x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
COMPUTER SCIENCES CORPORATION | ||
(Exact name of Registrant as specified in its charter) |
Nevada | 95-2043126 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
1775 Tysons Blvd. | ||
Tysons, Virginia | 22102 | |
(Address of principal executive offices) | (zip code) | |
Registrant's telephone number, including area code: (703) 245-9675 |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
COMPUTER SCIENCES CORPORATION | ||
TABLE OF CONTENTS | ||
PAGE | ||
PAGE | |
Three months ended | Six months ended | |||||||||||||||
(in millions, except per-share amounts) | September 30, 2016 | October 2, 2015(1) | September 30, 2016 | October 2, 2015(1) | ||||||||||||
(as adjusted) | (as adjusted) | |||||||||||||||
Revenues | $ | 1,871 | $ | 1,745 | 3,801 | 3,549 | ||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | 1,363 | 1,237 | 2,784 | 2,509 | ||||||||||||
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) | 293 | 269 | 598 | 540 | ||||||||||||
Depreciation and amortization | 167 | 168 | 333 | 342 | ||||||||||||
Restructuring costs | 25 | 5 | 82 | 5 | ||||||||||||
Interest expense | 29 | 29 | 54 | 59 | ||||||||||||
Interest income | (8 | ) | (7 | ) | (18 | ) | (18 | ) | ||||||||
Other expense (income), net | 3 | (3 | ) | 5 | (7 | ) | ||||||||||
Total costs and expenses | 1,872 | 1,698 | 3,838 | 3,430 | ||||||||||||
(Loss) income from continuing operations, before taxes | (1 | ) | 47 | (37 | ) | 119 | ||||||||||
Income tax benefit | (22 | ) | (46 | ) | (38 | ) | (39 | ) | ||||||||
Income from continuing operations | 21 | 93 | 1 | 158 | ||||||||||||
Income from discontinued operations, net of taxes | — | 84 | — | 186 | ||||||||||||
Net income | 21 | 177 | 1 | 344 | ||||||||||||
Less: net income attributable to noncontrolling interest, net of tax | 6 | 6 | 7 | 10 | ||||||||||||
Net income (loss) attributable to CSC common stockholders | $ | 15 | $ | 171 | $ | (6 | ) | $ | 334 | |||||||
Earnings (loss) per common share | ||||||||||||||||
Basic: | ||||||||||||||||
Continuing operations | $ | 0.11 | $ | 0.68 | $ | (0.04 | ) | $ | 1.14 | |||||||
Discontinued operations | — | 0.56 | — | 1.28 | ||||||||||||
$ | 0.11 | $ | 1.24 | $ | (0.04 | ) | $ | 2.42 | ||||||||
Diluted: | ||||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.66 | $ | (0.04 | ) | $ | 1.12 | |||||||
Discontinued operations | — | 0.55 | — | 1.24 | ||||||||||||
$ | 0.10 | $ | 1.21 | $ | (0.04 | ) | $ | 2.36 | ||||||||
Cash dividend per common share | $ | 0.14 | $ | 0.23 | $ | 0.28 | $ | 0.46 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Net Income | $ | 21 | $ | 177 | $ | 1 | $ | 344 | ||||||||
Other comprehensive income (loss), net of taxes: | ||||||||||||||||
Foreign currency translation adjustments, net of tax(1) | 44 | (110 | ) | (6 | ) | (57 | ) | |||||||||
Cash flow hedges adjustments | 14 | (14 | ) | 9 | (12 | ) | ||||||||||
Unrealized gain on available for sale equity investment | — | (6 | ) | — | — | |||||||||||
Pension and other post-retirement benefit plans, net of tax | ||||||||||||||||
Amortization of prior service costs, net of tax(2) | (4 | ) | (6 | ) | (7 | ) | (12 | ) | ||||||||
Foreign currency exchange rate changes | — | — | — | (1 | ) | |||||||||||
Pension and other post-retirement benefit plans, net of tax | (4 | ) | (6 | ) | (7 | ) | (13 | ) | ||||||||
Other comprehensive income (loss), net of taxes | 54 | (136 | ) | (4 | ) | (82 | ) | |||||||||
Comprehensive income (loss) | 75 | 41 | (3 | ) | 262 | |||||||||||
Less: comprehensive income attributable to noncontrolling interest, net of taxes | 6 | 6 | 7 | 10 | ||||||||||||
Comprehensive income (loss) attributable to CSC common stockholders | $ | 69 | $ | 35 | $ | (10 | ) | $ | 252 |
As of | ||||||||
(in millions, except per share and share amounts) | September 30, 2016 | April 1, 2016 | ||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 1,054 | $ | 1,178 | ||||
Receivables, net of allowance for doubtful accounts of $32 and $31 | 1,893 | 1,831 | ||||||
Prepaid expenses and other current assets | 379 | 403 | ||||||
Total current assets | 3,326 | 3,412 | ||||||
Intangible assets, net of accumulated amortization of $2,287 and $2,228 | 1,882 | 1,328 | ||||||
Goodwill | 1,843 | 1,277 | ||||||
Deferred income taxes, net | 327 | 345 | ||||||
Property and equipment, net of accumulated depreciation of $2,976 and $2,894 | 984 | 1,025 | ||||||
Other assets | 457 | 349 | ||||||
Total Assets | $ | 8,819 | $ | 7,736 | ||||
LIABILITIES and EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term debt and current maturities of long-term debt | $ | 794 | $ | 710 | ||||
Accounts payable | 281 | 341 | ||||||
Accrued payroll and related costs | 285 | 288 | ||||||
Accrued expenses and other current liabilities | 787 | 720 | ||||||
Deferred revenue and advance contract payments | 537 | 509 | ||||||
Income taxes payable | 17 | 40 | ||||||
Total current liabilities | 2,701 | 2,608 | ||||||
Long-term debt, net of current maturities | 2,506 | 1,934 | ||||||
Non-current deferred revenue | 313 | 348 | ||||||
Deferred tax liabilities | 221 | 181 | ||||||
Non-current income tax liabilities | 184 | 175 | ||||||
Other liabilities | 569 | 458 | ||||||
Total Liabilities | 6,494 | 5,704 | ||||||
Commitments and contingencies | ||||||||
CSC stockholders' equity: | ||||||||
Preferred stock, par value $1 per share. authorized 1,000,000 shares; none issued | ||||||||
Common stock, par value $1 per share; authorized 750,000,000; issued 151,373,670 and 148,746,672 | 151 | 149 | ||||||
Additional paid-in capital | 2,515 | 2,439 | ||||||
(Accumulated deficit) retained earnings | (14 | ) | 33 | |||||
Accumulated other comprehensive loss | (115 | ) | (111 | ) | ||||
Treasury stock, at cost, 10,603,537 and 10,365,811 shares | (496 | ) | (485 | ) | ||||
Total CSC stockholders’ equity | 2,041 | 2,025 | ||||||
Noncontrolling interest in subsidiaries | 284 | 7 | ||||||
Total Equity | 2,325 | 2,032 | ||||||
Total Liabilities and Equity | $ | 8,819 | $ | 7,736 |
Six months ended | ||||||||
(in millions) | September 30, 2016 | October 2, 2015(1) | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 1 | $ | 344 | ||||
Adjustments to reconcile net loss income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 339 | 410 | ||||||
Stock-based compensation | 35 | 7 | ||||||
Gain on dispositions | — | (55 | ) | |||||
Unrealized foreign currency exchange loss | 90 | 7 | ||||||
Other non-cash charges, net | — | 12 | ||||||
Changes in assets and liabilities, net of acquisitions and dispositions: | ||||||||
Decrease in assets | 64 | 176 | ||||||
Decrease in liabilities | (287 | ) | (417 | ) | ||||
Net cash provided by operating activities | 242 | 484 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property and equipment | (143 | ) | (184 | ) | ||||
Payments for outsourcing contract costs | (49 | ) | (53 | ) | ||||
Software purchased and developed | (78 | ) | (104 | ) | ||||
Payments for acquisitions, net of cash acquired | (434 | ) | (236 | ) | ||||
Business dispositions | — | 34 | ||||||
Proceeds from sale of assets | 9 | 50 | ||||||
Other investing activities, net | (26 | ) | 12 | |||||
Net cash used in investing activities | (721 | ) | (481 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings of commercial paper | 1,163 | 299 | ||||||
Repayments of commercial paper | (1,058 | ) | (84 | ) | ||||
Borrowings under lines of credit | 920 | 1,310 | ||||||
Repayment of borrowings under lines of credit | (529 | ) | (1,150 | ) | ||||
Debt borrowings | 107 | — | ||||||
Debt repayments | (188 | ) | (461 | ) | ||||
Proceeds from stock options | 42 | 45 | ||||||
Taxes paid related to net share settlements of stock-based compensation awards | (12 | ) | (27 | ) | ||||
Repurchase of common stock | — | (118 | ) | |||||
Dividend payments | (39 | ) | (64 | ) | ||||
Other financing activities, net | (30 | ) | (6 | ) | ||||
Net cash provided by (used in) financing activities | 376 | (256 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (21 | ) | (27 | ) | ||||
Net decrease in cash and cash equivalents | (124 | ) | (280 | ) | ||||
Cash and cash equivalents at beginning of year | 1,178 | 2,098 | ||||||
Cash and cash equivalents at end of period | $ | 1,054 | $ | 1,818 |
(in millions, except shares in thousands) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total CSC Equity | Non- Controlling Interest | Total Equity | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance at April 1, 2016 | 148,747 | $ | 149 | $ | 2,439 | $ | 33 | $ | (111 | ) | $ | (485 | ) | $ | 2,025 | $ | 7 | $ | 2,032 | |||||||
Net (loss) income | (6 | ) | (6 | ) | 7 | 1 | ||||||||||||||||||||
Other comprehensive income | (4 | ) | (4 | ) | (4 | ) | ||||||||||||||||||||
Stock based compensation expense | 35 | 35 | 35 | |||||||||||||||||||||||
Acquisition of treasury stock | (11 | ) | (11 | ) | (11 | ) | ||||||||||||||||||||
Stock option exercises and other common stock transactions | 2,627 | 2 | 41 | 43 | 43 | |||||||||||||||||||||
Cash dividends declared | (39 | ) | (39 | ) | (39 | ) | ||||||||||||||||||||
Noncontrolling interest distributions and other | (11 | ) | (11 | ) | ||||||||||||||||||||||
Noncontrolling interest from acquisition | 281 | 281 | ||||||||||||||||||||||||
Divestiture of NPS | (2 | ) | (2 | ) | (2 | ) | ||||||||||||||||||||
Balance at September 30, 2016 | 151,374 | $ | 151 | $ | 2,515 | $ | (14 | ) | $ | (115 | ) | $ | (496 | ) | $ | 2,041 | $ | 284 | $ | 2,325 | ||||||
(in millions, except shares in thousands) | Common Stock | Additional Paid-in Capital | Retained Earnings(1) | Accumulated Other Comprehensive Income | Treasury Stock | Total CSC Equity(1) | Non- Controlling Interest | Total Equity(1) | ||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||
Balance at April 3, 2015 | 148,374 | $ | 148 | $ | 2,286 | $ | 928 | $ | 21 | $ | (446 | ) | $ | 2,937 | $ | 28 | $ | 2,965 | ||||||||
Net income | 334 | 334 | 10 | 344 | ||||||||||||||||||||||
Other comprehensive income | (82 | ) | (82 | ) | (82 | ) | ||||||||||||||||||||
Stock based compensation expense | 6 | 6 | 6 | |||||||||||||||||||||||
Acquisition of treasury stock | (27 | ) | (27 | ) | (27 | ) | ||||||||||||||||||||
Stock option exercises and other common stock transactions | 2,053 | 2 | 36 | 38 | 38 | |||||||||||||||||||||
Share repurchase program | (1,943 | ) | (2 | ) | (32 | ) | (84 | ) | (118 | ) | (118 | ) | ||||||||||||||
Cash dividends declared | (64 | ) | (64 | ) | (64 | ) | ||||||||||||||||||||
Noncontrolling interest distributions and other | — | (9 | ) | (9 | ) | |||||||||||||||||||||
Balance at October 2, 2015 | 148,484 | $ | 148 | $ | 2,296 | $ | 1,114 | $ | (61 | ) | $ | (473 | ) | $ | 3,024 | $ | 29 | $ | 3,053 |
(in millions) | Estimated Fair Value | |||
Cash and cash equivalents | $ | 201 | ||
Accounts receivable and other current assets | 216 | |||
Intangible assets - developed technology | 100 | |||
Intangible assets - customer relationships | 457 | |||
Intangible assets - trade names | 10 | |||
Intangible assets - other | 17 | |||
Deferred tax asset, long-term | 56 | |||
Property and equipment and other noncurrent assets | 31 | |||
Accounts payable, accrued payroll, accrued expenses and other current liabilities | (215 | ) | ||
Deferred revenue and advance contract payments | (71 | ) | ||
Debt | (254 | ) | ||
Deferred tax liability, long-term | (101 | ) | ||
Other long-term liabilities | (117 | ) | ||
Total identifiable net assets acquired | 330 | |||
Goodwill | 644 | |||
Noncontrolling interest | (281 | ) | ||
Total estimated consideration | $ | 693 |
Description | Estimated Useful Lives (Years) | |
Developed technology | 7-8 | |
Customer relationships | 15 | |
Trade names | 3-5 |
For the periods ended October 2, 2015 | ||||||||
(in millions) | Three months ended | Six months ended | ||||||
Revenues | $ | 967 | $ | 1,924 | ||||
Costs of services | (733 | ) | (1,487 | ) | ||||
Selling, general and administrative | (25 | ) | (41 | ) | ||||
Depreciation and amortization | (35 | ) | (68 | ) | ||||
Restructuring costs | (1 | ) | (1 | ) | ||||
Separation and merger costs | (38 | ) | (53 | ) | ||||
Interest expense | (6 | ) | (11 | ) | ||||
Other income, net | — | 22 | ||||||
Total income from discontinued operations, before income taxes | 129 | 285 | ||||||
Income tax expense | (45 | ) | (99 | ) | ||||
Total income from discontinued operations | $ | 84 | $ | 186 |
(in millions) | Six months ended October 2, 2015 | |||
Depreciation | $ | 57 | ||
Amortization | $ | 11 | ||
Capital expenditures | $ | (75 | ) | |
Significant operating non-cash items: | ||||
Net gain on disposition of business | $ | 22 | ||
Significant investing non-cash items: | ||||
Capital expenditures in accounts payable | $ | (11 | ) |
Three months ended | Six months ended | |||||||||||||||
(in millions, except per-share amounts) | September 30, 2016 | October 2, 2015(1) | September 30, 2016 | October 2, 2015(1) | ||||||||||||
Net income attributable to CSC common stockholders | ||||||||||||||||
From continuing operations | $ | 15 | $ | 93 | $ | (6 | ) | $ | 158 | |||||||
From discontinued operations | — | 78 | — | 176 | ||||||||||||
$ | 15 | $ | 171 | $ | (6 | ) | $ | 334 | ||||||||
Common share information: | ||||||||||||||||
Weighted average common shares outstanding for basic EPS | 140.53 | 138.30 | 139.76 | 138.11 | ||||||||||||
Dilutive effect of stock options and equity awards | 3.25 | 2.55 | — | 3.16 | ||||||||||||
Weighted average common shares outstanding for diluted EPS | 143.78 | 140.85 | 139.76 | 141.27 | ||||||||||||
Earnings per share – basic and diluted: | ||||||||||||||||
Basic EPS: | ||||||||||||||||
Continuing operations | $ | 0.11 | $ | 0.68 | $ | (0.04 | ) | $ | 1.14 | |||||||
Discontinued operations | — | 0.56 | — | 1.28 | ||||||||||||
Total | $ | 0.11 | $ | 1.24 | $ | (0.04 | ) | $ | 2.42 | |||||||
Diluted EPS: | ||||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.66 | $ | (0.04 | ) | $ | 1.12 | |||||||
Discontinued operations | — | 0.55 | — | 1.24 | ||||||||||||
Total | $ | 0.10 | $ | 1.21 | $ | (0.04 | ) | $ | 2.36 |
Fair Value Hierarchy | ||||||||||||||||
(in millions) | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||
September 30, 2016 | ||||||||||||||||
Assets: | ||||||||||||||||
Money market funds and money market deposit accounts | $ | 245 | $ | 245 | $ | — | $ | — | ||||||||
Mutual fund investments | 25 | 25 | — | — | ||||||||||||
Derivative instruments | 20 | — | 20 | — | ||||||||||||
Total assets | $ | 290 | $ | 270 | $ | 20 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Contingent consideration | $ | 6 | $ | — | $ | — | $ | 6 | ||||||||
Derivative instruments | 7 | — | 7 | — | ||||||||||||
Total liabilities | $ | 13 | $ | — | $ | 7 | $ | 6 |
April 1, 2016 | ||||||||||||||||
Assets: | ||||||||||||||||
Money market funds and money market deposit accounts | $ | 348 | $ | 348 | $ | — | $ | — | ||||||||
Time deposits | 1 | 1 | — | — | ||||||||||||
Available for sale equity investments | 66 | 66 | — | — | ||||||||||||
Derivative instruments | 15 | — | 15 | — | ||||||||||||
Total assets | $ | 430 | $ | 415 | $ | 15 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Derivative instruments | $ | 11 | $ | — | $ | 11 | $ | — | ||||||||
Total liabilities | $ | 11 | $ | — | $ | 11 | $ | — |
Derivative Assets | ||||||||||
As of | ||||||||||
(in millions) | Balance sheet line item | September 30, 2016 | April 1, 2016 | |||||||
Derivatives designated for hedge accounting: | ||||||||||
Interest rate swaps | Other assets | $ | — | $ | — | |||||
Foreign Currency forward contracts | Prepaid expenses and other current assets | 9 | 3 | |||||||
Total fair value of derivatives designated for hedge accounting | $ | 9 | $ | 3 | ||||||
Derivatives not designated for hedge accounting: | ||||||||||
Foreign Currency forward contracts | Prepaid expenses and other current assets | $ | 11 | $ | 12 | |||||
Total fair value of derivatives not designated for hedge accounting | $ | 11 | $ | 12 |
Derivative Liabilities | ||||||||||
As of | ||||||||||
(in millions) | Balance sheet line item | September 30, 2016 | April 1, 2016 | |||||||
Derivatives designated for hedge accounting: | ||||||||||
Interest rate swaps | Other long-term liabilities | $ | 3 | $ | — | |||||
Foreign Currency forward contracts | Accrued expenses and other current liabilities | — | 4 | |||||||
Total fair value of derivatives designated for hedge accounting: | $ | 3 | $ | 4 | ||||||
Derivatives not designated for hedge accounting: | ||||||||||
Foreign Currency forward contracts | Accrued expenses and other current liabilities | $ | 4 | $ | 7 | |||||
Total fair value of derivatives not designated for hedge accounting | $ | 4 | $ | 7 |
Three months ended | Six months ended | |||||||||||||||||
(in millions) | Statement of Operations line item | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | |||||||||||||
Total return swaps | Cost of services and Selling, general & administrative expenses | $ | — | $ | (3 | ) | $ | — | $ | (3 | ) | |||||||
Foreign currency forwards | Other (expense) income, net | (3 | ) | (2 | ) | (5 | ) | 1 | ||||||||||
Total | $ | (3 | ) | $ | (5 | ) | $ | (5 | ) | $ | (2 | ) |
(in millions) | GBS | GIS | Total | |||||||||
Goodwill, gross | $ | 1,615 | $ | 2,424 | $ | 4,039 | ||||||
Accumulated impairment losses | (701 | ) | (2,061 | ) | (2,762 | ) | ||||||
Balance as of April 1, 2016, net | 914 | 363 | 1,277 | |||||||||
Additions | 617 | 32 | 649 | |||||||||
Foreign currency translation | (81 | ) | (2 | ) | (83 | ) | ||||||
Goodwill, gross | 2,151 | 2,454 | 4,605 | |||||||||
Accumulated impairment losses | (701 | ) | (2,061 | ) | (2,762 | ) | ||||||
Balance as of September 30, 2016, net | $ | 1,450 | $ | 393 | $ | 1,843 |
As of September 30, 2016 | ||||||||||||
(in millions) | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||
Software | $ | 2,409 | $ | 1,589 | $ | 820 | ||||||
Outsourcing contract costs | 788 | 459 | 329 | |||||||||
Customer and other intangible assets | 972 | 239 | 733 | |||||||||
Total intangible assets | $ | 4,169 | $ | 2,287 | $ | 1,882 |
As of April 1, 2016 | ||||||||||||
(in millions) | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | |||||||||
Software | $ | 2,243 | $ | 1,531 | $ | 712 | ||||||
Outsourcing contract costs | 828 | 494 | 334 | |||||||||
Customer and other intangible assets | 485 | 203 | 282 | |||||||||
Total intangible assets | $ | 3,556 | $ | 2,228 | $ | 1,328 |
Fiscal year | (in millions) | |||
Remainder of 2017 | $ | 195 | ||
2018 | $ | 323 | ||
2019 | $ | 296 | ||
2020 | $ | 261 | ||
2021 | $ | 205 |
As of | ||||||||
(in millions) | September 30, 2016 | April 1, 2016 | ||||||
Short-term debt and current maturities of long-term debt | ||||||||
Euro-denominated commercial paper | $ | 669 | $ | 559 | ||||
Current maturities of long-term debt | 76 | 79 | ||||||
Current maturities of capitalized lease liabilities | 49 | 72 | ||||||
Short-term debt and current maturities of long term debt | $ | 794 | $ | 710 | ||||
Long-term debt, net of current maturities | ||||||||
4.45% term notes, due September 2022 | $ | 454 | $ | 454 | ||||
Loan payable, due July 2021 | 76 | — | ||||||
Loan payable, due March 2021 | 568 | 575 | ||||||
Loan payable, due January 2019 | 259 | 284 | ||||||
Loan payable, due May 2016 | — | 71 | ||||||
Payable - credit facility, long-term(1) | 960 | 395 | ||||||
Lease credit facility, various | 68 | 49 | ||||||
Mandatorily redeemable preferred stock outstanding, due March 2023 | 61 | 61 | ||||||
Capitalized lease liabilities | 114 | 141 | ||||||
Borrowings for assets acquired under long-term financing | 69 | 51 | ||||||
Other borrowings | 2 | 4 | ||||||
Long-term debt | 2,631 | 2,085 | ||||||
Less: current maturities of long-term debt | 125 | 151 | ||||||
Long-term debt, net of current maturities | $ | 2,506 | $ | 1,934 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Service cost | 5 | 7 | $ | 11 | $ | 13 | ||||||||||
Interest cost | 21 | 24 | 42 | 47 | ||||||||||||
Expected return on assets | (40 | ) | (46 | ) | (83 | ) | (91 | ) | ||||||||
Amortization of prior service costs | (4 | ) | (6 | ) | (9 | ) | (10 | ) | ||||||||
Net periodic pension benefit | $ | (18 | ) | $ | (21 | ) | $ | (39 | ) | $ | (41 | ) |
September 30, 2016 | October 2, 2015 | |||||
Discount or settlement rates | 3.1 | % | 3.0 | % | ||
Expected long-term rates of return on assets | 6.3 | % | 6.3 | % | ||
Rates of increase in compensation levels | 2.6 | % | 2.8 | % |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Cost of services | $ | 7 | $ | 8 | $ | 12 | $ | (3 | ) | |||||||
Selling, general and administrative | 14 | 11 | 23 | 10 | ||||||||||||
Total | $ | 21 | $ | 19 | $ | 35 | $ | 7 | ||||||||
Total, net of tax | $ | 15 | $ | 12 | $ | 24 | $ | 4 |
Six months ended | |||||
September 30, 2016 | October 2, 2015 | ||||
Risk-free interest rate | 1.55 | % | 1.80 | % | |
Expected volatility | 29 | % | 32 | % | |
Expected term (in years) | 6.19 | 6.20 | |||
Dividend yield | 1.66 | % | 1.39 | % |
Number of Option Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value (millions) | |||||||||
Outstanding as of April 1, 2016(1) | 5,366,621 | $ | 24.83 | 7.06 | $ | 51 | ||||||
Granted | 2,109,337 | 49.17 | ||||||||||
Exercised | (2,055,901 | ) | 21.26 | 54 | ||||||||
Canceled/Forfeited | (292,078 | ) | 33.33 | |||||||||
Expired | (46,949 | ) | 23.31 | |||||||||
Outstanding as of September 30, 2016 | 5,081,030 | 35.90 | 8.13 | 83 | ||||||||
Vested and expected to vest in the future as of September 30, 2016 | 4,740,073 | 35.34 | 8.04 | 80 | ||||||||
Exercisable as of September 30, 2016 | 1,726,123 | $ | 24.28 | 5.97 | $ | 49 |
Number of Shares | Weighted Average Fair Value per share | |||||
Outstanding as of April 1, 2016(1) | 3,597,999 | $ | 29.25 | |||
Granted | 1,143,863 | 47.64 | ||||
Released/Issued | (534,331 | ) | 26.40 | |||
Canceled/Forfeited | (306,960 | ) | 31.14 | |||
Outstanding as of September 30, 2016 | 3,900,571 | $ | 34.88 |
Number of Shares | Weighted Average Fair Value per share | |||||
Outstanding as of April 1, 2016(1) | 89,046 | $ | 27.00 | |||
Granted | 33,600 | 47.35 | ||||
Released/Issued | (30,900 | ) | 29.06 | |||
Canceled/Forfeited | (4,800 | ) | 30.31 | |||
Outstanding as of September 30, 2016 | 86,946 | $ | 33.95 |
(in millions) | Foreign Currency Translation Adjustments | Cash Flow Hedge | Pension and Other Post-Retirement Benefit Plans(1) | Accumulated Other Comprehensive Loss | ||||||||||||
Balance at April 1, 2016 | $ | (399 | ) | $ | (1 | ) | $ | 289 | $ | (111 | ) | |||||
Current-period other comprehensive loss, net of taxes | (6 | ) | 9 | — | 3 | |||||||||||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | — | — | (7 | ) | (7 | ) | ||||||||||
Balance at September 30, 2016 | $ | (405 | ) | $ | 8 | $ | 282 | $ | (115 | ) |
(in millions) | Foreign Currency Translation Adjustments | Cash Flow Hedge | Pension and Other Post-Retirement Benefit Plans | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
Balance at April 3, 2015 | $ | (316 | ) | $ | (2 | ) | $ | 339 | $ | 21 | ||||||
Current-period other comprehensive loss, net of taxes | (57 | ) | (12 | ) | (1 | ) | (70 | ) | ||||||||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | — | — | (12 | ) | (12 | ) | ||||||||||
Balance at October 2, 2015 | $ | (373 | ) | $ | (14 | ) | $ | 326 | $ | (61 | ) |
(in millions) | Six months ended | |||||||
September 30, 2016 | October 2, 2015 | |||||||
Cash paid for: | ||||||||
Interest | $ | 52 | $ | 67 | ||||
Income taxes, net of refunds | $ | 25 | $ | 38 | ||||
Non-cash activities: | ||||||||
Operating: | ||||||||
Depreciation | $ | 177 | $ | 208 | ||||
Investing: | ||||||||
Capital expenditures in accounts payable and accrued expenses | $ | 28 | $ | 58 | ||||
Capital expenditures through capital lease obligations | $ | 22 | $ | 24 | ||||
Assets acquired under long-term financing | $ | 67 | $ | — | ||||
Financing: | ||||||||
Dividends declared but not yet paid | $ | 19 | $ | 32 |
• | Global Business Services - GBS provides innovative technology solutions including consulting, applications services and software, which address key business challenges within the customer’s industry. GBS strives to help clients understand and exploit industry trends of IT modernization and virtualization of the IT portfolio (hardware, software, networking, storage and computing assets). GBS has four primary focus areas: industry aligned next-generation software and solutions, end-to-end applications services, consulting services, and big data services. Industry aligned next-generation software and solutions is centered on the insurance, banking, healthcare and life sciences industries, as well as manufacturing and other diversified industries. Activities are primarily related to vertical alignment of software solutions and process-based intellectual property that power mission-critical transaction engines, in addition to the provision of tailored business process services (BPS). Applications services optimize and modernize clients' business and technical environments, enabling clients to capitalize on emerging services such as cloud and mobility as well as big data within new commercial models including "as a Service." The consulting services business helps organizations innovate, transform and create sustainable competitive advantage through a combination of industry, business process, technology, systems integration and change management expertise. Key competitive differentiators for GBS include its global scale, solution objectivity, depth of industry expertise, strong partnerships, vendor and product independence and end-to-end solutions and capabilities. Changing business issues such as globalization, fast-developing economies, government regulation and growing concerns around risk, security and compliance drive demand for these GBS offerings. |
• | Global Infrastructure Services - GIS provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, cyber security, compute and managed storage solutions to commercial clients globally. GIS also delivers CSC's next-generation cloud offerings, including Infrastructure as a Service (IaaS), private cloud solutions and Storage as a Service. GIS provides a portfolio of standard offerings that have predictable outcomes and measurable results while reducing business risk and operational costs for clients. To provide clients with differentiated offerings, GIS maintains a select number of key alliance partners to make |
(in millions) | GBS | GIS | Corporate | Total | ||||||||||||
Three months ended September 30, 2016 | ||||||||||||||||
Revenues | $ | 1,035 | $ | 836 | $ | — | $ | 1,871 | ||||||||
Consolidated segment operating income | $ | 83 | $ | 26 | $ | (11 | ) | $ | 98 | |||||||
Depreciation and amortization | $ | 41 | $ | 110 | $ | 16 | $ | 167 | ||||||||
Three months ended October 2, 2015 | ||||||||||||||||
Revenues | $ | 891 | $ | 854 | $ | — | $ | 1,745 | ||||||||
Consolidated segment operating income | $ | 101 | $ | 64 | $ | (35 | ) | $ | 130 | |||||||
Depreciation and amortization | $ | 30 | $ | 128 | $ | 10 | $ | 168 |
(in millions) | GBS | GIS | Corporate | Total | ||||||||||||
Six months ended September 30, 2016 | ||||||||||||||||
Revenues | $ | 2,084 | $ | 1,717 | $ | — | $ | 3,801 | ||||||||
Consolidated segment operating income | $ | 156 | $ | 22 | $ | (28 | ) | $ | 150 | |||||||
Depreciation and amortization | $ | 77 | $ | 224 | $ | 32 | $ | 333 | ||||||||
Six months ended October 2, 2015 | ||||||||||||||||
Revenues | $ | 1,810 | $ | 1,739 | $ | — | $ | 3,549 | ||||||||
Consolidated segment operating income | $ | 198 | $ | 117 | $ | (41 | ) | $ | 274 | |||||||
Depreciation and amortization | $ | 60 | $ | 263 | $ | 19 | $ | 342 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Consolidated segment operating income | $ | 98 | $ | 130 | $ | 150 | $ | 274 | ||||||||
Corporate G&A | (75 | ) | (64 | ) | (145 | ) | (121 | ) | ||||||||
Pension & OPEB actuarial & settlement losses | — | — | (1 | ) | — | |||||||||||
Interest expense | (29 | ) | (29 | ) | (54 | ) | (59 | ) | ||||||||
Interest income | 8 | 7 | 18 | 18 | ||||||||||||
Other (expense) income, net | (3 | ) | 3 | (5 | ) | 7 | ||||||||||
(Loss) income from continuing operations, before taxes | $ | (1 | ) | $ | 47 | $ | (37 | ) | $ | 119 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Costs of services | $ | 29 | $ | (2 | ) | $ | 75 | $ | (2 | ) | ||||||
Selling, general and administrative | (4 | ) | 7 | 7 | 7 | |||||||||||
Total | $ | 25 | $ | 5 | $ | 82 | $ | 5 |
(in millions) | Restructuring liability as of April 1, 2016 | Costs expensed in fiscal 2017 | Less: costs not affecting restructuring liability(1) | Cash paid | Other(2) | Restructuring liability as of September 30, 2016 | ||||||||||||||||||
Workforce reductions | $ | — | $ | 81 | (6 | ) | $ | (21 | ) | $ | — | $ | 54 | |||||||||||
Facilities costs | — | 3 | — | — | — | 3 | ||||||||||||||||||
$ | — | $ | 84 | $ | (6 | ) | $ | (21 | ) | $ | — | $ | 57 |
(in millions) | Restructuring liability as of April 1, 2016 | Costs reversed in fiscal 2017 | Cash paid | Restructuring liability as of September 30, 2016 | ||||||||||||
Workforce reductions | $ | 29 | $ | — | $ | (11 | ) | $ | 18 | |||||||
Facilities costs | 30 | (1 | ) | (10 | ) | 19 | ||||||||||
$ | 59 | $ | (1 | ) | $ | (21 | ) | $ | 37 |
(in millions) | Restructuring liability as of April 1, 2016 | Costs reversed in fiscal 2017 | Cash paid(1) | Restructuring liability as of September 30, 2016 | ||||||||||||
Workforce reductions | $ | 29 | $ | (1 | ) | $ | (19 | ) | $ | 9 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
GBS | $ | 2 | $ | 4 | $ | 22 | $ | 4 | ||||||||
GIS | 23 | 1 | 60 | 1 | ||||||||||||
Corporate | — | — | — | — | ||||||||||||
Total | $ | 25 | $ | 5 | $ | 82 | $ | 5 |
(in millions) | Minimum purchase commitment | |||
2017 | $ | 133 | ||
2018 | 283 | |||
2019 and thereafter | 1,181 | |||
Total | $ | 1,597 |
(in millions) | Fiscal 2017 | Fiscal 2018 | Fiscal 2019 and thereafter | Total | ||||||||||||
Surety bonds | $ | 10 | $ | 10 | $ | — | $ | 20 | ||||||||
Letters of credit | 11 | 3 | 33 | 47 | ||||||||||||
Stand-by letters of credit | 40 | 4 | 18 | 62 | ||||||||||||
Total | $ | 61 | $ | 17 | $ | 51 | $ | 129 |
(in millions) | Three months ended October 2, 2015 | |||||||||||||||||||
Condensed Consolidated Statements of Operations (unaudited) | As Previously Reported | Reclassification of Discontinued Operations | Correction of Prior Period Misstatement(1) | Adoption of ASU 2016-09 | As Adjusted | |||||||||||||||
Income (loss) from continuing operations, before taxes | $ | 176 | $ | (129 | ) | $ | — | $ | — | $ | 47 | |||||||||
Income tax expense (benefit) | $ | 3 | $ | (45 | ) | $ | (2 | ) | $ | (2 | ) | $ | (46 | ) | ||||||
Income (loss) from continuing operations | $ | 173 | $ | (84 | ) | $ | 2 | $ | 2 | $ | 93 | |||||||||
Income from discontinued operations | $ | — | $ | 84 | $ | — | $ | — | $ | 84 | ||||||||||
Net income | $ | 173 | $ | — | $ | 2 | $ | 2 | $ | 177 | ||||||||||
Net income attributable to CSC common stockholders | $ | 167 | $ | — | $ | 2 | $ | 2 | $ | 171 |
(in millions) | Six months ended October 2, 2015 | |||||||||||||||||||
Condensed Consolidated Statements of Operations (unaudited) | As Previously Reported | Reclassification of Discontinued Operations | Correction of Prior Period Misstatement(1) | Adoption of ASU 2016-09 | As Adjusted | |||||||||||||||
Income (loss) from continuing operations, before taxes | $ | 404 | $ | (285 | ) | $ | — | $ | — | $ | 119 | |||||||||
Income tax expense (benefit) | $ | 67 | $ | (99 | ) | $ | 9 | $ | (16 | ) | $ | (39 | ) | |||||||
Income (loss) from continuing operations | $ | 337 | $ | (186 | ) | $ | (9 | ) | $ | 16 | $ | 158 | ||||||||
Income from discontinued operations | $ | — | $ | 186 | $ | — | $ | — | $ | 186 | ||||||||||
Net income (loss) | $ | 337 | $ | — | $ | (9 | ) | $ | 16 | $ | 344 | |||||||||
Net income (loss) attributable to CSC common stockholders | $ | 327 | $ | — | $ | (9 | ) | $ | 16 | $ | 334 |
• | provide a narrative on the financial results, as presented by management; |
• | enhance the disclosures in the unaudited Condensed Consolidated Financial Statements and related Notes by providing context within which the financial results should be analyzed; and |
• | provide information to assist the reader in ascertaining the predictive value of the reported financial results. |
• | GBS provides innovative technology solutions including consulting, applications services and software, which address key business challenges within the customer’s industry. GBS strives to help clients understand and exploit industry trends of IT modernization and virtualization of the IT portfolio (hardware, software, networking, storage and computing assets). GBS has four primary focus areas: industry aligned next-generation software and solutions (IS&S), end-to-end applications services, consulting services, and big data services. Industry aligned next-generation software and solutions is centered on the insurance, banking, healthcare and life sciences industries, as well as manufacturing and other diversified industries. Activities are primarily related to vertical alignment of software solutions and process-based intellectual property that power mission-critical transaction engines, in addition to the provision of tailored BPS. Applications services optimize and modernize clients' business and technical environments, enabling clients to capitalize on emerging services such as cloud and mobility as well as big data within new commercial models including "as a Service." The consulting services business helps organizations innovate, transform and create sustainable competitive advantage through a combination of industry, business process, technology, systems integration and change management expertise. Key competitive differentiators for GBS include its global scale, solution objectivity, depth of industry expertise, strong partnerships, vendor and product independence and end-to-end solutions and capabilities. Changing business issues such as globalization, fast-developing economies, government regulation and growing concerns around risk, security and compliance drive demand for these GBS offerings. |
• | GIS provides managed and virtual desktop solutions, unified communications and collaboration services, data center management, cyber security, compute and managed storage solutions to commercial clients globally. GIS also delivers CSC's next-generation cloud offerings, including IaaS, private cloud solutions and Storage as a Service. GIS provides a portfolio of standard offerings that have predictable outcomes and measurable results while reducing business risk and operational costs for clients. To provide clients with differentiated offerings, GIS maintains a select number of key alliance partners to make investments in developing unique offerings and go-to-market strategies. This collaboration helps CSC determine the best technology, develop road maps and enhance opportunities to differentiate solutions, expand market reach, augment capabilities and jointly deliver impactful solutions. |
Three months ended | |||||||||||||||
(In millions, except per-share amounts) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | |||||||||||
Revenues | $ | 1,871 | $ | 1,745 | $ | 126 | 7.2 | % | |||||||
Total costs and expenses | 1,872 | 1,698 | 174 | 10.2 | % | ||||||||||
(Loss) income from continuing operations, before taxes | (1 | ) | 47 | (48 | ) | (102.1 | )% | ||||||||
Income tax benefit | (22 | ) | (46 | ) | 24 | (52.2 | )% | ||||||||
Income from continuing operations | 21 | 93 | (72 | ) | (77.4 | )% | |||||||||
Income from discontinued operations, net of taxes | — | 84 | (84 | ) | (100.0 | )% | |||||||||
Net income | $ | 21 | $ | 177 | $ | (156 | ) | (88.1 | )% | ||||||
Diluted earnings per share: | |||||||||||||||
Continuing operations | $ | 0.10 | $ | 0.66 | $ | (0.56 | ) | (84.8 | )% | ||||||
Discontinued operations | — | 0.55 | (0.55 | ) | (100.0 | )% | |||||||||
$ | 0.10 | $ | 1.21 | $ | (1.11 | ) | (91.7 | )% |
Six months ended | |||||||||||||||
(In millions, except per-share amounts) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | |||||||||||
Revenues | $ | 3,801 | $ | 3,549 | $ | 252 | 7.1 | % | |||||||
Total costs and expenses | 3,838 | 3,430 | 408 | 11.9 | % | ||||||||||
(Loss) income from continuing operations, before taxes | (37 | ) | 119 | (156 | ) | (131.1 | )% | ||||||||
Income tax benefit | (38 | ) | (39 | ) | 1 | (2.6 | )% | ||||||||
Income from continuing operations | 1 | 158 | (157 | ) | (99.4 | )% | |||||||||
Income from discontinued operations, net of taxes | — | 186 | (186 | ) | (100.0 | )% | |||||||||
Net income | $ | 1 | $ | 344 | $ | (343 | ) | (99.7 | )% | ||||||
Diluted (loss) earnings per share: | |||||||||||||||
Continuing operations | $ | (0.04 | ) | $ | 1.12 | $ | (1.16 | ) | (103.6 | )% | |||||
Discontinued operations | — | 1.24 | (1.24 | ) | (100.0 | )% | |||||||||
$ | (0.04 | ) | $ | 2.36 | $ | (2.40 | ) | (101.7 | )% |
Three months ended | ||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | ||||||||||
GBS | $ | 1,035 | $ | 891 | $ | 144 | 16.2% | |||||||
GIS | 836 | 854 | (18 | ) | (2.1) | |||||||||
Total Revenue | $ | 1,871 | $ | 1,745 | $ | 126 | 7.2% |
Six months ended | ||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | ||||||||||
GBS | $ | 2,084 | $ | 1,810 | $ | 274 | 15.1% | |||||||
GIS | 1,717 | 1,739 | (22 | ) | (1.3) | |||||||||
Total Revenue | $ | 3,801 | $ | 3,549 | $ | 252 | 7.1% |
Three months ended | Increase at Constant Currency | Approximate Impact of Currency Fluctuations | Total | ||||||
GBS | 19.2 | % | (3.0 | )% | 16.2 | % | |||
GIS | 1.1 | % | (3.2 | )% | (2.1 | )% | |||
Cumulative Net Percentage | 10.3 | % | (3.1 | )% | 7.2 | % |
Six months ended | Increase at Constant Currency | Approximate Impact of Currency Fluctuations | Total | ||||||
GBS | 17.8 | % | (2.7 | )% | 15.1 | % | |||
GIS | 1.4 | % | (2.7 | )% | (1.3 | )% | |||
Cumulative Net Percentage | 9.7 | % | (2.6 | )% | 7.1 | % |
Three months ended | |||||||||||||||||
Amount | Percentage of Revenue | Percentage | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | of Revenue Change | ||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | $ | 1,363 | $ | 1,237 | 72.9 | % | 70.9 | % | 2.0 | % | |||||||
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) | 293 | 269 | 15.7 | 15.4 | 0.3 | ||||||||||||
Depreciation and amortization | 167 | 168 | 8.9 | 9.6 | (0.7 | ) | |||||||||||
Restructuring costs | 25 | 5 | 1.3 | 0.3 | 1.0 | ||||||||||||
Interest expense, net | 21 | 22 | 1.1 | 1.3 | (0.2 | ) | |||||||||||
Other expense (income), net | 3 | (3 | ) | 0.2 | (0.2 | ) | 0.4 | ||||||||||
Total | $ | 1,872 | $ | 1,698 | 100.1 | % | 97.3 | % | 2.8 | % |
Six months ended | |||||||||||||||||
Amount | Percentage of Revenue | Percentage | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | of Revenue Change | ||||||||||||
Costs of services (excludes depreciation & amortization and restructuring costs) | $ | 2,784 | $ | 2,509 | 73.3 | % | 70.7 | % | 2.6 | % | |||||||
Selling, general and administrative (excludes SEC settlement related charges and restructuring costs) | 598 | 540 | 15.7 | 15.2 | 0.5 | ||||||||||||
Depreciation and amortization | 333 | 342 | 8.8 | 9.6 | (0.8 | ) | |||||||||||
Restructuring costs | 82 | 5 | 2.2 | 0.1 | 2.1 | ||||||||||||
Interest expense, net | 36 | 41 | 0.9 | 1.2 | (0.3 | ) | |||||||||||
Other expense (income), net | 5 | (7 | ) | 0.1 | (0.2 | ) | 0.3 | ||||||||||
Total | $ | 3,838 | $ | 3,430 | 101.0 | % | 96.6 | % | 4.4 | % |
Three months ended | |||||||||||||||
(in millions, except percentages) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | |||||||||||
Non-GAAP income from continuing operations | $ | 94 | $ | 78 | $ | 16 | 20.5 | % | |||||||
Consolidated segment operating income | $ | 98 | $ | 130 | $ | (32 | ) | (24.6 | )% | ||||||
EBIT | $ | 20 | $ | 69 | $ | (49 | ) | (71.0 | )% |
Six months ended | |||||||||||||||
(in millions, except percentages) | September 30, 2016 | October 2, 2015 | Change | Percentage Change | |||||||||||
Non-GAAP income from continuing operations | $ | 170 | $ | 144 | $ | 26 | 18.1 | % | |||||||
Consolidated segment operating income | $ | 150 | $ | 274 | $ | (124 | ) | (45.3 | )% | ||||||
EBIT | $ | (1 | ) | $ | 160 | $ | (161 | ) | (100.6 | )% |
• | Restructuring costs - Reflects restructuring costs related to workforce optimization and real estate charges. |
• | Transaction and other integration-related costs - Reflects costs related to (1) the Separation, (2) integration planning, financing and advisory fees associated with the proposed merger with the Enterprise Services segment of HPE, and (3) acquisitions and related intangible amortization. |
• | Certain overhead costs - Reflects costs historically allocated to NPS but not included in discontinued operations due to accounting rules. These costs are expected to be largely eliminated on a prospective basis. |
• | U.S. Pension and OPEB - Reflects the impact of certain U.S. pension and other post-retirement benefit (OPEB) plans historically included in CSC's financial results that have been transferred to CSRA as part of the Separation. |
• | SEC settlement-related items - Reflects costs associated with certain SEC charges and settlements. |
• | Tax adjustment - Reflects the adoption of a new accounting standard in fiscal 2016 changing excess tax benefits on stock-based compensation to be recorded as a reduction to income tax expense, the release of tax valuation allowances in certain jurisdictions, and the application of an approximate 20% tax rate for fiscal 2016 periods, which is at the low end of the prospective targeted effective tax rate range of 20% to 25% and effectively excludes the impact of discrete tax adjustments for those periods. |
Three months ended September 30, 2016 | ||||||||||||||||
(in millions, except per-share amounts) | As reported | Restructuring costs | Transaction and integration-related costs | Non-GAAP results | ||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | $ | 1,363 | $ | — | $ | — | $ | 1,363 | ||||||||
Selling, general and administrative (excludes depreciation and amortization, restructuring costs and transaction costs) | 293 | — | (53 | ) | 240 | |||||||||||
(Loss) income from continuing operations, before taxes | (1 | ) | (25 | ) | (78 | ) | 102 | |||||||||
Income tax (benefit) expense | (22 | ) | (6 | ) | (24 | ) | 8 | |||||||||
Income from continuing operations | 21 | (19 | ) | (54 | ) | 94 | ||||||||||
Net income | 21 | (19 | ) | (54 | ) | 94 | ||||||||||
Less: net income attributable to noncontrolling interest, net of tax | 6 | — | — | 6 | ||||||||||||
Net income attributable to CSC common stockholders | $ | 15 | $ | (19 | ) | $ | (54 | ) | $ | 88 | ||||||
Effective Tax Rate | n/m | 7.8 | % | |||||||||||||
Basic EPS from continuing operations | $ | 0.11 | $ | (0.14 | ) | $ | (0.38 | ) | $ | 0.63 | ||||||
Diluted EPS from continuing operations | $ | 0.10 | $ | (0.13 | ) | $ | (0.38 | ) | $ | 0.61 | ||||||
Weighted average common shares outstanding for: | ||||||||||||||||
Basic EPS | 140.53 | 140.53 | 140.53 | 140.53 | ||||||||||||
Diluted EPS | 143.78 | 143.78 | 143.78 | 143.78 |
Six months ended September 30, 2016 | ||||||||||||||||
(in millions, except per-share amounts) | As reported | Restructuring costs | Transaction and integration-related costs | Non-GAAP results | ||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | $ | 2,784 | $ | — | $ | — | $ | 2,784 | ||||||||
Selling, general and administrative (excludes depreciation and amortization, restructuring costs and transaction costs) | 598 | — | (109 | ) | 489 | |||||||||||
(Loss) income from continuing operations, before taxes | (37 | ) | (82 | ) | (148 | ) | 193 | |||||||||
Income tax (benefit) expense | (38 | ) | (18 | ) | (43 | ) | 23 | |||||||||
Income from continuing operations | 1 | (64 | ) | (105 | ) | 170 | ||||||||||
Net income | 1 | (64 | ) | (105 | ) | 170 | ||||||||||
Less: net income attributable to noncontrolling interest, net of tax | 7 | — | — | 7 | ||||||||||||
Net income attributable to CSC common stockholders | $ | (6 | ) | $ | (64 | ) | $ | (105 | ) | $ | 163 | |||||
Effective Tax Rate | 102.7 | % | 11.9 | % | ||||||||||||
Basic EPS from continuing operations | $ | (0.04 | ) | $ | (0.46 | ) | $ | (0.75 | ) | $ | 1.17 | |||||
Diluted EPS from continuing operations | $ | (0.04 | ) | $ | (0.45 | ) | $ | (0.73 | ) | $ | 1.14 | |||||
Weighted average common shares outstanding for: | ||||||||||||||||
Basic EPS | 139.76 | 139.76 | 139.76 | 139.76 | ||||||||||||
Diluted EPS | 139.76 | 143.14 | 143.14 | 143.14 |
Three months ended October 2, 2015 | ||||||||||||||||||||||||||||||||
(in millions, except per-share amounts) | As reported | Certain overhead costs | U.S. Pension and OPEB | Restructuring costs | Transaction and integration-related costs | SEC settlement-related items | Tax adjustment | Non-GAAP results | ||||||||||||||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | $ | 1,237 | $ | (17 | ) | $ | 12 | $ | — | $ | — | $ | — | $ | — | $ | 1,232 | |||||||||||||||
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) | 269 | (16 | ) | 2 | — | (7 | ) | (2 | ) | — | 246 | |||||||||||||||||||||
Income from continuing operations, before taxes | 47 | (33 | ) | 14 | (20 | ) | (7 | ) | (2 | ) | — | 95 | ||||||||||||||||||||
Income tax (benefit) expense | (46 | ) | (13 | ) | 6 | (6 | ) | (3 | ) | (1 | ) | (46 | ) | 17 | ||||||||||||||||||
Income from continuing operations | 93 | (20 | ) | 8 | (14 | ) | (4 | ) | (1 | ) | 46 | 78 | ||||||||||||||||||||
Net income | 177 | (20 | ) | 8 | (14 | ) | (4 | ) | (1 | ) | 46 | 162 | ||||||||||||||||||||
Less: net income attributable to noncontrolling interest, net of tax | 6 | — | — | — | — | — | — | 6 | ||||||||||||||||||||||||
Net income attributable to CSC common stockholders | $ | 171 | $ | (20 | ) | $ | 8 | $ | (14 | ) | $ | (4 | ) | $ | (1 | ) | $ | 46 | $ | 156 | ||||||||||||
Effective Tax Rate | (97.9 | )% | 17.9 | % | ||||||||||||||||||||||||||||
Basic EPS from continuing operations | $ | 0.68 | $ | (0.14 | ) | $ | 0.06 | $ | (0.10 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.33 | $ | 0.56 | ||||||||||||
Diluted EPS from continuing operations | $ | 0.66 | $ | (0.14 | ) | $ | 0.06 | $ | (0.10 | ) | $ | (0.03 | ) | $ | (0.01 | ) | $ | 0.33 | $ | 0.55 | ||||||||||||
Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||
Basic EPS | 138.30 | 138.30 | 138.30 | 138.30 | 138.30 | 138.30 | 138.30 | 138.30 | ||||||||||||||||||||||||
Diluted EPS | 140.85 | 140.85 | 140.85 | 140.85 | 140.85 | 140.85 | 140.85 | 140.85 |
Six months ended October 2, 2015 | ||||||||||||||||||||||||||||||||
(in millions, except per-share amounts) | As reported | Certain overhead costs | U.S. Pension and OPEB | Restructuring costs | Transaction and integration-related costs | SEC settlement-related items | Tax adjustment | Non-GAAP results | ||||||||||||||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | $ | 2,509 | $ | (34 | ) | $ | 24 | $ | — | $ | — | $ | — | $ | — | $ | 2,499 | |||||||||||||||
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) | 540 | (32 | ) | 4 | — | (10 | ) | (5 | ) | — | 497 | |||||||||||||||||||||
Income from continuing operations, before taxes | 119 | (66 | ) | 28 | (20 | ) | (10 | ) | (5 | ) | — | 192 | ||||||||||||||||||||
Income tax (benefit) expense | (39 | ) | (26 | ) | 11 | (6 | ) | (4 | ) | (2 | ) | (60 | ) | 48 | ||||||||||||||||||
Income from continuing operations | 158 | (40 | ) | 17 | (14 | ) | (6 | ) | (3 | ) | 60 | 144 | ||||||||||||||||||||
Net income | 344 | (40 | ) | 17 | (14 | ) | (6 | ) | (3 | ) | 60 | 330 | ||||||||||||||||||||
Less: net income attributable to noncontrolling interest, net of tax | 10 | — | — | — | — | — | — | 10 | ||||||||||||||||||||||||
Net income attributable to CSC common stockholders | $ | 334 | $ | (40 | ) | $ | 17 | $ | (14 | ) | $ | (6 | ) | $ | (3 | ) | $ | 60 | $ | 320 | ||||||||||||
Effective Tax Rate | (32.8 | )% | 25.0 | % | ||||||||||||||||||||||||||||
Basic EPS from continuing operations | $ | 1.14 | $ | (0.29 | ) | $ | 0.12 | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.43 | $ | 1.04 | ||||||||||||
Diluted EPS from continuing operations | $ | 1.12 | $ | (0.28 | ) | $ | 0.12 | $ | (0.10 | ) | $ | (0.04 | ) | $ | (0.02 | ) | $ | 0.42 | $ | 1.02 | ||||||||||||
Weighted average common shares outstanding for: | ||||||||||||||||||||||||||||||||
Basic EPS | 138.11 | 138.11 | 138.11 | 138.11 | 138.11 | 138.11 | 138.11 | 138.11 | ||||||||||||||||||||||||
Diluted EPS | 141.27 | 141.27 | 141.27 | 141.27 | 141.27 | 141.27 | 141.27 | 141.27 |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Consolidated segment operating income | $ | 98 | $ | 130 | $ | 150 | $ | 274 | ||||||||
Corporate G&A | (75 | ) | (64 | ) | (145 | ) | (121 | ) | ||||||||
Pension and OPEB actuarial and settlement losses | — | — | (1 | ) | — | |||||||||||
Interest expense | (29 | ) | (29 | ) | (54 | ) | (59 | ) | ||||||||
Interest income | 8 | 7 | 18 | 18 | ||||||||||||
Other (expense) income, net | (3 | ) | 3 | (5 | ) | 7 | ||||||||||
(Loss) income from continuing operations, before taxes | $ | (1 | ) | $ | 47 | $ | (37 | ) | $ | 119 |
Three months ended September 30, 2016 | |||||||||||||||||||
(in millions) | Consolidated segment operating income | Restructuring costs | Transaction and integration-related costs | Consolidated segment adjusted operating income | Consolidated segment adjusted operating margin | ||||||||||||||
Global Business Services | $ | 83 | (2 | ) | (20 | ) | $ | 105 | 10.1 | % | |||||||||
Global Infrastructure Services | 26 | (23 | ) | (17 | ) | 66 | 7.9 | % | |||||||||||
Total Commercial | 109 | (25 | ) | (37 | ) | 171 | 9.1 | % | |||||||||||
Corporate and Eliminations | (11 | ) | — | — | (11 | ) | — | % | |||||||||||
Total | $ | 98 | $ | (25 | ) | $ | (37 | ) | $ | 160 | 8.6 | % |
Six months ended September 30, 2016 | ||||||||||||||||
(in millions) | Consolidated segment operating income | Restructuring costs | Transaction and integration-related costs | Consolidated segment adjusted operating income | Consolidated segment adjusted operating margin | |||||||||||
Global Business Services | $ | 156 | (22 | ) | (37 | ) | 215 | 10.3 | % | |||||||
Global Infrastructure Services | 22 | (60 | ) | (35 | ) | 117 | 6.8 | % | ||||||||
Total Commercial | 178 | (82 | ) | (72 | ) | 332 | 8.7 | % | ||||||||
Corporate and Eliminations | (28 | ) | — | — | (28 | ) | — | % | ||||||||
Total | $ | 150 | (82 | ) | (72 | ) | 304 | 8.0 | % |
Three months ended October 2, 2015 | |||||||||||||||||||||||||||
(in millions) | Consolidated segment operating income | Certain overhead costs | U.S. Pension and OPEB | Restructuring costs | Transaction and integration-related costs | Consolidated segment adjusted operating income | Consolidated segment adjusted operating margin | ||||||||||||||||||||
Global Business Services | $ | 101 | — | 4 | (12 | ) | (1 | ) | $ | 110 | 12.3 | % | |||||||||||||||
Global Infrastructure Services | 64 | — | 10 | (8 | ) | (1 | ) | 63 | 7.4 | % | |||||||||||||||||
Total Commercial | 165 | — | 14 | (20 | ) | (2 | ) | 173 | 9.9 | % | |||||||||||||||||
Corporate and Eliminations | (35 | ) | (18 | ) | — | — | — | (17 | ) | — | % | ||||||||||||||||
Total | $ | 130 | $ | (18 | ) | $ | 14 | $ | (20 | ) | $ | (2 | ) | $ | 156 | 8.9 | % |
Six months ended October 2, 2015 | |||||||||||||||||||||||||||
(in millions) | Consolidated segment operating income | Certain overhead costs | U.S. Pension and OPEB | Restructuring costs | Transaction and integration-related costs | Consolidated segment adjusted operating income | Consolidated segment adjusted operating margin | ||||||||||||||||||||
Global Business Services | $ | 198 | — | 8 | (12 | ) | (1 | ) | $ | 203 | 11.2 | % | |||||||||||||||
Global Infrastructure Services | 117 | — | 20 | (8 | ) | (1 | ) | 106 | 6.1 | % | |||||||||||||||||
Total Commercial | 315 | — | 28 | (20 | ) | (2 | ) | 309 | 8.7 | % | |||||||||||||||||
Corporate and Eliminations | (41 | ) | (36 | ) | — | — | — | (5 | ) | — | % | ||||||||||||||||
Total | $ | 274 | $ | (36 | ) | $ | 28 | $ | (20 | ) | $ | (2 | ) | $ | 304 | 8.6 | % |
Three months ended | Six months ended | |||||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | September 30, 2016 | October 2, 2015 | ||||||||||||
Adjusted EBIT | $ | 120 | $ | 117 | $ | 226 | $ | 233 | ||||||||
Restructuring costs | (25 | ) | (20 | ) | (82 | ) | (20 | ) | ||||||||
Transaction and integration-related costs | (75 | ) | (7 | ) | (145 | ) | (10 | ) | ||||||||
Certain overhead costs | — | (33 | ) | — | (66 | ) | ||||||||||
U.S. Pension and OPEB | — | 14 | — | 28 | ||||||||||||
SEC settlement-related items | — | (2 | ) | — | (5 | ) | ||||||||||
EBIT | $ | 20 | $ | 69 | $ | (1 | ) | $ | 160 | |||||||
Interest expense | (29 | ) | (29 | ) | (54 | ) | (59 | ) | ||||||||
Interest income | 8 | 7 | 18 | 18 | ||||||||||||
Income tax benefit | 22 | 46 | 38 | 39 | ||||||||||||
Income from continuing operations | $ | 21 | $ | 93 | $ | 1 | $ | 158 | ||||||||
Income from discontinued operations, net of taxes | — | 84 | — | 186 | ||||||||||||
Net income | $ | 21 | $ | 177 | $ | 1 | $ | 344 |
Six months ended | ||||||||||||
(in millions) | September 30, 2016 | October 2, 2015 | Change | |||||||||
Net cash provided by operating activities | $ | 242 | $ | 484 | $ | (242 | ) | |||||
Net cash used in investing activities | (721 | ) | (481 | ) | (240 | ) | ||||||
Net cash provided by (used in) financing activities | 376 | (256 | ) | 632 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (21 | ) | (27 | ) | 6 | |||||||
Net (decrease) increase in cash and cash equivalents | $ | (124 | ) | $ | (280 | ) | $ | 156 | ||||
Cash and cash equivalents at beginning of year | 1,178 | 2,098 | ||||||||||
Cash and cash equivalents at the end of period | $ | 1,054 | $ | 1,818 |
As of | ||||||||
(in millions) | September 30, 2016 | April 1, 2016 | ||||||
Total debt | $ | 3,300 | $ | 2,644 | ||||
Cash and cash equivalents | 1,054 | 1,178 | ||||||
Net debt(1) | $ | 2,246 | $ | 1,466 | ||||
Total debt | $ | 3,300 | $ | 2,644 | ||||
Equity | 2,325 | 2,032 | ||||||
Total capitalization | $ | 5,625 | $ | 4,676 | ||||
Debt-to-total capitalization | 58.7 | % | 56.5 | % | ||||
Net debt-to-total capitalization(1) | 39.9 | % | 31.4 | % |
• | a Tax Matters Agreement, which will govern, among other things, HPE’s, CSC’s and Everett’s respective rights, responsibilities and obligations with respect to taxes, the preparation and filing of tax returns, preservation of the expected tax-free status and certain other tax matters; |
• | an Employee Matters Agreement, which will govern HPE’s, CSC’s and Everett’s obligations with respect to current and former employees of the Enterprise Services segment of HPE; |
• | an Intellectual Property Matters Agreement allocating rights and interests in intellectual property rights and technology of the Enterprise Services segment of HPE; and |
• | real estate, transitional and other service agreements. |
• | revenue recognition and cost estimation and recoverability on long term, fixed-price contracts; |
• | revenue recognition on software license sales that require significant customization; |
• | estimates used to determine deferred income taxes; |
• | capitalization of outsourcing contract costs and software development costs; |
• | assumptions related to purchase accounting and goodwill; |
• | assumptions used to determine retirement benefits, costs and liabilities; and |
• | assumptions and estimates used to analyze contingencies and litigation. |
• | pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of the unaudited Condensed Consolidated Financial Statements in accordance with GAAP, and that receipts and expenditures of the issuer are being made only in accordance with authorization of CSC's management and board members; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on CSC's unaudited Condensed Consolidated Financial Statements. |
• | Tax analyses were prepared late in the closing process, in part due to changes in information flows related to the implementation of our new financial system |
• | Turnover late in the year in the tax function resulted in ineffective reviews which did not detect certain errors |
• | Hiring of additional internal personnel dedicated to managing the income tax function to enhance our expertise in determining the appropriate accounting for material and complex tax transactions, and |
• | Review of our tax accounting process to identify and implement enhanced tax accounting processes and related internal control procedures. |
Exhibit Number | Description of Exhibit |
2.1 | Scheme Implementation Agreement by and among Computer Sciences Corporation, CSC Computer Sciences Australia Holdings Pty Limited, and iSOFT Group Limited (incorporated by reference to Exhibit 2 to the Company's Current Report on Form 8-K (filed April 5, 2011) (file no. 001-04850)) |
2.2 | Agreement and Plan of Merger, dated as of August 31, 2015, by and among Computer Sciences Corporation, Computer Sciences Government Services Inc., Star First Merger Sub Inc., Star Second Merger Sub LLC, SRA Companies, Inc., SRA International Inc. and Enumerated SRA Stockholders (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K (filed September 4, 2015) (file no. 001-04850)) |
2.3 | Rule 2.7 Announcement, dated December 9, 2015 (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K (filed December 9, 2015) (file no. 001-04850)) |
2.4 | Co-operation Agreement, dated as of December 9, 2015, between CSC Computer Sciences International Operations Limited and Xchanging plc. (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K (filed December 9, 2015) (file no. 001-04850)) |
2.5 | Agreement and Plan of Merger, dated as of May 24, 2016, by and among Computer Sciences Corporation, Hewlett Packard Enterprise Company, Everett SpinCo, Inc. and Everett Merger Sub, Inc. (incorporated by reference to Exhibit 2.2 to Hewlett Packard Enterprise Company's Current Report on Form 8-K (filed May 26, 2016) (file no. 001-37483), as amended by the First Amendment to Agreement and Plan of Merger, dated as of November 2, 2016, by and among Computer Sciences Corporation, Hewlett Packard Enterprise Company, Everett SpinCo, Inc.,New Everett Merger Sub Inc. and Everett Merger Sub Inc. (incorporated by reference to Exhibit 2.1 to Hewlett Packard Enterprise Company's Current Report on Form 8-K (filed November 2, 2016) (file no. 001-37483)) |
3.1 | Amended and Restated Articles of Incorporation filed with the Nevada Secretary of State on August 9, 2010 (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended July 2, 2010 (filed August 11, 2010) (file no. 001-04850)) |
3.2 | Amended and Restated Bylaws dated as of June 21, 2016 (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K (filed June 24, 2016) (file no. 001-04850)) |
3.3 | Certificate of Amendment to Section 1 of Article III of the Amended and Restated Bylaws, dated August 10, 2016 (incorporated by reference to Exhibit 3.2.1 to the Company's Current Report on Form 8-K (filed August 12, 2016) (file no. 001-04850)) |
4.1 | Indenture dated as of March 3, 2008, for the 5.50% senior notes due 2013 and the 6.50% senior notes due 2018 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (filed September 15, 2008) (file no. 001-04850)) |
4.2 | Indenture dated as of September 18, 2012, for the 2.500% senior notes due 2015 and the 4.450% senior notes due 2022 by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K (filed September 19, 2012) (file no. 001-04850)) |
4.3 | First Supplemental Indenture dated as of September 18, 2012, by and between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, and attaching a specimen form of the 2.500% Senior Notes due 2015 and the 4.450% Senior Notes due 2022 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K (filed September 19, 2012) (file no. 001-04850)) |
4.4 | 4.450% Senior Note due 2022 (in global form), dated September 18, 2012, among the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.4 to the Company's Current Report on Form 8-K (filed September 19, 2012) (file no. 001-04850)) |
10.1 | Amendment to Employment Agreement, dated August 25, 2016, by and between the Company and J. Michael Lawrie (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K (filed August 25, 2016) (file no. 001-04850))1 |
10.2 | Second Amendment to Computer Sciences Corporation Deferred Compensation Plan*1 |
31.1 | Section 302 Certification of the Chief Executive Officer* |
31.2 | Section 302 Certification of the Chief Financial Officer* |
32.1 | Section 906 Certification of Chief Executive Officer* |
32.2 | Section 906 Certification of Chief Financial Officer* |
101.INS | XBRL Instance* |
101.SCH | XBRL Taxonomy Extension Schema* |
101.CAL | XBRL Taxonomy Extension Calculation* |
101.LAB | XBRL Taxonomy Extension Labels* |
101.PRE | XBRL Taxonomy Extension Presentation* |
* | filed herewith |
1 | Management contract or compensation plan or agreement |
COMPUTER SCIENCES CORPORATION | |||
Dated: | November 3, 2016 | By: | /s/ Neil A. Manna |
Name: | Neil A. Manna | ||
Title: | Vice President, Corporate Controller | ||
Principal Accounting Officer |
2. | Section 18.1 of the Plan is hereby amended in its entirety as follows: |
(a) | General. Any Eligible Key Executive and any Nonemployee Director shall be eligible to be a Part C Participant in the Plan. |
(b) | Initial Eligibility Date for Certain Newly Eligible Participants. A person who first meets the requirements to be an Eligible Key Executive after the end of the most recent Annual Enrollment Cycle and before the start of the next Off-Cycle Enrollment Cycle shall become eligible to be a Part C Participant as of the start of the next Off-Cycle Enrollment Cycle. A Nonemployee Director shall become eligible to be a Part C Participant as of the date he or she is elected or appointed to the Board. |
3. | Section 19.1(a) of the Plan is hereby amended in its entirety as follows: |
(a) | At such time and in such form as determined by the Administrator, a Participant may elect to defer into his or her Part C Account Compensation, subject to paragraph (d) of this Section 19.1, which would otherwise be payable to him or her for any Deferral Period in which he or she has not incurred a Separation from Service but only to the extent such deferrals would qualify as Section 409A Deferrals. In no event shall the Part C Election be submitted later than |
4. | The final sentence of Section 19.1(b) of the Plan is hereby amended in its entirety as follows: |
5. | In all other respects, the Plan is hereby ratified and confirmed. |
By: | /s/ Eduardo Nunez |
1. | I have reviewed this quarterly report on Form 10-Q of Computer Sciences Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 3, 2016 | /s/ J. Michael Lawrie | ||
J. Michael Lawrie President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Computer Sciences Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act rules 13a- 15(e) and 15d- (15(e)) and internal control over financial reporting (as defined in Exchange Act rules 13a- 15(f) and 15d- 15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | November 3, 2016 | /s/ Paul N. Saleh | ||
Paul N. Saleh Executive Vice President and Chief Financial Officer |
1. | The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 (the "Report"), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Computer Sciences Corporation | |||
Dated: | November 3, 2016 | /s/ J. Michael Lawrie | |
J. Michael Lawrie President and Chief Executive Officer |
1. | The Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2016 (the "Report"), fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Computer Sciences Corporation | |||
Dated: | November 3, 2016 | /s/ Paul N. Saleh | |
Paul N. Saleh Executive Vice President and Chief Financial Officer |
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 24, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | COMPUTER SCIENCES CORP | |
Entity Central Index Key | 0000023082 | |
Current Fiscal Year End Date | --03-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 140,815,153 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
[1] | Sep. 30, 2016 |
Oct. 02, 2015 |
[1] | |||||||
Income Statement [Abstract] | ||||||||||||
Revenues | $ 1,871 | $ 1,745 | $ 3,801 | $ 3,549 | ||||||||
Costs of services (excludes depreciation and amortization and restructuring costs) | 1,363 | 1,237 | 2,784 | 2,509 | ||||||||
Selling, general and administrative (excludes depreciation and amortization and restructuring costs) | 293 | 269 | 598 | 540 | ||||||||
Depreciation and amortization | 167 | 168 | 333 | 342 | ||||||||
Restructuring costs | 25 | 5 | 82 | 5 | ||||||||
Interest expense | 29 | 29 | 54 | 59 | ||||||||
Interest income | (8) | (7) | (18) | (18) | ||||||||
Other expense (income), net | 3 | (3) | 5 | (7) | ||||||||
Total costs and expenses | 1,872 | 1,698 | 3,838 | 3,430 | ||||||||
(Loss) income from continuing operations, before taxes | (1) | 47 | (37) | 119 | ||||||||
Income tax benefit | (22) | (46) | (38) | (39) | ||||||||
Income from continuing operations | 21 | 93 | 1 | 158 | ||||||||
Income from discontinued operations, net of taxes | 0 | 84 | 0 | 186 | ||||||||
Net income | 21 | 177 | 1 | 344 | [2],[3] | |||||||
Less: net income attributable to noncontrolling interest, net of tax | 6 | 6 | 7 | 10 | ||||||||
Net income (loss) attributable to CSC common stockholders | $ 15 | $ 171 | $ (6) | $ 334 | ||||||||
(Loss) earnings per common share - Basic: | ||||||||||||
Continuing operations (in dollars per share) | $ 0.11 | $ 0.68 | $ (0.04) | $ 1.14 | ||||||||
Discontinued operations (in dollars per share) | 0.00 | 0.56 | 0.00 | 1.28 | ||||||||
Earnings per common share - basic (in dollars per share) | 0.11 | 1.24 | (0.04) | 2.42 | ||||||||
(Loss) earnings per common share - Diluted: | ||||||||||||
Continuing operations (in dollars per share) | 0.10 | 0.66 | (0.04) | 1.12 | ||||||||
Discontinued operations (in dollars per share) | 0.00 | 0.55 | 0.00 | 1.24 | ||||||||
Earnings per common share - diluted (in dollars per share) | 0.10 | 1.21 | (0.04) | 2.36 | ||||||||
Cash dividend per common share (in dollars per share) | $ 0.14 | $ 0.23 | $ 0.28 | $ 0.46 | ||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
||||||||||||||
Statement of Comprehensive Income [Abstract] | |||||||||||||||||
Net Income | $ 21 | $ 177 | [1] | $ 1 | $ 344 | [1],[2],[3] | |||||||||||
Other comprehensive income (loss), net of taxes: | |||||||||||||||||
Foreign currency translation adjustments, net of tax | [4] | 44 | (110) | (6) | (57) | ||||||||||||
Cash flow hedges adjustments | 14 | (14) | 9 | (12) | |||||||||||||
Unrealized gain on available for sale equity investment | 0 | (6) | 0 | 0 | |||||||||||||
Pension and other post-retirement benefit plans, net of tax | |||||||||||||||||
Amortization of prior service costs, net of tax | [5] | (4) | (6) | (7) | (12) | ||||||||||||
Foreign currency exchange rate changes | 0 | 0 | 0 | (1) | |||||||||||||
Pension and other post-retirement benefit plans, net of tax | (4) | (6) | (7) | (13) | |||||||||||||
Other comprehensive income (loss), net of taxes | 54 | (136) | (4) | (82) | [2] | ||||||||||||
Comprehensive income (loss) | 75 | 41 | (3) | 262 | |||||||||||||
Less: comprehensive income attributable to noncontrolling interest, net of taxes | 6 | 6 | 7 | 10 | |||||||||||||
Comprehensive income (loss) attributable to CSC common stockholders | 69 | 35 | (10) | 252 | |||||||||||||
Foreign currency translation adjustments, net of tax expense | 0 | 0 | 1 | 0 | |||||||||||||
Amortization of prior service costs, net of tax benefit | $ 1 | $ 3 | $ 3 | $ 6 | |||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) (PARENTHETICALS) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments, net of tax expense | $ 0 | $ 0 | $ 1 | $ 0 |
Amortization of prior service costs, net of tax benefit | $ 1 | $ 3 | $ 3 | $ 6 |
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (PARENTHETICAL) - USD ($) $ in Millions |
Sep. 30, 2016 |
Apr. 01, 2016 |
---|---|---|
Current assets: | ||
Allowance for doubtful accounts | $ 32 | $ 31 |
Intangible and other assets: | ||
Accumulated amortization | 2,287 | 2,228 |
Accumulated depreciation, property and equipment | $ 2,976 | $ 2,894 |
CSC stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, issued (in shares) | 151,373,670 | 148,746,672 |
Common stock in treasury, at cost (in shares) | 10,603,537 | 10,365,811 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions |
6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
[2] | |||||||
Cash flows from operating activities: | |||||||||
Net income | $ 1 | $ 344 | [1],[3] | ||||||
Adjustments to reconcile net loss income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 339 | 410 | |||||||
Stock-based compensation | 35 | 7 | |||||||
Gain on dispositions | 0 | (55) | |||||||
Unrealized foreign currency exchange loss | (90) | (7) | |||||||
Other non-cash charges, net | 0 | 12 | |||||||
Changes in assets and liabilities, net of acquisitions and dispositions: | |||||||||
Decrease in assets | 64 | 176 | |||||||
Decrease in liabilities | (287) | (417) | |||||||
Net cash provided by operating activities | 242 | 484 | |||||||
Cash flows from investing activities: | |||||||||
Purchases of property and equipment | (143) | (184) | |||||||
Payments for outsourcing contract costs | (49) | (53) | |||||||
Software purchased and developed | (78) | (104) | |||||||
Payments for acquisitions, net of cash acquired | (434) | (236) | |||||||
Business dispositions | 0 | 34 | |||||||
Proceeds from sale of assets | 9 | 50 | |||||||
Other investing activities, net | (26) | 12 | |||||||
Net cash used in investing activities | (721) | (481) | |||||||
Cash flows from financing activities: | |||||||||
Borrowings of commercial paper | 1,163 | 299 | |||||||
Repayments of commercial paper | (1,058) | (84) | |||||||
Borrowings under lines of credit | 920 | 1,310 | |||||||
Repayment of borrowings under lines of credit | (529) | (1,150) | |||||||
Debt borrowings | 107 | 0 | |||||||
Debt repayments | (188) | (461) | |||||||
Proceeds from stock options | 42 | 45 | |||||||
Taxes paid related to net share settlements of stock-based compensation awards | (12) | (27) | |||||||
Repurchase of common stock | 0 | (118) | |||||||
Dividend payments | (39) | (64) | |||||||
Other financing activities, net | (30) | (6) | |||||||
Net cash provided by (used in) financing activities | 376 | (256) | |||||||
Effect of exchange rate changes on cash and cash equivalents | (21) | (27) | |||||||
Net decrease in cash and cash equivalents | (124) | (280) | |||||||
Cash and cash equivalents at beginning of year | 1,178 | 2,098 | |||||||
Cash and cash equivalents at end of period | $ 1,054 | $ 1,818 | |||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) - USD ($) shares in Thousands, $ in Millions |
Total |
Common Stock |
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Treasury Stock |
Total CSC Equity |
Non- Controlling Interest |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Balance (in shares) at Apr. 03, 2015 | 148,374 | ||||||||||||||||
Balance at Apr. 03, 2015 | $ 2,965 | [1] | $ 148 | $ 2,286 | $ 928 | [1] | $ 21 | $ (446) | $ 2,937 | [1] | $ 28 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net Income | 344 | [1],[2],[3] | 334 | [1] | 334 | [1] | 10 | ||||||||||
Other comprehensive income | (82) | [1] | (82) | (82) | [1] | ||||||||||||
Stock based compensation expense | 6 | [1] | 6 | 6 | [1] | ||||||||||||
Acquisition of treasury stock | (27) | [1] | (27) | (27) | [1] | ||||||||||||
Stock option exercises and other common stock transactions (in shares) | 2,053 | ||||||||||||||||
Stock option exercises and other common stock transactions | 38 | [1] | $ 2 | 36 | 38 | [1] | |||||||||||
Share repurchase program (shares) | (1,943) | ||||||||||||||||
Share repurchase program | (118) | [1] | $ (2) | (32) | (84) | [1] | (118) | [1] | |||||||||
Cash dividends declared | [1] | (64) | (64) | (64) | |||||||||||||
Noncontrolling interest distributions and other | (9) | [1] | (9) | ||||||||||||||
Balance (in shares) at Oct. 02, 2015 | 148,484 | ||||||||||||||||
Balance at Oct. 02, 2015 | 3,053 | [1] | $ 148 | 2,296 | 1,114 | [1] | (61) | (473) | 3,024 | [1] | 29 | ||||||
Balance (in shares) at Apr. 01, 2016 | 148,747 | ||||||||||||||||
Balance at Apr. 01, 2016 | 2,032 | $ 149 | 2,439 | 33 | (111) | (485) | 2,025 | 7 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||
Net Income | 1 | (6) | (6) | 7 | |||||||||||||
Other comprehensive income | (4) | (4) | (4) | ||||||||||||||
Stock based compensation expense | 35 | 35 | 35 | ||||||||||||||
Acquisition of treasury stock | (11) | (11) | (11) | ||||||||||||||
Stock option exercises and other common stock transactions (in shares) | 2,627 | ||||||||||||||||
Stock option exercises and other common stock transactions | 43 | $ 2 | 41 | 43 | |||||||||||||
Cash dividends declared | (39) | (39) | (39) | ||||||||||||||
Noncontrolling interest distributions and other | (11) | (11) | |||||||||||||||
Noncontrolling interest from acquisition | 281 | 281 | |||||||||||||||
Divestiture of NPS | (2) | (2) | (2) | ||||||||||||||
Balance (in shares) at Sep. 30, 2016 | 151,374 | ||||||||||||||||
Balance at Sep. 30, 2016 | $ 2,325 | $ 151 | $ 2,515 | $ (14) | $ (115) | $ (496) | $ 2,041 | $ 284 | |||||||||
|
Basis of Presentation |
6 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Computer Sciences Corporation (CSC or the Company) has prepared the interim unaudited Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for quarterly reports and, therefore, omit or condense certain note disclosures and other information required by generally accepted accounting principles in the United States (GAAP) for complete financial statements. These financial statements should therefore be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company's Annual Report on Form 10-K for the fiscal year ended April 1, 2016 (fiscal 2016). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. As a result, actual results may be different from these estimates. In the opinion of the Company's management, the accompanying unaudited Condensed Consolidated Financial Statements of CSC contain all adjustments necessary, including those of a normal recurring nature, to present fairly the Company's financial position as of September 30, 2016 and April 1, 2016 and its results of operations and cash flows for the three and six months ended September 30, 2016 and October 2, 2015. The results of operations for such interim periods are not necessarily indicative of the results for the full year ending March 31, 2017. Certain prior year amounts have been reclassified to conform to the current year presentation. Intangible assets were combined into a single line on the face of the balance sheet, the details of which continue to be disclosed in Note 8 - Goodwill and Other Intangibles. During fiscal 2016, the Company adopted Accounting Standards Update (ASU) 2016-09 which, among other elements, requires the excess tax benefits and deficiencies related to employee share-based payment awards and related dividends to be recorded in the statement of operations during the reporting period in which they occur. ASU 2016-09 also requires that all tax-related cash flows resulting from share-based payments, including the excess tax benefits related to the settlement of stock-based awards, be classified as cash flows from operating activities, and that cash paid by directly withholding shares for tax withholding purposes be classified as a financing activity in the unaudited Condensed Consolidated Statements of Cash Flows. CSC elected to early adopt ASU 2016-09 in the fourth quarter of fiscal 2016 which requires CSC to reflect any adjustments as of April 4, 2015, the beginning of the annual period that includes the adoption. Amendments requiring recognition of excess tax benefits and tax deficiencies within the unaudited Condensed Consolidated Statements of Operations were adopted prospectively and resulted in the recognition of $2 million, or $0.01 per share, and $16 million, or $0.11 per share, of excess tax benefits within income tax (benefit) expense for the three and six months ended October 2, 2015, respectively. ASU 2016-09 amendments related to presentation within the unaudited Condensed Consolidated Statements of Cash Flows were applied retrospectively, and resulted in the reclassification of $16 million of excess tax benefits related to the settlement of stock-based awards from financing to operating activities, and $27 million of taxes paid related to net share settlements of stock-based compensation awards from operating activities to financing activities for the six months ended October 2, 2015. 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. Separation of NPS During fiscal 2016, the Company completed the separation of its U.S. public sector business (NPS) (the Separation) and combination of NPS with SRA International to form a new independent publicly traded Company: CSRA Inc. (CSRA). As a result of the Separation, the unaudited Condensed Consolidated Statements of Operations and related financial information reflect NPS's operations as discontinued operations for the first three months of fiscal 2016. However, the cash flows and comprehensive income of NPS have not been segregated and are included in the unaudited Condensed Consolidated Statements of Cash Flows and Statements of Comprehensive Income for the first three months of fiscal 2016. Furthermore, CSC reduced the number of its reportable segments from three to two: Global Infrastructure Services (GIS) and Global Business Services (GBS). Refer to Note 4 - Divestitures and Note 15 - Segment Information for further information. |
Recent Accounting Pronouncements |
6 Months Ended |
---|---|
Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Standards During the first six months of fiscal 2017, the Company adopted the following ASUs: ASU 2015-16, Business Combinations (Topic 805), "Simplifying the Accounting for Measurement Period Adjustments" requires an acquirer in a business combination to account for a measurement-period adjustment during the period in which the amount is determined, instead of retrospectively. CSC adopted this ASU effective April 2, 2016 and the impact on the Company's unaudited Condensed Consolidated Financial Statements was immaterial. ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," as clarified by ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting" (ASU 2015-15), states that debt issuance costs are presented in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Presentation of fees under line-of-credit (LOC) arrangements had not been specified in ASU 2015-03; as a result ASU 2015-15 was issued. ASU 2015-15 states that the SEC staff would not object to an entity deferring LOC commitment fees as an asset and subsequently amortizing ratably over the term of the underlying LOC arrangement, regardless of whether there are outstanding borrowings under that LOC arrangement. CSC adopted both ASUs effective April 2, 2016 and the impact upon the unaudited Condensed Consolidated Financial Statements was immaterial. ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" issued guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement does not contain a software license, the customer should account for the arrangement as a service contract. If the arrangement includes software licenses, it should be accounted for consistent with other licenses of intangible assets. CSC elected to adopt this ASU prospectively effective April 2, 2016. Adoption of this ASU did not have a material impact on the unaudited Condensed Consolidated Financial Statements. Standards Issued But Not Yet Effective The following ASUs were recently issued but have not yet been adopted by CSC: In October 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-17, “Consolidation (Topic 810): Interests held through Related Parties that are under Common Control,” which alters how a decision maker needs to consider indirect interests in a variable interest entity held through an entity under common control and simplifies that analysis to require consideration of only an entity’s proportionate indirect interest in a VIE held through a common control party. ASU 2016-17 amends ASU 2015-02, “Consolidations (Topic 810): Amendments to the Consolidation Analysis,” adopted by CSC in the first three months of fiscal 2017, which did not have a material impact upon the unaudited Condensed Consolidated Financial Statements. ASU 2016-17 will be effective for CSC in fiscal year 2018 and will be required to be applied retrospectively to all relevant periods in fiscal 2017 when ASU 2015-02 was initially applied. CSC is currently evaluating the impact, if any, that the adoption of ASU 2016-17 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In October 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-entity Asset Transfers of Assets Other than Inventory,” which requires that an entity recognize the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminate in consolidation. ASU 2016-16 will be effective for CSC in fiscal year 2019 and early adoption is permitted. This ASU must be adopted using a modified retrospective method. CSC is currently evaluating the impact that adoption of ASU 2016-16 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which addressed eight cash flow classification issues that have created diversity in practice, providing definitive guidance on classification of certain cash receipts and payments. ASU 2016-15 will be effective for CSC in fiscal year 2019 and early adoption is permitted. This ASU must be adopted retrospectively for all period presented but may be applied prospectively if retrospective application would be impracticable. CSC is currently evaluating the impact that adoption of ASU 2016-15 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 will be effective for CSC in fiscal 2020. This ASU must be adopted using a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the effective date. CSC is currently evaluating the impact that the adoption of ASU 2016-13 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This amendment is intended to increase transparency and comparability among organizations by recognizing virtually all lease assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements. ASU 2016-02 will be effective for CSC in fiscal 2020 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition and provides for certain practical expedients. CSC is currently evaluating the impact that the adoption of ASU 2016-02 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for CSC in fiscal 2019. This ASU should be applied prospectively to equity investments that exist as of the date of adoption for equity securities without readily determinable fair values. CSC is currently evaluating the impact that adoption of ASU 2016-01 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 605-35, "Revenue Recognition - Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which CSC expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readers of CSC’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods of retrospective application. The first method would require CSC to apply ASU 2014-09 to each prior reporting period presented. The second method would require CSC to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application. ASU 2014-09 will be effective for CSC beginning in fiscal 2019 as a result of ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" (ASU 2015-14), which was issued by the FASB in August 2015 and extended the original effective date by one year. CSC is currently evaluating the impact of adopting the available methodologies of ASU 2014-09 and 2015-14 upon its unaudited Condensed Consolidated Financial Statements in future reporting periods. There have been three new ASUs issued amending certain aspects of ASU 2014-09. ASU 2016-08 "Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)," was issued in March, 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10 "Identifying Performance Obligations and Licensing," issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. Finally, ASU 2016-12, "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients" provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. With its evaluation of the impact of ASU 2014-09, CSC will also consider the impact related to the updated guidance provided by these three new ASUs. Other recently issued ASUs effective after October 1, 2016 are not expected to have a material effect on CSC's unaudited Condensed Consolidated Financial Statements in future reporting periods. |
Acquisitions |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Fiscal 2017 Acquisitions Aspediens Acquisition On July 5, 2016, CSC acquired all of the outstanding capital stock of Aspediens, a privately held provider of technology-enabled solutions for the service-management sector and a preferred partner of ServiceNow, for total purchase consideration of $15 million. The acquisition enhances CSC's GBS segment in its ServiceNow practice. The purchase consideration included cash of $8 million paid at closing, the estimated fair value of contingent consideration as of the acquisition date of $6 million and $1 million being withheld by the Company for one year following the closing of the acquisition as security for potential claims against the seller. The estimated amount of contingent consideration was based on a contractually defined target of Aspediens' revenue growth during two specified periods, as well as other considerations. The preliminary purchase price was allocated to assets acquired and liabilities assumed based upon the current determination of fair values at the date of acquisition, as follows: $9 million to current assets, $9 million to intangible assets other than goodwill, $8 million to current liabilities and $5 million to goodwill. The goodwill is associated with the Company's GBS segment and is not tax deductible. The amortizable lives associated with the intangible assets acquired includes customer relationships which have a ten-year estimated useful life. Transaction costs associated with the acquisition were less than $1 million and are included within selling, general and administrative expenses in the Company's unaudited Condensed Consolidated Statements of Operations. Xchanging Acquisition On December 29, 2015, CSC invested in Xchanging plc (Xchanging), a provider of technology-enabled business solutions to organizations in global insurance and financial services, healthcare, manufacturing, real estate and the public sector. Xchanging was listed on the London Stock Exchange under the symbol “XCH”. CSC purchased 24,636,553 shares of common stock of Xchanging for a purchase price of $2.83 per share for a total initial investment of approximately $70 million. The investment represented a 9.99% non-controlling equity interest in the outstanding shares of Xchanging. On May 5, 2016, CSC acquired the remaining shares of Xchanging, for a purchase price of $2.76 per share, or approximately $623 million, resulting in total cash consideration paid to and on behalf of the Xchanging shareholders of $693 million (or $492 million net of cash acquired) in the aggregate, which was funded from existing cash balances and borrowings under CSC's credit facility. Subsequent to the acquisition, the Company repaid the $254 million of acquired debt. Transaction costs associated with the acquisition of $17 million are included within selling, general and administrative expenses in the Company's unaudited Condensed Consolidated Statements of Operations. The acquisition will expand CSC's market coverage in the global insurance industry and will enable the Company to offer access to a broader, partner-enriched portfolio of services including property and casualty insurance and wealth management business processing services. The Company’s purchase price allocation for the Xchanging acquisition is preliminary and subject to revision as additional information related to the fair value of assets and liabilities becomes available. During the three months ended September 30, 2016, the Company revised the fair value estimates associated with its acquisition accounting for the Xchanging acquisition consummated on May 5, 2016, that resulted in adjustments to the previously reported allocation of purchase consideration. The adjustments were a result of changes to the original fair value estimates of certain items acquired and are the result of additional information obtained since July 1, 2016 that related to facts and circumstances that existed at the respective acquisition date. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed is presented below:
The amortizable lives associated with the intangible assets acquired are as follows:
Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed when Xchanging was acquired. The goodwill arising from the acquisition was allocated to the Company's reportable segments based on the relative fair value of the expected incremental cash flows as $612 million to GBS segment and $32 million to GIS segment. The goodwill associated with this acquisition is not deductible for tax purposes. For the three and six months ended September 30, 2016, Xchanging contributed revenues of $128 million and $209 million, respectively, and income before taxes of $9 million and $13 million, respectively, to CSC's consolidated results. Disclosure of proforma information under ASC Topic 805 "Business Combinations" is impracticable, due to different fiscal year-ends and financial records that are not available in GAAP. Fiscal 2016 Acquisitions Below is a summary of the Company's prior year acquisitions which were all funded from existing cash balances. Additional details of the transactions were disclosed in CSC's Annual Report on Form 10-K for the year ended April 1, 2016. UXC Acquisition On February 26, 2016, CSC acquired all outstanding capital stock of UXC Limited (UXC), a publicly owned IT services company which is a leading provider of enterprise application capabilities, consulting, applications management, professional services, connect infrastructure and health services in Australia. UXC was listed on the Australian Securities Exchange under the symbol "UXC". UXC was acquired for total purchase consideration of $289 million (net of cash acquired of $13 million). The purchase consideration included cash paid at closing to and on behalf of the UXC shareholders of $302 million and was funded from existing cash balances. The acquisition continues CSC’s process of rebalancing its offering portfolio, strengthening CSC’s next-generation delivery model, and expanding its client base around the world. Transaction costs associated with the acquisition of $7 million are included within selling, general and administrative expenses in the Company's unaudited Condensed Consolidated Statements of Operations. The Company’s purchase price allocation for the UXC acquisition is preliminary and subject to revision as additional information related to the fair value of assets and liabilities becomes available. The preliminary allocation of the UXC purchase price was allocated to assets acquired and liabilities assumed based upon the determination of fair value at the date of acquisition as follows: $125 million to current assets, $37 million to noncurrent assets, $91 million to intangible assets other than goodwill, $153 million to current liabilities, $50 million to long-term liabilities and $252 million to goodwill. The amortizable lives associated with the intangible assets acquired includes customer relationships, which have an estimated useful life of ten years; software and trade names, both of which have indefinite lives. The goodwill arising from the acquisition was allocated to both of the Company's reportable segments and is not deductible for tax purposes. Axon Acquisition On December 11, 2015, CSC acquired all of the outstanding capital stock of Axon Puerto Rico, Inc. (Axon), a provider of enterprise application and infrastructure managed services to aerospace and defense, and other commercial industries, for cash consideration of $29 million (net of cash acquired of $5 million). The acquisition further advances CSC’s position as a leader in providing cost effective, highly-secure IT managed services to firms worldwide, strengthens CSC’s next-generation delivery model and expands its network of regional delivery centers. The preliminary purchase price was allocated to assets acquired and liabilities assumed based upon the determination of fair values at the date of acquisition, as follows: $5 million to current assets, $3 million to noncurrent assets, $11 million to an intangible asset other than goodwill, $2 million to current liabilities, and $12 million to goodwill. The goodwill is associated with the Company's GBS segment and is tax deductible. The amortizable lives associated with the intangible assets acquired includes customer relationships which have an estimated useful life of ten years. Transaction costs associated with the acquisition were less than $1 million and are included within selling, general and administrative expenses in the Company's unaudited Condensed Consolidated Statements of Operations. Fixnetix Acquisition On September 24, 2015, CSC acquired Fixnetix, Limited (Fixnetix), a privately held provider of front-office managed trading solutions for capital markets clients, for a total purchase consideration of $112 million ($88 million of cash at closing, net of $1 million of cash acquired and $19 million of contingent consideration). The fair value measurement of remaining contingent consideration as of September 30, 2016 was zero. The acquisition enhanced CSC's ability to offer capital market clients an expanded range of as-a-service front office capabilities and address growing demand for greater efficiency and innovation in trading, market data, hosting, infrastructure, connectivity and risk management. Fruition Acquisition On September 17, 2015, CSC acquired all of the outstanding capital stock of Fruition Partners, a privately held provider of technology-enabled solutions for the service management sector for cash consideration of $148 million (net of cash acquired of $2 million). The acquisition bolsters CSC's ability to offer enterprise and emerging clients an expanded range of cloud-based service-management solutions to improve their business through organizational efficiency and lower operating costs. |
Divestitures |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestitures | Divestitures During fiscal 2016, the Company completed the separation of NPS. As a result, the operating results for NPS were reclassified to discontinued operations. The following table details the components of discontinued operations:
There was no gain or loss on disposition recognized as a result of the Separation. The following selected financial information of NPS is included in the unaudited Condensed Consolidated Statements of Cash Flows:
J. Michael Lawrie currently serves as CSC's Chief Executive Officer and as a member of its Board of Directors. Mr. Lawrie also served as Chairman of the Board of Directors of CSRA from November 27, 2015 until August 9, 2016. During his term on the CSRA Board, CSRA was considered a related party under ASC 850 "Related Party Disclosures." Implementation of the Separation and CSC's post-Separation relationship with CSRA is governed by several agreements, including a master separation and distribution agreement and intellectual property (IP) matters, real estate matters, tax matters, non-U.S. agency and employee matters agreements. Pursuant to the IP matters agreement, which grants CSRA perpetual, royalty-free, non-assignable licenses to certain software products, trademarks and workflow and design methodologies owned by CSC, CSRA agreed to pay CSC an annual net maintenance fee of $30 million per year for each of the five years following the Separation in exchange for maintenance services. Under the IP matters agreement, CSC recognized $7 million and $15 million of related party revenue in its unaudited Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2016, respectively. An additional $5 million is included in deferred revenue and advance contract payments on CSC's unaudited Condensed Consolidated Balance Sheets as of September 30, 2016, which will be amortized to revenue over the successive quarter. In addition, CSC is also party to various other commercial agreements with CSRA totaling $13 million and $26 million of revenue during the three and six months ended September 30, 2016, respectively. As of September 30, 2016, related party accounts receivable of $33 million was due from CSRA, including $17 million, net related to the settlement of stock-based compensation awards (see Note 12 - Stock Incentive Plans). |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Basic earnings per common share (EPS) and diluted EPS are calculated as follows:
(1) The Company adopted ASU 2016-09 during the fourth quarter of fiscal 2016, effective as of the beginning of the fiscal year. As a result, weighted average diluted shares outstanding has been adjusted from the amount previously reported for the three and six months ended October 2, 2015 to exclude excess tax benefits from the assumed proceeds in the diluted shares calculations. The adoption of this standard resulted in diluted weighted average shares outstanding of 140.85 million and 141.27 million for the three and six months ended October 2, 2015, respectively, compared to 140.53 million and 140.70 million as calculated under the previous guidance. For the three months ended September 30, 2016, stock options of 2,038,486 and restricted stock units (RSUs) of 13,690 were excluded from the computation of diluted EPS because they would have been anti-dilutive. For the six months ended September 30, 2016, due to the Company's net loss, stock options of 2,858,277, performance stock units of 1,165,411 and RSUs of 979,647 were excluded from the computation of diluted EPS because inclusion of these amounts would have been anti-dilutive. For the three and six months ended October 2, 2015, stock options of 2,129,266 and 1,756,264, respectively, and RSUs of 149,236 and 219,681, respectively, were excluded from the computation of diluted EPS, which if included, would have been anti-dilutive. |
Fair Value |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | Fair Value Fair value measurements on a recurring basis The following tables present the Company’s assets and liabilities, excluding pension assets, that are measured at fair value on a recurring basis:
The Company's money market funds, money market deposit accounts and time deposits are reported in cash and cash equivalents, mutual fund investments are reported in other assets, and short-term investments, including available for sale securities (which was the Company's investment in Xchanging prior to the completion its acquisition as described in Note 3 - Acquisitions), are included in prepaid expenses and other current assets on the accompanying unaudited Condensed Consolidated Balance Sheets. The balance sheet classifications of the Company's derivative instruments are presented in Note 7 - Derivative Instruments. The fair value of contingent consideration is related to the Company's acquisition of Aspediens (see Note 3 - Acquisitions) and is included in other liabilities. There were no transfers between any of the levels during the periods presented. Fair value of the mutual fund investments is based on quoted market prices which is a level 1 input. Financial instruments not measured at fair value The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. As of September 30, 2016, the carrying amount of the Company’s long-term debt, excluding capital leases, and the estimated fair value was $2.5 billion. The fair value of long-term debt is estimated based on current interest rates offered to the Company for instruments with similar terms and remaining maturities and classified as Level 2. The Company is subject to counterparty risk in connection with its derivative instruments (see Note 7 - Derivative Instruments). With respect to its foreign currency derivatives, as of September 30, 2016 there were six counterparties with concentration of credit risk. Based on gross fair value of these foreign currency derivative instruments, the maximum amount of loss that the Company could incur is approximately $18 million. The Company’s credit risk is also affected by customers in bankruptcy proceedings; however, because most of these proceedings involve business reorganizations rather than liquidations and the nature of the Company’s services are often considered essential to the operational continuity of these customers, the Company is generally able to avoid or mitigate significant adverse financial impact in these cases. As of September 30, 2016, the Company had $17 million of accounts receivable, $11 million of related allowance for doubtful accounts and $4 million of accounts payable with customers involved in bankruptcy proceedings. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Derivative Instruments The following table presents the fair values of derivative instruments included in the unaudited Condensed Consolidated Balance Sheets:
Derivatives designated for hedge accounting Cash flow hedges As of September 30, 2016, the Company had a series of interest rate swap agreements with a total notional amount of $634 million. These instruments were designated as cash flow hedges of the variability of cash outflows for interest payments on certain floating interest rate debt, which effectively converted the debt into fixed interest rate debt. The Company has designated certain foreign currency forward contracts as cash flow hedges, to reduce risks related to certain Indian Rupee denominated intercompany obligations and forecasted transactions. The notional amount of foreign currency forward contracts designated as cash flow hedges as of September 30, 2016 was $409 million and the related forecasted transactions extend through March 2019. For the three months ended September 30, 2016, the Company performed an assessment at the inception of the cash flow hedge transactions that determined all critical terms of the hedging instruments and hedged items match; therefore, there is no ineffectiveness to be recorded and all changes in the hedging instruments’ fair value are recorded in accumulated other comprehensive loss (OCI) and subsequently reclassified into earnings in the period during which the hedged transactions are recognized in earnings. The Company performs an assessment of critical terms on an on-going basis throughout the hedging period. During the three months ended September 30, 2016, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur. As of September 30, 2016, approximately $1 million of the existing gains related to the cash flow hedges reported in accumulated OCI are expected to be reclassified into earnings within the next 12 months. Derivatives not designated for hedge accounting Total return swaps During fiscal 2016, the Company had total return swaps derivative contracts (TRS) to manage exposure to market volatility of the notional investments underlying the Company's deferred compensation obligations. For accounting purposes, these TRS are not designated as hedges, as defined under ASC 815, “Derivatives and Hedging,” and all changes in their fair value and changes in the associated deferred compensation liabilities are recorded in cost of services and selling, general and administrative expenses. Foreign currency derivatives The Company manages exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to economically hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and loans. For accounting purposes, these foreign currency option and forward contracts are not designated as hedges, as defined under ASC 815, “Derivatives and Hedging,” and all changes in their fair value are reported in current period earnings within the other income (expense) line of the unaudited Condensed Consolidated Statements of Operations. The notional amount of the foreign currency forward contracts outstanding as of September 30, 2016 was $1.9 billion. The following table presents the amounts included within (loss) income from continuing operations, before taxes related to derivatives not designated for hedge accounting, net of remeasurement gains and losses:
Other risks As discussed further in Note 6 - Fair Value, the Company is exposed to the risk of losses in the event of non-performance by the counterparties to its derivative contracts. To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of the counterparties. The Company also enters into enforceable master netting arrangements with some of its counterparties. However, for financial reporting purposes it is the Company’s policy to not offset derivative assets and liabilities despite the existence of enforceable master netting arrangements with some of its counterparties. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table summarizes the changes in the carrying amount of goodwill by segment for the six months ended September 30, 2016:
The fiscal 2017 additions to goodwill are due to the acquisitions of Xchanging and Aspediens. The foreign currency translation amount reflects the impact of currency movements on non-U.S. dollar-denominated goodwill balances. The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. For the Company’s annual goodwill impairment assessment as of July 2, 2016, the Company first assesses qualitative factors to determine whether events or circumstances existed that would lead the Company to conclude that it is more likely than not that the fair value of any of its reporting units was below their carrying amounts. If the Company determines that it is not more likely than not, then proceeding to step one of the two-step goodwill impairment test is not necessary. The Company chose to bypass the initial qualitative assessment and proceeded directly to the first step of the impairment test for all reporting units. Based on the results of the first step of the impairment test, the Company concluded that the fair value of each reporting unit exceeded its carrying value and therefore the second step of the goodwill impairment test was not required. At the end of the second quarter of fiscal 2017, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators and therefore, it was unnecessary to perform an interim goodwill impairment test as of September 30, 2016. Other Intangible Assets A summary of amortizable intangible assets is as follows:
Total intangible assets amortization was $82 million and $70 million for the three months ended September 30, 2016 and October 2, 2015, respectively. These estimates included reductions of revenue for amortization of outsourcing contract cost premiums of $3 million and $3 million, respectively. Amortization expense related to capitalized software, included within total intangible amortization, was $38 million and $40 million for the three months ended September 30, 2016 and October 2, 2015, respectively. Total intangible assets amortization was $162 million and $140 million for the six months ended September 30, 2016 and October 2, 2015, respectively. These estimates included reductions of revenue for amortization of outsourcing contract cost premiums of $6 million and $6 million, respectively. Amortization expense related to capitalized software, included within total intangible amortization, was $81 million and $82 million for the six months ended September 30, 2016 and October 2, 2015, respectively. Estimated future amortization related to intangible assets as of September 30, 2016 is as follows:
During the six months ended October 2, 2015, CSC sold certain fully amortized intangible assets to a third party and recorded a $31 million gain on sale as a reduction of cost of sales in its GIS segment. There were no sales of intangible assets to a third party during the first six months of fiscal 2017. |
Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The following is a summary of the Company's debt:
(1) Classified as short-term if the Company intends to repay within 12 months and as long-term otherwise. During the three months ended July 1, 2016, the Company amended its existing credit facility by expanding its borrowing capacity to $2.9 billion, which was further expanded to $3.0 billion during the three months ended September 30, 2016. In addition, the Company entered into conditional revolver commitments totaling $740 million that are contingent upon the closing of its announced merger with the Enterprise Services segment of Hewlett Packard Enterprise Company (HPE) which will further expand CSC's borrowing capacity to $3.7 billion. During the three months ended September 30, 2016 the Company received commitments to extend the maturity date of the credit facility. As a result, $2.8 billion of the commitments under the credit agreement will mature during 2022, $70 million will mature during 2021 and $70 million will mature during 2020. The Company drew down $920 million on the credit facility and repaid $275 million during the first six months of fiscal 2017. Additionally, the Company repaid $254 million of acquired credit facility borrowings related to its acquisition of Xchanging (see Note 3 - Acquisitions). During the three months ended July 1, 2016, the loan payable due May 2016 was replaced with borrowings under the credit facility. During the three months ended July 1, 2016, the Company increased the maximum size of its existing European commercial paper program (the ECP Program) from €500 million to €1 billion or its equivalent in alternative currencies. The Company had borrowings of $1.2 billion and repayments of $1.1 billion under the ECP Program during the first six months of fiscal 2017. Additionally, during the three months ended July 1, 2016, the Company amended its existing master loan and security agreement, which reduced the aggregate commitment under its lease credit facility from $250 million to $150 million. The drawdown availability period of the lease credit facility expires November 29, 2016 and, once drawn, converts into individual term notes of varying terms up to 60 months, depending upon the nature of the underlying equipment being financed. Borrowings under the lease credit facility are classified as short-term if the Company intends to repay within 12 months and as long-term otherwise. During the three months ended September 30, 2016, the Company, through its CSC Australia PTY Limited (CSCA) subsidiary, entered into an AUD $100 million term loan credit facility maturing July 2021, the proceeds of which were used to repay amounts drawn under the revolving credit facility by CSCA. The AUD term loan agreement permits the Company to request incremental term loans of up to AUD $175 million, which, if requested by the Company and agreed to by the lenders, would result in a maximum of AUD $275 million in total term facilities. The Company was in compliance with all financial covenants associated with its borrowings as of September 30, 2016. |
Pension and Other Benefit Plans |
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Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pension and Other Benefit Plans | Pension and Other Benefit Plans The Company sponsors a number of defined benefit plans for the benefit of eligible employees. The defined benefit plans comprise primarily pension plans and post-retirement medical benefit plans. Subsequent to the Separation, U.S. pension and other U.S. benefit plans represent an insignificant portion of the Company's pension and other post-retirement benefits. As a result, the disclosures below include the Company's U.S. and non-U.S. pension plans on a global consolidated basis. The net periodic pension benefit included the following components:
The weighted-average rates used to determine net periodic pension cost for the three and six months ended September 30, 2016 and October 2, 2015 were as follows:
The Company contributed $7 million and $10 million to the defined benefit pension plans during the three and six months ended September 30, 2016, respectively. The Company expects to contribute an additional $44 million during the remainder of fiscal 2017. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax benefit for the second quarter and first half of fiscal 2017 was $22 million and $38 million, respectively, compared with income tax benefit for the second quarter and first half of fiscal 2016 of $46 million and $39 million, respectively. For the three and six months ended September 30, 2016, the primary drivers of the income tax benefit were the global mix of income, release of a valuation allowance in a non-U.S. jurisdiction and excess tax benefits related to employee share-based payment awards. The primary drivers of the income tax benefit for the second quarter and first half of 2016 were the global mix of income, excess benefits related to employee share-based payment awards and the release of the reserve for an uncertain tax position following the closure of an audit in a non-U.S. jurisdiction. There were no material changes to uncertain tax positions during the first six months of fiscal 2017 compared to the fiscal 2016 year-end. It is reasonably possible that during the next 12 months the Company's liability for uncertain tax positions may change by a significant amount. In addition, the Company may settle certain other tax examinations, have lapses in statute limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more likely than not standard if such positions are not upheld. Conversely, the Company could settle positions with the tax authorities for amounts lower than those that have been accrued or extinguish a position through payment. The Company believes the outcomes which are reasonably possible within the next 12 months may result in a reduction in liability for uncertain tax positions of between $18 million and $48 million, excluding interest, penalties, and tax carryforwards. |
Stock Incentive Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Stock Incentive Plans The Company recognized stock-based compensation expense (benefit) as follows:
The Company uses the Black-Scholes-Merton model in determining the fair value of stock options granted. The weighted average grant-date fair values of stock options granted during the six months ended September 30, 2016 and October 2, 2015 were $12.41 and $20.03 per share, respectively. In calculating the compensation expense for its stock incentive plans, the Company used the following weighted-average assumptions:
As a result of the Separation, most stock awards issued by the Company were modified, including acceleration of vesting of certain awards and the issuance of new CSRA awards under the basket method, whereby awards granted prior to fiscal year 2016 in CSC equity were converted into two awards: an adjusted CSC equity award and a CSRA equity award. In the case of stock options, the number of options and the exercise price were adjusted for the impact of the Separation. The conversions were structured to generally preserve the intrinsic value of the awards immediately prior to the Separation. There was no incremental stock compensation expense recognized as a result of the modification of the awards. Employee Incentives The Company currently has two active stock incentive plans that authorize the issuance of stock options, restricted stock and other stock-based incentives to employees upon terms approved by the Compensation Committee of the Board of Directors. The Company issues authorized but previously unissued shares upon the exercise of stock options, the granting of restricted stock and the settlement of RSUs. As of September 30, 2016, 6,636,475 shares of CSC common stock were available for the grant of future stock options, equity awards or other stock-based incentives to employees under such stock incentive plans. Stock Options The Company’s standard vesting schedule for stock options is one-third of the total stock option award on each of the first three anniversaries of the grant date. Stock options are generally exercisable for a term of ten years from the grant date. Information concerning stock options granted under the Company's stock incentive plans is as follows:
(1) The amount of the weighted average exercise price and aggregate intrinsic value has been revised to reflect the impact of the Separation. The total intrinsic value of options exercised during the six months ended September 30, 2016 and October 2, 2015 was $54 million and $27 million, respectively. The cash received from stock options exercised during the six months ended September 30, 2016 and October 2, 2015 was $42 million and $45 million, respectively. As of September 30, 2016, there was $32 million of total unrecognized compensation expense related to unvested stock options, net of expected forfeitures. The cost is expected to be recognized over a weighted-average period of 2.36 years. Restricted Stock Units Information concerning RSUs granted under the Company's stock incentive plans is as follows:
(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the Separation. As of September 30, 2016, there was $90 million of total unrecognized compensation expense related to unvested RSUs, net of expected forfeitures. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.19 years. Non-employee Director Incentives The Company has one stock incentive plan that authorize the issuance of stock options, restricted stock and other stock-based incentives to non-employee directors upon terms approved by the Company’s Board of Directors. As of September 30, 2016, 93,136 shares of CSC common stock remained available for grant to non-employee directors as RSUs or other stock-based incentives. Information concerning RSUs granted to non-employee directors is as follows:
(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the Separation. |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income The following tables show the changes in accumulated other comprehensive (loss) income, net of taxes:
(1) Balance at April 1, 2016 is net of transfer to CSRA of $31 million.
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Supplemental Cash Flows |
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Supplemental Cash Flows | Supplemental Cash Flow Supplemental cash flow information is provided below.
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Segment Information |
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Segment Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information CSC's reportable segments are strategic business units that offer different products and services and whose operating results are regularly reviewed by CSC's chief operating decision maker which is the Chief Executive Officer. Due to the Separation, on November 27, 2015, North American Public Sector is no longer included as a reportable segment and its results have been reclassified to discontinued operations, net of taxes, for the three and six months ended October 2, 2015. CSC now operates in two reportable segments, as follows:
The following tables summarize operating results regularly provided to the chief operating decision maker by reportable segment and a reconciliation to our unaudited Condensed Consolidated Financial Statements:
A reconciliation of consolidated segment operating income to (loss) income from continuing operations, before taxes is as follows:
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Restructuring Costs |
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Restructuring Costs [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs | Restructuring Costs The Company recorded $25 million and $5 million of net restructuring costs for the three months ended September 30, 2016 and October 2, 2015, respectively. For the six months ended September 30, 2016 and October 2, 2015, the Company recorded $82 million and $5 million, respectively. The costs recorded during the three and six months ended September 30, 2016 were largely the result of implementing the Fiscal 2017 Plan, as described below. The composition of restructuring costs by financial statement line item is as follows:
Of the total $103 million restructuring liability as of September 30, 2016, $96 million is a short-term liability and is included in accrued expenses and other current liabilities and $7 million is included in other liabilities. Fiscal 2017 Plan In May 2016, the Company initiated restructuring actions across its business segments in certain areas (Fiscal 2017 Plan). The objective of the Fiscal 2017 Plan is to realign the Company's cost structure and resources to take advantage of operational efficiencies following recent acquisitions. The composition of the restructuring liability for the Fiscal 2017 Plan was as follows:
(1) Pension benefit augmentations recorded as a pension liability (2) Foreign currency translation adjustments Fiscal 2016 Plan In September 2015, the Company initiated restructuring actions across its business segments. The objectives of the Fiscal 2016 Plan are to optimize utilization of facilities and rightsize overhead organizations as a result of the Separation. The composition of the restructuring liability for the Fiscal 2016 Plan was as follows:
Fiscal 2015 Plan In June 2014, the Company initiated restructuring actions across its business segments. The objectives of the Fiscal 2015 Plan were to further reduce headcount in order to align resources to support business needs. The composition of the restructuring liability for the Fiscal 2015 Plan is as follows:
(1) Includes $0 million related to fourth quarter fiscal 2015 special restructuring Restructuring Expense by Segment The restructuring costs net of reversals by segment are shown in the table below.
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Consolidated Variable Interest Entities |
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Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidated Variable Interest Entities | Consolidated Variable Interest Entities On November 2, 2015, CSC entered into a partnership with HCL Technologies Ltd. (HCL) structured as two private limited companies, incorporated in the United Kingdom: CeleritiFinTech Limited and CeleritiFinTech Services Limited. The subsidiaries were formed to operate and further invest in and expand banking products with the combined objective to promote and generate revenues from banking and other customers. CSC holds a 49% membership interest in CeleritiFinTech Limited and a 51% membership interest in CeleritiFinTech Services Limited. During the three and six months ended September 30, 2016, results of operations conducted within these entities were not material to the Company's unaudited Condensed Consolidated Statements of Operations. As of September 30, 2016, no assets were pledged by the Company as collateral and there was no additional exposure to the Company for loss due to its involvement with these entities. The assets and liabilities attributable to these entities were not material to the Company's unaudited Condensed Consolidated Balance Sheets. The Company determined that it is the primary beneficiary of these entities and, as such, follows accounting treatment for variable interest entities that properly meet the criteria for consolidation. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Commitments The Company has entered into long-term purchase agreements with certain software, hardware, telecommunication and other service providers to obtain favorable pricing and terms for services and products that are necessary for the operations of business activities. Under the terms of these agreements, the Company is contractually committed to purchase specified minimums over periods ranging from one to seven years. If the specified minimums are not met, the Company would have an obligation to pay the service provider all or a portion of the shortfall. Minimum purchase commitments as of September 30, 2016 were as follows:
In the normal course of business, the Company may provide certain clients with financial performance guarantees, which are generally backed by letters of credit or surety bonds. In general, CSC would only be liable for the amounts of these guarantees in the event that its nonperformance permits termination of the related contract by the Company’s client. The Company believes it is in compliance with its performance obligations under all service contracts for which there is a financial performance guarantee and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its unaudited Condensed Consolidated Statements of Operations or Balance Sheets. The Company also uses stand-by letters of credit, in lieu of cash, to support various risk management insurance policies. These letters of credit represent a contingent liability and the Company would only be liable if it defaults on its payment obligations towards these policies. Generally, such guarantees have a one-year term and are renewed annually. The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of September 30, 2016:
The Company generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of their intellectual property rights (including rights in patents, with or without geographic limitations), copyrights, trademarks and trade secrets). CSC’s indemnification of its licensees relates to costs arising from court awards, negotiated settlements and the related legal and internal costs of those licensees. The Company maintains the right, at its own costs, to modify or replace software in order to eliminate any infringement. Historically, CSC has not incurred any significant costs related to licensee software indemnification. Contingencies Unless otherwise noted, the Company is unable to develop a reasonable estimate of a possible loss or range of losses associated with the following contingent matters at this time. Vincent Forcier v. Computer Sciences Corporation and The City of New York On October 27, 2014, the United States District Court for the Southern District of New York unsealed a qui tam complaint that had been filed under seal over two years prior in a case entitled United States of America and State of New York ex rel. Vincent Forcier v. Computer Sciences Corporation and The City of New York, Case No. 1:12-cv-01750-DAB. The original complaint was brought by Vincent Forcier, a former employee of Computer Sciences Corporation, as a private party qui tam relator on behalf of the United States and the State of New York. The relator’s amended complaint, dated November 15, 2012, which remained under seal until October 27, 2014, alleged civil violations of the federal False Claims Act, 31 U.S.C. § 3729 et seq., and New York State’s False Claims Act, NY. Finance L, Art. 13, § 187 et seq., arising out of certain coding methods employed with respect to claims submitted by the Company to Medicaid for reimbursements as fiscal agent on behalf of its client, New York City’s Early Intervention Program (EIP). EIP is a federal program promulgated by the Individuals with Disabilities in Education Act, 20 U.S.C. § 1401 et seq. (IDEA), that provides early intervention services for infants and toddlers who have, or are likely to have, developmental delays. Prior to the unsealing of the complaint on October 27, 2014, the United States Attorney’s Office for the Southern District of New York investigated the allegations in the qui tam relator’s complaint. That investigation included requests for information to the Company concerning the Company’s databases, software programs and related documents regarding EIP claims submitted by the Company on behalf of New York City. The Company produced documents and information that the government requested and cooperated fully with the government’s investigation regarding this matter at all times. In addition, the Company conducted its own investigation of the matter and openly shared its findings and worked constructively with all parties to resolve the matter. At the conclusion of its investigation, the Company concluded that it had not violated the law in any respect. On October 27, 2014, the United States Attorney’s Office for the Southern District of New York and the Attorney General for the State of New York filed complaints-in-intervention on behalf of the United States and the State of New York, respectively. The complaints allege that, from 2008 to 2012, the Company and New York City used the automatic defaulting capabilities of a computerized billing system that the Company developed for New York City’s EIP in order to orchestrate a billing fraud against Medicaid and failed to comply with Medicaid requirements regarding submission of claims to private insurance. The New York Attorney General’s complaint also alleges that the Company failed to reimburse Medicaid in certain instances where insurance had paid a portion of the claim. The lawsuits seek damages under the federal False Claims Act, the New York False Claims Act and common law theories in an amount equal to three times the sum of an unspecified amount of damages the United States and New York State allegedly sustained, plus civil penalties together with attorneys’ fees and costs. On January 26, 2015, the Company and the City of New York filed motions to dismiss Forcier’s amended complaint and the federal and state complaints-in-intervention. On April 28, 2016, the Court issued a decision on the motions. The Court dismissed Forcier’s amended complaint, some claims related to allegations of fraudulent defaulting practices and the claims related to the alleged failure to reimburse Medicaid. The Court denied the motions to dismiss claims based on other allegations of fraudulent defaulting practices and the alleged noncompliance with Medicaid requirements to bill private insurance, as well as the claims seeking damages under the common law. The United States and the State of New York each filed amended complaints-in-intervention on September 6, 2016. The amended complaints include the claims that the Court declined to dismiss in its April 28, 2016 decision. The amended complaints also assert new claims based on allegations related to the compensation provisions of the Company’s contract with New York City. Finally, the amended complaint of the United States reasserts some of the previously-dismissed claims related to allegations of fraudulent defaulting practices, though the United States has indicated that it does not intend to pursue these claims at trial and included them only to preserve them for appeal. The Company believes that the allegations in these amended complaints are without merit and intends to vigorously defend itself. Defendants’ deadline to answer, or move to dismiss, the amended complaints is November 9, 2016. CSC v. Eric Pulier On May 12, 2015, the Company and its wholly owned subsidiary, ServiceMesh Inc. (SMI), filed a civil complaint in the Court of Chancery of the State of Delaware against Eric Pulier (C.A. No. 11011-VCP). The Company acquired SMI on November 15, 2013. The purchase consideration included a cash payment at closing, as well as additional contingent consideration based on a contractually defined multiple of SMI’s revenues during a specified period ending January 31, 2014 (the Earnout Payment), all as set forth in the purchase agreement governing the acquisition. Before the acquisition, Mr. Pulier was the chief executive officer, chairman and one of the largest equity holders of SMI. Following the acquisition, Mr. Pulier became employed by the Company, at which time he executed a retention agreement pursuant to which he received a grant of restricted stock units of the Company and agreed to be bound by the Company’s rules and policies, including the Company’s Code of Business Conduct. In March 2015, the Company became aware of, and began its own investigation into the circumstances surrounding, the arrests of two former employees of the Commonwealth Bank of Australia Ltd. (CBA) in connection with payments allegedly received by them, either directly or indirectly, from Mr. Pulier. SMI and CBA had entered into several contracts with each other, including contracts that contributed to the Earnout Payment. In April 2015, the Company was contacted by the Australian Federal Police regarding the alleged payments. The Company is cooperating with and assisting the Australian and U.S. authorities in their investigations of the conduct of various individuals involved in SMI transactions during the earnout period. The Company’s and SMI’s original complaint against Mr. Pulier asserted claims for (i) breach of the purchase agreement, (ii) breach of the implied covenant of good faith and fair dealing in the purchase agreement, (iii) fraud, (iv) fraud by omission, (v) breach of his retention agreement, (vi) breach of the implied covenant of good faith and fair dealing in his retention agreement and (vii) breach of fiduciary duty. Mr. Pulier filed a motion to dismiss the complaint on May 28, 2015, and an opening brief in support of such motion on July 7, 2015. The Company and SMI filed a First Amended Complaint on August 6, 2015, adding as defendants TechAdvisors, LLC (TechAdvisors), an entity controlled by Mr. Pulier, and Shareholder Representative Services LLC (SRS). In addition to the claims asserted against Mr. Pulier, the First Amended Complaint asserted claims against TechAdvisors for (i) breach of the purchase agreement, (ii) breach of the implied covenant of good faith and fair dealing in the purchase agreement and (iii) fraud. The amended complaint added claims against SRS in its capacity as attorney-in-fact and representative of Mr. Pulier and TechAdvisors for breach of their indemnification obligations in the purchase agreement. Mr. Pulier, SRS and TechAdvisors filed motions to dismiss the First Amended Complaint on August 20, August 31 and September 8, 2015, respectively. On October 7, 2015, the Company filed its Second Amended Complaint against Mr. Pulier, TechAdvisors and SRS. In addition to the claims asserted against Mr. Pulier, TechAdvisors and SRS in the First Amended Complaint, the Second Amended Complaint asserts claims against SRS in its capacity as attorney-in-fact and representative of the former equityholders of ServiceMesh who are not current employees of CSC for breach of their indemnification obligations in the purchase agreement. The Second Amended Complaint seeks recovery of payments made to Mr. Pulier and TechAdvisors under the purchase agreement, the value of Mr. Pulier’s vested restricted stock units of the Company granted to him under his retention agreement and the full amount of the Earnout Payment, which was approximately $98 million. Defendants filed motions to dismiss the Second Amended Complaint on November 6, 2015. On December 17, 2015, the Company entered into a settlement agreement with the majority of the former equityholders of ServiceMesh, as well as SRS acting in its capacity as the agent and attorney-in-fact for the settling equityholders. Pursuant to the settlement agreement, the Company received $16.5 million, which amount was equal to the settling equityholders’ pro rata share of the funds remaining in escrow from the transaction, which was recorded as an offset to selling, general and administrative costs in our Consolidated Statements of Operations for the fiscal year ended April 1, 2016. The Company also moved to dismiss its claims against the settling equityholders and SRS, in its representative capacity for those equityholders. The Court granted the motion to dismiss on January 11, 2016. On April 29, 2016, the Court orally ruled on Defendants’ motions to dismiss the Second Amended Complaint. It entered an Order granting the same relief on May 9, 2016. The Court largely denied Defendants’ motions and allowed the majority of the Company’s claims against Mr. Pulier, TechAdvisors and SRS to proceed. The Court dismissed the Company’s claim against Mr. Pulier for breach of the implied covenant of good faith and fair dealing in his retention agreement, one alternative factual basis for the Company’s claims for breach of the purchase agreement and fraud and another alternative factual basis for the Company’s claim against Mr. Pulier for fraud. On May 23, 2016, SRS filed its Answer to the Second Amended Complaint. On June 3, 2016, Mr. Pulier and TechAdvisors filed an Answer and Mr. Pulier filed a Counterclaim against the Company. Mr. Pulier asserted counter-claims for (i) breach of the purchase agreement, (ii) breach of the implied covenant of good faith and fair dealing in the purchase agreement, (iii) fraud, (iv) negligent representation, (v) rescission of the purchase agreement and (vi) breach of his retention agreement. On June 23, 2016, the Company filed a motion to dismiss Mr. Pulier’s counterclaims. On September 22, 2016, Mr. Pulier filed an Amended Counterclaim against the Company. In addition to the claims asserted by Mr. Pulier in his Original Counterclaim, the Amended Counterclaim alleges that the Company violated California’s “Blue Sky” corporate securities law in connection with granting restricted stock units to Mr. Pulier. The Company filed a motion to dismiss Mr. Pulier’s Amended Counterclaim on September 29, 2016, and a brief in support of its motion to dismiss on October 14, 2016. Also on October 14, 2016, the Company filed a motion for partial summary judgment and a brief in support thereof. The motion for partial summary judgment seeks an order requiring SRS to release from escrow funds in the amount of $795,540.45, an amount equal to the legal and investigative costs incurred by the Company in investigating and responding to claims by a former employee and equityholder of SMI, plus pre- and post-judgment interest. The Court will hold a hearing on the Company’s motion to dismiss and motion for partial summary judgment on December 16, 2016. Additionally, on February 17, 2016, Mr. Pulier filed a complaint against the Company and its subsidiary - CSC Agility Platform, Inc., formerly known as SMI - seeking advancement of his legal fees and costs in the case described above. The summary proceeding is in the Court of Chancery of the State of Delaware (C.A. No. 12005-CB). On May 12, 2016, the Court ruled that the Company is not liable to advance legal fees and costs to Mr. Pulier because he was not an officer or director of the Company, but that its subsidiary - as the successor to SMI - is liable for advancing 80% of Mr. Pulier’s fees and costs in the underlying action. The Court entered an Order granting the same relief on May 27, 2016. On July 7, 2016, Mr. Pulier requested advancement from CSC Agility Platform, Inc., as the successor to SMI, for his attorneys’ fees and expenses incurred in connection with criminal and regulatory investigations and prosecutions. CSC Agility Platform, Inc. is investigating and analyzing that demand. Strauch et al. Fair Labor Standards Act Class Action On July 1, 2014, plaintiffs filed Strauch and Colby v. Computer Sciences Corporation in the U.S. District Court for the District of Connecticut, a putative nationwide class action alleging that CSC violated provisions of the Fair Labor Standards Act (FLSA) with respect to system administrators who worked for CSC at any time from June 1, 2011, to the present. Plaintiffs claim that CSC improperly classified its system administrators as exempt from the FLSA and that CSC therefore owes them overtime wages and associated relief available under the FLSA and various statutes, including the Connecticut Minimum Wage Act, the California Unfair Competition Law, California Labor Code, California Wage Order No. 4-2001 and the California Private Attorneys General Act. The relief sought by plaintiffs includes unpaid overtime compensation, liquidated damages, pre- and post-judgment interest, damages in the amount of twice the unpaid overtime wages due and civil penalties. CSC’s position is that its system administrators have the job duties, responsibilities and salaries of exempt employees and are properly classified as exempt from overtime compensation requirements. CSC’s Motion to Transfer Venue was denied in February 2015. On June 9, 2015, the Court entered an order granting the plaintiffs’ motion for conditional certification of the class of system administrators. The Strauch putative class includes more than 4,000 system administrators. Courts typically undertake a two-stage review in determining whether a suit may proceed as a class action under the FLSA. In its order, the Court noted that, as a first step, the Court examines pleadings and affidavits, and if it finds that proposed class members are similarly situated, the class is conditionally certified. Potential class members are then notified and given an opportunity to opt-in to the action. The second step of the class certification analysis occurs upon completion of discovery. At that point, the Court will examine all evidence then in the record to determine whether there is a sufficient basis to conclude that the proposed class members are similarly situated. If it is determined that they are, the case will proceed to trial; if it is determined they are not, the class is decertified and only the individual claims of the purported class representatives proceed. The Company’s position in this litigation continues to be that the employees identified as belonging to the conditional class were paid in accordance with the FLSA. Plaintiffs filed an amended complaint to add additional plaintiffs and allege violations under Missouri and North Carolina wage and hour laws. We do not believe these additional claims differ materially from those in the original complaint. On June 3, 2016, Plaintiffs filed a motion for Rule 23 class certification of California, Connecticut and North Carolina state-law classes. The Company filed its opposition to the motion on July 15, 2016, and Plaintiffs filed their reply on August 12, 2016. In addition to the matters noted above, the Company is currently party to a number of disputes which involve or may involve litigation. The Company accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated under ASC 450 "Contingencies." The Company believes it has appropriately recognized liabilities for any such matters. Regarding other matters that may involve actual or threatened disputes or litigation, the Company, in accordance with the applicable reporting requirements, provides disclosure of such matters for which the likelihood of material loss is at least reasonably possible. The Company assessed reasonably possible losses for all other such pending legal or other proceedings in the aggregate and concluded that the range of potential loss is not material. The Company also considered the requirements regarding estimates used in the disclosure of contingencies under ASC 275 "Risks and Uncertainties." Based on that guidance, the Company determined that supplemental accrual and disclosure was not required for a change in estimate that involves contingencies because the Company determined that it was not reasonably possible that a change in estimate will occur in the near term. The Company reviews contingencies during each interim period and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. |
Reconciliation of Previously Reported Amounts |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Previously Reported Amounts | Reconciliation of Previously Reported Amounts During fiscal 2016, the Company identified certain errors in previously issued financial statements related to income taxes. These errors resulted in adjustments to the unaudited Condensed Consolidated Financial Statements for the three and six months ended October 2, 2015. The Company considered the guidance in ASC 250-10-S99-2 “Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in the Current Year Financial Statements” in evaluating the effects of these misstatements on the Company's previously issued financial statements and concluded that the previously issued financial statements were not materially misstated. To correct these misstatements, the Company increased income from continuing operations by $2 million for the three months ended October 2, 2015 and decreased income from continuing operations by $9 million for the six months ended October 2, 2015. As described in Note 1, Basis of Presentation, the Company adopted ASU 2016-09 in the fourth quarter of fiscal 2016, which requires us to reflect any adjustments as of April 4, 2015, the beginning of the annual period that includes the adoption. As described in Note 4, Divestitures, during fiscal 2016, the Company completed the Separation and reclassified certain financial statement line items to discontinued operations. A reconciliation of the amounts previously reported on Form 10-Q to those as adjusted within the accompanying unaudited Condensed Consolidated Statements of Operations is shown in the tables below for selected financial amounts:
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Recent Accounting Pronouncements (Policies) |
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Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Basis of presentation | Computer Sciences Corporation (CSC or the Company) has prepared the interim unaudited Condensed Consolidated Financial Statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for quarterly reports and, therefore, omit or condense certain note disclosures and other information required by generally accepted accounting principles in the United States (GAAP) for complete financial statements. These financial statements should therefore be read in conjunction with the audited Consolidated Financial Statements and accompanying Notes included in the Company's Annual Report on Form 10-K for the fiscal year ended April 1, 2016 (fiscal 2016). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements and accompanying notes. As a result, actual results may be different from these estimates. In the opinion of the Company's management, the accompanying unaudited Condensed Consolidated Financial Statements of CSC contain all adjustments necessary, including those of a normal recurring nature, to present fairly the Company's financial position as of September 30, 2016 and April 1, 2016 and its results of operations and cash flows for the three and six months ended September 30, 2016 and October 2, 2015. The results of operations for such interim periods are not necessarily indicative of the results for the full year ending March 31, 2017. Certain prior year amounts have been reclassified to conform to the current year presentation. |
Fiscal period | 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. |
New Accounting Standards and Standards Issued But Not Yet Effective | New Accounting Standards During the first six months of fiscal 2017, the Company adopted the following ASUs: ASU 2015-16, Business Combinations (Topic 805), "Simplifying the Accounting for Measurement Period Adjustments" requires an acquirer in a business combination to account for a measurement-period adjustment during the period in which the amount is determined, instead of retrospectively. CSC adopted this ASU effective April 2, 2016 and the impact on the Company's unaudited Condensed Consolidated Financial Statements was immaterial. ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs," as clarified by ASU 2015-15, "Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting" (ASU 2015-15), states that debt issuance costs are presented in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Presentation of fees under line-of-credit (LOC) arrangements had not been specified in ASU 2015-03; as a result ASU 2015-15 was issued. ASU 2015-15 states that the SEC staff would not object to an entity deferring LOC commitment fees as an asset and subsequently amortizing ratably over the term of the underlying LOC arrangement, regardless of whether there are outstanding borrowings under that LOC arrangement. CSC adopted both ASUs effective April 2, 2016 and the impact upon the unaudited Condensed Consolidated Financial Statements was immaterial. ASU 2015-05, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" issued guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement does not contain a software license, the customer should account for the arrangement as a service contract. If the arrangement includes software licenses, it should be accounted for consistent with other licenses of intangible assets. CSC elected to adopt this ASU prospectively effective April 2, 2016. Adoption of this ASU did not have a material impact on the unaudited Condensed Consolidated Financial Statements. Standards Issued But Not Yet Effective The following ASUs were recently issued but have not yet been adopted by CSC: In October 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-17, “Consolidation (Topic 810): Interests held through Related Parties that are under Common Control,” which alters how a decision maker needs to consider indirect interests in a variable interest entity held through an entity under common control and simplifies that analysis to require consideration of only an entity’s proportionate indirect interest in a VIE held through a common control party. ASU 2016-17 amends ASU 2015-02, “Consolidations (Topic 810): Amendments to the Consolidation Analysis,” adopted by CSC in the first three months of fiscal 2017, which did not have a material impact upon the unaudited Condensed Consolidated Financial Statements. ASU 2016-17 will be effective for CSC in fiscal year 2018 and will be required to be applied retrospectively to all relevant periods in fiscal 2017 when ASU 2015-02 was initially applied. CSC is currently evaluating the impact, if any, that the adoption of ASU 2016-17 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In October 2016, the FASB issued ASU 2016-16, “Accounting for Income Taxes: Intra-entity Asset Transfers of Assets Other than Inventory,” which requires that an entity recognize the tax expense from the sale of intra-entity sales of assets, other than inventory, in the seller’s tax jurisdiction when the transfer occurs, even though the pre-tax effects of that transaction are eliminate in consolidation. ASU 2016-16 will be effective for CSC in fiscal year 2019 and early adoption is permitted. This ASU must be adopted using a modified retrospective method. CSC is currently evaluating the impact that adoption of ASU 2016-16 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which addressed eight cash flow classification issues that have created diversity in practice, providing definitive guidance on classification of certain cash receipts and payments. ASU 2016-15 will be effective for CSC in fiscal year 2019 and early adoption is permitted. This ASU must be adopted retrospectively for all period presented but may be applied prospectively if retrospective application would be impracticable. CSC is currently evaluating the impact that adoption of ASU 2016-15 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 will be effective for CSC in fiscal 2020. This ASU must be adopted using a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the effective date. CSC is currently evaluating the impact that the adoption of ASU 2016-13 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." This amendment is intended to increase transparency and comparability among organizations by recognizing virtually all lease assets and lease liabilities on the balance sheet and disclosing key information about lease arrangements. ASU 2016-02 will be effective for CSC in fiscal 2020 and early adoption is permitted. This ASU must be adopted using a modified retrospective transition and provides for certain practical expedients. CSC is currently evaluating the impact that the adoption of ASU 2016-02 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In January 2016, the FASB issued ASU 2016-01, "Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities," which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for CSC in fiscal 2019. This ASU should be applied prospectively to equity investments that exist as of the date of adoption for equity securities without readily determinable fair values. CSC is currently evaluating the impact that adoption of ASU 2016-01 may have on its unaudited Condensed Consolidated Financial Statements in future reporting periods. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (ASU 2014-09). ASU 2014-09 supersedes the revenue recognition requirements in ASC Topic 605, “Revenue Recognition” and some cost guidance included in ASC Subtopic 605-35, "Revenue Recognition - Construction-Type and Production-Type Contracts.” The core principle of ASU 2014-09 is that revenue is recognized when the transfer of goods or services to customers occurs in an amount that reflects the consideration to which CSC expects to be entitled in exchange for those goods or services. ASU 2014-09 requires the disclosure of sufficient information to enable readers of CSC’s financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. ASU 2014-09 also requires disclosure of information regarding significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 provides two methods of retrospective application. The first method would require CSC to apply ASU 2014-09 to each prior reporting period presented. The second method would require CSC to retrospectively apply ASU 2014-09 with the cumulative effect recognized at the date of initial application. ASU 2014-09 will be effective for CSC beginning in fiscal 2019 as a result of ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date" (ASU 2015-14), which was issued by the FASB in August 2015 and extended the original effective date by one year. CSC is currently evaluating the impact of adopting the available methodologies of ASU 2014-09 and 2015-14 upon its unaudited Condensed Consolidated Financial Statements in future reporting periods. There have been three new ASUs issued amending certain aspects of ASU 2014-09. ASU 2016-08 "Principal versus Agent Considerations (Reporting Revenue Gross Versus Net)," was issued in March, 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10 "Identifying Performance Obligations and Licensing," issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. Finally, ASU 2016-12, "Revenue from Contracts with Customers - Narrow Scope Improvements and Practical Expedients" provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. With its evaluation of the impact of ASU 2014-09, CSC will also consider the impact related to the updated guidance provided by these three new ASUs. Other recently issued ASUs effective after October 1, 2016 are not expected to have a material effect on CSC's unaudited Condensed Consolidated Financial Statements in future reporting periods. |
Acquisitions (Tables) - Xchanging |
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Business Acquisition [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Purchase Price Allocation | During the three months ended September 30, 2016, the Company revised the fair value estimates associated with its acquisition accounting for the Xchanging acquisition consummated on May 5, 2016, that resulted in adjustments to the previously reported allocation of purchase consideration. The adjustments were a result of changes to the original fair value estimates of certain items acquired and are the result of additional information obtained since July 1, 2016 that related to facts and circumstances that existed at the respective acquisition date. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed is presented below:
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Schedule of Intangible Assets Acquired | The amortizable lives associated with the intangible assets acquired are as follows:
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Divestitures (Tables) |
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Discontinued Operations and Disposal Groups [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Information of NPS | The following table details the components of discontinued operations:
The following selected financial information of NPS is included in the unaudited Condensed Consolidated Statements of Cash Flows:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Earnings Per Common Share Basic and Diluted | Basic earnings per common share (EPS) and diluted EPS are calculated as follows:
(1) The Company adopted ASU 2016-09 during the fourth quarter of fiscal 2016, effective as of the beginning of the fiscal year. As a result, weighted average diluted shares outstanding has been adjusted from the amount previously reported for the three and six months ended October 2, 2015 to exclude excess tax benefits from the assumed proceeds in the diluted shares calculations. The adoption of this standard resulted in diluted weighted average shares outstanding of 140.85 million and 141.27 million for the three and six months ended October 2, 2015, respectively, compared to 140.53 million and 140.70 million as calculated under the previous guidance. |
Fair Value (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present the Company’s assets and liabilities, excluding pension assets, that are measured at fair value on a recurring basis:
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair values of derivative instruments included in the Consolidated Condensed Balance Sheets | The following table presents the fair values of derivative instruments included in the unaudited Condensed Consolidated Balance Sheets:
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Schedule of pretax amounts affecting income related to derivatives not designated for hedge accounting | The following table presents the amounts included within (loss) income from continuing operations, before taxes related to derivatives not designated for hedge accounting, net of remeasurement gains and losses:
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Goodwill and Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Carrying Amount of Goodwill by Segment | The following table summarizes the changes in the carrying amount of goodwill by segment for the six months ended September 30, 2016:
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Schedule of Summary of Amortizable Intangible Assets | A summary of amortizable intangible assets is as follows:
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Schedule of Estimated Future Amortization Expense Related to Intangible Assets | Estimated future amortization related to intangible assets as of September 30, 2016 is as follows:
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Debt (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following is a summary of the Company's debt:
(1) Classified as short-term if the Company intends to repay within 12 months and as long-term otherwise. |
Pension and Other Benefit Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation and Retirement Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of defined benefit plans disclosures | The net periodic pension benefit included the following components:
The weighted-average rates used to determine net periodic pension cost for the three and six months ended September 30, 2016 and October 2, 2015 were as follows:
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Stock Incentive Plans (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The Company recognized stock-based compensation expense (benefit) as follows:
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Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions | In calculating the compensation expense for its stock incentive plans, the Company used the following weighted-average assumptions:
|
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Disclosure of Share Based Compensation Arrangements by Share Based Payment Award | Information concerning RSUs granted under the Company's stock incentive plans is as follows:
(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the Separation. Information concerning RSUs granted to non-employee directors is as follows:
(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the Separation. Information concerning stock options granted under the Company's stock incentive plans is as follows:
(1) The amount of the weighted average exercise price and aggregate intrinsic value has been revised to reflect the impact of the Separation. |
Accumulated Other Comprehensive (Loss) Income (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive (Loss) Income, Net of Tax | The following tables show the changes in accumulated other comprehensive (loss) income, net of taxes:
(1) Balance at April 1, 2016 is net of transfer to CSRA of $31 million.
|
Supplemental Cash Flows (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Supplemental Cash Flow Information | Supplemental cash flow information is provided below.
|
Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Results by Reportable Segment | The following tables summarize operating results regularly provided to the chief operating decision maker by reportable segment and a reconciliation to our unaudited Condensed Consolidated Financial Statements:
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Reconciliation of Operating Income to (Loss) Income From Continuing Operations Before Taxes | A reconciliation of consolidated segment operating income to (loss) income from continuing operations, before taxes is as follows:
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Restructuring Costs (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Expense | Restructuring Expense by Segment The restructuring costs net of reversals by segment are shown in the table below.
The composition of restructuring costs by financial statement line item is as follows:
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Schedule of Restructuring Liability | The composition of the restructuring liability for the Fiscal 2016 Plan was as follows:
The composition of the restructuring liability for the Fiscal 2015 Plan is as follows:
(1) Includes $0 million related to fourth quarter fiscal 2015 special restructuring The composition of the restructuring liability for the Fiscal 2017 Plan was as follows:
(1) Pension benefit augmentations recorded as a pension liability (2) Foreign currency translation adjustments |
Commitments and Contingencies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term purchase commitments | Minimum purchase commitments as of September 30, 2016 were as follows:
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Expiration Of Financial Guarantees | The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of September 30, 2016:
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Reconciliation of Previously Reported Amounts (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Previously Reported Amounts | A reconciliation of the amounts previously reported on Form 10-Q to those as adjusted within the accompanying unaudited Condensed Consolidated Statements of Operations is shown in the tables below for selected financial amounts:
|
Acquisitions (Narrative) (Details) - USD ($) |
3 Months Ended | 4 Months Ended | 6 Months Ended | |||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jul. 05, 2016 |
May 05, 2016 |
Feb. 26, 2016 |
Dec. 29, 2015 |
Dec. 11, 2015 |
Sep. 24, 2015 |
Sep. 17, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
[2] | May 05, 2016 |
Sep. 30, 2016 |
Oct. 02, 2015 |
Jul. 01, 2016 |
Apr. 01, 2016 |
||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Payments for acquisitions, net of cash acquired | $ 434,000,000 | $ 236,000,000 | [1] | |||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Goodwill | $ 1,843,000,000 | 1,843,000,000 | $ 1,277,000,000 | |||||||||||||||||
Revenues | 1,871,000,000 | $ 1,745,000,000 | 3,801,000,000 | $ 3,549,000,000 | [2] | |||||||||||||||
Aspediens | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Total consideration paid | $ 15,000,000 | |||||||||||||||||||
Payments for acquisitions, net of cash acquired | 8,000,000 | |||||||||||||||||||
Fair value of contingent consideration | 6,000,000 | |||||||||||||||||||
Contingent consideration held for one year as security for potential claims against seller | 1,000,000 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Current assets acquired | 9,000,000 | |||||||||||||||||||
Intangible assets acquired | 9,000,000 | |||||||||||||||||||
Current liabilities acquired | 8,000,000 | |||||||||||||||||||
Goodwill | 5,000,000 | |||||||||||||||||||
Transaction costs (less than 1 million) | $ 1,000,000 | |||||||||||||||||||
Xchanging | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Total consideration paid | $ 623,000,000 | $ 70,000,000 | $ 693,000,000 | |||||||||||||||||
Payments for acquisitions, net of cash acquired | 492,000,000 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Goodwill | $ 644,000,000 | |||||||||||||||||||
Transaction costs (less than 1 million) | $ 17,000,000 | $ 17,000,000 | ||||||||||||||||||
Number of shares purchased (in shares) | 24,636,553 | |||||||||||||||||||
Business acquisition, share price (in USD per share) | $ 2.76 | $ 2.83 | $ 2.76 | |||||||||||||||||
Percentage of equity interest acquired | 9.99% | |||||||||||||||||||
Acquired debt | 254,000,000 | |||||||||||||||||||
Revenues | 128,000,000 | 209,000,000 | ||||||||||||||||||
Income before taxes | 9,000,000 | 13,000,000 | ||||||||||||||||||
UXC | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Total consideration paid | $ 302,000,000 | |||||||||||||||||||
Payments for acquisitions, net of cash acquired | 289,000,000 | |||||||||||||||||||
Cash acquired | 13,000,000 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Current assets acquired | 125,000,000 | |||||||||||||||||||
Noncurrent assets | 37,000,000 | |||||||||||||||||||
Intangible assets acquired | 91,000,000 | |||||||||||||||||||
Current liabilities acquired | 153,000,000 | |||||||||||||||||||
Long-term liabilities acquired | 50,000,000 | |||||||||||||||||||
Goodwill | 252,000,000 | |||||||||||||||||||
Transaction costs (less than 1 million) | $ 7,000,000 | |||||||||||||||||||
Axon Puerto Rico | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Payments for acquisitions, net of cash acquired | $ 29,000,000 | |||||||||||||||||||
Cash acquired | 5,000,000 | |||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Current assets acquired | 5,000,000 | |||||||||||||||||||
Noncurrent assets | 3,000,000 | |||||||||||||||||||
Intangible assets acquired | 11,000,000 | |||||||||||||||||||
Current liabilities acquired | 2,000,000 | |||||||||||||||||||
Goodwill | 12,000,000 | |||||||||||||||||||
Transaction costs (less than 1 million) | $ 1,000,000 | |||||||||||||||||||
Fixnetix | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Total consideration paid | $ 112,000,000 | |||||||||||||||||||
Payments for acquisitions, net of cash acquired | 88,000,000 | |||||||||||||||||||
Cash acquired | 1,000,000 | |||||||||||||||||||
Fair value of contingent consideration | $ 19,000,000 | 0 | ||||||||||||||||||
Fruition Partners | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Payments for acquisitions, net of cash acquired | $ 148,000,000 | |||||||||||||||||||
Cash acquired | $ 2,000,000 | |||||||||||||||||||
Customer relationships | Aspediens | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Amortizable lives | 10 years | |||||||||||||||||||
Customer relationships | Xchanging | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Amortizable lives | 15 years | |||||||||||||||||||
Customer relationships | UXC | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Amortizable lives | 10 years | |||||||||||||||||||
Customer relationships | Axon Puerto Rico | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Amortizable lives | 10 years | |||||||||||||||||||
Revolving credit facility | Credit facility | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Credit facility borrowing capacity | 3,000,000,000.0 | 3,000,000,000.0 | $ 2,900,000,000.0 | |||||||||||||||||
GBS | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Goodwill | 1,450,000,000 | 1,450,000,000 | 914,000,000 | |||||||||||||||||
GBS | Xchanging | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Business Combination, Expected incremental Cash Flow | 612,000,000 | |||||||||||||||||||
GIS | ||||||||||||||||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | ||||||||||||||||||||
Goodwill | $ 393,000,000 | 393,000,000 | $ 363,000,000 | |||||||||||||||||
GIS | Xchanging | ||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||
Business Combination, Expected incremental Cash Flow | $ 32,000,000 | |||||||||||||||||||
|
Acquisitions (Purchase Price Allocation to Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Jul. 01, 2016 |
Apr. 01, 2016 |
---|---|---|---|
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 1,843 | $ 1,277 | |
Xchanging | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Cash and cash equivalents | $ 201 | ||
Accounts receivable and other current assets | 216 | ||
Deferred tax asset, long-term | 56 | ||
Property and equipment and other noncurrent assets | 31 | ||
Accounts payable, accrued payroll, accrued expenses and other current liabilities | (215) | ||
Deferred revenue and advance contract payments | (71) | ||
Debt | (254) | ||
Deferred tax liability, long-term | (101) | ||
Other long-term liabilities | (117) | ||
Total identifiable net assets acquired | 330 | ||
Goodwill | 644 | ||
Noncontrolling interest | (281) | ||
Total estimated consideration | 693 | ||
Developed technology | Xchanging | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Intangible assets | 100 | ||
Customer relationships | Xchanging | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Intangible assets | 457 | ||
Trade names | Xchanging | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Intangible assets | 10 | ||
Other | Xchanging | |||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |||
Intangible assets | $ 17 |
Acquisitions (Useful lives) (Details) - Xchanging |
May 05, 2016 |
---|---|
Customer relationships | |
Business Acquisition [Line Items] | |
Amortizable lives | 15 years |
Minimum | Developed technology | |
Business Acquisition [Line Items] | |
Amortizable lives | 7 years |
Minimum | Trade names | |
Business Acquisition [Line Items] | |
Amortizable lives | 3 years |
Maximum | Developed technology | |
Business Acquisition [Line Items] | |
Amortizable lives | 8 years |
Maximum | Trade names | |
Business Acquisition [Line Items] | |
Amortizable lives | 5 years |
Divestitures (Summary of Operating Results of NPS) (Details) - NPS - Discontinued Operations, Disposed of by Means Other than Sale, Spinoff - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Oct. 02, 2015 |
Oct. 02, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | $ 967 | $ 1,924 |
Costs of services | (733) | (1,487) |
Selling, general and administrative | (25) | (41) |
Depreciation and amortization | (35) | (68) |
Restructuring costs | (1) | (1) |
Separation and merger costs | (38) | (53) |
Interest expense | (6) | (11) |
Other income, net | 0 | 22 |
Total income from discontinued operations before income taxes | 129 | 285 |
Income tax expense | (45) | (99) |
Total income from discontinued operations | $ 84 | $ 186 |
Divestitures (NPS Selected Financial Information in Cash Flows) (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Capital expenditures in accounts payable | $ (28) | $ (58) |
NPS | Discontinued Operations, Disposed of by Means Other than Sale, Spinoff | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Depreciation | 57 | |
Amortization | 11 | |
Capital expenditures | (75) | |
Net gain on disposition of business | 22 | |
Capital expenditures in accounts payable | $ (11) |
Divestitures (Narrative) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|
CSRA Inc | Affiliated Entity | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accounts receivable from related party | $ 33,000,000 | $ 33,000,000 | ||
Accounts receivable related to settlement of stock-based compensation awards | 17,000,000 | 17,000,000 | ||
CSRA Inc | Affiliated Entity | IP Matters Agreement | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Annual net maintenance fee | $ 30,000,000 | |||
Annual net maintenance fee, term | 5 years | |||
CSRA Inc | Affiliated Entity | IP Matters Agreement | Revenues | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Payment received from other related party | 7,000,000 | $ 15,000,000 | ||
CSRA Inc | Affiliated Entity | Various Other Commercial Agreements | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Payment received from other related party | 13,000,000 | $ 26,000,000 | ||
CSRA Inc | Deferred Revenue an Advance Contract Payments | Affiliated Entity | IP Matters Agreement | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Payment received from other related party | $ 5,000,000 | |||
NPS | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain or loss on disposition | $ 0 | $ 0 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|||||
Net income attributable to CSC common stockholders | ||||||||
From continuing operations | $ 15 | $ 93 | $ (6) | $ 158 | ||||
From discontinued operations | 0 | 78 | 0 | 176 | ||||
Net income (loss) attributable to CSC common stockholders | $ 15 | $ 171 | [1] | $ (6) | $ 334 | [1] | ||
Common share information: | ||||||||
Weighted average common shares outstanding for basic EPS (in shares) | 140,530,000 | 138,300,000 | 139,760,000 | 138,110,000 | ||||
Dilutive effect of stock options and equity awards (in shares) | 3,250,000 | 2,550,000 | 0 | 3,160,000 | ||||
Weighted average common shares outstanding for diluted EPS (in shares) | 143,780,000 | 140,850,000 | 139,760,000 | 141,270,000 | ||||
Basic EPS: | ||||||||
Basic EPS - Continuing operations (in dollars per share) | $ 0.11 | $ 0.68 | [1] | $ (0.04) | $ 1.14 | [1] | ||
Basic EPS - Discontinued Operations (in dollars per share) | 0.00 | 0.56 | [1] | 0.00 | 1.28 | [1] | ||
Earnings per common share - basic (in dollars per share) | 0.11 | 1.24 | [1] | (0.04) | 2.42 | [1] | ||
Diluted EPS: | ||||||||
Diluted EPS - Continuing operations (in dollars per share) | 0.10 | 0.66 | [1] | (0.04) | 1.12 | [1] | ||
Diluted EPS - Discontinued operations (in dollars per share) | 0.00 | 0.55 | [1] | 0.00 | 1.24 | [1] | ||
Earnings per common share - diluted (in dollars per share) | $ 0.10 | $ 1.21 | [1] | $ (0.04) | $ 2.36 | [1] | ||
Weighted average common shares outstanding for diluted EPS (in shares) | 143,780,000 | 140,850,000 | 139,760,000 | 141,270,000 | ||||
Antidilution Due To Exercise Price Exceeding Average Market Price | Employee stock option | ||||||||
Antidilutive securities excluded from computation (in shares) | 2,129,266 | 2,858,277 | 1,756,264 | |||||
Antidilution Due To Exercise Price Exceeding Average Market Price | Performance stock units | ||||||||
Antidilutive securities excluded from computation (in shares) | 2,038,486 | 1,165,411 | ||||||
Antidilution Due To Exercise Price Exceeding Average Market Price | Restricted Stock Units (RSUs) | ||||||||
Antidilutive securities excluded from computation (in shares) | 13,690 | 149,236 | 979,647 | 219,681 | ||||
New accounting pronouncement, early adoption, effect | ||||||||
Common share information: | ||||||||
Weighted average common shares outstanding for diluted EPS (in shares) | 140,850,000 | 141,270,000 | ||||||
Weighted average common shares outstanding for diluted EPS (in shares) | 140,850,000 | 141,270,000 | ||||||
New Accounting Pronouncement, Early Adoption, Calculation Under Previous Guidance | ||||||||
Common share information: | ||||||||
Weighted average common shares outstanding for diluted EPS (in shares) | 140,530,000 | 140,700,000 | ||||||
Weighted average common shares outstanding for diluted EPS (in shares) | 140,530,000 | 140,700,000 | ||||||
|
Fair Value (Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions |
Sep. 30, 2016 |
Apr. 01, 2016 |
---|---|---|
Assets: | ||
Money market funds and money market deposit accounts | $ 245 | $ 348 |
Mutual fund investments | 25 | |
Time deposits | 1 | |
Available for sale equity investments | 66 | |
Derivative instruments | 20 | 15 |
Total assets | 290 | 430 |
Liabilities: | ||
Contingent consideration | 6 | |
Derivative instruments | 7 | 11 |
Total liabilities | 13 | 11 |
Level 1 | ||
Assets: | ||
Money market funds and money market deposit accounts | 245 | 348 |
Mutual fund investments | 25 | |
Time deposits | 1 | |
Available for sale equity investments | 66 | |
Derivative instruments | 0 | 0 |
Total assets | 270 | 415 |
Liabilities: | ||
Contingent consideration | 0 | |
Derivative instruments | 0 | 0 |
Total liabilities | 0 | 0 |
Level 2 | ||
Assets: | ||
Money market funds and money market deposit accounts | 0 | 0 |
Mutual fund investments | 0 | |
Time deposits | 0 | |
Available for sale equity investments | 0 | |
Derivative instruments | 20 | 15 |
Total assets | 20 | 15 |
Liabilities: | ||
Contingent consideration | 0 | |
Derivative instruments | 7 | 11 |
Total liabilities | 7 | 11 |
Level 3 | ||
Assets: | ||
Money market funds and money market deposit accounts | 0 | 0 |
Mutual fund investments | 0 | |
Time deposits | 0 | |
Available for sale equity investments | 0 | |
Derivative instruments | 0 | 0 |
Total assets | 0 | 0 |
Liabilities: | ||
Contingent consideration | 6 | |
Derivative instruments | 0 | 0 |
Total liabilities | $ 6 | $ 0 |
Fair Value (Narrative) (Details) $ in Millions |
Sep. 30, 2016
USD ($)
counterparty
|
Apr. 01, 2016
USD ($)
|
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, excluding capital leases | $ 2,506 | $ 1,934 |
Accounts receivable with customers involved in bankruptcy proceedings | 17 | |
Allowance for doubtful accounts with customers involved in bankruptcy proceedings | 11 | |
Accounts payable with customers in bankruptcy proceedings | $ 4 | |
Foreign Currency forward contracts | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Number of counterparties to foreign currency derivative instruments | counterparty | 6 | |
Foreign Currency forward contracts | Maximum | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative instrument, counterparty risk | $ 18 | |
Reported Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, excluding capital leases | 2,500 | |
Fair Value Measurement | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt, excluding capital leases | $ 2,500 |
Derivative Instruments (Fair Values of Derivative Instruments) (Details) - USD ($) $ in Millions |
Sep. 30, 2016 |
Apr. 01, 2016 |
---|---|---|
Derivatives designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | $ 9 | $ 3 |
Derivative Liabilities | 3 | 4 |
Derivatives not designated for hedge accounting | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 11 | 12 |
Derivative Liabilities | 4 | 7 |
Interest rate swaps | Derivatives designated for hedge accounting | Other assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 0 | 0 |
Interest rate swaps | Derivatives designated for hedge accounting | Other long-term liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 3 | 0 |
Foreign Currency forward contracts | Derivatives designated for hedge accounting | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 9 | 3 |
Foreign Currency forward contracts | Derivatives designated for hedge accounting | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | 0 | 4 |
Foreign Currency forward contracts | Derivatives not designated for hedge accounting | Prepaid expenses and other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Assets | 11 | 12 |
Foreign Currency forward contracts | Derivatives not designated for hedge accounting | Accrued expenses and other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liabilities | $ 4 | $ 7 |
Derivative Instruments (Narrative) (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Derivative [Line Items] | |
Cash flow hedge gains to be reclassified during next 12 months | $ 1 |
Derivatives designated for hedge accounting | Total return swaps | |
Derivative [Line Items] | |
Notional amount of derivatives outstanding | 634 |
Derivatives designated for hedge accounting | Foreign Currency forward contracts | |
Derivative [Line Items] | |
Notional amount of derivatives outstanding | 409 |
Derivatives not designated for hedge accounting | Foreign Currency forward contracts | |
Derivative [Line Items] | |
Notional amount of derivatives outstanding | $ 1,900 |
Derivative Instruments (Derivatives Not Designated For Hedge Accounting) (Details) - Derivatives not designated for hedge accounting - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, pretax amounts affecting income | $ (3) | $ (5) | $ (5) | $ (2) |
Total return swaps | Cost of services and Selling, general & administrative expenses | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, pretax amounts affecting income | 0 | (3) | 0 | (3) |
Foreign currency forwards | Other (expense) income, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, pretax amounts affecting income | $ (3) | $ (2) | $ (5) | $ 1 |
Goodwill and Other Intangible Assets (Goodwill) (Details) $ in Millions |
6 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Changes in the carrying amount of goodwill by segment [Roll Forward] | |
Beginning balance, goodwill, gross | $ 4,039 |
Beginning balance, accumulated impairment losses | (2,762) |
Beginning balance, goodwill | 1,277 |
Additions | 649 |
Foreign currency translation | (83) |
Ending balance, goodwill, gross | 4,605 |
Ending balance, accumulated impairment losses | (2,762) |
Ending balance, goodwill | 1,843 |
GBS | |
Changes in the carrying amount of goodwill by segment [Roll Forward] | |
Beginning balance, goodwill, gross | 1,615 |
Beginning balance, accumulated impairment losses | (701) |
Beginning balance, goodwill | 914 |
Additions | 617 |
Foreign currency translation | (81) |
Ending balance, goodwill, gross | 2,151 |
Ending balance, accumulated impairment losses | (701) |
Ending balance, goodwill | 1,450 |
GIS | |
Changes in the carrying amount of goodwill by segment [Roll Forward] | |
Beginning balance, goodwill, gross | 2,424 |
Beginning balance, accumulated impairment losses | (2,061) |
Beginning balance, goodwill | 363 |
Additions | 32 |
Foreign currency translation | (2) |
Ending balance, goodwill, gross | 2,454 |
Ending balance, accumulated impairment losses | (2,061) |
Ending balance, goodwill | $ 393 |
Goodwill and Other Intangible Assets (Other Intangible Assets) (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
Apr. 01, 2016 |
|
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Value | $ 4,169,000,000 | $ 4,169,000,000 | $ 3,556,000,000 | ||
Accumulated Amortization | 2,287,000,000 | 2,287,000,000 | 2,228,000,000 | ||
Net Carrying Value | 1,882,000,000 | 1,882,000,000 | 1,328,000,000 | ||
Amortization expense | 82,000,000 | $ 70,000,000 | 162,000,000 | $ 140,000,000 | |
Outsourcing contract costs amortization expense | 3,000,000 | 3,000,000 | 6,000,000 | 6,000,000 | |
Gain on sale of intangible asset | 0 | 0 | |||
GIS | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gain on sale of intangible asset | 31,000,000 | ||||
Software | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Value | 2,409,000,000 | 2,409,000,000 | 2,243,000,000 | ||
Accumulated Amortization | 1,589,000,000 | 1,589,000,000 | 1,531,000,000 | ||
Net Carrying Value | 820,000,000 | 820,000,000 | 712,000,000 | ||
Software | Capitalized software | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Amortization expense | 38,000,000 | $ 40,000,000 | 81,000,000 | $ 82,000,000 | |
Outsourcing contract costs | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Value | 788,000,000 | 788,000,000 | 828,000,000 | ||
Accumulated Amortization | 459,000,000 | 459,000,000 | 494,000,000 | ||
Net Carrying Value | 329,000,000 | 329,000,000 | 334,000,000 | ||
Customer and other intangible assets | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross Carrying Value | 972,000,000 | 972,000,000 | 485,000,000 | ||
Accumulated Amortization | 239,000,000 | 239,000,000 | 203,000,000 | ||
Net Carrying Value | $ 733,000,000 | $ 733,000,000 | $ 282,000,000 |
Goodwill and Other Intangible Assets (Estimated future amortization expense related to intangible assets) (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2017 | $ 195 |
2018 | 323 |
2019 | 296 |
2020 | 261 |
2021 | $ 205 |
Debt (Schedule of Debt) (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Jul. 01, 2016 |
Apr. 01, 2016 |
|
Debt, Current [Abstract] | |||
Euro-denominated commercial paper | $ 669,000,000 | $ 559,000,000 | |
Current maturities of long-term debt | 76,000,000 | 79,000,000 | |
Current maturities of capitalized lease liabilities | 49,000,000 | 72,000,000 | |
Short-term debt and current maturities of long term debt | 794,000,000 | 710,000,000 | |
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 2,631,000,000 | 2,085,000,000 | |
Less: current maturities of long-term debt | 125,000,000 | 151,000,000 | |
Long-term debt, net of current maturities | 2,506,000,000 | $ 1,934,000,000 | |
Debt, stated interest rate | 4.45% | ||
Mandatorily redeemable preferred stock outstanding, due March 2023 | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 61,000,000 | $ 61,000,000 | |
Capitalized lease liabilities | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 114,000,000 | 141,000,000 | |
Borrowings for assets acquired under long-term financing | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Borrowings for assets acquired under long-term financing | 69,000,000 | 51,000,000 | |
Other borrowings | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | $ 2,000,000 | 4,000,000 | |
Term notes | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Debt instrument, term | 60 months | ||
4.45% term notes, due September 2022 | Term notes | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | $ 454,000,000 | 454,000,000 | |
Debt, stated interest rate | 4.45% | ||
Loan payable, due July 2021 | Loans payable | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | $ 76,000,000 | 0 | |
Loan payable, due March 2021 | Loans payable | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 568,000,000 | 575,000,000 | |
Loan payable, due January 2019 | Loans payable | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 259,000,000 | 284,000,000 | |
Loan payable, due May 2016 | Loans payable | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 0 | 71,000,000 | |
Lease credit facility, various | Secured debt | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Total long-term debt | 68,000,000 | 49,000,000 | |
Revolving credit facility | Credit facility | |||
Long-term Debt and Capital Lease Obligations, Including Current Maturities [Abstract] | |||
Payable - credit facility, long-term | 960,000,000 | $ 395,000,000 | |
Amount of multi-year committed revolving credit facility | $ 3,000,000,000.0 | $ 2,900,000,000.0 |
Debt (Narrative) (Details) |
6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
|
Oct. 02, 2015
USD ($)
|
[1] |
Sep. 30, 2016
AUD
|
Jul. 25, 2016
USD ($)
|
Jul. 01, 2016
USD ($)
|
Jul. 01, 2016
EUR (€)
|
Apr. 01, 2016
USD ($)
|
Apr. 01, 2016
EUR (€)
|
|||
Debt Instrument [Line Items] | |||||||||||
Borrowings on the credit facility | $ 920,000,000 | $ 1,310,000,000 | |||||||||
Repayment of borrowings under credit facility | 529,000,000 | $ 1,150,000,000 | |||||||||
Euro-denominated commercial paper | CSC Capital Funding Limited | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity | € | € 1,000,000,000 | € 500,000,000 | |||||||||
Borrowings on the credit facility | 1,200,000,000 | ||||||||||
Repayment of borrowings under credit facility | 1,100,000,000 | ||||||||||
Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity | 3,000,000,000.0 | $ 2,900,000,000.0 | |||||||||
Increase in credit facility with conditional revolver commitments | 740,000,000 | ||||||||||
Credit facility borrowing capacity with conditional revolver commitments | $ 3,700,000,000 | ||||||||||
Repayment of borrowings under credit facility | $ 275,000,000 | ||||||||||
Credit facility | Lease credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity | $ 150,000,000 | $ 250,000,000 | |||||||||
Term notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, term | 60 months | ||||||||||
Revolving credit facility maturing 2022 | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity with conditional revolver commitments | $ 2,800,000,000 | ||||||||||
Revolving credit facility maturing 2021 | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity with conditional revolver commitments | 70,000,000 | ||||||||||
Revolving credit facility maturing 2020 | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility borrowing capacity with conditional revolver commitments | 70,000,000 | ||||||||||
Term loan credit facility maturing July 2021 | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Borrowings on the credit facility | 920,000,000 | ||||||||||
Debt face amount | AUD | AUD 100,000,000 | ||||||||||
Incremental term loans | AUD | 175,000,000 | ||||||||||
Maximum | Term loan credit facility maturing July 2021 | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt face amount | AUD | AUD 275,000,000 | ||||||||||
Xchanging | Credit facility | Revolving credit facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayment of borrowings under credit facility | $ 254,000,000 | ||||||||||
|
Pension and Other Benefit Plans (Narrative) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2016 |
|
Compensation and Retirement Disclosure [Abstract] | ||
Contributions by employer | $ 7 | $ 10 |
Expected company contributions for remainder of fiscal year | $ 44 |
Pension and Other Benefit Plans (Net Periodic Benefit Pension Benefit) (Details) - Pension Plan - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Components of net periodic benefit cost [Abstract] | ||||
Service cost | $ 5 | $ 7 | $ 11 | $ 13 |
Interest cost | 21 | 24 | 42 | 47 |
Expected return on assets | (40) | (46) | (83) | (91) |
Amortization of prior service costs | (4) | (6) | (9) | (10) |
Net periodic pension benefit | $ (18) | $ (21) | $ (39) | $ (41) |
Pension and Other Benefit Plans (Assumptions Used to Determine Net Periodic Pension and Other Post-Retirement Cost) (Details) - Pension Plan |
6 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Defined Benefit Plan Disclosure [Line Items] | ||
Discount or settlement rates | 3.10% | 3.00% |
Expected long-term rates of return on assets | 6.30% | 6.30% |
Rates of increase in compensation levels | 2.60% | 2.80% |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
[1] | Sep. 30, 2016 |
Oct. 02, 2015 |
||||
Income Tax Examination [Line Items] | ||||||||
Income tax expense (benefit) | $ (22) | $ (46) | $ (38) | $ (39) | [1] | |||
Change in uncertain tax position | 0 | $ 0 | ||||||
Settlement with taxing authority | Maximum | ||||||||
Income Tax Examination [Line Items] | ||||||||
Reasonably possible reduction in liability for uncertain tax positions | 48 | 48 | ||||||
Settlement with taxing authority | Minimum | ||||||||
Income Tax Examination [Line Items] | ||||||||
Reasonably possible reduction in liability for uncertain tax positions | $ 18 | $ 18 | ||||||
|
Stock Incentive Plans - Schedule of Stock-Based Compensation (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 21 | $ 19 | $ 35 | $ 7 |
Total stock-based compensation, net of tax | 15 | 12 | 24 | 4 |
Cost of services | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 7 | 8 | 12 | (3) |
Selling, general and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 14 | $ 11 | $ 23 | $ 10 |
Stock Incentive Plans - Narrative (Details) |
6 Months Ended | |
---|---|---|
Sep. 30, 2016
USD ($)
plan
Award
$ / shares
shares
|
Oct. 02, 2015
USD ($)
$ / shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of equity awards converted from historic award | Award | 2 | |
Incremental stock compensation expense as a result of modification of equity awards | $ 0 | |
Number of incentive plans | plan | 2 | |
Number of common shares available for grant at period end (in shares) | shares | 6,636,475 | |
Exercise period (in years) | 10 years | |
Aggregate intrinsic value exercised | $ 54,000,000 | $ 27,000,000 |
Cash received from stock awards exercised during the period | 42,000,000 | $ 45,000,000 |
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $ 32,000,000 | |
Weighted average period over which cost is expected to be recognized (in years) | 2 years 4 months 10 days | |
Employee stock option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Weighted average grant date fair value (in dollars per share) | $ / shares | $ 12.41 | $ 20.03 |
Vesting period - minimum (in years) | 3 years | |
Aggregate intrinsic value exercised | $ 54,000,000 | |
Restricted Stock Units (RSUs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $ 90,000,000 | |
Weighted average period over which cost is expected to be recognized (in years) | 2 years 2 months 9 days | |
Nonemployee director incentives | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of incentive plans | plan | 1 | |
Number of common shares available for grant at period end (in shares) | shares | 93,136 |
Stock Incentive Plans - Schedule of Assumptions Used to Calculate Fair Value of Stock Options Granted (Details) - Employee stock option |
6 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 1.55% | 1.80% |
Expected volatility | 29.00% | 32.00% |
Expected term (in years) | 6 years 2 months 9 days | 6 years 2 months 13 days |
Dividend yield | 1.66% | 1.39% |
Stock Incentive Plans - Schedule of Options (Details) - USD ($) $ / shares in Units, $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Apr. 01, 2016 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Aggregate intrinsic value exercised | $ 54 | $ 27 | |
Employee stock option | |||
Number of Option Shares | |||
Outstanding beginning of period (in shares) | 5,366,621 | ||
Granted (in shares) | 2,109,337 | ||
Exercised (in shares) | (2,055,901) | ||
Canceled/Forfeited (in shares) | (292,078) | ||
Expired (in shares) | (46,949) | ||
Outstanding end of period (in shares) | 5,081,030 | 5,366,621 | |
Weighted Average Exercise Price | |||
Weighted average exercise price - beginning of period (in dollars per share) | $ 24.83 | ||
Weighted average exercise price - granted (in dollars per share) | 49.17 | ||
Weighted average exercise price - exercised (in dollars per share) | 21.26 | ||
Weighted average exercise price - canceled/forfeited (in dollars per share) | 33.33 | ||
Weighted average exercise price - expired (in dollars per share) | 23.31 | ||
Weighted average exercise price - end of period (in dollars per share) | $ 35.90 | $ 24.83 | |
Vested and expected to vest [Abstract] | |||
Vested and expected to vest in the future as of period end (in shares) | 4,740,073 | ||
Exercisable as of period end (in shares) | 1,726,123 | ||
Weighted average exercise price vested and expected to vest as of period end (in dollars per share) | $ 35.34 | ||
Weighted average exercise price exercisable as of period end (in dollars per share) | $ 24.28 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Weighted average remaining contractual term (in years) | 8 years 1 month 17 days | 7 years 22 days | |
Weighted average remaining contractual term vested and expected to vest in the future as of period end (in years) | 8 years 15 days | ||
Weighted average remaining contractual tern exercisable as of period end (in years) | 5 years 11 months 19 days | ||
Aggregate intrinsic value | $ 83 | $ 51 | |
Aggregate intrinsic value exercised | 54 | ||
Aggregate intrinsic value vested and expected to vest in the future as of period end | 80 | ||
Aggregate intrinsic value exercisable as of period end | $ 49 |
Stock Incentive Plans - Schedule of RSUs (Details) |
6 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
shares
| |
Equity instruments other than options nonvested [Roll Forward] | |
Equity instruments other than options nonvested - beginning balance (in shares) | shares | 89,046 |
Equity instruments other than options nonvested - granted (in shares) | shares | 33,600 |
Equity instruments other than options nonvested - released/issued (in shares) | shares | (30,900) |
Equity instruments other than options nonvested - canceled/forfeited (in shares) | shares | (4,800) |
Equity instruments other than options nonvested - ending balance (in shares) | shares | 86,946 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average fair value other than options - beginning balance (in dollars per share) | $ / shares | $ 27.00 |
Weighted average fair value other than options - granted (in dollars per share) | $ / shares | 47.35 |
Weighted average fair value other than options - released/issued (in dollars per share) | $ / shares | 29.06 |
Weighted average fair value other than options - canceled/forfeited (in dollars per share) | $ / shares | 30.31 |
Weighted average fair value other than options - ending balance (in dollars per share) | $ / shares | $ 33.95 |
Restricted Stock Units (RSUs) | |
Equity instruments other than options nonvested [Roll Forward] | |
Equity instruments other than options nonvested - beginning balance (in shares) | shares | 3,597,999 |
Equity instruments other than options nonvested - granted (in shares) | shares | 1,143,863 |
Equity instruments other than options nonvested - released/issued (in shares) | shares | (534,331) |
Equity instruments other than options nonvested - canceled/forfeited (in shares) | shares | (306,960) |
Equity instruments other than options nonvested - ending balance (in shares) | shares | 3,900,571 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average fair value other than options - beginning balance (in dollars per share) | $ / shares | $ 29.25 |
Weighted average fair value other than options - granted (in dollars per share) | $ / shares | 47.64 |
Weighted average fair value other than options - released/issued (in dollars per share) | $ / shares | 26.40 |
Weighted average fair value other than options - canceled/forfeited (in dollars per share) | $ / shares | 31.14 |
Weighted average fair value other than options - ending balance (in dollars per share) | $ / shares | $ 34.88 |
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Millions |
6 Months Ended | ||||
---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | $ 2,032 | $ 2,965 | [1] | ||
Balance | 2,325 | 3,053 | [1] | ||
Foreign Currency Translation Adjustments | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | (399) | (316) | |||
Current-period other comprehensive loss, net of taxes | (6) | (57) | |||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | 0 | 0 | |||
Balance | (405) | (373) | |||
Cash Flow Hedge | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | (1) | (2) | |||
Current-period other comprehensive loss, net of taxes | 9 | (12) | |||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | 0 | 0 | |||
Balance | 8 | (14) | |||
Pension and Other Post-retirement Benefit Plans | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | 289 | 339 | |||
Current-period other comprehensive loss, net of taxes | 0 | (1) | |||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | (7) | (12) | |||
Balance | 282 | 326 | |||
Accumulated Other Comprehensive Income (Loss) | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | (111) | 21 | |||
Current-period other comprehensive loss, net of taxes | 3 | (70) | |||
Amounts reclassified from accumulated other comprehensive loss, net of taxes | (7) | (12) | |||
Balance | (115) | $ (61) | |||
Transfer to CSRA | |||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||
Balance | $ (31) | ||||
|
Supplemental Cash Flows (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
|
Cash paid for: | ||
Interest | $ 52 | $ 67 |
Income taxes, net of refunds | 25 | 38 |
Non-cash activities: | ||
Depreciation | 177 | 208 |
Capital expenditures in accounts payable and accrued expenses | 28 | 58 |
Capital expenditures through capital lease obligations | 22 | 24 |
Assets acquired under long-term financing | 67 | 0 |
Dividends declared but not yet paid | $ 19 | $ 32 |
Segment Information (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016
USD ($)
Segment
|
Oct. 02, 2015
USD ($)
|
Sep. 30, 2016
USD ($)
Segment
|
Oct. 02, 2015
USD ($)
|
|||||
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | Segment | 2 | 2 | ||||||
Revenues | $ 1,871 | $ 1,745 | [1] | $ 3,801 | $ 3,549 | [1] | ||
Operating income (loss) | 98 | 130 | 150 | 274 | ||||
Depreciation and amortization | 167 | 168 | [1] | 333 | 342 | [1] | ||
Corporate | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 0 | 0 | 0 | 0 | ||||
Operating income (loss) | (11) | (35) | (28) | (41) | ||||
Depreciation and amortization | 16 | 10 | 32 | 19 | ||||
GBS | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 1,035 | 891 | 2,084 | 1,810 | ||||
Operating income (loss) | 83 | 101 | 156 | 198 | ||||
Depreciation and amortization | 41 | 30 | 77 | 60 | ||||
GIS | Operating Segments | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Revenues | 836 | 854 | 1,717 | 1,739 | ||||
Operating income (loss) | 26 | 64 | 22 | 117 | ||||
Depreciation and amortization | $ 110 | $ 128 | $ 224 | $ 263 | ||||
|
Segment Information (Reconciliation of Consolidated Operating Income to Income Before Taxes) (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|||||
Reconciliation of consolidated operating income to income before taxes [Abstract] | ||||||||
Consolidated segment operating income | $ 98 | $ 130 | $ 150 | $ 274 | ||||
Corporate G&A | (75) | (64) | (145) | (121) | ||||
Pension & OPEB actuarial & settlement losses | 0 | 0 | (1) | 0 | ||||
Interest expense | (29) | (29) | [1] | (54) | (59) | [1] | ||
Interest income | 8 | 7 | [1] | 18 | 18 | [1] | ||
Other (expense) income, net | (3) | 3 | [1] | (5) | 7 | [1] | ||
(Loss) income from continuing operations, before taxes | $ (1) | $ 47 | [1] | $ (37) | $ 119 | [1] | ||
|
Restructuring Costs (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Apr. 03, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
|||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | $ 25,000,000 | $ 5,000,000 | [1] | $ 82,000,000 | $ 5,000,000 | [1] | ||||
Restructuring liability | 103,000,000 | 103,000,000 | $ 103,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | 25,000,000 | 5,000,000 | [1] | 82,000,000 | 5,000,000 | [1] | ||||
Restructuring liability, ending balance | 103,000,000 | 103,000,000 | ||||||||
Accrued expenses and other current liabilities | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring liability, current | 96,000,000 | |||||||||
Other liabilities | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring liability, noncurrent | 7,000,000 | |||||||||
Fiscal 2017 Plan | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 84,000,000 | |||||||||
Restructuring liability | 57,000,000 | 0 | 57,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 0 | |||||||||
Costs expensed (reversed) | 84,000,000 | |||||||||
Less: costs not affecting restructuring liability | (6,000,000) | |||||||||
Cash paid | (21,000,000) | |||||||||
Other | 0 | |||||||||
Restructuring liability, ending balance | 57,000,000 | 57,000,000 | ||||||||
Fiscal 2017 Plan | Workforce reductions | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 81,000,000 | |||||||||
Restructuring liability | 54,000,000 | 0 | 54,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 0 | |||||||||
Costs expensed (reversed) | 81,000,000 | |||||||||
Less: costs not affecting restructuring liability | (6,000,000) | |||||||||
Cash paid | (21,000,000) | |||||||||
Other | 0 | |||||||||
Restructuring liability, ending balance | 54,000,000 | 54,000,000 | ||||||||
Fiscal 2017 Plan | Facilities costs | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 3,000,000 | |||||||||
Restructuring liability | 3,000,000 | 0 | 3,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 0 | |||||||||
Costs expensed (reversed) | 3,000,000 | |||||||||
Less: costs not affecting restructuring liability | 0 | |||||||||
Cash paid | 0 | |||||||||
Other | 0 | |||||||||
Restructuring liability, ending balance | 3,000,000 | 3,000,000 | ||||||||
Fiscal 2016 Plan | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | (1,000,000) | |||||||||
Restructuring liability | 37,000,000 | 59,000,000 | 37,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 59,000,000 | |||||||||
Costs expensed (reversed) | (1,000,000) | |||||||||
Cash paid | (21,000,000) | |||||||||
Restructuring liability, ending balance | 37,000,000 | 37,000,000 | ||||||||
Fiscal 2016 Plan | Workforce reductions | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 0 | |||||||||
Restructuring liability | 18,000,000 | 29,000,000 | 18,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 29,000,000 | |||||||||
Costs expensed (reversed) | 0 | |||||||||
Cash paid | (11,000,000) | |||||||||
Restructuring liability, ending balance | 18,000,000 | 18,000,000 | ||||||||
Fiscal 2016 Plan | Facilities costs | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | (1,000,000) | |||||||||
Restructuring liability | 19,000,000 | 30,000,000 | 19,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 30,000,000 | |||||||||
Costs expensed (reversed) | (1,000,000) | |||||||||
Cash paid | (10,000,000) | |||||||||
Restructuring liability, ending balance | 19,000,000 | 19,000,000 | ||||||||
Fiscal 2015 Plan | Workforce reductions | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | (1,000,000) | |||||||||
Restructuring liability | 9,000,000 | 29,000,000 | 9,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 29,000,000 | |||||||||
Costs expensed (reversed) | (1,000,000) | |||||||||
Cash paid | (19,000,000) | |||||||||
Other | $ 0 | |||||||||
Restructuring liability, ending balance | 9,000,000 | 9,000,000 | ||||||||
Fiscal 2013 Plan | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 0 | |||||||||
Restructuring liability | 1,000,000 | 1,000,000 | $ 1,000,000 | |||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Restructuring liability, beginning balance | 1,000,000 | |||||||||
Costs expensed (reversed) | 0 | |||||||||
Restructuring liability, ending balance | 1,000,000 | 1,000,000 | ||||||||
Operating Segments | GBS | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 2,000,000 | 4,000,000 | 22,000,000 | 4,000,000 | ||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | 2,000,000 | 4,000,000 | 22,000,000 | 4,000,000 | ||||||
Operating Segments | GIS | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 23,000,000 | 1,000,000 | 60,000,000 | 1,000,000 | ||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | 23,000,000 | 1,000,000 | 60,000,000 | 1,000,000 | ||||||
Corporate | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 0 | 0 | 0 | 0 | ||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | 0 | 0 | 0 | 0 | ||||||
Cost of services | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | 29,000,000 | (2,000,000) | 75,000,000 | (2,000,000) | ||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | 29,000,000 | (2,000,000) | 75,000,000 | (2,000,000) | ||||||
Selling, general and administrative | ||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||
Restructuring costs | (4,000,000) | 7,000,000 | 7,000,000 | 7,000,000 | ||||||
Composition of Workforce Restructuring Liability [Roll Forward] | ||||||||||
Costs expensed (reversed) | $ (4,000,000) | $ 7,000,000 | $ 7,000,000 | $ 7,000,000 | ||||||
|
Consolidated Variable Interest Entities (Details) - USD ($) |
Nov. 02, 2015 |
Sep. 30, 2016 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Assets pledged as collateral | $ 0 | |
CeleritiFinTech | Consolidated Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Membership interest | 49.00% | |
CeleritiFinTech Services | Consolidated Variable Interest Entity | ||
Variable Interest Entity [Line Items] | ||
Membership interest | 51.00% |
Commitments and Contingencies (Commitments) (Details) $ in Millions |
6 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Guarantor Obligations [Line Items] | |
Purchase commitments, fiscal 2017 | $ 133 |
Purchase commitments, fiscal 2018 | 283 |
Purchase commitments, fiscal 2019 and thereafter | 1,181 |
Total | $ 1,597 |
Line of credit, term | 1 year |
Fiscal 2017 | $ 61 |
Fiscal 2018 | 17 |
Fiscal 2019 and thereafter | 51 |
Total | 129 |
Surety bonds | |
Guarantor Obligations [Line Items] | |
Fiscal 2017 | 10 |
Fiscal 2018 | 10 |
Fiscal 2019 and thereafter | 0 |
Total | 20 |
Letters of credit | |
Guarantor Obligations [Line Items] | |
Fiscal 2017 | 11 |
Fiscal 2018 | 3 |
Fiscal 2019 and thereafter | 33 |
Total | 47 |
Stand-by letters of credit | |
Guarantor Obligations [Line Items] | |
Fiscal 2017 | 40 |
Fiscal 2018 | 4 |
Fiscal 2019 and thereafter | 18 |
Total | $ 62 |
Minimum | |
Guarantor Obligations [Line Items] | |
Purchase commitments, period | 1 year |
Maximum | |
Guarantor Obligations [Line Items] | |
Purchase commitments, period | 7 years |
Commitments and Contingencies (Contingencies) (Details) Plaintiff in Thousands, $ in Millions |
Dec. 17, 2015
USD ($)
|
Jun. 09, 2015
Plaintiff
|
May 12, 2016 |
Oct. 07, 2015
USD ($)
|
---|---|---|---|---|
Civil Complaint Against Eric Pulier | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Gain contingency, amount sought | $ 98.0 | |||
Civil Complaint Against Eric Pulier | Settled Litigation | ||||
Loss Contingencies [Line Items] | ||||
SEC settlement related charges | $ 16.5 | |||
Strauch and Colby v. Computer Sciences Corporation | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Number of system administrators for class action, more than | Plaintiff | 4 | |||
CSC Agility Platform, Inc. | Civil Complaint Against Eric Pulier | Settled Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages awarded, legal fees percentage | 80.00% |
Reconciliation of Previously Reported Amounts (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 |
Oct. 02, 2015 |
Sep. 30, 2016 |
Oct. 02, 2015 |
|||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations, before taxes | $ (1) | $ 47 | [1] | $ (37) | $ 119 | [1] | ||||||
Income tax expense (benefit) | (22) | (46) | [1] | (38) | (39) | [1] | ||||||
Income (loss) from continuing operations | (21) | (93) | [1] | (1) | (158) | [1] | ||||||
Income from discontinued operations | 0 | 84 | [1] | 0 | 186 | [1] | ||||||
Net income | 21 | 177 | [1] | 1 | 344 | [1],[2],[3] | ||||||
Net income attributable to CSC common stockholders | $ 15 | 171 | [1] | $ (6) | 334 | [1] | ||||||
Restatement adjustment | Certain errors related to income taxes | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations | (2) | 9 | ||||||||||
As Previously Reported | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations, before taxes | 176 | 404 | ||||||||||
Income tax expense (benefit) | 3 | 67 | ||||||||||
Income (loss) from continuing operations | (173) | (337) | ||||||||||
Income from discontinued operations | 0 | 0 | ||||||||||
Net income | 173 | 337 | ||||||||||
Net income attributable to CSC common stockholders | 167 | 327 | ||||||||||
Adjustment | Adoption of ASU 2016-09 | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations, before taxes | 0 | 0 | ||||||||||
Income tax expense (benefit) | (2) | (16) | ||||||||||
Income (loss) from continuing operations | (2) | (16) | ||||||||||
Income from discontinued operations | 0 | 0 | ||||||||||
Net income | 2 | 16 | ||||||||||
Net income attributable to CSC common stockholders | 2 | 16 | ||||||||||
Adjustment | Correction of Prior Period Misstatement | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations, before taxes | 0 | 0 | ||||||||||
Income tax expense (benefit) | (2) | 9 | ||||||||||
Income (loss) from continuing operations | (2) | 9 | ||||||||||
Income from discontinued operations | 0 | 0 | ||||||||||
Net income | 2 | (9) | ||||||||||
Net income attributable to CSC common stockholders | 2 | (9) | ||||||||||
Adjustment | Reclassification of Discontinued Operations | ||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Income (loss) from continuing operations, before taxes | (129) | (285) | ||||||||||
Income tax expense (benefit) | (45) | (99) | ||||||||||
Income (loss) from continuing operations | 84 | 186 | ||||||||||
Income from discontinued operations | 84 | 186 | ||||||||||
Net income | 0 | 0 | ||||||||||
Net income attributable to CSC common stockholders | $ 0 | $ 0 | ||||||||||
|
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