What changed in this filing

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Item 1. Financial Statements

2024-11-08 compared with 2024-08-09 · 253 added, 170 removed, 665 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, 2024 and June 30, 2023 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended June 30, 2024 and June 30, 2023 (unaudited)

Condensed Consolidated Balance Sheets as of June 30, 2024 and March 31, 2024 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2024, and June 30, 2023 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2024 and June 30, 2023 (unaudited)

Condensed Consolidated Statements of Operations for the Three and Six Months Ended September 30, 202 4 and September 30, 202 3 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended September 30, 2024 and September 30, 2023 (unaudited)

Condensed Consolidated Balance Sheets as of September 30, 202 4 and March 31, 202 4 (unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 202 4 and September 30, 202 3 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended September 30, 202 4 and September 30, 202 3 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

17 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended

(in millions, except per-share amounts) June 30, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions, except per-share amounts) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Revenues $ 3,241 $ 3,436 $ 6,477 $ 6,882

11 unchanged sentences

Net income 45 99 70 141

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

net income attributable to non-controlling interest, net of tax 3 — 2 6

Net income attributable to DXC common stockholders $ 42 $ 99 $ 68 $ 135

5 unchanged sentences

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

Three Months Ended

(in millions)

June 30, 2024 June 30, 2023

Net income $ 25 $ 42

Other comprehensive income, net of taxes:

Foreign currency translation adjustments, net of tax expense of $ 1 and $ 0

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

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

$ 45 $ 99 $ 70 $ 141

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments, net of tax (1)

79 ( 40 ) 82 ( 6 )

Cash flow hedges adjustments, net of tax (2)

( 14 ) 4 ( 11 ) 7

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

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

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

( 1 ) — ( 2 ) ( 2 )

Pension and other post-retirement benefit plans, net of tax ( 1 ) — ( 2 ) ( 2 )

Other comprehensive income, net of taxes

Other comprehensive income (loss), net of taxes

64 ( 36 ) 69 ( 1 )

Comprehensive income

comprehensive (loss) income attributable to non-controlling interest

109 63 139 140

comprehensive income (loss) attributable to non-controlling interest

Comprehensive income attributable to DXC common stockholders

$ 106 $ 64 $ 137 $ 135

(1) Tax (benefit) expense related to foreign currency translation adjustments was $( 7 ) and $( 6 ) for the three and six months ended September 30, 2024, respectively, and $ 2 and $ 2 for the three and six months ended September 30, 2023, respectively.

(2) Tax (benefit) expense related to cash flow hedges adjustments was $( 4 ) and $( 3 ) for the three and six months ended September 30, 2024, respectively, and $ 1 and $ 2 for the three and six months ended September 30, 2023, respectively.

(3) Tax benefit related to amortization of prior service costs was $ 1 and $ 1 for the three and six months ended September 30, 2024, respectively, and $ 1 and $ 1 for the three and six months ended September 30, 2023, 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, 2024 March 31, 2024

(in millions, except per-share and share amounts) September 30, 2024 March 31, 2024

Current assets:

3 unchanged sentences

Other current assets 100 146

Assets held for sale

Total current assets 5,007 5,135

12 unchanged sentences

Accrued payroll and related costs 592 558

Operating lease liabilities

Current operating lease liabilities 250 282

Accrued expenses and other current liabilities 1,346 1,437

1 unchanged sentence

Income taxes payable 172 134

Liabilities related to assets held for sale

Total current liabilities 4,004 4,394

7 unchanged sentences

DXC stockholders’ equity:

Preferred stock, par value $ 0.01 per share;

authorized 1,000,000 shares;

none issued as of June 30, 2024 and March 31, 2024

Common stock, par value $ 0.01 per share;

authorized 750,000,000 shares;

issued 186,267,057 as of June 30, 2024 and 183,430,878 as of March 31, 2024

Preferred stock, par value $ 0.01 per share, 1,000,000 shares authorized, none issued as of September 30, 2024 and March 31, 2024

Common stock, par value $ 0.01 per share, 750,000,000 shares authorized, 186,520,916 issued as of September 30, 2024 and 183,430,878 issued as of March 31, 2024

Additional paid-in capital 7,647 7,599

1 unchanged sentence

Accumulated other comprehensive loss ( 663 ) ( 732 )

Treasury stock, at cost, 5,491,373 and 4,591,340 shares as of June 30, 2024 and March 31, 2024

Treasury stock, at cost, 5,528,105 and 4,591,340 shares as of September 30, 2024 and March 31, 2024

( 234 ) ( 219 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Three Months Ended

(in millions)

June 30, 2024 June 30, 2023

Six Months Ended

(in millions) September 30, 2024 September 30, 2023

Cash flows from operating activities:

5 unchanged sentences

Deferred taxes ( 95 ) ( 102 )

Gain on dispositions ( 1 ) ( 9 )

Loss (gain) on dispositions 23 ( 39 )

Provision for losses on accounts receivable 10 2

Unrealized foreign currency exchange loss — 23

Unrealized foreign currency exchange (gain) loss ( 2 ) 22

Impairment losses and contract write-offs 9 14

Other non-cash charges, net 3 —

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

Changes in assets and liabilities:

Decrease in assets 133 223

6 unchanged sentences

Software purchased and developed ( 178 ) ( 141 )

Business dispositions — ( 7 )

Proceeds from sale of assets 70 65

Proceeds from short-term investing — ( 3 )

Other investing activities, net 12 10

7 unchanged sentences

Other financing activities, net ( 2 ) ( 8 )

Net cash provided by (used in) financing activities 41 ( 210 )

Net cash used in financing activities ( 189 ) ( 521 )

Effect of exchange rate changes on cash and cash equivalents 38 ( 16 )

Net increase (decrease) in cash and cash equivalents including cash classified within current assets held for sale 24 ( 446 )

Cash classified within current assets held for sale ( 3 ) —

Net increase (decrease) in cash and cash equivalents 21 ( 446 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(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, 2024

Balance at June 30, 2024

186,267 $ 2 $ 7,622 $ ( 3,814 ) $ ( 727 ) $ ( 233 ) $ 2,850 $ 253 $ 3,103

5 unchanged sentences

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

Balance at June 30, 2024

Balance at September 30, 2024

186,521 $ 2 $ 7,647 $ ( 3,771 ) $ ( 663 ) $ ( 234 ) $ 2,981 $ 255 $ 3,236

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 Total

Controlling Interest

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at June 30, 2023

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

Other comprehensive loss ( 35 ) ( 35 ) ( 1 ) ( 36 )

Share-based compensation expense 23 23 23

Acquisition of treasury stock ( 1 ) ( 1 ) ( 1 )

Share repurchase program (2)

( 9,958 ) ( 420 ) 204 ( 216 ) ( 216 )

Stock option exercises and other common stock transactions 164 — —

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

Six Months Ended September 30, 2024

(in millions, except

shares in thousands) Common Stock Additional

Paid-in Capital Accumulated Deficit Accumulated

Comprehensive Loss

Treasury Stock (1)

DXC Equity Non-

Controlling Interest Total Equity

Shares Amount

Balance at March 31, 2024

4 unchanged sentences

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

Stock option exercises and other common stock transactions 3,090 — —

Non-controlling interest distributions and other — ( 2 ) ( 2 )

Balance at September 30, 2024

186,521 $ 2 $ 7,647 $ ( 3,771 ) $ ( 663 ) $ ( 234 ) $ 2,981 $ 255 $ 3,236

Six Months Ended September 30, 2023

(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 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)

2 unchanged sentences

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

Balance at June 30, 2023

Balance at September 30, 2023

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

(1) 5,491,373 treasury shares as of June 30, 2024.

(1) 5,528,105 treasury shares as of September 30, 2024.

(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.

48 unchanged sentences

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

Three Months Ended

(in millions, except per-share amounts)

June 30, 2024 June 30, 2023

Net income attributable to DXC common shareholders:

Three Months Ended Six Months Ended

(in millions, except per-share amounts) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Net income attributable to DXC common stockholders:

$ 42 $ 99 $ 68 $ 135

Common share information:

7 unchanged sentences

The number of awards excluded were as follows:

Three Months Ended

June 30, 2024 June 30, 2023

Three Months Ended Six Months Ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Stock Options 906,745 960,455 917,260 924,990

1 unchanged sentence

Performance Stock Units 107,406 1,700,588 114,745 35,604

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 3 – Receivables

1 unchanged sentence

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

(in millions) June 30, 2024 March 31, 2024

(in millions) September 30, 2024 March 31, 2024

Beginning balance $ 35 $ 47

5 unchanged sentences

The Receivables Facility was amended on July 26, 2024 extending the termination date to July 25, 2025.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of June 30, 2024, the total availability under the Receivables Facility was $ 400 million and the amount sold to the Purchasers was $ 381 million, which was derecognized from the Company’s balance sheet.

As of June 30, 2024, the Company recorded a $ 19 million asset within accounts receivable because the amount of cash proceeds received by the Company under the Receivables Facility was less than the total availability.

As of September 30, 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 book value due to the short-term nature, and as a result, no gain or loss on sale of receivables was recorded.

4 unchanged sentences

The components of operating lease expense were as follows:

(in millions) Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Operating lease cost $ 80 $ 91 $ 160 $ 181

3 unchanged sentences

Total operating costs $ 94 $ 110 $ 188 $ 218

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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, 2024

Three Months Ended June 30, 2023

Six Months Ended

(in millions) September 30, 2024 September 30, 2023

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 $ 237 million and $ 230 million in lease modifications and terminations for the three months ended June 30, 2024 and June 30, 2023, respectively.

(1) Net of $ 332 million and $ 557 million in lease modifications and terminations during the first six months of fiscal 2025 and 2024, respectively.

See Note 15 – “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, 2024 March 31, 2024

(in millions) Balance Sheet Line Item September 30, 2024 March 31, 2024

ROU operating lease assets Operating right-of-use assets, net $ 632 $ 731

2 unchanged sentences

Total operating lease liabilities $ 670 $ 779

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The weighted-average operating lease term was 3.7 years and 3.9 years as of June 30, 2024 and March 31, 2024, respectively.

The weighted-average operating lease discount rate was 4.7 % and 4.6 % as of June 30, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of June 30, 2024:

The weighted-average operating lease term was 3.7 years and 3.9 years as of September 30, 2024 and March 31, 2024, respectively.

The weighted-average operating lease discount rate was 4.7 % and 4.6 % as of September 30, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of September 30, 2024:

(in millions)

5 unchanged sentences

Total operating lease liabilities

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Finance Leases

The components of finance lease expense were as follows:

(in millions) Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Amortization of right-of-use assets $ 24 $ 37 $ 49 $ 79

Interest on lease liabilities 3 3 7 7

Total finance lease cost $ 29 $ 46

Total finance lease expense $ 27 $ 40 $ 56 $ 86

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

(in millions) Three Months Ended June 30, 2024

Three Months Ended June 30, 2023

(in millions) Six Months Ended September 30, 2024 Six Months Ended September 30, 2023

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, 2024 March 31, 2024

(in millions) Balance Sheet Line Item September 30, 2024 March 31, 2024

ROU finance lease assets Property and Equipment, net $ 205 $ 264

3 unchanged sentences

(1) See Note 8 – “Debt” for further information on finance lease liabilities.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The weighted-average finance lease term was 2.8 years and 2.9 years as of June 30, 2024 and March 31, 2024, respectively.

The weighted-average finance lease discount rate was 4.5 % and 4.3 % as of June 30, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of June 30, 2024:

The weighted-average finance lease term was 2.9 years as of both September 30, 2024 and March 31, 2024.

The weighted-average finance lease discount rate was 5.1 % and 4.3 % as of September 30, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of September 30, 2024:

(in millions)

5 unchanged sentences

Total finance lease liabilities

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 5 – Derivative Instruments

6 unchanged sentences

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, 2024 and March 31, 2024 were $ 838 million and $ 885 million, respectively.

As of June 30, 2024, the related forecasted transactions extend through August 2026.

During the three months ended June 30, 2024 and June 30, 2023, 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, 2024 and March 31, 2024 were $ 721 million and $ 885 million, respectively.

As of September 30, 2024, the related forecasted transactions extend through August 2026.

During the three and six months ended September 30, 2024 and September 30, 2023, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

See Note 13 - “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, 2024, $ 5 million of gain 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, 2024, $ 9 million 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.

Derivatives Not Designated for Hedge Accounting

3 unchanged sentences

The Company manages the exposure to fluctuations in foreign currencies by using primarily 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, 2024 and March 31, 2024 were $ 1.4 billion and $ 1.5 billion, respectively.

The net notional amounts of the foreign currency forward contracts outstanding as of September 30, 2024 and March 31, 2024 were $ 1.7 billion and $ 1.5 billion, respectively.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

For the Three Months Ended

(in millions) June 30, 2024 June 30, 2023

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, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Foreign currency remeasurement (1)

$ ( 25 ) $ 25 $ ( 18 ) $ 21

Undesignated foreign currency forward contracts (2)

Total - Foreign currency loss (gain)

25 ( 26 ) 19 ( 30 )

Total - Foreign currency (gain) loss

$ — $ ( 1 ) $ 1 $ ( 9 )

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

4 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, 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 $ 11 million.

With respect to its foreign currency derivatives, as of September 30, 2024, there were four counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 2 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 when such net investments are sold or substantially liquidated.

As of June 30, 2024 and March 31, 2024, DXC had $ 697 million and $ 702 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

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

As of September 30, 2024 and March 31, 2024, DXC had $ 725 million and $ 702 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, 2024, the pre-tax impact of gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $ 5 million.

For the three and six months ended September 30, 2024, the pre-tax loss on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $ 29 million and $ 24 million, respectively.

DXC TECHNOLOGY COMPANY

2 unchanged sentences

Intangible assets consisted of the following:

As of June 30, 2024

As of September 30, 2024

As of March 31, 2024

2 unchanged sentences

Customer related intangible assets

3,959 2,810 1,149 3,892 2,588 1,304

Other intangible assets

298 138 160 309 134 175

Total intangible assets $ 8,004 $ 6,023 $ 1,981 $ 7,922 $ 5,792 $ 2,130

The components of amortization expense were as follows:

Three Months Ended

(in millions) June 30, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Intangible asset amortization $ 187 $ 195 $ 366 $ 378

Transition and transformation contract cost amortization (1)

48 54 101 102

Total amortization expense $ 235 $ 249 $ 467 $ 480

(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, 2024 is as follows:

Estimated future amortization related to intangible assets as of September 30, 2024 is as follows:

Fiscal Year (in millions)

5 unchanged sentences

Note 7 – Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of June 30, 2024.

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of September 30, 2024.

(in millions) GBS GIS Total

Balance as of March 31, 2024, net

$ 532 $ — $ 532

Assets held for sale ( 3 ) — ( 3 )

Foreign currency translation 12 — 12

Balance as of June 30, 2024, net $ 531 $ — $ 531

Balance as of September 30, 2024, net

$ 541 $ — $ 541

Goodwill, gross 5,031 5,066 10,097

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

Balance as of June 30, 2024, net $ 531 $ — $ 531

Balance as of September 30, 2024, net

$ 541 $ — $ 541

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.

For the Company’s annual goodwill impairment assessment as of July 1, 2024, the Company chose to perform a quantitative goodwill impairment test.

This quantitative test concluded that the fair value of the Company’s GBS reporting unit exceeded its carrying amount and, thereby, the goodwill balance for GBS is not impaired.

As of September 30, 2024, 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, 2024.

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, 2024 (1)

March 31, 2024 (1)

(in millions) Interest Rates Fiscal Year Maturities 9/30/2024 (1)

3/31/2024 (1)

Short-term debt and

current maturities of long-term debt

Commercial paper (2)

4.26 % - 4.32 %

2025 $ 150 $ —

Current maturities of long-term debt Various 2025 - 2026 68 93

6 unchanged sentences

$ 700 million Senior notes

1.80 % 2027 697 697

€ 750 million Senior notes

11 unchanged sentences

Long-term debt, net of current maturities $ 3,825 $ 3,818

(1) The carrying amounts of the senior notes as of June 30, 2024 and March 31, 2024, include the remaining principal outstanding of $ 3,493 million and $ 3,509 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $ 15 million and $ 17 million, respectively.

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

(1) The carrying amounts of the senior notes as of September 30, 2024 and March 31, 2024, include the remaining principal outstanding of $ 3,582 million and $ 3,509 million, respectively, net of total unamortized debt discounts and premiums, and deferred debt issuance costs of $ 15 million and $ 17 million, respectively.

Fair Value of Debt

The estimated fair value of the Company’s long-term debt excluding finance lease liabilities was $ 3.3 billion as of both June 30, 2024 and March 31, 2024, compared with carrying value of $ 3.6 billion and $ 3.7 billion as of June 30, 2024 and March 31, 2024, respectively.

The estimated fair value of the Company’s long-term debt, excluding finance lease liabilities, was $ 3.4 billion and $ 3.3 billion as of September 30, 2024 and March 31, 2024, respectively, compared with carrying value of $ 3.7 billion and $ 3.7 billion as of September 30, 2024 and March 31, 2024, respectively.

Long-term debt excluding finance lease liabilities are classified as Level 1 or Level 2 within the fair value hierarchy.

4 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, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

United States $ 889 $ 1,002 $ 1,786 $ 2,004

7 unchanged sentences

Remaining Performance Obligations

As of June 30, 2024, approximately $ 16.7 billion of revenue is expected to be recognized from remaining performance obligations.

As of September 30, 2024, approximately $ 16.4 billion of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 26 % of these remaining performance obligations in fiscal 2025, 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, 2024 March 31, 2024

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

(in millions) Balance Sheet Line Item

September 30, 2024 March 31, 2024

Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts

$ 2,117 $ 2,195

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

Contract liabilities Deferred revenue and advance contract payments and Non-current deferred revenue

$ 1,348 $ 1,537

Change in contract liabilities were as follows:

Three Months Ended

(in millions) June 30, 2024 June 30, 2023

Six Months Ended

(in millions) September 30, 2024 September 30, 2023

Balance, beginning of period $ 1,537 $ 1,842

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Note 10 – Restructuring Costs

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

(in millions) June 30, 2024 March 31, 2024

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

(in millions) September 30, 2024 March 31, 2024

Accrued expenses and other current liabilities $ 35 $ 40

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Cash Paid Other (2)

Restructuring Liability as of June 30, 2024

Restructuring Liability as of September 30, 2024

Fiscal 2025 Plan

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Total $ 51 $ 81 $ ( 21 ) $ ( 69 ) $ ( 1 ) $ 41

(1) Restructuring costs associated with right-of-use assets.

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

(2) Foreign currency translation adjustments.

Restructuring costs for the three months ended June 30, 2024 includes $ 4 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.

Restructuring costs for the six months ended September 30, 2024 includes $ 8 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

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The components of net periodic pension income were:

Three Months Ended

(in millions) June 30, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Service cost $ 13 $ 15 $ 26 $ 30

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Expected return on assets ( 115 ) ( 112 ) ( 228 ) ( 226 )

Amortization of prior service credit ( 1 ) ( 2 )

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

Net periodic pension income $ ( 27 ) $ ( 21 ) $ ( 54 ) $ ( 43 )

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Note 12 – Income Taxes

The Company’s effective tax rate (“ETR”) was 63.2 % and 46.2 % for the three months ended June 30, 2024, and June 30, 2023, respectively.

For the three months ended June 30, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, a reduction in a deferred tax asset for stock based compensation, and a decrease in a deferred tax liability for estimated taxes associated with the repatriation of foreign earnings.

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.

The Company’s effective tax rate (“ETR”) was 51.6 % and 22.7 % for the three months ended September 30, 2024, and September 30, 2023, respectively, and 56.5 % and 31.6 % for the six months ended September 30, 2024, and September 30, 2023, respectively.

For the three months ended September 30, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, the foreign tax credit, and an increase in interest receivables due from tax authorities.

For the six months ended September 30, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, the foreign tax credit, an increase in interest receivables due from tax authorities, and a decrease in a deferred tax asset for stock based compensation.

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.

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

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Pursuant to the tax matters agreement, the Company recorded a $ 15 million tax indemnification receivable related to uncertain tax positions, a $ 52 million tax indemnification receivable related to other tax payables, and a $ 99 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.

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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.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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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 2011, no earlier than the end of fiscal year 2026.

The Company expects to reach resolution for the fiscal and tax return years 2012 and 2013 no earlier than fiscal year 2028.

The Company expects to reach resolution for fiscal and tax return years 2014 through 2021 no earlier than the end of fiscal year 2026.

The Company expects to reach resolution for fiscal and tax return years 2009 through 2011 no earlier than fiscal year 2026.

The Company expects to reach resolution for fiscal and tax return years 2012 and 2013 no earlier than fiscal year 2028.

The Company expects to reach resolution for fiscal and tax return years 2014 through 2021 no earlier than fiscal year 2026.

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

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

For the three months ended June 30, 2024, the Company’s liability for uncertain tax positions increased by $ 5 million (excluding interest and penalties and related tax attributes) primarily due to the benefit of the U.S.

research and development income tax credit .

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 $ 62 million.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 13 – Stockholders’ Equity

Share Repurchase Program

During the first quarter of fiscal 2025, there were no share repurchases under our Share Repurchase Program.

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

During the first six months of fiscal 2025, there were no share repurchases under our Share Repurchase Program.

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

Fiscal Period Number of Shares Repurchased Average Price Per Share Amount

(in millions)

Open market purchases 10,975,643 $ 25.53 $ 280

1st Quarter 10,975,643 $ 25.53 $ 280

2nd Quarter 9,958,585 $ 21.50 214

Total 20,934,228 $ 23.61 $ 494

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Accumulated Other Comprehensive Loss

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Other comprehensive income before reclassifications

82 ( 12 ) — 70

Amounts reclassified from accumulated other comprehensive loss — 1 ( 2 ) ( 1 )

Balance at June 30, 2024

Balance at September 30, 2024

$ ( 857 ) $ ( 11 ) $ 205 $ ( 663 )

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$ ( 985 ) $ ( 7 ) $ 218 $ ( 774 )

Other comprehensive income before reclassifications

Other comprehensive loss before reclassifications ( 5 ) 5 — —

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

Balance at June 30, 2023

Balance at September 30, 2023

$ ( 990 ) $ — $ 216 $ ( 774 )

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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

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Canceled/Forfeited ( 1,827,215 ) $ 26.43 — $ —

Outstanding as of June 30, 2024

Outstanding as of September 30, 2024

10,462,941 $ 22.52 201,017 $ 26.63

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

Three Months Ended

(in millions) June 30, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Total share-based compensation cost $ 25 $ 24 $ 48 $ 47

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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, 2024 June 30, 2023

Six Months Ended

(in millions) September 30, 2024 September 30, 2023

Cash paid for:

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

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

Assets acquired under long-term financing $ — $ 4

Capital expenditures in accounts payable and accrued expenses $ 7 $ 96

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Shares repurchased but not settled in cash (3)

(1) Income tax refunds were $ 16 million and $ 6 million for the three months ended June 30, 2024 and June 30, 2023, respectively.

(2) Net of $ 237 million and $ 230 million in lease modifications and terminations for the three months ended June 30, 2024 and June 30, 2023, respectively.

(1) Income tax refunds were $ 33 million and $ 18 million for the six months ended September 30, 2024 and September 30, 2023, respectively.

(2) Net of $ 332 million and $ 557 million in lease modifications and terminations during the first six months of fiscal 2025 and 2024, respectively.

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

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

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenues $ 1,677 $ 1,564 $ 3,241 $ — $ 3,241

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$ 40 $ 177 $ 217 $ 23 $ 240

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

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

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$ 49 $ 197 $ 246 $ 26 $ 272

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 87 million and $ 89 million for the

three months ended June 30, 2024 and June 30, 2023, respectively.

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

Six Months Ended September 30, 2024

Revenues $ 3,350 $ 3,127 $ 6,477 $ — $ 6,477

Segment profit $ 395 $ 243 $ 638 $ ( 135 ) $ 503

Depreciation and amortization (1)

$ 80 $ 352 $ 432 $ 47 $ 479

Six Months Ended September 30, 2023

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

Segment profit $ 405 $ 189 $ 594 $ ( 125 ) $ 469

Depreciation and amortization (1)

$ 94 $ 381 $ 475 $ 52 $ 527

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 89 million and $ 89 million for the three months ended September 30, 2024 and 2023, respectively, and $ 176 million and $ 178 million for the six months ended September 30, 2024 and 2023, respectively.

DXC TECHNOLOGY COMPANY

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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, 2024 June 30, 2023

Three Months Ended Six Months Ended

(in millions) September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Total profit for reportable segments $ 343 $ 314 $ 638 $ 594

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Transaction, separation and integration-related costs

( 15 ) ( 3 ) ( 22 ) ( 4 )

Amortization of acquired intangible assets ( 89 ) ( 89 ) ( 176 ) ( 178 )

Merger related indemnification — ( 2 ) — ( 13 )

Loss on disposition of businesses

Gains on dispositions

(Losses) gains on real estate and facility sales

( 27 ) — ( 29 ) 6

Impairment losses — ( 2 ) — ( 5 )

Income before income taxes

$ 93 $ 128 $ 161 $ 206

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

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Note 17 – Commitments and Contingencies

Minimum purchase commitments as of June 30, 2024 were as follows:

Minimum purchase commitments as of September 30, 2024 were as follows:

Fiscal year Minimum Purchase Commitment

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

The trial date has since been extended to February 2026.

The trial date has since been extended to May 2026.

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

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The putative class of plaintiffs includes investors who acquired DXC stock during the period of May 26, 2021 to May 16, 2024.

On August 29, 2024, a shareholder derivative suit was filed in the United States District Court for the Eastern District of Virginia against the Company’s Board of Directors and certain of its current and former officers.

The complaint alleges a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

The derivative suit has been temporarily stayed, pending further developments in the August 2024 securities class action lawsuit.

On September 27, 2024, a shareholder derivative suit was filed in the District Court of the State of Nevada, Clark County against the Company’s Board of Directors and certain of its current and former officers.

The complaint alleges a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action lawsuit.

The derivative suit has been temporarily stayed, pending further developments in the August 2024 securities class action lawsuit.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company believes that the lawsuits described above are without merit and intends to vigorously defend all claims asserted.

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For more detail, see Note 12 – “Income Taxes” for further information.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

TCS Litigation:

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The Court also issued a permanent injunction enjoining TCS from, among other things, possessing, accessing, or using any of the Company’s trade secrets that were at issue in the case, and appointing a monitor to confirm, among other things, that TCS does not do so.

TCS may choose to appeal the decision of the District Court.

In August 2024, TCS filed a Notice of Appeal to the U.S.

Court of Appeals for the Fifth Circuit.

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

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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

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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