COMPUTER SCIENCES CORPORATION
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On November 27, 2015, Computer Sciences Corporation ("CSC" or the "Company") completed the previously announced separation of its wholly owned subsidiary, Computer Sciences Government Holdings, Inc. (renamed CSRA, or “CSRA”) through a one-for-one pro rata distribution of all CSRA common stock to CSC stockholders of record at the close of business on November 18, 2015, the record date of the distribution (“the Distribution”). CSRA is now an independent public company trading under the symbol “CSRA” on the New York Stock Exchange.
On December 3, 2015, CSC filed unaudited pro forma condensed consolidated statements of operations of CSC for the six months ended October 2, 2015 and October 3, 2014 and for each of the fiscal years ended April 3, 2015, March 28, 2014, and March 29, 2013. These financial statements assume the Distribution had occurred on March 31, 2012. In the same filing, CSC also filed an unaudited pro forma Condensed Consolidated Balance Sheet of CSC as of October 2, 2015, which assumes the Distribution had occurred on October 2, 2015. Beginning in the third quarter of fiscal 2016, CSRA’s historical financial results for periods prior to the Distribution will be reflected in CSC’s consolidated condensed financial statements as discontinued operations.
In an effort to provide investors with additional information regarding CSC’s unaudited pro forma consolidated condensed statements of operations for the six months ended October 2, 2015 and the fiscal year ended April 3, 2015 as determined by U.S. generally accepted accounting principles (GAAP), the Company is also providing preliminary historical non-GAAP information, and certain further adjustments thereto, which management believes provides useful information to investors. This information includes: operating income, adjusted operating income, and non-GAAP results including non-GAAP income (loss) from continuing operations and non-GAAP diluted earnings (loss) per share from continuing operations. Reconciliations of the preliminary historical non-GAAP measures to the respective and most directly comparable GAAP measures, as well as the rationale for management’s use of non-GAAP measures, are included below.
The unaudited historical financial statements presented below should be read in conjunction with:
| |
| I. | The audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” include in CSC’s Form 10-K for the fiscal year ended April 3, 2015, |
| |
| II. | The unaudited consolidated condensed financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in CSC’s Form 10-Q for the six months ended October 2, 2015, and |
| |
| III. | The unaudited pro forma condensed consolidated statements of operations of CSC for the six months ended October 2, 2015 and October 3, 2014 and for each of the fiscal years ended April 3, 2015, March 28, 2014, and March 29, 2013, as well as the unaudited pro forma Condensed Consolidated Balance Sheet of CSC as of October 2, 2015, which were filed via 8-K on December 3, 2015. |
The Historical columns in the unaudited pro forma consolidated condensed financial statements reflect CSC’s historical financial statements for the periods presented and do not reflect any adjustments related to the Distribution and related events.
The CSRA Separation columns in the unaudited pro forma consolidated condensed financial statements were derived from the historical combined financial statements and the combined financial statements included in the CSRA Form S-1 filed with the SEC December 9, 2015 and the CSRA Form 10 filed with the SEC on November 6, 2015.
The pro forma adjustments columns reflects the exclusion of previously allocated corporate overhead costs as well as the inclusion of certain multi-employer pension and postretirement costs and actuarial gains / losses that were not reflected in the CSRA combined financial statements in the CSRA Form 10.
The pro forma adjustments represent the Company's current best estimates and may differ from those that will be calculated to report CSRA as discontinued operations in CSC’s future filings. The unaudited pro forma condensed consolidated financial statements are provided for illustrative and informational purposes only and are not intended to represent or be indicative of what CSC’s results of operations or financial position would have been had the
separation occurred on the dates indicated. The unaudited pro forma condensed consolidated financial statements also should not be considered representative of CSC’s future results of operations or financial position.
See combined notes to the unaudited pro forma condensed consolidated financial statements for a more detailed discussion of these transactions.
COMPUTER SCIENCES CORPORATION
PRO FORMA CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (unaudited)
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended October 2, 2015 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 2,712 |
| | $ | (969 | ) | | $ | 2 |
| | (A) | | $ | 1,745 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 1,970 |
| | (757 | ) | | 24 |
| | (A)(B)(C) | | 1,237 |
|
| Selling, general and administrative (excludes restructuring costs) | | 286 |
| | (44 | ) | | 22 |
| | (B) | | 264 |
|
| Depreciation and amortization | | 203 |
| | (35 | ) | | — |
| | | | 168 |
|
| Restructuring costs | | 6 |
| | — |
| | (1 | ) | | (C) | | 5 |
|
| Separation and merger costs | | 46 |
| | (41 | ) | | — |
| | | | 5 |
|
| Interest expense | | 35 |
| | (6 | ) | | — |
| | | | 29 |
|
| Interest income | | (7 | ) | | — |
| | — |
| | | | (7 | ) |
| Other (income) expense, net | | (3 | ) | | 2 |
| | (2 | ) | | (A) | | (3 | ) |
| Total costs and expenses | | 2,536 |
| | (881 | ) | | 43 |
| | | | 1,698 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | 176 |
| | (88 | ) | | (41 | ) | | | | 47 |
|
| Income tax expense (benefit) | | 3 |
| | (35 | ) | | (10 | ) | | (D) | | (42 | ) |
| Income from continuing operations | | 173 |
| | (53 | ) | | (31 | ) | | | | 89 |
|
| Less: net income attributable to noncontrolling interest, net of tax | | 6 |
| | (6 | ) | | — |
| | | | — |
|
| Net income attributable to CSC common stockholders from continuing operations | | $ | 167 |
| | $ | (47 | ) | | $ | (31 | ) | | | | $ | 89 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings per share from continuing operations | | $ | 1.21 |
| | | | | | | | $ | 0.64 |
|
| Diluted earnings per share from continuing operations | | $ | 1.19 |
| | | | | | | | $ | 0.63 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 138.295 |
| | | | | | | | 138.295 |
|
| Diluted EPS | | 140.532 |
| | | | | | | | 140.532 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended July 3, 2015 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 2,761 |
| | $ | (959 | ) | | $ | 2 |
| | (A) | | $ | 1,804 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 2,026 |
| | (775 | ) | | 21 |
| | (A)(B) | | 1,272 |
|
| Selling, general and administrative (excludes restructuring costs) | | 284 |
| | (41 | ) | | 25 |
| | (B) | | 268 |
|
| Depreciation and amortization | | 207 |
| | (33 | ) | | — |
| | | | 174 |
|
| Restructuring costs | | — |
| | — |
| | — |
| | | | — |
|
| Separation costs | | 18 |
| | (15 | ) | | — |
| | | | 3 |
|
| Interest expense | | 35 |
| | (5 | ) | | — |
| | | | 30 |
|
| Interest income | | (11 | ) | | — |
| | — |
| | | | (11 | ) |
| Other (income) expense, net | | (26 | ) | | 19 |
| | 3 |
| | (A)(E) | | (4 | ) |
| Total costs and expenses | | 2,533 |
| | (850 | ) | | 49 |
| | | | 1,732 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | 228 |
| | (109 | ) | | (47 | ) | | | | 72 |
|
| Income tax expense (benefit) | | 64 |
| | (42 | ) | | (12 | ) | | (D) | | 10 |
|
| Income from continuing operations | | 164 |
| | (67 | ) | | (35 | ) | | | | 62 |
|
| Less: net income attributable to noncontrolling interest, net of tax | | 4 |
| | (4 | ) | | — |
| | | | — |
|
| Net income attributable to CSC common stockholders from continuing operations | | $ | 160 |
| | $ | (63 | ) | | $ | (35 | ) | | | | $ | 62 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings per share from continuing operations | | $ | 1.16 |
| | | | | | | | $ | 0.45 |
|
| Diluted earnings per share from continuing operations | | $ | 1.14 |
| | | | | | | | $ | 0.44 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 137.917 |
| | | | | | | | 137.917 |
|
| Diluted EPS | | 140.801 |
| | | | | | | | 140.801 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended April 3, 2015 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 2,909 |
| | $ | (1,001 | ) | | $ | 2 |
| | (A) | | $ | 1,910 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 2,433 |
| | (812 | ) | | (3 | ) | | (A)(B)(C) | | 1,618 |
|
| Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | | 294 |
| | (49 | ) | | 21 |
| | (B) | | 266 |
|
| Selling, general and administrative - SEC settlement related charges | | 2 |
| | — |
| | — |
| | | | 2 |
|
| Depreciation and amortization | | 215 |
| | (33 | ) | | — |
| | | | 182 |
|
| Restructuring costs | | 246 |
| | — |
| | (5 | ) | | (C) | | 241 |
|
| Interest expense | | 36 |
| | (6 | ) | | — |
| | | | 30 |
|
| Interest income | | (6 | ) | | — |
| | — |
| | | | (6 | ) |
| Other expense (income), net | | 6 |
| | (2 | ) | | 1 |
| | (A) | | 5 |
|
| Total costs and expenses | | 3,226 |
| | (902 | ) | | 14 |
| | | | 2,338 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | (317 | ) | | (99 | ) | | (12 | ) | | | | (428 | ) |
| Income tax (benefit) expense | | (330 | ) | | (38 | ) | | 71 |
| | (D) | | (297 | ) |
| Income (loss) from continuing operations | | 13 |
| | (61 | ) | | (83 | ) | | | | (131 | ) |
| Less: net income attributable to noncontrolling interest, net of tax | | 4 |
| | (4 | ) | | — |
| | | | — |
|
| Net income (loss) attributable to CSC common stockholders from continuing operations | | $ | 9 |
| | $ | (57 | ) | | $ | (83 | ) | | | | $ | (131 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings per share from continuing operations | | $ | 0.06 |
| | | | | | | | $ | (0.93 | ) |
| Diluted earnings per share from continuing operations | | $ | 0.06 |
| | | | | | | | $ | (0.93 | ) |
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 140.760 |
| | | | | | | | 140.760 |
|
| Diluted EPS | | 142.812 |
| | | | | | | | 140.760 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended January 2, 2015 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 2,947 |
| | $ | (1,000 | ) | | $ | 2 |
| | (A) | | $ | 1,949 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 2,530 |
| | (816 | ) | | (142 | ) | | (A)(B) | | 1,572 |
|
| Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | | 356 |
| | (53 | ) | | 19 |
| | (B) | | 322 |
|
| Selling, general and administrative - SEC settlement related charges | | 195 |
| | — |
| | — |
| | | | 195 |
|
| Depreciation and amortization | | 238 |
| | (33 | ) | | — |
| | | | 205 |
|
| Restructuring costs | | 12 |
| | — |
| | — |
| | | | 12 |
|
| Interest expense | | 37 |
| | (5 | ) | | — |
| | | | 32 |
|
| Interest income | | (4 | ) | | — |
| | — |
| | | | (4 | ) |
| Other expense (income), net | | 1 |
| | (2 | ) | | 2 |
| | (A) | | 1 |
|
| Total costs and expenses | | 3,365 |
| | (909 | ) | | (121 | ) | | | | 2,335 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | (418 | ) | | (91 | ) | | 123 |
| | | | (386 | ) |
| Income tax (benefit) expense | | (105 | ) | | (35 | ) | | (52 | ) | | (D) | | (192 | ) |
| Loss from continuing operations | | (313 | ) | | (56 | ) | | 175 |
| | | | (194 | ) |
| Less: net income attributable to noncontrolling interest, net of tax | | 1 |
| | (1 | ) | | — |
| | | | — |
|
| Net loss attributable to CSC common stockholders from continuing operations | | $ | (314 | ) | | $ | (55 | ) | | $ | 175 |
| | | | $ | (194 | ) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings (loss) per share from continuing operations | | $ | (2.23 | ) | | | | | | | | $ | (1.38 | ) |
| Diluted earnings (loss) per share from continuing operations | | $ | (2.23 | ) | | | | | | | | $ | (1.38 | ) |
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 140.637 |
| | | | | | | | 140.637 |
|
| Diluted EPS | | 140.637 |
| | | | | | | | 140.637 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended October 3, 2014 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 3,080 |
| | $ | (1,044 | ) | | $ | 3 |
| | (A) | | $ | 2,039 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 2,207 |
| | (826 | ) | | 21 |
| | (A)(B) | | 1,402 |
|
| Selling, general and administrative (excludes restructuring costs) | | 346 |
| | (49 | ) | | 17 |
| | (B) | | 314 |
|
| Depreciation and amortization | | 252 |
| | (36 | ) | | — |
| | | | 216 |
|
| Restructuring costs | | (7 | ) | | — |
| | — |
| | | | (7 | ) |
| Interest expense | | 36 |
| | (5 | ) | | — |
| | | | 31 |
|
| Interest income | | (5 | ) | | — |
| | — |
| | | | (5 | ) |
| Other expense (income), net | | 6 |
| | (1 | ) | | 1 |
| | (A) | | 6 |
|
| Total costs and expenses | | 2,835 |
| | (917 | ) | | 39 |
| | | | 1,957 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | 245 |
| | (127 | ) | | (36 | ) | | | | 82 |
|
| Income tax (benefit) expense | | 68 |
| | (47 | ) | | 2 |
| | (D) | | 23 |
|
| Income from continuing operations | | 177 |
| | (80 | ) | | (38 | ) | | | | 59 |
|
| Less: net income attributable to noncontrolling interest, net of tax | | 5 |
| | (5 | ) | | — |
| | | | — |
|
| Net income attributable to CSC common stockholders from continuing operations | | $ | 172 |
| | $ | (75 | ) | | $ | (38 | ) | | | | $ | 59 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings per share from continuing operations | | $ | 1.20 |
| | | | | | | | $ | 0.41 |
|
| Diluted earnings per share from continuing operations | | $ | 1.18 |
| | | | | | | | $ | 0.41 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 143.279 |
| | | | | | | | 143.279 |
|
| Diluted EPS | | 145.596 |
| | | | | | | | 145.596 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
|
| | | | | | | | | | | | | | | | | | |
| | | Quarter ended July 4, 2014 |
| (Amounts in millions, except per-share amounts) | | Historical CSC | | CSRA Separation | | Pro Forma Adjustments | | Notes | | Pro Forma* CSC Continuing Operations |
| | | | | | | | | | | |
| Revenues | | $ | 3,237 |
| | $ | (1,020 | ) | | $ | 2 |
| | (A) | | $ | 2,219 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | 2,364 |
| | (818 | ) | | 21 |
| | (A)(B) | | 1,567 |
|
| Selling, general and administrative (excludes restructuring costs) | | 344 |
| | (43 | ) | | 17 |
| | (B) | | 318 |
|
| Depreciation and amortization | | 272 |
| | (35 | ) | | — |
| | | | 237 |
|
| Restructuring costs | | 10 |
| | — |
| | — |
| | | | 10 |
|
| Interest expense | | 39 |
| | (6 | ) | | — |
| | | | 33 |
|
| Interest income | | (5 | ) | | — |
| | — |
| | | | (5 | ) |
| Other (income) expense, net | | (1 | ) | | (1 | ) | | — |
| | | | (2 | ) |
| Total costs and expenses | | 3,023 |
| | (903 | ) | | 38 |
| | | | 2,158 |
|
| | | | | | | | | | | |
| Income from continuing operations, before taxes | | 214 |
| | (117 | ) | | (36 | ) | | | | 61 |
|
| Income tax expense | | 55 |
| | (41 | ) | | (2 | ) | | (D) | | 12 |
|
| Income from continuing operations | | 159 |
| | (76 | ) | | (34 | ) | | | | 49 |
|
| Less: net income attributable to noncontrolling interest, net of tax | | 5 |
| | (5 | ) | | — |
| | | | — |
|
| Net income attributable to CSC common stockholders from continuing operations | | $ | 154 |
| | $ | (71 | ) | | $ | (34 | ) | | | | $ | 49 |
|
| | | | | | | | | | | |
| | | | | | | | | | | |
| Basic earnings per share from continuing operations | | $ | 1.06 |
| | | | | | | | $ | 0.33 |
|
| Diluted earnings per share from continuing operations | | $ | 1.03 |
| | | | | | | | $ | 0.33 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 145.338 |
| | | | | | | | 145.338 |
|
| Diluted EPS | | 148.251 |
| | | | | | | | 148.251 |
|
*Pro forma as defined under Article 11 of SEC Regulation S-X
See accompanying notes.
COMPUTER SCIENCES CORPORATION
NOTES TO THE UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated condensed statements of earnings for the quarters ended October 2, 2015, July 3, 2015, April 3, 2015, January 2, 2015, October 3, 2014, and July 4, 2014 include the following pro forma adjustments:
| |
| (A) | Reflects the removal of related party revenue and costs. |
| |
| (B) | Reflects adjustments to the CSRA Separation amounts to exclude certain general corporate overhead costs which were historically allocated to CSRA which were not directly attributable to CSRA, stock compensation expense of CSC Board of Directors and corporate executives, and adjustments to include actuarial gains and losses, settlement charges, and net periodic benefit costs related to multi-employer pension plans. See the table below for a detail of these amounts. |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Increase (decrease) in millions | | Quarter Ended |
| | | October 2, 2015 | | July 3, 2015 | | April 3, 2015 | | January 2, 2014 | | October 3, 2014 | | July 4, 2014 |
| Cost of Services | | | | | | | | | | | | |
| Pension related adjustments | | $ | 11 |
| | $ | 10 |
| | $ | (12 | ) | | $ | (155 | ) | | $ | 10 |
| | $ | 9 |
|
| Corporate overhead and stock compensation adjustments | | 10 |
| | 9 |
| | 2 |
| | 11 |
| | 8 |
| | 10 |
|
| Net adjustments described in footnotes (A) and (C) | | 3 |
| | 2 |
| | 7 |
| | 2 |
| | 3 |
| | 2 |
|
| Total | | $ | 24 |
| | $ | 21 |
|
| $ | (3 | ) |
| $ | (142 | ) | | $ | 21 |
| | $ | 21 |
|
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Selling, general and administrative | | | | | | | | | | | | |
| Pension related adjustments | | $ | — |
| | $ | — |
| | $ | — |
| | $ | (2 | ) | | $ | — |
| | $ | — |
|
| Corporate overhead and stock compensation adjustments | | 22 |
| | 25 |
| | 21 |
| | 21 |
| | 17 |
| | 17 |
|
| Total | | $ | 22 |
| | $ | 25 |
|
| $ | 21 |
| | $ | 19 |
| | $ | 17 |
| | $ | 17 |
|
| | | | | | | | | | | | | |
| |
| (C) | Reflects the reclassification of restructuring costs from cost of services to restructuring costs to conform to CSC's historical financial statement presentation. |
| |
| (D) | Reflects the pro forma tax adjustments related to the Separation. |
| |
| (E) | Reflects the reversal of the goodwill adjustment recorded in the financial statements of CSRA on a carve-out basis attributable to the sale of Welkin. |
Pro Forma Business Segment Revenues, Operating Income and Operating Margins
(preliminary and unaudited)
Pro Forma Revenues by Segment
Fiscal 2016
|
| | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | October 2, 2015 | | July 3, 2015 |
| Global Business Services | | $ | 891 |
| | $ | 919 |
|
| Global Infrastructure Services | | 854 |
| | 885 |
|
| Total Revenue | | $ | 1,745 |
| | $ | 1,804 |
|
Fiscal 2015
|
| | | | | | | | | | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | April 3, 2015 | | January 2, 2015 | | October 3, 2014 | | July 4, 2014 |
| Global Business Services | | $ | 980 |
| | $ | 965 |
| | $ | 1,003 |
| | $ | 1,088 |
|
| Global Infrastructure Services | | 930 |
| | 984 |
| | 1,036 |
| | 1,131 |
|
| Total Revenue | | $ | 1,910 |
| | $ | 1,949 |
| | $ | 2,039 |
| | $ | 2,219 |
|
Pro Forma Operating Income and Operating Margins by Segment
Fiscal 2016
|
| | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | October 2, 2015 | | July 3, 2015 |
| Global Business Services | | $ | 101 |
| | $ | 97 |
|
| Global Infrastructure Services | | 64 |
| | 53 |
|
| Corporate | | (35 | ) | | (6 | ) |
| Total Operating Income | | $ | 130 |
| | $ | 144 |
|
Fiscal 2015
|
| | | | | | | | | | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | April 3, 2015 | | January 2, 2015 | | October 3, 2014 | | July 4, 2014 |
| Global Business Services | | $ | 39 |
| | $ | 128 |
| | $ | 130 |
| | $ | 108 |
|
| Global Infrastructure Services | | (49 | ) | | 72 |
| | 68 |
| | 71 |
|
| Corporate | | (29 | ) | | (22 | ) | | (20 | ) | | (37 | ) |
| Total Operating Income | | $ | (39 | ) | | $ | 178 |
| | $ | 178 |
| | $ | 142 |
|
Non-GAAP Financial Measures
The following tables reconcile non-GAAP financial measures of operating income and adjusted operating income to the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Also presented below are the Company's non-GAAP results, which exclude certain items that management believes are not indicative of the Company's operating performance, as described below. CSC management believes that these non-GAAP financial measures provide useful information to investors regarding the Company's financial condition and results of operations as they provide another measure of the Company's profitability and ability to service its debt, and are considered important measures by financial analysts covering CSC and its peers.
Adjustments to operating results include:
| |
| • | Certain CSRA overhead costs - Reflects costs historically allocated to CSRA but not included in discontinued operations based on Accounting Standards Codification Subtopic 205-20 "Presentation of Financial Statements - Discontinued Operations" (ASC 205-20). These costs are expected to be largely eliminated on a prospective basis. |
| |
| • | U.S. Pension and OPEB - Reflects the impact of certain US pension and other postretirement benefit (OPEB) plans historically included in CSC’s financial results that have been transferred to CSRA as part of the previously announced separation. |
| |
| • | Pension and OPEB actuarial & settlement losses - Reflects pension and OPEB actuarial and settlement losses from mark-to-market accounting. |
| |
| • | Separation and other transaction costs - Reflects non-recurring costs related to CSC’s (1) previously announced separation and (2) previously announced acquisitions. |
| |
| • | SEC settlement-related charges & other - Reflects costs associated with certain SEC charges and settlements. |
| |
| • | Special restructuring costs - Reflects the impact from certain special accelerated workforce optimization and real estate charges. |
| |
| • | Tax valuation allowance - Reflects the release of tax valuation allowances in certain jurisdictions. |
| |
| • | Tax adjustment - Reflects the application of a 20% tax rate, which is at the low end of the prospective targeted effective tax rate range of 20% to 25% and effectively excludes the impact of discrete tax adjustments in the periods presented below. |
GAAP Reconciliations
Operating Income and Adjusted Operating Income
(preliminary and unaudited)
CSC defines operating income as revenue less costs of services, depreciation and amortization expense, restructuring costs and segment selling, general and administrative (SG&A) expense. Operating income, as defined by CSC, excludes corporate G&A, actuarial and settlement gains and losses related to CSC's pension and other post-employment benefit (OPEB) plans, and separation costs. Operating margin is defined as operating income as a percentage of revenue.
Adjusted operating income is computed by excluding from operating income certain CSRA overhead costs that were not included in discontinued operations based on ASC 205-20, certain costs related to U.S. Pension and OPEB, special restructuring costs, and the transaction costs associated with acquisitions.
A reconciliation of consolidated operating income to income from continuing operations, before taxes is as follows:
Fiscal 2016
|
| | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | October 2, 2015 | | July 3, 2015 |
| Adjusted Operating income | | $ | 156 |
| | $ | 148 |
|
| Certain CSRA overhead costs | | (18 | ) | | (18 | ) |
| U.S. Pension & OPEB | | 14 |
| | 14 |
|
| Special restructuring costs | | (20 | ) | | — |
|
| Transaction costs | | (2 | ) | | — |
|
| Operating income | | $ | 130 |
| | $ | 144 |
|
| Corporate G&A | | (59 | ) | | (54 | ) |
| Separation costs | | (5 | ) | | (3 | ) |
| Interest expense | | (29 | ) | | (30 | ) |
| Interest income | | 7 |
| | 11 |
|
| Other income, net | | 3 |
| | 4 |
|
| Income from continuing operations before taxes | | $ | 47 |
| | $ | 72 |
|
Fiscal 2015
|
| | | | | | | | | | | | | | | | |
| | | Quarter Ended |
| (Amounts in millions) | | April 3, 2015 | | January 2, 2015 | | October 3, 2014 | | July 4, 2014 |
| Adjusted Operating income | | $ | 196 |
| | $ | 174 |
| | $ | 176 |
| | $ | 141 |
|
| Certain CSRA overhead costs | | (7 | ) | | (9 | ) | | (11 | ) | | (11 | ) |
| U.S. Pension & OPEB | | 13 |
| | 13 |
| | 13 |
| | 12 |
|
| Special restructuring costs | | (241 | ) | | — |
| | — |
| | — |
|
| Operating income | | $ | (39 | ) | | $ | 178 |
| | $ | 178 |
| | $ | 142 |
|
| Corporate G&A | | (57 | ) | | (55 | ) | | (64 | ) | | (54 | ) |
| Pension & OPEB actuarial & settlement losses | | (298 | ) | | (285 | ) | | — |
| | (1 | ) |
| SEC settlement related charges and other | | (5 | ) | | (195 | ) | | — |
| | — |
|
| Interest expense | | (30 | ) | | (32 | ) | | (31 | ) | | (33 | ) |
| Interest income | | 6 |
| | 4 |
| | 5 |
| | 5 |
|
| Other income, net | | (5 | ) | | (1 | ) | | (6 | ) | | 2 |
|
| Income (loss) from continuing operations before taxes | | $ | (428 | ) | | $ | (386 | ) | | $ | 82 |
| | $ | 61 |
|
Adjusted Segment Operating Income and Operating Margin
(preliminary and unaudited)
Adjusted operating income is computed by excluding from operating income certain CSRA overhead costs, certain costs related to U.S. Pension & OPEB, the impact of the special restructuring charges, and the transaction costs associated with acquisitions. Reconciliations of adjusted operating income to operating income, for the quarters ended October 2, 2015, July 3, 2015, April 3, 2015, January 2, 2015, October 3, 2014, and July 4, 2014, respectively, are as follows:
Fiscal 2016
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended October 2, 2015 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Special restructuring costs | | Transaction costs | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 101 |
| | $ | — |
| | $ | 4 |
| | $ | (12 | ) | | $ | (1 | ) | | $ | 110 |
| | 12.3 | % |
| Global Infrastructure Services | | 64 |
| | — |
| | 10 |
| | (8 | ) | | (1 | ) | | 63 |
| | 7.4 |
|
| Commercial | | 165 |
| | — |
| | 14 |
| | (20 | ) | | (2 | ) | | 173 |
| | 9.9 | % |
| Corporate | | (35 | ) | | (18 | ) | | — |
| | — |
| | — |
| | (17 | ) | | — |
|
| Total | | $ | 130 |
| | $ | (18 | ) | | $ | 14 |
| | $ | (20 | ) | | $ | (2 | ) | | $ | 156 |
| | 8.9 | % |
|
| | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended July 3, 2015 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 97 |
| | $ | — |
| | $ | 4 |
| | $ | 93 |
| | 10.1 | % |
| Global Infrastructure Services | | 53 |
| | — |
| | 10 |
| | 43 |
| | 4.9 |
|
| Commercial | | 150 |
| | — |
| | 14 |
| | 136 |
| | 7.5 | % |
| Corporate | | (6 | ) | | (18 | ) | | — |
| | 12 |
| | — |
|
| Total | | $ | 144 |
| | $ | (18 | ) | | $ | 14 |
| | $ | 148 |
| | 8.2 | % |
Fiscal 2015
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended April 3, 2015 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Special restructuring costs | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 39 |
| | $ | — |
| | $ | 4 |
| | $ | (125 | ) | | $ | 160 |
| | 16.3 | % |
| Global Infrastructure Services | | (49 | ) | | — |
| | 9 |
| | (112 | ) | | 54 |
| | 5.8 |
|
| Commercial | | (10 | ) | | — |
| | 13 |
| | (237 | ) | | 214 |
| | 11.2 | % |
| Corporate | | (29 | ) | | (7 | ) | | — |
| | (4 | ) | | (18 | ) | | — |
|
| Total | | $ | (39 | ) | | $ | (7 | ) | | $ | 13 |
| | $ | (241 | ) | | $ | 196 |
| | 10.3 | % |
|
| | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended January 2, 2015 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 128 |
| | $ | — |
| | $ | 4 |
| | $ | 124 |
| | 12.8 | % |
| Global Infrastructure Services | | 72 |
| | — |
| | 9 |
| | 63 |
| | 6.4 |
|
| Commercial | | 200 |
| | — |
| | 13 |
| | 187 |
| | 9.6 | % |
| Corporate | | (22 | ) | | (9 | ) | | — |
| | (13 | ) | | — |
|
| Total | | $ | 178 |
| | $ | (9 | ) | | $ | 13 |
| | $ | 174 |
| | 8.9 | % |
|
| | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended October 3, 2014 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 130 |
| | $ | — |
| | $ | 4 |
| | $ | 126 |
| | 12.6 | % |
| Global Infrastructure Services | | 68 |
| | — |
| | 9 |
| | 59 |
| | 5.7 |
|
| Commercial | | 198 |
| | — |
| | 13 |
| | 185 |
| | 9.1 | % |
| Corporate | | (20 | ) | | (11 | ) | | — |
| | (9 | ) | | — |
|
| Total | | $ | 178 |
| | $ | (11 | ) | | $ | 13 |
| | $ | 176 |
| | 8.6 | % |
|
| | | | | | | | | | | | | | | | | | | |
| | | Quarter Ended July 4, 2014 |
| (Amounts in millions) | | Operating income | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Adjusted operating income | | Adjusted operating margin |
| Global Business Solutions | | $ | 108 |
| | $ | — |
| | $ | 4 |
| | $ | 104 |
| | 9.6 | % |
| Global Infrastructure Services | | 71 |
| | — |
| | 8 |
| | 63 |
| | 5.6 |
|
| Commercial | | 179 |
| | — |
| | 12 |
| | 167 |
| | 7.5 | % |
| Corporate | | (37 | ) | | (11 | ) | | — |
| | (26 | ) | | — |
|
| Total | | $ | 142 |
| | $ | (11 | ) | | $ | 12 |
| | $ | 141 |
| | 6.4 | % |
Non-GAAP Results
(preliminary and unaudited)
Non-GAAP results are financial measures calculated by excluding certain items, which management believes are not indicative of the Company's operating performance post. A reconciliation of select non-GAAP results to reported results is as follows:
Fiscal 2016
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended October 2, 2015 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Separation & other transaction costs | | SEC settlement-related items | | Special restructuring costs | | Tax valuation allowance | | Tax adjustment | | Non-GAAP results |
| | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 1,745 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,745 |
|
| | | | | | | | | | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,237 |
| | $ | (17 | ) | | $ | 12 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,232 |
|
| | | | | | | | | | | | | | | | | | | |
| Selling, general and administrative (excludes restructuring costs) | | $ | 264 |
| | $ | (16 | ) | | $ | 2 |
| | $ | (2 | ) | | $ | (2 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 246 |
|
| | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | 47 |
| | $ | 33 |
| | $ | (14 | ) | | $ | 7 |
| | $ | 2 |
| | $ | 20 |
| | $ | — |
| | $ | — |
| | $ | 95 |
|
| Income tax (benefit) expense | | (42 | ) | | 13 |
| | (6 | ) | | 3 |
| | 1 |
| | 6 |
| | 53 |
| | (9 | ) | | 19 |
|
| Income (loss) from continuing operations | | $ | 89 |
| | $ | 20 |
| | $ | (8 | ) | | $ | 4 |
| | $ | 1 |
| | $ | 14 |
| | $ | (53 | ) | | $ | 9 |
| | $ | 76 |
|
| | | | | | | | | | | | | | | | | | | |
| Effective Tax Rate | | (89.4 | )% | | | | | | | | | | | | | | | | 20.0 | % |
| | | | | | | | | | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | 0.64 |
| | $ | 0.14 |
| | $ | (0.06 | ) | | $ | 0.03 |
| | $ | 0.01 |
| | $ | 0.10 |
| | $ | (0.38 | ) | | $ | 0.07 |
| | $ | 0.55 |
|
| Diluted EPS from continuing operations | | $ | 0.63 |
| | $ | 0.14 |
| | $ | (0.06 | ) | | $ | 0.03 |
| | $ | 0.01 |
| | $ | 0.10 |
| | $ | (0.38 | ) | | $ | 0.06 |
| | $ | 0.54 |
|
| | | | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | | | | | | | |
| Basic EPS | | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
| | 138.295 |
|
| Diluted EPS | | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
| | 140.532 |
|
(1) Refer to page 3
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended July 3, 2015 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Separation& other transaction costs | | SEC settlement-related items | | Non-GAAP results |
| | | | | | | | | | | | | |
| Revenues | | $ | 1,804 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,804 |
|
| | | | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,272 |
| | $ | (17 | ) | | $ | 12 |
| | $ | — |
| | $ | — |
| | $ | 1,267 |
|
| Selling, general and administrative (excludes restructuring costs) | | $ | 268 |
| | $ | (16 | ) | | $ | 2 |
| | $ | — |
| | $ | (3 | ) | | $ | 251 |
|
| | | | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | 72 |
| | $ | 33 |
| | $ | (14 | ) | | $ | 3 |
| | $ | 3 |
| | $ | 97 |
|
| Income tax expense (benefit) | | 10 |
| | 13 |
| | (5 | ) | | 1 |
| | 1 |
| | 20 |
|
| Income (loss) from continuing operations | | $ | 62 |
| | $ | 20 |
| | $ | (9 | ) | | $ | 2 |
| | $ | 2 |
| | $ | 77 |
|
| | | | | | | | | | | | | |
| Effective Tax Rate | | 13.9 | % | | | | | | | | | | 20.0 | % |
| | | | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | 0.45 |
| | $ | 0.15 |
| | $ | (0.07 | ) | | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.56 |
|
| Diluted EPS from continuing operations | | $ | 0.44 |
| | $ | 0.14 |
| | $ | (0.06 | ) | | $ | 0.01 |
| | $ | 0.01 |
| | $ | 0.55 |
|
| | | | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | | | |
| Basic EPS | | 137.917 |
| | 137.917 |
| | 137.917 |
| | 137.917 |
| | 137.917 |
| | 137.917 |
|
| Diluted EPS | | 140.801 |
| | 140.801 |
| | 140.801 |
| | 140.801 |
| | 140.801 |
| | 140.801 |
|
(1) Refer to page 4.
Fiscal 2015
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended April 3, 2015 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Pension & OPEB actuarial & settlement losses | | SEC settlement related charges | | Special restruct-uring costs | | Tax valuation allowance | | Tax adjustment | | Non-GAAP results |
| | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | 1,910 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,910 |
|
| | | | | | | | | | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,618 |
| | $ | (6 | ) | | $ | 11 |
| | $ | (281 | ) | | $ | (3 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,339 |
|
| Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | | $ | 266 |
| | $ | (18 | ) | | $ | 2 |
| | $ | (17 | ) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 233 |
|
| | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | (428 | ) | | $ | 24 |
| | $ | (13 | ) | | $ | 298 |
| | $ | 5 |
| | $ | 241 |
| | $ | — |
| | $ | — |
| | $ | 127 |
|
| Income tax (benefit) expense | | (297 | ) | | 9 |
| | (5 | ) | | 69 |
| | 2 |
| | 50 |
| | 264 |
| | (67 | ) | | 25 |
|
| Income (loss) from continuing operations | | $ | (131 | ) | | $ | 15 |
| | $ | (8 | ) | | $ | 229 |
| | $ | 3 |
| | $ | 191 |
| | $ | (264 | ) | | $ | 67 |
| | $ | 102 |
|
| | | | | | | | | | | | | | | | | | | |
| Effective Tax Rate | | 69.4 | % | | | | | | | | | | | | | | | | 20.0 | % |
| | | | | | | | | | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | (0.93 | ) | | $ | 0.11 |
| | $ | (0.06 | ) | | $ | 1.63 |
| | $ | 0.02 |
| | $ | 1.36 |
| | $ | (1.88 | ) | | $ | 0.48 |
| | $ | 0.72 |
|
| Diluted EPS from continuing operations | | $ | (0.93 | ) | | $ | 0.11 |
| | $ | (0.06 | ) | | $ | 1.60 |
| | $ | 0.02 |
| | $ | 1.34 |
| | $ | (1.85 | ) | | $ | 0.47 |
| | $ | 0.71 |
|
| | | | | | | | | | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | | | | | | | | | |
| Basic EPS | | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
| | 140.760 |
|
| Diluted EPS | | 140.760 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
| | 142.812 |
|
(1) Refer to page 5.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended January 2, 2015 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Pension & OPEB actuarial & settlement losses | | SEC settlement related charges | | Tax adjustment | | Non-GAAP results |
| | | | | | | | | | | | | | | |
| Revenues | | $ | 1,949 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 1,949 |
|
| | | | | | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,572 |
| | $ | (7 | ) | | $ | 11 |
| | $ | (244 | ) | | $ | — |
| | $ | — |
| | $ | 1,332 |
|
| Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | | $ | 322 |
| | $ | (21 | ) | | $ | 2 |
| | $ | (41 | ) | | $ | — |
| | $ | — |
| | $ | 262 |
|
| | | | | | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | (386 | ) | | $ | 28 |
| | $ | (13 | ) | | $ | 285 |
| | $ | 195 |
| | $ | — |
| | $ | 109 |
|
| Income tax (benefit) expense | | (192 | ) | | 11 |
| | (5 | ) | | 66 |
| | — |
| | 142 |
| | 22 |
|
| Income (loss) from continuing operations | | $ | (194 | ) | | $ | 17 |
| | $ | (8 | ) | | $ | 219 |
| | $ | 195 |
| | $ | (142 | ) | | $ | 87 |
|
| | | | | | | | | | | | | | | |
| Effective Tax Rate | | 49.7 | % | | | | | | | | | | | | 20.0 | % |
| | | | | | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | (1.38 | ) | | $ | 0.12 |
| | $ | (0.06 | ) | | $ | 1.56 |
| | $ | 1.39 |
| | $ | (1.01 | ) | | $ | 0.62 |
|
| Diluted EPS from continuing operations | | $ | (1.38 | ) | | $ | 0.12 |
| | $ | (0.06 | ) | | $ | 1.53 |
| | $ | 1.37 |
| | $ | (0.99 | ) | | $ | 0.61 |
|
| | | | | | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | | | | | |
| Basic EPS | | 140.637 |
| | 140.637 |
| | 140.637 |
| | 140.637 |
| | 140.637 |
| | 140.637 |
| | 140.637 |
|
| Diluted EPS | | 140.637 |
| | 142.852 |
| | 142.852 |
| | 142.852 |
| | 142.852 |
| | 142.852 |
| | 142.852 |
|
(1) Refer to page 6.
|
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended October 3, 2014 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Tax adjustment | | Non-GAAP results |
| | | | | | | | | | | |
| Revenues | | $ | 2,039 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2,039 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,402 |
| | $ | (10 | ) | | $ | 11 |
| | $ | — |
| | $ | 1,403 |
|
| Selling, general and administrative (excludes restructuring costs) | | $ | 314 |
| | $ | (16 | ) | | $ | 2 |
| | $ | — |
| | $ | 300 |
|
| | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | 82 |
| | $ | 26 |
| | $ | (13 | ) | | $ | — |
| | $ | 95 |
|
| Income tax expense (benefit) | | 23 |
| | 10 |
| | (5 | ) | | (9 | ) | | 19 |
|
| Income (loss) from continuing operations | | $ | 59 |
| | $ | 16 |
| | $ | (8 | ) | | $ | 9 |
| | $ | 76 |
|
| | | | | | | | | | | |
| Effective Tax Rate | | 28.0 | % | | | | | | | | 20.0 | % |
| | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | 0.41 |
| | $ | 0.11 |
| | $ | (0.06 | ) | | $ | 0.06 |
| | $ | 0.53 |
|
| Diluted EPS from continuing operations | | $ | 0.41 |
| | $ | 0.11 |
| | $ | (0.05 | ) | | $ | 0.06 |
| | $ | 0.52 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 143.279 |
| | 143.279 |
| | 143.279 |
| | 143.279 |
| | 143.279 |
|
| Diluted EPS | | 145.596 |
| | 145.596 |
| | 145.596 |
| | 145.596 |
| | 145.596 |
|
(1) Refer to page 7.
|
| | | | | | | | | | | | | | | | | | | | |
| | | Quarter ended July 4, 2014 |
| (Amounts in millions, except per-share amounts) | | Pro forma CSC continuing operations (1) | | Certain CSRA overhead costs | | U.S. Pension & OPEB | | Tax adjustment | | Non-GAAP results |
| | | | | | | | | | | |
| Revenues | | $ | 2,219 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 2,219 |
|
| | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,567 |
| | $ | (9 | ) | | $ | 10 |
| | $ | — |
| | $ | 1,568 |
|
| Selling, general and administrative (excludes restructuring costs) | | $ | 318 |
| | $ | (17 | ) | | $ | 2 |
| | $ | — |
| | $ | 303 |
|
| | | | | | | | | | | |
| Income (loss) from continuing operations, before taxes | | $ | 61 |
| | $ | 26 |
| | $ | (12 | ) | | $ | — |
| | $ | 75 |
|
| Income tax expense (benefit) | | 12 |
| | 10 |
| | (5 | ) | | (2 | ) | | 15 |
|
| Income (loss) from continuing operations | | $ | 49 |
| | $ | 16 |
| | $ | (7 | ) | | $ | 2 |
| | $ | 60 |
|
| | | | | | | | | | | |
| Effective Tax Rate | | 19.7 | % | | | | | | | | 20.0 | % |
| | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | 0.33 |
| | $ | 0.11 |
| | $ | (0.05 | ) | | $ | 0.01 |
| | $ | 0.41 |
|
| Diluted EPS from continuing operations | | $ | 0.33 |
| | $ | 0.11 |
| | $ | (0.05 | ) | | $ | 0.01 |
| | $ | 0.40 |
|
| | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | |
| Basic EPS | | 145.338 |
| | 145.338 |
| | 145.338 |
| | 145.338 |
| | 145.338 |
|
| Diluted EPS | | 148.251 |
| | 148.251 |
| | 148.251 |
| | 148.251 |
| | 148.251 |
|
(1) Refer to page 8.
Non-GAAP Results Summary
(preliminary and unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended | | Fiscal Year 2015 | | Fiscal Year 2016 |
| (Amounts in millions, except per-share amounts) | | July 4, 2014 | | October 3, 2014 | | January 2, 2015 | | April 3, 2015 | | July 3, 2015 | | October 2, 2015 |
| | | | | | | | | | | | | |
| Revenues | | $ | 2,219 |
| | $ | 2,039 |
| | $ | 1,949 |
| | $ | 1,910 |
| | $ | 1,804 |
| | $ | 1,745 |
|
| | | | | | | | | | | | | |
| Costs of services (excludes depreciation and amortization and restructuring costs) | | $ | 1,568 |
| | $ | 1,403 |
| | $ | 1,332 |
| | $ | 1,339 |
| | $ | 1,267 |
| | $ | 1,232 |
|
| Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | | $ | 303 |
| | $ | 300 |
| | $ | 262 |
| | $ | 233 |
| | $ | 251 |
| | $ | 246 |
|
| | | | | | | | | | | | | |
| Income from continuing operations, before taxes | | $ | 75 |
| | $ | 95 |
| | $ | 109 |
| | $ | 127 |
| | $ | 97 |
| | $ | 95 |
|
| Income tax expense | | 15 |
| | 19 |
| | 22 |
| | 25 |
| | 20 |
| | 19 |
|
| Income from continuing operations | | $ | 60 |
| | $ | 76 |
| | $ | 87 |
| | $ | 102 |
| | $ | 77 |
| | $ | 76 |
|
| | | | | | | | | | | | | |
| Effective Tax Rate | | 20.0 | % | | 20.0 | % | | 20.0 | % | | 20.0 | % | | 20.0 | % | | 20.0 | % |
| | | | | | | | | | | | | |
| Basic EPS from continuing operations | | $ | 0.41 |
| | $ | 0.53 |
| | $ | 0.62 |
| | $ | 0.72 |
| | $ | 0.56 |
| | $ | 0.55 |
|
| Diluted EPS from continuing operations | | $ | 0.40 |
| | $ | 0.52 |
| | $ | 0.61 |
| | $ | 0.71 |
| | $ | 0.55 |
| | $ | 0.54 |
|
| | | | | | | | | | | | | |
| Weighted average common shares outstanding for: | | | | | | | | | | | | |
| Basic EPS | | 145.338 |
| | 143.279 |
| | 140.637 |
| | 140.760 |
| | 137.917 |
| | 138.295 |
|
| Diluted EPS | | 148.251 |
| | 145.596 |
| | 142.852 |
| | 142.812 |
| | 140.801 |
| | 140.532 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Quarter Ended | | Fiscal Year 2016 | | Fiscal Year 2015 |
| (Amounts in millions, except per-share amounts) | | July 4, 2014 | | October 3, 2014 | | January 2, 2015 | | April 3, 2015 | | July 3, 2015 | | October 2, 2015 |
| | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | |
| Global Business Solutions | | $ | 1,088 |
| | $ | 1,003 |
| | $ | 965 |
| | $ | 980 |
| | $ | 919 |
| | $ | 891 |
|
| Global Infrastructure Solutions | | 1,131 |
| | 1,036 |
| | 984 |
| | 930 |
| | 885 |
| | 854 |
|
| Total | | $ | 2,219 |
| | $ | 2,039 |
| | $ | 1,949 |
| | $ | 1,910 |
| | $ | 1,804 |
| | $ | 1,745 |
|
| | | | | | | | | | | | | |
| Adjusted Operating Income | | | | | | | | | | | | |
| Global Business Solutions | | $ | 104 |
| | $ | 126 |
| | $ | 124 |
| | $ | 160 |
| | $ | 93 |
| | $ | 110 |
|
| Global Infrastructure Solutions | | 63 |
| | 59 |
| | 63 |
| | 54 |
| | 43 |
| | 63 |
|
| Commercial | | 167 |
| | 185 |
| | 187 |
| | 214 |
| | 136 |
| | 173 |
|
| Corporate | | (26 | ) | | (9 | ) | | (13 | ) | | (18 | ) | | 12 |
| | (17 | ) |
| Total | | $ | 141 |
| | $ | 176 |
| | $ | 174 |
| | $ | 196 |
| | $ | 148 |
| | $ | 156 |
|
