What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-05-26 compared with 2021-05-28 · 375 added, 630 removed, 1716 unchanged (37% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of March 31, 202 2 and March 31, 202 1

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Note 23–Commitments and Contingencies

Note 24–Subsequent Events

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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DXC Technology Company

Tysons, Virginia

Ashburn, Virginia

Opinion on the Financial Statements

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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 27, 2021, expressed an adverse opinion on the Company's internal control over financial reporting because of a material weakness.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated May 25, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

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Gain on arbitration award — — ( 632 )

Other expense (income), net 102 ( 720 ) ( 306 )

Other (income) expense, net ( 1,081 ) 102 ( 720 )

Total costs and expenses 15,124 17,075 24,805

Income (loss) from continuing operations, before taxes 654 ( 5,228 ) 1,515

Income (loss) before income taxes 1,141 654 ( 5,228 )

Income tax expense 405 800 130

(Loss) income from continuing operations ( 146 ) ( 5,358 ) 1,227

Income from discontinued operations, net of taxes — — 35

Net (loss) income ( 146 ) ( 5,358 ) 1,262

Net income (loss) 736 ( 146 ) ( 5,358 )

net income attributable to non-controlling interest, net of tax 18 3 11

Net (loss) income attributable to DXC common stockholders $ ( 149 ) $ ( 5,369 ) $ 1,257

(Loss) income per common share

Continuing operations $ ( 0.59 ) $ ( 20.76 ) $ 4.40

Discontinued operations — — 0.13

$ ( 0.59 ) $ ( 20.76 ) $ 4.53

Continuing operations $ ( 0.59 ) $ ( 20.76 ) $ 4.35

Discontinued operations — — 0.12

$ ( 0.59 ) $ ( 20.76 ) $ 4.47

Net income (loss) attributable to DXC common stockholders $ 718 $ ( 149 ) $ ( 5,369 )

Income (loss) per common share:

Basic $ 2.87 $ ( 0.59 ) $ ( 20.76 )

Diluted $ 2.81 $ ( 0.59 ) $ ( 20.76 )

The accompanying notes are an integral part of these consolidated financial statements.

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(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Net (loss) income $ ( 146 ) $ ( 5,358 ) $ 1,262

Net income (loss) $ 736 $ ( 146 ) $ ( 5,358 )

Other comprehensive income (loss), net of taxes:

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Cash flow hedges adjustments, net of tax (2)

19 ( 17 ) ( 12 )

Available-for-sale securities, net of tax (3)

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Comprehensive income (loss) attributable to DXC common stockholders $ 635 $ 152 $ ( 5,728 )

(1) Tax benefit related to foreign currency translation adjustments was $ 27 , $ 2 , and $ 1 for the fiscal years ended March 31, 2021, March 31, 2020, March 31, 2019, respectively.

(2) Tax expense (benefit) related to cash flow hedge adjustments was $ 6 , $( 5 ), and $( 3 ) for the fiscal years ended March 31, 2021, March 31, 2020, March 31, 2019, respectively.

(3) Tax benefit related to available-for-sale securities was $ 1 , $ 0 , and $ 0 for the fiscal years ended March 31, 2021, March 31, 2020, March 31, 2019, respectively.

(4) Tax expense (benefit) related to prior service costs was $ 2 , $ 0 , and $( 5 ) for the fiscal years ended March 31, 2021, March 31, 2020, March 31, 2019, respectively.

(5) Tax benefit related to amortization of prior service costs was $ 4 , $ 1 , and $ 2 for the fiscal years ended March 31, 2021, March 31, 2020, March 31, 2019, respectively.

(1) Tax expense (benefit) related to foreign currency translation adjustments was $ 5 , $( 27 ), and $( 2 ) for the fiscal years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively.

(2) Tax expense (benefit) related to cash flow hedge adjustments was $ 2 , $ 6 , and $( 5 ) for the fiscal years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively.

(3) Tax benefit related to available-for-sale securities was $ 0 , $ 1 , and $ 0 for the fiscal years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively.

(4) Tax expense related to prior service costs was $ 2 , $ 2 , and $ 0 for the fiscal years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively.

(5) Tax benefit related to amortization of prior service costs was $ 2 , $ 4 , and $ 1 for the fiscal years ended March 31, 2022, March 31, 2021, and March 31, 2020, respectively.

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities:

Net (loss) income $ ( 146 ) $ ( 5,358 ) $ 1,262

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Net income (loss) $ 736 $ ( 146 ) $ ( 5,358 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 1,742 1,988 1,960

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Operating right-of-use expense 484 616 698

Pension & other post-employment benefits, actuarial & settlement losses (gains) 519 ( 244 ) 143

Pension & other post-employment benefits, actuarial & settlement (gains) losses ( 684 ) 519 ( 244 )

Share-based compensation 101 56 68

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Changes in assets and liabilities, net of effects of acquisitions and dispositions:

Decrease (increase) in receivables 257 269 ( 947 )

Decrease in receivables 228 257 269

Increase in prepaid expenses and other current assets ( 48 ) ( 299 ) ( 229 )

Decrease in accounts payable and accruals ( 714 ) ( 527 ) ( 565 )

Increase (decrease) in income taxes payable and income tax liability 434 ( 197 ) ( 107 )

(Decrease) increase in income taxes payable and income tax liability ( 315 ) 434 ( 197 )

Decrease in operating lease liability ( 484 ) ( 616 ) ( 698 )

Decrease in advance contract payments and deferred revenue ( 66 ) ( 146 ) ( 74 )

Increase (decrease) in advance contract payments and deferred revenue 270 ( 66 ) ( 146 )

Other operating activities, net 5 ( 40 ) 12

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Other investing activities, net 41 ( 13 ) 19

Net cash provided by (used in) investing activities 4,665 ( 2,137 ) 69

Net cash (used in) provided by investing activities ( 60 ) 4,665 ( 2,137 )

Cash flows from financing activities:

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Payments on finance leases and borrowings for asset financing ( 990 ) ( 930 ) ( 865 )

Borrowings for USPS spin transaction — — 1,114

Proceeds from bond issuance 2,918 993 —

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Paid-in Capital

Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock (1)

Retained Earnings (Accumulated Deficit) Accumulated

Comprehensive

Loss Treasury Stock (1)

Controlling Interest

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Balance at March 31, 2019 270,214 $ 3 $ 11,301 $ 478 $ ( 244 ) $ ( 136 ) $ 11,402 $ 323 $ 11,725

Cumulative effect of adopting the new revenue standard 114 114 114

Net income 1,257 1,257 5 1,262

Net loss ( 5,369 ) ( 5,369 ) 11 ( 5,358 )

Other comprehensive loss ( 359 ) ( 359 ) 11 ( 348 )

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Non-controlling interest distributions and other — ( 1 ) ( 1 )

Divestiture of USPS ( 175 ) ( 1,491 ) ( 1,666 ) ( 1,666 )

Balance at March 31, 2020 255,674 $ 3 $ 10,714 $ ( 5,177 ) $ ( 603 ) $ ( 152 ) $ 4,785 $ 344 $ 5,129

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Paid-in Capital

Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock (1)

Accumulated Deficit Accumulated

Comprehensive

Loss Treasury Stock (1)

Controlling Interest

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Balance at March 31, 2020 255,674 $ 3 $ 10,714 $ ( 5,177 ) $ ( 603 ) $ ( 152 ) $ 4,785 $ 344 $ 5,129

Cumulative effect of adopting ASU 2016-13 ( 4 ) ( 4 ) ( 4 )

Net loss ( 149 ) ( 149 ) 3 ( 146 )

Other comprehensive loss ( 359 ) ( 359 ) 11 ( 348 )

Other comprehensive income 301 301 3 304

Share-based compensation expense 46 46 46

Acquisition of treasury stock ( 6 ) ( 6 ) ( 6 )

Share repurchase program ( 15,934 ) ( 669 ) ( 67 ) ( 736 ) ( 736 )

Stock option exercises and other common stock transactions 1,379 1 1 1

Dividends declared ($ 0.84 per share)

( 219 ) ( 219 ) ( 219 )

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 15 ) ( 16 )

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(1) 2,458,027 treasury shares as of March 31, 2021

The accompanying notes are an integral part of these consolidated financial statements.

(in millions, except shares in thousands) Common Stock Additional

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Balance at March 31, 2021 257,053 $ 3 $ 10,761 $ ( 5,331 ) $ ( 302 ) $ ( 158 ) $ 4,973 $ 335 $ 5,308

Cumulative effect of adopting ASU 2016-13 ( 4 ) ( 4 ) ( 4 )

Net loss ( 149 ) ( 149 ) 3 ( 146 )

Net income 718 718 18 736

Other comprehensive income ( 83 ) — ( 83 ) 11 ( 72 )

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Acquisition of treasury stock ( 15 ) ( 15 ) ( 15 )

Share repurchase program ( 18,819 ) ( 796 ) 162 ( 634 ) ( 634 )

Stock option exercises and other common stock transactions 2,274 12 12 12

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DXC Technology Company ("DXC" or the "Company") helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds.

With decades of driving innovation, the world’s largest companies trust DXC to deploy its Enterprise Technology Stack to deliver new levels of performance, competitiveness and customer experiences.

With decades of driving innovation, the world’s largest companies trust DXC to deploy its Enterprise Technology Stack to deliver new levels of performance, competitiveness and customer experience.

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.

On April 1, 2021, 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.

See Note 4 - "Assets Held for Sale" and Note 24 - "Subsequent Events" for further information.

See Note 3 - "Divestitures" for further information.

On October 1, 2020, DXC completed the sale of its U.S.

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Basis of Presentation

In order to make this report easier to read, DXC refers throughout to (i) the Consolidated Financial Statements as the “financial statements,” (ii) the Consolidated Statements of Operations as the “statements of operations,” (iii) the Consolidated Statement of Comprehensive Income (Loss) as the "statements of comprehensive income," (iv) the Consolidated Balance Sheets as the “balance sheets,” and (v) the Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references throughout to numbered “Notes” refer to the numbered Notes in these Notes to Consolidated Financial Statements unless otherwise noted.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared in accordance with the rules and regulations of the U.S.

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Certain amounts reported in the previous year have been reclassified to conform to the current year presentation.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

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However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates.

The severity, magnitude and duration, as well as the economic consequences of the COVID-19 crisis, are uncertain, rapidly changing and difficult to predict.

The severity, magnitude and duration, as well as the economic consequences of the ongoing COVID-19 crisis, are uncertain, rapidly changing and difficult to predict.

Therefore, accounting estimates and assumptions may change over time in response to the COVID-19 crisis and may change materially in future periods.

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Lease arrangements generally do not contain any residual value guarantees or material restrictive covenants.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Variable lease expense is related to the Company's leased real estate for offices and primarily includes labor and operational costs.

Variable lease expense is related to the Company's leased real estate for offices and primarily includes operational costs.

DXC subleases certain leased office space to third parties when it determines there is excess leased capacity.

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Revenue Recognition

Effective April 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (ASC 606),” using the modified retrospective method.

Refer to Note 21 - “Revenue” for required disclosures.

The Company’s accounting policy related to the new revenue standard is summarized below.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company's primary service offerings are information technology outsourcing, other professional services, or a combination thereof.

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A contract with a customer includes an embedded lease when DXC grants the customer a right to control the use of an identified asset for a period of time in exchange for consideration.

Embedded leases with customers are typically recognized either as a sales type lease in which revenue and co st of sales is recognized upon lease commencement;

Embedded leases with customers are typically recognized either as sales type leases in which revenue and co st of sales is recognized upon lease commencement;

or they may be recognized as operating leases in which revenue is recognized over the usage period.

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The transaction price of a contract is determined based on fixed and variable consideration.

Variable consideration related to the Company’s ITO offerings often include volume-based pricing that are allocated to the distinct days of the services to which the variable consideration pertains.

Variable consideration related to the Company’s ITO offerings often includes volume-based pricing that is allocated to the distinct days of the services to which the variable consideration pertains.

However, in certain cases, estimates of variable consideration, including penalties, contingent milestone payments and rebates are necessary.

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These judgments involve consideration of historical and expected experience with the customer and other similar customers, and the facts and circumstances specific to the arrangement.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company generally provides its services under time and materials contracts, unit price contracts, fixed-price contracts, and software contracts for which revenue is recognized in the following manner:

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Revenue is recognized over time based on unit metrics multiplied by the agreed upon contract unit price or when services are delivered.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fixed-price contracts.

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In addition, the Company reports revenue net of any revenue-based taxes assessed by a governmental authority that are imposed on and concurrent with specific revenue-producing transactions, such as sales taxes and value-added taxes.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

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Payment terms vary by type of product or service being provided as well as by customer, although the term between invoicing and when payment is due is generally an insignificant period of time.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Costs to Obtain a Contract

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The fair value of assets is determined based on the prevailing market prices or estimated fair value of investments when quoted prices are not available.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Software Development Costs

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When the unamortized balance exceeds the net realizable value, the unamortized balance is written down to the net realizable value and an impairment charge is recorded.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company capitalizes costs incurred to develop internal-use computer software during the application development stage.

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The Company provides different forms of share-based compensation to its employees and non-employee directors.

This includes stock options and restricted stock units ("RSUs"), including performance-based restricted stock units ("PSUs").

This generally includes restricted stock units ("RSUs"), including performance-based restricted stock units ("PSUs").

The fair value of the awards is determined on the grant date, based on the Company's closing stock price.

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Expected volatility is based on a historical approach, therefore the expected volatility assumption is based on the performance period of the award.

The Company u ses the Black-Scholes-Merton model to compute the estimated fair value of options granted.

This model includes assumptions regarding expected term, risk-free interest rates, expected volatility and dividend yields, which are periodically evaluated.

The expected term is calculated based on the Company’s historical experience with respect to its stock plan activity and an estimate of when vested and unexercised option shares will be exercised.

The expected term of options is based on job tier classifications, which have different historical exercise behavior.

The risk-free interest rate is based on the zero-coupon interest rate of U.S.

government issued treasury STRIPS with a period commensurate with the expected term of the options.

Expected volatility is based on a blended approach, which uses a two-thirds weighting for historical volatility and one-third weighting for implied volatility.

The Company’s historical volatility calculation is based on employee class and historical closing prices of the Company's peer group, in order to better align this factor with the expected terms of the stock options.

DXC’s implied stock price volatility is derived from the price of exchange traded options on DXC’s stock with the longest remaining contractual term.

Implied volatility is a prospective, forward looking measure representing market participants’ expectations of DXC's future stock price volatility.

The dividend yield assumption is based on the respective fiscal year dividend payouts.

Forfeitures are estimated based on historical experience.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Goodwill Impairment Analysis

Effective July 1, 2019, the Company adopted ASU 2017-04, "Intangibles-Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment" using the prospective method.

Refer to Note 12 - "Goodwill" for required disclosures.

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 circumstances change, or if an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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Changes in valuation allowances from period to period are included in the Company’s tax provision during the period in which the change occurred.

In determining whether a valuation allowance is warranted, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, taxable income in prior carryback years, projected future taxable income, tax planning strategies and recent financial operations.

The Company recognizes uncertain tax positions when it is more likely than not that the tax position will be sustained upon examination.

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dollars using fiscal year-end exchange rates, income and expense accounts are translated at the average rates in effect during the fiscal year and equity accounts are translated at historical rates.

The resulting translation adjustment is reported in the statements of comprehensive income and recorded as part of accumulated other comprehensive income ("AOCI").

The resulting translation adjustment is reported in the statements of comprehensive income and recorded as part of accumulated other comprehensive income.

Derivative Instruments

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Date Issued and ASU Date Adopted and Method Description Impact

ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments” April 1, 2020

Modified retrospective This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets.

It replaces the existing incurred loss impairment model with an expected loss methodology.

The recorded credit losses are adjusted each period for changes in expected lifetime credit losses.

The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.

The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.

"Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"

April 1, 2020 Prospective This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license.

Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.

The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.

New Accounting Pronouncements:

The following ASUs were recently issued but have not yet been adopted by DXC:

Date Issued and ASU DXC Effective Date Description Impact

December 2019

ASU 2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes" Fiscal 2022 This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

Simplifying the Accounting for Income Taxes” April 1, 2021

Multiple Methods This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

Early adoption of this update is permitted.

DXC has evaluated the impact of adopting ASU 2019-12 and determined that the adoption will be immaterial to the consolidated financial statements.

Other recently issued ASUs effective after March 31, 2021 are not expected to have a material effect on DXC's consolidated financial statements.

The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are applied on a prospective basis.

The Company determined that this standard had no material impact to its condensed consolidated financial statements following adoption.

ASU 2021-05, “Leases (Topic 842):

Lessors–Certain Leases with Variable Lease Payments”

Second quarter of fiscal 2022

Prospective The amendments in this update modify lease classification requirements for lessors, providing that lease contracts with variable lease payments that do not depend on a reference index or a rate should be classified as operating leases if they would have been classified as a sales-type or direct financing lease and resulted in the recognition of a selling loss at lease commencement.

Upon adoption, on a prospective basis, customer leases with variable payments that would have resulted in an upfront loss when meeting sales type lease classification are classified as operating leases upon commencement or modification.

Associated revenues, cost of services, or depreciation are subsequently recognized over their related lease terms or useful life.

Before adopting this standard, leases with similar variable payments were classified as sales-type leases.

These similar leases resulted in the recognition of upfront losses upon commencement or modification prior to the adoption, even when the overall economics of the lease arrangements were expected to be profitable.

New Accounting Pronouncements

Recently issued ASUs effective after March 31, 2022 are not expected to have a material effect on DXC's consolidated financial statements.

Note 2 - Acquisitions

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DXC recorded goodwill associated with the acquisition of AXA Bank totaling $ 2 million.

The AXA bank has been consolidated within FDB and will be part of the FDB sale previously disclosed.

Fiscal 2020 Acquisitions

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On June 14, 2019, DXC completed the acquisition of Luxoft, a digital service provider whose offerings encompass strategic consulting, custom software development services, and digital solution engineering for total consideration of $ 2.0 billion.

The acquisition will combine Luxoft’s digital engineering capabilities with DXC’s expertise in IT modernization and integration.

The purchase agreement (“Merger Agreement”) was entered into by DXC and Luxoft on January 6, 2019 and the transaction was closed on June 14, 2019.

The acquisition combined Luxoft’s digital engineering capabilities with DXC’s expertise in IT modernization and integration.

The purchase agreement was entered into by DXC and Luxoft on January 6, 2019 and the transaction was closed on June 14, 2019.

The transaction between DXC and Luxoft is an acquisition, with DXC as the acquirer and Luxoft as the acquiree, based on the fact that DXC acquired 100 % of the equity interests and voting rights in Luxoft, and that DXC is the entity that transferred the cash consideration.

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(1) Results for the fiscal year ended March 31, 2020 reflect operations subsequent to the acquisition date of June 14, 2019, not the full twelve months of fiscal 2020.

Fiscal 2019 Acquisitions

Molina Medicaid Solutions Acquisition (1)

On October 1, 2018, DXC completed its acquisition of Molina Medicaid Solutions ("MMS"), a Medicaid Management Information Systems business, from Molina Healthcare, Inc.

for the total consideration of $ 233 million.

The combination of MMS with DXC expands DXC’s ability to provide services to state agencies in the administration of Medicaid programs, including business processing, information technology development, and administrative services.

The purchase price for the MMS was allocated to assets acquired and liabilities assumed based upon the current determination of fair values at the date of acquisition as follows:

$ 87 million to current assets, $ 112 million to intangible assets other than goodwill, $ 11 million to other assets, $ 51 million to current liabilities, $ 18 million to other liabilities and $ 92 million to goodwill.

The goodwill is associated with the Company's GBS segment and is tax deductible.

The intangible assets acquired include customer relationships and developed technology which have a 13 -year weighted average estimated useful life.

(1) MMS was sold as part of the HHS Sale discussed in Note 3 - "Divestitures."

Other Acquisitions

In addition to the MMS acquisition, DXC completed seven acquisitions to complement the Company's Microsoft Dynamics and ServiceNow offerings and to provide opportunities for future growth.

The acquired businesses are included in the results for the GBS segment.

The purchase consideration of $ 228 million included cash of $ 187 million and contingent consideration with an estimated fair value of $ 41 million.

The purchase price was allocated to assets acquired and liabilities assumed based upon determination of fair values at the dates of acquisition as follows:

$ 73 million to current assets, $ 71 million to intangible assets other than goodwill, $ 10 million to other non-current assets, $ 63 million to current liabilities and $ 137 million to goodwill.

The goodwill is associated with the Company's GBS segment some of which is tax deductible.

Note 3 - Divestitures

Fiscal 2022 Divestitures

On October 1, 2020, DXC completed the sale of its HHS Business to Veritas Capital.

The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business for a total enterprise value of $ 5.0 billion (including $ 85 million related to future services to be provided by the Company).

As part of the sale of the HHS business, $ 272 million of repurchased receivables, previously sold under the Milano Receivables Facility ("Milano Facility') (see Note 6 - "Receivables" to the financial statements), $ 12 million of prepaid maintenance, and $ 48 million of software licenses were transferred to the HHS Business.

DXC made payment for these assets during the third quarter of fiscal 2021.

The repurchase of receivables and payment on prepaid maintenance are reported as operating cash outflows, and the payment for software license is considered an investing cash outflow.

The HHS Sale resulted in a pre-tax gain on sale of $ 2,014 million, net of closing costs.

The sale price is subject to adjustment based on changes in actual closing net working capital.

Final potential working capital adjustments are pending.

Approximately $ 3.5 billion of the sale proceeds were used to prepay $ 1,250 million of Revolver Credit Facility, £ 600 million of GBP commercial paper (approximately $ 772 million), and the following term loan facilities:

€ 350 million of Euro Term Loan due fiscal 2024 (approximately $ 410 million), $ 381 million of USD Term loan due fiscal 2025, A$ 500 million of AUD Term Loan due fiscal 2022 (approximately $ 358 million), and € 250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $ 292 million).

See Note 14 - "Debt" to the financial statements.

DXC's post-divestiture relationship with the HHS Business is governed by the Purchase Agreement, which provides for the allocation of assets, employees, liabilities and obligations (including property, employee benefits, litigation, and tax-related assets and liabilities) between DXC and the HHS Business attributable to periods prior to, at and after the divestment.

In addition, DXC and the HHS Business have service and commercial contracts that generally extend through fiscal 2023.

The divestment of the HHS Business, reported as part of the GBS segment, did not meet the requirements for presentation as discontinued operations as it did not represent a strategic shift that would have a major effect on DXC's operations and financial results and was included in income from continuing operations prior to its divestment.

The following is a summary of the assets and liabilities distributed as part of the HHS Sale on October 1, 2020:

(in millions) As of October 1, 2020

On April 1, 2021, DXC completed the sale of its HPS Business to Dedalus for € 468 million (approximately $ 551 million), which includes € 10 million (approximately $ 12 million) related to future services to be provided by the Company.

The sale proceeds were used to repay the remainder of two series of 4.45 % senior notes due fiscal 2023 for $ 154 million and $ 165 million.

The HPS Sale resulted in a pre-tax gain on sale of $ 331 million, net of closing costs.

The following is a summary of the assets and liabilities distributed as part of the HPS Sale on April 1, 2021:

(in millions) As of April 1, 2021

Cash and cash equivalents $ 34

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Prepaid expenses 7

Other current assets 2

Total current assets 104

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Operating right-of-use assets, net 3

Goodwill 1,354

Deferred income taxes, net 74

Property and equipment, net 4

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Total liabilities $ 92

During fiscal 2021, the Company sold some insignificant businesses that resulted in a loss of $ 10 million.

During fiscal 2022, the Company sold some insignificant businesses that resulted in a gain of $ 53 million.

This was partially offset by $ 13 million in sales price adjustments related to prior year dispositions, which resulted from changes in estimated net working capital.

Fiscal 2021 Divestitures

Separation of USPS

During fiscal 2019, the Company completed the separation of its U.S.

Public Sector business ("USPS") (the "Separation"), and combination of USPS with Vencore Holding Corp.

("Vencore") and KeyPoint Government Solutions ("Keypoint") (the "Mergers") to form Perspecta, an independent public company.

Implementation of the Separation and DXC's post-Separation relationship with Perspecta is governed by several agreements, including the following:

• a Separation and Distribution Agreement;

• an Employee Matters Agreement;

• a Tax Matters Agreement;

• an Intellectual Property Matters Agreement;

• a Transition Services Agreement;

• a Real Estate Matters Agreement;

• an IT Services Agreement and,

• a Non-US Agency Agreement.

These agreements provide for the allocation of assets, employees, liabilities and obligations (including property, employee benefits, litigation, and tax-related assets and liabilities) between DXC and Perspecta attributable to periods prior to, at and after the Separation.

In addition, DXC and Perspecta have service and commercial contracts that generally extend through fiscal 2023.

Results for the twelve months ended March 31, 2021 and March 31, 2020 include $ 31 million and $ 39 million of revenue and income from continuing operations before taxes associated with the IT services agreement.

Pursuant to the Separation and Distribution Agreement, immediately prior to the Separation, Perspecta made a net cash payment of $ 984 million to DXC, which reflects transaction consideration of $ 1,050 million less $ 66 million in principal amount of debt that was outstanding at a subsidiary of Perspecta.

Perspecta financed the payment through borrowings under a new senior secured term loan facility.

The following is a summary of the assets and liabilities distributed as part of the Separation of USPS on May 31, 2018:

(in millions) As of May 31, 2018

On October 1, 2020, DXC completed the sale of its HHS Business to Veritas Capital.

As part of the sale of the HHS business, $ 272 million of repurchased receivables, previously sold under the Milano Receivables Facility ("Milano Facility") (see Note 6 - "Receivables" to the financial statements), $ 12 million of prepaid maintenance, and $ 48 million of software licenses were transferred to the HHS Business.

DXC made payment for these assets during the third quarter of fiscal 2021.

The repurchase of receivables and payment on prepaid maintenance are reported as operating cash outflows, and the payment for software license is considered an investing cash outflow.

The HHS Sale resulted in a pre-tax gain on sale of $ 2,014 million, net of closing costs.

The sale price is subject to adjustment based on changes in actual closing net working capital.

Final potential working capital adjustments are pending.

Approximately $ 3.5 billion of the sale proceeds were used to prepay debt.

In addition, DXC and the HHS Business have service and commercial contracts that generally extend through fiscal 2023.

The following is a summary of the assets and liabilities distributed as part of the HHS Sale on October 1, 2020:

(in millions) As of October 1, 2020

Cash and cash equivalents $ 8

Receivables, net 458

Accounts receivable, net 295

Prepaid expenses 39

Other current assets 2

Total current assets of discontinued operations 670

Total current assets 344

Intangible assets, net 1,308

Operating right-of-use assets, net 74

Goodwill 1,354

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Other assets 54

Total non-current assets of discontinued operations 3,362

Total non-current assets 2,836

Total assets $ 3,180

Short-term debt and current maturities of long-term debt $ 161

Accounts payable $ 79

Accrued payroll and related costs 13

Current operating lease liabilities 27

Accrued expenses and other current liabilities 36

Deferred revenue and advance contract payments 20

Income tax payable 18

Total current liabilities of discontinued operations 772

Long-term debt, net of current maturities 1,320

Total current liabilities 175

Non-current deferred revenue 32

Non-current income tax liabilities and deferred tax liabilities 196

Long-term operating lease liabilities 48

Other long term liabilities 2

Total long-term liabilities of discontinued operations 1,592

Total long-term liabilities 82

Total liabilities $ 257

(1) Previously reported amounts were adjusted to reflect the reclassification of transition and transformation contract costs from intangible assets to other assets to conform to the current year presentation.

The following is a summary of the operating results of USPS which have been reflected within income from discontinued operations, net of tax:

(in millions) Fiscal Year Ended March 31, 2019 (1)

Revenue $ 431

Costs of services 311

Selling, general and administrative 50

Depreciation and amortization 33

Restructuring costs 1

Interest expense 8

Other (income) expense, net ( 25 )

Total costs and expenses 378

Total income from discontinued operations, before income taxes 53

Income tax expense 18

Total income from discontinued operations $ 35

(1) Results for the fiscal year ended March 31, 2019 reflect operations through the Separation date of May 31, 2018, not the full twelve-month period as shown for the prior period.

There was no gain or loss on disposition recognized as a result of the Separation.

The following selected financial information of USPS is included in the statements of cash flows:

(in millions) Fiscal Year Ended March 31, 2019 (1)

Depreciation $ 16

Amortization $ 17

Capital expenditures $ —

Significant operating non-cash items:

Gain on dispositions $ 24

(1) Results for the fiscal year ended March 31, 2019 reflect operations through the Separation date of May 31, 2018, not the full twelve-month period as shown for the prior period.

During fiscal 2021, the Company sold some insignificant businesses that resulted in a loss of $ 10 million.

Note 4 - Assets Held for Sale

On July 17, 2020, DXC entered into a purchase agreement to sell (the "HPS Sale") its healthcare software business ("HPS" or the "HPS Business") to Dedalus Holding S.p.A.

("Dedalus") for € 462 million (approximately $ 543 million), which includes € 10 million (approximately $ 12 million) related to future services to be provided by the Company.

Final consideration for the HPS Sale is subject to certain adjustments.

The transaction closed on April 1, 2021.

See Note 24 - "Subsequent Events."

As of March 31, 2021, the disposition of the HPS Business, reported as part of the GBS segment, met the requirements for presentation as assets held for sale under GAAP.

In addition, as of March 31, 2021, the Company entered into a definitive agreements to sell insignificant businesses, which were also classified as held for sale.

As of March 31, 2022, the Company had entered into definitive agreements to sell insignificant businesses, which are classified as held for sale.

As of March 31, 2021, the disposition of the HPS Business met the requirements for presentation as assets held for sale under GAAP.

In addition, as of March 31, 2021, the Company had entered into definitive agreements to sell insignificant businesses, which were also classified as held for sale.

Assets held for sale are reported at carrying value, which is less than fair value.

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March 31, 2022 March 31, 2021 March 31, 2020

Net (loss) income attributable to DXC common shareholders:

From continuing operations $ ( 149 ) $ ( 5,369 ) $ 1,222

From discontinued operations — — 35

Net income (loss) attributable to DXC common shareholders:

$ 718 $ ( 149 ) $ ( 5,369 )

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Weighted average common shares outstanding for diluted EPS 255.21 254.14 258.57

Continuing operations

$ ( 0.59 ) $ ( 20.76 ) $ 4.40

Discontinued operations

$ ( 0.59 ) $ ( 20.76 ) $ 4.53

Continuing operations

$ ( 0.59 ) $ ( 20.76 ) $ 4.35

Discontinued operations

$ ( 0.59 ) $ ( 20.76 ) $ 4.47

Earnings per Share:

Basic $ 2.87 $ ( 0.59 ) $ ( 20.76 )

Diluted $ 2.81 $ ( 0.59 ) $ ( 20.76 )

Certain share based equity awards were excluded from the computation of dilutive EPS because inclusion of these awards would have had an anti-dilutive effect.

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Fiscal Years Ended

March 31, 2021 (1)

March 31, 2020 (1)

March 31, 2022 March 31, 2021 (1)

March 31, 2020 (1)

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Provisions for losses on accounts receivable 5 53

Other adjustments to allowance and write-off's ( 40 ) 11

Other adjustments to allowance and write-offs ( 41 ) ( 40 )

Ending balance $ 55 $ 91

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The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of March 31, 2022, the "Receivables Facility") with certain unaffiliated financial institutions (the "Purchasers") for the sale of commercial accounts receivable in the United States.

The Receivables Facility has a facility limit of $ 400 million as of March 31, 2022.

Under the Receivables Facility, certain of the Company subsidiaries (the "Sellers") sell accounts receivable to DXC Receivables LLC ("Receivables SPV"), a wholly owned bankruptcy-remote entity, in a true sale.

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The financial obligations of Receivables SPV to the Purchasers under the Receivables Facility are limited to the assets it owns and non-recourse to the Company.

Sales of receivables by Receivables SPV occur continuously and are settled on a monthly basis.

During the second quarter of fiscal 2021, Receivables SPV amended the Receivables Facility (the "Amendment") to decrease the investment limit from $ 600 million to $ 500 million and extend the termination date to August 5, 2021.

For the fiscal year ended March 31, 2021, there is no deferred purchase price ("DPP") for receivables as the entire purchase price is paid in cash when the receivables are sold to the Purchasers.

DPPs were previously realized by Receivables SPV upon the ultimate collection of the underlying receivables sold to the Purchasers.

Cash receipts on the DPP were classified as cash flows from investing activities.

Sales of receivables by Receivables SPV occur continuously and are settled monthly.

The amount available under the Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations.

As of March 31, 2022, the total availability under the Receivables Facility was $ 400 million and the amount sold to the Purchasers was $ 400 million, which was derecognized from the Company's balance sheet.

As of March 31, 2021, the Company recorded a $ 40 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability.

The Receivables Facility is scheduled to terminate on August 5, 2021, but provides for one or more optional one-year extensions, if agreed to by the Purchasers.

The Receivables Facility is scheduled to terminate on July 29, 2022, but provides for one or more optional one-year extensions, if agreed to by the Purchasers.

The Company uses the proceeds from Receivables SPV's sale of receivables under the Receivables Facility for general corporate purposes.

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While the Company guarantees certain non-financial performance obligations of the Sellers, the Purchasers bear customer credit risk associated with the receivables sold under the Receivables Facility and have recourse in the event of credit-related customer non-payment solely to the assets of the Receivables SPV.

The following table is a reconciliation of the beginning and ending balances of the DPP:

As of and for the Fiscal Year Ended

(in millions) March 31, 2020

Beginning balance $ 574

Transfers of receivables 1,214

Collections ( 1,265 )

Change in funding availability 2

Facility amendments ( 525 )

Ending balance $ —

Milano Receivables Facility

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German Receivables Facility

On October 1, 2019, DXC executed an accounts receivable securitization facility (as amended, restated, supplemented or otherwise modified as of March 31, 2021, the "DE Receivables Facility") with certain unaffiliated financial institutions (the "DE Purchasers") for the sale of commercial accounts receivable in Germany.

The DE Receivables Facility has an investment limit of € 150 million (approximately $ 175 million as of March 31, 2021).

Under the DE Receivables Facility, certain of the Company's subsidiaries organized in Germany (the "DE Sellers") sell accounts receivable to DXC ARFacility Designated Activity Company ("DE Receivables SPV"), a trust owned bankruptcy-remote entity, in a true sale.

DE Receivables SPV subsequently sells certain of the receivables in their entirety to the DE Purchasers pursuant to a receivables purchase agreement.

Sales of receivables by DE Receivables SPV occur continuously and are settled on a monthly basis.

During the first quarter of fiscal 2021, DE Receivables SPV amended the DE Receivables Facility ("DE Amendment").

Under the terms of the amended DE Receivables Facility, there is no longer any DPP for receivables as the entire purchase price is paid in cash when the receivables are sold to the DE Purchasers.

Prior to the DE Amendment, DPPs were realized by DE Receivables SPV upon the ultimate collection of the underlying receivables sold to the DE Purchasers.

On October 1, 2019, the Company executed an accounts receivable securitization facility (the “DE Receivables Facility”) with certain unaffiliated financial institutions (the “DE Purchasers”) for the sale of commercial accounts receivable in Germany.

On June 30, 2021, the Company terminated the agreement governing the DE Receivables Facility.

In connection with the termination of the DE Receivables Facility, the Company repaid all outstanding obligations and fees thereunder.

Under the DE Receivables Facility, certain of the Company’s subsidiaries organized in Germany (the “DE Sellers”) sold accounts receivable to DXC ARFacility Designated Activity Company (“DE Receivables SPV”), a trust-owned bankruptcy-remote entity, in a true sale.

DE Receivables SPV subsequently sold certain of the receivables in their entirety to the DE Purchasers pursuant to a receivables purchase agreement.

Sales of receivables by DE Receivables SPV occurred continuously and were settled monthly.

During the first quarter of fiscal 2021, DE Receivables SPV amended the DE Receivables Facility (the "Amendment").

Under the terms of the DE Receivables Facility, there was no longer any deferred purchase price (“DPP”) for receivables as the entire purchase price is paid in cash when the receivables are sold to the DE Purchasers.

Prior to the Amendment, DPPs were realized by DE Receivables SPV upon the ultimate collection of the underlying receivables sold to the DE Purchasers.

Cash receipts on the DPPs were classified as cash flows from investing activities.

The DPP balance was $ 102 million before the DE Amendment was executed.

Upon execution of the DE Amendment, the DE Purchasers extinguished the DPP balance and returned title to the applicable underlying receivables to DE Receivables SPV.

The DPP extinguishment was classified as a non-cash investing activity, please refer to Note 18 - "Cash Flows."

The amount available under the DE Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations.

As of March 31, 2021, the total availability under the DE Receivables Facility was approximately $ 117 million, and the amount sold to DE Purchasers was $ 114 million, which was derecognized from the Company's balance sheet.

As of March 31, 2021, the Company recorded a $ 3 million receivable within accounts receivable because the amount of cash proceeds received by the Company under the DE Receivables Facility was less than the total availability.

The DE Receivables Facility is scheduled to terminate on September 30, 2021, but provides for one or more optional one-year extensions, if agreed to by the DE Purchasers.

The Company uses the proceeds from DE Receivables SPV's sale of receivables under the DE Receivables Facility for general corporate purposes.

The fair value of the sold receivables approximated book value due to the short-term nature, and as a result, no gain or loss on sale of receivables was recorded.

Certain obligations of DE Sellers under the DE Receivables Facility and certain DXC subsidiaries located in Germany, as initial servicers, are guaranteed by the Company under a performance guaranty, made in favor of an administrative agent on behalf of the DE Purchasers.

However, the performance guaranty does not cover DE Receivables SPV’s obligations to pay yield, fees or invested amounts to the administrative agent or any of the DE Purchasers.

The DPP balance was $ 102 million before the Amendment was executed.

Upon execution of the Amendment, the DE Purchasers extinguished the DPP balance and returned title to the applicable underlying receivables to DE Receivables SPV.

The DPP extinguishment was classified as a non-cash investing activity.

See Note 18 – “Cash Flows” for additional information.

The following table is a reconciliation of the beginning and ending balances of the DPP:

(in millions) As of March 31, 2021 As of March 31, 2020

(in millions) Fiscal 2021

Beginning balance $ 103

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Our leases have remaining lease terms of one to 11 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years .

The components of lease expense were as follows:

Operating Leases

The components of operating lease expense were as follows:

For the Fiscal Year Ended

(in millions) March 31, 2021 March 31, 2020

(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Operating lease cost $ 484 $ 616 $ 698

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Total operating costs $ 565 $ 685 $ 748

Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.

For the Fiscal Year Ended

(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows

$ 484 $ 616 $ 698

ROU assets obtained in exchange for operating lease liabilities (1)

$ 279 $ 530 $ 411

(1) There were $ 1,085 million, $ 763 million, and $ 216 million in modifications and terminations in fiscal 2022, 2021, and 2020, respectively, and net of $ 87 million change in lease classification from operating to finance lease in fiscal 2020.

See Note 18 – “Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents operating lease balances:

(in millions) Balance Sheet Line Item March 31, 2022 March 31, 2021

ROU operating lease assets Operating right-of-use assets, net $ 1,133 $ 1,366

Operating lease liabilities Current operating lease liabilities $ 388 $ 418

Operating lease liabilities Non-current operating lease liabilities 815 1,038

Total operating lease liabilities $ 1,203 $ 1,456

The weighted-average operating lease term was 4.4 years and 4.9 years as of March 31, 2022 and March 31, 2021, respectively.

The weighted-average operating lease discount rate was 3.3 % and 3.8 % as of March 31, 2022 and March 31, 2021, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of March 31, 2022:

(in millions)

2027 Thereafter

Operating lease payments

$ 415 $ 308 $ 225 $ 133 $ 70 $ 155 $ 1,306

imputed interest

Total operating lease liabilities

Finance Leases

The components of finance lease expense were as follows:

For the Fiscal Year Ended

(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Finance lease cost:

2 unchanged sentences

Total finance lease cost $ 373 $ 478 $ 470

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.

In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 18 - "Cash Flows."

The following table provides supplemental cash flow information related to the Company’s finance leases:

For the Fiscal Year Ended

(in millions) March 31, 2021 March 31, 2020

Cash paid for amounts included in the measurement of:

Operating cash flows from operating leases $ 616 $ 698

Operating cash flows from finance leases $ 45 $ 65

Financing cash flows from finance leases $ 584 $ 576

Supplemental Balance Sheet information related to leases was as follows:

(in millions) Balance Sheet Line Item

March 31, 2021 March 31, 2020

ROU operating lease assets Operating right-of-use assets, net $ 1,366 $ 1,428

(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Interest paid for finance lease liabilities – Operating cash flows

$ 27 $ 45 $ 65

Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows

Total cash paid in the measurement of finance lease obligations $ 528 $ 629 $ 641

Capital expenditures through finance lease obligations (1)

$ 233 $ 348 $ 605

(1) See Note 18 – ”Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents finance lease balances:

(in millions) Balance Sheet Line Item March 31, 2022 March 31, 2021

ROU finance lease assets Property and Equipment, net $ 602 $ 834

Total $ 2,200 $ 2,648

Operating lease Current operating lease liabilities $ 418 $ 482

Finance lease Short-term debt and current maturities of long-term debt $ 289 $ 398

Total $ 816 $ 926

Operating lease Non-current operating lease liabilities $ 1,038 $ 1,063

Finance lease Long-term debt, net of current maturities 354 496

Total $ 1,534 $ 1,665

The following table provides information on the weighted average remaining lease term and weighted average discount rate for operating and finance leases:

March 31, 2021 March 31, 2020

Weighted average remaining lease term:

Operating leases 4.9 4.8

Finance leases 2.6 2.7

Weighted average remaining discount rate:

Operating leases 3.8 % 4.0 %

Finance leases 3.6 % 6.4 %

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of March 31, 2021:

Fiscal year Operating Leases

(in millions) Real Estate Equipment Finance Leases

2022 $ 411 $ 41 $ 418

2023 335 23 290

2024 260 11 152

2025 190 5 59

2026 108 2 14

Total finance lease liabilities (1)

(1) See Note 14 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.8 years and 2.6 years as of March 31, 2022 and March 31, 2021, respectively.

The weighted-average finance lease discount rate was 2.9 % and 3.6 % as of March 31, 2022 and March 31, 2021, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of March 31, 2022:

(in millions)

2027 Thereafter

Total lease payments 1,511 83 933

Finance lease payments

$ 300 $ 195 $ 108 $ 50 $ 19 $ — $ 672

imputed interest

Total payments $ 1,376 $ 80 $ 894

Total finance lease liabilities

Note 8 - Fair Value

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Time deposits (1)

Other debt securities (2)

Deferred purchase price receivable 103 — — 103

Other securities (2)

Total assets $ 147 $ 90 $ 55 $ 2

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(1) Cost basis approximated fair value due to the short period of time to maturity.

(2) Other securities include available-for-sale equity security investments with Level 2 inputs that have a cost basis of $ 57 million and $ 37 million, and (losses)/gains of $( 2 ) million and $ 11 million, as of March 31, 2021 and March 31, 2020, respectively, included in other expense (income), net in the Company’s statements of operations.

During the third quarter of fiscal 2021, previously held investments were sold and the proceeds were used to purchase new investments.

The gain of $ 17 million from the sale was included in other expense (income), net.

The fair value of money market funds, money market deposit accounts with less than three months maturity, and time deposits included in cash and cash equivalents are based on quoted market prices.

The fair value of other securities included in other long-term assets is based on actual market prices.

The fair value of the DPPs included in receivables, net is determined by calculating the expected amount of cash to be received and is principally based on unobservable inputs consisting primarily of the face amount of the receivables adjusted for anticipated credit losses.

(2) Other securities include available-for-sale equity security investments with Level 2 inputs that have a cost basis of $ 53 million and $ 57 million, and losses of $ 4 million and $ 2 million, as of March 31, 2022 and March 31, 2021, respectively, included in other (income) expense, net in the Company’s statements of operations.

During the third quarter of fiscal 2021, previously held investments were sold and the proceeds were used to purchase new investments.The gain of $ 17 million from the sale was included in other (income) expense, net.

The fair value of money market funds, money market deposit accounts, U.S.

Treasury bills with less than three months maturity and time deposits, included in cash and cash equivalents, are based on quoted market prices.

The fair value of other debt securities, included in other long-term assets, is based on actual market prices.

The fair value of contingent consideration, included in other liabilities, is based on contractually defined targets of financial performance in connection with earn outs and other considerations.

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During the fiscal years ended March 31, 2022 and March 31, 2021, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

As of March 31, 2021, $ 3 million of the existing amount of gain related to the cash flow hedge reported in AOCI is expected to be reclassified into earnings within the next 12 months.

Amounts recognized in other comprehensive income (loss) and income (loss) from continuing operations

The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $ 19 million and in income (loss) from continuing operations was $( 5 ) million during the fiscal year ended March 31, 2021.

As of March 31, 2022, $ 14 million of the existing amount of gain related to the cash flow hedge reported in accumulated other comprehensive income is expected to be reclassified into earnings within the next 12 months.

Amounts recognized in other comprehensive income (loss) and income (loss) before income taxes

The pre-tax gain on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $ 23 million and $ 19 million during the fiscal year ended March 31, 2022 and March 31, 2021, respectively.

The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in income (loss) before income taxes was $ 6 million and $( 5 ) million during the fiscal year ended March 31, 2022 and March 31, 2021, respectively.

Derivatives Not Designated For Hedge Accounting

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(in millions) Statement of Operations Line Item March 31, 2022 March 31, 2021 March 31, 2020

Foreign currency forward contracts Other expense (income), net $ 51 $ ( 37 ) $ 16

Foreign currency forward contracts Other (income) expense, net $ 52 $ 51 $ ( 37 )

Fair Value of Derivative Instruments

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Foreign currency forward contracts Other current assets $ 18 $ 9

Total fair value of derivatives designated for hedge accounting $ 9 $ —

Derivatives not designated for hedge accounting:

Foreign currency forward contracts Other current assets $ 9 $ 3

Total fair value of derivatives not designated for hedge accounting $ 3 $ 16

Derivative Liabilities

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Foreign currency forward contracts Accrued expenses and other current liabilities $ — $ 5

Total fair value of derivatives designated for hedge accounting:

Derivatives not designated for hedge accounting:

Foreign currency forward contracts Accrued expenses and other current liabilities $ 15 $ 3

Total fair value of derivatives not designated for hedge accounting $ 3 $ 12

The fair value of foreign currency forward contracts represents the estimated amount required to settle the contracts using current market exchange rates and is based on the period-end foreign currency exchange rates and forward points which are classified as Level 2 inputs.

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To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of the counterparties.

With respect to its foreign currency derivatives, as of March 31, 2021, there were five counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is not material.

With respect to its foreign currency derivatives, as of March 31, 2022, there were twelve counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 16 million.

The Company also enters into enforceable master netting arrangements with some of its counterparties.

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subsidiaries.

For the fiscal year ended March 31, 2021, the pre-tax impact of gain (loss) on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income (loss) was $( 93 ) million.

For the fiscal year ended March 31, 2022, the pre-tax impact of gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income (loss) was $ 17 million.

As of March 31, 2021, DXC had $ 0.8 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

34 unchanged sentences

Fiscal Year (in millions)

Thereafter $ 405

Note 12 - Goodwill

2 unchanged sentences

Balance as of March 31, 2021, net $ 641 $ — $ 641

Acquisition related adjustments 15 — 15

Divestitures ( 2 ) — ( 2 )

1 unchanged sentence

Foreign currency translation ( 16 ) — ( 16 )

Balance as of March 31, 2022, net $ 617 $ — $ 617

Goodwill, gross 5,107 5,066 10,173

3 unchanged sentences

Balance as of March 31, 2020, net $ 2,017 $ — $ 2,017

Acquisitions 1,288 70 1,358

Impairment Losses ( 3,789 ) ( 3,005 ) ( 6,794 )

Acquisition related adjustments 15 — 15

Divestitures ( 1,355 ) — ( 1,355 )

Assets held for sale ( 90 ) — ( 90 )

Foreign currency translation 54 — 54

Balance as of March 31, 2021, net $ 641 $ — $ 641

Goodwill, gross 5,131 5,066 10,197

1 unchanged sentence

Balance as of March 31, 2021, net $ 641 $ — $ 641

The fiscal 2021 and 2020 additions to goodwill were due to the acquisitions described in Note 2 - "Acquisitions," including goodwill of some insignificant acquisitions.

The foreign currency translation amount reflects the impact of currency movements on non-U.S.

The fiscal 2021 additions to goodwill were related to acquisitions described in Note 2 - "Acquisitions" and assets held for sale are described in Note 4 - "Assets Held for Sale." The foreign currency translation amount reflects the impact of currency movements on non-U.S.

dollar-denominated goodwill balances.

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The Company determined that there have been no such indicators, and, therefore, it was unnecessary to perform an interim goodwill impairment test as of March 31, 2022.

The Company’s annual goodwill impairment analysis, which was performed qualitatively as of July 1, 2020, did not result in an impairment charge.

At the end of the fiscal 2021, 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 March 31, 2021.

The Company performed its annual goodwill impairment assessment as of July 1, 2019.

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The goodwill impairment charges do not have an impact on the calculation of the Company's financial covenants under the Company's debt arrangements.

The Company’s annual goodwill impairment analysis, which was performed as of July 1, 2018, did not result in an impairment charge.

At the end of fiscal 2019, 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 March 31, 2019.

Note 13 - Income Taxes

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Total income tax expense $ 405 $ 800 $ 130

The current federal (benefit) and tax expense for fiscal years 2021, 2020, and 2019 includes a $( 4 ) million transition tax benefit, $( 31 ) million transition tax benefit and $( 44 ) million transition tax benefit, respectively.

The current expense for fiscal years 2021, 2020 and 2019, includes interest and penalties of $ 2 million, $ 2 million and $ 1 million, respectively, for uncertain tax positions.

The current federal (benefit) and tax expense for fiscal years 2022, 2021, and 2020 includes a $( 7 ) million, $( 4 ) million and $( 31 ) million transition tax benefit, respectively.

The current expense (benefit) for fiscal years 2022, 2021 and 2020, includes interest and penalties of $( 3 ) million, $ 2 million and $ 2 million, respectively, for uncertain tax positions.

In connection with the HPES Merger, the Company entered into a tax matters agreement with HPE.

HPE generally will be responsible for pre-HPES Merger tax liabilities including adjustments made by tax authorities to HPES U.S.

income tax returns.

Likewise, DXC is liable to HPE for income tax receivables and refunds which it receives related to pre-HPES Merger periods.

HPE generally will be responsible for tax liabilities arising prior to the HPES Merger, and DXC is liable to HPE for income tax receivables it receives related to pre-HPES Merger periods.

Pursuant to the tax matters agreement, the Company recorded a $ 27 million tax indemnification receivable related to uncertain tax positions, $ 72 million of tax indemnification receivable related to other tax payables and $ 129 million of tax indemnification payable related to other tax receivables.

In connection with the USPS Separation, the Company entered into a tax matters agreement with Perspecta.

Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the USPS Separation.

In connection with the spin-off of the Company's former U.S.

public sector business (the "USPS Separation"), the Company entered into a tax matters agreement with Perspecta Inc.

(including its successors and permitted assigns, "Perspecta").

The Company generally will be responsible for tax liabilities arising prior to the USPS Separation, and Perspecta is liable to the Company for income tax receivables related to pre-spin-off periods.

Income tax liabilities transferred to Perspecta primarily relate to pre-HPES Merger periods, for which the Company is indemnified by HPE pursuant to the tax matters agreement between the Company and HPE.

The Company remains liable to HPE for tax receivables and refunds which it receives from Perspecta related to pre-HPES Merger periods that were transferred to Perspecta.

Pursuant to the tax matters agreement, the Company has recorded a tax indemnification receivable from Perspecta of $ 72 million and a tax indemnification payable to Perspecta of $ 33 million related to income tax and other tax liabilities.

The Company remains liable to HPE for tax receivables transferred to Perspecta related to pre-HPES Merger periods.

Pursuant to the tax matters agreement, the Company has recorded a tax indemnification receivable from Perspecta of $ 72 million related to other tax payables and a tax indemnification payable to Perspecta of $ 15 million related to income tax and other tax receivables.

In connection with the sale of HPS business, the Company entered into a tax matters agreement with Dedalus.

Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the sale of HPS business.

The major elements contributing to the difference between the U.S.

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Capitalized transaction costs 0.2 0.5 0.1

United States Tax Reform ( 0.7 ) ( 0.7 ) ( 3.4 )

Change in Indefinite Reinvestment Assertion — — ( 3.1 )

Base Erosion and Transition Taxes 6.6 ( 0.7 ) ( 0.7 )

Impact of Business Divestitures 3.0 52.6 —

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In fiscal 2022, the ETR was primarily impacted by:

• Income Tax and Foreign Tax Credits, which decreased income tax expense and decreased the ETR by $ 174 million and 15.2 %, respectively.

• Changes in Luxembourg losses that increased the ETR by $ 1,609 million and 141.0 %, respectively, with an offsetting decrease in the ETR due to a decrease in the valuation allowance of the same amount.

• Adjustments to uncertain tax positions that increased the overall income tax expense and the ETR by $ 78 million and 6.8 %, respectively.

In fiscal 2021, the ETR was primarily impacted by:

• Impact of the HHS and other business divestitures, which increased tax expense and increased the ETR $ 344 million and 52.6 %, respectively.

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• Local losses on investments in Luxembourg that increased the foreign rate differential and decreased the ETR by $ 637 million and 12.2 %, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount.

In fiscal 2019, the ETR was primarily impacted by:

• Local tax losses on investments in Luxembourg that decreased the foreign tax rate differential and decreased the ETR by $ 360 million and 23.7 %, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount.

• A change in the net valuation allowance on certain deferred tax assets, primarily in Luxembourg, Germany, Spain, U.K., and Switzerland, which increased income tax expense and increased the ETR by $ 256 million and 16.9 %, respectively.

• A decrease in the transition tax liability and a change in tax accounting method for deferred revenue, which decreased income tax expense and decreased the ETR by $ 66 million and 4.3 %, respectively.

The deferred tax assets (liabilities) were as follows:

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Objective verifiable evidence, which is historical in nature, carries more weight than subjective evidence, which is forward looking in nature.

A valuation allowance has been recorded against deferred tax assets of approximately $ 3.9 billion as of March 31, 2021 due to uncertainties related to the ability to utilize these assets.

A valuation allowance has been recorded against deferred tax assets of approximately $ 2,133 million as of March 31, 2022 due to uncertainties related to the ability to utilize these assets.

In assessing whether its deferred tax assets are realizable, the Company considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized and adjusts the valuation allowance accordingly.

The Company considers all available positive and negative evidence including future reversals of existing taxable temporary differences, taxable income in prior carryback years, projected future taxable income, tax planning strategies and recent financial operations.

As of March 31, 2021, our net deferred tax assets in certain German entities were primarily the result of net operating loss carryforwards, pension deductions, assumed debt obligations and other miscellaneous accruals.

In the current reporting period, the Company has determined that the negative evidence, including an unadjusted cumulative loss, on-going employee restructuring expenses for termination benefits and projected FY22 losses outweighed the positive evidence of potential steady state profitability when removing one-time non-recurring charges.

Therefore, the Company has had a change in judgement and concluded that the deferred tax assets in certain DXC German entities are no longer realizable and has recorded a valuation allowance of $ 175 million.

The net increase in the valuation allowance of $ 1,698 million in fiscal 2021, is primarily due to the local losses in Luxembourg, Belgium, Denmark, Italy, France, Germany and U.S.

of $ 1,565 million, balance sheet movement of $ 4 million, and an adjustment for currency translation of $ 129 million.

In the current reporting period, the Company recorded adjustments to Luxembourg losses and corresponding adjustments to the valuation allowance.

The net decrease in the valuation allowance of $ 1,729 million in fiscal 2022 is primarily due to changes in the Luxembourg losses of $ 1,609 million, other increases in the valuation allowance of $ 1 million and a currency translation adjustment of $ 121 million.

The following table provides information on the Company's various tax carryforwards:

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Net operating loss carryforwards

$ 132 $ 128 $ 4 2033 $ 15 $ 3 $ 12 2033

$ 88 $ 88 $ — N/A $ 132 $ 128 $ 4 2033

$ 589 $ 243 $ 346 2042 $ 369 $ 6 $ 363 2041

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$ 5 $ 2 $ 3 2037 $ — $ — $ — N/A

$ — $ — $ — N/A $ 16 $ — $ 16 2020

$ — $ — $ — N/A $ — $ — $ — N/A

Capital loss carryforwards

Federal $ — $ — $ — N/A $ — $ — $ — N/A

Federal $ 42 $ — $ 42 2026 $ — $ — $ — N/A

State $ — $ — $ — N/A $ — $ — $ — N/A

Foreign $ 45 $ 45 $ — N/A $ 59 $ 40 $ 19 2023

With the following exceptions, the majority of our global unremitted foreign earnings have been taxed or would be exempt from tax upon repatriation, except for the following earnings which are considered indefinitely reinvested:

approximately $ 522 million that could be taxable when repatriated to the U.S.

under section 1.245A-5(b) of the final Treasury regulations issued during fiscal 2021;

and our accumulated earnings in India.

Foreign $ 199 $ 199 $ — N/A $ 45 $ 45 $ — N/A

The Company also has federal and state 163(j) interest deduction carryforward attributes of approximately $ 239 million and $ 667 million, respectively, that have no expiration.

The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S.

tax upon repatriation.

Such earnings and all current foreign earnings are not indefinitely reinvested.

The following earnings are considered indefinitely reinvested:

approximately $ 495 million that could be subject to U.S.

federal tax when repatriated to the U.S.

under section 1.245A-5(b) of the final Treasury regulations;

and our accumulated earnings in India as of March 31, 2021.

A portion of these indefinitely reinvested earnings may be subject to foreign and U.S.

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The Company will continue to evaluate its position in the future based on its future strategy and cash needs.

As a result of the confluence of multiple events occurring during fiscal 2021, including but not limited to a corporate initiative to paydown debt and a recent change in India tax laws governing distributions, the Company distributed approximately $ 550 million from its accumulated earnings in India.

Although the distribution was subject to India withholding taxes under the new India tax rules, the withholding taxes are creditable against U.S.

federal income tax, resulting in minimal to no net income tax impact.

The distribution was not 100% of the cumulative earnings of its Indian subsidiaries, and the Company considers the undistributed accumulated earnings in India indefinitely reinvested.

The Company accounts for income tax uncertainties in accordance with ASC 740 Income Taxes, which prescribes a recognition threshold and measurement criteria for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

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Settlements and statute of limitation expirations ( 33 ) ( 36 ) ( 7 )

Acquisitions 6 18 —

Acquisitions and Dispositions ( 36 ) 6 18

Foreign exchange and others ( 1 ) ( 1 ) ( 3 )

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The Company’s liability for uncertain tax positions at March 31, 2022, March 31, 2021 and March 31, 2020, includes $ 393 million, $ 316 million and $ 210 million, respectively, related to amounts that, if recognized, would affect the effective tax rate (excluding related interest and penalties).

The increase relating to the tax positions primarily relate to the Company's increase in foreign tax credits and transfer pricing.

The increase relating to the tax positions primarily relate to the Company's increase in foreign tax credits.

The Company recognizes interest accrued related to uncertain tax positions and penalties as a component of income tax expense.

During the year ended March 31, 2022, the Company had net decrease in interest expense of $ 1 million ($ 1 million net of tax) and net decrease in accrued expense for penalties of $ 2 million, and as of March 31, 2022 recognized a liability for interest of $ 76 million ($ 60 million net of tax) and penalties of $ 20 million.

During the year ended March 31, 2021, the Company had a net increase in interest of $ 1 million ($( 1 ) million net of tax) and a net increase in accrued expense for penalties of $ 1 million and as of March 31, 2021, recognized a liability for interest of $ 46 million ($ 39 million net of tax) and penalties of $ 22 million.

During the year ended March 31, 2020, the Company had a net increase in interest expense of $ 5 million ($ 3 million net of tax) and a net decrease in accrued expense for penalties of $ 3 million and, as of March 31, 2020, recognized a liability for interest of $ 45 million ($ 40 million net of tax) and penalties of $ 21 million.

During the year ended March 31, 2019, the Company had a net increase in interest expense of $ 2 million ($ 1 million net of tax) and a net decrease in accrued expense for penalties of $ 1 million and, as of March 31, 2019, recognized a liability for interest of $ 41 million ($ 36 million net of tax) and penalties of $ 25 million.

The Company is currently under examination in several tax jurisdictions.

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Tax Examinations

The IRS is examining the Company's federal income tax returns for fiscal 2008 through the tax year ended October 31, 2018.

With respect to CSC's fiscal 2008 through 2017 federal tax returns, the Company has entered into negotiations for a resolution through settlement with the IRS Office of Appeals.

The IRS examined several issues for this audit that resulted in various audit adjustments.

The Company and the IRS Office of Appeals have an agreement in principle as to some of these adjustments and we disagree with the IRS' disallowance of certain losses and deductions resulting from restructuring costs and tax planning strategies in previous years.

As we believe we will ultimately prevail on the technical merits of the disagreed items and intend to challenge them in the IRS Office of Appeals or Tax Court, these matters are not fully reserved and would result in a federal and state tax expense of $ 405 million (including estimated interest and penalties) and related cash cost for the unreserved portion of the these items if we do not prevail in Tax Court.

We do not expect these matters that proceed to tax court to be resolved in the next 12 months.

We have received a notice of deficiency with respect to fiscal 2011 and 2013, and have filed a petition in Tax Court with respect to fiscal 2013 and expect to file in Tax Court with respect to fiscal 2011 in the first quarter of fiscal 2022.

We also expect fiscal 2010 to proceed to Tax Court.

The Company has agreed to extend the statute of limitations for fiscal years 2008 through 2012 through August 31, 2021 to provide for IRS completion of their review.

The Company has agreed to extend the statute of limitations for fiscal years 2014 through fiscal 2017 through October 31,2021 to provide for IRS completion of their review.

The Company expects to reach a resolution for all years no earlier than the first quarter of fiscal 2023 except for agreed issues related to fiscal 2008 through 2010 and fiscal 2011 through 2017 federal tax returns, which are expected to be resolved within twelve months.

In addition, the Company may settle certain other tax examinations, have lapses in statutes of 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 though less payment than previously estimated.

The Company believes the outcomes which are reasonably possible within the next twelve months may result in a reduction in liability for uncertain tax positions of $ 52 million, excluding interest, penalties, and tax carryforwards.

The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal 2008 through the tax year ended October 31, 2018.

With respect to CSC’s fiscal 2008 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.

The IRS examined several issues for these tax years that resulted in various audit adjustments.

The Company and the IRS Office of Appeals have an agreement in principle as to various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs and tax planning strategies in previous years.

As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the IRS Office of Appeals or the U.S.

Tax Court, these matters are not fully reserved and would result in a federal and state tax expense of approximately $ 458 million (including estimated interest and penalties) for the unreserved portion of these items and related cash cost if we do not prevail.

We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S.

We do not expect the U.S.

Tax Court matters to be resolved in the next 12 months.

The Company has agreed to extend the statute of limitations for fiscal years 2008 through 2010 to April 30, 2022, for fiscal years 2014 through fiscal 2017 to February 28, 2023, and for the tax years ended October 31, 2017 and October 31, 2018 to September 30, 2023.

The statute of limitations on assessments for fiscal years 2011 through 2013 has expired, with the exception of a $6 million refund claim for 2012 for which the statute remains open.

However, as previously noted, fiscal years 2011 and 2013 are in the U.S.

Tax Court and consequently these years will remain open until the U.S.

Tax Court proceedings have concluded.

The Company expects to reach resolution with regard to disagreed items for fiscal years 2009 through 2013 no earlier than fiscal 2025, and to reach resolution for fiscal years 2014 through 2017, within 12 months.

The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions.

Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.

The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $ 44 million.

Note 14 - Debt

3 unchanged sentences

Fiscal Year Maturities

March 31, 2021 March 31, 2020

March 31, 2022 (1)

March 31, 2021 (1)

Short-term debt and current maturities of long-term debt

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Long-term debt, net of current maturities

AUD term loan

€ 650 million Senior notes

1.75 % 2026 720 760

GBP term loan

$ 700 million Senior notes

1.80 % 2027 694 —

EUR term loan

€ 750 Senior notes

0.45 % 2028 828 —

EUR term loan

$ 650 million Senior notes

2.375 % 2029 644 —

USD term loan

€ 600 Senior notes

0.95 % 2032 661 —

$ 274 million Senior notes

EUR term loan

2023 - 2024 — 469

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7.45 % 2030 — 268

Revolving credit facility

1.26 % - 2.08 %

2024 - 2025 — 1,500

Lease credit facility

1.15 % - 1.99 %

2022 - 2023 — 11

Finance lease liabilities

3 unchanged sentences

2023 - 2026 344 672

2022 - 2027 672 802

Mandatorily redeemable preferred stock outstanding

5 unchanged sentences

$ 4,065 $ 4,345

(1) The carrying amounts of the senior term loans and notes as of March 31, 2022 and March 31, 2021, include the remaining principal outstanding of $ 3,575 million and $ 3,631 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $( 28 ) million and $ 34 million, respectively.

(2) At DXC's option, DXC can borrow up to a maximum of € 1 billion or its equivalent in €, £, and $.

(2) At DXC’s option, the EUR term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a

margin between 0.55 % and 1.05 %, based on published credit ratings of DXC.

Senior Notes and Term Loans

During the first quarter of fiscal 2021, the Company issued two senior notes with an aggregate principal of $ 1.0 billion consisting of (i) $ 500 million of 4.00 % Senior Notes due fiscal 2024 and (ii) $ 500 million of 4.13 % Senior Notes due fiscal 2026.

The proceeds from these notes were applied towards the early prepayment of DXC's term loan facilities including prepayment of € 500 million of Euro Term Loan due fiscal 2023, £ 150 million of GBP Term Loan due fiscal 2022, A$ 300 million of AUD Term Loan due fiscal 2022, and $ 100 million of USD Term Loan due fiscal 2025.

During the second quarter of fiscal 2021, the Company repaid the remaining £ 300 million GBP Term Loan due fiscal 2022.

During the third quarter of fiscal 2021, the Company used the proceeds from the sale of HHS Business to prepay approximately $ 1,441 million of term loan facilities detailed below under the heading "HHS Sale Use of Proceeds."

Interest on the Company's remaining term loan is payable monthly at DXC's election.

The Company fully and unconditionally guarantees term loans issued by its 100% owned subsidiaries.

The interest on the Company's senior notes is payable semi-annually in arrears except for interest on the £ 250 million Senior Notes due fiscal 2025 and the € 650 million Senior Notes due fiscal 2026, which are payable annually in arrears.

During the first quarter of fiscal 2022, the Company used the proceeds from the sale of its HPS business to complete the redemption of the remaining $ 319 million of the two series of 4.45 % senior notes due fiscal 2023.

The Company also repurchased $ 33 million of its 4.125 % senior notes due fiscal 2026 using the proceeds from the divestitures of other insignificant businesses and existing cash on hand and the remainder of these notes were subsequently redeemed in full.

Euro Senior Notes Issuance

During the second quarter of fiscal 2022, the Company issued (i) € 750 million aggregate principal amount of its 0.450 % senior notes due fiscal 2028 and (ii) € 600 million aggregate principal amount of its 0.950 % senior notes due fiscal 2032 (collectively, the “Euro Notes”).

The proceeds from the Euro Notes were applied principally to the repayment in full of the € 400 million aggregate principal amount of outstanding borrowings under its Euro-denominated term loan facility, the repayment of its U.S.

dollar-denominated 4.25 % senior notes due fiscal 2025 and the repayment of its Sterling-denominated 2.75 % senior notes due fiscal 2025.

Dollar Senior Notes Issuance

During the second quarter of fiscal 2022, the Company issued (i) $ 700 million aggregate principal amount of its 1.80 % senior notes due fiscal 2027, and (ii) $ 650 million aggregate principal amount of its 2.375 % senior notes due fiscal 2029 (collectively, the “USD Notes”).

The proceeds from the USD Notes were used for the repayment of its remaining 4.125 % senior notes due fiscal 2026, its 4.750 % senior notes due fiscal 2028 and its 7.45 % senior notes due fiscal 2030.

The interest on the Company’s $ 700 million senior notes due fiscal 2027 and $ 650 million senior notes due fiscal 2029 are payable semi-annually in arrears, while the interest on the € 650 million senior notes due fiscal 2026, € 750 million senior notes due fiscal 2028 and € 600 million senior notes due fiscal 2032 are payable annually in arrears.

Generally, the Company’s notes are redeemable at the Company’s discretion at the then-applicable redemption premium plus accrued and unpaid interest.

During the fourth quarter of fiscal 2021, the Company repaid the $ 500 million of 4.00 % Senior Notes due fiscal 2024 that was issued during the first quarter of fiscal 2021.

Tender Offers

On March 16, 2021, the Company announced the commencement of an offer (the "tender offers") to purchase for cash any and all of the Company's outstanding 4.45 % Senior Notes due fiscal 2023 (the "DXC Notes") and any and all of the outstanding 4.45 % Senior Notes due fiscal 2023 (the "CSC Notes) issued by its wholly owned subsidiary, Computer Sciences Corporation ("CSC").

On March 25, 2021, the Company settled the principal amount tendered of $ 121 million of the DXC Notes and $ 6 million of the CSC Notes.

Refer to Form 8-K dated March 16, 2021 and March 23, 2021 for more information.

Revolving Credit Facility

During the first quarter of fiscal 2021, the Company borrowed the remaining $ 2.5 billion under the $ 4.0 billion credit facility agreement ("Credit Agreement") as a precautionary measure to increase its cash position and increase financial flexibility in light of continuing uncertainty in the global economy and financial capital markets resulting from COVID-19.

The Company repaid the full $ 4.0 billion during the first nine months of fiscal 2021, which became available under the revolving credit facility for redraw at the request of the Company.

HHS Sale Use of Proceeds

In October 2020, DXC sold the HHS business and used approximately $ 3.5 billion of the proceeds to prepay $ 1,250 million of Revolver Credit Facility, £ 600 million of GBP commercial paper (approximately $ 772 million), and the following term loan facilities:

Future Maturities of Long-term Debt

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Eligible employees are enrolled in defined benefit pension plans in their country of domicile.

The Contributory defined benefit pension plan in the U.K.

The defined benefit pension plan in the U.K.

represents the largest plan.

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These amounts are reflected in the projected benefit obligation and in the net periodic pension cost.

The change in projected benefit obligation for fiscal year 2021 is primarily related to actuarial losses and foreign currency exchange rate changes.

Actuarial losses were primarily due to a decrease in discount rates and an increase in inflation rates across most plans, with partially offsetting impact of actuarial gains from a mortality update and lower than expected benefit indexation in the United Kingdom.

The change in projected benefit obligation for fiscal year 2022 is primarily related to actuarial gains and foreign currency exchange rate changes.

Actuarial gains were primarily due to an increase in discount rates across most plans, with partially offsetting impact of actuarial losses from an increase in inflation rates in Europe and in the United Kingdom and higher than expected benefit indexation in the United Kingdom.

Projected Benefit Obligations

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Settlement/curtailment ( 76 ) ( 37 )

Actuarial loss (gain) 1,262 ( 362 )

Actuarial (gain) loss ( 831 ) 1,262

Benefits paid ( 458 ) ( 393 )

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Rates of increase in compensation levels 2.9 % 2.5 %

Interest Crediting Rate 4.0 % N/A

Interest Crediting Rate 4.0 % 4.0 %

Fair Value of Plan Assets and Funded Status

33 unchanged sentences

( 581 ) ( 659 ) ( 651 )

Amortization of transition obligation

Amortization of prior service costs

( 8 ) ( 9 ) ( 15 )

Amortization of prior service credit ( 8 ) ( 8 ) ( 9 )

Contractual termination benefit

Settlement/curtailment (gain) loss ( 20 ) ( 18 ) 7

Recognition of actuarial loss (gain) 537 ( 252 ) 153

Net periodic pension expense (income) $ 201 $ ( 566 ) $ ( 98 )

Recognition of actuarial (gain) loss ( 664 ) 537 ( 252 )

Net periodic pension (income) expense $ ( 978 ) $ 201 $ ( 566 )

The service cost component of net periodic pension (income) expense is presented in cost of services and selling, general and administrative and the other components of net periodic pension income are presented in other income, net in the Company’s statements of operations.

Estimated prior service credit of $ 9 million will be amortized from AOCI into net periodic pension cost over the next fiscal year.

The weighted-average rates used to determine net periodic pension cost were:

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Rates of increase in compensation levels 2.5 % 1.7 % 2.0 %

The following is a summary of amounts in AOCI, before tax effects:

Interest Crediting Rate 4.0 % 4.0 % — %

The following is a summary of amounts in accumulated other comprehensive income, before tax effects:

Fiscal Years Ended

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Aon Hewitt GBP Single Agency AA Corporates-Only Curve.

Pension Equalization Ruling

On October 26, 2018 the High Court of Justice in the U.K.

(the "High Court") issued a ruling related to the equalization of benefits payable to men and women for the effect of guaranteed minimum pensions under U.K.

defined benefit pension plans.

As a result of this ruling, the Company estimated the impact of retroactively increasing benefits in its U.K.

plans in accordance with the High Court ruling.

The Company treated the additional benefits as a prior service cost which resulted in an increase to its projected benefit obligation and accumulated other comprehensive loss of $ 28 million.

The Company will amortize this cost over the average remaining life expectancy of the U.K.

participants.

Given the immaterial effect on the U.K.

plan's projected benefit, an interim remeasurement was not performed.

Defined Contribution Plans

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employees and certain foreign employees.

The plans allow employees to contribute a portion of their earnings in accordance with specified guidelines.

Matching contributions are made annually in January to participants employed on December 31 of the prior year and vest in one year .

However, if a participant retires from the Company or dies prior to December 31, the participant will be eligible to receive matching contributions approximately 30 days following separation from service.

For certain plans, the Company will match employee contributions.The plans allow employees to contribute a portion of their earnings in accordance with specified guidelines.

During fiscal 2022, 2021 and 2020, the Company contributed $ 226 million, $ 221 million and $ 192 million, respectively, to its defined contribution plans.

11 unchanged sentences

The liability under the plan, which is included in other long-term liabilities in the Company's balance sheets, amounted to $ 36 million as of March 31, 2022 and $ 42 million as of March 31, 2021.

The Company's expense under the Plan totaled $ 8 million, $ 0 million and $ 2 million, for fiscal 2021, 2020 and 2019, respectively.

The Company's expense under the Plan totaled $ 2 million and $ 8 million for fiscal 2022 and 2021 respectively.

Note 16 - Stockholders' Equity

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On November 8, 2018, DXC announced that its board of directors approved an incremental $ 2.0 billion share repurchase authorization.

On February 2, 2022, DXC announced its intention to repurchase incrementally up to $ 1.0 billion of its outstanding shares of common stock in the open market.

An expiration date has not been established for this repurchase plan.

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Open market purchases 18,818,934 $ 33.67 $ 634

ASR 3,654,544 $ 54.73 $ 200

2022 Total 18,818,934 $ 33.67 $ 634

Open market purchases 12,279,107 $ 43.67 $ 536

ASR 3,654,544 $ 54.73 $ 200

2020 Total 15,933,651 $ 46.21 $ 736

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The Board of Directors (the “Board”) has suspended the Company’s cash dividend payment beginning in the first quarter of fiscal 2021 to preserve cash and enhance financial flexibility in the current environment.

We intend to continue to suspend quarterly cash dividends for fiscal 2022.

The dividends declared during fiscal 2020 and 2019 are shown in the table below:

Dividends Declared

(in millions, except per share amounts) Per Common Share Total Unpaid at Fiscal Year End

Fiscal 2020 $ 0.84 $ 219 $ 55

Fiscal 2019 $ 0.76 $ 209 $ 53

Accumulated Other Comprehensive Income (Loss)

As of March 31, 2022 the Company does not intend to reinstate its quarterly cash dividends.

During fiscal 2020, the Company declared dividends of $ 0.84 per common share totaling $ 219 million.

Accumulated Other Comprehensive Loss

The following table shows the changes in accumulated other comprehensive income (loss), net of taxes:

(in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Available-for-sale Securities Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive Income (Loss)

Balance at March 31, 2018 $ ( 261 ) $ 9 $ 9 $ 301 $ 58

Current-period other comprehensive loss ( 256 ) ( 22 ) — ( 21 ) ( 299 )

Amounts reclassified from accumulated other comprehensive income (loss), net of taxes — 10 — ( 13 ) ( 3 )

(in millions) Foreign Currency Translation Adjustments Cash Flow Hedges Available-for-sale Securities Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive Loss

Balance at March 31, 2019 $ ( 517 ) $ ( 3 ) $ 9 $ 267 $ ( 244 )

Current-period other comprehensive loss ( 334 ) ( 15 ) — 0 — ( 349 )

Amounts reclassified from accumulated other comprehensive (loss) income, net of taxes — ( 2 ) — ( 8 ) ( 10 )

Amounts reclassified from accumulated other comprehensive loss, net of taxes — ( 2 ) — ( 8 ) ( 10 )

Balance at March 31, 2020 $ ( 851 ) $ ( 20 ) $ 9 $ 259 $ ( 603 )

2 unchanged sentences

Balance at March 31, 2021 $ ( 554 ) $ ( 1 ) $ — $ 253 $ ( 302 )

Current-period other comprehensive (loss) income ( 11 ) 17 — — 6

Amounts reclassified from accumulated other comprehensive (loss) income, net of taxes (1)

( 86 ) ( 6 ) — 3 ( 89 )

Balance at March 31, 2022 $ ( 651 ) $ 10 $ — $ 256 $ ( 385 )

(1) Includes net cumulative foreign currency translation losses of $ 86 million upon sale of foreign entities primarily related to the HPS business divestiture.

See Note 3 – “Divestitures” for additional information.

Note 17 - Stock Incentive Plans

As a result of the Separation of USPS, shared-based awards issued by the Company were modified.

The number of stock options and exercise price were adjusted to generally preserve the intrinsic value immediately prior to the Separation.

There was no incremental share-based compensation expense recognized as a result of the modification of the awards.

The Compensation Committee of the Board of Directors has broad authority to grant awards and otherwise administer the DXC Employee Equity Plan.

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PSU awards include the potential for up to 25 % of the shares granted to be earned after the first and second fiscal years if certain of the Company's performance targets are met early, subject to vesting based on the participant's continued employment through the end of the three-year performance period.

In fiscal 2021, DXC issued awards that are considered to have a market condition.

Beginning in fiscal 2021, DXC issued awards that are considered to have a market condition.

A Monte Carlo simulation model was used for the valuation of the grants.

Settlement of shares for the fiscal 2021 PSU awards will be made at the end of the third fiscal year subject to certain compounded annual growth rates of the stock price and continued employment through the last day of the third fiscal year.

Settlement of shares for these PSU awards will be made at the end of the third fiscal year subject to certain compounded annual growth rates of the stock price and continued employment through the last day of the third fiscal year.

The terms of the DXC Director Equity Plan allow DXC to grant RSU awards to non-employee directors of DXC.

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Outstanding as of March 31, 2019 2,318,768 $ 30.40 4.80 $ 79

2,933,501 $ 32.54 5.24 $ 185

Granted — $ —

Issued due to Separation modification 400,170 $ 31.72

Exercised ( 331,172 ) $ 31.36 $ 8

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Exercisable as of March 31, 2022 1,111,347 $ 33.47 3.01 $ 5

(1) The amount of the weighted average exercise price per share has been revised to reflect the impact of the Separation.

As of March 31, 2022

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Outstanding as of March 31, 2019 2,809,775 $ 67.27

3,985,616 $ 47.25

Granted 3,166,405 $ 45.58

Issued due to Separation modification 649,649 $ 51.98

Released/Issued ( 1,039,346 ) $ 54.39

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Outstanding as of March 31, 2022 7,477,126 $ 35.89

(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the USPS Separation.

Non-employee Director Incentives

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Outstanding as of March 31, 2019 75,750 $ 46.31

66,386 $ 37.26

Granted 62,200 $ 35.90

Issued due to Separation modification 10,488 $ 37.69

Released/Issued ( 23,335 ) $ 60.90

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Outstanding as of March 31, 2022 156,722 $ 36.18

(1) The amount of the weighted average fair value per share has been revised to reflect the impact of the USPS Separation.

Note 18 - Cash Flows

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Assets acquired under long-term financing $ 44 $ 35 $ 376

(Decrease) increase in deferred purchase price receivable $ ( 52 ) $ ( 205 ) $ 1,489

Decrease in deferred purchase price receivable $ — $ ( 52 ) $ ( 205 )

Contingent consideration $ — $ 3 $ 18

Dividends declared but not yet paid $ — $ — $ 55

Shares repurchased but not settled in cash $ 6 $ — $ —

(1) Income tax refunds were $ 54 million, $ 70 million, and $ 42 million for fiscal 2022, 2021, and 2020, respectively.

(2) $ 763 million and $ 216 million in modifications and terminations in fiscal 2021 and 2020, respectively, and net of $ 87 million change in lease classification from operating to finance lease in fiscal 2020,

Note 19 - Other Expense (Income)

The following table summarizes components of other expense (income), net:

(2) There were $ 1,085 million, $ 763 million, and $ 216 million in modifications and terminations in fiscal 2022, 2021, and 2020, respectively, and net of $ 87 million change in lease classification from operating to finance lease in fiscal 2020,

Note 19 - Other (Income) Expense, Net

The following table summarizes components of other (income) expense, net:

Fiscal Years Ended

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March 31, 2022 March 31, 2021 March 31, 2020

Non-service cost components of net periodic pension expense (income) $ 110 $ ( 658 ) $ ( 182 )

Non-service cost components of net periodic pension (income) expense $ ( 1,066 ) $ 110 $ ( 658 )

Foreign currency loss (gain) 13 14 ( 25 )

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$ ( 1,081 ) $ 102 $ ( 720 )

Non-service cost components of net periodic pension expense resulted primarily from the actuarial loss of $ 537 million compared to the gain of $ 252 million prior year.

Non-service cost components of net periodic pension expense resulted primarily from the actuarial gain of $ 664 million compared to the loss of $ 537 million prior year.

See Note 15 - Pension and Other Benefit Plans.

Foreign currency loss (gain) resulted from the movement of foreign currency exchange rates on the Company’s foreign currency denominated assets and liabilities, related hedges including options to manage its exposure to economic risk and the cost of the Company’s hedging program.

Other gain primarily relates to gain on sale of non-operating assets and investment income.

Other gain primarily relates to gain on sale of non-operating assets.

Note 20 - Segment and Geographic Information

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The CODM uses these results, in part, to evaluate the performance of, and allocate resources to, each of the segments.

As a result of the Separation, USPS is no longer included as a reportable segment and its results have been reclassified to discontinued operations, net of taxes, for all periods presented.

See Note 3 - "Divestitures." DXC now operates in two reportable segments as described below:

Global Business 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 Outsourcing.

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.

• IT Outsourcing ("ITO").

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.

Segment Measures

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(in millions) March 31, 2022 March 31, 2021 March 31, 2020

Total profit for reportable segment $ 1,365 $ 2,308 $ 3,556

Total profit for reportable segments $ 1,635 $ 1,365 $ 2,308

All other loss ( 260 ) ( 263 ) ( 247 )

Subtotal $ 1,375 $ 1,102 $ 2,061

Interest income 65 98 165

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Gains on dispositions 341 2,004 —

Pension and OPEB actuarial and settlement (losses) gains ( 519 ) 244 ( 143 )

Pension and OPEB actuarial and settlement gains (losses) 684 ( 519 ) 244

Debt extinguishment cost ( 311 ) ( 41 ) —

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Gain on arbitration award — — 632

Income (loss) from continuing operations before taxes $ 654 $ ( 5,228 ) $ 1,515

Income (loss) before income taxes $ 1,141 $ 654 $ ( 5,228 )

Management does not use total assets by segment to evaluate segment performance or allocate resources.

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The following table provides information about the balances of the Company's trade receivables and contract assets and contract liabilities:

(in millions) March 31, 2021 March 31, 2020

Trade receivables, net $ 2,871 $ 3,059

Contract assets $ 351 $ 454

Contract liabilities $ 1,701 $ 1,756

(in millions) Balance Sheet Line Item March 31, 2022 March 31, 2021

Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts $ 2,694 $ 2,871

Contract assets Receivables and contract assets, net of allowance for doubtful accounts $ 371 $ 351

Contract liabilities Deferred revenue and advance contract payments and Non-current deferred revenue $ 1,915 $ 1,701

Change in contract liabilities were as follows:

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Balance, end of period $ 1,915 $ 1,701

(1) Other included contract liabilities of $ 52 million related to the divested HHS business discussed in Note 3 - "Divestitures" and $ 62 million related to HPS business and other insignificant businesses reclassified to assets held for sale discussed in Note 4 - "Assets Held for Sale".

(1) For fiscal 2021, Other included contract liabilities of $ 52 million related to the divested HHS business and $ 62 million related to the HPS business and other insignificant businesses reclassified to assets held for sale.

See note Note 3 - "Divestitures and Note 4 - "Assets Held for Sale" for more information.

The following tables provides information about the Company’s capitalized costs to obtain and fulfill a contract:

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(1) Capitalized sales commission costs are included within other assets in the accompanying balance sheets and amortization expense related to the capitalized sales commission assets are included in selling, general, and administrative expenses in the accompanying statements of operations.

(2) Transition and transformation contract costs, net reflect the Company’s setup costs incurred upon initiation of an outsourcing contract that are classified as other assets in the accompanying balance sheets and amortization expense are included within depreciation and amortization in the accompanying statements of operations.

(2) Transition and transformation contract costs, net reflect the Company’s setup costs incurred upon initiation of an outsourcing contract and are included within other assets in the accompanying balance sheets and amortization expense are included within depreciation and amortization in the accompanying statements of operations.

Note 22 - Restructuring Costs

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During fiscal 2022, management approved global cost savings initiatives designed to better align the Company’s workforce and facility structures (the “Fiscal 2022 Plan”).

Also included in restructuring costs for the fiscal year ended March 31, 2022 is $ 18 million related to amortization of right-of-use assets and interest expense for leased facilities that we have vacated but that are being actively marketed for sublease, or we are in negotiations with the landlord to potentially terminate or modify those leases.

Fiscal 2021 Plan

During fiscal 2020, management approved cost savings initiatives designed to reduce operating costs by re-balancing its workforce and facilities structures (the "Fiscal 2020 Plan").

During fiscal 2021, management approved global cost savings initiatives designed to better align the Company’s workforce and facility structures (the “Fiscal 2021 Plan”).

The Fiscal 2021 Plan includes workforce optimization programs and facilities and data center rationalization.

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Fiscal 2020 Plan

During fiscal 2019, management approved global cost savings initiatives designed to better align the Company's organizational structure with its strategic initiatives and continue the integration of HPES and other acquisitions (the "Fiscal 2019 Plan").

The Fiscal 2019 Plan includes workforce optimization and rationalization of facilities and data center assets.

During fiscal 2020, management approved cost savings initiatives designed to reduce operating costs by re-balancing its workforce and facilities structures (the "Fiscal 2020 Plan").

The Fiscal 2020 Plan includes workforce optimization programs and facilities and data center rationalization.

Costs incurred to date under the Fiscal 2020 Plan total $ 294 million, comprising $ 277 million in employee severance and $ 17 million of facilities costs.

Other Prior Year Plans

In June 2017, management approved a post-HPES Merger restructuring plan to optimize the Company's operations in response to a continuing business contraction (the "Fiscal 2018 Plan").

The Fiscal 2018 Plan focuses mainly on optimizing specific aspects of global workforce, increasing the proportion of work performed in low cost offshore locations and re-balancing the pyramid structure.

Additionally, this plan included global facility restructuring, including a global data center restructuring program.

Costs incurred to date under the Fiscal 2018 Plan total $ 998 million, comprising $ 802 million in employee severance and $ 196 million of facilities costs.

In June 2017, management approved a post-HPES Merger restructuring plan to optimize the Company’s operations in response to a continuing business contraction.

Other prior year plans focus mainly on optimizing specific aspects of the global workforce, increasing the proportion of work performed in low-cost offshore locations and re-balancing the organizational structure.

Additionally, these plans included global facility restructuring, including a global data center restructuring program.

Costs incurred to date under other prior year plans total $ 1,478 million, comprising $ 1,141 million in employee severance and $ 337 million of facilities costs.

Acquired Restructuring Liabilities

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Restructuring Liability as of March 31, 2021 Costs Expensed,

Net of Reversals (1)

Costs Not Affecting Restructuring Liability (2)

Net of Reversals Costs Not Affecting Restructuring Liability (1)

Cash Paid Other (2)

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Facilities Costs — 92 ( 62 ) ( 30 ) 1 1

Total $ — $ 538 $ ( 28 ) $ ( 327 ) $ — $ 183

— $ 320 ( 67 ) ( 163 ) ( 5 ) 85

Fiscal 2021 Plan

Workforce Reductions $ 180 $ ( 2 ) $ — $ ( 142 ) $ ( 3 ) $ 33

$ 74 $ 8 $ 1 $ ( 60 ) $ 4 $ 27

Facilities Costs 3 5 ( 5 ) ( 2 ) — 1

Total $ 76 $ 4 $ 5 $ ( 62 ) $ 4 $ 27

183 3 ( 5 ) ( 144 ) ( 3 ) 34

Fiscal 2020 Plan

Workforce Reductions (3)

$ 27 $ ( 2 ) $ — $ ( 18 ) $ ( 1 ) $ 6

Facilities Costs — — — — — —

Total $ 30 $ ( 3 ) $ ( 1 ) $ ( 18 ) $ 5 $ 13

27 ( 2 ) — ( 18 ) ( 1 ) 6

Other Prior Year Plans

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Facilities Costs 6 ( 1 ) 1 ( 4 ) — 2

Total $ 24 $ 12 $ ( 7 ) $ ( 19 ) $ 2 $ 12

25 1 1 ( 21 ) — 6

Acquired Liabilities

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Facilities Costs 1 — — ( 1 ) — —

$ 35 ( 4 ) — ( 8 ) ( 2 ) 21

Total $ 270 $ 318 $ ( 71 ) $ ( 354 ) $ ( 11 ) $ 152

(1) Costs expensed, net of reversals include $ 11 million, $ 9 million, and $ 3 million of costs reversed from the Fiscal 2020 Plan, Fiscal 2019 Plan and Other Prior Year Plans, respectively.

(2) Pension benefit augmentations recorded as a pension liability and asset impairment.

(1) Pension benefit augmentations recorded as a pension liability and asset impairments and restructuring costs associated with right-of-use assets.

(2) Foreign currency translation adjustments.

(4) Fiscal 2020 workforce reductions includes a $ 14 million adjustment to restructuring expense related to the prior year.

Restructuring Liability as of March 31, 2019 Adoption of ASC 842 (1)

Costs Expensed,

Restructuring Liability as of March 31, 2020 Costs Expensed,

Net of Reversals

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Facilities Costs — 37 ( 17 ) ( 14 ) ( 3 ) 3

Total $ — $ — $ 292 $ ( 14 ) $ ( 193 ) $ ( 9 ) $ 76

— 538 ( 28 ) ( 327 ) — 183

Fiscal 2020 Plan

Workforce Reductions (3)

$ 74 $ 8 $ 1 $ ( 60 ) $ 4 $ 27

Facilities Costs 2 ( 4 ) 4 ( 2 ) — —

Total $ 206 $ ( 53 ) $ ( 25 ) $ ( 1 ) $ ( 90 ) $ ( 7 ) $ 30

76 4 5 ( 62 ) 4 27

Fiscal 2019 Plan

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Facilities Costs 5 ( 2 ) 1 ( 1 ) 3 6

Total $ 94 $ ( 36 ) $ ( 11 ) $ — $ ( 31 ) $ 4 $ 20

30 ( 3 ) ( 1 ) ( 18 ) 5 13

Other Prior Year Plans

1 unchanged sentence

Facilities Costs — — — — — —

Total $ 10 $ ( 1 ) $ ( 1 ) $ — $ ( 3 ) $ ( 1 ) $ 4

24 12 ( 7 ) ( 19 ) 2 12

Acquired Liabilities

1 unchanged sentence

Facilities Costs 11 ( 1 ) 1 ( 9 ) ( 1 ) 1

50 — 1 ( 16 ) — 35

Total $ 180 $ 551 $ ( 30 ) $ ( 442 ) $ 11 $ 270

(1) Represents restructuring liability recorded as an offset to right-of-use assets upon the adoption of ASC 842.

(2) Costs expensed, net of reversals include $ 30 million, $ 11 million, and $ 3 million of costs reversed from the Fiscal 2019 Plan, Fiscal 2018 Plan and Other Prior Year Plans, respectively.

(1) Pension benefit augmentations recorded as a pension liability and asset impairment.

(2) Foreign currency translation adjustments.

(3) Fiscal 2020 workforce reductions includes a $ 14 million adjustment to restructuring expense related to the prior year.

Note 23 - Commitments and Contingencies

The Company signed 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 five years .

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 Company does not meet the specified minimums, the Company would have an obligation to pay the service provider all, or a portion, of the shortfall.

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(in millions)

Thereafter 15

Total $ 1,723

15 unchanged sentences

Contingencies

Strauch Fair Labor Standards Act Collective Action:

On July 1, 2014, several plaintiffs filed an action in the U.S.

District Court for the District of Connecticut on behalf of themselves and a putative nationwide collective of CSC system administrators, alleging CSC’s failure to properly classify these employees as non-exempt under the federal Fair Labor Standards Act ("FLSA").

Plaintiffs alleged similar state-law Rule 23 class claims pursuant to Connecticut and California statutes.

Plaintiffs claimed double overtime damages, liquidated damages, and other amounts and remedies.

In 2015 the Court entered an order granting conditional certification under the FLSA of the collective of over 4,000 system administrators.

Approximately 1,000 system administrators filed consents with the Court to participate in the FLSA collective.

The class/collective action is currently made up of approximately 800 individuals who held the title of associate professional or professional system administrator .

In June 2017, the Court granted Rule 23 certification of a Connecticut state-law class and a California state-law class consisting of professional system administrators and associate professional system administrators.

Senior professional system administrators were found not to qualify for Rule 23 certification under the state-law claims.

CSC sought permission to appeal the Rule 23 decision to the Second Circuit Court of Appeals, which was denied.

In December 2017, a jury trial was held and a verdict was returned in favor of plaintiffs.

On August 6, 2019, the Court issued an order awarding plaintiffs $ 18.75 million in damages.

In September 2019, Plaintiffs filed a motion seeking $ 14.1 million in attorneys’ fees and costs.

In July 2020, the Court issued an order awarding Plaintiffs $ 8.1 million in attorneys' fees and costs.

The Company disagrees with the jury verdict, the damages award, and the fee award, and is appealing the judgment of the Court.

In October 2020, the Company reached an agreement in principle with the plaintiffs to resolve the matter.

In February 2021, the Company executed a settlement agreement with the plaintiffs, which is now pending court approval.

Computer Sciences Corporation v.

Eric Pulier, et al.:

On May 12, 2015, CSC filed a civil complaint in the Court of Chancery of the State of Delaware against Eric Pulier, the former CEO of Service Mesh Inc.

("SMI"), which CSC had acquired in November 2013.

The complaint asserted claims for fraud, breach of contract and breach of fiduciary duty, based on allegations that Mr.

Pulier had engaged in fraudulent transactions with two employees of the Commonwealth Bank of Australia Ltd.

The Court dismissed CSC’s claim for breach of the implied covenant of good faith, but allowed substantially all of the remaining claims to proceed.

Pulier asserted counter-claims for breach of contract, fraud, negligent representation, rescission, and violations of the California Blue Sky securities law, all of which the Court dismissed in whole or in part, except for claims for breach of Mr.

Pulier’s retention agreement.

In July 2017, the Court granted a motion by the United States for a 90-day stay of discovery pending the completion of a criminal investigation by the U.S.

Attorney's Office for the Central District of California.

In September 2017, a federal grand jury returned an indictment against Mr.

Pulier, charging him with conspiracy, securities and wire fraud, obstruction of justice, and other violations of federal law (United States v.

Eric Pulier, CR 17-599-AB).

The Government sought an extension of the stay which the Delaware Chancery Court granted.

In December 2018, the Government filed an application to dismiss the indictment against Mr.

Pulier, which was granted, and the indictment was dismissed with prejudice.

In March 2019, the Delaware Chancery Court lifted the stay and denied CSC's motion for a temporary restraining order and preliminary injunction with respect to certain of Mr.

Pulier's assets.

In August 2019, the Company entered into an agreement with Mr.

Pulier, resolving all claims and counterclaims in the Delaware litigation through the division of amounts previously held in escrow for post-closing disputes.

In September 2017, the Securities and Exchange Commission (“SEC”) filed a complaint against Mr.

Pulier in the U.S.

District Court for the Central District of California alleging various claims, including for fraud and falsifying books and records ( Securities and Exchange Commission v.

Eric Pulier, Case No.

2:17-cv-07124).

In May 2021, the SEC and Mr.

Pulier filed a Consent of Defendant Eric Pulier and a Proposed Final Judgment as to Defendant Eric Pulier, which the Court subsequently accepted and entered.

With the SEC’s claims against Mr.

Pulier resolved, the Company’s obligation to advance amounts for Mr.

Pulier’s legal fees and costs has concluded.

Kemper Corporate Services, Inc.

Computer Sciences Corporation:

In October 2015, Kemper Corporate Services, Inc.

(“Kemper”) filed a demand for arbitration against CSC with the American Arbitration Association (“AAA”), alleging that CSC breached the terms of a 2009 Master Software License and Services Agreement and related Work Orders (the “Agreement”) by failing to complete a software translation and implementation plan by certain contractual deadlines.

Kemper claimed breach of contract, seeking approximately $ 100 million in damages.

CSC answered the demand for arbitration denying Kemper’s claims and asserting a counterclaim for unpaid invoices for services rendered by CSC.

A single arbitrator conducted an evidentiary hearing on the merits of the claims and counterclaims in April 2017.

In October 2017, the arbitrator issued a partial final award, finding for Kemper on its breach of contract theory, awarding Kemper $ 84.2 million in compensatory damages plus prejudgment interest, denying Kemper’s claim for rescission as moot, and denying CSC’s counterclaim.

Kemper moved to confirm the award in federal district court in Texas.

CSC moved to vacate the award, and in August 2018, the Magistrate Judge issued its Report and Recommendation denying CSC's vacatur motion.

In September 2018, the District Court summarily accepted the Report and Recommendation without further briefing and entered a Final Judgment in the case.

The Company promptly filed a notice of appeal to the Fifth Circuit Court of Appeals.

Following the submission of briefs, oral argument was held on September 5, 2019.

On January 10, 2020, the Court of Appeals issued a decision denying the Company’s appeal.

On January 24, 2020, the Company filed a Petition for Rehearing, seeking review by the entire en banc Court of Appeals.

On February 14, 2020, the Court of Appeals denied the Company’s Petition.

The Company has been pursuing coverage for the full scope of the award, interest, and legal fees and expenses, under the Company's applicable insurance policies.

Certain carriers have accepted coverage while others have denied coverage.

On February 21, 2020, the Company paid the balance of the judgment, which net of insurance recovery, totalled $ 60 million.

The Company has since recovered an additional $ 12.5 million from its insurance carriers.

The Company continues to pursue recovery with its insurance carriers.

Insurance Recovery re Kemper Litigation:

The Company previously disclosed litigation with Kemper Corporate Services, Inc., in which an arbitration award was issued against the Company in October 2017.

Following a series of appeals, the Company paid the balance of the judgment in February 2020, which net of insurance recovery, totaled $ 60 million.

The Company has since recovered an additional $ 37 million from its insurance carriers and continues to pursue additional recovery.

All material issues pertaining to this matter have concluded.

Forsyth, et al.

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In April 2021, the court granted Plaintiffs’ motion for preliminary certification and lifted the previously imposed stay of the action.

In November 2021, notice was sent to putative members of the ADEA collectives regarding participation in the case.

In February 2022, the notice period closed.

Former business units of the Company now owned by Perspecta may be proportionately liable for any recovery by plaintiffs in this matter.

6 unchanged sentences

Oracle claims that Terix infringed its copyrights while acting as HPE’s subcontractor for certain customers of HPE’s multivendor support business.

Oracle claims that HPE is liable for vicarious and contributory infringement arising from the alleged actions of Terix and for direct infringement arising from its own alleged conduct.

Oracle claims that HPE is liable for vicarious and contributory infringement arising from the alleged actions of Terix and for direct infringement arising from HPE's own alleged conduct.

On January 29, 2019, the court granted HPE’s motion for summary judgment and denied Oracle’s motion for summary judgment, resolving the matter in HPE’s favor.

4 unchanged sentences

In January 2021, the District Court entered a scheduling order that provided for summary judgment briefing to be completed by May 2021 and a trial date in November 2021.

In June 2021, the Court issued a decision denying HPE’s motion for summary judgment and granting Oracle’s motion for summary judgment on various HPE defenses.

In November 2021, the court issued an order continuing the trial to May 2022.

The trial is scheduled to begin on May 23, 2022.

In re DXC Technology Company Securities Litigation:

On December 27, 2018, a purported class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against the Company and two of its current officers.

The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and is premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s business, operations, prospects and performance during the proposed class period of February 8, 2018 to November 6, 2018.

The Company moved to dismiss the claims in their entirety, and on June 2, 2020, the court granted the Company’s motion, dismissing all claims and entering judgment in the Company's favor.

On July 1, 2020, the plaintiffs filed a notice of appeal to the U.S.

Court of Appeals for the Fourth Circuit.

The appeal has been fully briefed and a decision on the appeal remains pending.

In March 2019, three related shareholder derivative lawsuits were filed in the Eighth Judicial District Court of the State of Nevada, in and for Clark County, against one of the Company’s current officers and a former officer as well as members of the Company’s board of directors, asserting claims for breach of fiduciary duty, waste of corporate assets , and unjust enrichment.

By agreement of the parties and order of the court, those lawsuits were consolidated on July 18, 2019, and are presently stayed pending the outcome of the appeal of the Eastern District of Virginia matter.

Previously disclosed matters have been dismissed, with one case remaining, in the Superior Court of the State of California.

On August 20, 2019, a purported class action lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, against the Company, directors of the Company, and a former officer of the Company, among other defendants.

On September 16, 2019, a substantially similar purported class action lawsuit was filed in the United States District Court for the Northern District of California against the Company, directors of the Company, and a former officer of the Company, among other defendants.

On November 8, 2019, a third purported class action lawsuit was filed in the Superior Court of the State of California, County of San Mateo, against the Company, directors of the Company, and a former officer of the Company, among other defendants.

The third lawsuit was voluntarily dismissed by the plaintiff and re-filed in the Superior Court of the State of California, County of Santa Clara on November 26, 2019, and thereafter was consolidated with the earlier-filed action in the same court on December 10, 2019.

The California lawsuits assert claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and are premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s prospects and expected performance.

Plaintiff in the federal action filed an amended complaint on January 8, 2020.

The putative class of plaintiffs in these cases includes all persons who acquired shares of the Company’s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC.

On July 15, 2020, the Superior Court of California, County of Santa Clara, denied the Company’s motion to stay the state court case but extended the Company’s deadline to seek dismissal of the state action, until after a decision on the Company’s motion to dismiss the federal action.

The Company has since moved to dismiss the state action, and the court has continued the motion until after the outcome of the federal action.

On July 27, 2020, the United States District Court for the Northern District of California granted the Company’s motion to dismiss the federal action.

The Court’s order permitted plaintiffs to amend and refile their complaint within 60 days, and on September 25, 2020, the plaintiffs filed an amended complaint.

On November 12, 2020, the Company filed a motion to dismiss the amended complaint.

On April 30, 2021, the Court granted the Company’s motion to dismiss the amended complaint, while granting Plaintiffs leave to amend and refile their complaint within 30 days.

On October 2, 2019, a shareholder derivative lawsuit was filed in the Eighth Judicial District Court of the State of Nevada, in and for Clark County, asserting various claims, including for breach of fiduciary duty and unjust enrichment, and challenging certain sales of securities by officers under Rule 10b5-1 plans.

The shareholder filed this action after making a demand on the board of directors, alleging breaches of fiduciary duty, corporate waste and disclosure violations, and demanding that the board take certain actions to evaluate the allegations and respond.

The Company’s board of directors analyzed the demand, and has determined to defer its decision on the demand pending developments in the securities and derivative lawsuits described above.

The Company moved to dismiss the complaint on the basis that the Board’s decision to defer action was not a refusal of the demand and was within its discretion.

The Company’s motion to dismiss was denied on January 22, 2020.

By agreement of the parties and order of the court, the case is presently stayed, pending the outcome of the appeal in the Eastern District of Virginia matter.

On March 31, 2020, a group of individual shareholders filed a complaint in the United States District Court for the Northern District of California, asserting non-class claims based on allegations substantially similar to those at issue in the earlier-filed putative class action complaints pending in the Northern District of California and Eastern District of Virginia.

The plaintiffs assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and under Sections 11 and 15 of the Securities Act of 1933, as amended.

On April 29, 2020, the court granted an administrative motion to relate the case with the earlier-filed putative class action pending in the Northern District of California.

And on May 13, 2020, the parties filed a stipulation requesting to stay the case subject to resolution of the motions to dismiss in the Northern District of California and Eastern District of Virginia class actions.

The Company believes that the lawsuits described above are without merit, and it intends to vigorously defend them.

Voluntary Disclosure of Certain Possible Sanctions Law Violations:

On February 2, 2017, CSC submitted an initial notification of voluntary disclosure to the U.S.

Department of Treasury, Office of Foreign Assets Control ("OFAC") regarding certain possible violations of U.S.

sanctions laws pertaining to insurance premium data and claims data processed by two partially-owned joint ventures of Xchanging, which CSC acquired during the first quarter of fiscal 2017.

A copy of the disclosure was also provided to Her Majesty’s Treasury Office of Financial Sanctions Implementation in the United Kingdom.

The Company has substantially completed its internal investigation.

The Company provided supplemental information to OFAC on January 31, 2020 and continues to work with OFAC on these issues.

Perspecta Arbitration:

In October 2019, Perspecta Inc.

("Perspecta") submitted a demand for arbitration claiming that in June 2018 DXC breached certain obligations under the Separation and Distribution Agreement ("SDA") between Perspecta and DXC and seeking at least $ 120 million in alleged damages.

During the course of discovery, Perspecta increased the amount of its alleged damages, first to $ 500 million and then to over $ 800 million.

Perspecta then increased its damages calculations to include interest, bringing its total claim to $ 990 million.

In its arbitration demand, Perspecta also challenged $ 39 million in invoices issued by DXC in June 2019 under its IT Services Agreement with Perspecta ("ITSA").

Perspecta subsequently challenged an additional $ 31 million sought by DXC in August 2020 under the ITSA.

In October 2020, a hearing was held before an arbitration panel, during which the Company and Perspecta each presented evidence on the claims at issue.

In December 2020, the parties presented closing arguments and the case was submitted.

In February 2021, the arbitration panel issued an interim award, finding in DXC’s favor on all matters at issue in the arbitration.

Perspecta’s claims under the SDA were denied in full.

Perspecta’s challenges under the ITSA were also denied in full, and DXC was awarded the full amount of its invoices, totaling $ 69 million.

The panel further held that DXC could seek reimbursement of its costs and fees in litigating the matter, as well as pre- and post-judgment interest on the $ 69 million DXC was awarded.

The parties submitted briefing on these issues in March 2021.

In May 2021, the parties reached an agreement to settle DXC’s pending request for fees and interest.

The agreement also provided for payment to DXC of the $ 69 million awarded to it in the arbitration.

This matter is now closed.

The action asserts claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and is premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s prospects and expected performance.

The putative class of plaintiffs includes all persons who acquired shares of the Company’s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC.

The State of California action had been stayed pending the outcome of the substantially similar federal action filed in the United States District Court for the Northern District of California.

The federal action was dismissed with prejudice in December 2021.

Thereafter, the state court lifted the stay and entered an order permitting additional briefing by the parties.

In March 2022, Plaintiffs filed an amended complaint.

In April 2022, the Company moved to dismiss the amended complaint.

A hearing on the Company’s motion to dismiss is scheduled for August 2022.

The Company believes that the final remaining lawsuit described above is also without merit, and it intends to vigorously defend it.

Tax Examinations:

1 unchanged sentence

on its federal income tax returns for certain fiscal years and is in disagreement with the IRS on certain of our tax positions.

For more detail, see Note 13 - "Income Taxes—Tax Examinations."

For more detail, see Note 13 - "Income Taxes" for further information.

In addition to the matters noted above, the Company is currently subject in the normal course of business to various claims and contingencies arising from, among other things, disputes with customers, vendors, employees, contract counterparties and other parties, as well as securities matters, environmental matters, matters concerning the licensing and use of intellectual property, and inquiries and investigations by regulatory authorities and government agencies.

4 unchanged sentences

Unless otherwise noted, the Company is unable to determine at this time a reasonable estimate of a possible loss or range of losses associated with the foregoing disclosed contingent matters.

Note 24 - Subsequent Events

On April 1, 2021, DXC completed the sale of its HPS Business to Dedalus Holding S.p.A.

("Dedalus") for € 462 million (approximately $ 543 million), subject to certain adjustments.

The sale of HPS to Dedalus is consistent with DXC’s strategy and focus on the Enterprise Technology Stack.

The sale proceeds were used to repay the remainder of two series of 4.45 % Senior Notes due fiscal 2023 for $ 154 million and $ 165 million.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data