Slide 1: 1st Quarter FY 2018 Earnings Presentation
1st Quarter FY 2018 Earnings Presentation August 8, 2017
Slide 2: Pro forma combined company financial information
Pro forma combined company financial information In an effort to provide investors with additional information, we are disclosing certain unaudited pro forma combined company financial information of DXC for the first quarter of fiscal 2017 (“pro forma combined company” information) as supplemental
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures We present non-GAAP financial measures of performance which are derived from the unaudited condensed consolidated statements of operations and unaudited pro forma combined company statement of operations of DXC. These non-GAAP financial measures include earnings before in
Slide 4: Forward-looking statements
Forward-looking statements All statements in this presentation 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 state
Slide 5: 1st Quarter FY 2018 Earnings Presentation - Mike Lawrie
1st Quarter FY 2018 Earnings Presentation Mike Lawrie Chairman, President and Chief Executive Officer
Slide 6: Key messages
Key messages Q1 FY18 non-GAAP EPS* of $1.59 Revenue down 4.2% YoY in cc, adjusted for PPA** with book-to-bill of 1.1x Strong digital momentum, with revenue up 13.4% YoY in cc, adjusted for PPA** Key merger integration milestones completed FY18 non-GAAP EPS* target of $6.50 – $7.00 *Non-GAAP EPS excl
Slide 7: 1st Quarter FY 2018 Earnings Presentation - Paul Saleh
1st Quarter FY 2018 Earnings Presentation Paul Saleh Executive Vice President and Chief Financial Officer
Slide 8: Financial presentation
Financial presentation • Pro forma results conform with the methodology used in the Form S-4 Fiscal 2017 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter CSC July 1, 2016 September 30, 2016 December 30, 2016 March 31, 2017 HPES April 30, 2016 July 31, 2016 October 31, 2016 January 31, 2017 • Prior ye
Slide 9: Reconciliation of non-GAAP results
Reconciliation of non-GAAP results Q1 FY18 Transaction and Amortization of Restructuring Non-GAAP (in millions except EPS) GAAP costs integration- acquired results related costs intangible assets Income before income taxes 185 190 124 120 619 Income tax expense 12 45 41 46 144 Net income 173 145 83
Slide 10: 1st quarter results
1st quarter results Pro forma combined Q1 FY18 company Q1 FY17 Revenue ($M) $ 5,913 $ 6,418 – YoY Growth - GAAP (7.9%) – YoY Growth - cc, adjusted for PPA* (4.2%) – QtQ Growth - GAAP (2.0%) – QtQ Growth - GAAP, adjusted for PPA* (0.1%) Adjusted EBIT ($M) 679 310 Adjusted EBIT Margin (%) 11.5% 4.8% N
Slide 11: Global Business Services (GBS)
Global Business Services (GBS) Pro forma combined Q1 FY18 company Q1 FY17 Revenue ($M) $ 2,267 $ 2,421 – YoY growth - GAAP (6.4%) – YoY growth - cc, adjusted for PPA* (3.8%) – QtQ growth - GAAP (0.8%) – QtQ growth - GAAP, adjusted for PPA* 0.1% GBS Profit ($M) 282 270 GBS Profit Margin (%) 12.4% 11.
Slide 12: Global Infrastructure Services (GIS)
Global Infrastructure Services (GIS) Pro forma combined Q1 FY18 company Q1 FY17 Revenue ($M) $ 2,969 $ 3,290 – YoY growth - GAAP (9.8%) – YoY growth - cc, adjusted for PPA* (4.7%) – QtQ growth - GAAP (4.6%) – QtQ growth - GAAP, adjusted for PPA* (1.6%) GIS Profit ($M) 290 55 GIS Profit Margin (%) 9.
Slide 13: U.S. Public Sector (USPS)
U.S. Public Sector (USPS) Pro forma combined Q1 FY18 company Q1 FY17 Revenue ($M) $ 677 $ 707 – YoY growth - GAAP (4.2%) – YoY growth - cc, adjusted for PPA* (3.5%) – QtQ growth - GAAP 6.0% – QtQ growth - GAAP, adjusted for PPA* 6.8% USPS Profit ($M) 77 80 USPS Profit Margin (%) 11.4% 11.3% Bookings
Slide 14: Financial highlights
Financial highlights Q1 FY18 Cash Flow ► Adjusted Free Cash Flow $595M Performance ► Cap Ex — Including Capital Leases $255M ► Cap Ex as a % of Revenue 4.3% Q1 FY18 Capital to Capital to ► Cash Dividends $20M Shareholders Shareholders $19M ► Share Repurchases 250K shares Q1 FY18 Capital ► Cash and C
Slide 15: FY 2018 targets
FY 2018 targets Revenue $24.0B – $24.5B Non-GAAP EPS* $6.50 – $7.00 Adjusted Free Cash Flow 100%+ of Adj. Net Income *Non-GAAP EPS excludes restructuring costs, transaction and integration-related costs, and amortization of acquired intangible assets (see slides 9, 18 – 21 for non-GAAP reconciliatio
Slide 16: Bookings
Bookings* $B FY17 FY18 7.0 $6.7 $6.3 $6.1 $5.9 6.0 $5.5 $2.2 5.0 $1.9 $2.4 $2.2 4.0 $3.1 3.0 $3.6 $3.4 $2.6 2.0 $3.7 $2.1 1.0 $0.9 $1.1 $0.7 $0.3 $0.2 0.0 Q1 FY17 Q2 FY17 Q3 FY17 Q4 FY17 Q1 FY18 GBS Global Business Services GIS Global Infrastructure Services USPS U.S. Public Sector *The summation of
Slide 17: Supplemental Information
1st Quarter FY 2018 Earnings Presentation Supplemental Information
Slide 18: Non-GAAP reconciliations
Non-GAAP reconciliations Pro forma Pro forma combined combined (in millions) Q1 FY18 (in millions) Q1 FY18 company company Q1 FY17 Q1 FY17 Net income (loss) $ 173 $ (281) Profit Income tax expense (benefit) 12 (41) GBS profit $ 282 $ 270 Interest income (16) (21) GIS profit 290 55 Interest expense 7
Slide 19: Q1 FY18 non-GAAP results
Q1 FY18 non-GAAP results Amortization of Transaction Restructuring acquired Non-GAAP (in millions except EPS) GAAP and integration- costs intangible results related costs assets Costs of services (excludes depreciation and amortization and restructuring costs) $ 4,788 $ - $ - $ - $ 4,788 Selling, ge
Slide 20: Q1 FY17 non-GAAP results
Q1 FY17 non-GAAP results Amortization of Pension and Pro forma Transaction Certain Restructuring acquired OPEB actuarial Tax Non-GAAP (in millions except EPS) combined and integration- overhead costs intangible and settlement adjustment results company related costs costs assets losses Costs of serv
Slide 21: Adjusted free cash flow
Adjusted free cash flow (in millions) Q1 FY18 Net cash provided by operating activities $ 534 Net cash used in investing activities 859 Acquisitions, net of cash acquired (974) Payment on capital leases and other long-term asset financings (125) Payments on transaction and integration-related costs
Slide 22: Non-GAAP and other definitions
Non-GAAP and other definitions Segment profit: Segment revenue less costs of services, segment selling, general, and administrative, and depreciation and amortization (excluding amortization of acquired intangible assets) Segment profit margin: Segment profit as a percentage of revenue Earnings befo
Slide 23: DXC.technology
v DXC.technology BD,