Business Wire | May 26, 2021 04:16PM EDT

DXC Technology Reports Fourth Quarter and Fiscal Year 2021 Results

May 26, 2021

TYSONS, Va.--(BUSINESS WIRE)--May 26, 2021--DXC Technology (NYSE: DXC) today reported results for the fourth quarter and fiscal year 2021.

"I am pleased to report a solid fourth quarter as the leadership team continues to execute on our transformation journey. Our results clearly indicate that we are winning in the marketplace, which in turn is driving improved sequential revenue and adjusted EBIT margin performance," said Mike Salvino, DXC president and chief executive officer. "I would like to thank the entire DXC team for their continued strong execution. Our FY22 and longer-term expectations reflect continuing solid business momentum and our confidence that we are building a people and customer focused organization that will compete and win in the IT services industry." Mr. Salvino continued, "As the world is witnessing the ongoing impact of COVID-19, our focus continues to be on our people, particularly in the more severely impacted areas including India and the Philippines. The dedication and perseverance on display by our team is a source of the great pride I have as our people continue to take care of themselves, each other, their families, and deliver for our customers."

Financial Highlights^(1) Q1 Q2 Q3 Q4 FY21 FY21 FY21 FY21 FY21

Revenue $4,502 $4,554 $4,288 $4,385 $17,729

YoY Reported Revenue Growth (7.9)% (6.1)% (14.6) (8.9)% (9.4)% %

YoY Organic Revenue Growth ^(2) (11.0) (9.8)% (10.5) (7.0)% (9.6)% % %

Sequential Revenue Growth (6.5)% 1.2 % (5.8)% 2.3 % N/A

Sequential Organic Revenue Growth (6.8)% (2.4)% 1.7 % 0.4 % N/A^(2)



Net Income $(199) $(246) $1,103 $(804) $(146)



EBIT $(142) $(235) $2,032 $(738) $917

EBIT Margin % (3.2)% (5.2)% 47.4 % (16.8) 5.2 % %



Adjusted EBIT ^(3) $190 $283 $300 $329 $1,102

Adjusted EBIT Margin % 4.2 % 6.2 % 7.0 % 7.5 % 6.2 %



Earnings Per Share (Diluted) $ $ $4.29 $ $(0.59) (0.81) (0.96) (3.14)



Non-GAAP EPS (Diluted) ^(3) $0.21 $0.64 $0.84 $0.74 $2.43



Book-to-Bill 1.18x 1.08x 1.13x 1.08x 1.12x

(1)

In millions, except per-share amounts

(2)

Reconciliation of reported revenue growth to organic revenue growth, and of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

(3)

Reconciliation of GAAP to Non-GAAP measures provided in Non-GAAP Results.

Financial Highlights - Fourth Quarter of Fiscal Year 2021

Revenue was $4.385 billion, down 8.9% as compared to prior year, and down 7.0% on an organic basis. Fourth quarter revenues exceeded the Company's previous revenue guidance range. Revenues increased 2.3% as compared to the third quarter of fiscal year 2021 and were up 0.4% on a sequential organic basis. This represents the third sequential quarter of organic revenue stabilization for DXC, and management anticipates this trend to continue into fiscal year 2022.

Net loss and EBIT included a $517 million pension and other post-employment benefits mark-to-market actuarial and settlement loss, asset impairment charges of $190 million, amortization of intangibles of $116 million, restructuring charges of $110 million, transaction, separation and integration cost of $51 million, loss on disposition of $42 million and a $41 million debt extinguishment charge resulting in EBIT margin of (16.8)% in the fourth quarter of fiscal 2021. Excluding these items, adjusted EBIT margin was 7.5% in the fourth quarter, an improvement of 50 basis points from the third quarter of fiscal year 2021. Fourth quarter adjusted EBIT margin came in above our guidance range.

Diluted earnings per share was $(3.14) and non-GAAP diluted earnings per share was $0.74 in the fourth quarter of fiscal year 2021, above our guidance range.

Book-to-bill for the quarter was 1.08x, underscoring the Company's continued focus on customers and our people, which in turn is driving ongoing success in the market. This represents the fourth straight quarter that the Company has delivered a book-to-bill of over 1.0x. The Company expects the new business momentum to continue in FY22.

Financial Information by Segment

^ In millions, except per-share amounts(1)

^ Reconciliation of reported revenue growth to organic revenue growth, and(2) of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

^ Reconciliation of GAAP to Non-GAAP measures provided in Non-GAAP Results.(3)

Financial Highlights - Fourth Quarter of Fiscal Year 2021

Revenue was $4.385 billion, down 8.9% as compared to prior year, and down 7.0% on an organic basis. Fourth quarter revenues exceeded the Company's previous revenue guidance range. Revenues increased 2.3% as compared to the third quarter of fiscal year 2021 and were up 0.4% on a sequential organic basis. This represents the third sequential quarter of organic revenue stabilization for DXC, and management anticipates this trend to continue into fiscal year 2022.

Net loss and EBIT included a $517 million pension and other post-employment benefits mark-to-market actuarial and settlement loss, asset impairment charges of $190 million, amortization of intangibles of $116 million, restructuring charges of $110 million, transaction, separation and integration cost of $51 million, loss on disposition of $42 million and a $41 million debt extinguishment charge resulting in EBIT margin of (16.8)% in the fourth quarter of fiscal 2021. Excluding these items, adjusted EBIT margin was 7.5% in the fourth quarter, an improvement of 50 basis points from the third quarter of fiscal year 2021. Fourth quarter adjusted EBIT margin came in above our guidance range.

Diluted earnings per share was $(3.14) and non-GAAP diluted earnings per share was $0.74 in the fourth quarter of fiscal year 2021, above our guidance range.

Book-to-bill for the quarter was 1.08x, underscoring the Company's continued focus on customers and our people, which in turn is driving ongoing success in the market. This represents the fourth straight quarter that the Company has delivered a book-to-bill of over 1.0x. The Company expects the new business momentum to continue in FY22.

Financial Information by Segment

Global Business Services ("GBS")^ Q1 Q2 Q3 Q4 FY21(1) FY21 FY21 FY21 FY21

Revenue $2,174 $2,242 $1,921 $1,999 $8,336

YoY Reported Revenue Growth 0.7 % (1.9)% (18.6) (13.4) (8.5)% % %

YoY Organic Revenue Growth ^(2) (8.5)% (7.0)% (7.0)% (4.0)% (6.6)%

Sequential Revenue Growth (5.8)% 3.1 % (14.3) 4.1 % N/A %

Sequential Organic Revenue Growth (7.6)% (0.2)% 2.1 % 2.0 % N/A^(2)



Segment Profit $215 $317 $273 $315 $1,120

Segment Profit Margin 9.9 % 14.1 % 14.2 % 15.8 % 13.4 %



Book-to-Bill 1.62x 1.09x 1.35x 1.20x 1.32x

(1)

In millions.

(2)

Reconciliation of reported revenue growth to organic revenue growth, and of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

GBS segment revenue was $1.999 billion in the fourth quarter of fiscal year 2021, down 13.4% compared to prior year, and down 4.0% on an organic basis. On a sequential basis, GBS revenues increased 4.1% and on an organic basis, increased 2.0%, driven by growth in Analytics and Engineering, Applications and Business Process Solutions ("BPS"). GBS Segment profit was $315 million and segment profit margin was 15.8%, up 160 bps as compared to the third quarter of fiscal year 2021. GBS bookings for the quarter were $2.4 billion for a book-to-bill of 1.20x.

^ In millions.(1)

^ Reconciliation of reported revenue growth to organic revenue growth, and(2) of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

GBS segment revenue was $1.999 billion in the fourth quarter of fiscal year 2021, down 13.4% compared to prior year, and down 4.0% on an organic basis. On a sequential basis, GBS revenues increased 4.1% and on an organic basis, increased 2.0%, driven by growth in Analytics and Engineering, Applications and Business Process Solutions ("BPS"). GBS Segment profit was $315 million and segment profit margin was 15.8%, up 160 bps as compared to the third quarter of fiscal year 2021. GBS bookings for the quarter were $2.4 billion for a book-to-bill of 1.20x.

Global Infrastructure Services Q1 Q2 Q3 Q4 FY21("GIS")^(1) FY21 FY21 FY21 FY21

Revenue $2,328 $2,312 $2,367 $2,386 $9,393

YoY Reported Revenue Growth (14.8) (9.9)% (11.1) (4.8)% (10.3) % % %

YoY Organic Revenue Growth ^(2) (12.7) (11.9) (13.1) (9.3)% (11.8) % % % %

Sequential Revenue Growth (7.1)% (0.7)% 2.4 % 0.8 % N/A

Sequential Organic Revenue Growth ^ (6.2)% (4.1)% 1.3 % (0.9)% N/A(2)



Segment Profit $23 $36 $88 $98 $245

Segment Profit Margin 1.0 % 1.6 % 3.7 % 4.1 % 2.6 %



Book-to-Bill 0.77x 1.07x 0.95x 0.98x 0.94x

(1)

In millions.

(2)

Reconciliation of reported revenue growth to organic revenue growth, and of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

GIS Segment revenue was $2.386 billion in the fourth quarter of 2021, down 4.8% compared to prior year, and down 9.3% on an organic basis. On a sequential basis, GIS revenues increased 0.8% and decreased 0.9% on an organic basis, driven by low-single digit revenue growth in IT Outsourcing, offset by declines in Cloud and Security and Modern Workplace. GIS segment profit was $98 million with a segment profit margin of 4.1%, a 40 basis points segment margin expansion as compared to third quarter of fiscal year 2021. GIS bookings were $2.3 billion in the quarter for a book-to-bill of 0.98x.

Enterprise Technology Stack Highlights

The components of the Enterprise Technology Stack are as follows:

^ In millions.(1)

^ Reconciliation of reported revenue growth to organic revenue growth, and(2) of sequential revenue growth to sequential organic revenue growth, provided in Non-GAAP Results.

GIS Segment revenue was $2.386 billion in the fourth quarter of 2021, down 4.8% compared to prior year, and down 9.3% on an organic basis. On a sequential basis, GIS revenues increased 0.8% and decreased 0.9% on an organic basis, driven by low-single digit revenue growth in IT Outsourcing, offset by declines in Cloud and Security and Modern Workplace. GIS segment profit was $98 million with a segment profit margin of 4.1%, a 40 basis points segment margin expansion as compared to third quarter of fiscal year 2021. GIS bookings were $2.3 billion in the quarter for a book-to-bill of 0.98x.

Enterprise Technology Stack Highlights

The components of the Enterprise Technology Stack are as follows:

Offerings Revenues^(1) Q1 Q2 Q3 Q4 FY21 FY21 FY21 FY21 FY21

Stack Revenues

Analytics and Engineering $412 $440 $465 $478 $1,795

Applications 1,207 1,214 1,263 1,318 5,002

Cloud and Security 460 491 522 524 1,997

IT Outsourcing 1,187 1,169 1,163 1,198 4,717

Subtotal 3,266 3,314 3,413 3,518 13,511

Businesses Beginning Transformation

Modern Workplace and BPS 792 776 808 795 3,171

Held for Sale/Disposed Businesses

Revenues 444 464 67 72 1,047

Total Revenues $4,502 $4,554 $4,288 $4,385 $17,729

(1)

In millions

Cash Flow

^(1) In millions

Cash Flow

Cash Flow Update^(1) Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 FY21

Cash Flow from (used in) $ 119 $ 472 $ (187 ) $ (280 ) $ 124 Operations

Less Capital Expenditures:

Purchase of property & (95 ) (61 ) (59 ) (46 ) (261 )equipment

Transition and transformation (82 ) (54 ) (53 ) (72 ) (261 )contract costs

Software purchased or developed (48 ) (54 ) (107 ) (45 ) (254 )

Free Cash Flow $ (106 ) $ 303 $ (406 ) $ (443 ) $ (652 )

(1)

In millions

Cash flow used in operations was $280 million in the fourth quarter of fiscal year 2021, and capital expenditures were $163 million, resulting in free cash flow (cash flow used in operations less capital expenditures) of $(443) million. Cash flow in the fourth quarter was impacted by the payment of taxes related to disposed businesses of $531 million. In fiscal year 2021, cash flow was reduced by the $531 million payment of taxes for the disposed businesses, $500 million normalization of payments to our partners and vendors, and $323 million related to the unwinding of the securitization of receivables and purchase of software license in connection with the sale of the U.S. State & Local Health and Human Services business. The aforementioned payments in fiscal year 2021 are not expected to reoccur.

Guidance

The Company's guidance for the first quarter and full fiscal year 2022 is as follows:

^(1) In millions

Cash flow used in operations was $280 million in the fourth quarter of fiscal year 2021, and capital expenditures were $163 million, resulting in free cash flow (cash flow used in operations less capital expenditures) of $(443) million. Cash flow in the fourth quarter was impacted by the payment of taxes related to disposed businesses of $531 million. In fiscal year 2021, cash flow was reduced by the $531 million payment of taxes for the disposed businesses, $500 million normalization of payments to our partners and vendors, and $323 million related to the unwinding of the securitization of receivables and purchase of software license in connection with the sale of the U.S. State & Local Health and Human Services business. The aforementioned payments in fiscal year 2021 are not expected to reoccur.

Guidance

The Company's guidance for the first quarter and full fiscal year 2022 is as follows:

Q1 FY22 FY22Fiscal Year Guidance ^(1) Guidance Outlook

Revenues $4.08 to $4.13B $16.6 to $16.8B

Organic Revenue Growth YoY (2)% - (4)% (1)% - (2)%

Adjusted EBIT Margin 7.4% - 7.8% 8.2% - 8.7%

Net Interest Cost ~$50 million ~$200 million

Adjusted Diluted EPS $0.72 - $0.76 $3.45 - $3.65

Restructuring and TSI ~$550 million

Free Cash Flow $500 million

Adjusted Effective Tax Rate ~28% ~28%

(1)

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.

The Company's longer-term guidance(1):

* Positive organic revenue growth of 1% to 3% for fiscal year 2024 * Adjusted EBIT margin of 10% to 11% in fiscal year 2024 * Adjusted diluted EPS 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

Ken Sharp, chief financial officer, commented: "We made continued progress in strengthening our balance sheet, retiring $0.7 billion of debt in the fourth quarter, bringing our total debt retirement to $6.5 billion in the last nine months. These actions clearly demonstrate our ongoing commitment to an investment grade credit rating. Once we achieve our targeted debt levels, and have improved our free cash flow generation, we will balance our capital deployment activity and resume returning cash to our shareholders. Our FY22 and longer-term guidance demonstrates the continued momentum in our business, the confidence we have in our people, and the execution of our strategy."

Earnings Conference Call and Webcast

DXC Technology senior management will host a conference call and webcast to discuss these results on May 26, 2021, at 5:00 p.m. EDT. The dial-in number for domestic callers is +1 (833) 979-2847. Callers who reside outside of the United States should dial +1 (236) 714-2943. The passcode for all participants is 5488532. 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 06/02/2021 23:59 ET. Phone number for the replay is +1 (800) 585-8367 or +1 (416) 621-4642. The replay passcode is 5488532.

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. With decades of driving innovation, the world's largest companies trust DXC to provide services across the Enterprise Technology Stack to deliver new levels of performance, competitiveness and customer experiences. Learn more about the DXC story and our focus on people, customers and operational execution at www.dxc.technology.

Forward-Looking Statements

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 including 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, and economic restrictions implemented to address the crisis; the effects of macroeconomic and geopolitical trends and events; our inability to succeed in our strategic objectives; our inability to succeed in our strategic transactions; the risk of liability or damage to our reputation resulting from security breaches, cyber-attacks or disclosure of sensitive data or failure to comply with data protection laws and regulations, including the ransomware attack experienced by our subsidiary, Xchanging; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs, respond to emerging technological trends and maintain and grow our customer relationships over time; the risks associated with our international operations; our credit rating and ability to manage working capital, refinance and raise additional capital for future needs; 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; our inability to retain and hire key personnel and maintain relationships with key partners; our inability to comply with governmental regulations or the adoption of new laws or regulations; 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 remediate any material weakness and 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 in accordance with our announced intent; 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; changes in tax laws and any adverse impact on our effective tax rate; and the other factors described in the section titled "Risk Factors" in DXC's Annual Report on Form 10-K for the year ended March 31, 2020, its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020, September 30, 2020, December 31, 2020 and any updating information in subsequent SEC filings, including DXC's upcoming Form 10-K for the fiscal year ended March 31, 2021. 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 income before income taxes, non-GAAP net income, non-GAAP EPS, organic revenues, and free cash flow.

We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses.

We believe organic revenues 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.

One category of expenses excluded from adjusted EBIT, non-GAAP income from continuing operations before tax, non-GAAP net income and non-GAAP 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, non-GAAP income from continuing operations before tax, non-GAAP net income and non-GAAP 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, 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.

There are limitations to the use of the non-GAAP financial measures presented in this report. 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.

Selected references are made to revenues 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. Revenues on an "organic basis" are non-GAAP financial 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.

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(1) 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.

The Company's longer-term guidance(1):

* Positive organic revenue growth of 1% to 3% for fiscal year 2024 * Adjusted EBIT margin of 10% to 11% in fiscal year 2024 * Adjusted diluted EPS 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

Ken Sharp, chief financial officer, commented: "We made continued progress in strengthening our balance sheet, retiring $0.7 billion of debt in the fourth quarter, bringing our total debt retirement to $6.5 billion in the last nine months. These actions clearly demonstrate our ongoing commitment to an investment grade credit rating. Once we achieve our targeted debt levels, and have improved our free cash flow generation, we will balance our capital deployment activity and resume returning cash to our shareholders. Our FY22 and longer-term guidance demonstrates the continued momentum in our business, the confidence we have in our people, and the execution of our strategy."

Earnings Conference Call and Webcast

DXC Technology senior management will host a conference call and webcast to discuss these results on May 26, 2021, at 5:00 p.m. EDT. The dial-in number for domestic callers is +1 (833) 979-2847. Callers who reside outside of the United States should dial +1 (236) 714-2943. The passcode for all participants is 5488532. 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 06/02/2021 23:59 ET. Phone number for the replay is +1 (800) 585-8367 or +1 (416) 621-4642. The replay passcode is 5488532.

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. With decades of driving innovation, the world's largest companies trust DXC to provide services across the Enterprise Technology Stack to deliver new levels of performance, competitiveness and customer experiences. Learn more about the DXC story and our focus on people, customers and operational execution at www.dxc.technology.

Forward-Looking Statements

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 including 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, and economic restrictions implemented to address the crisis; the effects of macroeconomic and geopolitical trends and events; our inability to succeed in our strategic objectives; our inability to succeed in our strategic transactions; the risk of liability or damage to our reputation resulting from security breaches, cyber-attacks or disclosure of sensitive data or failure to comply with data protection laws and regulations, including the ransomware attack experienced by our subsidiary, Xchanging; the development and transition of new products and services and the enhancement of existing products and services to meet customer needs, respond to emerging technological trends and maintain and grow our customer relationships over time; the risks associated with our international operations; our credit rating and ability to manage working capital, refinance and raise additional capital for future needs; 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; our inability to retain and hire key personnel and maintain relationships with key partners; our inability to comply with governmental regulations or the adoption of new laws or regulations; 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 remediate any material weakness and 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 in accordance with our announced intent; 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; changes in tax laws and any adverse impact on our effective tax rate; and the other factors described in the section titled "Risk Factors" in DXC's Annual Report on Form 10-K for the year ended March 31, 2020, its Quarterly Reports on Form 10-Q for the quarters ended June 30, 2020, September 30, 2020, December 31, 2020 and any updating information in subsequent SEC filings, including DXC's upcoming Form 10-K for the fiscal year ended March 31, 2021. 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 income before income taxes, non-GAAP net income, non-GAAP EPS, organic revenues, and free cash flow.

We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses.

We believe organic revenues 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.

One category of expenses excluded from adjusted EBIT, non-GAAP income from continuing operations before tax, non-GAAP net income and non-GAAP 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, non-GAAP income from continuing operations before tax, non-GAAP net income and non-GAAP 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, 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.

There are limitations to the use of the non-GAAP financial measures presented in this report. 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.

Selected references are made to revenues 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. Revenues on an "organic basis" are non-GAAP financial 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.

Condensed ConsolidatedStatements of Operations

(preliminary and unaudited)

Three Months Ended Twelve Months Ended

(in millions, except March 31, March 31, March 31, March 31,per-share amounts) 2021 2020 2021 2020



Revenues $ 4,385 $ 4,815 $ 17,729 $ 19,577



Costs of services 3,561 3,773 14,086 14,901

Selling, general and 471 536 2,066 2,050 administrative

Depreciation and 478 526 1,970 1,942 amortization

Goodwill impairment losses - 3,854 - 6,794

Restructuring costs 110 4 551 252

Interest expense 77 95 361 383

Interest income (22 ) (35 ) (98 ) (165 )

Debt extinguishment costs 41 - 41 -

Loss (gain) on disposition 42 - (2,004 ) - of businesses

Gain on arbitration award - - - (632 )

Other expense (income), net 420 (376 ) 102 (720 )

Total costs and expenses 5,178 8,377 17,075 24,805



(Loss) income before income (793 ) (3,562 ) 654 (5,228 )taxes

Income tax expense (benefit) 11 (61 ) 800 130

Net loss (804 ) (3,501 ) (146 ) (5,358 )

Less: net (loss) incomeattributable to (6 ) (6 ) 3 11 non-controlling interest,net of tax

Net loss attributable to DXC $ (798 ) $ (3,495 ) $ (149 ) $ (5,369 )common stockholders



Loss per common share:

Basic $ (3.14 ) $ (13.79 ) $ (0.59 ) $ (20.76 )

Diluted $ (3.14 ) $ (13.79 ) $ (0.59 ) $ (20.76 )



Cash dividend per common $ - $ 0.21 $ - $ 0.84 share



Weighted average common shares outstanding for:

Basic EPS 254.49 253.51 254.14 258.57

Diluted EPS 254.49 253.51 254.14 258.57

Selected Consolidated Balance Sheet Data

(preliminary and unaudited)

As of

(in millions)

March 31, 2021

March 31, 2020

Assets

Cash and cash equivalents

$

2,968

$

3,679

Receivables, net

4,156

4,392

Prepaid expenses

567

646

Other current assets

357

270

Assets held for sale

160

-

Total current assets

8,208

8,987

Intangible assets, net

4,043

5,731

Operating right-of-use assets, net

1,366

1,428

Goodwill

641

2,017

Deferred income taxes, net

289

265

Property and equipment, net

2,946

3,547

Other assets

4,192

4,031

Assets held for sale - non-current

353

-

Total Assets

$

22,038

$

26,006

Liabilities

Short-term debt and current maturities of long-term debt

$

1,167

$

1,276

Accounts payable

914

1,598

Accrued payroll and related costs

698

630

Current operating lease liabilities

418

482

Accrued expenses and other current liabilities

3,358

2,801

Deferred revenue and advance contract payments

1,079

1,021

Income taxes payable

398

87

Liabilities related to assets held for sale

118

-

Total current liabilities

8,150

7,895

Long-term debt, net of current maturities

4,345

8,672

Non-current deferred revenue

622

735

Non-current operating lease liabilities

1,038

1,063

Non-current pension obligations

793

761

Non-current income tax liabilities and deferred tax liabilities

854

1,157

Other long-term liabilities

908

594

Liabilities related to assets held for sale - non-current

20

-

Total Liabilities

16,730

20,877

Total Equity

5,308

5,129

Total Liabilities and Equity

$

22,038

$

26,006

Selected Consolidated Balance Sheet Data

(preliminary and unaudited)

As of

(in millions) March 31, March 31, 2021 2020

Assets

Cash and cash equivalents $ 2,968 $ 3,679

Receivables, net 4,156 4,392

Prepaid expenses 567 646

Other current assets 357 270

Assets held for sale 160 -

Total current assets 8,208 8,987



Intangible assets, net 4,043 5,731

Operating right-of-use assets, net 1,366 1,428

Goodwill 641 2,017

Deferred income taxes, net 289 265

Property and equipment, net 2,946 3,547

Other assets 4,192 4,031

Assets held for sale - non-current 353 -

Total Assets $ 22,038 $ 26,006



Liabilities

Short-term debt and current maturities of long-term $ 1,167 $ 1,276 debt

Accounts payable 914 1,598

Accrued payroll and related costs 698 630

Current operating lease liabilities 418 482

Accrued expenses and other current liabilities 3,358 2,801

Deferred revenue and advance contract payments 1,079 1,021

Income taxes payable 398 87

Liabilities related to assets held for sale 118 -

Total current liabilities 8,150 7,895



Long-term debt, net of current maturities 4,345 8,672

Non-current deferred revenue 622 735

Non-current operating lease liabilities 1,038 1,063

Non-current pension obligations 793 761

Non-current income tax liabilities and deferred tax 854 1,157 liabilities

Other long-term liabilities 908 594

Liabilities related to assets held for sale - 20 - non-current

Total Liabilities 16,730 20,877



Total Equity 5,308 5,129



Total Liabilities and Equity $ 22,038 $ 26,006

Condensed Consolidated Statements of Cash Flows

(preliminary and unaudited)

Twelve Months Ended

(in millions)

March 31, 2021

March 31, 2020

Cash flows from operating activities:

Net (loss) income

$

(146

)

$

(5,358

)

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization

1,988

1,960

Goodwill impairment losses

-

6,794

Operating right-of-use expense

616

698

Pension & other post-employment benefits, actuarial & settlement losses (gains)

519

(244

)

Share-based compensation

56

68

Deferred taxes

(403

)

(56

)

(Gain) loss on dispositions

(1,983

)

1

Provision for losses on accounts receivable

53

3

Unrealized foreign currency exchange (gains) losses

(36

)

24

Impairment losses and contract write-offs

275

30

Debt extinguishment costs

41

-

Amortization of debt issuance costs and discount (premium)

3

(4

)

Cash surrender value in excess of premiums paid

(3

)

(12

)

Other non-cash charges, net

1

-

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in receivables

257

269

Increase in prepaid expenses and other current assets

(299

)

(229

)

Decrease in accounts payable and accruals

(527

)

(565

)

Increase (decrease) in income taxes payable and income tax liability

434

(197

)

Decrease in operating lease liability

(616

)

(698

)

Decrease in advance contract payments and deferred revenue

(66

)

(146

)

Other operating activities, net

(40

)

12

Net cash provided by operating activities

124

2,350

Cash flows from investing activities:

Purchases of property and equipment

(261

)

(350

)

Payments for transition and transformation contract costs

(261

)

(281

)

Software purchased and developed

(254

)

(235

)

Proceeds (payments) for acquisitions, net of cash acquired

184

(1,997

)

Business dispositions

4,947

-

Cash collections related to deferred purchase price receivable

159

671

Proceeds from sale of assets

164

73

Short-term investing

-

(75

)

Proceeds from short-term investing

-

38

Other investing activities, net

(13

)

19

Net cash provided by (used in) investing activities

4,665

(2,137

)

Cash flows from financing activities:

Borrowings of commercial paper

1,486

4,939

Repayments of commercial paper

(1,852

)

(5,076

)

Borrowings under lines of credit

2,500

1,500

Repayment of borrowings under lines of credit

(4,000

)

-

Borrowings on long-term debt

-

2,198

Principal payments on long-term debt

(3,552

)

(1,039

)

Payments on finance leases and borrowings for asset financing

(930

)

(865

)

Proceeds from bond issuance

993

-

Proceeds from stock options and other common stock transactions

1

11

Taxes paid related to net share settlements of share-based compensation awards

(7

)

(16

)

Repurchase of common stock and advance payment for accelerated share repurchase

-

(736

)

Dividend payments

(53

)

(214

)

Payments for debt extinguishment costs

(41

)

-

Other financing activities, net

(21

)

(45

)

Net cash (used in) provided by financing activities

(5,476

)

657

Effect of exchange rate changes on cash and cash equivalents

39

(90

)

Net (decrease) increase in cash and cash equivalents including cash classified within current assets held for sale

(648

)

780

Less: cash classified within current assets held for sale

(63

)

-

Net (decrease) increase in cash and cash equivalents

(711

)

780

Cash and cash equivalents at beginning of year

3,679

2,899

Cash and cash equivalents at end of year

$

2,968

$

3,679

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.

Condensed Consolidated Statements of Cash Flows

(preliminary and unaudited)

Twelve Months Ended

(in millions) March 31, March 31, 2021 2020

Cash flows from operating activities:

Net (loss) income $ (146 ) $ (5,358 )

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation and amortization 1,988 1,960

Goodwill impairment losses - 6,794

Operating right-of-use expense 616 698

Pension & other post-employment benefits, actuarial & 519 (244 )settlement losses (gains)

Share-based compensation 56 68

Deferred taxes (403 ) (56 )

(Gain) loss on dispositions (1,983 ) 1

Provision for losses on accounts receivable 53 3

Unrealized foreign currency exchange (gains) losses (36 ) 24

Impairment losses and contract write-offs 275 30

Debt extinguishment costs 41 -

Amortization of debt issuance costs and discount 3 (4 )(premium)

Cash surrender value in excess of premiums paid (3 ) (12 )

Other non-cash charges, net 1 -

Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in receivables 257 269

Increase in prepaid expenses and other current assets (299 ) (229 )

Decrease in accounts payable and accruals (527 ) (565 )

Increase (decrease) in income taxes payable and income 434 (197 )tax liability

Decrease in operating lease liability (616 ) (698 )

Decrease in advance contract payments and deferred (66 ) (146 )revenue

Other operating activities, net (40 ) 12

Net cash provided by operating activities 124 2,350



Cash flows from investing activities:

Purchases of property and equipment (261 ) (350 )

Payments for transition and transformation contract (261 ) (281 )costs

Software purchased and developed (254 ) (235 )

Proceeds (payments) for acquisitions, net of cash 184 (1,997 )acquired

Business dispositions 4,947 -

Cash collections related to deferred purchase price 159 671 receivable

Proceeds from sale of assets 164 73

Short-term investing - (75 )

Proceeds from short-term investing - 38

Other investing activities, net (13 ) 19

Net cash provided by (used in) investing activities 4,665 (2,137 )



Cash flows from financing activities:

Borrowings of commercial paper 1,486 4,939

Repayments of commercial paper (1,852 ) (5,076 )

Borrowings under lines of credit 2,500 1,500

Repayment of borrowings under lines of credit (4,000 ) -

Borrowings on long-term debt - 2,198

Principal payments on long-term debt (3,552 ) (1,039 )

Payments on finance leases and borrowings for asset (930 ) (865 )financing

Proceeds from bond issuance 993 -

Proceeds from stock options and other common stock 1 11 transactions

Taxes paid related to net share settlements of (7 ) (16 )share-based compensation awards

Repurchase of common stock and advance payment for - (736 )accelerated share repurchase

Dividend payments (53 ) (214 )

Payments for debt extinguishment costs (41 ) -

Other financing activities, net (21 ) (45 )

Net cash (used in) provided by financing activities (5,476 ) 657

Effect of exchange rate changes on cash and cash 39 (90 )equivalents

Net (decrease) increase in cash and cash equivalentsincluding cash classified within current assets held (648 ) 780 for sale

Less: cash classified within current assets held for (63 ) - sale

Net (decrease) increase in cash and cash equivalents (711 ) 780

Cash and cash equivalents at beginning of year 3,679 2,899

Cash and cash equivalents at end of year $ 2,968 $ 3,679

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 March 31, March 31, March 31, 31, 2021 2020 2021 2020

Profit

GBS profit $ 315 $ 223 $ 1,120 $ 1,301

GIS profit 98 192 245 1,007

All other loss (84 ) (63 ) (263 ) (247 )

Interest income 22 35 98 165

Interest expense (77 ) (95 ) (361 ) (383 )

Restructuring costs (110 ) (4 ) (551 ) (252 )

Transaction, separation and (51 ) (92 ) (358 ) (318 )integration-related costs

Amortization of acquired (116 ) (148 ) (530 ) (583 )intangible assets

(Loss) gain on dispositions (42 ) - 2,004 -

Pension and OPEB actuarial and (517 ) 244 (519 ) 244 settlement (losses) gains

Debt extinguishment costs (41 ) - (41 ) -

Impairment losses (190 ) (3,854 ) (190 ) (6,794 )

Gain on arbitration award - - - 632

(Loss) income before income $ (793 ) $ (3,562 ) $ 654 $ (5,228 )taxes



Segment profit margins

GBS 15.8 % 9.7 % 13.4 % 14.3 %

GIS 4.1 % 7.7 % 2.6 % 9.6 %

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) * Pension and OPEB actuarial and settlement gains and losses - pension and OPEB actuarial mark to market adjustments and settlement gains and losses. * 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.(3) * Impairment losses - impairment losses on assets classified as long-term on the balance sheet.(4) * Gain on arbitration award - reflects a gain related to the HPES merger arbitration award. * Tax adjustments - adjustments to impair tax assets, merger and divestiture related tax matters, restructuring charges and income tax expense of non-GAAP adjustments. Income tax expense of other 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 (1) 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 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 the healthcare software business 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.



Gains and losses on dispositions for the fourth quarter fiscal 2021 ^ includes $27 million of adjustments relating to the sale of the HHS (2) 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. We expect to close the sale of the equity securities during fiscal 2022.



Debt extinguishment costs adjustments for all periods presented includes ^ $34 million to fully redeem our 4.00% senior notes due fiscal 2024 and (3) $7 million to partially redeem two series of our 4.45% senior notes due fiscal 2023 via tender offer.



Impairment losses for the fourth quarter of fiscal 2021 of $190 million ^ relate to the impairment of undeployable assets, software, and (4) capitalized transition and transformation costs. In fiscal 2020 goodwill was impaired following a sustained decline in market capitalization.



Impairment losses for the fourth quarter of fiscal 2021 were $190 million. This includes $165 million impairment for assets pre-purchased through preferred vendor agreements and determined undeployable, $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.



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 (5) 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. Tax adjustments for fiscal 2020 includes tax expense related to prior restructuring charges.

Non-GAAP Results

A reconciliation of reported results to non-GAAP results is as follows:

Three Months Ended March 31, 2021

Pension Transaction, and(in millions, Separation Amortization Gains and OPEB Debtexcept As Restructuring and of Acquired Impairment Losses on Actuarial Extinguishment Tax Non-GAAPper-share Reported Costs Integration- Intangible Losses Dispositions and Costs Adjustment Resultsamounts) Related Assets Settlement Costs Gains and Losses

Costs ofservices(excludesdepreciationand $ 3,561 $ - $ (2 ) $ - $ (190 ) $ - $ - $ - $ - $ 3,369 amortizationandrestructuringcosts)

Selling,general andadministrative(excludesdepreciation 471 - (49 ) - - - - - - 422 andamortizationandrestructuringcosts)

(Loss) incomebefore income (793 ) 110 51 116 190 42 517 41 - 274 taxes

Income taxexpense 11 17 17 26 49 (17 ) 115 10 (140 ) 88 (benefit)

Net (loss) (804 ) 93 34 90 141 59 402 31 140 186 income

Less: net lossattributable tonon-controlling (6 ) - - - - - - - - (6 )interest, netof tax

Net (loss)incomeattributable to $ (798 ) $ 93 $ 34 $ 90 $ 141 $ 59 $ 402 $ 31 $ 140 $ 192 DXC commonstockholders



Effective tax (1.4 ) 32.1 %rate %



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



Weightedaverage commonshares outstandingfor:

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

Costs of services (excludes depreciation and amortization and restructuring costs)

$

14,086

$

-

$

(2

)

$

-

$

(190

)

$

-

$

-

$

-

$

-

$

13,894

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)

2,066

-

(363

)

-

-

-

-

-

-

1,703

Income before income taxes

654

551

358

530

190

(2,004

)

519

41

-

839

Income tax expense (benefit)

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

Twelve Months Ended March 31, 2021

Pension Transaction, and(in millions, Separation Amortization Gains and OPEB Debtexcept As Restructuring and of Acquired Impairment Losses on Actuarial Extinguishment Tax Non-GAAPper-share Reported Costs Integration- Intangible Losses Dispositions and Costs Adjustment Resultsamounts) Related Assets Settlement Costs Gains and Losses

Costs ofservices(excludesdepreciationand $ 14,086 $ - $ (2 ) $ - $ (190 ) $ - $ - $ - $ - $ 13,894 amortizationandrestructuringcosts)

Selling,general andadministrative(excludesdepreciation 2,066 - (363 ) - - - - - - 1,703 andamortizationandrestructuringcosts)

Income before 654 551 358 530 190 (2,004 ) 519 41 - 839 income taxes

Income taxexpense 800 92 87 121 49 (920 ) 115 10 (142 ) 212 (benefit)

Net (loss) (146 ) 459 271 409 141 (1,084 ) 404 31 142 627 income

Less: netincomeattributable to 3 - - - - - - - - 3 non-controllinginterest, netof tax

Net (loss)incomeattributable to $ (149 ) $ 459 $ 271 $ 409 $ 141 $ (1,084 ) $ 404 $ 31 $ 142 $ 624 DXC commonstockholders



Effective tax 122.3 % 25.3 %rate



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



Weightedaverage commonshares outstandingfor:

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

Three Months Ended March 31, 2020

(in millions, except per-share amounts)

As Reported

Restructuring Costs

Transaction, Separation and Integration- Related Costs

Amortization of Acquired Intangible Assets

Impairment Losses

Pension and OPEB Actuarial and Settlement Gains

Tax Adjustment

Non-GAAP Results

Costs of services (excludes depreciation and amortization and restructuring costs)

$

3,773

$

-

$

-

$

-

$

-

$

-

$

-

$

3,773

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)

536

-

(92

)

-

-

-

-

444

(Loss) income before income taxes

(3,562

)

4

92

148

3,854

(244

)

-

292

Income tax (benefit) expense

(61

)

2

20

34

42

(51

)

6

(8

)

Net (loss) income

(3,501

)

2

72

114

3,812

(193

)

(6

)

300

Less: net loss attributable to non-controlling interest, net of tax

(6

)

-

-

-

-

-

-

(6

)

Net (loss) income attributable to DXC common stockholders

$

(3,495

)

$

2

$

72

$

114

$

3,812

$

(193

)

$

(6

)

$

306

Effective Tax Rate

1.7

%

(2.7

)%

Basic EPS

$

(13.79

)

$

0.01

$

0.28

$

0.45

$

15.04

$

(0.76

)

$

(0.02

)

$

1.21

Diluted EPS

$

(13.79

)

$

0.01

$

0.28

$

0.45

$

15.00

$

(0.76

)

$

(0.02

)

$

1.20

Weighted average common shares outstanding for:

Basic EPS

253.51

253.51

253.51

253.51

253.51

253.51

253.51

253.51

Diluted EPS

253.51

254.14

254.14

254.14

254.14

254.14

254.14

254.14

Three Months Ended March 31, 2020

Transaction, Pension and(in millions, Separation Amortization OPEBexcept As Restructuring and of Acquired Impairment Actuarial Tax Non-GAAPper-share Reported Costs Integration- Intangible Losses and Adjustment Resultsamounts) Related Assets Settlement Costs Gains

Costs ofservices(excludesdepreciationand $ 3,773 $ - $ - $ - $ - $ - $ - $ 3,773 amortizationandrestructuringcosts)

Selling,general andadministrative(excludesdepreciation 536 - (92 ) - - - - 444 andamortizationandrestructuringcosts)

(Loss) incomebefore income (3,562 ) 4 92 148 3,854 (244 ) - 292 taxes

Income tax(benefit) (61 ) 2 20 34 42 (51 ) 6 (8 )expense

Net (loss) (3,501 ) 2 72 114 3,812 (193 ) (6 ) 300 income

Less: net lossattributable tonon-controlling (6 ) - - - - - - (6 )interest, netof tax

Net (loss)incomeattributable to $ (3,495 ) $ 2 $ 72 $ 114 $ 3,812 $ (193 ) $ (6 ) $ 306 DXC commonstockholders



Effective Tax 1.7 % (2.7 )Rate %



Basic EPS $ (13.79 ) $ 0.01 $ 0.28 $ 0.45 $ 15.04 $ (0.76 ) $ (0.02 ) $ 1.21

Diluted EPS $ (13.79 ) $ 0.01 $ 0.28 $ 0.45 $ 15.00 $ (0.76 ) $ (0.02 ) $ 1.20



Weightedaverage commonshares outstandingfor:

Basic EPS 253.51 253.51 253.51 253.51 253.51 253.51 253.51 253.51

Diluted EPS 253.51 254.14 254.14 254.14 254.14 254.14 254.14 254.14

Twelve Months Ended March 31, 2020

(in millions, except per-share amounts)

As Reported

Restructuring Costs

Transaction, Separation and Integration- Related Costs

Amortization of Acquired Intangible Assets

Impairment Losses

Gain on Arbitration Award

Pension and OPEB Actuarial and Settlement Gains

Tax Adjustment

Non-GAAP Results

Costs of services (excludes depreciation and amortization and restructuring costs)

$

14,901

$

-

$

-

$

-

$

-

$

-

$

-

$

-

$

14,901

Selling, general and administrative (excludes depreciation and amortization and restructuring costs)

2,050

-

(318

)

-

-

-

-

-

1,732

(Loss) income before income taxes

(5,228

)

252

318

583

6,794

(632

)

(244

)

-

1,843

Income tax expense (benefit)

130

44

63

133

95

-

(51

)

(33

)

381

Net (loss) income

(5,358

)

208

255

450

6,699

(632

)

(193

)

33

1,462

Less: net income attributable to non-controlling interest, net of tax

11

-

-

-

-

-

-

-

11

Net (loss) income attributable to DXC common stockholders

$

(5,369

)

$

208

$

255

$

450

$

6,699

$

(632

)

$

(193

)

$

33

$

1,451

Effective Tax Rate

(2.5

)%

20.7

%

Basic EPS

$

(20.76

)

$

0.80

$

0.99

$

1.74

$

25.91

$

(2.44

)

$

(0.75

)

$

0.13

$

5.61

Diluted EPS

$

(20.76

)

$

0.80

$

0.98

$

1.73

$

25.78

$

(2.43

)

$

(0.74

)

$

0.13

$

5.58

Weighted average common shares outstanding for:

Basic EPS

258.57

258.57

258.57

258.57

258.57

258.57

258.57

258.57

258.57

Diluted EPS

258.57

259.81

259.81

259.81

259.81

259.81

259.81

259.81

259.81

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

Twelve Months Ended March 31, 2020

Transaction, Pension and(in millions, Separation Amortization Gain on OPEBexcept As Restructuring and of Acquired Impairment Arbitration Actuarial Tax Non-GAAPper-share Reported Costs Integration- Intangible Losses Award and Adjustment Resultsamounts) Related Assets Settlement Costs Gains

Costs ofservices(excludesdepreciationand $ 14,901 $ - $ - $ - $ - $ - $ - $ - $ 14,901 amortizationandrestructuringcosts)

Selling,general andadministrative(excludesdepreciation 2,050 - (318 ) - - - - - 1,732 andamortizationandrestructuringcosts)

(Loss) incomebefore income (5,228 ) 252 318 583 6,794 (632 ) (244 ) - 1,843 taxes

Income taxexpense 130 44 63 133 95 - (51 ) (33 ) 381 (benefit)

Net (loss) (5,358 ) 208 255 450 6,699 (632 ) (193 ) 33 1,462 income

Less: netincomeattributable to 11 - - - - - - - 11 non-controllinginterest, netof tax

Net (loss)incomeattributable to $ (5,369 ) $ 208 $ 255 $ 450 $ 6,699 $ (632 ) $ (193 ) $ 33 $ 1,451 DXC commonstockholders



Effective Tax (2.5 ) 20.7 %Rate %



Basic EPS $ (20.76 ) $ 0.80 $ 0.99 $ 1.74 $ 25.91 $ (2.44 ) $ (0.75 ) $ 0.13 $ 5.61

Diluted EPS $ (20.76 ) $ 0.80 $ 0.98 $ 1.73 $ 25.78 $ (2.43 ) $ (0.74 ) $ 0.13 $ 5.58



Weightedaverage commonshares outstandingfor:

Basic EPS 258.57 258.57 258.57 258.57 258.57 258.57 258.57 258.57 258.57

Diluted EPS 258.57 259.81 259.81 259.81 259.81 259.81 259.81 259.81 259.81

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 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 2.0 % (1.6 )% (2.3 )% (4.6 )% (1.7 )%

Acquisitions (3.8 )% (0.3 )% (0.1 )% (0.4 )% (1.1 )%

Dispositions (1.3 )% (1.8 )% 6.5 % 6.9 % 2.6 %

Organic revenue growth (11.0 )% (9.8 )% (10.5 )% (7.0 )% (9.6 )%



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 (0.2 )% (0.2 )% - % - % (0.1 )%

Dispositions (0.1 )% (0.1 )% 0.4 % 0.5 % 0.2 %

GIS organic revenue growth (12.7 )% (11.9 )% (13.1 )% (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 (8.4 )% (0.3 )% (0.2 )% (0.7 )% (2.3 )%

Dispositions (2.6 )% (3.3 )% 14.0 % 14.3 % 5.8 %

GBS organic revenue growth (8.5 )% (7.0 )% (7.0 )% (4.0 )% (6.6 )%

Sequential Organic Revenue Growth

Fiscal Year 2021

Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21

Total revenue growth (6.5 )% 1.2 % (5.8 )% 2.3 %

Foreign currency 0.8 % (3.1 )% (1.3 )% (1.6 )%

Acquisitions (0.1 )% - % - % (0.3 )%

Dispositions (1.0 )% (0.5 )% 8.8 % - %

Organic revenue growth (6.8 )% (2.4 )% 1.7 % 0.4 %



GIS revenue growth (7.1 )% (0.7 )% 2.4 % 0.8 %

Foreign currency 1.0 % (3.3 )% (1.5 )% (1.8 )%

Acquisitions - % - % - % - %

Dispositions (0.1 )% (0.1 )% 0.4 % 0.1 %

GIS organic revenue growth (6.2 )% (4.1 )% 1.3 % (0.9 )%



GBS revenue growth (5.8 )% 3.1 % (14.3 )% 4.1 %

Foreign currency 0.6 % (2.6 )% (1.1 )% (1.3 )%

Acquisitions (0.1 )% - % - % (0.8 )%

Dispositions (2.3 )% (0.7 )% 17.5 % - %

GBS organic revenue growth (7.6 )% (0.2 )% 2.1 % 2.0 %

EBIT and Adjusted EBIT

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 (26 ) (60 ) 875 11 800 (benefit) expense

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 110 101 96 51 358 integration-relatedcosts

Amortization ofacquired intangible 148 152 114 116 530 assets

(Gain) loss on - - (2,046 ) 42 (2,004 )dispositions

Pension and OPEBactuarial and 2 - - 517 519 settlement losses

Impairment losses - - - 190 190

Debt extinguishment - - - 41 41 costs

Adjusted EBIT $ 190 $ 283 $ 300 $ 329 $ 1,102



Adjusted EBIT 4.2 % 6.2 % 7.0 % 7.5 % 6.2 %margin

EBIT margin (3.2 ) (5.2 ) 47.4 % (16.8 ) 5.2 % % % %

Fiscal Year 2020

(in millions)

Q1 FY20

Q2 FY20

Q3 FY20

Q4 FY20

FY20

Net income (loss)

$

168

$

(2,115

)

$

90

$

(3,501

)

$

(5,358

)

Income tax expense (benefit)

38

116

37

(61

)

130

Interest income

(30

)

(67

)

(33

)

(35

)

(165

)

Interest expense

91

104

93

95

383

EBIT

267

(1,962

)

187

(3,502

)

(5,010

)

Restructuring costs

142

32

74

4

252

Transaction, separation, and integration-related costs

105

53

68

92

318

Amortization of acquired intangible assets

138

151

146

148

583

Pension and OPEB actuarial and settlement gains

-

-

-

(244

)

(244

)

Impairment losses

-

2,887

53

3,854

6,794

Gain on arbitration award

-

(632

)

-

-

(632

)

Adjusted EBIT

$

652

$

529

$

528

$

352

$

2,061

Adjusted EBIT margin

13.3

%

10.9

%

10.5

%

7.3

%

10.5

%

EBIT margin

5.5

%

(40.4

)%

3.7

%

(72.7

)%

(25.6

)%

View source version on businesswire.com: https://www.businesswire.com/news/home/20210526005981/en/

CONTACT: Richard Adamonis, Corporate Media Relations, +1-862-228-3481, radamonis@dxc.com John Sweeney, CFA, Vice President, Investor Relations, +1-980-315-3665, john.sweeney@dxc.com