- Revenues of $4.01 billion for
Q4 FY22, down 8.6% as compared to prior year period, and down 2.8%
on an organic basis
- Diluted Earnings Per Share was $2.14 and Non-GAAP Diluted Earnings Per Share was
$0.84 in Q4 FY22
- Bookings of $4.8 billion and
book-to-bill ratio of 1.20x in Q4 FY22
- FY22 operating cash flow of $1,501
million, less capital expenditures of $758 million, results in $743 million of free cash flow, a $1.4 billion improvement over FY21
- Returned $271 million to
shareholders by repurchasing 8.2 million shares in Q4 FY22,
bringing FY22 repurchases to $634
million or 18.8 million shares. Repurchased over 7% of
shares outstanding in FY22
ASHBURN,
Va., May 25, 2022 /PRNewswire/ - DXC Technology
(NYSE: DXC) today reported results for the fourth quarter and full
fiscal year 2022.
"I would like to thank our DXC colleagues across the
organization for coming together to deliver excellence for our
customers and colleagues in the midst of the challenges raised by
the ongoing conflict in Ukraine,"
said Mike Salvino, DXC President and
Chief Executive Officer. "Our transformation journey starts with
our people, and we are honored by the commitment, dedication, and
caring we have seen from our people in the region and throughout
the company over the past few months."
Mr. Salvino continued, "DXC is now in a dramatically better
place and I am pleased with the ongoing business momentum that DXC
has achieved in FY22. We significantly improved our organic revenue
performance, expanded margins, drove strong Adjusted EPS growth,
and improved free cash flow by $1.4
billion as compared to FY21. I am excited about FY23 and the
clarity that our leadership team has as to what we need to execute
within GBS and GIS in order to meet our long-term targets."
Financial
Highlights(1)
|
|
Q4
FY22
|
|
Q4
FY21
|
|
FY22
|
|
FY21
|
Revenue
|
|
$
4,008
|
|
$
4,385
|
|
$
16,265
|
|
$
17,729
|
YoY Revenue
Growth
|
|
(8.6)%
|
|
(8.9)%
|
|
(8.3)%
|
|
(9.4)%
|
YoY Organic Revenue
Growth(2)
|
|
(2.8)%
|
|
(6.5)%
|
|
(2.6)%
|
|
(8.8)%
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
539
|
|
$
(804)
|
|
$
736
|
|
$
(146)
|
Net Income as a % of
Sales
|
|
13.4%
|
|
(18.3)%
|
|
4.5%
|
|
(0.8)%
|
|
|
|
|
|
|
|
|
|
EBIT(2)
|
|
$
828
|
|
$
(738)
|
|
$
1,280
|
|
$
917
|
EBIT Margin
%(2)
|
|
20.7%
|
|
(16.8)%
|
|
7.9%
|
|
5.2%
|
|
|
|
|
|
|
|
|
|
Adjusted
EBIT(2)
|
|
$
342
|
|
$
329
|
|
$
1,375
|
|
$
1,102
|
Adjusted EBIT Margin
%(2)
|
|
8.5%
|
|
7.5%
|
|
8.5%
|
|
6.2%
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(Diluted)
|
|
$
2.14
|
|
$
(3.14)
|
|
$
2.81
|
|
$
(0.59)
|
Non-GAAP EPS
(Diluted)(2)
|
|
$
0.84
|
|
$
0.74
|
|
$
3.50
|
|
$
2.43
|
|
|
|
|
|
|
|
|
|
Book-to-Bill
|
|
1.20x
|
|
1.08x
|
|
1.11x
|
|
1.12x
|
(1)
|
In millions, except
per-share amounts and numbers presented as percentages and
ratios
|
(2)
|
Reconciliation of GAAP
to Non-GAAP measures provided in Non-GAAP Results.
|
Financial Highlights - Fourth Quarter of Fiscal Year
2022
Revenue was $4.01 billion for the
fourth quarter of fiscal year 2022, down 8.6% as compared to prior
year period, and down 2.8% on an organic basis. Fourth quarter
revenues came in below the previous guidance range, as the
strengthening of the U.S. dollar reduced fourth quarter fiscal year
2022 revenues by $52 million as
compared to the currency rates used in our prior earnings guidance.
Management estimates that Russia's
invasion of Ukraine, exiting our
Russian business, and the associated distraction accounted for the
majority of the organic revenue miss to guidance.
Net income was $539 million, or
13.4% of sales for the fourth quarter of fiscal year 2022, compared
to $(804) million, or (18.3)% of
sales, in the prior year quarter. EBIT was $828 million or 20.7% of sales. Net income and
EBIT in the quarter included the following items: amortization of
acquired intangible assets of $109
million, restructuring costs of $70
million, mark-to-market pension gain of $691 million, loss on disposition of $2 million, asset impairment loss of $21 million, and transaction, separation, and
integration costs of $3 million.
Excluding these items, Adjusted EBIT margin was 8.5% in the fourth
quarter, an improvement of 100 bps as compared to the prior year
quarter. Fourth quarter adjusted EBIT margin was reduced by
$16 million of expenses, or 40 basis
points, related to Russia's
invasion of Ukraine.
Diluted earnings per share was $2.14 and Non-GAAP diluted earnings per share was
$0.84 for the fourth quarter of
fiscal year 2022, driven by the improvement in margins, lower
interest expense, and lower shares outstanding. Non-GAAP earnings
per share fell below the Company's previous guidance range due to
$0.04 per share of incremental costs
related to Russia's invasion of
Ukraine, $0.07 of headwinds related to higher than
expected tax expense due to the write down of a deferred tax asset,
and an incremental $0.06 in higher
European energy costs that we were not able to pass on to
customers.
Book-to-bill for the quarter was 1.20x. Over the trailing
four quarters, the company delivered a book to bill of 1.11x.
During the fourth quarter, the Company repurchased 8.2 million
shares of common stock for a total of $271
million. For the full fiscal year 2022, the company
repurchased 18.8 million shares for a total of $634 million.
Ukraine / Russia
Update
Subsequent to the end of the quarter, DXC exited its domestic
Russian business. This action achieves a significant portion of our
commitment to exit Russia. The
sale of this business has provided continuing employment
opportunities for many former DXC employees who have chosen to stay
in Russia. The exit of this market
will reduce revenues by approximately $140
million annually. The company is transitioning global
business previously serviced by our DXC Russian colleagues to
international teams and expects to complete this process by the end
of the second quarter.
DXC's Ukraine business
supported approximately $250 million
of revenue, predominantly serving international customers. Despite
the ongoing conflict, these revenues have only seen a minor impact
stemming from the conflict. Our global teams have worked to augment
their Ukrainian colleagues, and to continue to deliver for our
customers through the conflict.
During the fourth quarter, DXC spent approximately $16 million related to Russia's invasion of Ukraine.
Financial Information by Segment
Global Business
Services ("GBS")(1)
|
|
Q4
FY22
|
|
Q4
FY21
|
|
FY22
|
|
FY21
|
Revenue
|
|
$
1,892
|
|
$
1,999
|
|
$
7,598
|
|
$
8,336
|
YoY Revenue
Growth
|
|
(5.4)%
|
|
(13.4)%
|
|
(8.9)%
|
|
(8.5)%
|
YoY Organic Revenue
Growth(2)
|
|
3.4%
|
|
(3.4)%
|
|
3.9%
|
|
(5.6)%
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
$
275
|
|
$
315
|
|
$
1,160
|
|
$
1,120
|
Segment Profit
Margin
|
|
14.5%
|
|
15.8%
|
|
15.3%
|
|
13.4%
|
|
|
|
|
|
|
|
|
|
Book-to-Bill
|
|
1.46x
|
|
1.20x
|
|
1.24x
|
|
1.32x
|
(1)
|
In millions
|
(2)
|
Reconciliation of GAAP
to Non-GAAP measures provided in Non-GAAP Results.
|
GBS segment revenue was $1,892
million in the fourth quarter of fiscal year 2022, down 5.4%
compared to prior year period and up 3.4% on an organic basis. The
GBS performance was driven by strong growth in the Analytics &
Engineering business, where revenue increased 19.7% on an organic
basis. GBS segment profit was $275
million and segment profit margin was 14.5%, down 130 bps
compared to prior year, primarily due to expenses related to
Russia's invasion of Ukraine. GBS bookings for the quarter were
$2.8 billion for a book-to-bill of
1.46x.
Global
Infrastructure Services ("GIS")(1)
|
|
Q4
FY22
|
|
Q4
FY21
|
|
FY22
|
|
FY21
|
Revenue
|
|
$
2,116
|
|
$
2,386
|
|
$
8,667
|
|
$
9,393
|
YoY Revenue
Growth
|
|
(11.3)%
|
|
(4.8)%
|
|
(7.7)%
|
|
(10.3)%
|
YoY Organic Revenue
Growth(2)
|
|
(8.0)%
|
|
(9.3)%
|
|
(8.4)%
|
|
(11.8)%
|
|
|
|
|
|
|
|
|
|
Segment
Profit
|
|
$
124
|
|
$
98
|
|
$
475
|
|
$
245
|
Segment Profit
Margin
|
|
5.9%
|
|
4.1%
|
|
5.5%
|
|
2.6%
|
|
|
|
|
|
|
|
|
|
Book-to-Bill
|
|
0.96x
|
|
0.98x
|
|
1.01x
|
|
0.94x
|
(1)
|
In millions
|
(2)
|
Reconciliation of GAAP
to Non-GAAP measures provided in Non-GAAP Results.
|
GIS segment revenue was $2,116
million in the fourth quarter of fiscal year 2022, down
11.3% compared to prior year period, and down 8.0% on an organic
basis. GIS segment performance was driven by improving Cloud and
Security revenues, which declined by 6.9% on an organic basis,
offset by lower resale revenues in Modern Workplace. GIS segment
profit was $124 million with a
segment profit margin of 5.9%, a 180 bps margin expansion as
compared to fourth quarter of fiscal year 2021. GIS bookings were
$2.0 billion in the quarter for a
book-to-bill of 0.96x.
Enterprise Technology Stack Highlights
The components of the Enterprise Technology Stack are as
follows:
Offerings
Revenues
|
|
Q4
FY22
|
|
Q3
FY22
|
|
Q2
FY22
|
|
Q1
FY22
|
|
FY22
|
Analytics
and Engineering
|
|
$
554
|
|
$
545
|
|
$
520
|
|
$
482
|
|
$
2,101
|
Applications
|
|
1,224
|
|
1,268
|
|
1,216
|
|
1,246
|
|
4,954
|
Business
Process Services
|
|
112
|
|
116
|
|
118
|
|
118
|
|
464
|
Cloud and
Security
|
|
488
|
|
471
|
|
521
|
|
549
|
|
2,029
|
IT
Outsourcing
|
|
1,115
|
|
1,111
|
|
1,052
|
|
1,128
|
|
4,406
|
Modern
Workplace
|
|
513
|
|
561
|
|
581
|
|
577
|
|
2,232
|
Subtotal
|
|
4,006
|
|
4,072
|
|
4,008
|
|
4,100
|
|
16,186
|
M&A and
Divestitures
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
2
|
|
17
|
|
19
|
|
41
|
|
79
|
Total
Revenues
|
|
$
4,008
|
|
$
4,089
|
|
$
4,027
|
|
$
4,141
|
|
$
16,265
|
Cash Flow
Cash
Flow
|
|
Q4
FY22
|
|
Q4
FY21
|
|
FY22
|
|
FY21
|
Cash Flow from (used
in) Operations
|
|
$
271
|
|
$
(280)
|
|
$
1,501
|
|
$
124
|
Less Capital
Expenditures:
|
|
|
|
|
|
|
|
|
Purchase
of property and equipment
|
|
(37)
|
|
(46)
|
|
(254)
|
|
(261)
|
Transition
and transformation contract costs
|
|
(57)
|
|
(72)
|
|
(209)
|
|
(261)
|
Software
purchased or developed
|
|
(84)
|
|
(45)
|
|
(295)
|
|
(254)
|
Free Cash
Flow
|
|
$
93
|
|
$
(443)
|
|
$
743
|
|
$
(652)
|
Cash flow from (used in) operations was $271 million in the fourth quarter of fiscal year
2022, as compared to $(280) million
in the fourth quarter of fiscal year 2021, and capital expenditures
were $178 million in the fourth
quarter of fiscal year 2022, as compared to $163 million in the fourth quarter of fiscal year
2021. Free cash flow (cash flow from operations, less capital
expenditures) was $93 million in the
fourth quarter of fiscal year 2022, as compared to $(443) million in the fourth quarter of fiscal
year 2021.
Guidance
The Company's guidance for the first quarter and full fiscal
year 2023 is as follows:
|
|
|
|
|
Key
Metrics
|
|
Q1 FY23
Guidance
|
|
FY23
Guidance
|
|
Lower
End
|
Higher
End
|
Prior
Year
Actuals
|
|
Lower
End
|
Higher
End
|
Prior
Year
Actuals
|
Organic
Revenue Growth %
|
|
(2.5)%
|
(1.5)%
|
(3.7)%
|
|
(2.0)%
|
(1.0)%
|
(2.6)%
|
Adjusted
EBIT Margin
|
|
7.5%
|
8.0%
|
8.0%
|
|
8.5%
|
9.0%
|
8.5%
|
Non-GAAP
Diluted EPS
|
|
$0.80
|
$0.85
|
$0.84
|
|
$3.85
|
$4.15
|
$3.50
|
Free Cash
Flow
|
|
|
$(304)
|
|
~$800
|
$743
|
Revenue
|
|
|
|
|
|
|
Revenue
$
|
|
$3,700
|
$3,750
|
$4,141
|
|
$14,900
|
$15,050
|
$16,265
|
Acquisition & Divestitures Revenues %
|
|
(2.0)%
|
(10.0)%
|
|
(1.9)%
|
(6.5)%
|
Foreign
Exchange Impact on Revenues %
|
|
(6.0)%
|
5.7%
|
|
(4.6)%
|
0.8%
|
Others
|
|
|
|
|
|
|
Pension
Income Benefit*
|
|
~$50
|
$74
|
|
~$200
|
$298
|
Net
Interest Expense
|
|
~$25
|
$42
|
|
~$100
|
$139
|
Non-GAAP
Tax Rate
|
|
~25%
|
23.4%
|
|
~25%
|
26.6%
|
Weighted
Average Diluted Shares Outstanding
|
|
235
|
238
|
260
|
|
223
|
228
|
255
|
Restructuring & TSI Expense
|
|
|
|
|
$300
|
$344
|
Capital
Lease / Asset Financing payments
|
|
|
|
|
~$500
|
$990
|
Foreign Exchange
Assumptions
|
|
|
|
|
|
|
$/Euro
exchange rate
|
|
$1.05
|
$1.21
|
|
$1.05
|
$1.16
|
$/GBP
exchange rate
|
|
$1.25
|
$1.40
|
|
$1.25
|
$1.37
|
$/AUD
exchange rate
|
|
$0.70
|
$0.77
|
|
$0.70
|
$0.74
|
*Pension benefit is split between Cost Of
Sales (COS) & Other Income:
Fiscal year 2023: $80 million service cost in COS, $280 million pension benefit in Other
income
Fiscal year 2022: $88 million service cost in COS, $386 million pension benefit in Other
income
The Company reaffirmed its longer-term guidance:
- Positive organic revenue growth of 1% to 3% for fiscal year
2024
- Adjusted EBIT margin of 10% to 11% in fiscal year 2024
- Non-GAAP diluted Earnings Per Share of $5.00 to $5.25 in
fiscal year 2024
- Free cash flow of approximately $1.5
billion in fiscal year 2024
- Restructuring and TSI of approximately $100 million in fiscal year 2024
DXC does not provide a reconciliation of Non-GAAP measures that
it discusses as part of its guidance because certain significant
information required for such reconciliation is not available
without unreasonable efforts or at all, including, most notably,
the impact of significant non-recurring items. Without this
information, DXC does not believe that a reconciliation would be
meaningful.
Ken Sharp, Chief Financial
Officer, commented: "In FY22, we made excellent progress in
building our financial foundation. We significantly lowered our
debt and related interest expense, substantially reduced
restructuring, transaction, separation and integration expenses,
and lowered capital expenditures, capital lease originations and
our facility footprint. These initiatives, and the ongoing strong
business execution of our DXC colleagues, allowed us to deliver a
$1.4 billion improvement in free cash
flow over FY21. We continue to execute on our capital
deployment program, repurchasing 18.8 million shares during the
year, and expect to complete our $1
billion repurchase commitment over the next three
quarters. We look forward to the opportunities presented by
FY23 and expect to continue our steady progress on the
transformation journey."
Earnings Conference Call and Webcast
DXC Technology senior management will host a conference call and
webcast to discuss these results on May 25,
2022, at 5:00 p.m. EDT. The
dial-in number for domestic callers is +1 (888) 330-2455. Callers
who reside outside of the United
States should dial +1 (240) 789-2717. The passcode for all
participants is 4164760. The webcast audio and any presentation
slides will be available on DXC Technology's Investor Relations
website.
A replay of the conference call will be available from
approximately two hours after the conclusion of the call until
June 1, 2022. Phone number for the
replay is +1 (800) 770-2030 or +1 (647) 362-9199. The replay
passcode is 4164760.
About DXC Technology
DXC Technology (NYSE: DXC) helps global companies run their
mission critical systems and operations while modernizing IT,
optimizing data architectures, and ensuring security and
scalability across public, private and hybrid clouds. The world's
largest companies and public sector organizations trust DXC to
deploy services across the Enterprise Technology Stack to drive new
levels of performance, competitiveness, and customer experience.
Learn more about how we deliver excellence for our customers and
colleagues at DXC.com.
Forward-Looking Statements
All statements in this press release that do not directly and
exclusively relate to historical facts constitute "forward-looking
statements." Forward-looking statements often include words such as
"anticipates," "believes," "estimates," "expects," "forecast,"
"goal," "intends," "objective," "plans," "projects," "strategy,"
"target," and "will" and words and terms of similar substance in
discussions of future operating or financial performance.
Forward-looking statements include, among other things, statements
with respect to our future financial condition, results of
operations, cash flows, business strategies, operating efficiencies
or synergies, divestitures, competitive position, growth
opportunities, share repurchases, dividend payments, plans and
objectives of management and other matters.
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. Furthermore, many of these risks and uncertainties are
currently amplified by and may continue to be amplified by or may,
in the future, be amplified by, the ongoing coronavirus disease
2019 ("COVID-19") pandemic and the impact of varying private and
governmental responses that affect our customers, employees,
vendors and the economies and communities where they operate.
Important factors that could cause actual results to differ
materially from those described in forward-looking statements
include, but are not limited to: the uncertainty of the magnitude,
duration, geographic reach of the COVID-19 crisis, its impact on
the global economy and the impact of current and potential travel
restrictions, stay-at-home orders, vaccine mandates and economic
restrictions implemented to address the crisis; our inability to
succeed in our strategic objectives; the risk of liability or
damage to our reputation resulting from security incidents,
including breaches, and cyber-attacks to our systems and networks
and those of our business partners, insider threats, disclosure of
sensitive data or failure to comply with data protection laws and
regulations in a rapidly evolving regulatory environment, in each
case, whether deliberate or accidental; our inability to develop
and expand our service offerings to address emerging business
demands and technological trends, including our inability to sell
differentiated services up the Enterprise Technology Stack; our
inability to compete in certain markets and expand our capacity in
certain offshore locations and risks associated with such offshore
locations such as Russia's recent
invasion of Ukraine and our exit
from the Russian market; failure to maintain our credit rating and
ability to manage working capital, refinance and raise additional
capital for future needs; our indebtedness; the competitive
pressures faced by our business; our inability to accurately
estimate the cost of services, and the completion timeline of
contracts; execution risks by us and our suppliers, customers, and
partners; the risks associated with natural disasters; our
inability to retain and hire key personnel and maintain
relationships with key partners; the risks associated with
prolonged periods of inflation; the risks associated with our
international operations, such as risks related to currency
exchange rates and Brexit; our inability to comply with
governmental regulations or the adoption of new laws or
regulations, including social and environmental responsibility
regulations, policies and provisions; our inability to achieve the
expected benefits of our restructuring plans; inadvertent
infringement of third-party intellectual property rights or our
inability to protect our own intellectual property assets; our
inability to procure third-party licenses required for the
operation of our products and service offerings; risks associated
with disruption of our supply chain; our inability to maintain
effective internal control over financial reporting; potential
losses due to asset impairment charges; our inability to pay
dividends or repurchase shares of our common stock; pending
investigations, claims and disputes and any adverse impact on our
profitability and liquidity; disruptions in the credit markets,
including disruptions that reduce our customers' access to credit
and increase the costs to our customers of obtaining credit; our
failure to bid on projects effectively; financial difficulties of
our customers and our inability to collect receivables; our
inability to maintain and grow our customer relationships over time
and to comply with customer contracts or government contracting
regulations or requirements; our inability to succeed in our
strategic transactions; changes in tax laws and any adverse impact
on our effective tax rate; risks following the merger of Computer
Sciences Corporation and Enterprise Services business of Hewlett
Packard Enterprise Company's businesses, including anticipated tax
treatment, unforeseen liabilities and future capital expenditures;
and risks following the spin-off of our former U.S. Public Sector
business and its related mergers with Vencore Holding Corp. and
KeyPoint Government Solutions in June
2018 to form Perspecta Inc., which was acquired by Peraton
in May 2021. For a written
description of these factors, see the section titled "Risk Factors"
in DXC's Annual Report on Form 10-K for the fiscal year ended
March 31, 2021, and any updating
information in subsequent SEC filings, including DXC's upcoming
Annual Report on Form 10-K for the quarterly period ended
March 31, 2022.
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 this press release or to reflect the occurrence
of unanticipated events except as required by law.
About Non-GAAP Measures
In an effort to provide investors with supplemental financial
information, in addition to the preliminary and unaudited financial
information presented on a GAAP basis, we have also disclosed in
this press release preliminary Non-GAAP information including:
earnings before interest and taxes ("EBIT"), EBIT margin, Adjusted
EBIT, Adjusted EBIT margin, Non-GAAP diluted EPS, organic revenues,
organic revenue growth, and free cash flow.
We believe EBIT, EBIT margin, Adjusted EBIT, Adjusted EBIT
margin, and Non-GAAP diluted EPS provide investors with useful
supplemental information about our operating performance after
excluding certain categories of expenses. Free cash flow represents
cash flow from operations, less capital expenditures.
One category of expenses excluded from Adjusted EBIT,
Adjusted EBIT margin, and Non-GAAP diluted EPS, incremental
amortization of intangible assets acquired through business
combinations, may result in a significant difference in period over
period amortization expense on a GAAP basis. We exclude
amortization of certain acquired intangible assets as these
non-cash amounts are inconsistent in amount and frequency and are
significantly impacted by the timing and/or size of acquisitions.
Although DXC management excludes amortization of acquired
intangible assets primarily customer-related intangible assets,
from its Non-GAAP expenses, we believe that it is important for
investors to understand that such intangible assets were recorded
as part of purchase accounting and support revenue generation. Any
future transactions may result in a change to the acquired
intangible asset balances and associated amortization
expense.
Another category of expenses excluded from Adjusted EBIT,
Adjusted EBIT margin, and Non-GAAP diluted EPS, impairment losses,
may result in a significant difference in period over period
expense on a GAAP basis. We exclude impairment losses as these
non-cash amounts, reflect generally an acceleration of what would
be multiple periods of expense and do not expect to occur
frequently. Further assets such as goodwill may be significantly
impacted by market conditions outside of management's
control.
We believe organic revenue growth provides investors with
useful supplemental information about our revenues after excluding
the effect of currency exchange rate fluctuations for currencies
other than U.S. dollars and the effects of acquisitions and
divestitures in the periods presented. See below for a description
of the methodology we use to present organic revenues.
Selected references are made to revenue growth on an "organic
basis" so that certain financial results can be viewed without the
impact of fluctuations in foreign currency rates and without the
impacts of acquisitions and divestitures from "organic basis"
financial results, thereby providing comparisons of operating
performance from period to period of the business that we have
owned during all periods presented. Organic revenue growth is
calculated by dividing the year-over-year change in GAAP revenues
attributed to organic growth by the GAAP revenues reported in the
prior comparable period. This approach is used for all results
where the functional currency is not the U.S. dollar.
There are limitations to the use of the Non-GAAP financial
measures presented in this press release. One of the limitations is
that they do not reflect complete financial results. We compensate
for this limitation by providing a reconciliation between our
Non-GAAP financial measures and the respective most directly
comparable financial measure calculated and presented in accordance
with GAAP. Additionally, other companies, including companies in
our industry, may calculate Non-GAAP financial measures differently
than we do, limiting the usefulness of those measures for
comparative purposes between companies.
Condensed Consolidated Statements of
Operations
(preliminary and unaudited)
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(in millions, except
per-share
amounts)
|
|
March 31,
2022
|
|
March 31,
2021
|
|
March 31,
2022
|
|
March 31,
2021
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
4,008
|
|
$
4,385
|
|
$
16,265
|
|
$
17,729
|
|
|
|
|
|
|
|
|
|
Costs of
services
|
|
3,161
|
|
3,561
|
|
12,683
|
|
14,086
|
Selling, general and
administrative
|
|
315
|
|
471
|
|
1,408
|
|
2,066
|
Depreciation and
amortization
|
|
423
|
|
478
|
|
1,717
|
|
1,970
|
Restructuring
costs
|
|
70
|
|
110
|
|
318
|
|
551
|
Interest
expense
|
|
43
|
|
77
|
|
204
|
|
361
|
Interest
income
|
|
(14)
|
|
(22)
|
|
(65)
|
|
(98)
|
Debt extinguishment
costs
|
|
—
|
|
41
|
|
311
|
|
41
|
Loss (gain) on
disposition of
businesses
|
|
2
|
|
42
|
|
(371)
|
|
(2,004)
|
Other (income) expense,
net
|
|
(791)
|
|
420
|
|
(1,081)
|
|
102
|
Total costs and
expenses
|
|
3,209
|
|
5,178
|
|
15,124
|
|
17,075
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
799
|
|
(793)
|
|
1,141
|
|
654
|
Income tax
expense
|
|
260
|
|
11
|
|
405
|
|
800
|
Net income
(loss)
|
|
539
|
|
(804)
|
|
736
|
|
(146)
|
Less: net income (loss)
attributable to
non-controlling interest, net of tax
|
|
9
|
|
(6)
|
|
18
|
|
3
|
Net income (loss)
attributable to DXC
common stockholders
|
|
$
530
|
|
$
(798)
|
|
$
718
|
|
$
(149)
|
|
|
|
|
|
|
|
|
|
Income (loss) per
common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
2.18
|
|
$
(3.14)
|
|
$
2.87
|
|
$
(0.59)
|
Diluted
|
|
$
2.14
|
|
$
(3.14)
|
|
$
2.81
|
|
$
(0.59)
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares
outstanding for:
|
|
|
|
|
|
|
|
|
Basic
EPS
|
|
242.65
|
|
254.49
|
|
250.02
|
|
254.14
|
Diluted
EPS
|
|
247.69
|
|
254.49
|
|
255.21
|
|
254.14
|
Selected Consolidated Balance Sheet Data
(preliminary
and unaudited)
|
|
As of
|
(in
millions)
|
|
March 31,
2022
|
|
March 31,
2021
|
Assets
|
|
|
|
|
Cash and
cash equivalents
|
|
$
2,672
|
|
$
2,968
|
Receivables, net
|
|
3,854
|
|
4,156
|
Prepaid
expenses
|
|
617
|
|
567
|
Other
current assets
|
|
268
|
|
357
|
Assets
held for sale
|
|
35
|
|
160
|
Total current assets
|
|
7,446
|
|
8,208
|
|
|
|
|
|
Intangible
assets, net
|
|
3,378
|
|
4,043
|
Operating
right-of-use assets, net
|
|
1,133
|
|
1,366
|
Goodwill
|
|
617
|
|
641
|
Deferred
income taxes, net
|
|
221
|
|
289
|
Property
and equipment, net
|
|
2,412
|
|
2,946
|
Other
assets
|
|
4,850
|
|
4,192
|
Assets
held for sale - non-current
|
|
82
|
|
353
|
Total Assets
|
|
$
20,139
|
|
$
22,038
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Short-term
debt and current maturities of long-term debt
|
|
$
900
|
|
$
1,167
|
Accounts
payable
|
|
840
|
|
914
|
Accrued
payroll and related costs
|
|
570
|
|
698
|
Current
operating lease liabilities
|
|
388
|
|
418
|
Accrued
expenses and other current liabilities
|
|
2,882
|
|
3,358
|
Deferred
revenue and advance contract payments
|
|
1,053
|
|
1,079
|
Income
taxes payable
|
|
197
|
|
398
|
Liabilities related to assets held for sale
|
|
23
|
|
118
|
Total current liabilities
|
|
6,853
|
|
8,150
|
|
|
|
|
|
Long-term
debt, net of current maturities
|
|
4,065
|
|
4,345
|
Non-current deferred revenue
|
|
862
|
|
622
|
Non-current operating lease liabilities
|
|
815
|
|
1,038
|
Non-current pension obligations
|
|
590
|
|
793
|
Non-current income tax liabilities and deferred tax
liabilities
|
|
994
|
|
854
|
Other
long-term liabilities
|
|
546
|
|
908
|
Liabilities related to assets held for sale -
non-current
|
|
39
|
|
20
|
Total
Liabilities
|
|
14,764
|
|
16,730
|
|
|
|
|
|
Total Equity
|
|
5,375
|
|
5,308
|
|
|
|
|
|
Total Liabilities and
Equity
|
|
$
20,139
|
|
$
22,038
|
Condensed Consolidated Statements of Cash
Flows
(preliminary and unaudited)
|
|
Twelve Months
Ended
|
(in
millions)
|
|
March 31,
2022
|
|
March 31,
2021
|
Cash flows from
operating activities:
|
|
|
|
|
Net
income (loss)
|
|
$
736
|
|
$
(146)
|
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
1,742
|
|
1,988
|
Operating right-of-use expense
|
|
484
|
|
616
|
Pension & other post-employment benefits, actuarial &
settlement (gains) losses
|
|
(684)
|
|
519
|
Share-based compensation
|
|
101
|
|
56
|
Deferred taxes
|
|
255
|
|
(403)
|
Gain on dispositions
|
|
(421)
|
|
(1,983)
|
Provision for losses on accounts receivable
|
|
5
|
|
53
|
Unrealized foreign currency exchange gains
|
|
(12)
|
|
(36)
|
Impairment losses and contract write-offs
|
|
51
|
|
275
|
Debt extinguishment costs
|
|
311
|
|
41
|
Amortization of debt issuance costs and discount
|
|
—
|
|
3
|
Cash surrender value in excess of premiums paid
|
|
(24)
|
|
(3)
|
Other non-cash charges, net
|
|
15
|
|
1
|
Changes in
assets and liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
|
Decrease in receivables
|
|
228
|
|
257
|
Increase in prepaid expenses and other current
assets
|
|
(48)
|
|
(299)
|
Decrease in accounts payable and accruals
|
|
(714)
|
|
(527)
|
(Decrease) increase in income taxes payable and income tax
liability
|
|
(315)
|
|
434
|
Decrease in operating
lease liability
|
|
(484)
|
|
(616)
|
Increase (decrease) in
advance contract payments and deferred revenue
|
|
270
|
|
(66)
|
Other operating
activities, net
|
|
5
|
|
(40)
|
Net cash provided by
operating activities
|
|
1,501
|
|
124
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchases
of property and equipment
|
|
(254)
|
|
(261)
|
Payments
for transition and transformation contract costs
|
|
(209)
|
|
(261)
|
Software
purchased and developed
|
|
(295)
|
|
(254)
|
Proceeds
for acquisitions, net of cash acquired
|
|
—
|
|
184
|
Business
dispositions
|
|
533
|
|
4,947
|
Cash
collections related to deferred purchase price
receivable
|
|
—
|
|
159
|
Proceeds
from sale of assets
|
|
100
|
|
164
|
Proceeds
from short-term investing
|
|
24
|
|
—
|
Other
investing activities, net
|
|
41
|
|
(13)
|
Net cash (used in)
provided by investing activities
|
|
(60)
|
|
4,665
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Borrowings
of commercial paper
|
|
1,068
|
|
1,486
|
Repayments
of commercial paper
|
|
(905)
|
|
(1,852)
|
Borrowings
under lines of credit
|
|
—
|
|
2,500
|
Repayment
of borrowings under lines of credit
|
|
—
|
|
(4,000)
|
Borrowings
on long-term debt
|
|
19
|
|
—
|
Principal
payments on long-term debt
|
|
(2,872)
|
|
(3,552)
|
Payments
on finance leases and borrowings for asset financing
|
|
(990)
|
|
(930)
|
Proceeds
from bond issuance
|
|
2,918
|
|
993
|
Proceeds
from stock options and other common stock transactions
|
|
13
|
|
1
|
Taxes paid
related to net share settlements of share-based compensation
awards
|
|
(18)
|
|
(7)
|
Repurchase
of common stock and advance payment for accelerated share
repurchase
|
|
(628)
|
|
—
|
Dividend
payments
|
|
—
|
|
(53)
|
Payments
for debt extinguishment costs
|
|
(344)
|
|
(41)
|
Other financing
activities, net
|
|
(79)
|
|
(21)
|
Net cash used in
financing activities
|
|
(1,818)
|
|
(5,476)
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
29
|
|
39
|
Net decrease in cash
and cash equivalents including cash classified within current
assets held for sale
|
|
(348)
|
|
(648)
|
Cash classified within
current assets held for sale
|
|
52
|
|
(63)
|
Net decrease in cash
and cash equivalents
|
|
(296)
|
|
(711)
|
Cash and cash
equivalents at beginning of year
|
|
2,968
|
|
3,679
|
Cash and cash
equivalents at end of year
|
|
$
2,672
|
|
$
2,968
|
Segment Profit
We define segment profit as segment revenues less costs of
services, segment selling, general and administrative, depreciation
and amortization, and other income (excluding the movement in
foreign currency exchange rates on our foreign currency denominated
assets and liabilities and the related economic hedges). 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 other post-retirement benefits ("OPEB")
actuarial and settlement gains and losses, restructuring costs,
transaction, separation and integration-related costs, and
amortization of acquired intangible assets.
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
(in
millions)
|
|
March 31,
2022
|
|
March 31,
2021
|
|
March 31,
2022
|
|
March 31,
2021
|
GBS profit
|
|
$
275
|
|
$
315
|
|
$
1,160
|
|
$
1,120
|
GIS profit
|
|
124
|
|
98
|
|
475
|
|
245
|
All other
loss
|
|
(57)
|
|
(84)
|
|
(260)
|
|
(263)
|
Subtotal
|
|
$
342
|
|
$
329
|
|
$
1,375
|
|
$
1,102
|
Interest
income
|
|
14
|
|
22
|
|
65
|
|
98
|
Interest
expense
|
|
(43)
|
|
(77)
|
|
(204)
|
|
(361)
|
Restructuring
costs
|
|
(70)
|
|
(110)
|
|
(318)
|
|
(551)
|
Transaction, separation
and integration-related costs
|
|
(3)
|
|
(51)
|
|
(26)
|
|
(358)
|
Amortization of
acquired intangibles
|
|
(109)
|
|
(116)
|
|
(434)
|
|
(530)
|
(Losses) gains on
dispositions
|
|
(2)
|
|
(42)
|
|
341
|
|
2,004
|
Pension and OPEB
actuarial and settlement gains (losses)
|
|
691
|
|
(517)
|
|
684
|
|
(519)
|
Debt extinguishment
cost
|
|
—
|
|
(41)
|
|
(311)
|
|
(41)
|
Impairment
losses
|
|
(21)
|
|
(190)
|
|
(31)
|
|
(190)
|
Income (loss) before
income taxes
|
|
$
799
|
|
$
(793)
|
|
$
1,141
|
|
$
654
|
|
|
|
|
|
|
|
|
|
Segment profit
margins
|
|
|
|
|
|
|
|
|
GBS
|
|
14.5 %
|
|
15.8 %
|
|
15.3 %
|
|
13.4 %
|
GIS
|
|
5.9 %
|
|
4.1 %
|
|
5.5 %
|
|
2.6 %
|
Reconciliation of Non-GAAP Financial Measures
Our Non-GAAP adjustments include:
- Restructuring costs – includes costs, net of reversals, related
to workforce and real estate optimization and other similar
charges.
- Transaction, separation and integration-related ("TSI") costs –
includes costs related to integration, planning, financing and
advisory fees and other similar charges associated with mergers,
acquisitions, strategic investments, joint ventures, and
dispositions and other similar transactions.(1)
- Amortization of acquired intangible assets – includes
amortization of intangible assets acquired through business
combinations.
- Gains and losses on dispositions – gains and losses related to
dispositions of businesses, strategic assets and interests in less
than wholly-owned entities.(2)
- Impairment losses – impairment losses on assets classified as
long-term on the balance sheet.(3)
- Debt extinguishment costs – costs associated with early
retirement, redemption, repayment or repurchase of debt and
debt-like items including any breakage, make-whole premium,
prepayment penalty or similar costs as well as solicitation and
other legal and advisory expenses.(4)
- Pension and OPEB actuarial and settlement gains and losses –
pension and OPEB actuarial mark to market adjustments and
settlement gains and losses.
- Tax adjustments – reflects discrete tax adjustments to impair
or recognize certain deferred tax assets and adjustments for
changes in tax legislation. Income tax expense of merger and
divestitures is separately computed based on the underlying
transaction. Income tax expense of all other (non-discrete)
non-GAAP adjustments is computed by applying the jurisdictional tax
rate to the pre-tax adjustments on a jurisdictional
basis.(5)
- TSI-Related Costs for all periods presented include fees and
other internal and external expenses associated with legal,
accounting, consulting, due diligence, investment banking advisory,
and other services, as well as financing fees, retention
incentives, and resolution of transaction related claims in
connection with, or resulting from, exploring or executing
potential acquisitions, dispositions and strategic investments,
whether or not announced or consummated.
The TSI-Related Costs for the fourth quarter of fiscal
2022 include $1 million of costs to
execute HHS and HPS dispositions and $2
million of costs incurred in connection with activities
related to other acquisitions and divestitures.
The TSI-Related costs for fiscal 2022 include
$14 million of costs to execute
dispositions (including $2 million
for the sale of HHS which closed in October
2020 and $12 million for the
sale of HPS which closed on April 1,
2021); $2 million legal costs
and a ($12 million) credit towards
Perspecta Arbitration settlement; $5
million in expenses related to integration projects
resulting from the CSC – HPE ES merger (including costs associated
with continuing efforts to separate certain IT systems) and
$17 million of costs incurred in
connection with activities related to other acquisitions and
divestitures.
The TSI-Related Costs for the fourth quarter of fiscal
2021 include $25 million of costs to
execute dispositions (including $2
million for the sale of HHS which closed in October 2020 and $24
million for the sale of HPS which closed on April 1, 2021); $17
million in expenses related to integration projects
resulting from the CSC – HPE ES merger (including costs associated
with continuing efforts to separate certain IT systems) and
$9 million of costs incurred in
connection with activities related to other acquisitions and
divestitures.
The TSI-Related costs for fiscal 2021 include
$250 million of costs to execute
dispositions (including $142 million
for the sale of HHS which closed in October
2020 and $61 million for the
sale of HPS which closed on April 1,
2021); $42 million in expenses
related to integration projects resulting from the CSC – HPES
merger (including costs associated with continuing efforts to
separate certain IT systems) and $66
million of costs incurred in connection with activities
related to other acquisitions and divestitures.
- Gains and losses on dispositions for the fourth quarter
fiscal 2022 includes $(6) million of
adjustments relating to the sale of the HPS business and a
$4 million gain on insignificant
businesses.
Gains and losses on dispositions for fiscal 2022 include
a $331 million gain on sale of the
HPS business, gains of $23 million on
other dispositions and loss of $13
million on adjustments relating to the sale of the HHS
business.
Gains and losses on dispositions for the fourth quarter
fiscal 2021 includes $27 million of
adjustments relating to the sale of the HHS business and a
$15 million loss on equity securities
without readily determinable fair value, which were adjusted to
fair value following receipt of a bona fide offer to purchase.
Gains and losses on dispositions for fiscal 2021
includes a $2,014 million gain on
sale of the HHS business, a gain of $5
million on sales of other insignificant businesses, and a
$15 million loss on equity securities
without readily determinable fair value, which were adjusted to
fair value following receipt of a bona fide offer to purchase.
- Impairment losses for the fourth quarter of fiscal 2022 of
$21 million relate to the impairment
of loan receivable and stock warrants associated with a strategic
investment.
Impairment losses for fiscal 2022 includes a
$10 million impairment charge of
capitalized TSI related property and equipment and a $21 million impairment charge of loan receivable
and stock warrants associated with a strategic investment.
Impairment losses for the fourth quarter of fiscal 20221
and for fiscal 2021 were $190
million. This includes $165
million impairment for assets pre-purchased through
preferred vendor agreements and determined un-deployable,
$12 million partial impairment of
acquired software, $7 million partial
impairment of internally developed software intended for internal
use and external sale, and $6 million
of capitalized transition and transformation contract costs.
- Debt extinguishment costs adjustments for fiscal 2022
includes $18 million to fully redeem
two series of our 4.45% senior notes due fiscal 2023, $7 million associated with asset financing,
$1 million to fully redeem our
Euro-denominated term loan facility, $41
million to fully redeem our 4.25% senior notes due fiscal
2025, $26 million to fully redeem our
2.75% senior notes due fiscal 2025, $58
million to fully redeem our 4.125% senior notes due fiscal
2026, $87 million to fully redeem our
4.750% senior notes due fiscal 2028, $71
million to fully redeem our 7.45% senior notes due fiscal
2030, and $2 million related to the
decrease in our revolving credit facility limit.
Debt extinguishment costs adjustments for the fourth
quarter of fiscal 2021 and for fiscal 2021 includes $34 million to fully redeem our 4.00% senior
notes due fiscal 2024 and $7 million
to partially redeem two series of our 4.45% senior notes due fiscal
2023 via tender offer.
- Tax adjustment for the fourth quarter of fiscal 2022
includes $32 million for the net
revaluation of deferred taxes resulting from changes in non-US
jurisdiction tax rates, and $(7)
million of adjustment to the transition tax.
Tax adjustment for fiscal 2022 includes $50 million for the net revaluation of deferred
taxes resulting from changes in non-US jurisdiction tax rates, and
$(7) million of adjustment to the
transition tax.
Tax adjustment for fiscal 2021 includes $175 million for the impairment of the German
deferred tax asset via a valuation allowance, $9 million for tax expense relating to the U.S.
Public Sector business ("USPS") spin-off, offset by $35 million tax benefit related to the held for
sale classification of the Healthcare Provider Software business,
and $7 million tax benefit related to
prior restructuring charges. The German tax asset was created from
multiple periods of losses in Germany that, if not for certain non-GAAP
adjustments of restructurings, pension mark to market loss, and
impairments, would not have required the asset to be impaired and a
valuation allowance established.
Non-GAAP Results
A reconciliation of reported results to Non-GAAP results is as
follows:
|
|
Three Months Ended
March 31, 2022
|
(in millions, except
per-share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation and
Integration-
Related Costs
|
|
Amortization of Acquired Intangible Assets
|
|
Gains
and Losses
on Dispositions
|
|
Pension
and OPEB
Actuarial and
Settlement Gains
and Losses
|
|
Impairment Losses
|
|
Tax Adjustment
|
|
Non-GAAP Results
|
Income before income
taxes
|
|
$
799
|
|
$
70
|
|
$
3
|
|
$
109
|
|
$
2
|
|
$
(691)
|
|
$
21
|
|
$
—
|
|
$
313
|
Income tax
expense
|
|
260
|
|
17
|
|
1
|
|
27
|
|
(13)
|
|
(172)
|
|
5
|
|
(25)
|
|
100
|
Net income
|
|
539
|
|
53
|
|
2
|
|
82
|
|
15
|
|
(519)
|
|
16
|
|
25
|
|
213
|
Less: net income
attributable to non-controlling interest, net of tax
|
|
9
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5)
|
|
—
|
|
—
|
|
4
|
Net income attributable
to DXC common stockholders
|
|
$
530
|
|
$
53
|
|
$
2
|
|
$
82
|
|
$
15
|
|
$
(514)
|
|
$
16
|
|
$
25
|
|
$
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
|
32.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$ 2.18
|
|
$
0.22
|
|
$
0.01
|
|
$
0.34
|
|
$
0.06
|
|
$
(2.12)
|
|
$
0.07
|
|
$
0.10
|
|
$
0.86
|
Diluted EPS
|
|
$ 2.14
|
|
$
0.21
|
|
$
0.01
|
|
$
0.33
|
|
$
0.06
|
|
$
(2.08)
|
|
$
0.06
|
|
$
0.10
|
|
$
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
|
242.65
|
Diluted EPS
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
247.69
|
|
|
Twelve Months Ended
March 31, 2022
|
(in millions, except
per-share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation and Integration-
Related Costs
|
|
Amortization of Acquired Intangible Assets
|
|
Impairment Losses
|
|
Gains
and Losses
on Dispositions
|
|
Pension
and OPEB
Actuarial and
Settlement Gains
and Losses
|
|
Debt Extinguishment Costs
|
|
Tax Adjustment
|
|
Non-GAAP Results
|
Income before
income
taxes
|
|
$ 1,141
|
|
$
318
|
|
$
26
|
|
$
434
|
|
$
31
|
|
$
(341)
|
|
$
(684)
|
|
$
311
|
|
$
—
|
|
$
1,236
|
Income tax
expense
|
|
405
|
|
65
|
|
7
|
|
90
|
|
7
|
|
(104)
|
|
(171)
|
|
73
|
|
(43)
|
|
329
|
Net income
|
|
736
|
|
253
|
|
19
|
|
344
|
|
24
|
|
(237)
|
|
(513)
|
|
238
|
|
43
|
|
907
|
Less: net loss
attributable to non-controlling interest, net of tax
|
|
18
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5)
|
|
—
|
|
—
|
|
13
|
Net income attributable
to DXC common stockholders
|
|
$
718
|
|
$
253
|
|
$
19
|
|
$
344
|
|
$
24
|
|
$
(237)
|
|
$
(508)
|
|
$
238
|
|
$
43
|
|
$
894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
|
35.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$ 2.87
|
|
$
1.01
|
|
$
0.08
|
|
$
1.38
|
|
$
0.10
|
|
$
(0.95)
|
|
$
(2.03)
|
|
$
0.95
|
|
$
0.17
|
|
$
3.58
|
Diluted EPS
|
|
$ 2.81
|
|
$
0.99
|
|
$
0.07
|
|
$
1.35
|
|
$
0.09
|
|
$
(0.93)
|
|
$
(1.99)
|
|
$
0.93
|
|
$
0.17
|
|
$
3.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
|
250.02
|
Diluted EPS
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
255.21
|
|
|
Three Months Ended
March 31, 2021
|
(in millions, except
per-
share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation
and Integration- Related Costs
|
|
Amortization of Acquired Intangible
Assets
|
|
Impairment Losses
|
|
Gains
and Losses
on Dispositions
|
|
Pension
and OPEB
Actuarial and
Settlement Gains
and Losses
|
|
Debt Extinguishment Costs
|
|
Tax Adjustment
|
|
Non-GAAP Results
|
(Loss) income
before
income taxes
|
|
$ (793)
|
|
$
110
|
|
$
51
|
|
$
116
|
|
$
190
|
|
$
42
|
|
$
517
|
|
$
41
|
|
$
—
|
|
$
274
|
Income tax
expense
|
|
11
|
|
17
|
|
17
|
|
26
|
|
49
|
|
(17)
|
|
115
|
|
10
|
|
(140)
|
|
88
|
Net (loss)
income
|
|
(804)
|
|
93
|
|
34
|
|
90
|
|
141
|
|
59
|
|
402
|
|
31
|
|
140
|
|
186
|
Less: net loss
attributable to
non-controlling interest, net
of tax
|
|
(6)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(6)
|
Net (loss) income
attributable to DXC common
stockholders
|
|
$ (798)
|
|
$
93
|
|
$
34
|
|
$
90
|
|
$
141
|
|
$
59
|
|
$
402
|
|
$
31
|
|
$
140
|
|
$
192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
|
(1.4) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
(3.14)
|
|
$
0.37
|
|
$
0.13
|
|
$
0.35
|
|
$
0.55
|
|
$
0.23
|
|
$
1.58
|
|
$
0.12
|
|
$
0.55
|
|
$
0.75
|
Diluted EPS
|
|
$
(3.14)
|
|
$
0.36
|
|
$
0.13
|
|
$
0.35
|
|
$
0.55
|
|
$
0.23
|
|
$
1.56
|
|
$
0.12
|
|
$
0.54
|
|
$
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
|
254.49
|
Diluted EPS
|
|
254.49
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
258.42
|
|
|
Twelve Months
Ended March 31, 2021
|
(in millions, except
per-
share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation
and Integration- Related Costs
|
|
Amortization of Acquired Intangible
Assets
|
|
Impairment Losses
|
|
Gains
and Losses
on Dispositions
|
|
Pension
and OPEB
Actuarial and
Settlement Gains
and Losses
|
|
Debt Extinguishment Costs
|
|
Tax Adjustment
|
|
Non-GAAP Results
|
Income before
income
taxes
|
|
$ 654
|
|
$
551
|
|
$
358
|
|
$
530
|
|
$
190
|
|
$
(2,004)
|
|
$
519
|
|
$
41
|
|
$
—
|
|
$
839
|
Income tax
expense
|
|
800
|
|
92
|
|
87
|
|
121
|
|
49
|
|
(920)
|
|
115
|
|
10
|
|
(142)
|
|
212
|
Net (loss)
income
|
|
(146)
|
|
459
|
|
271
|
|
409
|
|
141
|
|
(1,084)
|
|
404
|
|
31
|
|
142
|
|
627
|
Less: net income
attributable to non-controlling interest, net of tax
|
|
3
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
3
|
Net (loss) income
attributable to DXC common
stockholders
|
|
$ (149)
|
|
$
459
|
|
$
271
|
|
$
409
|
|
$
141
|
|
$
(1,084)
|
|
$
404
|
|
$
31
|
|
$
142
|
|
$
624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
|
122.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
$
(0.59)
|
|
$
1.81
|
|
$
1.07
|
|
$
1.61
|
|
$
0.55
|
|
$
(4.27)
|
|
$
1.59
|
|
$
0.12
|
|
$
0.56
|
|
$
2.46
|
Diluted EPS
|
|
$
(0.59)
|
|
$
1.79
|
|
$
1.06
|
|
$
1.59
|
|
$
0.55
|
|
$
(4.22)
|
|
$
1.57
|
|
$
0.12
|
|
$
0.55
|
|
$
2.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
|
254.14
|
Diluted EPS
|
|
254.14
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
|
256.86
|
The above tables serve to reconcile the Non-GAAP financial
measures to the most directly comparable GAAP measures. Please
refer to the "About Non-GAAP Measures" section of the press release
for further information on the use of these Non-GAAP measures.
Year-over-Year Organic Revenue Growth
|
|
Fiscal Year
2022
|
|
|
Q1
FY22
|
|
Q2
FY22
|
|
Q3
FY22
|
|
Q4
FY22
|
|
FY22
|
Total revenue
growth
|
|
(8.0)%
|
|
(11.6)%
|
|
(4.6)%
|
|
(8.6)%
|
|
(8.3)%
|
Foreign
currency
|
|
(5.7)%
|
|
(1.4)%
|
|
1.0%
|
|
3.0%
|
|
(0.8)%
|
Acquisitions and divestitures
|
|
10.0%
|
|
10.6%
|
|
2.2%
|
|
2.8%
|
|
6.5%
|
Organic revenue
growth
|
|
(3.7)%
|
|
(2.4)%
|
|
(1.4)%
|
|
(2.8)%
|
|
(2.6)%
|
|
|
|
|
|
|
|
|
|
|
|
GIS revenue
growth
|
|
(3.2)%
|
|
(6.8)%
|
|
(9.5)%
|
|
(11.3)%
|
|
(7.7)%
|
Foreign
currency
|
|
(6.6)%
|
|
(1.9)%
|
|
0.9%
|
|
2.9%
|
|
(1.2)%
|
Acquisitions and divestitures
|
|
0.7%
|
|
0.7%
|
|
0.3%
|
|
0.4%
|
|
0.5%
|
GIS organic revenue
growth
|
|
(9.1)%
|
|
(8.0)%
|
|
(8.3)%
|
|
(8.0)%
|
|
(8.4)%
|
|
|
|
|
|
|
|
|
|
|
|
GBS revenue
growth
|
|
(13.2)%
|
|
(16.5)%
|
|
1.3%
|
|
(5.4)%
|
|
(8.9)%
|
Foreign
currency
|
|
(4.7)%
|
|
(0.9)%
|
|
1.3%
|
|
3.2%
|
|
(0.4)%
|
Acquisitions and divestitures
|
|
19.9%
|
|
20.8%
|
|
4.4%
|
|
5.6%
|
|
13.2%
|
GBS organic revenue
growth
|
|
2.0
%
|
|
3.4
%
|
|
7.0
%
|
|
3.4
%
|
|
3.9
%
|
|
|
Fiscal Year
2021
|
|
|
Q1
FY21
|
|
Q2
FY21
|
|
Q3
FY21
|
|
Q4
FY21
|
|
FY21
|
Total revenue
growth
|
|
(7.9)%
|
|
(6.1)%
|
|
(14.6)%
|
|
(8.9)%
|
|
(9.4)%
|
Foreign
currency
|
|
2.1%
|
|
(1.6)%
|
|
(2.3)%
|
|
(4.6)%
|
|
(1.6)%
|
Acquisitions and divestitures
|
|
(4.3)%
|
|
(1.4)%
|
|
7.2%
|
|
7.0%
|
|
2.2%
|
Organic revenue
growth
|
|
(10.1)%
|
|
(9.1)%
|
|
(9.7)%
|
|
(6.5)%
|
|
(8.8)%
|
|
|
|
|
|
|
|
|
|
|
|
GIS revenue
growth
|
|
(14.8)%
|
|
(9.9)%
|
|
(11.1)%
|
|
(4.8)%
|
|
(10.3)%
|
Foreign
currency
|
|
2.4%
|
|
(1.7)%
|
|
(2.4)%
|
|
(5.0)%
|
|
(1.6)%
|
Acquisitions and divestitures
|
|
(0.2)%
|
|
(0.2)%
|
|
0.5%
|
|
0.5%
|
|
0.1%
|
GIS organic revenue
growth
|
|
(12.6)%
|
|
(11.8)%
|
|
(13.0)%
|
|
(9.3)%
|
|
(11.8)%
|
|
|
|
|
|
|
|
|
|
|
|
GBS revenue
growth
|
|
0.7%
|
|
(1.9)%
|
|
(18.6)%
|
|
(13.4)%
|
|
(8.5)%
|
Foreign
currency
|
|
1.8%
|
|
(1.5)%
|
|
(2.2)%
|
|
(4.2)%
|
|
(1.6)%
|
Acquisitions and divestitures
|
|
(9.4)%
|
|
(2.6)%
|
|
14.9%
|
|
14.2%
|
|
4.5%
|
GBS organic revenue
growth
|
|
(6.9)%
|
|
(6.0)%
|
|
(5.9)%
|
|
(3.4)%
|
|
(5.6)%
|
EBIT and Adjusted EBIT
|
|
Fiscal Year
2022
|
(in
millions)
|
|
Q1
FY22
|
|
Q2
FY22
|
|
Q3
FY22
|
|
Q4
FY22
|
|
FY22
|
Net income
(loss)
|
|
$
282
|
|
$
(187)
|
|
$
102
|
|
$
539
|
|
$
736
|
Income tax expense
(benefit)
|
|
142
|
|
(61)
|
|
64
|
|
260
|
|
405
|
Interest
income
|
|
(20)
|
|
(16)
|
|
(15)
|
|
(14)
|
|
(65)
|
Interest
expense
|
|
62
|
|
61
|
|
38
|
|
43
|
|
204
|
EBIT
|
|
466
|
|
(203)
|
|
189
|
|
828
|
|
1,280
|
Restructuring
costs
|
|
67
|
|
145
|
|
36
|
|
70
|
|
318
|
Transaction,
separation, and integration-related costs
|
|
9
|
|
3
|
|
11
|
|
3
|
|
26
|
Amortization of
acquired intangible assets
|
|
109
|
|
110
|
|
106
|
|
109
|
|
434
|
Gains and losses on
disposition of businesses
|
|
(347)
|
|
—
|
|
4
|
|
2
|
|
(341)
|
Debt extinguishment
costs
|
|
28
|
|
281
|
|
2
|
|
—
|
|
311
|
Pension and OPEB
actuarial and settlement
gains and losses
|
|
—
|
|
—
|
|
7
|
|
(691)
|
|
(684)
|
Impairment
losses
|
|
—
|
|
10
|
|
—
|
|
21
|
|
31
|
Adjusted
EBIT
|
|
$
332
|
|
$
346
|
|
$
355
|
|
$
342
|
|
$
1,375
|
|
|
|
|
|
|
|
|
|
|
|
EBIT margin
|
|
11.3 %
|
|
(5.0) %
|
|
4.6 %
|
|
20.7 %
|
|
7.9 %
|
Adjusted EBIT
margin
|
|
8.0 %
|
|
8.6 %
|
|
8.7 %
|
|
8.5 %
|
|
8.5 %
|
|
|
Fiscal Year
2021
|
(in
millions)
|
|
Q1
FY21
|
|
Q2
FY21
|
|
Q3
FY21
|
|
Q4
FY21
|
|
FY21
|
Net (loss)
income
|
|
$
(199)
|
|
$
(246)
|
|
$
1,103
|
|
$
(804)
|
|
$
(146)
|
Income tax (benefit)
expense
|
|
(26)
|
|
(60)
|
|
875
|
|
11
|
|
800
|
Interest
income
|
|
(23)
|
|
(25)
|
|
(28)
|
|
(22)
|
|
(98)
|
Interest
expense
|
|
106
|
|
96
|
|
82
|
|
77
|
|
361
|
EBIT
|
|
(142)
|
|
(235)
|
|
2,032
|
|
(738)
|
|
917
|
Restructuring
costs
|
|
72
|
|
265
|
|
104
|
|
110
|
|
551
|
Transaction,
separation, and integration-related
costs
|
|
110
|
|
101
|
|
96
|
|
51
|
|
358
|
Amortization of
acquired intangible assets
|
|
148
|
|
152
|
|
114
|
|
116
|
|
530
|
Gains and losses on
disposition of businesses
|
|
—
|
|
—
|
|
(2,046)
|
|
42
|
|
(2,004)
|
Pension and OPEB
actuarial and settlement
losses
|
|
2
|
|
—
|
|
—
|
|
517
|
|
519
|
Impairment
losses
|
|
—
|
|
—
|
|
—
|
|
190
|
|
190
|
Debt extinguishment
costs
|
|
—
|
|
—
|
|
—
|
|
41
|
|
41
|
Adjusted
EBIT
|
|
$
190
|
|
$
283
|
|
$
300
|
|
$
329
|
|
$
1,102
|
|
|
|
|
|
|
|
|
|
|
|
EBIT margin
|
|
(3.2) %
|
|
(5.2) %
|
|
47.4 %
|
|
(16.8) %
|
|
5.2 %
|
Adjusted EBIT
margin
|
|
4.2 %
|
|
6.2 %
|
|
7.0 %
|
|
7.5 %
|
|
6.2 %
|
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SOURCE DXC Technology Company