What changed in this filing

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Item 1. Business

2022-05-26 compared with 2021-05-28 · 86 added, 48 removed, 151 unchanged (47% of the section changed)

DXC, a Nevada corporation, is a global IT services market leader.

Our more than 130,000 people in 70-plus countries help our global customers, over half of today’s fortune 500 companies, run mission-critical systems with the latest technology innovations across our Enterprise Technology Stack.

Our customers trust DXC to innovate and deliver transformative solutions for new levels of performance, profitability, competitiveness, and customer experience.

We provide mission-critical IT services that transform global businesses.

We deliver excellence for our customers and colleagues around the world.

Our more than 130,000 people in approximately 70 countries are entrusted by our customers, nearly half of today’s Fortune 500 companies, to provide solutions across the Enterprise Technology Stack for new levels of performance, scale and competitiveness.

DXC was formed on April 1, 2017 by the merger of CSC and HPES (the "HPES Merger").

Transformation Journey

The DXC “Transformation Journey” strategy focuses on building stronger relationships with customers, its people, and unlocking value across the Enterprise Technology Stack.

DXC's transformation journey focuses on building stronger relationships with customers, its people, and unlocking value across the Enterprise Technology Stack.

Key transformation journey priorities include:

• Inspire and Take Care of our People – Ensuring the health and safety of our people is a top priority, especially in the current environment

• Inspire and Take Care of our Colleagues – Ensuring the health and safety of our people is a top priority, especially in the current environment

Continuing to bring in new technology, account and delivery talent across the world, and making investments that recognize and reward our people

• Focus on Customers – Strengthening our customer relationships and ensuring we are proactively delivering for customers

• Optimize Cost – Optimizing value to better serve our customers by eliminating confusion and complexity

• Optimize Costs – Optimizing value to better serve our customers by eliminating confusion and complexity

• Seize the Market – Seizing the market opportunity by cross-selling and expanding what we do with our customers across the Enterprise Technology Stack

• Unlock Value to Strengthen Balance Sheet – Unlocking value by pursuing strategic alternatives, rationalizing our portfolio, and strengthening our balance sheet through our commitment to running a long-term sustainable business

The Company will continue to focus on execution of its strategy in the next fiscal year, with a continued focus on our people, revenue stabilization, cost optimization and winning in the market.

While the Company has already disclosed that it completed the sale of two businesses that comprised the Strategic Alternatives plan, the Company will continue its portfolio shaping efforts and divest assets that the Company does not believe are well integrated with its enterprise technology stack and its strategic direction so it can focus on its strategy.

• Financial Foundation – Unlocking value by pursuing strategic alternatives, rationalizing our portfolio, and strengthening our balance sheet through creating a firm foundation that reflects our commitment to running a long-term sustainable business

The Company will continue to focus on execution of its transformation journey in the next fiscal year, with a continued focus on our people, revenue stabilization, cost optimization and winning in the market.

The Company is continuing with its portfolio shaping efforts, making the right investments and divesting assets that the Company does not believe are well integrated with its enterprise technology stack and its strategic direction in order to better focus on its strategy.

Important Acquisitions and Divestitures

During the third quarter of fiscal 2022, a subsidiary of DXC entered into a purchase agreement to sell (the "FDB Sale") its German financial services subsidiary ("FDB" or the "FDB Business") to the FNZ Group ("FNZ") for €300 million (approximately $335 million as of March 31, 2022), subject to certain adjustments.

The closing of the transaction is subject to certain conditions, including receipt of certain regulatory consents.

At March 31, 2022, FDB held approximately $572 million in cash which primarily related to customer deposit liabilities.

The Company expects to complete the FDB Sale in fiscal 2023.

During the first quarter of fiscal 2022, DXC completed the sale of its healthcare provider software business (“HPS” or the “HPS Business”) to Dedalus Holding S.p.A.

The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HPS Business for €468 million (approximately $551 million), subject to certain adjustments.

During fiscal 2021, DXC completed the sale of its U.S.

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The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business together with future services to be provided by the Company for a total enterprise value of $5.0 billion, subject to net working capital adjustments and assumed liabilities.

On July 17, 2020, DXC entered into a purchase agreement with Dedalus Holding S.p.A.

("Dedalus"), a company organized under the laws of Italy, pursuant to which Dedalus will acquire DXC’s healthcare provider software business (the "HPS" or the "HPS Business").

The sale was completed on April 1, 2021, for a purchase price of €462 million (approximately $543 million) (the "HPS Sale").

During fiscal 2020, DXC completed the acquisition of Luxoft Holding, Inc., a global scale digital service provider whose offerings encompass strategic consulting, custom software development, and digital solution engineering services.

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Our portfolio of analytics services and extensive partner ecosystem help customers gain rapid insights, automate operations, and accelerate their transformation journeys.

We provide software engineering and solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business.

We provide software engineering, consulting, and data analytics solutions that enable businesses to run and manage their mission-critical functions, transform their operations, and develop new ways of doing business.

• Applications.

We use advanced technologies and methods to accelerate the creation, modernization, delivery and maintenance of high-quality, secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership, across industries.

Our vertical-specific IP includes solutions for insurance, banking and capital markets, and automotive among others.

We support customers across all industries, including public sector, insurance, banking and capital markets, and automotive.

• Business process services.

Include integration and optimization of front and back office processes, and agile process automation.

We perform the integration and optimization of front and back office processes, as well as agile process automation.

This helps companies to reduce cost and minimize business disruption, human error, and operational risk while improving customer experiences.

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• Cloud and Security.

We help customers to rapidly modernize by adapting legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments.

We help customers rapidly modernize by adapting legacy apps to cloud, migrate the right workloads, and effectively manage their multi-cloud environments.

Our security solutions help predict attacks, proactively respond to threats, ensure compliance and protect data, applications and infrastructure.

• IT Outsour cing ("ITO").

Our ITO services support infrastructure, applications, and workplace IT operations, including hardware, software, physical/virtual end-user devices, collaboration tools, and IT support services.

We help customers securely optimize operations to ensure continuity of their systems and respond to new business and workplace demands while achieving cost takeout, all with limited resources, expertise, and budget.

Our ITO services help customers securely and cost-effectively run mission-critical systems and IT infrastructure.

We manage and simplify our customers’ existing IT investments, reduce the costs to run them and provide a path for customers to move portions of their IT estates to the cloud to drive innovation and additional savings.

• Modern Workplace.

Services to fit our customer’s employee, business and IT needs from intelligent collaboration, modern device management, digital support services, Internet of Things ("IoT") and mobility services, providing a consumer-like, digital experience.

We provide services to fit our customer’s employee, business and IT needs from intelligent collaboration, modern device management, digital support services, and mobility services.

Our focus on the employee experience provides a consumer-like, digital experience that fits the needs of today's professional.

See Note 20 - "Segment and Geographic Information" for additional information related to our reportable segments, including the disclosure of segment revenues, segment profit, and financial information by geographic area.

Sales and Marketing

We market and sell our services to customers through our direct sales force, operating out of locations around the world.

Our customers include commercial businesses of many sizes and in many industries and public sector enterprises.

We market and sell our services to customers through our direct sales force, which operates out of various locations around the world.

Our customers include commercial businesses of many sizes and across many industries, as well as public sector enterprises.

No individual customer exceeded 10% of our consolidated revenues for fiscal 2022, fiscal 2021, or fiscal 2020.

General economic conditions have an impact on our business and financial results.

The markets in which we sell our solutions, services and productions occasionally experience weak economic conditions that may negatively affect sales.

The markets in which we sell our solutions, services and products occasionally experience weak economic conditions that may negatively affect sales.

We also experience some seasonal trends in the sale of our services.

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The IT and professional services markets we compete in are highly competitive and are not dominated by a single company or a small number of companies.

A substantial number of companies offer services that overlap and are competitive with those we offer.

A substantial number of companies offer services that overlap our offerings and are competitive with our services.

In addition, the increased importance of offshore labor centers has brought several foreign-based competitors into our markets.

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• investments in our services and solutions;

• focus on responsiveness to proactively address customer needs, quality of services and competitive prices;

• focus on responsiveness to proactively address customer needs, provide quality services and competitive prices;

• successful management of our relationships with leading strategic and solution partners in hardware, networking, cloud, applications and software;

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We believe that our patents and patent applications are important for maintaining the competitive differentiation of our solutions and services and enhancing our freedom to sell solutions and services in markets in which we choose to participate.

No single patent is in itself essential to our company as a whole or to any business segment.

Additionally, we own or have rights to various trademarks, service marks, and trade names that are used in the operation of our business.

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We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest.

These license arrangements include a number of cross-licenses with third parties.

Environmental, Social and Governance ("ESG")

In 2021, we enhanced the governance of our ESG program to include a multitiered process involving the Board of Directors, members of our executive staff and internal leadership.

Our Board of Directors provides oversight of our ESG program, enabling us to have the governance, long-term strategy and processes to manage ESG outcomes and meet the needs of our stakeholders.

The Nominating and Corporate Governance Committee of our Board of Directors has specific oversight of ESG.

Our ESG leadership team regularly updates the committee on ESG status and provides an update to the full board annually.

Our ESG strategy reflects our ongoing commitment to being a responsible corporate citizen.

We are proud to be part of the global movement to minimize the impact of climate change on the world, and we are dedicated to driving sustainable growth by setting ambitious, science-based emissions reduction targets in the next two years.

We strive to minimize our impact on the environment and improve resource efficiency in the areas of energy consumption, data center management and travel and transportation.

Our conservation efforts are supported in part by our shift to a virtual-first operating model, which enables our workforce to be largely remote and helps us reduce our greenhouse gas emissions and our overall energy consumption.

While the virtual-first model mainly helps reduce the size of our office footprint, we are also pursuing efficiency programs for data centers and data center rationalization programs to reduce energy consumption.

DXC also partners with customers to help them achieve their own climate-related goals.

In response to shifting customer demand, we offer a number of products and services that can have a significant impact on our customers’ sustainability objectives, delivering climate-related benefits far greater than what we could achieve alone through our internal carbon-reduction efforts.

Offerings such as DXC Modern Workplace, cloud migration services and data-driven sustainability services directly reduce carbon emissions for our customers.

Additional information about our ESG initiatives is available on our website at http://dxc.com/us/en/about-us/corporate-responsibility .

The information on our website is not incorporated by reference into, and is not a part of, this report.

Environmental Regulation

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However, we could incur substantial costs including clean-up costs, fines and civil or criminal sanctions and third-party damage or personal injury claims if we were to violate or become liable under existing and future environmental laws or legislation.

To limit future risks, DXC has committed to set near-term company-wide emission reductions in line with the Science Based Targets initiative (SBTi).

Human Capital Management

As a leading global information technology services company, we attract highly skilled and educated people.

As of March 31, 2021, we employed approximately 134,000 people worldwide.

At DXC our people are our number one asset - ensuring they feel valued and respected.

As of March 31, 2022, we employed more than 130,000 people worldwide.

At DXC we value our people and the opportunity to engage with them - we are at our best when our people feel valued and respected.

Value of Employee Engagement

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We assess employee engagement at least annually through a global engagement survey.

During the past year, 77% of our people participated in the survey, which resulted in an Employee Engagement Index measuring 72%.

Based on feedback received through periodic engagement surveys, management has implemented several initiatives to improve the employee experience from rewards and recognition, communications and process improvement.

During the past surveys, we have approximately 80% of our people participating in the survey with an employee engagement score measuring above 70%, and employees rated DXC highly on career path, communication, and culture.

Based on feedback received through periodic engagement surveys, management has implemented several initiatives to improve the employee experience through rewards and recognition, open communications and process improvement.

Various platforms like Global Talent Management, Coaching & Mentoring, Career Development programs, and global recognition are also used to improve employee experiences and engagement.

_______________________

(1) The information in this section is based in part on data provided to us by our customers, and we do not,and do not intend to, independently verify such information or claims.

Management During COVID-19

We are committed to keeping our people safe and well.

DXC employees are equipped and enabled to work virtually and flexibly from home today and continue to deliver results for our customers.

Science and data will remain the drivers of our approach as we continue to navigate through COVID-19, and ensure the safety and well-being of our people.

DXC employees are equipped and enabled to work virtually and flexibly from home and continue to deliver results for our customers.

Science and data will remain the drivers of our approach as we continue to navigate through COVID-19, and promote the safety and well-being of our people.

We will remain flexible and ready to react quickly if required to deliver for our customers.

We recognize that this is an opportunity for DXC to change the employee experience in an impactful way.

We recognize that this is an opportunity for DXC to change employee experience in an impactful way.

Training and Education

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Our self-directed learning culture encourages employees to learn at their own pace and in a learning environment of their preference.

Key to our people development is the role managers play – we remain focused on equipping and enabling our people leaders to ensure our people have leaders that guide and support them in their development and success.

Key to our people development is the role managers play – we remain focused on equipping and enabling our people leaders so that our people have leaders that guide and support them in their development and success.

Inclusion & Diversity

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The DXC Global Diversity and Non-Discrimination Policy guides our engagement in management and hiring practices that promote diversity and inclusion.

We are committed to the protection and advancement of human rights and to ensuring that our operations in communities around the world function with integrity.

We are committed to the protection and advancement of human rights and to enabling our operations in communities around the world to function with integrity.

DXC is firmly committed to preventing the exploitation of vulnerable groups.

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DXC’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, all amendments to those reports, and the Proxy Statements for our Annual Meetings of Stockholders are made available, free of charge, on our corporate website as soon as reasonably practicable after such reports have been filed with or furnished to the SEC.

They are also available through the SEC at www.sec.gov/edgar/searchedgar/companysearch.html.

Our corporate governance guidelines, Board of Directors' committee charters (including the charters of the Audit Committee, Compensation Committee, Nominating/Corporate Governance Committee and Risk Committee) and code of ethics entitled "Code of Business Conduct" are also available on our website.

They are also available through the SEC at www.sec.gov.

Our corporate governance guidelines, Board committee charters (including the charters of the Audit Committee, Compensation Committee and Nominating/Corporate Governance Committee) and code of ethics entitled "Code of Conduct" are also available on our website.

The information on our website is not incorporated by reference into, and is not a part of, this report.

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Finch 52 2019 Indefinite Executive Vice President and Chief Human Resources Officer None

Vinod Bagal 55 2019 Indefinite Executive Vice President, Global Delivery and Transformation None

Manna 58 2017 Indefinite Senior Vice President, Corporate Controller and

Vinod Bagal 56 2019 Indefinite President, Cloud and Infrastructure Services None

Christopher R.

Drumgoole 47 2021 Indefinite Executive Vice President and Chief Operating Officer None

Christopher A.

Voci 50 2021 Indefinite Senior Vice President, Corporate Controller and

Principal Accounting Officer None

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from 2000 to 2001.

Vinod Bagal was appointed as Executive Vice President, Global Delivery and Transformation of DXC in October 2019.

Vinod Bagal serves as President, Cloud and Infrastructure Services since March 2022.

He previously served as Executive Vice President, Global Delivery and Transformation of DXC from October 2019 to March 2022.

Prior to joining DXC, Mr.

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Bagal held a series of leadership roles at Accenture.

Manna has served as Senior Vice President, Corporate Controller and Principal Accounting Officer of DXC since the completion of the HPES Merger.

He also served as Acting Chief Financial Officer of DXC from October 2020 until November 2020.

Manna previously served as Principal Accounting Officer, Vice President and Controller of CSC.

Manna joined CSC in June 2016.

Prior to joining CSC, he served as the Chief Accounting Officer and Senior Vice President of CA Technologies (formerly Computer Associates, Inc.) from December 2008 to June 2016.

He served as Principal Accounting Officer and Vice President of Worldwide Accounting for RealNetworks, Inc.

from July 2007 to November 2008.

He is a Certified Public Accountant and holds a Bachelor’s degree in Accounting and a Master’s degree in Business Administration.

Christopher R.

Drumgoole was appointed as Executive Vice President and Chief Operating Officer of DXC in August 2021.

He previously served as Executive Vice President and Chief Information Officer since April 2020.

Before joining DXC, Mr.

Drumgoole served as Chief Information Officer at GE from May 2018 to April 2020, where he led the company’s global technology operations, including applications, infrastructure, and related shared services.

Prior to that role, he was GE’s Chief Technology Officer from April 2014 to April 2018.

Drumgoole joined GE from Verizon, where he was Chief Operating Officer of Verizon’s Terremark subsidiary, a cloud, hosting, and data center provider, from January 2012 to April 2014.

Drumgoole serves on the Board of Directors of PetSmart;

on the Advisory Board of Florida International University’s College of Engineering & Computing;

and on the Board of Directors of ONUG, a forum for IT business leaders interested in open technologies.

Christopher A.

Voci was appointed Senior Vice President, Corporate Controller and Principal Accounting Officer in June 2021.

Before joining DXC, Mr.

Voci served as Senior Vice President, Controller and Chief Accounting Officer for CACI International Inc.

from November 2018 to May 2021.

From 2016 to November 2018, Mr.

Voci served as Vice President, Controller and Chief Accounting Officer of Orbital ATK (subsequently purchased by Northrop Grumman).

Prior to that, he spent eleven years at Air Products and Chemicals, Inc.

While at APD from 2004 to 2015, Mr.

Voci was Global Controller Industrial Gases from 2014 to 2015, Global Controller Merchant Gases from 2011 to 2014, Director, Financial Planning & Analysis from 2007 to 2011 and Global Healthcare Controller from 2004 to 2007.

Voci served as Senior Manager, Audit and Risk Advisory Services at KPMG LLP from 2002 to 2004 and in various roles at Arthur Andersen LLP from 1994 to 2002.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business