4TH QUARTER FY 2017 EARNINGS PRESENTATION...4th Quarter FY 2017 Earnings Presentation 8 May 25, 2017...
Transcript of 4TH QUARTER FY 2017 EARNINGS PRESENTATION...4th Quarter FY 2017 Earnings Presentation 8 May 25, 2017...
4TH QUARTER FY 2017EARNINGS PRESENTATION
May 25, 2017
2 May 25, 20174th Quarter FY 2017 Earnings Presentation
Basis of Presentation
As previously disclosed, effective April 1, 2017, CSC became a wholly owned subsidiary of DXC Technology Company, an independent public company formed in connection with the spin-off and combination with CSC of the Enterprise Services business of the Hewlett Packard Enterprise Company (“HPES”). CSC common stock was suspended from trading on the NYSE effective as of the opening of trading on April 3, 2017. CSC filed a Form 15 with the SEC on April 18, 2017 to deregister the shares of CSC common stock. DXC common stock began regular-way trading under the symbol “DXC” on the New York Stock Exchange on April 3, 2017.These presentation materials are solely focused on CSC, and the financial information set forth herein relates only to CSC and its subsidiaries, as of and for the two years ended March 31, 2017 and as of and for the three-month periods ended March 31, 2017 and April 1, 2016, which periods predate the April 1, 2017 effective date of the previously disclosed merger transaction involving CSC. These presentation materials do not include the financial results of HPES for any periods. Accordingly, unless the context otherwise requires, references herein to “CSC,” the “Company,” “we,” “us” or “our” refer only to CSC and its pre-combination subsidiaries and not to DXC, HPES or their pre-combination subsidiaries.Beginning with the first quarter earnings presentation for the quarter ending June 30, 2017, DXC will report on a consolidated basis representing the combined operations of CSC and HPES and their respective subsidiaries. Because CSC is deemed the acquirer inthis combination for accounting purposes under U.S. Generally Accepted Accounting Principles (GAAP), CSC is considered DXC’s predecessor, and the historical financial statements of CSC prior to April 1, 2017 will be reflected in DXC’s future quarterly and annual presentations as DXC’s historical financial statements.
3 May 25, 20174th Quarter FY 2017 Earnings Presentation
Forward-Looking Statements
All statements in these presentation materials that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. For a written description of these factors, see the section titled “Risk Factors” in CSC’s Form 10-K for the fiscal year ended April 1, 2016 and DXC’s (formerly named Everett SpinCo, Inc.) Form S-4 filed on February 24, 2017 and any updating information in subsequent SEC filings. No assurance can be given that any goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of these presentation materials or to reflect the occurrence of unanticipated events except as required by law.
4 May 25, 20174th Quarter FY 2017 Earnings Presentation
Non-GAAP Financial Measures
This presentation includes certain non-GAAP financial measures such as consolidated segment operating income and margin, consolidated segment adjusted operating income and margin, consolidated segment commercial operating income and margin, consolidated segment commercial adjusted operating income and margin, earnings before interest and taxes (EBIT) and margin, adjusted EBIT and margin, non-GAAP income from continuing operations before taxes, non-GAAP income from continuing operations, non-GAAP EPS from continuing operations and adjusted free cash flow.
We present these non-GAAP financial measures to provide investors with meaningful supplemental financial information, in addition to the financial information presented on a U.S. GAAP basis. Non-GAAP financial measures exclude certain items otherwise required by U.S. GAAP which management believes are not indicative of core operating performance. We believe these non-GAAP measures allow investors to better understand the financial performance of CSC exclusive of the impacts of corporate-wide strategic decisions. We believe that adjusting for these items provides investors with additional measures to evaluate the financial performance of our core business operations on a comparable basis from period to period. We believe the non-GAAP measures provided are also considered important measures by financial analysts covering CSC as equity research analysts publish estimates and research notes based on our non-GAAP commentary, including our guidance around non-GAAP EPS.
There are limitations to the use of the non-GAAP financial measures we present. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in CSC’s industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies. Consolidated segment operating income and consolidated segment adjusted operating income are useful measures in evaluating the financial performance of CSC’s core segment business operations on a more comparable basis year-over-year. However, these measures could limit one’s ability to assess CSC’s financial performance by excluding corporate G&A and certain other items. To compensate for this limitation, we provide a reconciliation between these measures and income from continuing operations, before taxes, which is the most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.
Selected references are made on a “constant currency basis” (cc) so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. Financial results on a “constant currency basis” are non-GAAP measures calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This approach is used for all results where the functional currency is not the U.S. dollar.
4TH QUARTER FY 2017EARNINGS PRESENTATION
Mike LawrieChief Executive Officer
6 May 25, 20174th Quarter FY 2017 Earnings Presentation
Key Messages
*Non-GAAP EPS from continuing operations excludes restructuring costs, transaction and integration-related costs, pension and OPEB actuarial and settlement losses(see slides 8, 15 – 23 for non-GAAP reconciliations)
Delivered on financial targets for fiscal 2017• Q4 Non-GAAP EPS from continuing operations* of $1.15• Q4 Consolidated segment adjusted commercial operating margin of 13.1%• Q4 Adjusted free cash flow of $204M• FY17 Non-GAAP EPS from continuing operations* of $3.10• FY17 Consolidated segment adjusted commercial operating margin of 10.6%• FY17 Adjusted free cash flow of $610M
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FY17 CSC revenue up over 10.2% YoY in cc2
Strong next-gen momentum with revenue up 75% YoY in cc3
DXC Technology launched, now executing on merger plan4
FY18 DXC Technology non-GAAP EPS from continuing operations target of $6.50 – $7.00 5
4TH QUARTER FY 2017EARNINGS PRESENTATION
Paul SalehChief Financial Officer
8 May 25, 20174th Quarter FY 2017 Earnings Presentation
Reconciliation of Non-GAAP Results
*EPS from continuing operations and per-share values of certain items may not sum to non-GAAP EPS due to rounding
Q4 FY17
$M Except EPS GAAP Restructuringcosts
Transaction and integration-
related costs
Pension & OPEB actuarial
& settlement gains
Non-GAAPresults
(Loss) income from continuing operations, before taxes (187) (153) (147) (86) 199
Income tax (benefit) expense (49) (17) (37) (17) 22
(Loss) income from continuing operations (138) (136) (110) (69) 177
Diluted EPS from continuing operations* $ (1.05) (0.93) (0.76) (0.47) $ 1.15
FY17
$M Except EPS GAAP Restructuringcosts
Transaction and integration-
related costs
Pension & OPEB actuarial
& settlement gains
Non-GAAPresults
(Loss) income from continuing operations, before taxes (174) (247) (403) (87) 563
Income tax (benefit) expense (74) (39) (111) (17) 93
(Loss) income from continuing operations (100) (208) (292) (70) 470
Diluted EPS from continuing operations* $ (0.88) (1.44) (2.02) (0.49) $ 3.10
9 May 25, 20174th Quarter FY 2017 Earnings Presentation
4th Quarter and Full Year Results
*Non-GAAP EPS from continuing operations excludes restructuring costs, transaction and other integration-related costs, certain overhead costs, impact of transfer of U.S. Pension and OPEB assets to CSRA, pension and OPEB actuarial and settlement losses, SEC settlement-related items, debt extinguishment costs, and tax adjustment
(see slides 8, 15 – 23 for non-GAAP reconciliations)
Q4 FY17 Q4 FY16 FY17 FY16Revenue ($M) 1,889$ 1,807$ 7,607$ 7,106$
YoY Growth – GAAP 4.5% 7.1%
YoY Growth – cc 7.5% 10.2%
Consolidated Segment Adjusted Commercial Operating Income ($M) 248 156 807 660
Consolidated Segment Adjusted Commercial Operating Margin (%) 13.1% 8.6% 10.6% 9.3%
Consolidated Segment Adjusted Operating Income ($M) 235 138 755 632
Consolidated Segment Adjusted Operating Margin (%) 12.4% 7.6% 9.9% 8.9%
Adjusted EBIT ($M) 216 123 627 503
Adjusted EBIT Margin (%) 11.4% 6.8% 8.2% 7.1%
Non-GAAP Income from Continuing Operations ($M)* 177 116 470 363
Non-GAAP EPS from Continuing Operations* 1.15$ 0.82$ 3.10$ 2.57$
Bookings ($B) 2.1$ 2.3$ 8.6$ 8.6$
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$4.3 $4.9
FY16 FY17
$3,637 $4,173
FY16 FY17
11.6% 11.9%
FY16 FY17
Growth in cc of 18.0%
*Segment adjusted operating income and margin exclude restructuring costs, transaction and integration-related costs, and FY16 impact of transfer of U.S. Pension & OPEB assets to CSRA
Global Business Services (GBS)
Segment Adjusted OI Margin %*Revenue ($M) Bookings ($B)FY17
Q4 FY17 Q4 FY16 FY17 FY16Revenue ($M) 1,043$ 941$ 4,173$ 3,637$ – YoY growth - GAAP 10.8% 14.7%– YoY growth - cc 14.2% 18.0%
Segment adjusted operating income ($M)* 144 104 498 423 Segment adjusted operating margin (%)* 13.8% 11.1% 11.9% 11.6%Bookings ($B) 1.1$ 1.1$ 4.9$ 4.3$
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$4.3 $3.6
FY16 FY17
$3,469 $3,434
FY16 FY17
Segment Adjusted OI Margin %*Revenue ($M) Bookings ($B)
6.8%9.0%
FY16 FY17
Growth in cc of 2.0%
Global Infrastructure Services (GIS)
FY17
Q4 FY17 Q4 FY16 FY17 FY16Revenue ($M) 846$ 866$ 3,434$ 3,469$ – YoY growth - GAAP (2.3%) (1.0%)– YoY growth - cc 0.2% 2.0%
Segment adjusted operating income ($M)* 104 52 309 237 Segment adjusted operating margin (%)* 12.3% 6.0% 9.0% 6.8%Bookings ($B) 1.0$ 1.2$ 3.6$ 4.3$
*Segment adjusted operating income and margin exclude restructuring costs, transaction and integration-related costs, and FY16 impact of transfer of U.S. Pension & OPEB assets to CSRA
12 May 25, 20174th Quarter FY 2017 Earnings Presentation
Financial Highlights
Q4 FY17 FY17
Adjusted Free Cash Flow $204M $610M
Cap Ex — Including Capital Leases $98M $542M
Cap Ex as a % of Revenue 5.2% 7.1%
Cash Flow Performance
Q4 FY17 FY17
Dividends $20M $78MCapital to Shareholders
Q4 FY17 Q4 FY16
Cash and Equivalents $1.3B $1.2B
Net Debt-to-Total Capitalization Ratio 33.1% 31.4%
Capital Structure
13 May 25, 20174th Quarter FY 2017 Earnings Presentation
Delivered on financial targets for fiscal 2017• Double digit revenue growth in cc• Non-GAAP EPS from continuing operations* of $3.10• Adjusted free cash flow of $610M, up 91% YoY
CSC FY 2017 Summary
Executing on merger integration and cost synergy plans
Will be reporting next quarter on progress toward DXC Technology FY18 targets
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*Non-GAAP EPS from continuing operations excludes restructuring costs, transaction and other integration-related costs, certain overhead costs, impact of transfer of U.S. Pension and OPEB assets to CSRA, pension and OPEB actuarial and settlement losses, SEC settlement-related items, debt extinguishment costs, and tax adjustment
(see slides 8, 15 – 23 for non-GAAP reconciliations)
4TH QUARTER FY 2017EARNINGS PRESENTATION
Supplemental Information
15 May 25, 20174th Quarter FY 2017 Earnings Presentation
FY17 Q4 & Full Year Non-GAAP ReconciliationsConsolidated Segment Adjusted Operating Income and Margins
(in millions)
Consolidated segment operating
income
Restructuring costs
Transaction and
integration-related costs
Consolidated segment adjusted operating
income
Consolidated segment adjusted operating
margin
Global Business Services 36 (88) (20) 144 13.8%
Global Infrastructure Services 21 (65) (18) 104 12.3%
Total Commercial 57$ (153)$ (38)$ 248$ 13.1%
Corporate and Eliminations (15) — (2) (13) —
Total 42$ (153)$ (40)$ 235$ 12.4%
Q4 FY17
(in millions)
Consolidated segment operating
income
Restructuring costs
Transaction and
integration-related costs
Consolidated segment adjusted operating
income
Consolidated segment adjusted operating
margin
Global Business Services 305 (116) (77) 498 11.9%
Global Infrastructure Services 107 (131) (71) 309 9.0%
Total Commercial 412$ (247)$ (148)$ 807$ 10.6%
Corporate and Eliminations (55) — (3) (52) —
Total 357$ (247)$ (151)$ 755$ 9.9%
FY17
16 May 25, 20174th Quarter FY 2017 Earnings Presentation
FY16 Q4 & Full Year Non-GAAP ReconciliationsConsolidated Segment Adjusted Operating Income and Margins
(in millions)
Consolidated segment operating
income
Certain overhead costs
U.S. Pension & OPEB
Restructuring costs
Transaction and
integration-related costs
Consolidated segment adjusted operating
income
Consolidated segment adjusted operating
margin
Global Business Services 381 — 11 (37) (16) 423 11.6%
Global Infrastructure Services 216 — 27 (28) (20) 237 6.8%
Total Commercial 597$ —$ 38$ (65)$ (36)$ 660$ 9.3%
Corporate and Eliminations (82) (48) — (1) (5) (28) —
Total 515$ (48)$ 38$ (66)$ (41)$ 632$ 8.9%
FY16
(in millions)
Consolidated segment operating
income
Certain overhead costs
U.S. Pension & OPEB
Restructuring costs
Transaction and
integration-related costs
Consolidated segment adjusted operating
income
Consolidated segment adjusted operating
margin
Global Business Services 82 — — (10) (12) 104 11.1%
Global Infrastructure Services 29 — — (11) (12) 52 6.0%
Total Commercial 111$ —$ —$ (21)$ (24)$ 156$ 8.6%
Corporate and Eliminations (18) — — — — (18) —
Total 93$ —$ —$ (21)$ (24)$ 138$ 7.6%
Q4 FY16
17 May 25, 20174th Quarter FY 2017 Earnings Presentation
Q4 & Full Year Non-GAAP ReconciliationsConsolidated Segment Operating Income and Consolidated Segment Adjusted Operating Income
(in millions) Q4 FY17 Q4 FY16
Consolidated segment adjusted operating income 235$ 138$ Restructuring costs (153) (21) Transaction and integration-related costs (40) (24) Certain overhead costs - - U.S. Pension and OPEB - - Consolidated segment operating income 42$ 93$ Corporate G&A (135) (45) Pension and OPEB actuarial and settlement losses (86) (118) Separation costs - (9) Interest expense (30) (31) Interest income 9 12 Debt extinguishment costs - (95) Other income, net 13 6 (Loss) income from continuing operations, before taxes (187)$ (187)$
Q4 FY17 Q4 FY16
Consolidated segment adjusted operating margin 12.4% 7.6%Consolidated segment operating margin 2.2% 5.1%
(in millions) FY17 FY16
Consolidated segment adjusted operating income 755$ 632$ Restructuring costs (247) (66) Transaction and integration-related costs (151) (41) Certain overhead costs - (48) U.S. Pension and OPEB - 38 Consolidated segment operating income 357$ 515$ Corporate G&A (372) (216) Pension and OPEB actuarial and settlement losses (87) (99) Separation costs - (19) Interest expense (117) (123) Interest income 35 38 Debt extinguishment costs - (95) Other income, net 10 9 (Loss) income from continuing operations, before taxes (174)$ 10$
FY17 FY16
Consolidated segment adjusted operating margin 9.9% 8.9%Consolidated segment operating margin 4.7% 7.2%
18 May 25, 20174th Quarter FY 2017 Earnings Presentation
Q4 & Full Year Non-GAAP ReconciliationsEBIT and Adjusted EBIT
(in millions) FY17 FY16
Adjusted EBIT 627$ 503$ Restructuring costs (247) (66) Transaction and integration-related costs (385) (93) SEC settlement-related items - (5) Pension and OPEB actuarial and settlement losses (87) (99) Debt extinguishment costs - (95) Certain overhead costs - (88) U.S. Pension and OPEB - 38 EBIT (92)$ 95$ Interest expense (117) (123) Interest income 35 38 Income tax benefit 74 62 (Loss) income from continuing operations (100)$ 72$ (Loss) income from discontinued operations, net of taxes - 191 Net (loss) income (100)$ 263$
FY17 FY16
Adjusted EBIT margin 8.2% 7.1%EBIT margin (1.2%) 1.3%
(in millions) Q4 FY17 Q4 FY16
Adjusted EBIT 216$ 123$ Restructuring costs (153) (21) Transaction and integration-related costs (143) (57) SEC settlement-related items - - Pension and OPEB actuarial and settlement losses (86) (118) Debt extinguishment costs - (95) Certain overhead costs - - U.S. Pension and OPEB - - EBIT (166)$ (168)$ Interest expense (30) (31) Interest income 9 12 Income tax benefit 49 79 (Loss) income from continuing operations (138)$ (108)$ (Loss) income from discontinued operations, net of taxes - (25) Net (loss) income (138)$ (133)$
Q4 FY17 Q4 FY16
Adjusted EBIT margin 11.4% 6.8%EBIT margin (8.8%) (9.3%)
19 May 25, 20174th Quarter FY 2017 Earnings Presentation
Q4 FY17 Non-GAAP Results
*EPS from continuing operations and per-share values of certain items may not sum to non-GAAP EPS due to rounding
$M Except EPS GAAP Restructuring costs
Transaction and integration-related costs
Pension & OPEB actuarial
& settlement losses
Non-GAAP results
Costs of services (excludes depreciation and amortization and restructuring costs) 1,414$ -$ -$ (71)$ 1,343$
Selling, general and administrative (excludes depreciation and amortization, restructuring costs) 348 - (119) (15) 214
(Loss) income from continuing operations, before taxes (187) (153) (147) (86) 199
Income tax (benefit) expense (49) (17) (37) (17) 22
(Loss) income from continuing operations (138) (136) (110) (69) 177
Net (loss) income (138) (136) (110) (69) 177
Less: net income attributable to noncontrolling interest, net of tax 10 - - - 10
Net (loss) income attributable to CSC common stockholders (148)$ (136)$ (110)$ (69)$ 167$
Effective tax rate 26.2% 11.1%
Basic EPS from continuing operations* (1.05)$ (0.96)$ (0.78)$ (0.49)$ 1.18$
Diluted EPS from continuing operations* (1.05)$ (0.93)$ (0.76)$ (0.47)$ 1.15$
Weighted average common shares outstanding for:Basic EPS 141.16 141.16 141.16 141.16 141.16Diluted EPS 141.16 145.68 145.68 145.68 145.68
20 May 25, 20174th Quarter FY 2017 Earnings Presentation
Q4 FY16 Non-GAAP Results
*EPS from continuing operations and per-share values of certain items may not sum to non-GAAP EPS due to rounding
$M Except EPS GAAP Restructuring costs
Transaction and integration-related costs
Pension & OPEB actuarial
& settlement losses
Debt extinguishment
costs
Tax adjustment
Non-GAAP results
Costs of services (excludes depreciation and amortization and restructuring costs) 1,460$ -$ -$ (116)$ -$ -$ 1,344$
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 251 - (40) (2) - - 209
(Loss) income from continuing operations, before taxes (187) (21) (57) (118) (100) - 109
Income tax expense (79) (4) (10) (24) (40) 6 (7)
(Loss) income from continuing operations (108) (17) (47) (94) (60) (6) 116
Net (loss) income (133) (17) (47) (94) (60) (6) 91
Less: net income attributable to noncontrolling interest, net of tax - - - - - - -
Net (loss) income attributable to CSC common stockholders (133)$ (17)$ (47)$ (94)$ (60)$ (6)$ 91$
Effective tax rate 42.2% (6.4)%
Basic EPS from continuing operations* (0.78)$ (0.12)$ (0.34)$ (0.68)$ (0.43)$ (0.04)$ 0.84$
Diluted EPS from continuing operations* (0.78)$ (0.12)$ (0.33)$ (0.66)$ (0.42)$ (0.04)$ 0.82$
Weighted average common shares outstanding for:Basic EPS 138.05 138.05 138.05 138.05 138.05 138.05 138.05Diluted EPS 138.05 141.61 141.61 141.61 141.61 141.61 141.61
21 May 25, 20174th Quarter FY 2017 Earnings Presentation
FY17 Non-GAAP Results
*EPS from continuing operations and per-share values of certain items may not sum to non-GAAP EPS due to rounding
$M Except EPS GAAP Restructuring costs
Transaction and integration-related costs
Pension & OPEB actuarial
& settlement losses
Non-GAAP results
Costs of services (excludes depreciation and amortization and restructuring costs) 5,545$ -$ -$ (72)$ 5,473$
Selling, general and administrative (excludes depreciation and amortization, restructuring costs) 1,279 - (305) (15) 959
(Loss) income from continuing operations, before taxes (174) (247) (403) (87) 563
Income tax (benefit) expense (74) (39) (111) (17) 93
(Loss) income from continuing operations (100) (208) (292) (70) 470
Net (loss) income (100) (208) (292) (70) 470
Less: net income attributable to noncontrolling interest, net of tax 23 - - - 23
Net (loss) income attributable to CSC common stockholders (123)$ (208)$ (292)$ (70)$ 447$
Effective tax rate 42.5% 16.5%
Basic EPS from continuing operations* (0.88)$ (1.48)$ (2.08)$ (0.50)$ 3.18$
Diluted EPS from continuing operations* (0.88)$ (1.44)$ (2.02)$ (0.49)$ 3.10$
Weighted average common shares outstanding for:Basic EPS 140.39 140.39 140.39 140.39 140.39Diluted EPS 140.39 144.31 144.31 144.31 144.31
22 May 25, 20174th Quarter FY 2017 Earnings Presentation
FY16 Non-GAAP Results
*EPS from continuing operations and per-share values of certain items may not sum to non-GAAP EPS due to rounding
$M Except EPS GAAPCertain
overhead costs
U.S. pension and OPEB
Transaction and integration-related costs
Restructuring costs
Pension & OPEB actuarial
& settlement losses
SEC settlement-related items
Debt extinguishment
costs
Tax adjustment
Non-GAAP results
Costs of services (excludes depreciation and amortization and restructuring costs) 5,185$ (41)$ 32$ (5)$ -$ (100)$ -$ -$ -$ 5,071$
Selling, general and administrative (excludes depreciation and amortization, SEC settlement-related items and restructuring costs) 1,040 (47) 6 (55) - 1 (5) - - 940
Income from continuing operations, before taxes 10 (88) 38 (95) (66) (99) (5) (100) - 425
Income tax (benefit) expense (62) (34) 15 (23) (18) (18) (2) (40) (4) 62
Income from continuing operations 72 (54) 23 (72) (48) (81) (3) (60) 4 363
Net income 263 (54) 23 (72) (48) (81) (3) (60) 4 554
Less: net income attributable to noncontrolling interest, net of tax 12 - - - - - - - - 12
Net income attributable to CSC common stockholders 251$ (54)$ 23$ (72)$ (48)$ (81)$ (3)$ (60)$ 4$ 542$
Effective tax rate (620.0)% 14.6%
Basic EPS from continuing operations* 0.51$ (0.39)$ 0.17$ (0.52)$ (0.35)$ (0.59)$ (0.02)$ (0.43)$ 0.03$ 2.63$
Diluted EPS from continuing operations* 0.50$ (0.38)$ 0.16$ (0.51)$ (0.34)$ (0.57)$ (0.02)$ (0.42)$ 0.03$ 2.57$
Weighted average common shares outstanding for:Basic EPS 138.28 138.28 138.28 138.28 138.28 138.28 138.28 138.28 138.28 138.28Diluted EPS 141.33 141.33 141.33 141.33 141.33 141.33 141.33 141.33 141.33 141.33
23 May 25, 20174th Quarter FY 2017 Earnings Presentation
Adjusted Free Cash Flow
*Excludes capital expenditures financed through CSC Finco and other investments
$M Q4 FY17 Q4 FY16 FY17 FY16Net cash provided by operating activities 173$ 60$ 978$ 802$
Net cash used in investing activities* (84) (447) (840) (1,126)
Acquisitions, net of cash acquired - 289 434 554
Business dispositions (3) - (3) (37)
Short-term investments - (1) - 70
Payment on capital leases and other long-term asset financings (26) (31) (145) (166)
Payments on transaction and integration-related costs 70 8 268 79
Payments on restructuring costs 56 56 141 173
SEC settlement-related payments, net - - - 187
Sale of accounts receivables 18 - (223) (239)
Certain overhead costs - - - 22
Adjusted free cash flow 204$ (66)$ 610$ 319$
24 May 25, 20174th Quarter FY 2017 Earnings Presentation
$B
Global Business ServicesGBS Global Infrastructure ServicesGIS
$1.2 $0.9
$0.5
$1.3 $1.0
$1.1
$0.7 $2.0
$1.1
$1.1
$2.3
$1.6
$2.5 $2.4
$2.1
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Q4 FY16 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17
Bookings*
*Segment bookings may not sum to total due to rounding
FY16 FY17
25 May 25, 20174th Quarter FY 2017 Earnings Presentation
• Consolidated segment operating income: Revenue less costs of services, depreciation and amortization expense, restructuring costs and segment selling, general and administrative (G&A) expenses. Consolidated segment operating income excludes corporate G&A, and pension and OPEB actuarial and settlement losses
• Consolidated segment operating margin: Consolidated segment operating income as a percentage of revenue• Consolidated segment adjusted operating income: Consolidated segment operating income excluding restructuring costs, transaction and integration-related costs,
certain overhead costs, and U.S. Pension and OPEB• Consolidated segment adjusted operating margin: Consolidated segment adjusted operating income as a percentage of revenue• Consolidated segment commercial operating income: Consolidated segment operating income for the combined GBS and GIS segments• Consolidated segment commercial operating margin: Consolidated segment commercial operating income as a percentage of revenue• Consolidated segment adjusted commercial operating income: Consolidated segment adjusted commercial operating income for the combined GBS and GIS
segments• Consolidated segment adjusted commercial operating margin: Consolidated segment adjusted commercial operating income as a percentage of revenue• Earnings before interest and taxes (EBIT): Net (loss) income less income from discontinued operations, net of taxes, interest expense, interest income, and income tax
benefit (expense)• EBIT margin: EBIT as a percentage of revenue• Adjusted EBIT: EBIT excluding the impact of certain items, including restructuring costs, transaction and integration-related costs, certain overhead costs, U.S. Pension
and OPEB, and SEC settlement-related items• Adjusted EBIT margin: Adjusted EBIT as a percentage of revenue• Adjusted free cash flow: Equal to the sum of (1) operating cash flows, (2) investing cash flows, excluding business acquisitions, dispositions and investments (including
short-term investments and purchase or sale of available for sale securities), and (3) payments on capital leases and other long-term asset financings. Adjusted free cash flow is further adjusted for certain cash flow items, such as (i) payments for transaction and integration-related costs, (ii) restructuring payments, (iii) SEC settlement-related payments and (iv) cash receipts from the sale of accounts receivables
• Capital expenditure: Equal to sum of purchases of property, equipment, and software, and payments on outsourcing contracts, less proceeds from sales of assets and purchases made through CSC Finco, excluding prior year CSRA capital expenditures
• Net debt: Total debt, less cash and cash equivalents• Net debt-to-total capitalization ratio: Calculated as the ratio of net debt to total capitalization
Non-GAAP and Other Definitions
4TH QUARTER FY 2017EARNINGS PRESENTATION
Thank You