Global Infrastructure Services (GIS)

GIS revenue was $3,142 million in the quarter as compared to $836 million for the comparable period of the prior fiscal year. Excluding the impact of purchase price accounting, GIS revenue decreased 4.8% year-over-year in constant currency on a pro forma combined company basis. The GIS revenue reflects a continued moderation of headwinds in legacy infrastructure. GIS profit margin in the quarter was 14.9%, up from 4.7% in the prior year on a pro forma basis, reflecting ongoing cost actions in the business and the reclassification of HPES operating leases to capitalized leases and the corresponding adjustment of the related assets to fair value. New business awards for GIS were $2.8 billion in the second quarter.

United States Public Sector (USPS)

USPS revenue was $710 million in the quarter. Excluding the impact of purchase price accounting, USPS revenue grew 5.5% year-over-year on a pro forma combined company basis. USPS profit margin in the quarter was 15.4%, up from 10.1% in the prior year on a pro forma basis, reflecting ongoing cost actions in the business and the reclassification of HPES operating leases to capitalized leases and the corresponding adjustment of the related assets to fair value. New business awards for USPS were $644 million in the second quarter.

Returning Capital to Shareholders

During the second quarter, DXC Technology returned $97 million to shareholders in the form of dividends and share repurchases.

Earnings Conference Call

DXC Technology senior management will host a conference call to discuss these results today at 5 p.m. EST. The dial-in number for domestic callers is 800-289-0438. Callers who reside outside of the United States or Canada should dial +1-323-794-2423. The passcode for all participants is 1280312. 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 November 14, 2017. Replay dial in numbers can be found on DXC Technology’s Investor Relations website. The replay passcode is also 1280312.

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 and pro forma basis, we have also disclosed in this press release preliminary non-GAAP information including: constant currency, earnings before interest and taxes ("EBIT"), adjusted EBIT, adjusted EBIT margin, non-GAAP income before income taxes, non-GAAP net income, non-GAAP EPS and adjusted free cash flow. Reconciliations of the preliminary non-GAAP measures to the respective most directly comparable measures calculated on a GAAP or pro forma basis, as well as the rationale for management’s use of non-GAAP measures, are included below.

About DXC Technology

DXC Technology is the world’s leading independent, end-to-end IT services company, helping clients harness the power of innovation to thrive on change. Created by the merger of CSC and the Enterprise Services business of Hewlett Packard Enterprise, DXC Technology serves nearly 6,000 private and public sector clients across 70 countries. The company’s technology independence, global talent and extensive partner network combine to deliver powerful next-generation IT services and solutions. DXC Technology is recognized among the best corporate citizens globally. For more information, visit DXC Technology's website at www.dxc.technology.

All statements in this press release 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 March 31, 2017 and DXC's Form 10-Q for the quarter ended June 30, 2017 filed on August 9, 2017 and any updating information in subsequent SEC filings, including DXC's upcoming Form 10-Q for the quarter ended September 30, 2017. 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.

Consolidated Statements of Operations
(preliminary and unaudited)
				Three Months Ended												Six Months Ended
(in millions, except per-share amounts)				September 30, 2017						September 30, 2016						September 30, 2017						September 30, 2016
Revenues				$	6,163					$	1,871					$	12,076					$	3,801
Costs of services				4,312						1,363						9,100						2,784
Selling, general and administrative				672						293						1,082						598
Depreciation and amortization				537						167						898						333
Restructuring costs				192						25						382						82
Interest expense				78						29						154						54
Interest income				(16		)				(8		)				(32		)				(18		)
Other expense (income), net				1						3						(80		)				5
Total costs and expenses				5,776						1,872						11,504						3,838
Income (loss) before income taxes				387						(1		)				572						(37		)
Income tax expense (benefit)				122						(22		)				134						(38		)
Net income				265						21						438						1
Less: net income attributable to non-controlling interest, net of tax				9						6						23						7
Net income (loss) attributable to DXC common stockholders				$	256					$	15					$	415					$	(6	)
Income (loss) per common share:
Basic:				$	0.90					$	0.11					$	1.46					$	(0.04	)
Diluted:				$	0.88					$	0.10					$	1.43					$	(0.04	)
Cash dividend per common share				$	0.18					$	0.14					$	0.36					$	0.28
Weighted average common shares outstanding for:
Basic EPS				284.87						140.53						284.35						139.76
Diluted EPS				289.29						143.78						289.38						139.76

Selected Consolidated Balance Sheet Data
(preliminary and unaudited)
				As of
(in millions)				September 30, 2017					March 31, 2017
Assets
Cash and cash equivalents				$	2,671				$	1,263
Receivables, net				5,676					1,643
Prepaid expenses				610					223
Other current assets				483					118
Total current assets				9,440					3,247
Intangible assets, net				8,004					1,794
Goodwill				9,158					1,855
Deferred income taxes, net				386					381
Property and equipment, net				3,745					903
Other assets				2,443					483
Total Assets				$	33,176				$	8,663
Liabilities
Short-term debt and current maturities of long-term debt				$	2,200				$	738
Accounts payable				1,666					410
Accrued payroll and related costs				825					248
Accrued expenses and other current liabilities				3,235					998
Deferred revenue and advance contract payments				1,325					518
Income taxes payable				186					38
Total current liabilities				9,437					2,950
Long-term debt, net of current maturities				6,325					2,225
Non-current deferred revenue				806					286
Non-current income tax liabilities and deferred tax liabilities				2,117					423
Other long-term liabilities				1,984					613
Total Liabilities				20,669					6,497
Total Equity				12,507					2,166
Total Liabilities and Equity				$	33,176				$	8,663

Consolidated Statements of Cash Flows
(preliminary and unaudited)
				Six Months Ended
(in millions)				September 30, 2017						September 30, 2016
Cash flows from operating activities:
Net income				$	438					$	1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization				904						339
Share-based compensation				58						35
Unrealized foreign currency exchange losses				4						90
Other non-cash charges, net				15						—
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in assets				78						64
Increase (decrease) in liabilities				46						(287		)
Net cash provided by operating activities				1,543						242
Cash flows from investing activities:
Purchases of property and equipment				(123		)				(143		)
Payments for outsourcing contract costs				(176		)				(49		)
Software purchased and developed				(86		)				(78		)
Cash acquired through Merger				974						—
Payments for acquisitions, net of cash acquired				(152		)				(434		)
Proceeds from sale of assets				20						9
Other investing activities, net				(20		)				(26		)
Net cash provided by (used in) investing activities				437						(721		)
Cash flows from financing activities:
Borrowings of commercial paper				1,182						1,163
Repayments of commercial paper				(1,067		)				(1,058		)
Borrowings under lines of credit				—						920
Repayment of borrowings under lines of credit				(335		)				(529		)
Borrowings on long-term debt, net of discount				615						107
Principal payments on long-term debt				(1,552		)				(188		)
Proceeds from bond issuance				647						—
Proceeds from stock options and other common stock transactions				92						42
Taxes paid related to net share settlements of share-based compensation awards				(66		)				(12		)
Repurchase of common stock				(66		)				—
Dividend payments				(72		)				(39		)
Other financing activities, net				1						(30		)
Net cash (used in) provided by financing activities				(621		)				376
Effect of exchange rate changes on cash and cash equivalents				49						(21		)
Net increase (decrease) in cash and cash equivalents				1,408						(124		)
Cash and cash equivalents at beginning of year				1,263						1,178
Cash and cash equivalents at end of period				$	2,671					$	1,054

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