Reconciliation of Previously Reported Amounts to Recast Financial Statements

As described in Note 2 - "Recent Accounting Pronouncements," during the first quarter of fiscal 2019, the Company adopted ASU's 2017-07, 2016-18 and 2016-15. The adoption of these standards requires the Company to recast each prior period presented consistent with the new guidance. As described in Note 4 - "Divestitures," on May 31, 2018, the Company completed the Separation of USPS. As a result, the results of operations and financial position of USPS are reflected in the accompanying statements of operations and balance sheets as discontinued operations and each prior period presented has been recast to present USPS as a discontinued operation.

A reconciliation of the amounts previously reported for the three and nine months ended December 31, 2017 in DXC's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2017 to those as adjusted within the accompanying financial statements is shown in the tables below for selected financial amounts:



Condensed Consolidated Statement of Operations	Three Months Ended December 31, 2017
(in millions)	As Previously Reported		Reclassification of Discontinued Operations			Retrospective Adoption of ASU 2017-07			As Adjusted
Costs of services (excludes depreciation and amortization and restructuring costs)	$	4,521	$	(544	)	$	74		$	4,051
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	$	475	$	(37	)	$	9		$	447
Other expense (income), net	$	8	$	—		$	(83	)	$	(75	)



Condensed Consolidated Statement of Operations	Nine Months Ended December 31, 2017
(in millions)	As Previously Reported			Reclassification of Discontinued Operations			Retrospective Adoption of ASU 2017-07			As Adjusted
Costs of services (excludes depreciation and amortization and restructuring costs)	$	13,621		$	(1,589	)	$	198		$	12,230
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	$	1,557		$	(94	)	$	21		$	1,484
Other income, net	$	(72	)	$	—		$	(219	)	$	(291	)



Condensed Consolidated Statement of Cash Flows	Nine Months Ended December 31, 2017
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			Retrospective Adoption of ASU 2016-18			As Adjusted
Decrease (increase) in assets	$	167		$	(531	)	$	(1	)	$	(365	)
Net cash provided by operating activities	$	2,542		$	(531	)	$	(1	)	$	2,010
Deferred purchase price receivable	$	—		$	531		$	—		$	531
Other investing activities, net	$	(6	)	$	—		$	26		$	20
Net cash provided by investing activities	$	213		$	531		$	26		$	770
Cash and cash equivalents at beginning of year	$	1,263		$	—		$	5		$	1,268
Cash and cash equivalents at end of period	$	2,926		$	—		$	30		$	2,956

During the third quarter of fiscal 2019, pursuant to its adoption of ASU 2016-15, the Company determined that it was necessary to change the unit of account used in determining the portions of transferred trade receivables pertaining to operating activities and investing activities from each month's transactional activity to each day’s transactional activity. A reconciliation of amounts previously reported to amounts adjusted for this change are shown in the following tables. See Note 2 - "Recent Accounting Pronouncements" for additional information.

Previously reported amounts in the tables below refer to the Company's Quarterly Reports on Form 10-Q for the three months ended June 30, 2018 filed with the SEC on August 8, 2018 and the six months ended September 30, 2018 filed with the SEC on November 8, 2018.



Condensed Consolidated Statement of Cash Flows	Three Months Ended June 30, 2018
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			As Adjusted
Increase in assets	$	(196	)	$	(104	)	$	(300	)
Net cash provided by operating activities	$	473		$	(104	)	$	369
Deferred purchase price receivable	$	33		$	104		$	137
Net cash used in investing activities	$	(284	)	$	104		$	(180	)



Condensed Consolidated Statement of Cash Flows	Six Months Ended September 30, 2018
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			As Adjusted
Increase in assets	$	(447	)	$	(36	)	$	(483	)
Net cash provided by operating activities	$	885		$	(36	)	$	849
Deferred purchase price receivable	$	409		$	36		$	445
Net cash used in investing activities	$	(84	)	$	36		$	(48	)

Previously reported amounts in the tables below refer to the Company's Quarterly Reports on Form 10-Q for the three months ended June 30, 2017 filed with the SEC on August 9, 2017 and the six months ended September 30, 2017 filed with the SEC on November 8, 2017.



Condensed Consolidated Statement of Cash Flows	Three Months Ended June 30, 2017
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			As Adjusted
Increase in assets	$	(27	)	$	(155	)	$	(182	)
Net cash provided by operating activities	$	534		$	(155	)	$	379
Deferred purchase price receivable	$	—		$	155		$	155
Net cash provided by investing activities	$	859		$	155		$	1,014



Condensed Consolidated Statement of Cash Flows	Six Months Ended September 30, 2017
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			Retrospective Adoption of ASU 2016-18		As Adjusted
Decrease (increase) in assets	$	78		$	(339	)	$	—	$	(261	)
Net cash provided by operating activities	$	1,543		$	(339	)	$	—	$	1,204
Deferred purchase price receivable	$	—		$	339		$	—	$	339
Other investing activities, net	$	(20	)	$	—		$	26	$	6
Net cash provided by investing activities	$	437		$	339		$	26	$	802
Cash and cash equivalents at beginning of year	$	1,263		$	—		$	5	$	1,268
Cash and cash equivalents at end of period	$	2,671		$	—		$	31	$	2,702

Previously reported amounts in the tables below refer to Exhibit 99.1 of the Company's Current Report on Form 8-K filed with the SEC on August 16, 2018.



Unaudited Consolidated Statement of Cash Flows	Fiscal Year Ended March 31, 2018
(in millions)	As Previously Reported		Retrospective Adoption of ASU 2016-15			As Adjusted
Decrease (increase) in receivables	$	74	$	(538	)	$	(464	)
Net cash provided by operating activities	$	3,105	$	(538	)	$	2,567
Deferred purchase price receivable	$	147	$	538		$	685
Net cash provided by investing activities	$	181	$	538		$	719



Unaudited Consolidated Statement of Cash Flows	Fiscal Year Ended March 31, 2017
(in millions)	As Previously Reported			Retrospective Adoption of ASU 2016-15			As Adjusted
Decrease (increase) in receivables	$	193		$	(218	)	$	(25	)
Net cash provided by operating activities	$	837		$	(218	)	$	619
Deferred purchase price receivable	$	141		$	218		$	359
Net cash used in investing activities	$	(783	)	$	218		$	(565	)

The adoption of ASU 2016-15 did not impact the Company's statement of cash flows for the fiscal year ended April 1, 2016.