Basis of Presentation

6 Months Ended

Oct. 02, 2015

Computer Sciences Corporation (CSC or the Company) has prepared the interim period unaudited Consolidated Condensed Financial Statements included herein, as of and for the quarters ended October 2, 2015 and October 3, 2014, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited Consolidated Condensed Financial Statements and the accompanying notes. The unaudited Consolidated Condensed Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended April 3, 2015 (fiscal 2015).

On November 4, 2015, the Company's Board of Directors approved the separation of the Company's U.S. public sector business (see Note 19).

In the opinion of management, the unaudited Consolidated Condensed Financial Statements included herein reflect all adjustments necessary, including those of a normal recurring nature, to present fairly the financial position, the results of operations and the cash flows for such interim periods. The results of operations for such interim periods are not necessarily indicative of the Company's actual or expected results for the full year ending April 1, 2016 (fiscal 2016).

The Company reports its results based on a fiscal year convention that comprises four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. As a result, the first quarter of fiscal 2015 was a fourteen-week quarter.

The Company's income from continuing operations, before taxes and noncontrolling interest, and diluted earnings per share (EPS) from continuing operations, included the following adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method, for the quarters ended October 2, 2015 and October 3, 2014:



	Quarter Ended						Six Months Ended
(Amounts in millions, except per-share data)	October 2, 2015			October 3, 2014			October 2, 2015			October 3, 2014
Gross favorable	$	15		$	43		$	37		$	72
Gross unfavorable	(2		)	(7		)	(11		)	(17		)
Total net adjustments, before taxes and non-controlling interest	$	13		$	36		$	26		$	55

Impact on diluted EPS from continuing operations	$	0.05		$	0.15		$	0.11		$	0.21

Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses, and therefore, any adjustments to unbilled recoverable amounts under contracts in progress related to credit quality would be accounted for as a reduction of revenue. Unbilled recoverable amounts under contracts in progress resulting from sales, primarily to the United States (U.S.) and other governments, that are expected to be collected after one year totaled $27 million and $19 million as of October 2, 2015 and April 3, 2015, respectively.

Depreciation expense was $131 million and $265 million for the quarter and six months ended October 2, 2015, respectively, and $155 million and $324 million for the quarter and six months ended October 3, 2014, respectively.