What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-02 compared with 2023-08-03 · 268 added, 186 removed, 705 unchanged (39% of the section changed)

1 unchanged sentence

Index to Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2023 and June 30, 2022 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended June 30, 2023 and June 30, 2022 (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 202 3 and March 31, 202 3 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 202 3 and June 30, 202 2 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 202 3 and June 30, 202 2 (unaudited)

Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 2023 and September 30, 2022 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended September 30, 2023 and September 30, 2022 (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 2023 and March 31, 2023 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2023 and September 30, 2022 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended September 30, 2023 and September 30, 2022 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

19 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended

(in millions, except per-share amounts) June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

(in millions, except per-share amounts) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Revenues $ 3,436 $ 3,566 $ 6,882 $ 7,273

5 unchanged sentences

Interest income ( 53 ) ( 28 ) ( 102 ) ( 48 )

Loss (gain) on disposition of businesses 5 ( 29 )

Loss on disposition of businesses 2 32 7 3

Other income, net ( 76 ) ( 68 ) ( 140 ) ( 172 )

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

Three Months Ended

(in millions)

June 30, 2023 June 30, 2022

Net income $ 42 $ 103

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments, net of tax expense (benefit) of $ 0 and $ 5

Cash flow hedges adjustments, net of tax expense (benefit) of $ 1 and $( 1 )

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

$ 99 $ 28 $ 141 $ 131

Other comprehensive loss, net of taxes:

Foreign currency translation adjustments, net of tax (1)

( 40 ) ( 165 ) ( 6 ) ( 341 )

Cash flow hedges adjustments, net of tax (2)

Pension and other post-retirement benefit plans, net of tax:

Amortization of prior service cost, net of tax benefit of $ 0 and $ 4

Amortization of prior service cost, net of tax (3)

— ( 2 ) ( 2 ) ( 4 )

Pension and other post-retirement benefit plans, net of tax — ( 2 ) ( 2 ) ( 4 )

Other comprehensive income (loss), net of taxes 35 ( 178 )

Other comprehensive loss, net of taxes

( 36 ) ( 165 ) ( 1 ) ( 343 )

Comprehensive income (loss)

comprehensive income attributable to non-controlling interest 6 1

63 ( 137 ) 140 ( 212 )

comprehensive (loss) income attributable to non-controlling interest

( 1 ) ( 3 ) 5 ( 2 )

Comprehensive income (loss) attributable to DXC common stockholders

$ 64 $ ( 134 ) $ 135 $ ( 210 )

(1) Tax expense related to foreign currency translation adjustments was $ 2 and $ 2 for the three and six months ended September 30, 2023, respectively, and $ 4 and $ 9 for the three and six months ended September 30, 2022, respectively.

(2) Tax expense (benefit) related to cash flow hedges adjustments was $ 1 and $ 2 for the three and six months ended September 30, 2023, respectively, and $ 0 and $( 1 ) for the three and six months ended September 30, 2022, respectively.

(3) Tax benefit related to amortization of prior service costs was $ 1 and $ 1 for the three and six months ended September 30, 2023, respectively, and $ 0 and $ 4 for the three and six months ended September 30, 2022, respectively.

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

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions, except per-share and share amounts) June 30, 2023 March 31, 2023

(in millions, except per-share and share amounts) September 30, 2023 March 31, 2023

Current assets:

33 unchanged sentences

DXC stockholders’ equity:

Preferred stock, par value $ 0.01 per share;

authorized 1,000,000 shares;

none issued as of June 30, 2023 and March 31, 2023

Common stock, par value $ 0.01 per share;

authorized 750,000,000 shares;

issued 210,584,214 as of June 30, 2023 and 218,058,482 as of March 31, 2023

Preferred stock, par value $ 0.01 per share, 1,000,000 shares authorized, none issued as of September 30, 2023 and March 31, 2023

Common stock, par value $ 0.01 per share, 750,000,000 shares authorized, 200,789,520 issued as of September 30, 2023 and 218,058,482 issued as of March 31, 2023

Additional paid-in capital 8,280 9,121

1 unchanged sentence

Accumulated other comprehensive loss ( 774 ) ( 774 )

Treasury stock, at cost, 4,507,506 and 3,333,592 shares as of June 30, 2023 and March 31, 2023

Treasury stock, at cost, 4,541,145 and 3,333,592 shares as of September 30, 2023 and March 31, 2023

( 218 ) ( 187 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Three Months Ended

(in millions)

June 30, 2023 June 30, 2022

Six Months Ended

(in millions) September 30, 2023 September 30, 2022

Cash flows from operating activities:

19 unchanged sentences

Software purchased and developed ( 141 ) ( 110 )

Business dispositions, net of cash sold ( 7 ) ( 36 )

Business dispositions — 51

Proceeds from sale of assets 65 109

Short-term investing ( 3 ) —

Other investing activities, net 10 17

3 unchanged sentences

Repayments of commercial paper ( 841 ) ( 657 )

Principal payments on long-term debt — ( 1 )

Payments on finance leases and borrowings for asset financing ( 231 ) ( 274 )

13 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital

Accumulated Deficit Accumulated

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss

Treasury Stock (1)

Controlling Interest

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at March 31, 2023 218,058 $ 2 $ 9,121 $ ( 4,665 ) $ ( 774 ) $ ( 187 ) $ 3,497 $ 323 $ 3,820

Balance at June 30, 2023

210,584 $ 2 $ 8,677 $ ( 4,445 ) $ ( 739 ) $ ( 217 ) $ 3,278 $ 325 $ 3,603

Net Income 99 99 99

Other comprehensive income 35 35 35

Other comprehensive loss

( 35 ) ( 35 ) ( 1 ) ( 36 )

Share-based compensation expense 23 23 23

4 unchanged sentences

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 4 ) ( 5 )

Balance at September 30, 2023

200,790 $ 2 $ 8,280 $ ( 4,143 ) $ ( 774 ) $ ( 218 ) $ 3,147 $ 320 $ 3,467

Three Months Ended September 30, 2022

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury Stock Total

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at June 30, 2022

Three Months Ended June 30, 2022

232,995 $ 2 $ 9,708 $ ( 4,239 ) $ ( 563 ) $ ( 183 ) $ 4,725 $ 324 $ 5,049

Other comprehensive loss ( 161 ) ( 161 ) ( 4 ) ( 165 )

Share-based compensation expense 25 25 25

Acquisition of treasury stock ( 2 ) ( 2 ) ( 2 )

Stock option exercises and other common stock transactions 283 — —

Non-controlling interest distributions and other 1 1 1

Balance at September 30, 2022

233,278 $ 2 $ 9,733 $ ( 4,211 ) $ ( 724 ) $ ( 185 ) $ 4,615 $ 321 $ 4,936

Six Months Ended September 30, 2023

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital

Accumulated Deficit Accumulated

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss

Treasury Stock (1)

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at March 31, 2023

218,058 $ 2 $ 9,121 $ ( 4,665 ) $ ( 774 ) $ ( 187 ) $ 3,497 $ 323 $ 3,820

Net income 135 135 6 141

Other comprehensive loss

— ( 1 ) ( 1 )

Share-based compensation expense 45 45 45

Acquisition of treasury stock ( 31 ) ( 31 ) ( 31 )

Share repurchase program (2)

( 20,934 ) ( 886 ) 388 ( 498 ) ( 498 )

Stock option exercises and other common stock transactions 3,666 — —

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 8 ) ( 9 )

Balance at September 30, 2023

200,790 $ 2 $ 8,280 $ ( 4,143 ) $ ( 774 ) $ ( 218 ) $ 3,147 $ 320 $ 3,467

Six Months Ended September 30, 2022

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss Treasury Stock Total

Controlling Interest

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at March 31, 2022

240,508 $ 3 $ 10,057 $ ( 4,450 ) $ ( 385 ) $ ( 173 ) $ 5,052 $ 323 $ 5,375

Net income 129 129 2 131

4 unchanged sentences

Stock option exercises and other common stock transactions 1,621 1 1 1

Balance at June 30, 2022 232,995 $ 2 $ 9,708 $ ( 4,239 ) $ ( 563 ) $ ( 183 ) $ 4,725 $ 324 $ 5,049

(1) 4,507,506 treasury shares as of June 30, 2023.

Non-controlling interest distributions and other 1 1 1

Balance at September 30, 2022

233,278 $ 2 $ 9,733 $ ( 4,211 ) $ ( 724 ) $ ( 185 ) $ 4,615 $ 321 $ 4,936

(1) 4,541,145 treasury shares as of September 30, 2023.

(2) On August 16, 2022, the U.S.

Government enacted the Inflation Reduction Act (the “IRA”) into law.

The IRA imposes a 1% excise tax on share repurchases completed after December 31, 2022.

We reflect the excise tax within equity as part of the repurchase of the common stock.

The IRA imposes a 1% excise tax on

share repurchases completed after December 31, 2022.

We reflect the excise tax within equity as part of the repurchase of the common

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

5 unchanged sentences

Basis of Presentation

In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the “financial statements,” (ii) the Condensed Consolidated Statements of Operations as the “statements of operations,” (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the “statements of comprehensive income,” (iv) the Condensed Consolidated Balance Sheets as the “balance sheets,” and (v) the Condensed Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q.

In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the “financial statements,” (ii) the Condensed Consolidated Statements of Operations as the “statements of operations,” (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the “statements of comprehensive income (loss),” (iv) the Condensed Consolidated Balance Sheets as the “balance sheets,” and (v) the Condensed Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q.

The accompanying financial statements include the accounts of DXC, its consolidated subsidiaries, and those business entities in which DXC maintains a controlling interest.

2 unchanged sentences

Non-controlling interests are presented as a separate component within equity in the balance sheets.

Net earnings attributable to the non-controlling interests are presented separately in the statements of operations and comprehensive income attributable to non-controlling interests are presented separately in the statements of comprehensive income.

Net earnings attributable to the non-controlling interests are presented separately in the statements of operations and comprehensive income (loss) attributable to non-controlling interests are presented separately in the statements of comprehensive income (loss).

All intercompany transactions and balances have been eliminated.

4 unchanged sentences

These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (“fiscal 2023”).

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Use of Estimates

6 unchanged sentences

Recent Accounting Pronouncements

Recently issued Accounting Standards Updates (ASUs) effective after June 30, 2023 are not expected to have a material effect on DXC’s condensed consolidated financial statements.

Recently issued Accounting Standards Updates (“ASUs”) effective after September 30, 2023 are not expected to have a material effect on DXC’s condensed consolidated financial statements.

DXC TECHNOLOGY COMPANY

1 unchanged sentence

Note 2 – Divestitures

During the first quarters of fiscal 2024 and fiscal 2023, the Company sold insignificant businesses that resulted in a loss of $ 5 million and a gain of $ 38 million, respectively.

During the first quarter of fiscal 2023, the Company also classified certain insignificant businesses as held for sale and recognized a loss of $ 9 million.

During the first six months of fiscal 2024 and fiscal 2023, the Company sold insignificant businesses that resulted in a loss of $ 7 million and $ 3 million, respectively.

Note 3 – Earnings per Share

2 unchanged sentences

The following table reflects the calculation of basic and diluted EPS:

Three Months Ended

(in millions, except per-share amounts)

June 30, 2023 June 30, 2022

Net income attributable to DXC common shareholders:

Three Months Ended Six Months Ended

(in millions, except per-share amounts) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Net income attributable to DXC common stockholders:

$ 99 $ 27 $ 135 $ 129

Common share information:

7 unchanged sentences

The number of awards excluded were as follows:

Three Months Ended

June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Stock Options 960,455 475,559 924,990 478,128

6 unchanged sentences

The following table presents the change in balance for the allowance for doubtful accounts:

(in millions) June 30, 2023 March 31, 2023

(in millions) September 30, 2023 March 31, 2023

Beginning balance $ 47 $ 55

3 unchanged sentences

Receivables Facility

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of June 30, 2023, the “Receivables Facility”) with certain unaffiliated financial institutions (the “Purchasers”) for the sale of commercial accounts receivable in the United States up to a maximum amount of $ 400 million.

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of September 30, 2023, the “Receivables Facility”) with certain unaffiliated financial institutions (the “Purchasers”) for the sale of commercial accounts receivable in the United States up to a maximum amount of $ 400 million.

The Receivables Facility was amended on July 28, 2023 extending the termination date to July 26, 2024.

As of June 30, 2023, the total availability under the Receivables Facility and the amount sold to the Purchasers was $ 380 million, which was derecognized from the Company’s balance sheet.

As of June 30, 2023, the Company recorded a liability of $ 20 million within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability.

As of September 30, 2023, the total availability under the Receivables Facility was $ 384 million and the amount sold to the Purchasers was $ 378 million, which was derecognized from the Company’s balance sheet.

As of September 30, 2023, the Company recorded an asset of $ 6 million within accounts receivable because the amount of cash proceeds received by the Company under the Receivables Facility was less than the total availability.

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.

1 unchanged sentence

The Company has operating and finance leases for data centers, corporate offices, and certain equipment.

Its leases have remaining lease terms of one to nine years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one to three years .

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

Operating Leases

The components of operating lease expense were as follows:

(in millions) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Operating lease cost $ 91 $ 108 $ 181 $ 214

6 unchanged sentences

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.

(in millions) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

Six Months Ended

(in millions) September 30, 2023 September 30, 2022

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

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

(1) Net of $ 230 million and $ 338 million in lease modifications and terminations for the three months ended June 30, 2023 and June 30, 2022, respectively.

(1) Net of $ 557 million and $ 521 million in lease modifications and terminations during the first six months of fiscal 2024 and 2023, respectively.

See Note 17 – “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 June 30, 2023 March 31, 2023

(in millions) Balance Sheet Line Item September 30, 2023 March 31, 2023

ROU operating lease assets Operating right-of-use assets, net $ 809 $ 909

2 unchanged sentences

Total operating lease liabilities $ 866 $ 965

The weighted-average operating lease term was 3.9 years and 3.9 years as of June 30, 2023 and March 31, 2023, respectively.

The weighted-average operating lease discount rate was 4.1 % and 3.9 % as of June 30, 2023 and March 31, 2023, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of June 30, 2023:

The weighted-average operating lease term was 4.0 years and 3.9 years as of September 30, 2023 and March 31, 2023, respectively.

The weighted-average operating lease discount rate was 4.4 % and 3.9 % as of September 30, 2023 and March 31, 2023, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of September 30, 2023:

(in millions)

9 unchanged sentences

The components of finance lease expense were as follows:

(in millions) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Amortization of right-of-use assets $ 37 $ 55 $ 79 $ 116

Interest on lease liabilities 3 4 7 9

Total finance lease cost $ 46 $ 66

Total finance lease expense $ 40 $ 59 $ 86 $ 125

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

(in millions) Three Months Ended June 30, 2023 Three Months Ended June 30, 2022

(in millions) Six Months Ended September 30, 2023 Six Months Ended September 30, 2022

Interest paid for finance lease liabilities – Operating cash flows

4 unchanged sentences

The following table presents finance lease balances:

(in millions) Balance Sheet Line Item June 30, 2023 March 31, 2023

(in millions) Balance Sheet Line Item September 30, 2023 March 31, 2023

ROU finance lease assets Property and Equipment, net $ 327 $ 424

3 unchanged sentences

(1) See Note 10 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.8 years and 2.9 years as of June 30, 2023 and March 31, 2023, respectively.

The weighted-average finance lease discount rate was 3.5 % and 3.4 % as of June 30, 2023 and March 31, 2023, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of June 30, 2023:

The weighted-average finance lease term was 2.9 years as of September 30, 2023 and March 31, 2023, respectively.

The weighted-average finance lease discount rate was 3.8 % and 3.4 % as of September 30, 2023 and March 31, 2023, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following maturity analysis presents expected undiscounted cash payments for finance leases as of September 30, 2023:

(in millions)

5 unchanged sentences

Total finance lease liabilities

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 6 – Fair Value

5 unchanged sentences

Fair Value Hierarchy

(in millions) As of June 30, 2023

(in millions) September 30, 2023

Fair Value Level 1 Level 2 Level 3

3 unchanged sentences

Total assets $ 214 $ 168 $ 44 $ 2

As of March 31, 2023

March 31, 2023

Fair Value Level 1 Level 2 Level 3

7 unchanged sentences

(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 $ 52 million as of both June 30, 2023 and March 31, 2023.

(2) Other securities include available-for-sale equity security investments with Level 2 inputs that have a cost basis of $ 51 million and $ 52 million as of September 30, 2023 and March 31, 2023, respectively.

For the periods presented, gains and losses are insignificant and are included in other income, net in the Company’s statements of operations.

(3) As of June 30, 2023, the Company completed the payment for its contingent consideration obligation.

(3) During the first six months of fiscal 2024, the Company completed the payment for its contingent consideration obligation.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 7 – Derivative Instruments

3 unchanged sentences

The Company does not use derivative instruments for trading or any speculative purposes.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Derivatives Designated for Hedge Accounting

1 unchanged sentence

The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Euro and Indian Rupee-denominated obligations and forecasted transactions.

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of June 30, 2023 and March 31, 2023 were $ 893 million and $ 842 million, respectively.

As of June 30, 2023, the related forecasted transactions extend through June 2025.

During the three months ended June 30, 2023 and June 30, 2022, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of September 30, 2023 and March 31, 2023 were $ 889 million and $ 842 million, respectively.

As of September 30, 2023, the related forecasted transactions extend through September 2025.

During the three and six months ended September 30, 2023 and September 30, 2022, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

See Note 15 - “Stockholders’ Equity” for changes in accumulated other comprehensive loss, net of taxes, related to the Company’s derivatives designated for hedge accounting.

As of June 30, 2023, $ 7 million of loss related to cash flow hedges reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

As of September 30, 2023, $ 1 million of the existing amount of gain related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

Derivatives Not Designated for Hedge Accounting

3 unchanged sentences

The Company manages the exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and forecasted transactions.

The net notional amounts of the foreign currency forward contracts outstanding as of June 30, 2023 and March 31, 2023 were $ 2.4 billion and $ 2.5 billion, respectively.

The following table presents the pretax foreign currency (gain) loss to Other income, net:

For the Three Months Ended

(in millions) June 30, 2023 June 30, 2022

The net notional amounts of the foreign currency forward contracts outstanding as of September 30, 2023 and March 31, 2023 were $ 2.4 billion and $ 2.5 billion, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following table presents the foreign currency (gain) loss to Other income, net:

For the Three Months Ended For the Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Foreign currency remeasurement (1)

$ 25 $ 40 $ 21 $ 76

Undesignated foreign currency forward contracts (2)

( 26 ) ( 41 ) ( 30 ) ( 79 )

Total - Foreign currency gain $ ( 1 ) $ ( 1 ) $ ( 9 ) $ ( 3 )

1 unchanged sentence

(2) Movements from hedges used to manage the Company’s foreign currency remeasurement exposure, and the associated costs of the hedging program.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value of Derivative Instruments

2 unchanged sentences

The following tables present the fair values of derivative instruments included in the balance sheets:

(in millions) Balance Sheet Line Item June 30, 2023 March 31, 2023

(in millions) Balance Sheet Line Item September 30, 2023 March 31, 2023

Derivatives designated for hedge accounting:

9 unchanged sentences

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 June 30, 2023, there were six counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 7 million.

With respect to its foreign currency derivatives, as of September 30, 2023, there were six counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 21 million.

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

1 unchanged sentence

The potential effect of such netting arrangements on the Company’s balance sheets is not material for the periods presented.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Non-Derivative Financial Instruments Designated for Hedge Accounting

7 unchanged sentences

Gains or losses on individual net investments in non-U.S.

operations are reclassified to earnings from accumulated other comprehensive loss when such net investments are sold or substantially liquidated.

operations are reclassified to earnings from accumulated other comprehensive income (loss) when such net investments are sold or substantially liquidated.

As of September 30, 2023 and March 31, 2023, DXC had $ 265 million and $ 272 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the three and six months ended September 30, 2023, the pre-tax gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive loss was $ 8 million and $ 7 million, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 2023 and March 31, 2023, DXC had $ 273 million and $ 272 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the three months ended June 30, 2023, the pre-tax impact of loss on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $ 1 million.

Note 8 – Intangible Assets

Intangible assets consisted of the following:

As of June 30, 2023 As of March 31, 2023

As of September 30, 2023 As of March 31, 2023

(in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value

1 unchanged sentence

Customer related intangible assets

3,887 2,409 1,478 3,927 2,260 1,667

Other intangible assets

307 137 170 303 120 183

Total intangible assets $ 8,187 $ 5,751 $ 2,436 $ 8,239 $ 5,670 $ 2,569

The components of amortization expense were as follows:

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Intangible assets amortization $ 183 $ 199

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Intangible asset amortization $ 195 $ 198 $ 378 $ 397

Transition and transformation contract cost amortization (1)

54 53 102 105

Total amortization expense $ 249 $ 251 $ 480 $ 502

(1) Transaction and transformation contract costs are included within other assets on the balance sheets.

Estimated future amortization related to intangible assets as of June 30, 2023 is as follows:

Estimated future amortization related to intangible assets as of September 30, 2023 is as follows:

Fiscal Year (in millions)

5 unchanged sentences

Note 9 – Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of June 30, 2023.

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of September 30, 2023.

(in millions) GBS GIS Total

Balance as of March 31, 2023, net $ 539 $ — $ 539

Balance as of June 30, 2023, net $ 539 $ — $ 539

Foreign currency translation ( 9 ) — ( 9 )

Balance as of September 30, 2023, net $ 530 $ — $ 530

Goodwill, gross 5,020 5,066 10,086

Accumulated impairment losses ( 4,490 ) ( 5,066 ) ( 9,556 )

Balance as of June 30, 2023, net $ 539 $ — $ 539

Balance as of September 30, 2023, net $ 530 $ — $ 530

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

dollar-denominated goodwill balances.

Goodwill Impairment Analyses

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.

The Company concluded that, as a result of its qualitative assessment performed on July 1, 2023, it remained more likely than not that the fair value of the GBS reporting unit exceeds its carrying amount.

As of September 30, 2023, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment.

The Company determined that there have been no such indicators and therefore, it was unnecessary to perform an interim goodwill impairment test as of September 30, 2023.

DXC TECHNOLOGY COMPANY

2 unchanged sentences

The following is a summary of the Company’s debt:

(in millions) Interest Rates Fiscal Year Maturities June 30, 2023 (1)

March 31, 2023 (1)

(in millions) Interest Rates Fiscal Year Maturities 9/30/2023 (1)

3/31/2023 (1)

Short-term debt and

11 unchanged sentences

$ 700 million Senior notes

1.80 % 2027 696 696

€ 750 million Senior notes

12 unchanged sentences

Long-term debt, net of current maturities $ 3,791 $ 3,900

(1) The carrying amounts of the senior notes as of June 30, 2023 and March 31, 2023, include the remaining principal outstanding of $ 3,532 million and $ 3,523 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $ 21 million and $ 22 million, respectively.

(1) The carrying amounts of the senior notes as of September 30, 2023 and March 31, 2023, include the remaining principal outstanding of $ 3,468 million and $ 3,523 million, respectively, net of total unamortized debt discounts and premiums, and deferred debt issuance costs of $ 19 million and $ 22 million, respectively.

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

During the second quarter of fiscal 2023, the Company entered into a $ 500 million term loan credit agreement (as amended, the “USD Term Loan”) with certain unaffiliated financial institutions.

The USD Term Loan is required to be drawn down by September 1, 2023 or the facility will terminate.

The Company did not draw on the USD Term Loan as of June 30, 2023.

The USD Term Loan was required to be drawn down by September 1, 2023.

The Company did not draw on the USD Term Loan and the facility has been terminated during the second quarter of fiscal 2024.

Fair Value of Debt

The estimated fair value of the Company’s long-term debt, excluding finance lease liabilities, was $ 3.2 billion and $ 3.3 billion as of June 30, 2023 and March 31, 2023, respectively, compared with carrying value of $ 3.8 billion and $ 3.8 billion as of June 30, 2023 and March 31, 2023, respectively.

The estimated fair value of the Company’s long-term debt, excluding finance lease liabilities, was $ 3.1 billion and $ 3.3 billion as of September 30, 2023 and March 31, 2023, respectively, compared with carrying value of $ 3.7 billion and $ 3.8 billion as of September 30, 2023 and March 31, 2023, respectively.

DXC TECHNOLOGY COMPANY

3 unchanged sentences

The following table presents DXC’s revenues disaggregated by geography, based on the location of incorporation of the DXC entity providing the related goods or services:

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

United States $ 1,002 $ 1,093 $ 2,004 $ 2,224

7 unchanged sentences

Remaining Performance Obligations

As of June 30, 2023, approximately $ 19.4 billion of revenue is expected to be recognized from remaining performance obligations.

As of September 30, 2023, approximately $ 18.5 billion of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 24 % of these remaining performance obligations in fiscal 2024, with the remainder of the balance recognized thereafter.

Contract Balances

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

(in millions) Balance Sheet Line Item June 30, 2023 March 31, 2023

Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts $ 2,210 $ 2,269

Contract assets Receivables and contract assets, net of allowance for doubtful accounts $ 363 $ 366

Contract liabilities Deferred revenue and advance contract payments and Non-current deferred revenue $ 1,757 $ 1,842

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

(in millions) September 30, 2023 March 31, 2023

Trade receivables, net $ 2,081 $ 2,269

Contract assets $ 377 $ 366

Contract liabilities $ 1,578 $ 1,842

Change in contract liabilities were as follows:

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Six Months Ended

(in millions) September 30, 2023 September 30, 2022

Balance, beginning of period $ 1,842 $ 1,915

7 unchanged sentences

Note 12 – Restructuring Costs

The composition of restructuring liabilities by financial statement line items is as follows:

(in millions) June 30, 2023 March 31, 2023

The composition of restructuring liabilities by financial statement line item is as follows:

(in millions) September 30, 2023 March 31, 2023

Accrued expenses and other current liabilities $ 60 $ 105

7 unchanged sentences

Cash Paid Other (2)

Restructuring Liability as of June 30, 2023

Restructuring Liability as of September 30, 2023

Fiscal 2024 Plan

Workforce Reductions $ — $ — $ — $ — $ — $ —

Facilities Costs — 34 ( 27 ) ( 1 ) — 6

11 unchanged sentences

(2) Foreign currency translation adjustments.

Included in restructuring costs for the three months ended June 30, 2023 is $ 6 million related to amortization of the right-of-use asset and interest expense for leased facilities that have been vacated but are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases.

Included in restructuring costs for the six months ended September 30, 2023 is $ 14 million related to amortization of the right-of-use asset and interest expense for leased facilities that have been vacated but are being actively marketed for sublease or we are in negotiations with the landlord to potentially terminate or modify those leases.

DXC TECHNOLOGY COMPANY

3 unchanged sentences

The components of net periodic pension income were:

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Service cost $ 15 $ 18 $ 30 $ 37

1 unchanged sentence

Expected return on assets ( 112 ) ( 122 ) ( 226 ) ( 254 )

Amortization of prior service credit ( 2 ) ( 2 )

Amortization of prior service costs ( 1 ) ( 2 ) ( 3 ) ( 4 )

Recognition of actuarial loss — 1 — 1

Net periodic pension income $ ( 21 ) $ ( 42 ) $ ( 43 ) $ ( 90 )

1 unchanged sentence

Note 14 – Income Taxes

The Company’s effective tax rate (“ETR”) was 46.2 % and 15.6 % for the three months ended June 30, 2023, and June 30, 2022, respectively.

For the three months ended June 30, 2023, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and a decrease in uncertain tax positions due to an income tax audit settlement.

For the three months ended June 30, 2022, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income and base erosion payments, and a decrease in uncertain tax positions due to statute of limitation expirations.

The Company’s effective tax rate (“ETR”) was 22.7 % and 48.1 % for the three months ended September 30, 2023 and September 30, 2022, respectively, and 31.6 % and 25.6 % for the six months ended September 30, 2023 and September 30, 2022, respectively.

For the three and six months ended September 30, 2023, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, a decrease in valuation allowances on deferred tax assets, and the foreign tax credit.

For the three months ended September 30, 2022, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the tax impact of business divestitures.

For the six months ended September 30, 2022, the primary drivers of the ETR were the global mix of income, tax impact of business divestitures, U.S.

tax on foreign income, and a decrease in unrecognized tax benefits due to income tax audit settlements and statute of limitation expirations.

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

11 unchanged sentences

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 $ 16 million tax indemnification receivable related to uncertain tax positions, a $ 53 million tax indemnification receivable related to other tax payables, and an $ 89 million tax indemnification payable related to other tax receivables.

Pursuant to the tax matters agreement, the Company recorded a $ 16 million tax indemnification receivable related to uncertain tax positions, a $ 52 million tax indemnification receivable related to other tax payables, and a $ 91 million tax indemnification payable related to other tax receivables.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

4 unchanged sentences

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 recorded an $ 18 million tax indemnification receivable from Perspecta related to other tax payables and a $ 6 million tax indemnification payable to Perspecta related to income tax and other tax receivables.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Pursuant to the tax matters agreement, the Company recorded a $ 17 million tax indemnification receivable from Perspecta related to other tax receivables and a $ 6 million tax indemnification payable to Perspecta related to income tax and other tax payables.

In connection with the sale of its healthcare provider software business (“HPS”), the Company entered into a tax matters agreement with Dedalus.

7 unchanged sentences

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

During the first quarter of fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years.

During the first six months of fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years.

We do not expect the U.S.

7 unchanged sentences

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.

For the three months ended June 30, 2023, the Company’s liability for uncertain tax positions decreased by $ 3 million (excluding interest and penalties and related tax attributes) primarily due to statute of limitation expirations.

For the three months ended September 30, 2023, the Company’s liability for uncertain tax positions increased by $ 2 million (excluding interest and penalties and related tax attributes) primarily due to the benefit of U.S.

research and development income tax credits.

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 $ 14 million.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 15 – Stockholders’ Equity

Share Repurchases

The details of shares repurchased during the three months ended June 30, 2023 and June 30, 2022 are shown below:

The details of shares repurchased during the six months ended September 30, 2023 and September 30, 2022 are shown below:

Fiscal 2024 Fiscal 2023

2 unchanged sentences

(in millions)

Open market purchases 10,975,643 $ 25.53 $ 280 8,850,912 $ 30.09 $ 266

1st Quarter 10,975,643 $ 25.53 $ 280 8,850,912 $ 30.09 $ 266

2nd Quarter 9,958,585 $ 21.50 214 — $ — —

Total 20,934,228 $ 23.61 $ 494 8,850,912 $ 30.09 $ 266

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Accumulated Other Comprehensive Loss

4 unchanged sentences

Amounts reclassified from accumulated other comprehensive loss — 2 ( 2 ) —

Balance at June 30, 2023 $ ( 951 ) $ ( 4 ) $ 216 $ ( 739 )

Balance at September 30, 2023 $ ( 990 ) $ — $ 216 $ ( 774 )

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

Balance at March 31, 2022

$ ( 651 ) $ 10 $ 256 $ ( 385 )

Other comprehensive loss before reclassifications ( 337 ) 11 — ( 326 )

Amounts reclassified from accumulated other comprehensive loss — ( 9 ) ( 4 ) ( 13 )

Balance at June 30, 2022 $ ( 827 ) $ 10 $ 254 $ ( 563 )

Balance at September 30, 2022 $ ( 988 ) $ 12 $ 252 $ ( 724 )

Note 16 – Stock Incentive Plans

5 unchanged sentences

For PSUs with a market-based condition, DXC uses a Monte Carlo simulation model to value the grants.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Employee Equity Plan Director Equity Plan

6 unchanged sentences

Canceled/Forfeited ( 718,992 ) $ 43.13 — $ —

Outstanding as of June 30, 2023 8,154,395 $ 35.85 147,487 $ 35.80

Outstanding as of September 30, 2023 7,916,903 $ 35.29 202,298 $ 27.13

Share-Based Compensation

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Total share-based compensation cost $ 24 $ 27 $ 47 $ 55

Related income tax benefit $ 4 $ 3 $ 7 $ 6

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 17 – Cash Flows

Cash payments for interest on indebtedness and income taxes and other select non-cash activities are as follows:

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Six Months Ended

(in millions) September 30, 2023 September 30, 2022

Cash paid for:

3 unchanged sentences

ROU assets obtained in exchange for lease, net (2)

Prepaid assets acquired under long-term financing $ 4 $ 34

Assets acquired under long-term financing $ 4 $ 37

Capital expenditures in accounts payable and accrued expenses $ 96 $ —

2 unchanged sentences

Shares repurchased but not settled in cash (3)

(1) Income tax refunds were $ 6 million and $ 13 million for the three months ended June 30, 2023 and June 30, 2022, respectively.

(2) Net of $ 230 million and $ 338 million in lease modifications and terminations for the three months ended June 30, 2023 and June 30, 2022, respectively.

(1) Income tax refunds were $ 18 million and $ 30 million for the six months ended September 30, 2023 and September 30, 2022, respectively.

(2) Net of $ 557 million and $ 521 million in lease modifications and terminations during the first six months of fiscal 2024 and 2023, respectively.

(3) On August 16, 2022, the U.S.

42 unchanged sentences

(in millions) GBS GIS Total Reportable Segments All Other Totals

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenues $ 1,709 $ 1,727 $ 3,436 $ — $ 3,436

2 unchanged sentences

$ 49 $ 197 $ 246 $ 26 $ 272

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenues $ 1,713 $ 1,853 $ 3,566 $ — $ 3,566

2 unchanged sentences

$ 40 $ 216 $ 256 $ 23 $ 279

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 89 million and $ 104 million for the

three months ended June 30, 2023 and June 30, 2022, respectively.

(in millions) GBS GIS Total Reportable Segments All Other Totals

Six Months Ended September 30, 2023

Revenues $ 3,412 $ 3,470 $ 6,882 $ — $ 6,882

Segment profit $ 405 $ 192 $ 597 $ ( 122 ) $ 475

Depreciation and amortization (1)

$ 94 $ 381 $ 475 $ 52 $ 527

Six Months Ended September 30, 2022

Revenues $ 3,471 $ 3,802 $ 7,273 $ — $ 7,273

Segment profit $ 428 $ 241 $ 669 $ ( 141 ) $ 528

Depreciation and amortization (1)

$ 81 $ 434 $ 515 $ 49 $ 564

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 89 million and $ 101 million for the three months ended September 30, 2023 and 2022, respectively, and $ 178 million and $ 205 million for the six months ended September 30, 2023 and 2022, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Reconciliation of Reportable Segment Profit to Consolidated Total

3 unchanged sentences

These unallocated costs generally include certain corporate function costs, stock-based compensation expense, pension and other post-retirement benefit (“OPEB”) actuarial and settlement gains and losses, restructuring costs, transaction, separation, and integration-related costs and amortization of acquired intangible assets.

Three Months Ended

(in millions) June 30, 2023 June 30, 2022

Three Months Ended Six Months Ended

(in millions) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022

Total profit for reportable segments $ 314 $ 332 $ 597 $ 669

4 unchanged sentences

Restructuring costs ( 35 ) ( 53 ) ( 55 ) ( 86 )

Transaction, separation and integration-relation costs ( 1 ) ( 2 )

Transaction, separation and integration-related costs

( 3 ) ( 4 ) ( 4 ) ( 6 )

Amortization of acquired intangible assets ( 89 ) ( 101 ) ( 178 ) ( 205 )

Merger related indemnification ( 2 ) — ( 13 ) ( 10 )

(Loss) gain on disposition of businesses ( 5 ) 29

SEC Matter — ( 8 ) — ( 8 )

Gains (losses) on dispositions

33 ( 32 ) 28 ( 3 )

Impairment losses ( 2 ) — ( 5 ) —

Pension and OPEB actuarial and settlement losses — ( 1 ) — ( 1 )

Income before income taxes

$ 128 $ 54 $ 206 $ 176

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

3 unchanged sentences

Note 19 – Commitments and Contingencies

Minimum purchase commitments as of June 30, 2023 were as follows:

Minimum purchase commitments as of September 30, 2023 were as follows:

Fiscal year Minimum Purchase Commitment

1 unchanged sentence

Remainder of 2024 $ 349

Thereafter 23

Total $ 1,718

(1) Subsequent to June 30, 2023, the Company entered into minimum purchase commitments totaling approximately $ 250 million for additional purchased goods and services.

These minimum purchase commitments are not reflected in the table above.

Contingencies

8 unchanged sentences

In February 2022, the notice period closed.

The case is currently stayed.

In September 2023, the parties entered into a settlement agreement to resolve the matter and submitted it to the District Court for approval.

In October 2023, the District Court entered an order preliminarily approving the proposed settlement.

Securities Litigation:

2 unchanged sentences

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 putative class of plaintiffs includes former shareholders of Computer Sciences Corporation (“CSC”) who exchanged their CSC shares for 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.

6 unchanged sentences

In March 2023, the Court entered a scheduling order setting a trial date for September 2025.

The case is now in discovery.

The Company believes that the final remaining lawsuit described above is also without merit, and intends to vigorously defend it.

A hearing on Plaintiffs’ motion for class certification is scheduled for January 2024.

The case is otherwise in discovery.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company believes that the final remaining lawsuit described above is also without merit, and intends to vigorously defend it.

Tax Examinations:

2 unchanged sentences

For more detail, see Note 14 – “Income Taxes” for further information.

In December 2019, the Company received a request for voluntary production of information in connection with an informal investigation by the U.S.

Securities and Exchange Commission.

The primary focus of the investigation was the Company’s historical reporting related to its non-GAAP adjustment for “transaction, separation, and integration-related costs,” including whether the disclosure the Company previously used to describe the non-GAAP adjustment was sufficiently broad to cover certain expenses the Company included as transaction, separation, and integration-related costs.

The non-GAAP costs at issue primarily consisted of expenses associated with the business combination that formed DXC in 2017.

The Company cooperated fully with the SEC’s informal investigation, and the new management team appointed beginning in September of 2019 proactively clarified and expanded the disclosure of the Company’s non-GAAP transaction, separation, and integration-related costs.

In addition, the new management team significantly reduced the transaction, separation, and integration-related costs.

In September 2022, the Company accrued $ 8 million, representing its estimate of the settlement costs based on its discussions with the SEC at that time.

In March 2023, the Company entered into an Offer of Settlement with the SEC and a Cease-and-Desist Order was entered.

The Company agreed to pay a civil penalty of $ 8 million and to implement certain remedial measures related to the Company’s non-GAAP policies and procedures within 120 days.

The Company has paid the civil penalty and has implemented the requisite remedial measures within the time provided.

This matter is now closed.

OFAC Matter :

In August 2022, the Company submitted an initial notification of voluntary self-disclosure to the U.S.

11 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.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

8 unchanged sentences

• our inability to develop and expand our service offerings to address emerging business demands and technological trends, including our inability to sell differentiated services amongst our offerings;

• our inability to compete in certain markets and expand our capacity in certain offshore locations and risks associated with such offshore locations, such as the on-going conflict between Russia and Ukraine;

• failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs;

35 unchanged sentences

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-Q

Item 1. Financial Statements