What changed in this filing

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Item 1. Financial Statements

2025-02-05 compared with 2024-11-08 · 160 added, 144 removed, 774 unchanged (28% of the section changed)

1 unchanged sentence

Index to Condensed Consolidated Financial Statements

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)

Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

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

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended December 31 , 2024 and December 31 , 2023 (unaudited)

Notes to Condensed Consolidated Financial Statements (unaudited)

Note 1–Summary of Significant Accounting Policies

Note 2–Divestitures

Note 3–Earnings Per Share

15 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in millions, except per-share amounts) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Revenues $ 3,225 $ 3,399 $ 9,702 $ 10,281

5 unchanged sentences

Interest income ( 51 ) ( 56 ) ( 153 ) ( 158 )

Loss on disposition of businesses — 2 — 7

Gain on disposition of businesses

( 7 ) ( 103 ) ( 7 ) ( 96 )

Other income, net ( 28 ) ( 48 ) ( 94 ) ( 188 )

3 unchanged sentences

Net income 63 140 133 281

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

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

6 ( 16 ) 8 ( 10 )

Net income attributable to DXC common stockholders $ 57 $ 156 $ 125 $ 291

5 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

$ 63 $ 140 $ 133 $ 281

5 unchanged sentences

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

Prior service cost, net of tax (3)

— ( 7 ) — ( 7 )

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

6 unchanged sentences

comprehensive income (loss) attributable to non-controlling interest

5 ( 23 ) 7 ( 18 )

Comprehensive income attributable to DXC common stockholders

$ 2 $ 188 $ 139 $ 323

(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.

(1) Tax expense (benefit) related to foreign currency translation adjustments was $ 13 and $ 7 for the three and nine months ended December 31, 2024, respectively, and $( 3 ) and $( 1 ) for the three and nine months ended December 31, 2023, respectively.

(2) Tax expense (benefit) related to cash flow hedges adjustments was $ 1 and $( 2 ) for the three and nine months ended December 31, 2024, respectively, and $( 1 ) and $ 1 for the three and nine months ended December 31, 2023, respectively.

(3) Tax expense related to prior service costs was $ 0 for the three and nine months ended December 31, 2023, respectively.

(4) Tax benefit related to amortization of prior service costs was $ 0 and $ 1 for the three and nine months ended December 31, 2024, respectively, and $ 0 and $ 1 for the three and nine months ended December 31, 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) September 30, 2024 March 31, 2024

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

Current assets:

3 unchanged sentences

Other current assets 125 146

Assets held for sale

Total current assets 5,075 5,135

16 unchanged sentences

Income taxes payable 215 134

Liabilities related to assets held for sale

Total current liabilities 3,788 4,394

7 unchanged sentences

DXC stockholders’ equity:

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

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

Common stock, par value $ 0.01 per share, 750,000,000 shares authorized, 186,609,810 issued as of December 31, 2024 and 183,430,878 issued as of March 31, 2024

Additional paid-in capital 7,657 7,599

1 unchanged sentence

Accumulated other comprehensive loss ( 719 ) ( 732 )

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

Treasury stock, at cost, 5,567,341 and 4,591,340 shares as of December 31, 2024 and March 31, 2024

( 235 ) ( 219 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

Six Months Ended

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

Nine Months Ended

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

Cash flows from operating activities:

7 unchanged sentences

Provision for losses on accounts receivable 9 —

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

Unrealized foreign currency exchange loss 33 48

Impairment losses and contract write-offs 25 17

9 unchanged sentences

Software purchased and developed ( 230 ) ( 177 )

Business dispositions 26 31

Proceeds from sale of assets 126 70

10 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 16 ( 4 )

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 499 ( 167 )

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)

Three Months Ended September 30, 2024

Three Months Ended December 31, 2024

(in millions, except

6 unchanged sentences

Shares Amount

Balance at June 30, 2024

Balance at September 30, 2024

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

Net Income 57 57 6 63

Other comprehensive income

Other comprehensive loss

( 55 ) ( 55 ) ( 1 ) ( 56 )

Share-based compensation expense 11 11 11

2 unchanged sentences

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 1 ) ( 3 ) 2 ( 1 )

Balance at September 30, 2024

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

Three Months Ended September 30, 2023

Balance at December 31, 2024 186,610 $ 2 $ 7,657 $ ( 3,715 ) $ ( 719 ) $ ( 235 ) $ 2,990 $ 262 $ 3,252

Three Months Ended December 31, 2023

(in millions, except

5 unchanged sentences

Shares Amount

Balance at June 30, 2023

Balance at September 30, 2023

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

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

156 156 ( 16 ) 140

Other comprehensive income

32 32 ( 7 ) 25

Share-based compensation expense 26 26 26

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

Share repurchase program (2)

2 unchanged sentences

Non-controlling interest distributions and other 1 1 $ ( 38 ) ( 37 )

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

Balance at December 31, 2023 189,469 $ 2 $ 7,827 $ ( 3,762 ) $ ( 742 ) $ ( 218 ) $ 3,107 $ 259 $ 3,366

Nine Months Ended December 31, 2024

(in millions, except

10 unchanged sentences

Other comprehensive income

14 14 ( 1 ) 13

Share-based compensation expense 59 59 59

2 unchanged sentences

Non-controlling interest distributions and other ( 1 ) ( 1 ) ( 1 ) ( 3 ) ( 3 )

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

Balance at December 31, 2024 186,610 $ 2 $ 7,657 $ ( 3,715 ) $ ( 719 ) $ ( 235 ) $ 2,990 $ 262 $ 3,252

Nine Months Ended December 31, 2023

(in millions, except

8 unchanged sentences

Net income 291 291 ( 10 ) 281

Other comprehensive loss — ( 1 ) ( 1 )

Other comprehensive income

32 32 ( 8 ) 24

Share-based compensation expense 71 71 71

4 unchanged sentences

Non-controlling interest distributions and other — — ( 46 ) ( 46 )

Balance at September 30, 2023

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

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

Balance at December 31, 2023 189,469 $ 2 $ 7,827 $ ( 3,762 ) $ ( 742 ) $ ( 218 ) $ 3,107 $ 259 $ 3,366

(1) 5,567,341 treasury shares as of December 31, 2024.

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

31 unchanged sentences

Recent Accounting Pronouncements

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:

During fiscal 2024 and fiscal 2025, 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

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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.

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

November 2024

ASU 2024-03, “Disaggregation of Income Statement Expenses”

The update requires disclosure, in the notes to financial statements, of specified quantitative information about certain costs and expenses presented in the income statement and certain qualitative information about costs that are not disaggregated.

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 financial statement 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 condensed consolidated financial statements.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 2 – Divestitures

During the first nine months of fiscal 2025 and fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $ 7 million and $ 96 million, respectively.

Note 3 – Earnings per Share

2 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(in millions, except per-share amounts) December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Net income attributable to DXC common stockholders:

7 unchanged sentences

Diluted $ 0.31 $ 0.81 $ 0.68 $ 1.43

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

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

The number of awards excluded were as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023

Stock Options 899,937 952,077 911,471 956,588

6 unchanged sentences

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

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

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

Beginning balance $ 35 $ 47

4 unchanged sentences

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

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

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 Receivables Facility’s termination date is July 25, 2025.

As of December 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 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:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Operating lease cost $ 75 $ 88 $ 235 $ 269

6 unchanged sentences

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

Six Months Ended

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

Nine Months Ended

(in millions) December 31, 2024 December 31, 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 $ 332 million and $ 557 million in lease modifications and terminations during the first six months of fiscal 2025 and 2024, respectively.

(1) Net of $ 528 million and $ 691 million in lease modifications and terminations during the first nine months of fiscal 2025 and 2024, respectively.

See Note 16 – “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 September 30, 2024 March 31, 2024

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

ROU operating lease assets Operating right-of-use assets, net $ 638 $ 731

2 unchanged sentences

Total operating lease liabilities $ 671 $ 779

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:

The weighted-average operating lease term was 3.8 years and 3.9 years as of December 31, 2024 and March 31, 2024, respectively.

The weighted-average operating lease discount rate was 5.0 % and 4.6 % as of December 31, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of December 31, 2024:

(in millions)

9 unchanged sentences

The components of finance lease expense were as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Amortization of right-of-use assets $ 17 $ 31 $ 66 $ 110

2 unchanged sentences

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

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

Nine Months Ended

(in millions) December 31, 2024

December 31, 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 September 30, 2024 March 31, 2024

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

ROU finance lease assets Property and Equipment, net $ 166 $ 264

3 unchanged sentences

(1) See Note 9 – “Debt” for further information on finance lease liabilities.

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:

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

The weighted-average finance lease discount rate was 5.6 % and 4.3 % as of December 31, 2024 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for finance leases as of December 31, 2024:

(in millions)

15 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 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.

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of December 31, 2024 and March 31, 2024 were $ 730 million and $ 885 million, respectively.

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

During the three and nine months ended December 31, 2024 and December 31, 2023, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur.

See Note 14 - “Stockholders’ Equity” for changes in accumulated other comprehensive loss, net of taxes, related to the Company’s derivatives designated for hedge accounting.

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.

As of December 31, 2024, $ 2 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 September 30, 2024 and March 31, 2024 were $ 1.7 billion and $ 1.5 billion, respectively.

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

DXC TECHNOLOGY COMPANY

1 unchanged sentence

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

Three Months Ended

Nine Months Ended

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

Foreign currency remeasurement (1)

10 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 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.

With respect to its foreign currency derivatives, as of December 31, 2024, there were seven counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $ 19 million.

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

11 unchanged sentences

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.

As of December 31, 2024 and March 31, 2024, DXC had $ 673 million and $ 702 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the three and six months ended September 30, 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.

For the three and nine months ended December 31, 2024, the pre-tax gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $ 52 million and $ 28 million, respectively.

DXC TECHNOLOGY COMPANY

2 unchanged sentences

Intangible assets consisted of the following:

As of September 30, 2024

As of March 31, 2024

As of December 31, 2024 As of March 31, 2024

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

6 unchanged sentences

The components of amortization expense were as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Intangible asset amortization $ 182 $ 192 $ 548 $ 570

2 unchanged sentences

Total amortization expense $ 233 $ 245 $ 700 $ 725

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

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

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

Estimated future amortization related to intangible assets as of December 31, 2024 is as follows:

Fiscal Year (in millions)

5 unchanged sentences

Note 8 – Goodwill

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

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of December 31, 2024.

(in millions) GBS GIS Total

1 unchanged sentence

$ 532 $ — $ 532

Assets held for sale ( 3 ) — ( 3 )

Foreign currency translation 12 — 12

Balance as of September 30, 2024, net

( 3 ) — ( 3 )

Foreign currency translation ( 11 ) — ( 11 )

Balance as of December 31, 2024, net $ 518 $ — $ 518

Goodwill, gross 5,008 5,066 10,074

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

Balance as of September 30, 2024, net

$ 541 $ — $ 541

Balance as of December 31, 2024, net $ 518 $ — $ 518

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 9/30/2024 (1)

3/31/2024 (1)

(in millions) Interest Rates Fiscal Year Maturities December 31, 2024 (1)

March 31, 2024 (1)

Short-term debt and

19 unchanged sentences

2025 - 2029 96 177

Other borrowings Various 2025 - 2035 20 —

Long-term debt 3,830 4,089

1 unchanged sentence

Long-term debt, net of current maturities $ 3,637 $ 3,818

(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.

(1) The carrying amounts of the senior notes as of December 31, 2024 and March 31, 2024, include the remaining principal outstanding of $ 3,422 million and $ 3,509 million, respectively, net of total unamortized debt discounts and premiums, and deferred debt issuance costs of $ 13 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 $ 3.4 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.

The estimated fair value of the Company’s long-term debt, excluding finance lease liabilities, was $ 3.3 billion as of both December 31, 2024 and March 31, 2024, compared with carrying value of $ 3.5 billion and $ 3.7 billion as of December 31, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

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

United States $ 902 $ 967 $ 2,688 $ 2,971

7 unchanged sentences

Remaining Performance Obligations

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

As of December 31, 2024, approximately $ 16.6 billion of revenue is expected to be recognized from remaining performance obligations.

We expect to recognize revenue on approximately 14 % of these remaining performance obligations in fiscal 2025, with the remainder of the balance recognized thereafter.

2 unchanged sentences

(in millions) Balance Sheet Line Item

September 30, 2024 March 31, 2024

December 31, 2024 March 31, 2024

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

4 unchanged sentences

Change in contract liabilities were as follows:

Six Months Ended

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

Nine Months Ended

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

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

8 unchanged sentences

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

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

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

Accrued expenses and other current liabilities $ 39 $ 40

8 unchanged sentences

Cash Paid Other (2)

Restructuring Liability as of September 30, 2024

Restructuring Liability as of December 31, 2024

Fiscal 2025 Plan

13 unchanged sentences

(2) Foreign currency translation adjustments.

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.

Restructuring costs for the nine months ended December 31, 2024 includes $ 11 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 Six Months Ended

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

Three Months Ended Nine Months Ended

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

Service cost $ 13 $ 11 $ 39 $ 41

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Note 13 – Income Taxes

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.

The Company’s effective tax rate (“ETR”) was 51.9 % and 34.0 % for the three months ended December 31, 2024, and December 31, 2023, respectively, and 54.5 % and 32.8 % for the nine months ended December 31, 2024, and December 31, 2023, respectively.

For the three months ended December 31, 2024, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the foreign tax credit.

For the nine months ended December 31, 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.

For the three months ended December 31, 2023, the primary drivers of the ETR were the global mix of income, U.S.

tax on foreign income, and the foreign tax credit.

For the nine months ended December 31, 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.

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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 do not expect the U.S.

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

We expect court proceedings to progress during calendar year 2025 that may result in resolution of some or all of the litigation matters by the end of fiscal year 2026.

During 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.

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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 December 31, 2024, the Company’s liability for uncertain tax positions decreased by $ 19 million (excluding interest and penalties and related tax attributes) primarily due to a change in the uncertain tax position related to capitalized research and experimental expenditures.

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.

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Share Repurchase Program

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:

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

During the third quarter of fiscal 2025, the Company made a $ 12 million payment for the excise tax associated with prior year share repurchases in compliance with the Inflation Reduction Act.

The details of shares repurchased during the nine months ended December 31, 2023 are shown below:

Fiscal Period Number of Shares Repurchased Average Price Per Share Amount

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2nd Quarter 9,958,585 $ 21.50 214

11,340,699 $ 22.18 252

Total 32,274,927 $ 23.11 $ 746

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Amounts reclassified from accumulated other comprehensive loss — 1 ( 3 ) ( 2 )

Balance at September 30, 2024

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

Balance at December 31, 2024 $ ( 916 ) $ ( 7 ) $ 204 $ ( 719 )

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

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Amounts reclassified from accumulated other comprehensive loss — 6 ( 10 ) ( 4 )

Balance at September 30, 2023

$ ( 990 ) $ — $ 216 $ ( 774 )

Balance at December 31, 2023 $ ( 946 ) $ ( 4 ) $ 208 $ ( 742 )

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 15 – Stock Incentive Plans

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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 ( 2,784,790 ) $ 25.61 — $ —

Outstanding as of September 30, 2024

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

Outstanding as of December 31, 2024 9,524,004 $ 22.32 201,017 $ 26.63

Share-Based Compensation

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

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

Total share-based compensation cost $ 11 $ 28 $ 59 $ 75

Related income tax benefit $ 3 $ 4 $ 10 $ 11

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 16 – Cash Flows

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

Six Months Ended

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

Nine Months Ended

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

Cash paid for:

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Shares repurchased but not settled in cash (3)

(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.

(1) Income tax refunds were $ 36 million and $ 26 million for the nine months ended December 31, 2024 and December 31, 2023, respectively.

(2) Net of $ 528 million and $ 691 million in lease modifications and terminations during the nine months ended December 31, 2024 and December 31, 2023, 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 September 30, 2024

Three Months Ended December 31, 2024

Revenues $ 1,666 $ 1,559 $ 3,225 $ — $ 3,225

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$ 40 $ 171 $ 211 $ 22 $ 233

Three Months Ended September 30, 2023

Three Months Ended December 31, 2023

Revenues $ 1,696 $ 1,703 $ 3,399 $ — $ 3,399

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

Six Months Ended September 30, 2024

Nine Months Ended December 31, 2024

Revenues $ 5,016 $ 4,686 $ 9,702 $ — $ 9,702

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$ 120 $ 523 $ 643 $ 69 $ 712

Six Months Ended September 30, 2023

Nine Months Ended December 31, 2023

Revenues $ 5,108 $ 5,173 $ 10,281 $ — $ 10,281

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$ 139 $ 572 $ 711 $ 78 $ 789

(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.

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 87 million and $ 88 million for the three months ended December 31, 2024 and 2023, respectively, and $ 263 million and $ 266 million for the nine months ended December 31, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

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

Total profit for reportable segments $ 325 $ 321 $ 963 $ 915

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Note 18 – Commitments and Contingencies

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

Minimum purchase commitments as of December 31, 2024 were as follows:

Fiscal year Minimum Purchase Commitment

1 unchanged sentence

Remainder of 2025

Thereafter 26

Total $ 1,325

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

In November and December 2024, two additional shareholder derivative suits were 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 and directors.

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

In January 2025, a second 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.

This case has been consolidated with the previously filed derivative suit from September 2024, and has been temporarily stayed pending further developments in the August 2024 securities class action lawsuit.

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

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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