What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-05-17 compared with 2023-05-19 · 210 added, 300 removed, 1518 unchanged (25% of the section changed)

4 unchanged sentences

Consolidated Statements of Operations for the Fiscal Years Ended March 31, 2024, March 31, 2023 and March 31, 2022

Consolidated Statements of Comprehensive (Loss) Income for the Fiscal Years Ended March 31, 2023, March 31, 2022 and March 31, 2021

Consolidated Statements of Comprehensive Income (Loss) for the Fiscal Years Ended March 31, 2024, March 31, 2023 and March 31, 2022

Consolidated Statements of Cash Flows for the Fiscal Years Ended March 31, 2024, March 31, 2023 and March 31, 2022

6 unchanged sentences

Note 5–Leases

Note 6 –Fair Value

Note 6–Derivative Instruments

2 unchanged sentences

Note 9–Goodwill

Note 1 1 –Debt

Note 11–Revenue

9 unchanged sentences

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

To the stockholders and the Board of Directors of

DXC Technology Company

1 unchanged sentence

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of DXC Technology Company and subsidiaries (the "Company") as of March 31, 2023 and 2022, the related consolidated statements of operations, comprehensive (loss) income, cash flows, and changes in equity, for each of the three years in the period ended March 31, 2023, and the related notes (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of DXC Technology Company and subsidiaries (the "Company") as of March 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), cash flows, and changes in equity, for each of the three years in the period ended March 31, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

28 unchanged sentences

• We tested the effectiveness of internal controls related to the review of revenue recognition conclusions for new and modified contracts.

• We analyzed the population of material revenue arrangements that were new or modified during the year and performed the following procedures on the arrangements that were determined to be complex:

– Obtained and read the customer contract and evaluated management’s identification of performance obligations and embedded lease components.

– If applicable, evaluated management’s conclusions regarding lease classification.

– Evaluated management’s determination of standalone selling price for the identified performance obligations and lease components.

– Recalculated the transaction price and tested the allocation of transaction price to each performance obligation and lease component.

– Evaluated the pattern of delivery and revenue recognition timing for each performance obligation and lease component.

• We analyzed the population of material revenue arrangements that were new or modified during the year and performed the following procedures on a selection of new or modified contracts:

– Obtained and read the customer contract and evaluated management’s identification of performance obligations.

– Evaluated management’s determination of standalone selling price for the identified performance obligations.

– Recalculated the transaction price and tested the allocation of transaction price to each performance obligation.

– Evaluated the pattern of delivery and revenue recognition timing for each performance obligation.

/s/ Deloitte & Touche LLP

72 unchanged sentences

Total costs and expenses 13,558 15,315 15,124

(Loss) income before income taxes ( 885 ) 1,141 654

Income tax (benefit) expense ( 319 ) 405 800

Net (loss) income ( 566 ) 736 ( 146 )

net income attributable to non-controlling interest, net of tax 2 18 3

Net (loss) income attributable to DXC common stockholders $ ( 568 ) $ 718 $ ( 149 )

(Loss) income per common share:

Income (loss) before income taxes 109 ( 885 ) 1,141

Income tax expense (benefit) 23 ( 319 ) 405

Net income (loss) 86 ( 566 ) 736

net (loss) income attributable to non-controlling interest, net of tax ( 5 ) 2 18

Net income (loss) attributable to DXC common stockholders $ 91 $ ( 568 ) $ 718

Income (loss) per common share:

Basic $ 0.46 $ ( 2.48 ) $ 2.87

2 unchanged sentences

DXC TECHNOLOGY COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Fiscal Years Ended

(in millions) March 31, 2024 March 31, 2023 March 31, 2022

Net (loss) income $ ( 566 ) $ 736 $ ( 146 )

Other comprehensive (loss) income, net of taxes:

Net income (loss) $ 86 $ ( 566 ) $ 736

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments, net of tax (1)

1 unchanged sentence

Cash flow hedges adjustments, net of tax (2)

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

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

Prior service cost, net of tax (3)

( 6 ) ( 2 ) 9

Amortization of prior service cost, net of tax (4)

1 unchanged sentence

Pension and other post-retirement benefit plans, net of tax ( 11 ) ( 38 ) 3

Other comprehensive (loss) income, net of taxes ( 391 ) ( 72 ) 304

Comprehensive (loss) income ( 957 ) 664 158

Other comprehensive income (loss), net of taxes 35 ( 391 ) ( 72 )

Comprehensive income (loss) 121 ( 957 ) 664

comprehensive (loss) income attributable to non-controlling interest ( 12 ) — 29

Comprehensive (loss) income attributable to DXC common stockholders $ ( 957 ) $ 635 $ 152

(1) Tax expense (benefit) related to foreign currency translation adjustments was $ 2 , $ 5 , and $( 27 ) for the fiscal years ended March 31, 2023, March 31, 2022, and March 31, 2021, respectively.

(2) Tax (benefit) expense related to cash flow hedge adjustments was $( 6 ), $ 2 , and $ 6 for the fiscal years ended March 31, 2023, March 31, 2022, and March 31, 2021, respectively.

(3) Tax benefit related to available-for-sale securities was $ 0 , $ 0 , and $ 1 for the fiscal years ended March 31, 2023, March 31, 2022, and March 31, 2021, respectively.

Comprehensive income (loss) attributable to DXC common stockholders $ 133 $ ( 957 ) $ 635

(1) Tax (benefit) expense related to foreign currency translation adjustments was $( 4 ), $ 2 , and $ 5 for the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, respectively.

(2) Tax expense (benefit) related to cash flow hedge adjustments was $ 3 , $( 6 ), and $ 2 for the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, respectively.

(3) Tax (benefit) expense related to prior service costs was $ 0 , $( 1 ), and $ 2 for the fiscal years ended March 31, 2024, March 31, 2023, and March 31, 2022, respectively.

6 unchanged sentences

Cash flows from operating activities:

Net (loss) income $ ( 566 ) $ 736 $ ( 146 )

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

Net income (loss) $ 86 $ ( 566 ) $ 736

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

Depreciation and amortization 1,433 1,551 1,742

5 unchanged sentences

Provision for losses on accounts receivable — ( 1 ) 5

Unrealized foreign currency exchange losses (gains) 8 ( 12 ) ( 36 )

Unrealized foreign currency exchange (gains) losses ( 7 ) 8 ( 12 )

Impairment losses and contract write-offs 18 47 51

Debt extinguishment costs — — 311

Amortization of debt issuance costs and discount (premium) 4 — 3

Amortization of debt issuance costs and discount 5 4 —

Cash surrender value in excess of premiums paid ( 14 ) ( 17 ) ( 24 )

2 unchanged sentences

Decrease in receivables 176 412 228

Increase in prepaid expenses and other current assets ( 119 ) ( 48 ) ( 299 )

Decrease (Increase) in prepaid expenses and other current assets 211 ( 119 ) ( 48 )

Decrease in accounts payable and accruals ( 278 ) ( 424 ) ( 714 )

(Decrease) increase in income taxes payable and income tax liability ( 161 ) ( 315 ) 434

Increase (Decrease) in income taxes payable and income tax liability 13 ( 161 ) ( 315 )

Decrease in operating lease liability ( 353 ) ( 404 ) ( 484 )

Increase (decrease) in advance contract payments and deferred revenue 11 270 ( 66 )

(Decrease) Increase in advance contract payments and deferred revenue ( 290 ) 11 270

Other operating activities, net ( 8 ) ( 4 ) 5

4 unchanged sentences

Software purchased and developed ( 225 ) ( 188 ) ( 295 )

Proceeds for acquisitions, net of cash acquired — — 184

Business dispositions 26 ( 147 ) 533

Cash collections related to deferred purchase price receivable — — 159

Proceeds from sale of assets 75 171 100

1 unchanged sentence

Other investing activities, net 13 19 41

Net cash (used in) provided by investing activities ( 635 ) ( 60 ) 4,665

Net cash used in investing activities ( 491 ) ( 635 ) ( 60 )

Cash flows from financing activities:

1 unchanged sentence

Repayments of commercial paper ( 1,887 ) ( 1,757 ) ( 905 )

Borrowings under lines of credit — — 2,500

Repayment of borrowings under lines of credit — — ( 4,000 )

Borrowings on long-term debt — — 19

5 unchanged sentences

Repurchase of common stock ( 898 ) ( 669 ) ( 628 )

Dividend payments — — ( 53 )

Payments for debt extinguishment costs — — ( 344 )

18 unchanged sentences

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 )

Other comprehensive income 301 301 3 304

Net income ` 718 718 18 736

Other comprehensive loss ( 83 ) ( 83 ) 11 ( 72 )

Share-based compensation expense 80 80 80

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

10 unchanged sentences

Balance at March 31, 2022 240,508 $ 3 $ 10,057 $ ( 4,450 ) $ ( 385 ) $ ( 173 ) $ 5,052 $ 323 $ 5,375

Net income 718 718 18 736

Net loss ( 568 ) ( 568 ) 2 ( 566 )

Other comprehensive loss ( 389 ) ( 389 ) ( 2 ) ( 391 )

2 unchanged sentences

Share repurchase program (2)

( 24,437 ) ( 1 ) ( 1,036 ) 354 ( 683 ) ( 683 )

Stock option exercises and other common stock transactions 1,987 1 1 1

10 unchanged sentences

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

Net loss ( 568 ) ( 568 ) 2 ( 566 )

Other comprehensive loss ( 389 ) ( 389 ) ( 2 ) ( 391 )

Net income 91 91 ( 5 ) 86

Other comprehensive income 42 42 ( 7 ) 35

Share-based compensation expense 107 107 107

16 unchanged sentences

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

Our more than 130,000 people in approximately 70 countries are entrusted by our customers, approximately half of today’s Fortune 500 companies.

Our approximately 130,000 people in about 65 countries are entrusted by our customers, close to half of today’s Fortune 500 companies.

We operate through two segments:

Global Business Services ("GBS") and Global Infrastructure Services ("GIS"), to provide solutions across our six differentiated offerings that modernize operations and drive innovation across our customers' entire IT estate.

Global Business Services ("GBS") and Global Infrastructure Services ("GIS"), to provide solutions that modernize operations and drive innovation across our customers' entire IT estate.

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 (Loss) Income 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 are made throughout to the numbered Notes to the Consolidated Financial Statements (“Notes”) in this Annual Report on Form 10-K.

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 Statements 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 are made throughout to the numbered Notes to the Consolidated Financial Statements (“Notes”) in this Annual Report on Form 10-K.

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

6 unchanged sentences

All intercompany transactions and balances have been eliminated.

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

Use of Estimates

4 unchanged sentences

In the opinion of the Company's management, the accompanying financial statements contain all adjustments necessary, including those of a normal recurring nature, to fairly present the financial statements.

The Company determines if an arrangement is a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether DXC obtains substantially all economic benefits from and has the ability to direct the use of the asset.

Leased assets classified as operating leases are included in operating right-of-use ("ROU") assets, net, with the associated liabilities included in current operating lease liabilities and non-current operating lease liabilities in DXC's balance sheets.

Finance leases are included in property and equipment, net, short-term debt and current maturities of long-term debt and long-term debt, net of current maturities in DXC's balance sheets.

The Company determines if an arrangement is or contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether DXC obtains substantially all economic benefits from and has the ability to direct the use of the asset.

Operating leases are reported as operating right-of-use ("ROU") assets, net, with the associated liabilities included in current operating lease liabilities and non-current operating lease liabilities in DXC's balance sheets.

Finance leases are included in property and equipment, net, and the associated liabilities are included in short-term debt and current maturities of long-term debt and long-term debt, net of current maturities in DXC's balance sheets.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Leased assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

Lease assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease.

Lease liabilities are recognized at commencement based on the present value of fixed or in-substance fixed lease payments over the lease term.

Leased assets are recognized at commencement based upon the leased liability plus any lease payments made at or before lease commencement and excluding any lease incentives.

Leased assets are recognized at commencement based on the leased liability plus any lease payments made at or before lease commencement and excluding any lease incentives.

As most of the Company's leases do not provide an implicit rate, DXC uses its incremental borrowing rate based on the information available at commencement to determine the present value of lease payments.

3 unchanged sentences

Leased assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

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

Operating lease expense, which includes interest, is recognized on a straight-line basis over the lease term with variable payments, primarily related to the operational costs for the Company's leased real estate for offices, which are recognized as incurred.

Assets obtained under finance leases are recorded as fixed assets and depreciated over the shorter of the depreciable life of the asset or the lease term.

The Company's lease arrangements generally do not contain any residual value guarantees or material restrictive covenants.

Assets obtained under finance leases are recorded as fixed assets and depreciated over the shorter of the depreciable life of the asset or the lease term with interest recognized as it is incurred.

The Company combines lease and non-lease components under its lease agreements.

6 unchanged sentences

• Determination of the transaction price

• Allocation of the transaction price to the performance obligations in the contract

• Allocation of the transaction price to the identified performance obligations

• Recognition of revenue when, or as, the Company satisfies a performance obligation

142 unchanged sentences

Unobservable inputs that reflect the entity's own assumptions which market participants would use in pricing the asset or liability.

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 equity 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.

The carrying amounts of the Company’s financial instruments with short-term maturities, primarily accounts receivable, accounts payable, short-term debt, and financial liabilities included in other accrued liabilities approximate their market values due to their short-term nature.

Non-financial assets such as goodwill, tangible assets, intangible assets, and other contract related long-lived assets are recorded at fair value in the period they are initially recognized;

and such fair value may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired.

The fair value measurements in such instances would be classified as Level 3 within the fair value hierarchy.

There were no significant impairments recorded during the fiscal periods covered by this report.

The Company records receivables at their face amounts less an allowance for doubtful accounts.

55 unchanged sentences

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 (loss) income.

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

Derivative Instruments

1 unchanged sentence

The Company's derivative instruments designated for hedge accounting include interest rate swaps and foreign currency forward and option contracts.

Changes in the fair value measurements of these derivative instruments are reflected as adjustments to other comprehensive (loss) income and subsequently reclassified into earnings in the period during which the hedged transactions occurred.

Changes in the fair value measurements of these derivative instruments are reflected as adjustments to other comprehensive income (loss) and subsequently reclassified into earnings in the period during which the hedged transactions occurred.

Any ineffectiveness or excluded portion of a designated hedge is recognized in earnings.

The Company also has entered into certain net investment hedges.

Changes in the fair value of net investment hedges are recorded in the currency translation adjustment section of other comprehensive (loss) income and subsequently reclassified into earnings in the period the hedged item affects earnings.

Changes in the fair value of net investment hedges are recorded in the currency translation adjustment section of other comprehensive income (loss) and subsequently reclassified into earnings in the period the hedged item affects earnings.

The Company excludes forward points from the effectiveness assessment of its net investment hedges.

6 unchanged sentences

New Accounting Pronouncements

Recently issued ASUs effective after March 31, 2023 are not expected to have a material effect on DXC's consolidated financial statements.

During fiscal 2024, the following Accounting Standards Updates (“ASUs”) were issued by the Financial Accounting Standards Board but have not yet been adopted by DXC:

Date Issued and ASU DXC Effective Date

Description Impact

November 2023

ASU 2023-07, “Improvements to Reportable Segment Disclosures”

Fiscal 2025 This update requires disclosure of significant segment expenses used by the Chief Operating Decision Maker (“CODM”) to assess performance and allocate resources, disclose the title and position of the CODM and modifies other segment disclosures and the frequency thereof.

Early adoption of this update is permitted.

The Company is in the process of assessing the impacts and method of adoption.

This ASU will impact the Company’s segment disclosures, but not its consolidated financial statements.

December 2023

ASU 2023-09, “Improvements to Income Tax Disclosures”

The update requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures.

Early adoption of this update is permitted.

The Company is in the process of assessing the impacts and method of adoption.

This ASU will impact our income tax disclosures, but not its consolidated financial statements.

Other recently issued ASUs that have not yet been adopted are not expected to have a material effect on DXC's consolidated financial statements.

Note 2 - Divestitures

Fiscal 2024 Divestitures

On January 3, 2023, DXC completed the sale of its German financial services subsidiary ("FDB" or the "FDB Business") to the FNZ Group ("FNZ") for € 308 million (approximately $ 329 million), resulting in a pre-tax gain of approximately $ 215 million.

During fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $ 79 million.

Fiscal 2023 Divestitures

During fiscal 2023, DXC completed the sale of its German financial services subsidiary ("FDB" or the "FDB Business") to the FNZ Group ("FNZ") for € 308 million (approximately $ 329 million), resulting in a pre-tax gain of approximately $ 215 million.

Included in the FDB sale was AXA Bank Germany, a German retail bank, that DXC acquired for total consideration of $ 101 million on January 1, 2021.

The following is a summary of the assets and liabilities distributed as part of the FDB Sale on January 3, 2023:

(in millions) As of January 3, 2023

Cash and cash equivalents $ 509

Accounts receivable, net 67

Prepaid expenses 1

Total current assets 577

Intangible assets, net 45

Property and equipment, net 1

Other assets 12

Total non-current assets 106

Total assets $ 683

Accounts payable $ 5

Accrued expenses and other current liabilities 529

Income taxes payable 1

Total current liabilities 535

Non-current income tax liabilities and deferred tax liabilities 6

Other long-term liabilities 4

Total long-term liabilities 10

Total liabilities $ 545

During fiscal 2023, the Company sold insignificant businesses that resulted in a net loss of $ 25 million.

Included in this amount was the Company's primary Russian entity that the Company sold in the second quarter of fiscal 2023, in response to the ongoing sanctions against certain industry sectors and parties in Russia due to Russia's invasion of Ukraine.

As of March 31, 2023, the Company had entered into definitive agreements to sell insignificant businesses and assets, which are classified as held for sale.

Fiscal 2022 Divestitures

3 unchanged sentences

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

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

State and Local Health and Human Services business ("HHS" or the "HHS Business") to Veritas Capital Fund Management, L.L.C.

("Veritas Capital"), for approximately $ 5.0 billion, resulting in a pre-tax gain on sale of $ 2,014 million.

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

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

Note 3 - Earnings (Loss) Per Share

5 unchanged sentences

March 31, 2024 March 31, 2023 March 31, 2022

Net (loss) income attributable to DXC common shareholders:

Net income (loss) attributable to DXC common shareholders:

$ 91 $ ( 568 ) $ 718

9 unchanged sentences

Fiscal Years Ended

March 31, 2023 (1)

March 31, 2022 March 31, 2021 (1)

March 31, 2024 March 31, 2023 March 31, 2022

Stock Options 953,126 523,969 510,933

1 unchanged sentence

PSUs 37,504 3,380,812 37,821

(1) Due to the Company's net loss during fiscal 2023 and fiscal 2021, stock options, RSUs and PSUs were excluded from the computation of dilutive EPS because they would have had an anti-dilutive effect.

Note 4 - Receivables

17 unchanged sentences

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

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.

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

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 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, 2024, 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.

The fair value of the sold receivables approximated their book value due to their short-term nature, resulting in no gain or loss recorded on the sale of receivables.

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.

Milano Receivables Facility

On October 1, 2020, in connection with the sale of the HHS Business, the Milano Facility was terminated.

For more information, refer to Note 2 - "Divestitures."

German Receivables Facility

On June 30, 2021, the Company terminated its accounts receivable securitization facility with certain unaffiliated financial institutions for the sale of commercial accounts receivable in Germany (the "DE Receivables Facility").

Under the DE Receivables Facility, the deferred purchase price ("DPP") was classified as cash flows from investing activities.

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) Fiscal 2021

Beginning balance $ 103

Transfers of receivables 417

Collections ( 420 )

Change in funding availability 2

Facility amendments ( 102 )

Ending balance $ —

Note 5 - Leases

25 unchanged sentences

Total operating lease liabilities $ 779 $ 965

The weighted-average operating lease term was 3.9 years and 4.4 years as of March 31, 2023 and March 31, 2022, respectively.

The weighted-average operating lease term was 3.9 years as of both March 31, 2024 and March 31, 2023.

The weighted-average operating lease discount rate was 4.6 % and 3.9 % as of March 31, 2024 and March 31, 2023, respectively.

31 unchanged sentences

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

The weighted-average finance lease term was 2.9 years and 2.8 years as of March 31, 2023 and March 31, 2022, respectively.

The weighted-average finance lease term was 2.9 years as of both March 31, 2024 and March 31, 2023.

The weighted-average finance lease discount rate was 4.3 % and 3.4 % as of March 31, 2024 and March 31, 2023, respectively.

6 unchanged sentences

Total finance lease liabilities

Note 6 - Fair Value

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, excluding pension assets and derivative assets and liabilities.

See Note 14 - "Pension and Other Benefit Plans" and Note 7 - "Derivative Instruments" for information about these excluded assets and liabilities.

There were no transfers between any of the levels during the periods presented.

Fair Value Hierarchy

(in millions) As of March 31, 2023

Fair Value Level 1 Level 2 Level 3

Money market funds and money market deposit accounts $ 75 $ 75 $ — $ —

Time deposits (1)

Other securities (2)

Total assets $ 160 $ 112 $ 46 $ 2

Contingent consideration $ 2 $ — $ — $ 2

Total liabilities $ 2 $ — $ — $ 2

(in millions) As of March 31, 2022

Fair Value Level 1 Level 2 Level 3

Money market funds and money market deposit accounts $ 5 $ 5 $ — $ —

Time deposits (1)

Other securities (2)

Total assets $ 107 $ 56 $ 49 $ 2

Contingent consideration $ 8 $ — $ — $ 8

Total Liabilities $ 8 $ — $ — $ 8

(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 and $ 53 million as of March 31, 2023 and March 31, 2022, respectively.

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

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 equity 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.

Other Fair Value Disclosures

If measured at fair value, these financial instruments would be classified as Level 2 or Level 3 within the fair value hierarchy.

Note 11 - “Debt” includes information about the estimated fair value of the Company's long-term debt.

Non-financial assets such as goodwill, tangible assets, intangible assets, and other contract related long-lived assets are recorded at fair value in the period they are initially recognized;

and such fair value may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired.

The fair value measurements in such instances would be classified as Level 3 within the fair value hierarchy.

There were no significant impairments recorded during the fiscal periods covered by this report.

Note 6 - Derivative Instruments

5 unchanged sentences

Cash flow hedges

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

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

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of March 31, 2024 and March 31, 2023 were $ 885 million and $ 842 million, respectively.

As of March 31, 2023, the related forecasted transactions extend through June 2025.

For the fiscal years ended March 31, 2023 and March 31, 2022, the Company performed an assessment at the inception of the cash flow hedge transactions and determined that all critical terms of the hedging instruments and hedged items matched.

The Company performs an assessment of critical terms on an on-going basis throughout the hedging period.

During the fiscal years ended March 31, 2023 and March 31, 2022, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

As of March 31, 2023, $ 6 million of the existing amount of loss related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

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

The pre-tax (loss) gain on derivatives designated for hedge accounting recognized in other comprehensive (loss) income was $( 11 ) million and $ 23 million during the fiscal year ended March 31, 2023 and March 31, 2022, respectively.

The pre-tax gain on derivatives designated for hedge accounting recognized in (loss) income before income taxes was $ 11 million and $ 6 million during the fiscal year ended March 31, 2023 and March 31, 2022, respectively.

As of March 31, 2024, the related forecasted transactions extend through May 2026.

For the fiscal years ended March 31, 2024 and March 31, 2023, 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 March 31, 2024, $ 2 million 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

4 unchanged sentences

The notional amount of the foreign currency forward contracts outstanding as of March 31, 2024 and March 31, 2023 was $ 1.5 billion and $ 2.5 billion, respectively.

The following table presents the pre-tax amounts impacting income related to foreign currency forward contracts designated and non-designated for hedge accounting:

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

Fiscal Years Ended

(in millions) Statement of Operations Line Item March 31, 2023 March 31, 2022 March 31, 2021

Foreign currency forward contracts Other (income) expense, net $ ( 27 ) $ 52 $ 51

(in millions) March 31, 2024 March 31, 2023 March 31, 2022

Foreign currency remeasurement (1)

$ 18 $ 12 $ ( 39 )

Undesignated foreign currency forward contracts (2)

( 25 ) ( 27 ) 52

Total - Foreign currency (gain) loss

$ ( 7 ) $ ( 15 ) $ 13

(1) Movements from exchange rates on the Company’s foreign currency-denominated assets and liabilities.

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

Fair Value of Derivative Instruments

14 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 March 31, 2023, 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 $ 3 million.

With respect to its foreign currency derivatives, as of March 31, 2024, there were eight counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 9 million.

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

10 unchanged sentences

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

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

As of March 31, 2023, DXC had $ 0.3 billion of foreign currency-denominated debt designated as hedges of 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.

As of March 31, 2024, DXC had $ 702 million of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the fiscal year ended March 31, 2023, the pre-tax impact of gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive loss was $ 6 million.

As of March 31, 2022, DXC had $ 0.3 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

For the fiscal year ended March 31, 2024, the pre-tax impact of gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income (loss) was $ 5 million.

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

subsidiaries.

33 unchanged sentences

Balance as of March 31, 2023, net

$ 539 $ — $ 539

Divestitures ( 3 ) — ( 3 )

1 unchanged sentence

Balance as of March 31, 2024, net

$ 532 $ — $ 532

Goodwill, gross 5,022 5,066 10,088

1 unchanged sentence

Balance as of March 31, 2024, net

$ 532 $ — $ 532

(in millions) GBS GIS Total

Balance as of March 31, 2022, net

$ 617 $ — $ 617

Divestitures ( 60 ) — ( 60 )

Assets held for sale ( 6 ) — ( 6 )

Foreign currency translation ( 18 ) — ( 18 )

Balance as of March 31, 2023, net

$ 539 $ — $ 539

Goodwill, gross 5,029 5,066 10,095

1 unchanged sentence

Balance as of March 31, 2023, net

$ 539 $ — $ 539

Divestitures are described in Note 2 - "Divestitures." The foreign currency translation amount reflects the impact of currency movements on non-U.S.

14 unchanged sentences

2024 $ — $ 109

2024 $ 109 $ 362

Current maturities of long-term debt

15 unchanged sentences

0.01 % - 14.59 %

2024 - 2028 502 643

Borrowings for assets acquired under long-term financing 0.00 % - 9.78 %

2025 - 2029 177 285

Mandatorily redeemable preferred stock outstanding

6.00 % 2023 — 63

Other borrowings Various 2024 — 3

5 unchanged sentences

(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 that matures on September 1, 2024, unless the Company exercises its option to extend for one year until September 1, 2025.

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

The Company did not draw on the USD Term Loan as of March 31, 2023.

Fair Value of Debt

The Company estimates the fair value of its long-term debt primarily by using quoted prices obtained from third-party providers such as Bloomberg and by using an expected present value technique based on observable market inputs for instruments with similar terms currently available to the Company.

The estimated fair value of the Company's long-term debt excluding finance lease liabilities was $ 3.3 billion and $ 3.3 billion as of March 31, 2024 and March 31, 2023, respectively, as compared with the carrying value of $ 3.7 billion and $ 3.8 billion as of March 31, 2024 and March 31, 2023, respectively.

30 unchanged sentences

Change in contract liabilities were as follows:

(in millions) Twelve Months Ended March 31, 2023 Twelve Months Ended March 31, 2022

(in millions) Twelve Months Ended March 31, 2024

Twelve Months Ended March 31, 2023

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

27 unchanged sentences

Fiscal 2024 Plan

During fiscal 2023, management approved global cost savings initiatives designed to better align the Company’s workforce and facility structures (the “Fiscal 2023 Plan”).

Also included in restructuring costs for the fiscal year ended March 31, 2023 is $ 22 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.

During fiscal 2024, management approved global cost savings initiatives designed to better align the Company’s workforce, facilities and data centers (the “Fiscal 2024 Plan”).

Restructuring activities, summarized by plan year, were as follows:

21 unchanged sentences

(2) Foreign currency translation adjustments.

Included in restructuring costs for fiscal 2024 is $ 22 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.

Note 13 - Pension and Other Benefit Plans

18 unchanged sentences

plan participants.

In addition, the Company recognized a noncash pension settlement charge of $ 361 million, which includes the accelerated recognition of prior service credit that was included in accumulated other comprehensive income.

This transaction is irrevocable, and as a result of the transaction, the pension trustees and the Company were relieved of all responsibility for the related pension obligations and the insurance company is now required to pay and administer the retirement benefits.

1 unchanged sentence

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 2023 is primarily related to actuarial gains, the pension risk transfer transaction discussed above, and foreign currency exchange rate changes.

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

The change in projected benefit obligation for fiscal year 2024 is primarily related to interest cost and benefits paid and includes actuarial losses.

Actuarial losses were primarily due to benefit indexation in the United Kingdom.

Projected Benefit Obligations

6 unchanged sentences

Business/contract acquisitions/divestitures 4 ( 84 )

Contractual termination benefits — 4

Settlement/curtailment ( 268 ) ( 1,102 )

Actuarial (gain) loss ( 2,083 ) ( 831 )

Actuarial loss (gain)

Benefits paid ( 292 ) ( 330 )

45 unchanged sentences

Subtotal ( 92 ) ( 178 ) ( 294 )

Settlement/curtailment loss (gain) 361 ( 20 ) ( 18 )

Settlement/curtailment (gain) loss

( 2 ) 361 ( 20 )

Recognition of actuarial loss (gain) 447 1,070 ( 664 )

Net periodic pension expense (income) $ 353 $ 1,253 $ ( 978 )

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

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

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

5 unchanged sentences

Interest Crediting Rate 4.5 % 4.0 % 4.0 %

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

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

Fiscal Years Ended

(in millions) March 31, 2024 March 31, 2023

Prior service cost $ ( 188 ) $ ( 238 )

Prior service credit

$ ( 176 ) $ ( 188 )

Estimated Future Contributions and Benefits Payments

8 unchanged sentences

(in millions) Level 1 Level 2 Level 3 Total

US Domestic Stocks $ — $ —

Global Stocks — — — —

Global/International Equity commingled funds $ 21 $ 662 $ — $ 683

Global equity mutual funds — — — —

U.S./North American Equity commingled funds 5 — — 5

14 unchanged sentences

(in millions) Level 1 Level 2 Level 3 Total

US Domestic Stocks $ — $ — $ — $ —

Global Stocks — — — —

Global/International Equity commingled funds $ 18 $ 756 $ — $ 774

Global equity mutual funds — — — —

U.S./North American Equity commingled funds 5 — — 5

49 unchanged sentences

pension plans, the Company's largest pension plans by assets and projected liabilities, a target allocation by asset class was developed to achieve their long-term objectives.

Asset allocations are monitored closely and investment reviews regarding asset strategy are conducted regularly with internal and external advisors.

Asset allocations are

monitored closely and investment reviews regarding asset strategy are conducted regularly with internal and external advisors.

The Company’s investment goals and risk management strategy for plan assets evaluates a number of factors, including the time horizon of the plans’ obligations.

20 unchanged sentences

discount rate is based on the yield curve approach using the U.K.

Aon Hewitt GBP Single Agency AA Corporates-Only Curve.

Aon GBP Single Agency AA Corporates-Only Curve.

Defined Contribution Plans

9 unchanged sentences

The DXC DCP covers eligible employees who participated in CSC’s Deferred Compensation Plan prior to the HPES Merger.

The ES DCP covers eligible employees who participated in the HPE Executive Deferred Compensation Plan prior to the HPES Merger.

The ES DCP covers eligible employees who participated in the HPE Executive Deferred Compensation Plan prior

to the HPES Merger.

Both plans allow participating employees to defer the receipt of current compensation to a future distribution date or event above the amounts that may be deferred under DXC’s tax-qualified 401(k) plan, the DXC Technology Matched Asset Plan.

18 unchanged sentences

Foreign 288 155 285

290 150 1,203

Federal ( 186 ) ( 192 ) 9

11 unchanged sentences

(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.

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 transferred to Perspecta related to pre-HPES Merger periods.

Pursuant to the tax matters agreement, the Company recorded a $ 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.

Pursuant to the tax matters agreement, the Company recorded a $ 15 million tax indemnification receivable from Perspecta related to other tax receivables and a $ 4 million tax indemnification payable to Perspecta related to income tax and other tax payables.

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

12 unchanged sentences

tax on foreign income 35.8 5.8 2.5

Excess tax benefits or expense for stock compensation 0.6 0.1 2.2

Excess tax benefit or expense for stock compensation

( 0.9 ) 0.6 0.1

Capitalized transaction costs 0.9 0.2 0.2

1 unchanged sentence

Impact of business divestitures ( 5.5 ) ( 7.6 ) 3.0

Granite trust capital loss — — ( 5.7 )

Indemnification costs 3.7 1.2 —

2 unchanged sentences

In fiscal 2024, the ETR was primarily impacted by:

• Changes in foreign jurisdictional losses that decreased the ETR by $ 160 million and 146.8 %, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount.

• Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $ 101 million and 92.7 %, respectively, offset by tax expense on U.S.

international tax inclusions, which increased tax expense and increased the ETR by $ 39 million and 35.8 %, respectively.

• Foreign withholding taxes, which increased income tax expense and increased the ETR by $ 64 million and 58.7 %, respectively.

In fiscal 2023, the ETR was primarily impacted by:

• A reduction in base erosion and transition taxes, which increased income tax benefit and decreased the ETR by $ 81 million and 9.1 %, respectively.

6 unchanged sentences

• 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.

The HHS tax gain increased tax expense and the ETR as the tax basis of assets sold, primarily goodwill, was lower than the book basis.

• Continued losses in countries where we are recording a valuation allowance on certain deferred tax assets, primarily in Belgium, Denmark, Italy, France, Luxembourg, and U.S., and an impairment of the full German deferred tax asset, which increased income tax expense and increased the ETR by $ 1,565 million and 239.3 %, respectively.

• An increase in income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $ 319 million and 48.7 %, respectively.

• Local losses on investments in Luxembourg that increased the foreign rate differential and decreased the ETR by $ 1,226 million and 187.5 %, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount.

• The Company recognized adjustments to uncertain tax positions that increased the overall income tax expense and the ETR by $ 112 million and 17.2 %, respectively.

The deferred tax assets (liabilities) were as follows:

5 unchanged sentences

Contract accounting

Depreciation and amortization 129 —

Other assets 298 272

16 unchanged sentences

Deferred tax assets 804 460

$ 1,062 $ 652

Total $ 1,106 $ 712

15 unchanged sentences

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 net decrease in the valuation allowance of $ 66 million in fiscal 2023 was primarily due to a currency translation adjustment of $ 55 million.

The net increase in the valuation allowance of $ 200 million in fiscal 2024 was primarily due to losses in Luxembourg.

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

12 unchanged sentences

$ 5 $ — $ 5 2034 $ 4 $ — $ 4 2037

$ — $ — $ — N/A $ — $ — $ — N/A

$ 2 $ — $ 2 2037 $ — $ — $ — N/A

Capital loss carryforwards

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

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

State $ 46 $ 46 $ — N/A $ 46 $ 46 $ — N/A

24 unchanged sentences

Penalties 4 18

Offset to receivable ( 91 ) ( 104 )

Reduction of receivables

( 72 ) ( 91 )

Net of tax attributes ( 2 ) ( 1 )

12 unchanged sentences

The Company’s liability for uncertain tax positions at March 31, 2024, March 31, 2023, and March 31, 2022, includes $ 365 million, $ 368 million and $ 393 million, respectively, related to amounts that, if recognized, would affect the effective tax rate (excluding related interest and penalties).

The increase related to prior year tax positions primarily relates to an increase in foreign tax credits.

The change in settlements and statute of limitation expirations primarily relates to amounts agreed to with tax authorities.

The decrease related to prior year tax positions primarily relates to the Company's increase in the foreign tax credit and capitalized research and experimental expenditures.

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, 2024, the Company had a net increase in interest expense of $ 24 million ($ 18 million net of tax) and a net decrease in accrued expense for penalties of $ 14 million and, as of March 31, 2024, recognized a liability for interest of $ 103 million ($ 79 million net of tax) and penalties of $ 4 million.

During the year ended March 31, 2023, the Company had a net increase in interest expense of $ 3 million ($ 1 million net of tax) and a net decrease in accrued expense for penalties of $ 2 million and, as of March 31, 2023, recognized a liability for interest of $ 79 million ($ 61 million net of tax) and penalties of $ 18 million.

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.

The Company is currently under examination in several tax jurisdictions.

3 unchanged sentences

(Fiscal Year Ending):

2020 and forward

United States – Federal 2009 and forward

9 unchanged sentences

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

The Company and the IRS Office of Appeals have settled 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 U.S.

Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense and cash tax payments of approximately $ 477 million (including estimated interest and penalties) for the unreserved portion of these items if we do not prevail.

Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense of approximately $ 507 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $ 582 million, 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.

During 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 expect court proceedings to progress during calendar year 2024 that may result in resolution of some or all of the litigation matters by the end of fiscal year 2025.

During the third quarter of fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures.

The Company notified the IRS in December of 2023 and filed for relief under Treas.

1.367(a)-8(p) in January 2024 to correct the issue.

The Company’s fiscal years 2009, 2010, and 2013 are in the U.S.

1 unchanged sentence

The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025.

The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2020 to September 30, 2024.

The Company expects to reach resolution for fiscal and tax return years 2009 through 2020 no earlier than fiscal 2025.

The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2025.

The Company expects to reach resolution for fiscal and tax return years 2009 through 2021 no earlier than the end of fiscal year 2026, except fiscal year 2012 for which the statute closes in fiscal year 2025, and potentially the years subject to litigation which may be resolved in fiscal year 2025.

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

10 unchanged sentences

Share Repurchase Program

On April 3, 2017, DXC announced the establishment of a share repurchase program approved by the Board with an initial authorization of up to $ 2.0 billion for future repurchases of outstanding shares of DXC common stock.

On April 3, 2017, DXC announced the establishment of a share repurchase program approved by the Board with an initial authorization of $ 2.0 billion for future repurchases of outstanding shares of DXC common stock.

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

Under these approved share repurchase plans, on February 2, 2022, we announced our intention and subsequently completed the repurchase of $ 1.0 billion of our outstanding shares of common stock in the open market prior to the issuance of this Annual Report on Form 10-K.

During fiscal 2024, DXC completed the remaining share repurchases under the above authorizations.

On May 18, 2023, DXC announced that its Board approved an incremental $ 1.0 billion share repurchase authorization.

1 unchanged sentence

The timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time.

As of March 31, 2024, the approximate dollar value of shares that may yet be purchased under the plans or programs was $ 592 million.

The shares repurchased are retired immediately and included in the category of authorized but unissued shares.

The excess of purchase price over par value of the common shares is allocated between additional paid-in capital and retained earnings.

There was no share repurchase activity during fiscal 2021.

The details of shares repurchased during fiscal 2024, 2023 and 2022 are shown below:

5 unchanged sentences

2023 Total 24,436,738 $ 27.78 $ 679

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

2022 Total 18,818,934 $ 33.67 $ 634

Treasury Stock Transactions

2 unchanged sentences

As a result, the Company holds 4,591,340 treasury shares as of March 31, 2024.

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.

The Board 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.

As of March 31, 2024, the Company does not intend to reinstate its quarterly cash dividends.

1 unchanged sentence

The following table shows the changes in accumulated other comprehensive 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 Loss

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

Current-period other comprehensive income (loss) 297 14 ( 9 ) — 302

Amounts reclassified from accumulated other comprehensive income (loss), net of taxes — 5 — ( 6 ) ( 1 )

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

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)

3 unchanged sentences

Amounts reclassified from accumulated other comprehensive loss, net of taxes

— ( 11 ) ( 38 ) ( 49 )

Balance at March 31, 2023 $ ( 985 ) $ ( 7 ) $ 218 $ ( 774 )

Current-period other comprehensive (loss) income 46 — — 46

Amounts reclassified from accumulated other comprehensive loss, net of taxes — 7 ( 11 ) ( 4 )

Balance at March 31, 2024 $ ( 939 ) $ — $ 207 $ ( 732 )

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

8 unchanged sentences

The Company also grants PSUs, which generally vest over a period of three years .

The number of PSUs that ultimately vest is dependent upon the Company’s achievement of certain specified financial performance criteria over a 3 -year period.

The number of PSUs that ultimately vest is dependent upon the Company’s achievement of certain specified financial performance criteria over a three-year period.

If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents upon the filing with the SEC of the Annual Report on Form 10-K for the last fiscal year of the performance period.

Certain 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.

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

5 unchanged sentences

In addition, RSUs vest in full upon a change in control of DXC.

The DXC Share Purchase Plan allows DXC’s employees located in the U.K.

to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date.

There were 35,721 shares purchased under this plan during fiscal 2023.

The Board has reserved for issuance shares of DXC common stock, par value $ 0.01 per share, under each of the plans as detailed below:

3 unchanged sentences

DXC Director Equity Plan 745,000 166,852

DXC Share Purchase Plan 250,000 90,196

Total 51,945,000 24,379,449

6 unchanged sentences

Tax benefits from exercised stock options and awards $ 14 $ 12 $ 17

As of March 31, 2023, total unrecognized compensation expense related to unvested DXC RSUs, net of expected forfeitures was $ 141 million, respectively.

The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 1.74 years.

As of March 31, 2024, total unrecognized compensation expense related to unvested DXC RSUs and PSUs, net of expected forfeitures was $ 145 million, respectively.

The unrecognized compensation expense for unvested RSUs and PSUs is expected to be recognized over a weighted-average period of 1.74 years.

Stock Options

19 unchanged sentences

Expired ( 32,366 ) $ 30.75

Outstanding as of March 31, 2023 992,703 $ 33.89 2.20 $ —

Vested and expected to vest in the future as of March 31, 2023 992,703 $ 33.89 2.20 $ —

Exercisable as of March 31, 2023 992,703 $ 33.89 2.20 $ —

Outstanding and exercisable as of March 31, 2024 945,059 $ 34.25 1.27 $ —

As of March 31, 2024

53 unchanged sentences

Prepaid assets acquired under long-term financing

$ 46 $ 106 $ 107

Capital expenditures in accounts payable and accrued expenses $ 67 $ 5 $ 9

1 unchanged sentence

Assets acquired under long-term financing $ 34 $ 25 $ 44

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

Contingent consideration $ — $ — $ 3

Shares repurchased but not settled in cash (3)

$ 10 $ 20 $ 6

(1) Income tax refunds were $ 38 million, $ 43 million, and $ 54 million for fiscal 2024, 2023, and 2022, respectively.

5 unchanged sentences

Note 18 - Other Expense (Income), Net

Other expense (income), net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement losses (gains), movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, gains on sale of assets, and other miscellaneous gains and losses.

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

2 unchanged sentences

March 31, 2024 March 31, 2023 March 31, 2022

Non-service cost components of net periodic pension expense (income) $ 1,180 $ ( 1,066 ) $ 110

Non-service cost components of net periodic pension (income) expense

$ ( 145 ) $ ( 251 ) $ ( 382 )

Pension and OPEB actuarial and settlement losses (gains)

445 1,431 ( 684 )

Foreign currency (gain) loss

( 7 ) ( 15 ) 13

Gain on sale of assets ( 40 ) ( 90 ) ( 88 )

Other loss 9 60 ( 16 )

Other (gain) loss

Total $ 218 $ 1,084 $ ( 1,081 )

Other expense (income), net, was $ 1,084 million and $( 1,081 ) million in fiscal 2023 and fiscal 2022, respectively, a change of $ 2,165 million compared to the prior fiscal year that was primarily due to:

• net periodic pension expense increased by $ 2,246 million primarily due to a $ 1,070 million mark-to-market pension loss in fiscal 2023 versus a $ 664 million gain in fiscal 2022, a $ 361 million settlement loss in fiscal 2023 related to the buy-out of a defined benefit pension plan in the U.K., and $ 131 million less pension income in fiscal 2023 due to changes in expected returns on assets and other actuarial assumptions.

See Note 14 - "Pension and Other Benefit Plans" for additional information.

• a foreign currency gain of $ 15 million in fiscal 2023 versus a $ 13 million loss in fiscal 2022 primarily due to movements of exchange rates on our foreign currency denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program.

• a $ 2 million increase in gains from sales of assets.

• a $ 51 million decrease in other losses, primarily due to a greater amount of impairment losses in the comparative period.

Note 19 - Segment and Geographic Information

3 unchanged sentences

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

Global Business Services

GBS provides innovative technology solutions that help our customers address key business challenges and accelerate transformations tailored to each customer’s industry and specific objectives.

GBS offerings include:

• Analytics and Engineering .

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, 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 help simplify, modernize, and accelerate mission-critical applications that support business agility and growth through our Applications services.

We are the engineers that enable our customers to take advantage of the latest digital platforms with both customized and pre-packaged applications, ensure resiliency, launch new products and enter new markets with minimal disruption.

We help customers define, execute and manage their enterprise applications strategy.

• Insurance Software and Business Process Services .

We partner with insurance clients, to modernize and run IT systems, provide proprietary modular insurance software and platforms, and operate the full spectrum of insurance business process services.

We also help operate and continuously improve bank cards, payment and lending processes and operations, and customer experience operations.

Global Infrastructure Services

GIS provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers.

GIS offerings include:

Our Security services help customers assess risk and proactively address all facets of the security environment, from threat intelligence to compliance.

We leverage proven methodologies, intelligent automation and industry-leading partners to tailor security solutions to customers’ unique business needs.

Our experts weave cyber resilience into IT security, operations and culture.

Whether migrating to the cloud, protecting data with a Zero Trust strategy or managing a security operations center, our Security services enable our customers to focus on their business.

• Cloud Infrastructure and IT Outsourcing (“ITO”).

We enable customers to do Cloud Right™, making the right investments at the right time and on the right platforms.

We orchestrate hybrid cloud and multicloud environments, ensuring private and public clouds, servers and mainframes operate effectively together.

We provide companies with tailored plans for cloud migration and optimization to enable successful transformation.

We leverage our deep expertise in legacy IT and drive innovation with reliable, secure, mission-critical IT Outsourcing services – from compute and data center, to storage and backup, to network, to mainframe and to business continuity – providing a clear path to modernization.

• Modern Workplace.

Our Modern Workplace services put the employee experience first, helping them achieve new levels of productivity, engagement and collaboration while working seamlessly and securely on any device.

Organizations are empowered to deliver a consumer-like experience, centralize IT management and support services, and improve the total cost of ownership.

Global Business Services ("GBS") provides innovative technology solutions that help our customers address key business challenges and accelerate transformations tailored to each customer’s industry and specific objectives.

Global Infrastructure Services ("GIS") provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers.

Segment Measures

39 unchanged sentences

Pension and OPEB actuarial and settlement (losses) gains ( 445 ) ( 1,431 ) 684

(Loss) income before income taxes $ ( 885 ) $ 1,141 $ 654

Income (loss) before income taxes

$ 109 $ ( 885 ) $ 1,141

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

18 unchanged sentences

(in millions)

Total $ 1,411

In the normal course of business, the Company may provide certain customers with financial performance guarantees, and at times performance letters of credit or surety bonds.

4 unchanged sentences

The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of March 31, 2024:

(in millions) Fiscal 2024 Fiscal 2025 Fiscal 2026 and Thereafter Totals

(in millions) Fiscal 2025

Fiscal 2027 and Thereafter

Surety bonds $ 81 $ 66 $ 136 $ 283

16 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.

In March 2024, the District Court issued its final approval of the settlement and entered a final judgment closing the case.

In May 2024, the Company funded its contribution to the settlement amount.

This matter is now closed.

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.

In March 2024, a hearing was held on Plaintiffs’ motion for class certification.

In May 2024, the Court entered an order granting Plaintiffs’ motion for class certification.

The case is otherwise in discovery.

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

3 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 intends to fully implement the remedial measures within the time provided.

This matter is otherwise closed.

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

4 unchanged sentences

Department of Commerce, Bureau of Industry and Security (“BIS”) regarding potential export control violations in connection with its exit from the Russian market.

The Company’s review of potential sanctions violations is ongoing, and the Company may make further disclosures to relevant agencies as its review continues.

In August 2023, the Company submitted its Final Report of Voluntary Self-Disclosure to OFAC, and in November 2023, the Company submitted its Final Report of Voluntary Self-Disclosure to BIS.

In January 2024, BIS issued a Warning Letter to the Company, in lieu of any penalties, and closed its review of the matter.

In March 2024, OFAC issued a Cautionary Letter to the Company, in lieu of any penalties or further enforcement action, and closed its review of the matter.

The OFAC and BIS matters are now closed.

TCS Litigation:

In April 2019, the Company filed a lawsuit against Tata Consultancy Services Limited and Tata America International Corporation (“TCS”) alleging misappropriation of certain of the Company’s trade secrets.

In November 2023, a trial was held in the United States District Court for the Northern District of Texas, and a jury found TCS liable for misappropriating the Company’s trade secrets and awarded the Company $ 70 million in compensatory damages and $ 140 million in punitive damages, for a total award of $ 210 million.

The jury verdict is considered advisory and remains subject to the court’s review.

A final verdict is expected to be entered after the parties complete post-trial briefing, which the Company estimates will conclude in Q2 FY25.

The Company has not recognized any portion of the award in its financial statements and will continue to monitor the progress of the case.

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.

6 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-K

Item 8. Financial Statements and Supplementary Data