Segment Information

USPS was a reportable segment of DXC through May 31, 2018. As a result of the Spin-Off and Mergers on that date, during the first quarter of fiscal year 2019, Perspecta’s management reevaluated its operating segments and segment reporting and determined that the Company’s chief operating decision maker, the Chief Executive Officer, evaluates Perspecta’s consolidated operations based on two reportable segments: (1) Defense and Intelligence, and (2) Civilian and Health Care. During the fourth quarter of fiscal year 2019, Perspecta's management further reevaluated and refined its segment reporting and determined that the Company's chief operating decision maker, the Chief Executive Officer, evaluates the performance of the segments using a performance measure that excludes the amortization expense on intangible assets acquired in business combinations. The accompanying prior year disclosures have been revised to reflect this change.

Management believes that these changes provide investors with a more precise view of field operations and corporate costs that accurately aligns with the chief operating decision maker’s view of the business. In the following tables, corporate activity is reported separately to reconcile to the statements of operations. The accounting policies of the reportable segments are the same as those described in Note 1 – “Overview and Summary of Significant Accounting Policies.” Reportable segments and their respective operations are defined as follows:

Defense and Intelligence

Through its Defense and Intelligence business, Perspecta provides cybersecurity, data analytics, digital transformation, information technology modernization, and agile software development, as well as technology to support intelligence, surveillance, and reconnaissance services to the DoD, intelligence community, branches of the U.S. Armed Forces, and other DoD agencies.

Key competitive differentiators for the Defense and Intelligence segment include global scale, solution objectivity, depth of industry expertise, strong partnerships, vendor and product independence and end-to-end solutions and capabilities. Evolving business demands such as globalization, fast-developing economies, government regulation and growing concerns around risk, security, and compliance drive demand for these offerings.

Civilian and Health Care

Through its Civilian and Health Care business, Perspecta provides enterprise IT transformation and modernization, application development and modernization, enterprise security, risk decision support, operations and sustainment, systems engineering, applied research, cyber services, and cloud transformation to the Departments of Homeland Security, Justice, and Health and Human Services, as well as other federal civilian and state and local government agencies.

In the following tables, certain corporate activity is reported separately to reconcile the Company’s segment information to the statements of operations. The accounting policies of the reportable segments are the same as those described herein in Note 1 – “Overview and Summary of Significant Accounting Policies.”

Segment Measures

The following tables summarize operating results regularly provided to the chief operating decision maker by reportable segment and a reconciliation of those reporting results to the statements of operations for the relevant periods.

Revenue

Our revenue by reportable segment was as follows:



	Successor				Predecessor
	Fiscal Years Ended				Five Months Ended		Fiscal Year Ended
(in millions)	March 31, 2019		March 31, 2018		March 31, 2017		October 31, 2016
Defense and Intelligence	$	2,587	$	1,416	$	488	$	1,153
Civilian and Health Care	1,443		1,403		585		1,579
Total revenue	$	4,030	$	2,819	$	1,073	$	2,732

Segment Profit

Our segment profit by reportable segment was as follows:



	Successor				Predecessor
	Fiscal Years Ended				Five Months Ended		Fiscal Year Ended
(in millions)	March 31, 2019		March 31, 2018		March 31, 2017		October 31, 2016
Defense and Intelligence	$	331	$	168	$	35	$	51
Civilian and Health Care	196		222		75		183
Total segment profit	$	527	$	390	$	110	$	234

Total Assets by Segment

Management does not use total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment and therefore, total assets by segment is not disclosed.

Reconciliation of Reportable Segment Profit to the Statements of Operations

The Company’s management uses segment profit as the measure for assessing performance of its segments. Segment profit is defined as segment revenue less segment cost of services, selling, general and administrative and depreciation and amortization, excluding amortization of acquired intangible assets. The Company does not allocate to its segments certain operating expenses managed at the corporate level. These unallocated costs include certain corporate function costs, stock-based compensation expense, amortization of acquired intangible assets, certain nonrecoverable restructuring costs, transaction and integration-related costs and net periodic benefit cost.



	Successor						Predecessor
	Fiscal Years Ended						Five Months Ended			Fiscal Year Ended
(in millions)	March 31, 2019			March 31, 2018			March 31, 2017			October 31, 2016
Segment profit	$	527		$	390		$	110		$	234
Not allocated to segments:
Stock-based compensation	(11		)	(6		)	(7		)	(20		)
Amortization of acquired intangible assets	(165		)	(69		)	—			—
Restructuring costs	(4		)	(14		)	—			(20		)
Separation and integration-related costs	(106		)	(90		)	(34		)	(34		)
Interest expense, net	(121		)	(12		)	(10		)	(31		)
Other unallocated, net	(8		)	—			—			—
Income before taxes	$	112		$	199		$	59		$	129

Depreciation and Amortization

Our depreciation and amortization expense by reportable segment was as follows:



	Successor				Predecessor
	Fiscal Years Ended				Five Months Ended		Fiscal Year Ended
(in millions)	March 31, 2019		March 31, 2018		March 31, 2017		October 31, 2016
Defense and Intelligence	$	74	$	34	$	34	$	95
Civilian and Health Care	91		64		39		130
Amortization of acquired intangible assets	165		69		—		—
Total depreciation and amortization	$	330	$	167	$	73	$	225