudited pro forma statement of operations, expected to have a continuing impact on the consolidated results of operations of the combined company. Nonrecurring transaction costs associated with the Merger of $26 million for the nine months ended December 31, 2017 are not included in the unaudited pro forma information above. Subsequent to the Merger, the Company adjusted the preliminary purchase price allocation, which would have decreased pro forma combined net loss and loss per common share by $96 million and $0.34 , respectively, for the three months ended December 30, 2016, and $292 million and $1.03 , respectively, for the nine months ended December 30, 2016. The decrease in pro forma combined net loss and loss per common share was primarily attributed to the acquisition-related fair value adjustments discussed above. Tribridge Acquisition On July 1, 2017, DXC acquired all of the outstanding capital stock of Tribridge Holdings LLC, an independent integrator of Microsoft Dynamics 365, for total consideration of $152 million . The acquisition includes the Tribridge affiliate company, Concerto Cloud Services LLC. The combination of Tribridge with DXC expands DXC’s Microsoft Dynamics 365 global systems integration business. The Company’s purchase price allocation for the Tribridge acquisition is preliminary and subject to revision as additional information related to the fair value of assets and liabilities becomes available. The preliminary purchase price was allocated to assets acquired and liabilities assumed based upon current determination of fair values at the date of acquisition as follows: $32 million to current assets, $4 million to property and equipment, $62 million to intangible assets other than goodwill, $24 million to current liabilities and $78 million to goodwill. The goodwill is primarily associated with the Company's GBS segment and is tax deductible. The amortizable lives associated with the intangible assets acquired includes customer relationships which have a 12 -year estimated useful life. Fiscal 2017 Acquisitions Xchanging Acquisition On May 5, 2016, DXC acquired Xchanging plc ("Xchanging"), a provider of technology-enabled business solutions to organizations in global insurance and financial services, healthcare, manufacturing, real estate, and the public sector in a step acquisition. Xchanging was listed on the London Stock Exchange under the symbol “XCH.” Total cash consideration paid to and on behalf of the Xchanging shareholders of $693 million (or $492 million net of cash acquired) was funded from existing cash balances and borrowings under DXC's credit facility. Transaction costs associated with the acquisition of $17 million were included within Selling, general, and administrative expenses. The acquisition expanded CSC's market coverage in the global insurance industry and enabled the Company to offer access to a broader, partner-enriched portfolio of services including property and casualty insurance and wealth management business processing services. The Xchanging purchase price was allocated to assets acquired and liabilities assumed based upon the determination of fair value at date of acquisition as follows: $396 million to current assets, $99 million to non-current assets, $582 million to intangible assets other than goodwill, $267 million to current liabilities, $516 million to long-term liabilities, $680 million to goodwill, and $281 million to non-controlling interest. The amortizable lives associated with the intangible assets acquired includes developed technology, customer relationships and trade names, which have estimated useful lives of 7 to 8 years, 15 years and 3 to 5 years, respectively. The goodwill arising from the acquisition was allocated to the GBS and GIS segments and is no t deductible for tax purposes. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share Basic EPS are computed using the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflect the incremental shares issuable upon the assumed exercise of stock options and equity awards. The following table reflects the calculation of basic and diluted EPS: Three Months Ended Nine Months Ended (in millions, except per-share amounts) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Net income attributable to DXC common shareholders: $ 776 $ 31 $ 1,191 $ 25 Common share information: Weighted average common shares outstanding for basic EPS 285.38 140.88 284.70 140.13 Dilutive effect of stock options and equity awards 4.39 3.93 4.83 3.67 Weighted average common shares outstanding for diluted EPS 289.77 144.81 289.53 143.80 Earnings per share: Basic $ 2.72 $ 0.22 $ 4.18 $ 0.18 Diluted $ 2.68 $ 0.21 $ 4.11 $ 0.17 Certain stock options and RSUs were excluded from the computation of dilutive EPS because inclusion of these amounts would have had an anti-dilutive effect. The number of options and shares excluded were as follows: Three Months Ended Nine Months Ended December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Stock Options — 1,956,698 24,850 1,621,950 RSUs 10,552 1,470 21,030 1,611 |
Sale of Receivables
Sale of Receivables | 9 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Sale of Receivables | Sale of Receivables Receivables Securitization Facility On December 21, 2016, CSC established a $250 million accounts receivable securitization facility (the "Receivables Facility") with certain unaffiliated financial institutions (the "Purchasers") for the sale of commercial account receivables in the United States. Under the Receivables Facility, CSC and certain of its subsidiaries (collectively, the "Sellers") sell billed and unbilled accounts receivable to CSC Receivables, LLC ("CSC Receivables"), a wholly owned bankruptcy-remote entity. CSC Receivables in turn sells such purchased accounts receivable in their entirety to the Purchasers pursuant to a receivables purchase agreement. Sales of receivables by CSC Receivables occur continuously and are settled on a monthly basis. The proceeds from the sale of these receivables comprise a combination of cash and a deferred purchase price receivable ("DPP"). The DPP is realized by the Company upon the ultimate collection of the underlying receivables sold to the Purchasers. The amount available under the Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of December 31, 2017 , the total availability under the Receivables Facility was approximately $177 million . The Receivables Facility terminates on September 14, 2018, but provides for one or more optional one-year extensions, if agreed to by the Purchasers. The Company uses the proceeds from receivables sales under the Receivables Facility for general corporate purposes. The Company has no retained interests in the transferred receivables, other than collection and administrative services and its right to the DPP. The DPP is included in receivables at fair value on the condensed consolidated balance sheets. The fair value of the sold receivables approximated their book value due to their short-term nature, and as a result no gain or loss on sale of receivables was recorded. In exchange for the sale of accounts receivable during the nine months ended December 31, 2017 , the Company received cash of $201 million and recorded a DPP. The DPP, which fluctuates over time based on the total amount of eligible receivables generated during the normal course of business, was $249 million as of December 31, 2017 . Additionally, as of December 31, 2017 , the Company recorded a $24 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility exceeded the maximum funding limit. The Company's risk of loss following the transfer of accounts receivable under the Receivables Facility is limited to the DPP outstanding and any short-falls in collections for specified non-credit related reasons after sale. Payment of the DPP is not subject to significant risks other than delinquencies and credit losses on accounts receivable sold under the Receivables Facility. Certain obligations of Sellers under the Receivables Facility and CSC, as initial servicer, are guaranteed by the Company under a performance guaranty, made in favor of an administrative agent on behalf of the Purchasers. However, the performance guaranty does not cover CSC Receivables’ obligations to pay yield, fees or invested amounts to the administrative agent or any of the Purchasers. The following table is a reconciliation of the beginning and ending balances of the DPP: As of and for the (in millions) Three Months Ended December 31, 2017 Nine Months Ended Beginning balance $ 272 $ 252 Transfers of receivables 562 1,716 Collections (593 ) (1,717 ) Fair value adjustment 8 (2 ) Ending balance $ 249 $ 249 Receivables Sales Facility On July 14, 2017, Enterprise Services LLC, a wholly-owned subsidiary of the Company ("Enterprise"), entered into a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) with certain financial institutions (the "Financial Institutions"). The Purchase Agreement established a federal government obligor receivables purchase facility (the “Facility”). Concurrently, the Company entered into a guaranty made in favor of the Financial Institutions, that guarantees the obligations of the sellers and servicers of receivables under the Purchase Agreement. The guaranty does not cover any credit losses under the receivables . In connection with the previously announced spin-off of the Company's USPS business, the Company entered into certain amendments to the guaranty whereby the Company can request to terminate its guaranty at the time of the separation of the USPS business. In accordance with the terms of the Purchase Agreement, on January 23, 2018, the Purchase Agreement was amended to increase the facility limit from $200 million to $300 million in funding based on the availability of eligible receivables and the satisfaction of certain conditions. Under the Facility, the Company sells eligible federal government obligor receivables, including both billed and certain unbilled receivables. The Company has no retained interests in the transferred receivables other than collection and administrative functions for the Financial Institutions for a servicing fee. The Facility has a one-year term but may be extended. The Company uses the proceeds from receivables sales under the Facility for general corporate purposes. The Company accounts for these receivable transfers as sales and derecognizes the sold receivables from its condensed consolidated balance sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. The Company estimated that its servicing fee was at fair value and therefore, no servicing asset or liability related to these services was recognized as of December 31, 2017 . During the three and nine months ended December 31, 2017 , the Company sold $0.7 billion and $1.2 billion of billed and unbilled receivables, respectively. Collections corresponding to these receivables sales were $0.6 billion and $1.0 billion during the three and nine months ended December 31, 2017 , respectively. As of December 31, 2017 , there was $27 million of cash collected by the Company, but not remitted to the Financial Institutions, which represents restricted cash and is included within other current assets on the condensed consolidated balance sheets. The operating cash flow effect, net of collections and fees from sales was $176 million . |
Fair Value
Fair Value | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Fair Value Measurements on a Recurring Basis The following table presents the Company’s assets and liabilities, excluding pension assets, see Note 12 - " Pension and Other Benefit Plans " and derivative assets and liabilities, see Note 7 - " Derivative Instruments ", that are measured at fair value on a recurring basis. There were no transfers between any of the levels during the periods presented. Fair Value Hierarchy (in millions) Fair Value Level 1 Level 2 Level 3 Assets: As of December 31, 2017 Money market funds and money market deposit accounts (1) $ 217 $ 217 $ — $ — Time deposits (1) 35 35 — — Foreign bonds 52 — 52 — Other debt securities 7 — — 7 Deferred purchase price receivable 249 — — 249 Total assets $ 560 $ 252 $ 52 $ 256 Liabilities: Contingent consideration $ 8 $ — $ — $ 8 Total liabilities $ 8 $ — $ — $ 8 (1) Cost basis approximated fair value due to the short period of time to maturity. As of March 31, 2017 Assets: Fair Value Level 1 Level 2 Level 3 Money market funds and money market deposit accounts $ 406 $ 406 $ — $ — Deferred purchase price receivable 252 — — 252 Total assets $ 658 $ 406 $ — $ 252 Liabilities: Contingent consideration $ 7 $ — $ — $ 7 Total liabilities $ 7 $ — $ — $ 7 The fair value of money market funds, money market deposit accounts, and time deposits, reported as cash and cash equivalents, are based on quoted market prices. The fair value of foreign government bonds is based on actual market prices and included in Other long-term assets. Fair value of the DPP, included in Receivables, net, is determined by calculating the expected amount of cash to be received and is principally based on unobservable inputs consisting primarily of the face amount of the receivables adjusted for anticipated credit losses. The fair value of contingent consideration, presented in Other liabilities, is based on contractually defined targets of financial performance and other considerations. Other Fair Value Disclosures The carrying amounts of the Company’s other financial instruments with short-term maturities, primarily accounts receivable, accounts payable, short-term debt, and financial liabilities included in Other accrued liabilities, are deemed to approximate their market values. If measured at fair value, these financial instruments would be classified in Level 2 or Level 3 of the fair value hierarchy. The Company estimates the fair value of its long-term debt primarily using an expected present value technique, which is based on observable market inputs, using interest rates currently available to the Company for instruments with similar terms and remaining maturities. The estimated fair value of the Company's long-term debt, excluding capital leases, was $5.9 billion as of December 31, 2017 , as compared with carrying value of $5.7 billion . If measured at fair value, long-term debt, excluding capital lease would be classified in Level 2 of the fair value hierarchy. Non-financial assets such as goodwill, tangible assets, intangible assets and other contract related long-lived assets are recorded at fair value in the period an impairment charge is recognized. The fair value measurements, in such instances, would be classified in Level 3. There were no significant impairments recorded during the three and nine months ended December 31, 2017 and December 30, 2016 . The Company is subject to counterparty risk in connection with its derivative instruments, see Note 7 - "Derivative Instruments". With respect to its foreign currency derivatives, as of December 31, 2017 there were five counterparties with concentration of credit risk. Based on gross fair value of these foreign currency derivative instruments, the maximum amount of loss that the Company could incur is approximately $22 million . |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments In the normal course of business, the Company is exposed to interest rate and foreign exchange rate fluctuations. As part of its risk management strategy, the Company uses derivative instruments, primarily forward contracts and interest rate swaps, to hedge certain foreign currency and interest rate exposures. The Company’s objective is to offset gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them, thereby reducing volatility of earnings. The Company does not use derivative instruments for trading or any speculative purpose. Derivatives Designated for Hedge Accounting Cash flow hedges The Company uses interest rate swap agreements designated as cash flow hedges to mitigate its exposure to interest rate risk associated with the variability of cash outflows for interest payments on certain floating interest rate debt, which effectively converted the debt into fixed interest rate debt. As of December 31, 2017 , the Company had interest rate swap agreements with a total notional amount of $625 million . For the three and nine months ended December 31, 2017 , the Company performed both retrospective and prospective hedge effectiveness analyses for the interest rate swaps designated as cash flow hedges. The Company applied the long-haul method outlined in ASC 815 “Derivatives and Hedging", to assess retrospective and prospective effectiveness of the interest rate swaps. A quantitative effectiveness analysis assessment of the hedging relationship was performed using regression analysis. As of December 31, 2017 , the Company has determined that the hedging relationship was highly effective. The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Indian Rupee denominated intercompany obligations and forecasted transactions. T he notional amount of foreign currency forward contracts designated as cash flow hedges as of December 31, 2017 was $686 million , and the related forecasted transactions extend through February 2020 . For the three and nine months ended December 31, 2017 and December 30, 2016 , the Company performed an assessment at the inception of the cash flow hedge transactions and determined all critical terms of the hedging instruments and hedged items matched; therefore, there is no ineffectiveness to be recorded and all changes in the hedging instruments’ fair value are recorded in accumulated other comprehensive income (loss) ("AOCI") and subsequently reclassified into earnings in the period during which the hedged transactions are recognized in earnings. The Company performs an assessment of critical terms on an on-going basis throughout the hedging period. During the three and nine months ended December 31, 2017 and December 30, 2016 , the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur. As of December 31, 2017 , $24 million of the existing amount of gain related to the cash flow hedge reported in AOCI is expected to be reclassified into earnings within the next 12 months. For derivative instruments that are designated and qualify as cash flow hedges, the Company initially records changes in fair value for the effective portion of the derivative instrument in AOCI in the condensed consolidated balance sheets and subsequently reclassifies these amounts into earnings in the period during which the hedged transaction is recognized in the condensed statements of operations. The Company reports the effective portion of its cash flow hedges in the same financial statement line item as changes in the fair value of the hedged item. The pre-tax impact of gain (loss) on derivatives designated for hedge accounting recognized in other comprehensive income and net income was not material for three and nine months ended December 31, 2017 and December 30, 2016 . Derivatives not Designated for Hedge Accounting The derivative instruments not designated as hedges for purposes of hedge accounting include total return swaps and certain short-term foreign currency forward and option contracts. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. Total return swaps The Company manages the exposure to market volatility of the notional investments underlying its deferred compensation obligations by using total return swaps derivative contracts ("TRS"). The TRS are reset monthly and are marked-to-market on the last day of each fiscal month. Gain (loss) on TRS was not material for the three and nine months ended December 31, 2017 and December 30, 2016 . Foreign currency forward contracts The Company manages the exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to economically hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and loans. The notional amount of the foreign currency forward contracts outstanding as of December 31, 2017 was $2.4 billion . (Loss) gain on foreign currency forward contracts not designated for hedge accounting, recognized within other income, net, were $(3) million and $(117) million during the three and nine months ended December 31, 2017 , respectively, and $2 million and $(3) million during the three and nine months ended December 30, 2016 , respectively. Fair Value of Derivative Instruments All derivatives are recorded at fair value. The Company’s accounting treatment for these derivative instruments is based on its hedge designation. The following tables show the Company’s derivative instruments at gross fair value: Derivative Assets As of (in millions) Balance Sheet Line Item December 31, 2017 March 31, 2017 Derivatives designated for hedge accounting: Interest rate swaps Other assets $ 5 $ 5 Foreign currency forward contracts Other current assets 27 27 Total fair value of derivatives designated for hedge accounting $ 32 $ 32 Derivatives not designated for hedge accounting: Foreign currency forward contracts Other current assets $ 9 $ 15 Total fair value of derivatives not designated for hedge accounting $ 9 $ 15 Derivative Liabilities As of (in millions) Balance Sheet Line Item December 31, 2017 March 31, 2017 Derivatives designated for hedge accounting: Interest rate swaps Other long-term liabilities $ — $ 1 Foreign currency forward contracts Accrued expenses and other current liabilities — — Total fair value of derivatives designated for hedge accounting: $ — $ 1 Derivatives not designated for hedge accounting: Foreign currency forward contracts Accrued expenses and other current liabilities $ 13 $ 12 Total fair value of derivatives not designated for hedge accounting $ 13 $ 12 Derivative instruments include foreign currency forward contracts and interest rate swap contracts. The fair value of foreign currency forward contracts represents the estimated amount required to settle the contracts using current market exchange rates and is based on the period-end foreign currency exchange rates and forward points as Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use interest rate yield curves as Level 2 inputs. Other risks The Company is exposed to the risk of losses in the event of non-performance by counterparties to its derivative contracts. To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of counterparties. The Company also enters into enforceable master netting arrangements with some of its counterparties. However, for financial reporting purposes, it is Company policy not to offset derivative assets and liabilities despite the existence of enforceable master netting arrangements with some of its counterparties. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets As of December 31, 2017 (in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 3,231 $ 1,792 $ 1,439 Outsourcing contract costs 1,436 612 824 Customer related intangible assets 6,151 583 5,568 Other intangible assets 114 18 96 Total intangible assets $ 10,932 $ 3,005 $ 7,927 As of March 31, 2017 (in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 2,347 $ 1,554 $ 793 Outsourcing contract costs 793 475 318 Customer related intangible assets 851 248 603 Other intangible assets 96 16 80 Total intangible assets $ 4,087 $ 2,293 $ 1,794 Total intangible assets amortization was $279 million and $81 million for the three months ended December 31, 2017 and December 30, 2016 , respectively, and included reductions of revenue for amortization of outsourcing contract cost premiums of $2 million and $2 million , respectively. Total intangible assets amortization was $793 million and $243 million for the nine months ended December 31, 2017 and December 30, 2016 , respectively, and included reductions of revenue for amortization of outsourcing contract cost premiums of $8 million and $8 million , respectively. The increase in net and gross carrying value for the nine months ended December 31, 2017 were primarily due to the Merger. See Note 3 - " Acquisitions ". Estimated future amortization related to intangible assets as of December 31, 2017 is as follows: Fiscal Year (in millions) Remainder of 2018 $ 306 2019 $ 1,094 2020 $ 1,032 2021 $ 943 2022 $ 804 |
Goodwill
Goodwill | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The following table summarizes the changes in the carrying amount of Goodwill, by segment, as of December 31, 2017 . (in millions) GBS GIS USPS Total Balance as of March 31, 2017, net $ 1,470 $ 385 $ — $ 1,855 Additions 2,800 2,532 1,984 7,316 Foreign currency translation 94 55 — 149 Balance as of December 31, 2017, net $ 4,364 $ 2,972 $ 1,984 $ 9,320 The additions to goodwill during the nine months ended December 31, 2017 were primarily due to the Merger described in Note 3 - " Acquisitions ." As a result of the Merger, the Company began to report the United States Public Sector ("USPS") segment, formerly a component of the HPES business, see Note 17 - " Segment Information " for additional information. The foreign currency translation amounts reflect the impact of currency movements on non-U.S. dollar-denominated goodwill balances. Goodwill Impairment Analyses The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if circumstances change, or if an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The Company’s annual goodwill impairment analysis, which was performed qualitatively during the three months ended September 30, 2017, did not result in an impairment charge. This qualitative analysis, which is commonly referred to as step zero under ASC Topic 350, Goodwill and Other Intangible Assets, considered all relevant factors specific to the reporting units, including macroeconomic conditions; industry and market considerations; overall financial performance and relevant entity-specific events. At the end of the third quarter of fiscal 2018, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators, and, therefore, it was unnecessary to perform an interim goodwill impairment test as of December 31, 2017. |
Debt
Debt | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following is a summary of the Company's debt: As of (in millions) Interest Rates Fiscal Year Maturities December 31, 2017 March 31, 2017 Short-term debt and current maturities of long-term debt Euro-denominated commercial paper (0.1) - 0.02% (1) 2018 $ 841 $ 646 EUR term loan 1.75% (2) 2019 480 — Current maturities of long-term debt Various 2019 128 55 Current maturities of capitalized lease liabilities 1.1% - 6.7% 2019 724 37 Short-term debt and current maturities of long-term debt $ 2,173 $ 738 Long-term debt, net of current maturities GBP term loan 1.0 - 1.2% (3) 2019 $ 250 $ 233 USD term loan 1.2% - 2.3% (4) 2021 — 571 AUD term loan 2.9% - 3.0% (5) 2022 215 76 EUR term loan 0.9% (6) 2022 179 — USD term loan 2.2% - 2.8% (7) 2022 1,149 — $500 million Senior notes 2.875% 2020 503 — $650 million Senior notes 2.3% - 2.4% (8) 2021 646 — $274 million Senior notes 4.45% 2023 278 — $170 million Senior notes 4.45% 2023 174 453 $500 million Senior notes 4.25% 2025 507 — $500 million Senior notes 4.75% 2028 509 — $300 million Senior notes 7.45% 2030 357 — Revolving credit facility 1.4% - 1.6% 2021 - 2023 388 678 Lease credit facility 2.0% - 2.6% 2020 - 2023 51 60 Capitalized lease liabilities 1.1% - 6.7% 2018 - 2022 1,518 104 Borrowings for assets acquired under long-term financing 2.3% -3.2% 2018 - 2023 318 77 Mandatorily redeemable preferred stock outstanding 3.5% 2023 61 61 Other borrowings 0.5% - 14.0% 2018 - 2037 116 4 Long-term debt 7,219 2,317 Less: current maturities 852 92 Long-term debt, net of current maturities $ 6,367 $ 2,225 (1) Approximate weighted average interest rate (2) Three-month EURIBOR rate plus 1.75% (3) Three-month LIBOR rate plus 0.65 % (4) At DXC's option, the USD term loan bears interest at a variable rate equal to the adjusted LIBOR for a one-, two-, three-, or six-month interest period, plus a margin between 0.75% and 1.50% based on a pricing grid consistent with the Company's outstanding revolving credit facility or the greater of the prime rate, the federal funds rate plus 0.50% , or the adjusted LIBOR for a one-month interest period plus 1.00% , in each case plus a margin of up to 0.50% , based on a pricing grid consistent with the revolving credit facility. (5) Variable interest rate equal to the bank bill swap bid rate for a one-, two-, three- or six-month interest period plus 0.95% to 1.45% based on the published credit ratings of DXC. (6) At DXC’s option, the EUR term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin of between 0.75% and 1.35% , based on published credit ratings of DXC. (7) At DXC’s option, the USD term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin of between 1.00% and 1.75% , based on published credit ratings of DXC or the Base Rate plus a margin of between 0% and 0.75% , based on published credit ratings of DXC. (8) Three-month LIBOR plus 0.95% Senior Notes and Terms Loans Interest on the Company's term loans is payable monthly or quarterly in arrears. The Company fully and unconditionally guaranteed term loans issued by its 100% owned subsidiaries. Interest on the Company's senior notes is payable semi-annually in arrears. Generally, the Company's notes are redeemable at the Company's discretion at the then-applicable redemption prices plus accrued interest. On April 3, 2017, as a result of the Merger, financial covenants were amended and CSC was replaced with DXC as the borrower and guarantor to certain outstanding debt including short-term Euro-denominated commercial paper, senior notes and term loans. In connection with the Merger, DXC entered into an unsecured term loan agreement consisting of a $375 million U.S. dollar term loan maturing in 2020 , a $1.3 billion U.S. dollar term loan maturing in 2022 and a Euro-equivalent of $315 million EUR term loan maturing in 2022 . The $375 million U.S. term loan maturing in 2020 and portions of the term loans maturing in 2022 were repaid subsequent to the Merger. DXC assumed pre-existing indebtedness incurred by HPES including 7.45% senior notes due 2030 which were issued at a principal amount of $300 million . During the nine months ended December 31, 2017, DXC completed an offering of senior notes in an aggregate principal amount of $1.5 billion consisting of 2.875% senior notes due 2020 , 4.25% senior notes due 2025 and 4.75% senior notes due 2028 . Revolving Credit Facility In connection with the Merger, the Company entered into several amendments to its revolving credit facility agreement pursuant to which DXC replaced CSC as the principal borrower and as the guarantor of borrowings by subsidiary borrowers. During the nine months ended December 31, 2017 , DXC exercised its option to extend the maturity date and also increased commitments to $3.81 billion , $70 million of which matures in January 2021 and $3.74 billion matures in January 2023. |
Restructuring Costs
Restructuring Costs | 9 Months Ended |
Dec. 31, 2017 | |
Restructuring Costs [Abstract] | |
Restructuring Costs | Restructuring Costs The Company recorded restructuring costs of $213 million and $3 million , net of reversals, for the three months ended December 31, 2017 and December 30, 2016 , respectively. For the nine months ended December 31, 2017 and December 30, 2016 , the Company recorded $595 million and $85 million , respectively. The costs recorded during the three and nine months ended December 31, 2017 were largely a result of the Fiscal 2018 Plan (defined below). The composition of restructuring liabilities by financial statement line items is as follows: As of (in millions) December 31, 2017 Accrued expenses and other current liabilities $ 343 Other long-term liabilities 173 Total $ 516 Summary of Restructuring Plans Fiscal 2018 Plan On June 30, 2017, management approved a post-Merger restructuring plan to optimize the Company's operations in response to a continuing business contraction (the "Fiscal 2018 Plan"). The additional restructuring initiatives are intended to reduce the company's core structure and related operating costs, improve its competitiveness, and facilitate the achievement of acceptable and sustainable profitability. The Fiscal 2018 Plan focuses mainly on optimizing specific aspects of global workforce, increasing the proportion of work performed in low cost offshore locations and re-balancing the pyramid structure. Additionally, this plan included global facility restructuring, including a global data center restructuring program. Fiscal 2017 Plan In May 2016, the Company initiated a restructuring plan to realign the Company's cost structure and resources to take advantage of operational efficiencies following recent acquisitions. During the fourth quarter of Fiscal 2017, the Company expanded the plan to strengthen the Company's competitiveness and to optimize the workforce by increasing work performed in low-cost locations (the "Fiscal 2017 Plan"). Total costs incurred to date under the Fiscal 2017 Plan total $221 million , comprising $214 million in employee severance and $7 million of facilities costs. Fiscal 2016 Plan In September 2015, the Company initiated a restructuring plan to optimize utilization of facilities and right-size overhead organizations as a result of CSC's separation of its former NPS segment (the "Fiscal 2016 Plan"). N o additional costs are expected to be expensed under this plan. Total costs incurred to date under the Fiscal 2016 Plan total $58 million , comprising $25 million in employee severance and $33 million of facilities costs. Fiscal 2015 Plan In June 2014, the Company initiated a restructuring plan to optimize the workforce in high cost markets, particularly in Europe, address the Company's labor pyramid and right shore its labor mix (the "Fiscal 2015 Plan"). No additional costs are expected to be expensed under this plan. Total costs incurred to date under the Fiscal 2015 Plan total $228 million , comprising $220 million in employee severance and $8 million of facilities costs. Acquired Restructuring Liabilities As a result of the Merger, DXC acquired restructuring liabilities under restructuring plans that were initiated for HPES under plans approved by the HPE Board of Directors. Restructuring Liability Reconciliations by Plan Restructuring Liability as of March 31, 2017 Acquired Balance as of April 1, 2017 Costs Expensed, net of reversals (1) Costs Not Affecting Restructuring Liability (2) Cash Paid Other (3) Restructuring Liability as of December 31, 2017 Fiscal 2018 Plan Workforce Reductions $ — n/a $ 451 $ (13 ) $ (228 ) $ 6 $ 216 Facilities Costs — n/a 174 (15 ) (70 ) 1 90 Total $ — n/a $ 625 $ (28 ) $ (298 ) $ 7 $ 306 Fiscal 2017 Plan Workforce Reductions $ 155 n/a $ (25 ) $ (6 ) $ (91 ) $ 10 $ 43 Facilities Costs 6 n/a (2 ) — (4 ) — — Total $ 161 n/a $ (27 ) $ (6 ) $ (95 ) $ 10 $ 43 Fiscal 2016 Plan Workforce Reductions $ 8 n/a $ (1 ) $ — $ (3 ) $ — $ 4 Facilities Costs 5 n/a — — (3 ) — 2 Total $ 13 n/a $ (1 ) $ — $ (6 ) $ — $ 6 Fiscal 2015 Plan Workforce Reductions $ 3 n/a $ — $ — $ (2 ) $ — $ 1 Facilities Costs — n/a — — — — — Total $ 3 n/a $ — $ — $ (2 ) $ — $ 1 Acquired Liabilities Workforce Reductions n/a $ 256 $ 1 $ (2 ) $ (139 ) $ 6 $ 122 Facilities Costs n/a 72 (3 ) (3 ) (29 ) 1 38 Total n/a $ 328 $ (2 ) $ (5 ) $ (168 ) $ 7 $ 160 (1) Costs expensed, net of reversals include $29 million , $2 million and $3 million of costs reversed from the Fiscal 2017 Plan, Fiscal 2016 Plan and Acquired liabilities, respectively. (2) Pension benefit augmentations recorded as a pension liability and asset impairment. (3) Foreign currency translation adjustments. |
Pension and Other Benefit Plans
Pension and Other Benefit Plans | 9 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Benefit Plans | Pension and Other Benefit Plans The Company offers a number of pension and other post-retirement benefit ("OPEB") plans, life insurance benefits, deferred compensation and defined contribution plans. Most of the Company's pension plans are not admitting new participants; therefore, changes to pension liabilities are primarily due to market fluctuations of investments for existing participants and changes in interest rates. Defined Benefit Plans The Company sponsors a number of defined benefit and post-retirement medical benefit plans for the benefit of eligible employees. The benefit obligations of the Company's U.S. pension, U.S. OPEB, and non-U.S. OPEB represent an insignificant portion of the Company's pension and other post-retirement benefits. As a result, the disclosures below include the Company's U.S. and non-U.S. pension plans on a global consolidated basis. The Company contributed $8 million and $40 million to the defined benefit pension and other post-retirement benefit plans during the three and nine months ended December 31, 2017 . The Company expects to contribute an additional $31 million during the remainder of fiscal 2018, which does not include certain salary deferral programs and future potential termination benefits related to the Company's potential restructuring activities. During the three months ended December 31, 2017, we adopted amendments to certain U.K. pension plans which necessitated an interim remeasurement of the plans assets and liabilities as of December 1, 2017. The remeasurement resulted in a net gain of $17 million , comprising a curtailment gain of $40 million and an actuarial loss $23 million . The net gain was recognized within costs of services and selling, general and administrative. The components of net periodic pension expense (benefit) were: Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Service cost $ 30 $ 6 $ 96 $ 17 Interest cost 63 20 184 62 Expected return on assets (133 ) (40 ) (393 ) (123 ) Amortization of prior service costs (5 ) (4 ) (13 ) (13 ) Contractual termination benefit 10 — 21 — Curtailment gain (40 ) — (40 ) — Recognition of actuarial loss 23 — 23 — Net periodic pension benefit $ (52 ) $ (18 ) $ (122 ) $ (57 ) The weighted-average rates used to determine net periodic pension cost for the three and nine months ended December 31, 2017 and December 30, 2016 were: December 31, 2017 December 30, 2016 Discount or settlement rates 2.4 % 3.1 % Expected long-term rates of return on assets 5.0 % 6.3 % Rates of increase in compensation levels 2.7 % 2.6 % Deferred Compensation Plans Effective as of the Merger, DXC assumed sponsorship of the Computer Sciences Corporation Deferred Compensation Plan, which was renamed the “DXC Technology Company Deferred Compensation Plan” (the “DXC DCP”) and adopted the Enterprise Services Executive Deferred Compensation Plan (the “ES DCP”). Both plans are non-qualified deferred compensation plans maintained for a select group of management, highly compensated employees and non-employee directors. The DXC DCP covers eligible employees who participated in CSC’s Deferred Compensation Plan prior to the Merger. The ES DCP covers eligible employees who participated in the HPE Executive Deferred Compensation Plan prior to the Merger. Both plans allow participating employees to defer the receipt of current compensation to a future distribution date or event above the amounts that may be deferred under DXC’s tax-qualified 401(k) plan, the DXC Technology Matched Asset Plan. Neither plan provides for employer contributions. As of April 3, 2017, the ES DCP does not admit new participants. Certain management and highly compensated employees are eligible to defer all, or a portion of, their regular salary that exceeds the limitation set forth in Internal Revenue Section 401(a)(17) and all or a portion of their incentive compensation. Non-employee directors are eligible to defer up to 100% of their cash compensation. The liability, which is included in Other long-term liabilities in the Company's condensed consolidated balance sheets, amounted to $74 million as of December 31, 2017 and $67 million as of March 31, 2017 . |
Income Taxes
Income Taxes | 9 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the President of the United States signed into law comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "Act"). The Act makes significant changes to the Internal Revenue Code of 1986 with varying effective dates. The Act reduces the maximum corporate income tax rate to 21% effective as of January 1, 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries, broadens the tax base, generally eliminates U.S. federal income taxes on dividends from foreign subsidiaries, creates a new limitation on the deductibility of interest expense, limits the deductibility of certain executive compensation, and allows for immediate capital expensing of certain qualified property. It also requires companies to pay minimum taxes on foreign earnings and subjects certain payments from U.S. corporations to foreign related parties to additional taxes. As a fiscal year taxpayer, the Company will not be subject to many of the tax law provisions until fiscal year 2019; however, U.S. generally accepted accounting principles require companies to revalue their deferred tax assets and liabilities with resulting tax effects accounted for in the reporting period of enactment including retroactive effects. Section 15 of the Internal Revenue Code stipulates that the Company's fiscal year ending March 31, 2018, will have an estimated blended corporate U.S. federal income tax rate of 28.87% , which is based on the applicable tax rates before and after the Act and the number of days in the Company's federal tax year pro-rated for actual earnings through its October 31, 2017 tax year-end. The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Act. SAB 118 provides a measurement period that should not extend beyond one year from the Act enactment date for companies to complete the accounting under ASC 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Act. Based on a preliminary assessment of the Act, the Company believes that the most significant impact on the Company’s consolidated financial statements are as follows: Reduction of US federal corporate income tax rate: As discussed above, the Act reduces the corporate tax rate to 21% , effective January 1, 2018. For certain DTAs and DTLs, the Company has recorded a provisional deferred income tax discrete benefit of $320 million , resulting in a $320 million decrease in net deferred tax liabilities as of December 31, 2017. While the Company is able to make a reasonable estimate of the impact of the reduction in corporate tax rate, the amount will be impacted by changes in estimated deferred tax balances prior to and after December 22, 2017 for fiscal year March 31, 2018. Deemed Repatriation Transition Tax: The deemed repatriation one-time transition tax is a tax on previously untaxed accumulated and current earnings and profits (E&P) of certain of the Company's foreign subsidiaries. To determine the amount of the transition tax, the Company must determine, in addition to other factors, the amount of post-1986 E&P of the relevant foreign subsidiaries, as well as the amount of non-U.S. income taxes paid on such earnings. The Company is able to make a reasonable estimate of the transition tax and recorded a provisional discrete income tax expense and related liability of $386 million . However, the Company is continuing to gather additional information to compute the amount of the transition tax, including further analysis regarding the amount and composition of the Company’s and HPES’s historical foreign earnings and taxes. The Company's accounting for the following elements of the Act is incomplete, and it is not yet able to make reasonable estimates of the effects. Therefore, no provisional adjustments were recorded. Capital expensing: The Company has not yet completed all of the computations necessary or completed an inventory of its 2018 expenditures that qualify for immediate expensing to determine a reasonable estimate. The income tax effects for this change in law require further analysis due to the volume of data required to complete the calculations. Executive compensation : As a result of changes made by the Act, starting with compensation paid in fiscal 2019, Section 162(m) will limit us from deducting compensation, including performance-based compensation, in excess of $1 million paid to anyone who, starting in 2018, serves as the Chief Executive Officer or Chief Financial Officer, or who is among the three most highly compensated executive officers for any fiscal year. The only exception to this rule is for compensation that is paid pursuant to a binding contract in effect on November 2, 2017 that would have otherwise been deductible under the prior Section 162(m) rules. Accordingly, any compensation paid in the future pursuant to new compensation arrangements entered into after November 2, 2017, even if performance-based, will count towards the $1 million fiscal year deduction limit if paid to a covered executive. The Company has not yet completed an analysis of the binding contract requirement on the various compensation plans to determine the impact of the law change. Global intangible low taxed income (GILTI): The Act creates a new requirement that certain income (i.e., GILTI) earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder for taxable years of foreign corporations beginning after December 31, 2017. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. Because of the complexity of the new GILTI tax rules, the Company is continuing to evaluate this provision of the Act and the application of ASC 740. Under U.S. GAAP, the Company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). The Company's selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing its global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be as well as a final determination of a tax year-end for the Company. Because whether the Company expects to have future U.S. inclusions in taxable income related to GILTI depends on not only its current structure and estimated future results of global operations but also its intent and ability to modify its structure and business, the Company is not yet able to reasonably estimate the effect of this provision of the Act in the current reporting period. Therefore, the Company has not made any adjustments related to potential GILTI tax in its financial statements and has not made an accounting policy decision. Due to anticipated future guidance to be issued by the Internal Revenue Service, interpretation of the changes in tax law and analysis of the information required to complete the calculations, the amounts recorded as a result of the Act in the period are provisional and subject to material changes. The Company will continue to analyze the Act’s impact on its consolidated financial statements and adjust the provisional amounts recorded as our analysis is completed, no later than December 2018. The Company's income tax (benefit) expense was $(341) million and $13 million for the three months ended December 31, 2017 and December 30, 2016 , respectively, and $(207) million and $(25) million for the nine months ended December 31, 2017 and December 30, 2016 , respectively. For the three and nine months ended December 31, 2017 , the primary drivers of the effective tax rate ("ETR") were the remeasurement of deferred tax assets and liabilities as a result of the Act, the remeasurement of a deferred tax liability relating to the outside basis difference of HPES foreign subsidiaries, the accrual of a one-time transition tax on estimated unremitted foreign earnings and India dividend distribution tax (DDT) accrual on historic earnings and taxes. The primary drivers of the ETR for the three and nine months ended December 30, 2016 were the global mix of income, release of a valuation allowance in a non-U.S. jurisdiction and excess tax benefits related to employee share-based payment awards . As a result of the Merger and changes in U.S. cash requirements, a deferred tax liability of $545 million was recorded for U.S. income taxes based on the estimated historical taxable earnings of the HPES foreign subsidiaries. In addition, the Company recorded an estimated liability of $50 million for India DDT tax based on estimated historical taxable earnings of the HPES India subsidiary. These liabilities were recorded as part of acquisition accounting. As a result of the Act, the Company has changed its permanently reinvested assertion on the remaining CSC foreign subsidiaries and will no longer consider current and accumulated earnings for all non-U.S. subsidiaries permanently reinvested, except for current year Indian earnings. The deferred tax liability of $575 million has been released and the Company's estimated liability for India DDT was increased by $30 million to $80 million to include estimated historical taxable earnings for CSC Indian subsidiaries. For those investments from which the Company was able to make a reasonable estimate of the tax effects of its change in assertion, the Company has recorded a provisional estimate for withholding taxes, state taxes, and India DDT of $115 million . For those investments from which the Company was not able to make a reasonable estimate, it has not recorded any deferred taxes. The Company will record the tax effects of any change in its prior assertion with respect to these investments, and disclose any unrecognized deferred tax liability for temporary differences related to its foreign investments, if practicable, in the period that it is first able to make a reasonable estimate, no later than December 2018. In connection with the Merger, the Company entered into a tax matters agreement with HPE. HPE generally will be responsible for pre-Merger tax liabilities including adjustments made by tax authorities to HPES U.S. and non-U.S. income tax returns. Likewise, DXC is liable to HPE for income tax receivables and refunds which it receives related to pre-Merger periods. Pursuant to the tax matters agreement, the Company recorded a net payable of $24 million due to $111 million of tax indemnification receivable related to uncertain tax positions net of related deferred tax benefits, $72 million of tax indemnification receivable related to other tax payables and $207 million of tax indemnification payable related to other tax receivables. As part of the acquisition of HPES, DXC acquired uncertain tax liabilities including interest and penalties of $115 million for prior year income taxes, whic h are ind emnified by HPE. There were no other material changes to uncertain tax positions during the three and nine months ended December 31, 2017 . The IRS is examining CSC's federal income tax returns for fiscal 2008 through 2016. With respect to CSC's fiscal 2008 through 2010 federal tax returns, the Company previously entered into negotiations for a resolution through settlement with the IRS Office of Appeals. The IRS examined several issues for this audit that resulted in various audit adjustments. The Company and the IRS Office of Appeals have an agreement in principle as to some but not all of these adjustments. The Company has agreed to extend the statute of limitations associated with this audit through September 30, 2018. In addition, during the first quarter of fiscal 2018, the Company received a Revenue Agent’s Report with proposed adjustments to CSC's fiscal 2011 through 2013 federal returns. The Company has filed a protest of certain of these adjustments to the IRS Office of Appeals. The IRS is also examining CSC's fiscal 2014 through 2016 federal income tax returns. The Company has not received any adjustments for this cycle. The Company continues to believe that its tax positions are more-likely-than-not sustainable and that the Company will ultimately prevail. In addition, the Company may settle certain other tax examinations, have lapses in statutes of limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more-likely-than-not standard if such positions are not upheld. Conversely, the Company could settle positions by payment with the tax authorities for amounts lower than those that have been accrued or extinguish a position through payment. The Company believes the outcomes that are reasonably possible within the next 12 months may result in a reduction in liability for uncertain tax positions of $14 million to $20 million , excluding interest, penalties, and tax carry-forwards. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Description of Capital Stock The Company has authorized share capital consisting of 750,000,000 shares of common stock, par value $.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share. Each share of common stock is equal in all respects to every other share of common stock of the Company. Each share of common stock is entitled to one vote per share at each annual or special meeting of stockholders for the election of directors and upon any other matter coming before such meeting. Subject to all the rights of the preferred stock, dividends may be paid to holders of common stock as and when declared by the Board of Directors. The Company's charter requires that preferred stock must be all of one class but may be issued from time to time in one or more series, each of such series to have such full or limited voting powers, if any, and such designations, preferences and relative, participating, optional or other special rights or qualifications, limitations or restrictions as provided in a resolution adopted by the Board of Directors. Each share of preferred stock will rank on a parity with each other share of preferred stock, regardless of series, with respect to the payment of dividends at the respectively designated rates and with respect to the distribution of capital assets according to the amounts to which the shares of the respective series are entitled. Share repurchases On April 3, 2017, DXC announced the establishment of a share repurchase program approved by the Board of Directors with an initial authorization of $2.0 billion for future repurchases of outstanding shares of DXC common stock. An expiration date has not been established for this repurchase plan. The shares repurchased are retired immediately and included in the category of authorized but unissued shares. The excess of purchase price over par value of the common shares is allocated between additional paid-in capital and retained earnings. The details of shares repurchased are shown below: Fiscal Period Number of Shares Repurchased Average Price per Share Amount (in millions) 1st Quarter 2018 250,000 $ 77.39 $ 19 2nd Quarter 2018 591,505 78.20 47 3rd Quarter 2018 — — — Total 841,505 $ 77.96 $ 66 Accumulated other comprehensive income (loss) The following table shows the changes in accumulated other comprehensive income (loss), net of taxes: (in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance at March 31, 2017 $ (458 ) $ 20 $ 276 $ (162 ) Current-period other comprehensive income 62 — — 62 Amounts reclassified from accumulated other comprehensive income (8 ) — (10 ) (18 ) Balance at December 31, 2017 $ (404 ) $ 20 $ 266 $ (118 ) (in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive Loss Balance at April 1, 2016 $ (399 ) $ (1 ) $ 289 $ (111 ) Current-period other comprehensive (loss) income (180 ) 15 — (165 ) Amounts reclassified from accumulated other comprehensive loss — — (10 ) (10 ) Balance at December 30, 2016 $ (579 ) $ 14 $ 279 $ (286 ) |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans Equity Plans As a result of the Merger, all outstanding CSC awards of stock options, stock appreciation rights, restricted stock units ("CSC RSUs"), including performance-based restricted stock units, relating to CSC common stock granted under the 2011 Omnibus Incentive Plan, the 2007 Employee Incentive Plan and the 2010 Non-Employee Director Incentive Plan (the “CSC Equity Incentive Plans”) held by CSC employees and non-employee directors were converted into an adjusted award relating to DXC common shares subject to the same terms and conditions after the Merger as the terms and conditions applicable to such awards prior to the Merger. Under the terms of the CSC Equity Incentive Plans and the individual award agreements, all unvested equity incentive awards, including all stock options and CSC RSUs held by all participants under the plans, including its named executive officers and directors, are subject to accelerated vesting in whole or in part upon the occurrence of a change in control or upon the participant’s termination of employment on or after the occurrence of a change in control under certain circumstances ("CIC events"). As a result of CIC events triggered by the Merger, approximately $3.6 million unvested awards became vested on April 1, 2017 and $26 million of incremental stock compensation expense was recognized. CSC options granted in fiscal 2017 vested 33% upon the Merger; the remaining 67% were converted into DXC RSUs based on the accounting value of the options. These RSUs will vest on the second and third anniversaries of the original option grant date. For equity incentive awards granted by HPE under HPE equity incentive plans to HPES prior to the Merger, outstanding options (vested and unvested) and unvested RSU awards were converted upon the Merger into economically equivalent DXC option and RSU awards, with terms and conditions substantially the same as the terms of such awards prior to the Merger. In March 2017, prior to the Merger, the board of directors and shareholders of HPES approved DXC’s 2017 Omnibus Incentive Plan (the “DXC Employee Equity Plan”), DXC’s 2017 Non-Employee Director Incentive Plan (the “DXC Director Equity Plan”) and DXC’s 2017 Share Purchase Plan (“DXC Share Purchase Plan”). The terms of the DXC Employee Equity Plan and DXC Director Equity Plans are substantially similar to the terms of the CSC Equity Incentive Plans. The former allows DXC to grant stock options (including incentive stock options), stock appreciation rights (“SARs”), restricted stock, RSUs (including PSUs), and cash awards intended to qualify for the performance-based compensation exemption to the $1 million deduction limit under Section 162(m) of the Internal Revenue Code (collectively the "Awards"). Awards are typically subject to vesting over the 3 -year period following the grant date. Vested stock options are generally exercisable for a term of 10 years from the grant date. All of DXC’s employees are eligible for awards under the plan. The Company issues authorized but previously unissued shares upon the granting of stock options and the settlement of RSUs and PSUs. The Compensation Committee of the Board of Directors (the "Board") has broad authority to grant awards and otherwise administer the DXC Employee Equity Plan. The plan became effective March 30, 2017 and will continue in effect for a period of 10 years thereafter, unless earlier terminated by the Board. The Board has the authority to amend the plan in such respects as it deems desirable, subject to approval of DXC’s stockholders for material modifications. RSUs represent the right to receive one share of DXC common stock upon a future settlement date, subject to vesting and other terms and conditions of the award, plus any dividend equivalents accrued during the award period. In general, if the employee’s status as a full-time employee is terminated prior to the vesting of the RSU grant in full, then the RSU grant is automatically canceled on the termination date and any unvested shares and dividend equivalents are forfeited. Certain executives were awarded service-based "career share" RSUs for which the shares are settled over the 10 anniversaries following the executive's separation from service as a full-time employee, provided the executive complies with certain non-competition covenants during that period. The Company also grants PSUs, which generally vest over a period of 3 years. The number of PSUs that ultimately vest is dependent upon the Company’s achievement of certain specified financial performance criteria over a three -year period. If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents upon the filing with the SEC of the Annual Report on Form 10-K for the last fiscal year of the performance period. PSU awards include the potential for up to 25% of the shares granted to be earned after the first and second fiscal years if certain of the Company's performance targets are met early, subject to vesting based on the participant's continued employment through the end of the three -year performance period. The terms of the DXC Director Equity Plan allow DXC to grant RSU awards to non-employee directors of DXC. Such RSU awards vest in full at the earlier of (i) the first anniversary of the grant date or (ii) the next annual meeting date, and are automatically redeemed for DXC common stock and dividend equivalents either at that time or, if an RSU deferral election form is submitted, upon the date or event elected by the director. Distributions made upon a director’s separation from the Board may occur in either a lump sum or in annual installments over periods of 5 , 10 , or 15 years, per the director’s election. In addition, RSUs vest in full upon a change in control of DXC. The DXC Share Purchase Plan allows DXC’s employees located in the United Kingdom to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date. There were no shares purchased under this plan during the three and nine months ended December 31, 2017 . The Board has reserved for issuance shares of DXC common stock, par value $0.01 per share, under each of the plans as detailed below: As of December 31, 2017 Reserved for issuance Available for future grants DXC Employee Equity Plan 34,200,000 22,403,601 DXC Director Equity Plan 230,000 121,334 DXC Share Purchase Plan 250,000 250,000 Total 34,680,000 22,774,935 Stock Options Number of Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding as of March 31, 2017 4,767,396 $ 38.70 8.01 $ 145 HPE options converted to DXC options at Merger 2,654,872 $ 46.56 CSC Options converted to RSUs due to Merger (1,521,519 ) $ 51.00 Exercised (2,390,929 ) $ 40.07 $ 104 Canceled/Forfeited (2,629 ) $ 57.08 Expired (46,578 ) $ 42.40 Outstanding as of December 31, 2017 3,460,613 $ 38.31 5.58 $ 196 Vested and expected to vest in the future as of December 31, 2017 3,455,538 $ 38.28 5.58 $ 196 Exercisable as of December 31, 2017 3,419,060 $ 38.02 5.57 $ 194 Restricted Stock Units Employee Equity Plan Director Equity Plan Number of Weighted Number of Weighted Average Grant Date Fair Value Outstanding as of March 31, 2017 3,710,985 $ 34.86 85,766 $ 34.19 Granted 1,566,361 $ 79.11 22,900 $ 84.40 HPE RSUs converted to DXC RSUs due to Merger 95,683 $ 69.33 — $ — Options converted to RSUs due to Merger 609,416 $ 32.58 — $ — Settled (1,926,043 ) $ 35.89 (39,980 ) $ 45.25 Canceled/Forfeited (172,881 ) $ 54.65 — $ — Outstanding as of December 31, 2017 3,883,521 $ 51.80 68,686 $ 44.50 Share-Based Compensation Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Total share-based compensation cost $ 19 $ 21 $ 76 $ 56 Related income tax benefit $ 5 $ 7 $ 24 $ 18 Total intrinsic value of options exercised $ 30 $ 6 $ 104 $ 60 Tax benefits from exercised stock options and awards $ 9 $ 4 $ 62 $ 30 As of December 31, 2017 , total unrecognized compensation expense related to unvested DXC stock options and unvested DXC RSUs, net of expected forfeitures was $ 1 million and $ 136 million , respectively. The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 2.02 years. |
Cash Flows
Cash Flows | 9 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flows | Cash Flows Cash payments for interest on indebtedness and income taxes and other select non-cash activities are as follows: Nine Months Ended (in millions) December 31, 2017 December 30, 2016 Cash paid for: Interest $ 188 $ 70 Taxes on income, net of refunds $ 235 $ 43 Non-cash activities: Investing: Capital expenditures in accounts payable and accrued expenses $ 4 $ 33 Capital expenditures through capital lease obligations $ 510 $ 34 Assets acquired under long-term financing $ 284 $ 75 Financing: Dividends declared but not yet paid $ 52 $ 20 Stock issued for the acquisition of HPES $ 9,850 $ — |
Segment Information
Segment Information | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information DXC has a matrix form of organization and is managed in several different and overlapping groupings including services, industry and geographic region. As a result, and in accordance with accounting standards, operating segments are organized by the type of services provided. DXC's chief operating decision maker ("CODM"), the chief executive officer, obtains, reviews, and manages the Company’s financial performance based on these segments. The CODM uses these results, in part, to evaluate the performance of, and allocate resources to, each of the segments. As a result of the Merger, the HPES legacy reportable segments were combined with GBS and GIS, and the HPES U.S. public sector business, USPS, is now a separate operating segment. DXC's operating segments are the same as its reportable segments: GBS, GIS, and USPS. In addition, DXC management changed its primary segment performance measure to segment profit from the previously used consolidated segment operating income. Prior periods presented have been restated to reflect this change. The accounting policies of the reportable segments are the same as those described in Note 1 - “ Summary of Significant Accounting Policies .” Global Business Services GBS provides innovative technology solutions including Enterprise and Cloud Applications, Consulting Application Services, and Analytics. GBS also includes our Industry-aligned IP and Business Process Services. These offerings address key business challenges and accelerate digital transformations tailored to each customer’s industry and specific objectives. GBS strives to help clients understand and take advantage of IT modernization and virtualization across the IT portfolio (hardware, software, networking, storage, and computing assets). Enterprise and Cloud Applications provide industry, business process, systems integration, technical delivery experience, and innovation to deliver value across our clients' enterprise application portfolios. The Company's Consulting professionals act as a trusted source for clients in creating bold digital strategies, designing innovative digital experiences, managing complex digital integration, and delivering safe and secure digital operations that help the Company's clients disrupt their industry, without disrupting their business operations. DXC's Application Services offerings utilize the Company's IP and world-class partner ecosystem to modernize and transform its clients' applications landscape, develop and manage their portfolio and roadmap, and execute with precision. In Analytics, DXC offers a complete portfolio of services to rapidly provide insights and drive impactful business outcomes. DXC's Partner Network allows clients to leverage investment while building the analytic solutions of tomorrow. DXC’s industry-aligned IP is centered on the insurance, banking, healthcare, and travel and transportation industries. Activities are primarily related to vertical alignment of software solutions and process-based IP that power mission-critical transaction engines. DXC's Business Process Services combine business process expertise and intellectual property with the resources of a global Tier I IT services company, leveraging intelligent automation and innovative solutions to reduce manual effort and the associated cost. Key competitive differentiators for GBS include global scale, solution objectivity, depth of industry expertise, strong partnerships, vendor and product independence and end-to-end solutions and capabilities. Evolving business demands such as globalization, fast-developing economies, government regulation and growing concerns around risk, security, and compliance drive demand for these offerings. Global Infrastructure Services GIS provides Cloud, Platforms and Infrastructure Technology Outsourcing, Workplace and Mobility and Security solutions to commercial clients globally. This includes DXC’s next-generation cloud offerings, including Infrastructure as a Service ("IaaS"), private cloud solutions, and Storage as a Service. GIS provides a portfolio of standard offerings that have predictable outcomes and measurable results while reducing business risk and operational costs for clients. Further, DXC's industry-leading security solutions help clients predict attacks, proactively respond to threats, ensure compliance, and protect data, applications, infrastructure and endpoints. To provide clients with differentiated offerings, GIS maintains a Partner Network to make investments in developing unique offerings and go-to-market strategies. This collaboration helps the Company independently determine the best technology, develop road maps, and enhance opportunities to differentiate solutions, expand market reach, augment capabilities, and jointly deliver impactful solutions that best address client needs. United States Public Sector USPS delivers technology services and business solutions to all levels of government in the United States. USPS helps clients to address their key objectives of: (1) transforming and modernizing through innovation, (2) enhancing security and privacy, (3) improving efficiency and effectiveness, (4) reducing and optimizing costs, and (5) becoming more agile, flexible, and resilient. USPS aims to be a transformation partner that can maximize technology’s potential to create the solutions that matter most to its government clients. USPS supports hundreds of accounts at the federal, state, and local government levels. Commensurate with DXC's strategy of leading the next generation of IT services, USPS is leveraging the Company’s commercial best practices and next-generation offerings to help civilian government agencies address their business issues and provide better and more secure access to citizen services while reducing costs for community & social service, environmental management, education, transportation, and general government & revenue collection. Segment Measures The following table summarizes operating results regularly provided to the CODM by reportable segment and a reconciliation to the financial statements: (in millions) GBS GIS USPS Total Reportable Segments All Other Totals Three Months Ended December 31, 2017 Revenues $ 2,315 $ 3,145 $ 726 $ 6,186 $ — $ 6,186 Segment profit $ 431 $ 463 $ 110 $ 1,004 $ (77 ) $ 927 Depreciation and amortization (1) $ 16 $ 269 $ 20 $ 305 $ 27 $ 332 Three Months Ended December 30, 2016 Revenues $ 1,046 $ 871 $ — $ 1,917 $ — $ 1,917 Segment profit $ 134 $ 84 $ — $ 218 $ (42 ) $ 176 Depreciation and amortization (1) $ 25 $ 100 $ — $ 125 $ 16 $ 141 (in millions) GBS GIS USPS Total Reportable Segments All Other Totals Nine Months Ended December 31, 2017 Revenues $ 6,893 $ 9,256 $ 2,113 $ 18,262 $ — $ 18,262 Segment profit $ 1,093 $ 1,222 $ 296 $ 2,611 $ (129 ) $ 2,482 Depreciation and amortization (1) $ 67 $ 743 $ 55 $ 865 $ 76 $ 941 Nine Months Ended December 30, 2016 Revenues $ 3,130 $ 2,588 $ — $ 5,718 $ — $ 5,718 Segment profit $ 349 $ 201 $ — $ 550 $ (148 ) $ 402 Depreciation and amortization (1) $ 81 $ 309 $ — $ 390 $ 48 $ 438 (1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $149 million and $20 million for the three months ended December 31, 2017 and December 30, 2016, respectively, and $438 million and $56 million for the nine months ended December 31, 2017 and December 30, 2016, respectively. Reconciliation of Reportable Segment Profit to Consolidated Total The Company's management uses segment profit as the measure for assessing performance of its segments. Segment profit is defined as segment revenues less segment cost of services, selling, general and administrative, and depreciation and amortization (excluding amortization of acquired intangible assets). 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 and integration-related costs and amortization of acquired intangible assets. Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Profit Total profit for reportable segments $ 1,004 $ 218 $ 2,611 $ 550 All other loss (77 ) (42 ) (129 ) (148 ) Interest income 27 8 59 26 Interest expense (77 ) (33 ) (231 ) (87 ) Restructuring costs (213 ) (3 ) (595 ) (85 ) Pension and OPEB actuarial and settlement gains 17 — 17 — Amortization of acquired intangible assets (149 ) (20 ) (438 ) (56 ) Transaction and integration-related costs (94 ) (78 ) (284 ) (187 ) Income before income taxes $ 438 $ 50 $ 1,010 $ 13 Management does not use total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment and therefore, total assets by segment is not disclosed. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has operating leases for the use of certain real estate and equipment. Substantially all operating leases are non-cancelable or cancelable only through payment of penalties. Lease payments are typically based upon the period of the lease but may include payments for insurance, maintenance, and property taxes. There are no purchase options on operating leases at favorable terms. Most real estate leases have one or more renewal options. Certain leases on real estate are subject to annual escalations for increases in utilities and property taxes. Minimum fixed rentals required for the next five years and thereafter under operating leases in effect at December 31, 2017 , were as follows: Fiscal year (in millions) Real Estate Equipment Remainder of 2018 $ 110 $ 86 2019 359 297 2020 264 211 2021 206 68 2022 155 8 Thereafter 719 1 Minimum fixed rentals 1,813 671 Less: Sublease rental income (187 ) — Totals $ 1,626 $ 671 The Company signed long-term purchase agreements with certain software, hardware, telecommunication, and other service providers to obtain favorable pricing and terms for services, and products that are necessary for the operations of business activities. Under the terms of these agreements, the Company is contractually committed to purchase specified minimums over periods ranging from 1 to 6 years. If the Company does not meet the specified minimums, the Company would have an obligation to pay the service provider all, or a portion, of the shortfall. Minimum purchase commitments as of December 31, 2017 were as follows: Fiscal year Minimum Purchase Commitment (in millions) Remainder of 2018 $ 664 2019 2,201 2020 2,095 Thereafter 1,222 Total $ 6,182 (1) A significant portion of the minimum purchase commitments in fiscal 2018, 2019 and 2020 relate to the amounts committed under the HPE preferred vendor agreements. In the normal course of business, the Company may provide certain clients with financial performance guarantees and at times performance letters of credit or surety bonds. In general, the Company would only be liable for the amounts of these guarantees in the event that non-performance by the Company permits termination of the related contract by the Company’s client. The Company believes it is in compliance with its performance obligations under all service contracts for which there is a financial performance guarantee, and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its condensed consolidated results of operations or financial position. The Company also uses stand-by letters of credit, in lieu of cash, to support various risk management insurance policies. These letters of credit represent a contingent liability and the Company would only be liable if it defaults on its payment obligations on these policies. The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of December 31, 2017 : (in millions) Fiscal 2018 Fiscal 2019 Fiscal 2020 and Thereafter Totals Surety bonds $ 48 $ 152 $ 157 $ 357 Performance letters of credit 140 85 338 563 Stand-by letters of credit 8 15 32 55 Totals $ 196 $ 252 $ 527 $ 975 The Company generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of their intellectual property rights, including rights in patents (with or without geographic limitations), copyrights, trademarks, and trade secrets. DXC’s indemnification of its licensees relates to costs arising from court awards, negotiated settlements, and the related legal and internal costs of those licensees. The Company maintains the right, at its own cost, to modify or replace software in order to eliminate any infringement. The Company has not incurred any significant costs related to licensee software indemnification. Contingencies Vincent Forcier v. Computer Sciences Corporation and The City of New York : On October 27, 2014, the United States Attorney’s Office for the Southern District of New York and the Attorney General for the State of New York filed complaints-in-intervention on behalf of the United States and the State of New York, respectively, against CSC and The City of New York. This action arose out of a qui tam complaint originally filed under seal in 2012 by Vincent Forcier, a former employee of CSC. The complaints allege that from 2008 to 2012 New York City and CSC, in its role as fiscal agent for New York City’s Early Intervention Program ("EIP"), a federal program that provides services for infants and toddlers with manifest or potential developmental delays, violated the federal and state False Claims Acts and various common law standards by allegedly orchestrating a billing fraud against Medicaid through the misapplication of default billing codes and the failure to exhaust private insurance coverage before submitting claims to Medicaid. The New York Attorney General’s complaint also alleges that New York City and CSC failed to reimburse Medicaid in certain instances where insurance had paid a portion of the claim. The lawsuits seek treble statutory damages, other civil penalties and attorneys’ fees and costs. On January 26, 2015, CSC and the City of New York moved to dismiss Forcier’s amended qui tam complaint as well as the federal and state complaints-in-intervention. In June 2016, the Court dismissed Forcier’s amended complaint in its entirety. With regard to the complaints-in-intervention, the Court dismissed the federal claims alleging misuse of default diagnosis codes when the provider had entered an invalid code, and the state claims alleging failure to reimburse Medicaid when claims were subsequently paid by private insurance. The Court denied the motions to dismiss with respect to the federal and state claims relating to (i) submission of insurance claims with a code signifying that the patient’s policy ID was unknown, and (ii) submission of claims to Medicaid after the statutory deadline for payment by private insurance had passed, and state common law claims. In accordance with the ruling, the United States and the State of New York each filed amended complaints-in-intervention on September 6, 2016. In addition to reasserting the claims upheld by the Court, the amended complaints assert new claims alleging that the compensation provisions of CSC’s contract with New York City rendered it ineligible to serve as a billing agent under state law. On November 9, 2016, CSC filed motions to dismiss the amended complaints in their entirety. On August 10, 2017, the Court granted in part and denied in part the motions to dismiss, allowing the remaining causes of action to proceed. On January 9, 2018, the Company answered the complaints, and asserted a counterclaim against the State of New York on a theory of contribution and indemnification. On January 30, 2018, the State of New York filed a motion to dismiss the Company’s counterclaim. The Parties participated in a non-binding mediation on November 29, 2017, and settlement discussions are continuing. Commencement of discovery will be deferred by the parties pending settlement negotiations. The Company believes that these claims are without merit and intends to continue to defend itself vigorously. Washington, DC Navy Yard Litigation : In December 2013, a wrongful death action was filed in U.S. District Court for the Middle District of Florida against HP Enterprise Services, LLC, now known as Enterprise Services, LLC (“ES”) and others in connection with the September 2013 Washington, DC Navy Yard shooting that resulted in the deaths of 12 individuals. The perpetrator was an employee of The Experts, ES’s now terminated subcontractor on ES’s IT services contract with the U.S. Navy (a contract served by USPS). A total of 15 lawsuits arising out of the shooting have been filed. All have been consolidated in the U.S. District Court for the District of Columbia. ES filed motions to dismiss, which the Court has granted in part and denied in part. Discovery is proceeding. Strauch Fair Labor Standards Act Collective Action : On July 1, 2014, plaintiffs Joseph Strauch, Timothy Colby, Charles Turner, and Vernon Carre filed an action in the U.S. District Court for the District of Connecticut on behalf of themselves and a putative nationwide collective of CSC system administrators, alleging CSC’s failure to properly classify these employees as non-exempt under the federal Fair Labor Standards Act ("FLSA"). Plaintiffs allege similar state-law Rule 23 class claims pursuant to Connecticut and California statutes, including the Connecticut Minimum Wage Act, the California Unfair Competition Law, California Labor Code, California Wage Order No. 4-2001 and the California Private Attorneys General Act. Plaintiffs claim double overtime damages, liquidated damages, pre- and post-judgment interest, civil penalties, and other state-specific remedies. In 2015 the Court entered an order granting conditional certification under the FLSA of the collective of over 4,000 system administrators, and notice of the right to participate in the FLSA collective action was mailed to the system administrators. Approximately 1,000 system administrators, prior to the announced deadline, filed consents with the Court to participate in the FLSA collective. On June 30, 2017, the Court granted Rule 23 certification of a Connecticut state-law class and a California state-law class consisting of professional system administrators and associate professional system administrators. Senior professional system administrators were found not to qualify for Rule 23 certification under the state-law claims. On July 14, 2017, the Company petitioned the Second Circuit Court of Appeals for permission to file an appeal of the Rule 23 decision. That petition was denied on November 21, 2017. As a result of the Court's findings in its Rule 23 certification order, the parties entered into a stipulation to decertify the senior professional system administrators from the FLSA collective. On August 2, 2017, the Court approved the stipulation, and the FLSA collective action is currently made up of approximately 700 individuals who held the title of associate professional or professional system administrator. A jury trial commenced on December 11, 2017. On December 20, 2017, the jury returned a verdict in favor of plaintiffs, finding that the Company had misclassified the class of employees as exempt under federal and state laws, and finding that it had done so willfully. The Court will determine damages and address post-trial motions in further proceedings. The Company disagrees with the verdict and intends to continue to defend itself vigorously, including by appealing the verdict and the final judgment of the Court. Computer Sciences Corporation v. Eric Pulier, et al. : On May 12, 2015, CSC and its wholly owned subsidiary, ServiceMesh Inc. ("SMI"), filed a civil complaint in the Court of Chancery of the State of Delaware against Eric Pulier, the former CEO of SMI, which had been acquired by CSC on November 15, 2013. Following the acquisition, Mr. Pulier signed a retention agreement with SMI pursuant to which he received a grant of restricted stock units of CSC and agreed to be bound by CSC’s rules and policies, including CSC’s Code of Business Conduct. Mr. Pulier resigned from SMI on April 22, 2015 amid allegations that he had engaged in fraudulent transactions with two employees of the Commonwealth Bank of Australia Ltd. (“CBA”). The original complaint against Mr. Pulier asserted claims for fraud, breach of contract and breach of fiduciary duty. In an amended complaint, CSC named TechAdvisors, LLC and Shareholder Representative Services LLC ("SRS") as additional defendants. In ruling on a motion to dismiss filed by Mr. Pulier, the Court dismissed CSC’s claim for breach of the implied covenant of good faith, but allowed substantially all of the remaining claims to proceed. Mr. Pulier asserted counter-claims for breach of contract, fraud, negligent representation, rescission, and violations of the California Blue Sky securities law. With the exception of the claim for breach of his retention agreement, the Court dismissed in whole or in part each of Mr. Pulier’s counterclaims. On December 17, 2015, CSC entered into a settlement agreement with the majority of the former equityholders of SMI, as well as with SRS acting in its capacity as the agent and attorney-in-fact for the settling equityholders. Pursuant to the settlement agreement, CSC received $16.5 million , which amount was equal to the settling equityholders’ pro rata share of the funds remaining in escrow from the transaction, which was recorded as an offset to selling, general and administrative costs in CSC’s Consolidated Statements of Operations for the fiscal year ended March 31, 2016. On February 20, 2017, CSC, SRS and the former equityholders of SMI who remain named defendants entered into a partial settlement agreement by which CSC received payment of some of the funds remaining in escrow. Discovery was proceeding when on July 20, 2017, the Court granted a motion by the United States for a 90-day stay of discovery pending the completion of a criminal investigation. On September 27, 2017, a grand jury empaneled by the United States District Court for the Central District of California returned an indictment against Pulier, charging him with conspiracy, securities and wire fraud, obstruction of justice, and other violations of federal law ( United States v. Eric Pulier , CR 17-599-AB). The Government sought an extension of the stay which the Delaware Court granted on November 3, 2017. The civil action is now stayed pending resolution of the criminal case. Law enforcement officials in Australia have brought bribery-related charges against the two former CBA employees. One of these has since pled guilty, and in 2016 received a sentence of imprisonment. In 2016, the United States Attorney’s Office for the Central District of California announced similar criminal charges against this same CBA employee for securities fraud and wire fraud. CSC is cooperating with and assisting the Australian and U.S. authorities in their investigations. On February 17, 2016, Mr. Pulier filed a complaint in Delaware Chancery Court against CSC and its subsidiary - CSC Agility Platform, Inc., formerly known as SMI - seeking advancement of his legal fees and costs. On May 12, 2016, the Court ruled that CSC Agility Platform - as the successor to SMI - is liable for advancing 80% of Mr. Pulier’s fees and costs in the underlying civil action. Mr. Pulier has also filed a complaint for advancement of the legal fees and costs incurred in connection with his defense of criminal investigations by the U.S. Government and other entities. On March 30, 2017, Mr. Pulier filed a motion for judgment on the pleadings in this fee advancement matter. Mr. Pulier's motion for judgment on the pleadings and other advancement-related issues were argued before the Court on August 2, 2017, and, on August 7, 2017, the Court ruled substantially in Mr. Pulier's favor. On January 30, 2018, the Court reduced the Company’s advancement obligation to only 80% of the criminal defense fees and costs sought by Mr. Pulier. In undertakings previously provided to SMI, Mr. Pulier agreed to repay all amounts advanced to him if it should ultimately be determined that he is not entitled to indemnification. Cisco Systems Inc. and Cisco Systems Capital Corporation v. Hewlett-Packard Co. : On August 24, 2015, Cisco Systems, Inc. (“Cisco”) and Cisco Systems Capital Corporation (“Cisco Capital”) filed an action against Hewlett Packard Co., now known as HP Inc. ("HP") in California Superior Court, Santa Clara County, for declaratory judgment and breach of contract in connection with a contract to utilize Cisco products and services, and to finance the services through Cisco Capital. HP terminated the contract, and the parties dispute the calculation of the proper cancellation credit. On December 18, 2015, Cisco filed an amended complaint that abandoned the claim for breach of contract set forth in the original complaint, and asserted a single cause of action for declaratory relief concerning the proper calculation of the cancellation credit. On January 19, 2016, HP answered the complaint and filed a counterclaim for breach of contract and declaratory judgment. Discovery is completed, and the trial, originally scheduled for March of this year, is now scheduled to begin on June 11, 2018. A court-ordered mediation took place on August 30, 2017, and a second mediation has been scheduled for February 13, 2018. DXC is the party in interest in this matter pursuant to the Separation and Distribution Agreement between the then Hewlett-Packard Co. and HPE and the subsequent Separation and Distribution Agreement between HPE and DXC. Kemper Corporate Services, Inc. v. Computer Sciences Corporation : In October 2015, Kemper Corporate Services, Inc. (“Kemper”) filed a demand for arbitration against CSC with the American Arbitration Association (“AAA”), alleging that CSC breached the terms of a 2009 Master Software License and Services Agreement and related Work Orders (the “Agreement”) by failing to complete a software translation and implementation plan by certain contractual deadlines. Kemper claimed breach of contract, seeking approximately $100 million in damages measured in part by the amount of the fees paid under the contract, as well as pre-judgment interest, and in the alternative claimed rescission of the Agreement. CSC answered the demand for arbitration denying Kemper’s claims and asserting a counterclaim for unpaid invoices for services rendered by CSC. A single arbitrator conducted an evidentiary hearing on the merits of the claims and counterclaims in April 2017. Oral argument took place on August 28, 2017. On October 2, 2017, the arbitrator issued a partial final award, finding for Kemper on its breach of contract theory, awarding Kemper $84.2 million in compensatory damages plus prejudgment interest, denying Kemper’s claim for rescission as moot, and denying CSC’s counterclaim. Kemper moved on October 10, 2017, in federal district court in Texas to confirm the award. On November 16, 2017, the arbitrator issued a Final Award which reiterated his findings of fact and law, calculated the amount of prejudgment interest, and awarded Kemper its costs of arbitration including reasonable attorneys’ fees and expenses . On December 6, 2017, the Company filed a motion to vacate the award in federal district court in New York. A week later, the New York court stayed the action in deference to the Texas court’s decision as to which venue was more appropriate to address the vacatur arguments. On January 12, 2018, the Company appeared in the Texas action seeking a stay of the confirmation proceedings or a transfer of venue to New York. The venue motion will be fully briefed by February 23, 2018. The Company disagrees with the decision of the arbitrator and intends to continue to defend itself vigorously. The Company is also pursuing coverage for the full scope of the award, interest, and legal fees and expenses, under the Company's applicable insurance policies. Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise : This purported class and collective action was filed on August 18, 2016 in the U.S. District Court for the Northern District of California, against HP and HPE alleging violations of the Federal Age Discrimination in Employment Act (“ADEA”), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code. Former business units of HPE now owned by the Company will be proportionately liable for any recovery by plaintiffs in this matter. Plaintiffs filed an amended complaint on December 19, 2016. Plaintiffs seek to certify a nationwide class action under the ADEA comprised of all U.S. residents employed by defendants who had their employment terminated pursuant to a work force reduction (“WFR”) plan on or after December 9, 2014 (deferral states) and April 8, 2015 (non-deferral states), and who were 40 years of age or older at the time of termination. Plaintiffs also seek to represent a Rule 23 class under California law comprised of all persons 40 years or older employed by defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012. On January 30, 2017, defendants filed a partial motion to dismiss and a motion to compel arbitration of claims by opt-in plaintiffs who signed releases as part of their WFR packages. On September 20, 2017, the Court denied the partial motion to dismiss without prejudice, but granted defendants’ motions to compel arbitration. Accordingly, the Court has stayed the entire action pending arbitration, and administratively closed the case. Plaintiffs have filed a motion for reconsideration as well as a notice of appeal to the Ninth Circuit (which has been denied as premature). The reconsideration motion, and others pending before the District Court relating to class arbitration, are fully briefed and will be adjudicated without oral argument. Voluntary Disclosure of Certain Possible Sanctions Law Violations : On February 2, 2017, CSC submitted an initial notification of voluntary disclosure to the U.S. Department of Treasury, Office of Foreign Assets Control ("OFAC") regarding certain possible violations of U.S. sanctions laws pertaining to insurance premium data and claims data processed by two partially-owned joint ventures of Xchanging, which CSC acquired during the first quarter of fiscal 2017. A copy of the disclosure was also provided to Her Majesty’s Treasury Office of Financial Sanctions Implementation in the U.K. The Company’s related internal investigation is continuing, and the Company has undertaken to cooperate with and provide a full report of its findings to OFAC when completed. In addition to the matters noted above, the Company is currently subject in the normal course of business to various claims and contingencies arising from, among other things, disputes with customers, vendors, employees, contract counterparties and other parties, as well as securities matters, environmental matters, matters concerning the licensing and use of intellectual property, and inquiries and investigations by regulatory authorities and government agencies. Some of these disputes involve or may involve litigation. The consolidated financial statements reflect the treatment of claims and contingencies based on management's view of the expected outcome. DXC consults with outside legal counsel on issues related to litigation and regulatory compliance and seeks input from other experts and advisors with respect to matters in the ordinary course of business. Although the outcome of these and other matters cannot be predicted with certainty, and the impact of the final resolution of these and other matters on the Company’s results of operations in a particular subsequent reporting period could be material and adverse, management does not believe based on information currently available to the Company, that the resolution of any of the matters currently pending against the Company will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due. Unless otherwise noted, the Company is unable to determine at this time a reasonable estimate of a possible loss or range of losses associated with the foregoing disclosed contingent matters. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following Accounting Standards Updates ("ASU") were recently issued but have not yet been adopted by DXC: In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815).” This amendment was issued to improve the financial reporting of hedge relationships to better portray the economic results of an entity’s risk management activities in its financial statements and to make certain improvements to simplify the application of hedge accounting. ASU 2017-12 will be effective for DXC in fiscal 2020 and early adoption is permitted. The ASU must be adopted by applying the standard to existing hedge instruments at the adoption date. DXC is currently evaluating the effect the adoption of ASU 2017-12 will have on its consolidated financial statements and notes thereto. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This amendment is intended to increase transparency and comparability among organizations by recognizing virtually all lease assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements. ASU 2016-02 will be effective for DXC in fiscal 2020 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition and provides for certain practical expedients. DXC is currently evaluating the effect the adoption of ASU 2016-02 will have on its existing accounting policies and the consolidated financial statements in future reporting periods, but expects there will be an increase in assets and liabilities on its balance sheets at adoption due to the recording of right-of-use assets and corresponding lease liabilities, which may be significant. Refer to Note 18 - " Commitments and Contingencies " for information about its operating lease obligations. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which, along with amendments issued in 2015 and 2016, will replace most existing revenue recognition guidance under U.S. GAAP and eliminate industry specific guidance. The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which DXC expects to be entitled in exchange for those goods or services. The guidance also addresses the timing of recognition of certain costs incurred to obtain or fulfill a customer contract. Further, it requires the disclosure of sufficient information to enable readers of DXC’s financial statements to understand the nature, amount, timing and uncertainty of revenues, and cash flows arising from customer contracts, and information regarding significant judgments and changes in judgments made. ASU 2014-09 provides two methods of adoption: full retrospective and modified retrospective. Under the full retrospective method, the standard would be applied to all periods presented with previously disclosed periods restated under the new guidance. Under the modified retrospective method, prior periods would not be restated but rather a cumulative catch-up adjustment would be recorded on the adoption date. The Company will adopt this standard in the first quarter of Fiscal 2019 and expects to adopt using the modified retrospective method. DXC has performed an initial assessment of the impact of the standard and continues to assess the impact that the guidance will have on accounting policies, processes, systems and internal controls. The Company is currently in the process of implementing the new standard. Based on the implementation efforts to-date, including the assessment of contracts acquired through the combination with HPES, the Company expects the primary accounting impacts to include the following: • The Company’s IT and business process outsourcing arrangements comprise a series of distinct services, for which revenue is expected to be recognized as the services are provided in a manner that is generally consistent with current practices. • The Company has certain arrangements involving the sale of proprietary software and related services for which vendor-specific objective evidence of fair value may not exist, resulting in the deferral of revenues. Under the new standard, estimates of standalone selling price will be necessary for all software performance obligations, which may result in the acceleration of revenues. • The Company currently does not capitalize commission costs, which will be required in certain cases under the new standard and amortized over the period that services or goods are transferred to the customer. However, the Company is currently assessing the impact of the standard on commission plans of the combined company. As the quantitative impact of adopting the standard may be significantly impacted by arrangements contracted before the adoption date, the Company has not yet reached a conclusion about whether the accounting impact of the new standard will be material to its consolidated financial statements. However, the Company expects continuing significant implementation efforts to accumulate and report additional disclosures required by the standard. Other recently issued ASUs effective after December 31, 2017 are not expected to have a material effect on DXC's consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, Consideration Exchanged | Under the acquisition method of accounting, total consideration exchanged was: (in millions) Amount Preliminary fair value of purchase consideration received by HPE stockholders (1) $ 9,782 Preliminary fair value of HPES options assumed by CSC (2) 68 Total estimated consideration transferred $ 9,850 (1) Represents the fair value of consideration received by HPE stockholders to give them 50.1% ownership in the combined company. The fair value of the purchase consideration transferred was based on a total of 141,865,656 shares of DXC common stock distributed to HPE stockholders as of the close of business on the record date ( 141,741,712 after the effect of 123,944 cancelled shares) at CSC's closing price of $69.01 per share on March 31, 2017. (2) Represents the fair value of certain stock-based awards of HPES employees that were unexercised on March 31, 2017, which HPE, HPES and CSC agreed would be converted to DXC stock-based awards. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The acquired property and equipment are summarized in the following table: (in millions) Amount Land, buildings, and leasehold improvements $ 1,500 Computers and related equipment 1,122 Furniture and other equipment 45 Construction in progress 132 Total $ 2,799 The preliminary estimated purchase price is allocated as follows: (in millions) Estimated Fair Value Cash and cash equivalents $ 974 Accounts receivable (1) 4,092 Other current assets 535 Total current assets 5,601 Property and equipment 2,799 Intangible assets 6,169 Other assets 1,614 Total assets acquired 16,183 Accounts payable, accrued payroll, accrued expenses, and other current liabilities (4,496 ) Deferred revenue (1,267 ) Long-term debt, net of current maturities (4,817 ) Long-term deferred tax liabilities and income tax payable (1,570 ) Other liabilities (1,336 ) Total liabilities assumed (13,486 ) Net identifiable assets acquired 2,697 Add: Fair value of non-controlling interests (55 ) Goodwill 7,208 Total estimated consideration transferred $ 9,850 (1) Includes aggregate adjustments received from HPE, in accordance with the provisions of the Separation Agreement, of $203 million . |
Schedule of Finite-Lived Intangible Assets Acquired | The acquired identifiable intangible assets are summarized in the following table: (in millions) Amount Estimated Useful Lives (Years) Customer relationships $ 5,200 10-13 Developed technology 141 2-7 Third-party purchased software 508 2-7 Deferred contract costs 320 n/a Total $ 6,169 |
Schedule of Amounts Recognized in Balance Sheet | The following table summarizes the balance sheet impact of the pension plans assumed from HPES as a result of the Merger. (in millions) Amount Other assets $ 558 Accrued expenses and other current liabilities (13 ) Other long-term liabilities (547 ) Net amount recorded $ (2 ) |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | The following table summarizes the projected benefit obligation, fair value of the plan assets and the funded status assumed from HPES as a result of the Merger. (in millions) Amount Projected benefit obligation $ (7,413 ) Fair value of plan assets 7,411 Funded status $ (2 ) |
Schedule of Allocation of Plan Assets | The following table summarizes the plan asset allocations by asset category for HPES pension plans assumed by the Company as a result of the Merger. Equity securities 22 % Debt securities (1) 72 % Alternatives 5 % Cash and other 1 % Total 100 % (1) Includes liability-driven investments |
Schedule of Expected Benefit Payments | The following table summarizes the estimated future benefit payments due to the pension and benefit plans assumed from HPES as a result of the Merger. (in millions) Amount Employer contributions: 2018 $ 39 Benefit payments: 2018 $ 225 2019 $ 151 2020 $ 163 2021 $ 224 2022 $ 180 2023 through 2027 $ 1,132 |
Summary of Pro Forma Information | The Company's condensed consolidated statements of operations includes the following revenues and net income attributable to HPES since the Merger date: (in millions) Three Months Ended December 31, 2017 Nine Months Ended December 31, 2017 Revenues $ 4,374 $ 12,942 Net income $ 422 $ 1,199 The following table provides unaudited pro forma results of operations for the Company for the three and nine months ended December 31, 2016, as if the Merger had been consummated on April 2, 2016, the first day of DXC's fiscal year ended March 31, 2017. These unaudited pro forma results do not reflect any cost saving synergies from operating efficiencies. In addition, the unaudited pro forma adjustments are preliminary and are subject to change as additional information becomes available and as additional analyses are performed during the measurement period. Accordingly, the Company presents these unaudited pro forma results for informational purposes only, and they are not necessarily indicative of what the actual results of operations of DXC would have been if the Merger had occurred at the beginning of the period presented, nor are they indicative of future results of operations. CSC reported its results based on a fiscal year convention that comprised four thirteen-week quarters. HPES reported its results on a fiscal year basis ended October 31. As a consequence of CSC and HPES having different fiscal year-end dates, all references to the unaudited pro forma statement of operations include the results of operations of CSC for the three and nine months ended December 31, 2016 and of HPES for the three and nine months ended October 31, 2016. (in millions, except per-share amounts) Three Months Ended December 30, 2016 (1) Nine Months Ended December 30, 2016 (1) Revenues $ 6,585 $ 19,358 Net loss (166 ) (570 ) Loss attributable to the Company (174 ) (587 ) Loss per common share: Basic $ (0.61 ) $ (2.07 ) Diluted $ (0.61 ) $ (2.07 ) (1) The unaudited pro forma information is based on legacy CSC results for the three and nine months ended December 31, 2016 and legacy HPES results for the three and nine months ended October 31, 2016. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per Share | The following table reflects the calculation of basic and diluted EPS: Three Months Ended Nine Months Ended (in millions, except per-share amounts) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Net income attributable to DXC common shareholders: $ 776 $ 31 $ 1,191 $ 25 Common share information: Weighted average common shares outstanding for basic EPS 285.38 140.88 284.70 140.13 Dilutive effect of stock options and equity awards 4.39 3.93 4.83 3.67 Weighted average common shares outstanding for diluted EPS 289.77 144.81 289.53 143.80 Earnings per share: Basic $ 2.72 $ 0.22 $ 4.18 $ 0.18 Diluted $ 2.68 $ 0.21 $ 4.11 $ 0.17 |
Schedule of Antidilutive Securities | The number of options and shares excluded were as follows: Three Months Ended Nine Months Ended December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Stock Options — 1,956,698 24,850 1,621,950 RSUs 10,552 1,470 21,030 1,611 |
Sale of Receivables (Tables)
Sale of Receivables (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Summary of Transfer of Assets Accounted for as Sales, Deferred Purchase Price | The following table is a reconciliation of the beginning and ending balances of the DPP: As of and for the (in millions) Three Months Ended December 31, 2017 Nine Months Ended Beginning balance $ 272 $ 252 Transfers of receivables 562 1,716 Collections (593 ) (1,717 ) Fair value adjustment 8 (2 ) Ending balance $ 249 $ 249 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following table presents the Company’s assets and liabilities, excluding pension assets, see Note 12 - " Pension and Other Benefit Plans " and derivative assets and liabilities, see Note 7 - " Derivative Instruments ", that are measured at fair value on a recurring basis. There were no transfers between any of the levels during the periods presented. Fair Value Hierarchy (in millions) Fair Value Level 1 Level 2 Level 3 Assets: As of December 31, 2017 Money market funds and money market deposit accounts (1) $ 217 $ 217 $ — $ — Time deposits (1) 35 35 — — Foreign bonds 52 — 52 — Other debt securities 7 — — 7 Deferred purchase price receivable 249 — — 249 Total assets $ 560 $ 252 $ 52 $ 256 Liabilities: Contingent consideration $ 8 $ — $ — $ 8 Total liabilities $ 8 $ — $ — $ 8 (1) Cost basis approximated fair value due to the short period of time to maturity. As of March 31, 2017 Assets: Fair Value Level 1 Level 2 Level 3 Money market funds and money market deposit accounts $ 406 $ 406 $ — $ — Deferred purchase price receivable 252 — — 252 Total assets $ 658 $ 406 $ — $ 252 Liabilities: Contingent consideration $ 7 $ — $ — $ 7 Total liabilities $ 7 $ — $ — $ 7 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables show the Company’s derivative instruments at gross fair value: Derivative Assets As of (in millions) Balance Sheet Line Item December 31, 2017 March 31, 2017 Derivatives designated for hedge accounting: Interest rate swaps Other assets $ 5 $ 5 Foreign currency forward contracts Other current assets 27 27 Total fair value of derivatives designated for hedge accounting $ 32 $ 32 Derivatives not designated for hedge accounting: Foreign currency forward contracts Other current assets $ 9 $ 15 Total fair value of derivatives not designated for hedge accounting $ 9 $ 15 Derivative Liabilities As of (in millions) Balance Sheet Line Item December 31, 2017 March 31, 2017 Derivatives designated for hedge accounting: Interest rate swaps Other long-term liabilities $ — $ 1 Foreign currency forward contracts Accrued expenses and other current liabilities — — Total fair value of derivatives designated for hedge accounting: $ — $ 1 Derivatives not designated for hedge accounting: Foreign currency forward contracts Accrued expenses and other current liabilities $ 13 $ 12 Total fair value of derivatives not designated for hedge accounting $ 13 $ 12 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Amortizable Intangible Assets | As of December 31, 2017 (in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 3,231 $ 1,792 $ 1,439 Outsourcing contract costs 1,436 612 824 Customer related intangible assets 6,151 583 5,568 Other intangible assets 114 18 96 Total intangible assets $ 10,932 $ 3,005 $ 7,927 As of March 31, 2017 (in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Software $ 2,347 $ 1,554 $ 793 Outsourcing contract costs 793 475 318 Customer related intangible assets 851 248 603 Other intangible assets 96 16 80 Total intangible assets $ 4,087 $ 2,293 $ 1,794 |
Estimated Future Amortization of Intangible Assets | Estimated future amortization related to intangible assets as of December 31, 2017 is as follows: Fiscal Year (in millions) Remainder of 2018 $ 306 2019 $ 1,094 2020 $ 1,032 2021 $ 943 2022 $ 804 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in the Carrying Amount of Goodwill by Segment | The following table summarizes the changes in the carrying amount of Goodwill, by segment, as of December 31, 2017 . (in millions) GBS GIS USPS Total Balance as of March 31, 2017, net $ 1,470 $ 385 $ — $ 1,855 Additions 2,800 2,532 1,984 7,316 Foreign currency translation 94 55 — 149 Balance as of December 31, 2017, net $ 4,364 $ 2,972 $ 1,984 $ 9,320 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following is a summary of the Company's debt: As of (in millions) Interest Rates Fiscal Year Maturities December 31, 2017 March 31, 2017 Short-term debt and current maturities of long-term debt Euro-denominated commercial paper (0.1) - 0.02% (1) 2018 $ 841 $ 646 EUR term loan 1.75% (2) 2019 480 — Current maturities of long-term debt Various 2019 128 55 Current maturities of capitalized lease liabilities 1.1% - 6.7% 2019 724 37 Short-term debt and current maturities of long-term debt $ 2,173 $ 738 Long-term debt, net of current maturities GBP term loan 1.0 - 1.2% (3) 2019 $ 250 $ 233 USD term loan 1.2% - 2.3% (4) 2021 — 571 AUD term loan 2.9% - 3.0% (5) 2022 215 76 EUR term loan 0.9% (6) 2022 179 — USD term loan 2.2% - 2.8% (7) 2022 1,149 — $500 million Senior notes 2.875% 2020 503 — $650 million Senior notes 2.3% - 2.4% (8) 2021 646 — $274 million Senior notes 4.45% 2023 278 — $170 million Senior notes 4.45% 2023 174 453 $500 million Senior notes 4.25% 2025 507 — $500 million Senior notes 4.75% 2028 509 — $300 million Senior notes 7.45% 2030 357 — Revolving credit facility 1.4% - 1.6% 2021 - 2023 388 678 Lease credit facility 2.0% - 2.6% 2020 - 2023 51 60 Capitalized lease liabilities 1.1% - 6.7% 2018 - 2022 1,518 104 Borrowings for assets acquired under long-term financing 2.3% -3.2% 2018 - 2023 318 77 Mandatorily redeemable preferred stock outstanding 3.5% 2023 61 61 Other borrowings 0.5% - 14.0% 2018 - 2037 116 4 Long-term debt 7,219 2,317 Less: current maturities 852 92 Long-term debt, net of current maturities $ 6,367 $ 2,225 (1) Approximate weighted average interest rate (2) Three-month EURIBOR rate plus 1.75% (3) Three-month LIBOR rate plus 0.65 % (4) At DXC's option, the USD term loan bears interest at a variable rate equal to the adjusted LIBOR for a one-, two-, three-, or six-month interest period, plus a margin between 0.75% and 1.50% based on a pricing grid consistent with the Company's outstanding revolving credit facility or the greater of the prime rate, the federal funds rate plus 0.50% , or the adjusted LIBOR for a one-month interest period plus 1.00% , in each case plus a margin of up to 0.50% , based on a pricing grid consistent with the revolving credit facility. (5) Variable interest rate equal to the bank bill swap bid rate for a one-, two-, three- or six-month interest period plus 0.95% to 1.45% based on the published credit ratings of DXC. (6) At DXC’s option, the EUR term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin of between 0.75% and 1.35% , based on published credit ratings of DXC. (7) At DXC’s option, the USD term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin of between 1.00% and 1.75% , based on published credit ratings of DXC or the Base Rate plus a margin of between 0% and 0.75% , based on published credit ratings of DXC. (8) Three-month LIBOR plus 0.95% |
Restructuring Costs (Tables)
Restructuring Costs (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Restructuring Costs [Abstract] | |
Schedule of Restructuring Expense | The composition of restructuring liabilities by financial statement line items is as follows: As of (in millions) December 31, 2017 Accrued expenses and other current liabilities $ 343 Other long-term liabilities 173 Total $ 516 |
Schedule of Restructuring Liability | Restructuring Liability as of March 31, 2017 Acquired Balance as of April 1, 2017 Costs Expensed, net of reversals (1) Costs Not Affecting Restructuring Liability (2) Cash Paid Other (3) Restructuring Liability as of December 31, 2017 Fiscal 2018 Plan Workforce Reductions $ — n/a $ 451 $ (13 ) $ (228 ) $ 6 $ 216 Facilities Costs — n/a 174 (15 ) (70 ) 1 90 Total $ — n/a $ 625 $ (28 ) $ (298 ) $ 7 $ 306 Fiscal 2017 Plan Workforce Reductions $ 155 n/a $ (25 ) $ (6 ) $ (91 ) $ 10 $ 43 Facilities Costs 6 n/a (2 ) — (4 ) — — Total $ 161 n/a $ (27 ) $ (6 ) $ (95 ) $ 10 $ 43 Fiscal 2016 Plan Workforce Reductions $ 8 n/a $ (1 ) $ — $ (3 ) $ — $ 4 Facilities Costs 5 n/a — — (3 ) — 2 Total $ 13 n/a $ (1 ) $ — $ (6 ) $ — $ 6 Fiscal 2015 Plan Workforce Reductions $ 3 n/a $ — $ — $ (2 ) $ — $ 1 Facilities Costs — n/a — — — — — Total $ 3 n/a $ — $ — $ (2 ) $ — $ 1 Acquired Liabilities Workforce Reductions n/a $ 256 $ 1 $ (2 ) $ (139 ) $ 6 $ 122 Facilities Costs n/a 72 (3 ) (3 ) (29 ) 1 38 Total n/a $ 328 $ (2 ) $ (5 ) $ (168 ) $ 7 $ 160 (1) Costs expensed, net of reversals include $29 million , $2 million and $3 million of costs reversed from the Fiscal 2017 Plan, Fiscal 2016 Plan and Acquired liabilities, respectively. (2) Pension benefit augmentations recorded as a pension liability and asset impairment. (3) Foreign currency translation adjustments. |
Pension and Other Benefit Pla37
Pension and Other Benefit Plans (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Defined Benefit Plans Disclosures | The components of net periodic pension expense (benefit) were: Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Service cost $ 30 $ 6 $ 96 $ 17 Interest cost 63 20 184 62 Expected return on assets (133 ) (40 ) (393 ) (123 ) Amortization of prior service costs (5 ) (4 ) (13 ) (13 ) Contractual termination benefit 10 — 21 — Curtailment gain (40 ) — (40 ) — Recognition of actuarial loss 23 — 23 — Net periodic pension benefit $ (52 ) $ (18 ) $ (122 ) $ (57 ) The weighted-average rates used to determine net periodic pension cost for the three and nine months ended December 31, 2017 and December 30, 2016 were: December 31, 2017 December 30, 2016 Discount or settlement rates 2.4 % 3.1 % Expected long-term rates of return on assets 5.0 % 6.3 % Rates of increase in compensation levels 2.7 % 2.6 % |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of Shares Repurchased | The details of shares repurchased are shown below: Fiscal Period Number of Shares Repurchased Average Price per Share Amount (in millions) 1st Quarter 2018 250,000 $ 77.39 $ 19 2nd Quarter 2018 591,505 78.20 47 3rd Quarter 2018 — — — Total 841,505 $ 77.96 $ 66 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table shows the changes in accumulated other comprehensive income (loss), net of taxes: (in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance at March 31, 2017 $ (458 ) $ 20 $ 276 $ (162 ) Current-period other comprehensive income 62 — — 62 Amounts reclassified from accumulated other comprehensive income (8 ) — (10 ) (18 ) Balance at December 31, 2017 $ (404 ) $ 20 $ 266 $ (118 ) (in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive Loss Balance at April 1, 2016 $ (399 ) $ (1 ) $ 289 $ (111 ) Current-period other comprehensive (loss) income (180 ) 15 — (165 ) Amounts reclassified from accumulated other comprehensive loss — — (10 ) (10 ) Balance at December 30, 2016 $ (579 ) $ 14 $ 279 $ (286 ) |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share Based Compensation Shares Authorized Under Stock Option Plans | The Board has reserved for issuance shares of DXC common stock, par value $0.01 per share, under each of the plans as detailed below: As of December 31, 2017 Reserved for issuance Available for future grants DXC Employee Equity Plan 34,200,000 22,403,601 DXC Director Equity Plan 230,000 121,334 DXC Share Purchase Plan 250,000 250,000 Total 34,680,000 22,774,935 |
Disclosure of Share Based Compensation Arrangements by Share Based Payment Award | Number of Option Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in millions) Outstanding as of March 31, 2017 4,767,396 $ 38.70 8.01 $ 145 HPE options converted to DXC options at Merger 2,654,872 $ 46.56 CSC Options converted to RSUs due to Merger (1,521,519 ) $ 51.00 Exercised (2,390,929 ) $ 40.07 $ 104 Canceled/Forfeited (2,629 ) $ 57.08 Expired (46,578 ) $ 42.40 Outstanding as of December 31, 2017 3,460,613 $ 38.31 5.58 $ 196 Vested and expected to vest in the future as of December 31, 2017 3,455,538 $ 38.28 5.58 $ 196 Exercisable as of December 31, 2017 3,419,060 $ 38.02 5.57 $ 194 Employee Equity Plan Director Equity Plan Number of Weighted Number of Weighted Average Grant Date Fair Value Outstanding as of March 31, 2017 3,710,985 $ 34.86 85,766 $ 34.19 Granted 1,566,361 $ 79.11 22,900 $ 84.40 HPE RSUs converted to DXC RSUs due to Merger 95,683 $ 69.33 — $ — Options converted to RSUs due to Merger 609,416 $ 32.58 — $ — Settled (1,926,043 ) $ 35.89 (39,980 ) $ 45.25 Canceled/Forfeited (172,881 ) $ 54.65 — $ — Outstanding as of December 31, 2017 3,883,521 $ 51.80 68,686 $ 44.50 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Total share-based compensation cost $ 19 $ 21 $ 76 $ 56 Related income tax benefit $ 5 $ 7 $ 24 $ 18 Total intrinsic value of options exercised $ 30 $ 6 $ 104 $ 60 Tax benefits from exercised stock options and awards $ 9 $ 4 $ 62 $ 30 |
Cash Flows (Tables)
Cash Flows (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Payments for Interest on Indebtedness and for Taxes, Supplemental Information on Cash Flow | Cash payments for interest on indebtedness and income taxes and other select non-cash activities are as follows: Nine Months Ended (in millions) December 31, 2017 December 30, 2016 Cash paid for: Interest $ 188 $ 70 Taxes on income, net of refunds $ 235 $ 43 Non-cash activities: Investing: Capital expenditures in accounts payable and accrued expenses $ 4 $ 33 Capital expenditures through capital lease obligations $ 510 $ 34 Assets acquired under long-term financing $ 284 $ 75 Financing: Dividends declared but not yet paid $ 52 $ 20 Stock issued for the acquisition of HPES $ 9,850 $ — |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Operating Results by Reportable Segment | The following table summarizes operating results regularly provided to the CODM by reportable segment and a reconciliation to the financial statements: (in millions) GBS GIS USPS Total Reportable Segments All Other Totals Three Months Ended December 31, 2017 Revenues $ 2,315 $ 3,145 $ 726 $ 6,186 $ — $ 6,186 Segment profit $ 431 $ 463 $ 110 $ 1,004 $ (77 ) $ 927 Depreciation and amortization (1) $ 16 $ 269 $ 20 $ 305 $ 27 $ 332 Three Months Ended December 30, 2016 Revenues $ 1,046 $ 871 $ — $ 1,917 $ — $ 1,917 Segment profit $ 134 $ 84 $ — $ 218 $ (42 ) $ 176 Depreciation and amortization (1) $ 25 $ 100 $ — $ 125 $ 16 $ 141 (in millions) GBS GIS USPS Total Reportable Segments All Other Totals Nine Months Ended December 31, 2017 Revenues $ 6,893 $ 9,256 $ 2,113 $ 18,262 $ — $ 18,262 Segment profit $ 1,093 $ 1,222 $ 296 $ 2,611 $ (129 ) $ 2,482 Depreciation and amortization (1) $ 67 $ 743 $ 55 $ 865 $ 76 $ 941 Nine Months Ended December 30, 2016 Revenues $ 3,130 $ 2,588 $ — $ 5,718 $ — $ 5,718 Segment profit $ 349 $ 201 $ — $ 550 $ (148 ) $ 402 Depreciation and amortization (1) $ 81 $ 309 $ — $ 390 $ 48 $ 438 (1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $149 million and $20 million for the three months ended December 31, 2017 and December 30, 2016, respectively, and $438 million and $56 million for the nine months ended December 31, 2017 and December 30, 2016, respectively. |
Reconciliation of Consolidated Operating Income to Income Before Taxes | Three Months Ended Nine Months Ended (in millions) December 31, 2017 December 30, 2016 December 31, 2017 December 30, 2016 Profit Total profit for reportable segments $ 1,004 $ 218 $ 2,611 $ 550 All other loss (77 ) (42 ) (129 ) (148 ) Interest income 27 8 59 26 Interest expense (77 ) (33 ) (231 ) (87 ) Restructuring costs (213 ) (3 ) (595 ) (85 ) Pension and OPEB actuarial and settlement gains 17 — 17 — Amortization of acquired intangible assets (149 ) (20 ) (438 ) (56 ) Transaction and integration-related costs (94 ) (78 ) (284 ) (187 ) Income before income taxes $ 438 $ 50 $ 1,010 $ 13 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Operating Lease Payments | Minimum fixed rentals required for the next five years and thereafter under operating leases in effect at December 31, 2017 , were as follows: Fiscal year (in millions) Real Estate Equipment Remainder of 2018 $ 110 $ 86 2019 359 297 2020 264 211 2021 206 68 2022 155 8 Thereafter 719 1 Minimum fixed rentals 1,813 671 Less: Sublease rental income (187 ) — Totals $ 1,626 $ 671 |
Schedule of Long-term Purchase Agreements | Minimum purchase commitments as of December 31, 2017 were as follows: Fiscal year Minimum Purchase Commitment (in millions) Remainder of 2018 $ 664 2019 2,201 2020 2,095 Thereafter 1,222 Total $ 6,182 (1) A significant portion of the minimum purchase commitments in fiscal 2018, 2019 and 2020 relate to the amounts committed under the HPE preferred vendor agreements. |
Expiration of Financial Guarantees And Stand-by Letters Of Credit Outstanding | The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of December 31, 2017 : (in millions) Fiscal 2018 Fiscal 2019 Fiscal 2020 and Thereafter Totals Surety bonds $ 48 $ 152 $ 157 $ 357 Performance letters of credit 140 85 338 563 Stand-by letters of credit 8 15 32 55 Totals $ 196 $ 252 $ 527 $ 975 |
Acquisitions - HPES Merger Addi
Acquisitions - HPES Merger Additional Information (Details) $ / shares in Units, $ in Millions | Sep. 25, 2017USD ($) | Apr. 01, 2017USD ($)shares | Dec. 31, 2017USD ($) | Dec. 18, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 30, 2016USD ($)$ / shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 30, 2016USD ($)$ / shares | Mar. 31, 2017USD ($)tranche | May 31, 2016USD ($) | |
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 9,320 | $ 9,320 | $ 1,855 | [1] | ||||||||
Adjustment to net income for nonrecurring transaction costs | 779 | $ 37 | 1,217 | $ 38 | ||||||||
HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Shares issued for each share of CSC common stock (in shares) | shares | 1 | |||||||||||
Shares issued for merger consideration (in shares) | shares | 141,298,797 | |||||||||||
Percent ownership of CSC stockholders following the Merger | 49.90% | |||||||||||
Adjustment to settle obligations | $ 203 | $ 203 | ||||||||||
Adjustment to capital lease obligations | $ 977 | 1,000 | ||||||||||
Adjustment to property, plant, and equipment | 317 | |||||||||||
Adjustment to net assets | 450 | |||||||||||
Adjustment to assets | 1,200 | |||||||||||
Adjustment to accounts receivable | 127 | |||||||||||
Adjustment to intangible assets | 1,100 | |||||||||||
Adjustment to liabilities | 1,700 | |||||||||||
Adjustment to deferred revenue | 343 | |||||||||||
Adjustment to long-term debt | 106 | |||||||||||
Adjustment to debt | 12 | 94 | ||||||||||
Adjustment to long-term income tax liabilities | 200 | |||||||||||
Goodwill | $ 7,208 | |||||||||||
Acquired restructuring liabilities | 328 | |||||||||||
Long-term debt | 4,817 | |||||||||||
Adjustment to deferred debt issuance costs, premiums and discounts | 12 | |||||||||||
Capital lease obligation | 1,600 | 1,600 | ||||||||||
Net income (loss) | $ (166) | $ (570) | ||||||||||
Loss per common share, Basic (in dollars per share) | $ / shares | $ (0.61) | $ (2.07) | ||||||||||
Loss per common share, Diluted (in dollars per share) | $ / shares | $ (0.61) | $ (2.07) | ||||||||||
HPES | Employee severance | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquired restructuring liabilities | 256 | |||||||||||
HPES | Facilities costs | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Acquired restructuring liabilities | $ 72 | |||||||||||
HPES | Senior notes | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Long-term debt | 1,800 | |||||||||||
HPES | Term Loan | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Long-term debt | $ 2,000 | |||||||||||
Number of tranches | tranche | 3 | |||||||||||
Hewlett Packard Enterprise Company | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Debt and accrued interest | 87 | 87 | ||||||||||
Customer relationships | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustment to intangible assets | 1,300 | |||||||||||
Assets Held under Capital Leases | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustment to property, plant, and equipment | 594 | 594 | ||||||||||
Adjustment to goodwill | $ 383 | |||||||||||
Land and Data Centers | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustment to property, plant, and equipment | (277) | |||||||||||
Accounting Standards Update 2015-16 | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustment to income (loss) before income taxes | $ 16 | |||||||||||
Adjustment to interest expense related to capital lease | 9 | |||||||||||
Adjustment to cost of services | 7 | |||||||||||
Maximum | HPES | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Lease obligation | $ 250 | |||||||||||
GBS | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 4,364 | 4,364 | $ 1,470 | |||||||||
GBS | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 2,700 | 2,700 | ||||||||||
GIS | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 2,972 | 2,972 | 385 | |||||||||
GIS | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 2,500 | 2,500 | ||||||||||
USPS | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | 1,984 | 1,984 | 0 | |||||||||
USPS | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Goodwill | $ 2,000 | 2,000 | ||||||||||
Senior Notes, Issued 2017 | HPES | Senior notes | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Long-term debt | 1,500 | |||||||||||
Senior Notes, Issued 1999 | HPES | Senior notes | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Long-term debt | $ 300 | |||||||||||
Acquisition-related Costs | HPES | ||||||||||||
Business Acquisition [Line Items] | ||||||||||||
Adjustment to net income for nonrecurring transaction costs | $ (26) | |||||||||||
Net income (loss) | $ (96) | $ (292) | ||||||||||
Loss per common share, Basic (in dollars per share) | $ / shares | $ (0.34) | $ (1.03) | ||||||||||
Loss per common share, Diluted (in dollars per share) | $ / shares | $ (0.34) | $ (1.03) | ||||||||||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Acquisitions - HPES Merger (Det
Acquisitions - HPES Merger (Details) - USD ($) $ / shares in Units, $ in Millions | Sep. 25, 2017 | Apr. 01, 2017 | Dec. 18, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Goodwill | $ 9,320 | $ 1,855 | [1] | |||
HPES | ||||||
Business Acquisition [Line Items] | ||||||
Preliminary fair value of purchase consideration received by HPE stockholders | $ 9,782 | |||||
Preliminary fair value of HPES options assumed by CSC | 68 | |||||
Total estimated consideration transferred | $ 9,850 | |||||
Ownership percentage of HPE stockholders | 50.10% | |||||
Number of shares to acquired entity stockholders | 141,865,656 | |||||
Number of shares to acquired entity stockholders, net | 141,741,712 | |||||
Number of shares to acquired entity stockholders, cancelled | 123,944 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | ||||||
Cash and cash equivalents | $ 974 | |||||
Accounts receivable | 4,092 | |||||
Other current assets | 535 | |||||
Total current assets | 5,601 | |||||
Property and equipment | 2,799 | |||||
Intangible assets | 6,169 | |||||
Other assets | 1,614 | |||||
Total assets acquired | 16,183 | |||||
Accounts payable, accrued payroll, accrued expenses, and other current liabilities | (4,496) | |||||
Deferred revenue | (1,267) | |||||
Long-term debt, net of current maturities | (4,817) | |||||
Long-term deferred tax liabilities and income tax payable | (1,570) | |||||
Other liabilities | (1,336) | |||||
Total liabilities assumed | (13,486) | |||||
Net identifiable assets acquired | 2,697 | |||||
Add: Fair value of non-controlling interests | (55) | |||||
Goodwill | 7,208 | |||||
Total estimated consideration transferred | $ 9,850 | |||||
Adjustment to settle obligations | $ 203 | $ 203 | ||||
Computer Sciences Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Closing price (in dollars per share) | $ 69.01 | |||||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Acquisitions - Property and Equ
Acquisitions - Property and Equipment (Details) - HPES $ in Millions | Apr. 01, 2017USD ($) |
Business Acquisition [Line Items] | |
Property and equipment | $ 2,799 |
Land, buildings, and leasehold improvements | |
Business Acquisition [Line Items] | |
Property and equipment | 1,500 |
Computers and related equipment | |
Business Acquisition [Line Items] | |
Property and equipment | 1,122 |
Furniture and other equipment | |
Business Acquisition [Line Items] | |
Property and equipment | 45 |
Construction in progress | |
Business Acquisition [Line Items] | |
Property and equipment | $ 132 |
Acquisitions - Identified Intan
Acquisitions - Identified Intangible Assets Acquired (Details) - HPES $ in Millions | Apr. 01, 2017USD ($) |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 6,169 |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 5,200 |
Customer relationships | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 10 years |
Customer relationships | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 13 years |
Developed technology | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 141 |
Developed technology | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 2 years |
Developed technology | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 7 years |
Third-party purchased software | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 508 |
Third-party purchased software | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 2 years |
Third-party purchased software | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Useful Lives (Years) | 7 years |
Deferred contract costs | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Amount | $ 320 |
Acquisitions - HPES Merger Defi
Acquisitions - HPES Merger Defined Benefit Pension Plans (Details) - HPES - Defined Benefit Pension Plans $ in Millions | Apr. 01, 2017USD ($) |
Defined Benefit Plan, Amounts for Asset (Liability) Recognized in Statement of Financial Position [Abstract] | |
Other assets | $ 558 |
Accrued expenses and other current liabilities | (13) |
Other long-term liabilities | (547) |
Net amount recorded | (2) |
Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract] | |
Projected benefit obligation | (7,413) |
Fair value of plan assets | 7,411 |
Funded status | $ (2) |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |
Percent of plan assets | 100.00% |
Employer contributions: | |
2,018 | $ 39 |
Benefit payments: | |
2,018 | 225 |
2,019 | 151 |
2,020 | 163 |
2,021 | 224 |
2,022 | 180 |
2023 through 2027 | $ 1,132 |
Equity securities | |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |
Percent of plan assets | 22.00% |
Debt securities | |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |
Percent of plan assets | 72.00% |
Alternative Securities | |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |
Percent of plan assets | 5.00% |
Cash and other | |
Defined Benefit Plan, Information about Plan Assets [Abstract] | |
Percent of plan assets | 1.00% |
Acquisitions - Pro-Forma Inform
Acquisitions - Pro-Forma Information (Details) - HPES - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 4,374 | $ 12,942 | ||
Net income | $ 422 | $ 1,199 | ||
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenues | $ 6,585 | $ 19,358 | ||
Net income (loss) | (166) | (570) | ||
Loss attributable to the Company | $ (174) | $ (587) | ||
Loss per common share: | ||||
Loss per common share, Basic (in dollars per share) | $ (0.61) | $ (2.07) | ||
Loss per common share, Diluted (in dollars per share) | $ (0.61) | $ (2.07) |
Acquisitions - Fiscal 2018 Acqu
Acquisitions - Fiscal 2018 Acquisitions (Details) - USD ($) $ in Millions | Jul. 01, 2017 | Dec. 31, 2017 | Mar. 31, 2017 | [1] |
Business Acquisition [Line Items] | ||||
Goodwill | $ 9,320 | $ 1,855 | ||
Tribridge Holdings LLC | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 152 | |||
Current assets | 32 | |||
Property and equipment | 4 | |||
Intangible assets, other than goodwill | 62 | |||
Current liabilities | 24 | |||
Goodwill | $ 78 | |||
Estimated useful life | 12 years | |||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Acquisitions - Fiscal 2017 Acqu
Acquisitions - Fiscal 2017 Acquisitions (Details) - USD ($) | May 05, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | Mar. 31, 2017 | [1] |
Business Acquisition [Line Items] | |||||
Payments for acquisitions, net of cash acquired | $ 193,000,000 | $ 434,000,000 | |||
Goodwill | $ 9,320,000,000 | $ 1,855,000,000 | |||
Xchanging | |||||
Business Acquisition [Line Items] | |||||
Total estimated consideration transferred | $ 693,000,000 | ||||
Payments for acquisitions, net of cash acquired | 492,000,000 | ||||
Transaction costs | 17,000,000 | ||||
Current assets acquired | 396,000,000 | ||||
Noncurrent assets | 99,000,000 | ||||
Intangible assets | 582,000,000 | ||||
Current liabilities | 267,000,000 | ||||
Long-term liabilities | 516,000,000 | ||||
Goodwill | 680,000,000 | ||||
Noncontrolling interest | 281,000,000 | ||||
Expected tax deductible amount of goodwill acquired | $ 0 | ||||
Xchanging | Developed technology | Minimum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Lives (Years) | 7 years | ||||
Xchanging | Developed technology | Maximum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Lives (Years) | 8 years | ||||
Xchanging | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Lives (Years) | 15 years | ||||
Xchanging | Trade names | Minimum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Lives (Years) | 3 years | ||||
Xchanging | Trade names | Maximum | |||||
Business Acquisition [Line Items] | |||||
Estimated Useful Lives (Years) | 5 years | ||||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to DXC common shareholders: | $ 776 | $ 31 | $ 1,191 | $ 25 |
Common share information: | ||||
Weighted average common shares outstanding for basic EPS (in shares) | 285,380 | 140,880 | 284,700 | 140,130 |
Dilutive effect of stock options and equity awards (in shares) | 4,390 | 3,930 | 4,830 | 3,670 |
Weighted average common shares outstanding for diluted EPS (in shares) | 289,770 | 144,810 | 289,530 | 143,800 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 2.72 | $ 0.22 | $ 4.18 | $ 0.18 |
Diluted (in dollars per share) | $ 2.68 | $ 0.21 | $ 4.11 | $ 0.17 |
Earnings per Share - Antidiluti
Earnings per Share - Antidilutive Shares (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0 | 1,956,698 | 24,850 | 1,621,950 |
RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 10,552 | 1,470 | 21,030 | 1,611 |
Sale of Receivables (Details)
Sale of Receivables (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2017 | Jan. 23, 2018 | Dec. 31, 2017 | Jul. 14, 2017 | Dec. 21, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Accounts receivable securitization facility, amount | $ 250,000,000 | |||||
Total availability under the Receivables Facility | $ 177,000,000 | |||||
Gain (loss) on sale of receivables | $ 0 | |||||
Cash received upon sale of receivables | 201,000,000 | |||||
Deferred purchase price receivable | $ 272,000,000 | 252,000,000 | 249,000,000 | |||
Liability recorded due to maximum funding limit being exceeded | $ 24,000,000 | |||||
Purchase Agreement, maximum funding available | $ 200,000,000 | |||||
Billed and unbilled sold receivables | 700,000,000 | 1,200,000,000 | ||||
Cash collection by not remitted to the Financial Institutions | 27,000,000 | |||||
Operating cash flow effect, net of collections and fees from sales | 176,000,000 | |||||
Transfer of Financial Assets Accounted for as Sales, Deferred Purchase Price [Roll Forward] | ||||||
Beginning balance | 272,000,000 | 252,000,000 | ||||
Transfers of receivables | 562,000,000 | 1,716,000,000 | ||||
Collections | (593,000,000) | (1,717,000,000) | ||||
Fair value adjustment | 8,000,000 | (2,000,000) | ||||
Ending balance | 249,000,000 | 249,000,000 | ||||
Financial Institution | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Collection of receivables sold | $ 600,000,000 | $ 1,000,000,000 | ||||
Subsequent event | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Purchase Agreement, maximum funding available | $ 300,000,000 |
Fair Value - Fair Value Measure
Fair Value - Fair Value Measurements on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions | Dec. 31, 2017 | Mar. 31, 2017 |
Assets: | ||
Money market funds and money market deposit accounts | $ 217 | $ 406 |
Time deposits | 35 | |
Foreign bonds | 52 | |
Other debt securities | 7 | |
Deferred purchase price receivable | 249 | 252 |
Total assets | 560 | 658 |
Liabilities: | ||
Contingent consideration | 8 | 7 |
Total liabilities | 8 | 7 |
Level 1 | ||
Assets: | ||
Money market funds and money market deposit accounts | 217 | 406 |
Time deposits | 35 | |
Foreign bonds | 0 | |
Other debt securities | 0 | |
Deferred purchase price receivable | 0 | 0 |
Total assets | 252 | 406 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds and money market deposit accounts | 0 | 0 |
Time deposits | 0 | |
Foreign bonds | 52 | |
Other debt securities | 0 | |
Deferred purchase price receivable | 0 | 0 |
Total assets | 52 | 0 |
Liabilities: | ||
Contingent consideration | 0 | 0 |
Total liabilities | 0 | 0 |
Level 3 | ||
Assets: | ||
Money market funds and money market deposit accounts | 0 | 0 |
Time deposits | 0 | |
Foreign bonds | 0 | |
Other debt securities | 7 | |
Deferred purchase price receivable | 249 | 252 |
Total assets | 256 | 252 |
Liabilities: | ||
Contingent consideration | 8 | 7 |
Total liabilities | $ 8 | $ 7 |
Fair Value - Other Fair Value D
Fair Value - Other Fair Value Disclosures (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017USD ($)counterparty | Dec. 30, 2016USD ($) | Dec. 31, 2017USD ($)counterparty | Dec. 30, 2016USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Goodwill impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Tangible asset impairment charges | 0 | 0 | 0 | 0 |
Impairment of intangible assets | 0 | 0 | 0 | 0 |
Impairment of other intangible assets | $ 0 | $ 0 | $ 0 | $ 0 |
Number of counterparties with concentration of credit risk | counterparty | 5 | 5 | ||
Foreign currency forward contracts | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Maximum amount of loss the Company could incur | $ 22 | |||
Fair value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt, net of current maturities | $ 5,900 | 5,900 | ||
Carrying value | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Long-term debt, net of current maturities | $ 5,700 | $ 5,700 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Derivative [Line Items] | ||||
Gain (loss) on cash flow hedge ineffectiveness | $ 0 | $ 0 | $ 0 | $ 0 |
Foreign currency cash flow hedge gain to be reclassified during next 12 months | 24,000,000 | 24,000,000 | ||
Foreign currency forward contracts | ||||
Derivative [Line Items] | ||||
Notional amount of derivatives outstanding | 2,400,000,000 | 2,400,000,000 | ||
Derivatives designated for hedge accounting | Interest rate swap | ||||
Derivative [Line Items] | ||||
Derivative notional amount | 625,000,000 | 625,000,000 | ||
Derivatives designated for hedge accounting | Cash Flow Hedging | Foreign currency forward contracts | ||||
Derivative [Line Items] | ||||
Derivative notional amount | 686,000,000 | 686,000,000 | ||
Derivatives not designated for hedge accounting | Foreign currency forward contracts | Other (income) expense, net | ||||
Derivative [Line Items] | ||||
Pretax gain (loss) on derivative instruments | $ (3,000,000) | $ 2,000,000 | $ (117,000,000) | $ (3,000,000) |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Mar. 31, 2017 |
Derivatives designated for hedge accounting | Fair Value Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | $ 32 | $ 32 |
Derivative liability, fair value | 0 | 1 |
Derivatives designated for hedge accounting | Fair Value Hedging | Interest rate swap | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 5 | 5 |
Derivatives designated for hedge accounting | Fair Value Hedging | Interest rate swap | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 1 |
Derivatives designated for hedge accounting | Fair Value Hedging | Foreign currency forward contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 27 | 27 |
Derivatives designated for hedge accounting | Fair Value Hedging | Foreign currency forward contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | 0 | 0 |
Derivatives not designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 9 | 15 |
Derivative liability, fair value | 13 | 12 |
Derivatives not designated for hedge accounting | Foreign currency forward contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative asset, fair value | 9 | 15 |
Derivatives not designated for hedge accounting | Foreign currency forward contracts | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liability, fair value | $ 13 | $ 12 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2017 | Mar. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | $ 10,932 | $ 4,087 | |
Accumulated Amortization | 3,005 | 2,293 | [1] |
Net Carrying Value | 7,927 | 1,794 | [1] |
Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 3,231 | 2,347 | |
Accumulated Amortization | 1,792 | 1,554 | |
Net Carrying Value | 1,439 | 793 | |
Outsourcing contract costs | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 1,436 | 793 | |
Accumulated Amortization | 612 | 475 | |
Net Carrying Value | 824 | 318 | |
Customer related intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 6,151 | 851 | |
Accumulated Amortization | 583 | 248 | |
Net Carrying Value | 5,568 | 603 | |
Other intangible assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Value | 114 | 96 | |
Accumulated Amortization | 18 | 16 | |
Net Carrying Value | $ 96 | $ 80 | |
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 279 | $ 81 | $ 793 | $ 243 |
Finite-Lived Intangible Assets, Future Amortization Expense [Abstract] | ||||
Remainder of 2018 | 306 | 306 | ||
2,019 | 1,094 | 1,094 | ||
2,020 | 1,032 | 1,032 | ||
2,021 | 943 | 943 | ||
2,022 | 804 | 804 | ||
Outsourcing contract costs | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 2 | $ 2 | $ 8 | $ 8 |
Goodwill (Details)
Goodwill (Details) $ in Millions | 9 Months Ended | |
Dec. 31, 2017USD ($) | ||
Changes in the carrying amount of goodwill by segment [Roll Forward] | ||
Balance as of March 31, 2017, net | $ 1,855 | [1] |
Additions | 7,316 | |
Foreign currency translation | 149 | |
Balance as of December 31, 2017, net | 9,320 | |
GBS | ||
Changes in the carrying amount of goodwill by segment [Roll Forward] | ||
Balance as of March 31, 2017, net | 1,470 | |
Additions | 2,800 | |
Foreign currency translation | 94 | |
Balance as of December 31, 2017, net | 4,364 | |
GIS | ||
Changes in the carrying amount of goodwill by segment [Roll Forward] | ||
Balance as of March 31, 2017, net | 385 | |
Additions | 2,532 | |
Foreign currency translation | 55 | |
Balance as of December 31, 2017, net | 2,972 | |
USPS | ||
Changes in the carrying amount of goodwill by segment [Roll Forward] | ||
Balance as of March 31, 2017, net | 0 | |
Additions | 1,984 | |
Foreign currency translation | 0 | |
Balance as of December 31, 2017, net | $ 1,984 | |
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Dec. 31, 2017 | Mar. 31, 2017 | ||
Short-term debt and current maturities of long-term debt | |||
Current maturities of long-term debt | $ 128 | $ 55 | |
Current maturities of capitalized lease liabilities | 724 | 37 | |
Short-term debt and current maturities of long-term debt | 2,173 | 738 | [1] |
Long-term debt, net of current maturities | |||
Long-term debt | 7,219 | 2,317 | |
Less: current maturities | 852 | 92 | |
Long-term debt, net of current maturities | 6,367 | 2,225 | [1] |
Term loan | GBP term loan due 2019 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 250 | 233 | |
Term loan | GBP term loan due 2019 | Three-month LIBOR | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.65% | ||
Term loan | GBP term loan due 2019 | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.00% | ||
Term loan | GBP term loan due 2019 | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.20% | ||
Term loan | USD term loan due 2021 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 0 | 571 | |
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.50% | ||
Term loan | USD term loan due 2021 | Federal Funds Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.50% | ||
Term loan | USD term loan due 2021 | One-month LIBOR | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.00% | ||
Term loan | USD term loan due 2021 | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.20% | ||
Term loan | USD term loan due 2021 | Minimum | LIBOR | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.75% | ||
Term loan | USD term loan due 2021 | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.30% | ||
Term loan | USD term loan due 2021 | Maximum | LIBOR | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.50% | ||
Term loan | AUD term loan due 2022 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 215 | 76 | |
Term loan | AUD term loan due 2022 | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.90% | ||
Term loan | AUD term loan due 2022 | Minimum | Bank Bill Swap Bid Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.95% | ||
Term loan | AUD term loan due 2022 | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 3.00% | ||
Term loan | AUD term loan due 2022 | Maximum | Bank Bill Swap Bid Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.45% | ||
Term loan | EUR term loan due 2022 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 179 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 0.90% | ||
Term loan | EUR term loan due 2022 | Minimum | Eurocurrency Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.75% | ||
Term loan | EUR term loan due 2022 | Maximum | Eurocurrency Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.35% | ||
Term loan | USD term loan due 2022 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 1,149 | 0 | |
Term loan | USD term loan due 2022 | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.20% | ||
Term loan | USD term loan due 2022 | Minimum | Eurocurrency Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.00% | ||
Term loan | USD term loan due 2022 | Minimum | Base Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.00% | ||
Term loan | USD term loan due 2022 | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.80% | ||
Term loan | USD term loan due 2022 | Maximum | Eurocurrency Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 1.75% | ||
Term loan | USD term loan due 2022 | Maximum | Base Rate | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.75% | ||
Senior notes | Senior notes due 2020 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 503 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 2.875% | ||
Senior notes | Senior notes due 2021 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 646 | 0 | |
Senior notes | Senior notes due 2021 | Three-month LIBOR | |||
Debt Information [Abstract] | |||
Basis spread on variable rate | 0.95% | ||
Senior notes | Senior notes due 2021 | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.30% | ||
Senior notes | Senior notes due 2021 | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.40% | ||
Senior notes | Senior notes due 2023 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 278 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 4.45% | ||
Senior notes | Senior notes due 2023 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 174 | 453 | |
Debt Information [Abstract] | |||
Effective interest rate | 4.45% | ||
Senior notes | Senior notes due 2025 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 507 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 4.25% | ||
Senior notes | Senior notes due 2028 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 509 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 4.75% | ||
Senior notes | Senior notes due 2030 | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 357 | 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 7.45% | ||
Credit facility | Revolving credit facility | |||
Long-term debt, net of current maturities | |||
Borrowings under long-term financing and credit facility | $ 388 | 678 | |
Credit facility | Revolving credit facility | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.40% | ||
Credit facility | Revolving credit facility | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.60% | ||
Lease credit facility | Lease credit facility | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 51 | 60 | |
Lease credit facility | Lease credit facility | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.00% | ||
Lease credit facility | Lease credit facility | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.60% | ||
Capitalized lease liabilities | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 1,518 | 104 | |
Capitalized lease liabilities | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.10% | ||
Capitalized lease liabilities | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 6.70% | ||
Borrowings for assets acquired under long-term financing | |||
Long-term debt, net of current maturities | |||
Borrowings under long-term financing and credit facility | $ 318 | 77 | |
Borrowings for assets acquired under long-term financing | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 2.30% | ||
Borrowings for assets acquired under long-term financing | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 3.20% | ||
Mandatorily redeemable preferred stock outstanding | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 61 | 61 | |
Debt Information [Abstract] | |||
Effective interest rate | 3.50% | ||
Other borrowings | |||
Long-term debt, net of current maturities | |||
Long-term debt | $ 116 | 4 | |
Other borrowings | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 0.50% | ||
Other borrowings | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 14.00% | ||
Commercial paper | |||
Short-term debt and current maturities of long-term debt | |||
Short-term debt | $ 841 | 646 | |
Commercial paper | Minimum | |||
Debt Information [Abstract] | |||
Weighted average interest rate | (0.10%) | ||
Commercial paper | Maximum | |||
Debt Information [Abstract] | |||
Weighted average interest rate | 0.02% | ||
Term loan | |||
Short-term debt and current maturities of long-term debt | |||
Short-term debt | $ 480 | $ 0 | |
Debt Information [Abstract] | |||
Effective interest rate | 1.75% | ||
Basis spread on variable rate | 1.75% | ||
Capital lease obligations, current | Minimum | |||
Debt Information [Abstract] | |||
Effective interest rate | 1.10% | ||
Capital lease obligations, current | Maximum | |||
Debt Information [Abstract] | |||
Effective interest rate | 6.70% | ||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Dec. 31, 2017 | Apr. 03, 2017 |
Debt Instrument [Line Items] | ||
Principal amount | $ 1,500,000,000 | |
Term loan | USD term loan due 2020 | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 375,000,000 | |
Term loan | USD term loan due 2022 | ||
Debt Instrument [Line Items] | ||
Principal amount | 1,300,000,000 | |
Term loan | EUR term loan due 2022 | ||
Debt Instrument [Line Items] | ||
Principal amount | 315,000,000 | |
Senior notes | Senior notes due 2020 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 2.875% | |
Senior notes | Senior notes due 2025 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.25% | |
Senior notes | Senior notes due 2028 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.75% | |
Senior notes | Senior notes due 2030 | HPES | ||
Debt Instrument [Line Items] | ||
Principal amount | $ 300,000,000 | |
Stated interest rate | 7.45% | |
Credit facility | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Commitments outstanding | $ 3,810,000,000 | |
Credit facility | Commitments due January 2021 | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Commitments outstanding | 70,000,000 | |
Credit facility | Commitments due January 2023 | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Commitments outstanding | $ 3,740,000,000 |
Restructuring Costs (Details)
Restructuring Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Restructuring Costs [Abstract] | ||||
Restructuring costs | $ 213 | $ 3 | $ 595 | $ 85 |
Restructuring Reserve [Abstract] | ||||
Accrued expenses and other current liabilities | 343 | 343 | ||
Other long-term liabilities | 173 | 173 | ||
Total | $ 516 | $ 516 |
Restructuring Costs - Narrative
Restructuring Costs - Narrative (Details) $ in Millions | Dec. 31, 2017USD ($) |
Fiscal 2017 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | $ 221 |
Fiscal 2017 Plan | Employee severance | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 214 |
Fiscal 2017 Plan | Facilities costs | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 7 |
Fiscal 2016 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 58 |
Fiscal 2016 Plan | Employee severance | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 25 |
Fiscal 2016 Plan | Facilities costs | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 33 |
Fiscal 2015 Plan | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 228 |
Fiscal 2015 Plan | Employee severance | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | 220 |
Fiscal 2015 Plan | Facilities costs | |
Restructuring Cost and Reserve [Line Items] | |
Total costs incurred to date | $ 8 |
Restructuring Costs - Restructu
Restructuring Costs - Restructuring Liability (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||||
Costs Expensed, net of reversals | $ 213 | $ 3 | $ 595 | $ 85 |
Restructuring Liability, ending balance | 516 | 516 | ||
Fiscal 2018 Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 0 | |||
Costs Expensed, net of reversals | 625 | |||
Costs Not Affecting Restructuring Liability | (28) | |||
Cash Paid | (298) | |||
Other | 7 | |||
Restructuring Liability, ending balance | 306 | 306 | ||
Fiscal 2018 Plan | Workforce Reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 0 | |||
Costs Expensed, net of reversals | 451 | |||
Costs Not Affecting Restructuring Liability | (13) | |||
Cash Paid | (228) | |||
Other | 6 | |||
Restructuring Liability, ending balance | 216 | 216 | ||
Fiscal 2018 Plan | Facilities Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 0 | |||
Costs Expensed, net of reversals | 174 | |||
Costs Not Affecting Restructuring Liability | (15) | |||
Cash Paid | (70) | |||
Other | 1 | |||
Restructuring Liability, ending balance | 90 | 90 | ||
Fiscal 2017 Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 161 | |||
Costs Expensed, net of reversals | (27) | |||
Costs Not Affecting Restructuring Liability | (6) | |||
Cash Paid | (95) | |||
Other | 10 | |||
Restructuring Liability, ending balance | 43 | 43 | ||
Costs reversed | 29 | |||
Fiscal 2017 Plan | Workforce Reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 155 | |||
Costs Expensed, net of reversals | (25) | |||
Costs Not Affecting Restructuring Liability | (6) | |||
Cash Paid | (91) | |||
Other | 10 | |||
Restructuring Liability, ending balance | 43 | 43 | ||
Fiscal 2017 Plan | Facilities Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 6 | |||
Costs Expensed, net of reversals | (2) | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (4) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 0 | 0 | ||
Fiscal 2016 Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 13 | |||
Costs Expensed, net of reversals | (1) | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (6) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 6 | 6 | ||
Costs reversed | 2 | |||
Fiscal 2016 Plan | Workforce Reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 8 | |||
Costs Expensed, net of reversals | (1) | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (3) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 4 | 4 | ||
Fiscal 2016 Plan | Facilities Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 5 | |||
Costs Expensed, net of reversals | 0 | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (3) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 2 | 2 | ||
Fiscal 2015 Plan | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 3 | |||
Costs Expensed, net of reversals | 0 | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (2) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 1 | 1 | ||
Fiscal 2015 Plan | Workforce Reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 3 | |||
Costs Expensed, net of reversals | 0 | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | (2) | |||
Other | 0 | |||
Restructuring Liability, ending balance | 1 | 1 | ||
Fiscal 2015 Plan | Facilities Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 0 | |||
Costs Expensed, net of reversals | 0 | |||
Costs Not Affecting Restructuring Liability | 0 | |||
Cash Paid | 0 | |||
Other | 0 | |||
Restructuring Liability, ending balance | 0 | 0 | ||
Acquired Liabilities | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 328 | |||
Costs Expensed, net of reversals | (2) | |||
Costs Not Affecting Restructuring Liability | (5) | |||
Cash Paid | (168) | |||
Other | 7 | |||
Restructuring Liability, ending balance | 160 | 160 | ||
Costs reversed | 3 | |||
Acquired Liabilities | Workforce Reductions | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 256 | |||
Costs Expensed, net of reversals | 1 | |||
Costs Not Affecting Restructuring Liability | (2) | |||
Cash Paid | (139) | |||
Other | 6 | |||
Restructuring Liability, ending balance | 122 | 122 | ||
Acquired Liabilities | Facilities Costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Restructuring Liability, beginning balance | 72 | |||
Costs Expensed, net of reversals | (3) | |||
Costs Not Affecting Restructuring Liability | (3) | |||
Cash Paid | (29) | |||
Other | 1 | |||
Restructuring Liability, ending balance | $ 38 | $ 38 |
Pension and Other Benefit Pla66
Pension and Other Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||||
Employer contribution | $ 8 | $ 40 | |||
Deferred compensation plan, liability | 74 | $ 74 | $ 67 | ||
Non-employee directors | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Maximum deferral percentage | 100.00% | ||||
Defined Benefit Pension Plans | |||||
Defined Benefit Plan Disclosure [Line Items] | |||||
Expected employer contributions during remainder of Fiscal 2018 | 31 | $ 31 | |||
Remeasurement Gain | 17 | ||||
Curtailment gain | 40 | $ 0 | 40 | $ 0 | |
Recognition of actuarial loss | $ 23 | $ 0 | $ 23 | $ 0 |
Pension and Other Benefit Pla67
Pension and Other Benefit Plans - Pension Plan, Net Periodic Costs and Other Changes (Details) - Defined Benefit Pension Plans - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | ||||
Service cost | $ 30 | $ 6 | $ 96 | $ 17 |
Interest cost | 63 | 20 | 184 | 62 |
Expected return on assets | (133) | (40) | (393) | (123) |
Amortization of prior service costs | (5) | (4) | (13) | (13) |
Contractual termination benefit | 10 | 0 | 21 | 0 |
Curtailment gain | (40) | 0 | (40) | 0 |
Recognition of actuarial loss | 23 | 0 | 23 | 0 |
Net periodic pension benefit | $ (52) | $ (18) | $ (122) | $ (57) |
Defined Benefit Plan, Assumptions Used in Calculations [Abstract] | ||||
Discount or settlement rates | 2.40% | 3.10% | ||
Expected long-term rates of return on assets | 5.00% | 6.30% | ||
Rates of increase in compensation levels | 2.70% | 2.60% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | Mar. 31, 2018 | Apr. 01, 2017 | |
Income Tax Contingency [Line Items] | ||||||
Provisional deferred income tax discrete benefit | $ 320 | |||||
Provisional income tax benefit | 320 | |||||
Estimated transition tax | 386 | |||||
Income tax (benefit) expense | $ (341) | $ 13 | (207) | $ (25) | ||
Settlement with Taxing Authority | Minimum | ||||||
Income Tax Contingency [Line Items] | ||||||
Reasonably possible reduction in liability for uncertain tax positions | 14 | 14 | ||||
Settlement with Taxing Authority | Maximum | ||||||
Income Tax Contingency [Line Items] | ||||||
Reasonably possible reduction in liability for uncertain tax positions | 20 | 20 | ||||
India | ||||||
Income Tax Contingency [Line Items] | ||||||
Deferred tax liability | 80 | 80 | $ 50 | |||
Undistributed accumulated earnings of foreign subsidiary, provisional unrecognized deferred tax liability | 30 | 30 | ||||
Provisional estimate for withholdings taxes, state taxes, and India DDT as a result of the Act | 115 | 115 | ||||
HPES | ||||||
Income Tax Contingency [Line Items] | ||||||
Net taxes payable | 24 | |||||
Tax indemnification receivable, net uncertain tax positions | 111 | |||||
Tax indemnification receivable, other tax payables | 72 | |||||
Tax indemnification payable, other tax receivables | 207 | |||||
Liability for uncertain tax positions | 115 | |||||
Domestic Tax Authority | HPES | ||||||
Income Tax Contingency [Line Items] | ||||||
Deferred tax liability | $ 575 | $ 575 | $ 545 | |||
Forecast | ||||||
Income Tax Contingency [Line Items] | ||||||
Estimated blended corporate U.S. federal income tax rate | 28.87% |
Stockholders' Equity - Capital
Stockholders' Equity - Capital Stock and Share Repurchases (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Dec. 31, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Jun. 30, 2017USD ($)$ / sharesshares | Dec. 31, 2017USD ($)vote$ / sharesshares | Apr. 03, 2017shares | Mar. 31, 2017$ / sharesshares | [1] | |
Equity [Abstract] | |||||||
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 | 750,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 | 1,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Number of votes per common share | vote | 1 | ||||||
Share Repurchases [Abstract] | |||||||
Initial authorization (in shares) | 2,000,000,000 | ||||||
Number of Shares Repurchased (in shares) | 0 | 591,505 | 250,000 | 841,505 | |||
Average Price per Share (in dollars per share) | $ / shares | $ 0 | $ 78.20 | $ 77.39 | $ 77.96 | |||
Amount (in millions) | $ | $ 0 | $ 47 | $ 19 | $ 66 | |||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | ||
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Balance, beginning | $ 2,166 | [1] | $ 2,032 |
Balance, ending | 13,202 | 2,194 | |
Foreign Currency Translation Adjustments | |||
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Balance, beginning | (458) | (399) | |
Current-period other comprehensive income | 62 | (180) | |
Amounts reclassified from accumulated other comprehensive income | 8 | 0 | |
Balance, ending | (404) | (579) | |
Cash Flow Hedges | |||
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Balance, beginning | 20 | (1) | |
Current-period other comprehensive income | 0 | 15 | |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | |
Balance, ending | 20 | 14 | |
Pension and Other Post-retirement Benefit Plans | |||
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Balance, beginning | 276 | 289 | |
Current-period other comprehensive income | 0 | 0 | |
Amounts reclassified from accumulated other comprehensive income | 10 | (10) | |
Balance, ending | 266 | 279 | |
Accumulated Other Comprehensive (Loss) Income | |||
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Balance, beginning | (162) | (111) | |
Current-period other comprehensive income | 62 | (165) | |
Amounts reclassified from accumulated other comprehensive income | 18 | (10) | |
Balance, ending | $ (118) | $ (286) | |
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Stock Incentive Plans - Narrati
Stock Incentive Plans - Narrative (Details) $ in Millions | Apr. 01, 2017USD ($) | Dec. 31, 2017USD ($)shares | Dec. 30, 2016USD ($) | Dec. 31, 2017USD ($)anniversaryshares | Dec. 30, 2016USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Incremental stock compensation expense | $ 19 | $ 21 | $ 76 | $ 56 | |
Plan term | 10 years | ||||
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $ 1 | $ 1 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period (in years) | 3 years | ||||
Term of options | 10 years | ||||
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares received per RSU (in shares) | shares | 1 | 1 | |||
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $ 136 | $ 136 | |||
Weighted average period over which cost is expected to be recognized (in years) | 2 years 7 days | ||||
RSUs | Five Years | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual installments | 5 years | ||||
RSUs | Ten Years | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual installments | 10 years | ||||
RSUs | Fifteen Years | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual installments | 15 years | ||||
RSUs | Service-based RSU's | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of anniversaries following the executive's termination that the shares are redeemable | anniversary | 10 | ||||
Performance-based Restricted Stock Units (PSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 25.00% | ||||
Vesting period (in years) | 3 years | ||||
Performance period | 3 years | ||||
HPES | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unvested awards became vested, triggered by Merger | $ 3.6 | ||||
Incremental stock compensation expense | $ 26 | ||||
HPES | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percent of options converted into RSU's upon merger | 67.00% | ||||
Upon Merger | HPES | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights, percentage | 33.00% | ||||
DXC Share Purchase Plan | Stock purchase plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares purchased under plan (in shares) | shares | 0 | 0 |
Stock Incentive Plans - Schedul
Stock Incentive Plans - Schedule of Share Based Compensation Shares Authorized (Details) - $ / shares | Dec. 31, 2017 | Mar. 31, 2017 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Reserved for issuance (in shares) | 34,680,000 | ||
Available for future grants (in shares) | 22,774,935 | ||
DXC Employee Equity Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Reserved for issuance (in shares) | 34,200,000 | ||
Available for future grants (in shares) | 22,403,601 | ||
DXC Director Equity Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Reserved for issuance (in shares) | 230,000 | ||
Available for future grants (in shares) | 121,334 | ||
DXC Share Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Reserved for issuance (in shares) | 250,000 | ||
Available for future grants (in shares) | 250,000 | ||
[1] | Certain prior year amounts were adjusted to retroactively reflect the legal capital of DXC. |
Stock Incentive Plans - Sched73
Stock Incentive Plans - Schedule of Options (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | Mar. 31, 2017 | |
Additional Disclosures | |||||
Aggregate Intrinsic Value (in millions) - Exercised | $ 30 | $ 6 | $ 104 | $ 60 | |
Stock Options | |||||
Number of Option Shares | |||||
Outstanding beginning of period (in shares) | 4,767,396 | ||||
HPE options converted to DXC options at Merger (in shares) | 2,654,872 | ||||
CSC Options Converted to RSU's due to Merger (in shares) | (1,521,519) | ||||
Exercised (in shares) | (2,390,929) | ||||
Canceled/Forfeited (in shares) | (2,629) | ||||
Expired (in shares) | (46,578) | ||||
Outstanding end of period (in shares) | 3,460,613 | 3,460,613 | 4,767,396 | ||
Weighted Average Exercise Price | |||||
Weighted Average Exercise Price - beginning of period (in dollars per share) | $ 38.70 | ||||
Weighted Average Exercise Price - HPE options converted to DXC options at Merger (in dollars per share) | 46.56 | ||||
Weighted Average Exercise Price - CSC Options converted to RSU's due to merger (in dollars per share) | 51 | ||||
Weighted Average Exercise Price - Exercised (in dollars per share) | 40.07 | ||||
Weighted Average Exercise Price - Cancelled/Forfeited (in dollars per share) | 57.08 | ||||
Weighted Average Exercise Price - Expired (in dollars per share) | 42.40 | ||||
Weighted Average Exercise Price - end of period (in dollars per share) | $ 38.31 | $ 38.31 | $ 38.70 | ||
Additional Disclosures | |||||
Weighted Average Remaining Contractual Term (in years) | 5 years 6 months 29 days | 8 years 4 days | |||
Aggregate Intrinsic Value (in millions) | $ 196 | $ 196 | $ 145 | ||
Aggregate Intrinsic Value (in millions) - Exercised | $ 104 | ||||
Vested and Expected to Vest | |||||
Vested and expected to vest in the future as of period end (in shares) | 3,455,538 | 3,455,538 | |||
Exercisable as of period end (in shares) | 3,419,060 | 3,419,060 | |||
Weighted average exercise price vested and expected to vest as of period end (in dollars per share) | $ 38.28 | $ 38.28 | |||
Weighted average exercise price exercisable as of period end (in dollars per share) | $ 38.02 | $ 38.02 | |||
Weighted average remaining contractual life vested and expected to vest in the future as of period end (in years) | 5 years 6 months 29 days | ||||
Weighted average remaining contractual life exercisable as of period end (in years) | 5 years 6 months 25 days | ||||
Aggregate intrinsic value vested and expected to vest in the future as of period end | $ 196 | $ 196 | |||
Aggregate intrinsic value exercisable as of period end | $ 194 | $ 194 |
Stock Incentive Plans - Sched74
Stock Incentive Plans - Schedule of RSUs (Details) - RSUs | 9 Months Ended |
Dec. 31, 2017$ / sharesshares | |
DXC Employee Equity Plan | |
Number of Shares | |
Beginning balance (in shares) | shares | 3,710,985 |
Granted (in shares) | shares | 1,566,361 |
HPE RSUs converted to DSC RSUs due to Merger (in shares) | shares | 95,683 |
Options converted to RSU due to Merger (in shares) | shares | 609,416 |
Settled (in shares) | shares | (1,926,043) |
Canceled/Forfeited (in shares) | shares | (172,881) |
Ending balance (in shares) | shares | 3,883,521 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value - Beginning balance (in dollars per share) | $ / shares | $ 34.86 |
Weighted Average Grant Date Fair Value - Granted (in dollars per share) | $ / shares | 79.11 |
Weighted Average Grant Date Fair Value - HPE RSUs converted to DSC RSUs due to Merger (in dollars per share) | $ / shares | 69.33 |
Weighted Average Grant Date Fair Value - Options converted to RSU due to merger (in dollars per share) | $ / shares | 32.58 |
Weighted Average Grant Date Fair Value - Settled (in dollars per share) | $ / shares | 35.89 |
Weighted Average Grant Date Fair Value - Canceled/Forfeited (in dollars per share) | $ / shares | 54.65 |
Weighted Average Grant Date Fair Value - Ending balance (in dollars per share) | $ / shares | $ 51.80 |
DXC Director Equity Plan | |
Number of Shares | |
Beginning balance (in shares) | shares | 85,766 |
Granted (in shares) | shares | 22,900 |
HPE RSUs converted to DSC RSUs due to Merger (in shares) | shares | 0 |
Options converted to RSU due to Merger (in shares) | shares | 0 |
Settled (in shares) | shares | (39,980) |
Canceled/Forfeited (in shares) | shares | 0 |
Ending balance (in shares) | shares | 68,686 |
Weighted Average Grant Date Fair Value | |
Weighted Average Grant Date Fair Value - Beginning balance (in dollars per share) | $ / shares | $ 34.19 |
Weighted Average Grant Date Fair Value - Granted (in dollars per share) | $ / shares | 84.40 |
Weighted Average Grant Date Fair Value - HPE RSUs converted to DSC RSUs due to Merger (in dollars per share) | $ / shares | 0 |
Weighted Average Grant Date Fair Value - Options converted to RSU due to merger (in dollars per share) | $ / shares | 0 |
Weighted Average Grant Date Fair Value - Settled (in dollars per share) | $ / shares | 45.25 |
Weighted Average Grant Date Fair Value - Canceled/Forfeited (in dollars per share) | $ / shares | 0 |
Weighted Average Grant Date Fair Value - Ending balance (in dollars per share) | $ / shares | $ 44.50 |
Stock Incentive Plans - Sched75
Stock Incentive Plans - Schedule of Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Total share-based compensation cost | $ 19 | $ 21 | $ 76 | $ 56 |
Related income tax benefit | 5 | 7 | 24 | 18 |
Total intrinsic value of options exercised | 30 | 6 | 104 | 60 |
Tax benefits from exercised stock options and awards | $ 9 | $ 4 | $ 62 | $ 30 |
Cash Flows (Details)
Cash Flows (Details) - USD ($) $ in Millions | 9 Months Ended | |
Dec. 31, 2017 | Dec. 30, 2016 | |
Cash paid for: | ||
Interest | $ 188 | $ 70 |
Taxes on income, net of refunds | 235 | 43 |
Non-cash activities, Investing: | ||
Capital expenditures in accounts payable and accrued expenses | 4 | 33 |
Capital expenditures through capital lease obligations | 510 | 34 |
Assets acquired under long-term financing | 284 | 75 |
Non-cash activities, Financing: | ||
Dividends declared but not yet paid | 52 | 20 |
Stock issued for the acquisition of HPES | $ 9,850 | $ 0 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2017 | Dec. 30, 2016 | Dec. 31, 2017 | Dec. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 6,186 | $ 1,917 | $ 18,262 | $ 5,718 |
Segment profit | 927 | 176 | 2,482 | 402 |
Depreciation and amortization | 332 | 141 | 941 | 438 |
Amortization of acquired intangible assets | 149 | 20 | 438 | 56 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | 927 | 176 | 2,482 | 402 |
Interest income | 27 | 8 | 59 | 26 |
Interest expense | (77) | (33) | (231) | (87) |
Restructuring costs | (213) | (3) | (595) | (85) |
Pension and OPEB actuarial and settlement gains | 17 | 0 | 17 | 0 |
Amortization of acquired intangible assets | (149) | (20) | (438) | (56) |
Transaction and integration-related costs | (94) | (78) | (284) | (187) |
Income before income taxes | 438 | 50 | 1,010 | 13 |
Operating segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 6,186 | 1,917 | 18,262 | 5,718 |
Segment profit | 1,004 | 218 | 2,611 | 550 |
Depreciation and amortization | 305 | 125 | 865 | 390 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | 1,004 | 218 | 2,611 | 550 |
Operating segments | GBS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,315 | 1,046 | 6,893 | 3,130 |
Segment profit | 431 | 134 | 1,093 | 349 |
Depreciation and amortization | 16 | 25 | 67 | 81 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | 431 | 134 | 1,093 | 349 |
Operating segments | GIS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,145 | 871 | 9,256 | 2,588 |
Segment profit | 463 | 84 | 1,222 | 201 |
Depreciation and amortization | 269 | 100 | 743 | 309 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | 463 | 84 | 1,222 | 201 |
Operating segments | USPS | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 726 | 0 | 2,113 | 0 |
Segment profit | 110 | 0 | 296 | 0 |
Depreciation and amortization | 20 | 0 | 55 | 0 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | 110 | 0 | 296 | 0 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Segment profit | (77) | (42) | (129) | (148) |
Depreciation and amortization | 27 | 16 | 76 | 48 |
Reconciliation of Consolidated Operating Income to Income Before Taxes [Abstract] | ||||
Profit | $ (77) | $ (42) | $ (129) | $ (148) |
Commitments and Contingencies78
Commitments and Contingencies (Details) $ in Millions | 9 Months Ended |
Dec. 31, 2017USD ($) | |
Minimum Purchase Commitment | |
Remainder of 2018 | $ 664 |
2,019 | 2,201 |
2,020 | 2,095 |
Thereafter | 1,222 |
Total | $ 6,182 |
Minimum | |
Minimum Purchase Commitment | |
Long-term purchase commitment, period | 1 year |
Maximum | |
Minimum Purchase Commitment | |
Long-term purchase commitment, period | 6 years |
Real Estate | |
Minimum Fixed Rentals | |
Remainder of 2018 | $ 110 |
2,019 | 359 |
2,020 | 264 |
2,021 | 206 |
2,022 | 155 |
Thereafter | 719 |
Minimum fixed rentals | 1,813 |
Less: Sublease rental income | (187) |
Totals | 1,626 |
Equipment | |
Minimum Fixed Rentals | |
Remainder of 2018 | 86 |
2,019 | 297 |
2,020 | 211 |
2,021 | 68 |
2,022 | 8 |
Thereafter | 1 |
Minimum fixed rentals | 671 |
Less: Sublease rental income | 0 |
Totals | $ 671 |
Commitments and Contingencies -
Commitments and Contingencies - Guarantor Obligations (Details) $ in Millions | Dec. 31, 2017USD ($) |
Guarantor Obligations [Line Items] | |
Fiscal 2,018 | $ 196 |
Fiscal 2,019 | 252 |
Fiscal 2020 and Thereafter | 527 |
Total | 975 |
Surety bonds | |
Guarantor Obligations [Line Items] | |
Fiscal 2,018 | 48 |
Fiscal 2,019 | 152 |
Fiscal 2020 and Thereafter | 157 |
Total | 357 |
Performance letters of credit | |
Guarantor Obligations [Line Items] | |
Fiscal 2,018 | 140 |
Fiscal 2,019 | 85 |
Fiscal 2020 and Thereafter | 338 |
Total | 563 |
Stand-by letters of credit | |
Guarantor Obligations [Line Items] | |
Fiscal 2,018 | 8 |
Fiscal 2,019 | 15 |
Fiscal 2020 and Thereafter | 32 |
Total | $ 55 |
Commitments and Contingencies80
Commitments and Contingencies - Contingencies (Details) administrator in Thousands, $ in Millions | Oct. 02, 2017USD ($) | Aug. 02, 2017individual | Dec. 17, 2015USD ($) | May 12, 2015employee | Oct. 31, 2015USD ($) | Dec. 31, 2013lawsuit | Sep. 30, 2013individual | Apr. 01, 2016employee | Apr. 03, 2015administrator | Jan. 30, 2018 | Feb. 02, 2017joint_venture | May 12, 2016 |
Loss Contingencies [Line Items] | ||||||||||||
Number of partially-owned joint ventures involved in possible sanctions law violations | joint_venture | 2 | |||||||||||
DC Navy Yard Litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of individuals deceased in shooting | individual | 12 | |||||||||||
Number of lawsuits | lawsuit | 15 | |||||||||||
Strauch and Colby v. Computer Sciences Corporation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Number of system administrators for class action, more than | administrator | 4 | |||||||||||
Number of system administrators filed Consent to Join forms | administrator | 1 | |||||||||||
Number of individuals involved in collective action | individual | 700 | |||||||||||
Civil Complaint Against Eric Pulier | Settled litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Former employees under investigation | employee | 2 | |||||||||||
Litigation settlement | $ 16.5 | |||||||||||
Former employees who pled guilty | employee | 1 | |||||||||||
Loss contingency, legal fees percentage | 80.00% | |||||||||||
Kemper Corporate Services, Inc. v. Computer Sciences Corporation | Settled litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Litigation settlement to other party | $ 84.2 | |||||||||||
Kemper Corporate Services, Inc. v. Computer Sciences Corporation | Pending litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency, damages sought | $ 100 | |||||||||||
Subsequent event | Civil Complaint Against Eric Pulier | Settled litigation | ||||||||||||
Loss Contingencies [Line Items] | ||||||||||||
Loss contingency, legal fees percentage | 80.00% |