What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-05-15 compared with 2024-05-17 · 228 added, 230 removed, 1498 unchanged (23% of the section changed)

24 unchanged sentences

Note 17–Cash Flows

Note 18–Other Expense (Income), Net

Note 18–Other (Income) Expense, Net

Note 19–Segment and Geographic Information

3 unchanged sentences

DXC Technology Company

Ashburn, Virginia

Opinion on the Financial Statements

30 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 a selection of new or modified contracts:

• We analyzed the population of material revenue arrangements 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.

14 unchanged sentences

Other current assets 118 146

Assets held for sale — 5

Total current assets 5,363 5,135

16 unchanged sentences

Income taxes payable 64 134

Liabilities related to assets held for sale — 9

Total current liabilities 4,411 4,394

5 unchanged sentences

Other long-term liabilities 347 446

Liabilities related to assets held for sale - non-current — 3

Total Liabilities 9,715 10,805

28 unchanged sentences

Interest income ( 199 ) ( 214 ) ( 135 )

Debt extinguishment costs — — 311

Gain on disposition of businesses ( 7 ) ( 79 ) ( 190 )

Other expense (income), net 218 1,084 ( 1,081 )

Other (income) expense, net ( 376 ) 218 1,084

Total costs and expenses 12,241 13,558 15,315

2 unchanged sentences

Net income (loss) 396 86 ( 566 )

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

net income (loss) attributable to non-controlling interest, net of tax 7 ( 5 ) 2

Net income (loss) attributable to DXC common stockholders $ 389 $ 91 $ ( 568 )

8 unchanged sentences

Net income (loss) $ 396 $ 86 $ ( 566 )

Other comprehensive income (loss), net of taxes:

Other comprehensive (loss) income, net of taxes:

Foreign currency translation adjustments, net of tax (1)

1 unchanged sentence

Cash flow hedges adjustments, net of tax (2)

( 7 ) 7 ( 17 )

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

4 unchanged sentences

Pension and other post-retirement benefit plans, net of tax ( 14 ) ( 11 ) ( 38 )

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

Other comprehensive (loss) income, net of taxes ( 30 ) 35 ( 391 )

Comprehensive income (loss) 366 121 ( 957 )

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

comprehensive income (loss) attributable to non-controlling interest 7 ( 12 ) —

Comprehensive income (loss) attributable to DXC common stockholders $ 359 $ 133 $ ( 957 )

(1) Tax (benefit) expense related to foreign currency translation adjustments was $ 0 , $( 4 ), and $ 2 for the fiscal years ended March 31, 2025, March 31, 2024, and March 31, 2023, 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.

(2) Tax (benefit) expense related to cash flow hedge adjustments was $( 2 ), $ 3 , and $( 6 ) for the fiscal years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively.

(3) Tax benefit related to prior service costs was $ 3 , $ 0 , and $ 1 for the fiscal years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively.

(4) Tax benefit related to amortization of prior service costs was $ 1 , $ 1 , and $ 15 for the fiscal years ended March 31, 2025, March 31, 2024, and March 31, 2023, respectively.

9 unchanged sentences

Operating right-of-use expense 309 353 404

Pension & other post-employment benefits, actuarial & settlement losses (gains) 445 1,431 ( 684 )

Pension & other post-employment benefits, actuarial & settlement (gains) losses ( 232 ) 445 1,431

Share-based compensation 79 109 108

Deferred taxes ( 35 ) ( 416 ) ( 609 )

Gain on dispositions ( 131 ) ( 260 ) ( 421 )

Loss (gain) on dispositions 24 ( 131 ) ( 260 )

Provision for losses on accounts receivable 12 — ( 1 )

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

Unrealized foreign currency exchange losses (gains) 40 ( 7 ) 8

Impairment losses and contract write-offs 32 18 47

Debt extinguishment costs — — 311

Amortization of debt issuance costs and discount 5 5 4

3 unchanged sentences

Decrease in receivables 320 176 412

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

(Increase) Decrease in prepaid expenses and other current assets ( 81 ) 211 ( 119 )

Decrease in accounts payable and accruals ( 335 ) ( 278 ) ( 424 )

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

(Decrease) Increase in income taxes payable and income tax liability ( 57 ) 13 ( 161 )

Decrease in operating lease liability ( 309 ) ( 353 ) ( 404 )

8 unchanged sentences

Proceeds from sale of assets 161 75 171

Proceeds from short-term investing — — 24

Other investing activities, net 12 13 19

3 unchanged sentences

Repayments of commercial paper ( 369 ) ( 1,887 ) ( 1,757 )

Borrowings on long-term debt — — 19

Principal payments on long-term debt — — ( 63 )

Payments on finance leases and borrowings for asset financing ( 298 ) ( 430 ) ( 511 )

Proceeds from bond issuance — — 2,918

Proceeds from stock options and other common stock transactions — — 2

1 unchanged sentence

Repurchase of common stock ( 14 ) ( 898 ) ( 669 )

Payments for debt extinguishment costs — — ( 344 )

Other financing activities, net 17 ( 21 ) ( 6 )

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents 3 ( 17 ) ( 97 )

Net decrease in cash and cash equivalents including cash classified within current assets held for sale ( 634 ) ( 824 ) ( 348 )

Net increase (decrease) in cash and cash equivalents including cash classified within current assets held for sale 572 ( 634 ) ( 824 )

Cash classified within current assets held for sale — — 10

Net decrease in cash and cash equivalents ( 634 ) ( 814 ) ( 296 )

Net increase (decrease) in cash and cash equivalents 572 ( 634 ) ( 814 )

Cash and cash equivalents at beginning of year 1,224 1,858 2,672

11 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 )

Net income 91 91 ( 5 ) 86

Other comprehensive loss 42 42 ( 7 ) 35

19 unchanged sentences

Acquisition of treasury stock ( 18 ) ( 18 ) ( 18 )

Share repurchase program (2)

( 38,445 ) ( 1,626 ) 734 ( 892 ) ( 892 )

Stock option exercises and other common stock transactions 3,425 — —

9 unchanged sentences

Note 1 - Summary of Significant Accounting Policies

DXC Technology Company ("DXC," the "Company," "we," "us," or "our") is a global IT services market leader.

We provide mission-critical IT services that transform global businesses.

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

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 that modernize operations and drive innovation across our customers' entire IT estate.

DXC Technology Company ("DXC," the "Company," "we," "us," or "our") is a leading global provider of IT services.

We are a trusted partner to many of the world’s most innovative organizations, building solutions that move industries and companies forward.

Our engineering, consulting, and technology experts help clients simplify, optimize, and modernize their systems and processes, manage their most critical workloads, integrate AI-powered intelligence into their operations, and put security and trust at the forefront.

Through innovative solutions, we help clients to achieve competitive advantages in the marketplace.

We serve a global client base, including many Fortune 500 companies, through our more than 120,000 people in over 60 countries.

We operate through two segments - Global Business Services ("GBS") and Global Infrastructure Services ("GIS") - delivering 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 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.

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 (loss)," (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.

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

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

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

All intercompany transactions and balances have been eliminated.

Use of Estimates

The preparation of the financial statements, in accordance with GAAP, requires the Company's management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities.

The preparation of the financial statements, in accordance with GAAP, requires the Company's management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities.

The Company bases its estimates on assumptions regarding historical experience, currently available information, and anticipated developments that it believes are reasonable and appropriate.

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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.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

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

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.

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

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DXC's IT outsourcing ("ITO") arrangements typically reflect a single performance obligation that comprises a series of distinct services which are substantially the same and provided over a period of time using the same measure of progress.

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DXC's contracts often include upfront fees billed for activities to familiarize DXC with the customers' operations, take control over their administration and operation, and adapt them to DXC's solutions.

Upfront fees are generally recognized ratably over the contract period, which approximates the manner in which the services are provided.

These activities typically do not qualify as performance obligations, and the related revenues are allocated to the relevant performance obligations and recognized ratably over time as the performance obligation is satisfied during the period in which DXC provides the related service, which is typically the life of the contract.

Software transactions that include multiple performance obligations are described below.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For contracts with multiple performance obligations, DXC allocates the contract’s transaction price to each performance obligation based on the relative standalone selling price of each distinct good or service in the contract.

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

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fixed-price contracts.

2 unchanged sentences

A performance obligation's estimate at completion includes all direct costs such as materials and labor.

If output or input measures are not available or cannot be reasonably estimated, revenue is deferred until progress can be measured and costs are not deferred unless they meet the criteria for capitalization.

Under the percentage-of-completion cost-to-cost method, progress towards completion is measured based on costs incurred as a proportion of estimated total costs.

Profit in a given period is reported at the estimated profit margin to be achieved on the overall contract.

If estimated total costs at completion exceed estimated revenue for a contract under the percentage-of-completion cost-to-cost method, the loss is recognized in the quarter it first becomes probable and reasonably estimable.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Software contracts.

4 unchanged sentences

Revenue from distinct software licenses is recognized at a point in time when the customer can first use the software license.

If significant customization is required, software revenue is recognized as the related software customization services are performed in accordance with the percentage-of-completion method described above.

Revenue for post-contract customer support and other software services is recognized over time as those services are provided .

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Capitalized sales commissions costs are classified within other assets and amortized in selling, general and administrative expenses.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Costs to Fulfill a Contract

3 unchanged sentences

The Company recognizes these transition and transformation contract costs as other assets, which are amortized over the respective contract life.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pension and Other Benefit Plans

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Costs incurred to establish technological feasibility are charged to expense as incurred.

Enhancements to software products are capitalized where such enhancements extend the life or significantly expand the marketability of the products.

Enhancements to software products are capitalized when such enhancements extend the life or significantly expand the marketability of the products.

Amortization of capitalized software development costs is determined separately for each software product.

9 unchanged sentences

Internal-use software assets are evaluated for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation

2 unchanged sentences

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

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

For awards settled in shares, the Company recognizes compensation expense based on the grant-date fair value net of estimated forfeitures over the vesting period.

For awards settled in ca sh, the Company recognizes compensation expense based on the fair value at each reporting date net of estimated forfeitures.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The Company uses a Monte Carlo simulation model to compute the estimated fair value of PSUs with a market condition.

4 unchanged sentences

Expected volatility is based on a historical approach and the Company considers the performance period of the award.

For awards settled in shares, the Company recognizes compensation expense based on the grant-date fair value net of estimated forfeitures over the vesting period.

For awards settled in ca sh, the Company recognizes compensation expense based on the fair value at each reporting date net of estimated forfeitures.

Goodwill Impairment Analysis

13 unchanged sentences

However, if a reporting unit’s fair value is less than its carrying value, then an impairment charge is recorded in the amount of the excess .

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

When the Company performs the quantitative goodwill impairment test for a reporting unit, it estimates the fair value of the reporting unit using a combination of an income approach and a market approach.

7 unchanged sentences

The fair values determined by the market approach and income approach, as described above, are weighted to determine the fair value for each reporting unit.

DXC TECHNOLOGY COMPANY - NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

When the Company performs a quantitative goodwill impairment test for its reporting units, it also compares the sum of the reporting units’ fair values to the Company's market capitalization (per-share stock price multiplied by the number of shares outstanding) and calculates an implied control premium representing the excess of the sum of the reporting units’ fair values over the market capitalization.

12 unchanged sentences

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.

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

Receivables consist of amounts billed and currently due from customers, amounts earned but unbilled (including contracts measured under the percentage-of-completion cost-to-cost method of accounting), amounts retained by the customer until the completion of a specified contract and claims.

Unbilled recoverable amounts under contracts in progress generally become billable upon the passage of time, the achievement of project milestones, or upon acceptance by the customer.

Receivables consist of amounts billed and currently due from customers, amounts earned but unbilled (including contracts measured under the percentage-of-completion cost-to-cost method of accounting), and amounts retained by the customer until the completion of a specified contract and claims.

Unbilled receivables amounts under contracts in progress generally become billable upon the passage of time, the achievement of project milestones, or upon acceptance by the customer.

Allowances for uncollectible trade receivables are estimated based on a combination of write-off history, aging analysis, any known collectability issues, and certain forward-looking information.

DXC uses receivables securitization facilities or receivables sales facilities in the normal course of business as part of managing its cash flows.

The Company accounts for receivables sold under these facilities as a sale of financial assets pursuant to ASC 860 “Transfers and Servicing” and derecognizes these receivables, as well as the related allowances, from its balance sheets.

The Company accounts for receivables sold under these facilities as a sale of financial assets pursuant to ASC 860 “Transfers and Servicing” and derecognizes these receivables, along with the related allowances, from its balance sheets.

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

64 unchanged sentences

All cash flows associated with the Company's derivative instruments are classified as operating activities in the statements of cash flows.

Recently Adopted Accounting Pronouncements

During fiscal 2025, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:

Date Issued and ASU Date Adopted and Method Description Impact

November 2023

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

January 1, 2025 Prospective

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.

The Company adopted this standard by expanding disclosures related to segments in the notes to the financial statements.

New 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 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.

December 2023

ASU 2023-09, “Improvements to Income Tax Disclosures” Fiscal 2026 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 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.

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

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 consolidated financial statements.

1 unchanged sentence

Fiscal 2025 Divestitures

During fiscal 2025, the Company sold insignificant businesses that resulted in a gain of $ 7 million.

Fiscal 2024 Divestitures

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.

3 unchanged sentences

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.

Fiscal 2022 Divestitures

During fiscal 2022, DXC completed the sale of its healthcare provider software business (“HPS” or the “HPS Business”) to Dedalus Holding S.p.A.

(“Dedalus”) for € 468 million (approximately $ 551 million), resulting in a pre-tax gain on sale of $ 331 million, net of closing costs.

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

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

Included in this amount was the Company's primary Russian entity that the Company sold in the second quarter of fiscal 2023.

Note 3 - Earnings (Loss) Per Share

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The Receivables Facility has a facility limit of $ 400 million as of March 31, 2025.

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

The Receivables Facility's termination date is July 25, 2025.

As of March 31, 2025, 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.

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Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows $ 309 $ 353 $ 404

$ 353 $ 404 $ 484

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

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Total operating lease liabilities $ 671 $ 779

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 term was 3.8 years and 3.9 years as of March 31, 2025 and March 31, 2024, respectively.

The weighted-average operating lease discount rate was 4.9 % and 4.6 % as of March 31, 2025 and March 31, 2024, respectively.

18 unchanged sentences

Interest paid for finance lease liabilities – Operating cash flows $ 14 $ 15 $ 17

$ 15 $ 17 $ 27

Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows 200 240 315

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

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 term was 2.7 years and 2.9 years as of March 31, 2025 and March 31, 2024, respectively.

The weighted-average finance lease discount rate was 5.6 % and 4.3 % as of March 31, 2025 and March 31, 2024, respectively.

10 unchanged sentences

The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them.

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

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

Derivatives Designated for Hedge Accounting

Cash flow hedges

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

The notional amounts of foreign currency forward contracts designated as cash flow hedges as of March 31, 2025 and March 31, 2024 were $ 668 million and $ 885 million, respectively.

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

As of March 31, 2025, the related forecasted transactions extend through December 2026.

For the fiscal years ended March 31, 2025 and March 31, 2024, 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.

As of March 31, 2025, $ 4 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

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

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 net notional amounts of the foreign currency forward contracts outstanding as of March 31, 2025 and March 31, 2024 was $ 1.9 billion and $ 1.5 billion, respectively.

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

5 unchanged sentences

( 7 ) ( 25 ) ( 27 )

Total - Foreign currency (gain) loss

Total - Foreign currency gain

$ ( 4 ) $ ( 7 ) $ ( 15 )

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

With respect to its foreign currency derivatives, as of March 31, 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.

With respect to its foreign currency derivatives, as of March 31, 2025, there were three counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is immaterial.

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 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, 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.

As of March 31, 2025 and March 31, 2024, DXC had $ 702 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S.

subsidiaries.

For the fiscal year ended March 31, 2025, the pre-tax impact of loss on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income (loss) was immaterial.

Note 7 - Property and Equipment

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

Estimated future amortization as of March 31, 2024 is as follows:

Estimated future intangible asset amortization as of March 31, 2025 is as follows:

Fiscal Year (in millions)

28 unchanged sentences

Goodwill Impairment Analyses

The Company’s annual goodwill impairment analyses, which were performed qualitatively in the second quarter of fiscal years 2024, 2023, and 2022, did not result in an impairment charge.

For the Company’s annual goodwill impairment assessment performed as of July 1, 2024, the Company chose the option to bypass the initial qualitative assessment stage and proceed directly to the quantitative goodwill impairment test;

the impairment analyses performed as of July 1, 2023 and 2022 were performed qualitatively.

The analyses for each of these fiscal years did not result in an impairment charge.

At the end of each fiscal year, 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.

8 unchanged sentences

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

Commercial paper (2)

€ 650 million Senior notes

1.75 % 2026 $ 702 $ —

Current maturities of long-term debt

Various 2025 93 176

Current maturities of finance lease liabilities 0.51 % - 14.59 %

Current maturities of other long-term debt

Various 2026 55 93

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

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Other borrowings Various 2026 - 2035

Long-term debt

current maturities

Long-term debt, net of current maturities

$ 2,996 $ 3,818

$ 3,876 $ 4,089

(1) The carrying amounts of the senior notes as of March 31, 2025 and March 31, 2024, include the remaining principal outstanding of $ 3,510 million and $ 3,509 million, respectively, net of total unamortized debt (discounts) and premiums, and deferred debt issuance costs of $ 11 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 $.

Fair Value of Debt

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.

The estimated fair value of the Company's long-term debt excluding finance lease liabilities was $ 3.3 billion as of both March 31, 2025 and March 31, 2024, respectively, as compared with the carrying value of $ 3.6 billion and $ 3.7 billion as of March 31, 2025 and March 31, 2024, respectively.

If measured at fair value, long-term debt excluding finance lease liabilities would be classified as Level 1 or Level 2 within the fair value hierarchy.

Future Maturities of Long-term Debt

Expected maturities of long-term debt, including borrowings for asset financing but excluding minimum capital lease payments, for fiscal years subsequent to March 31, 2024, are as follows:

Future Maturities of Debt

Future maturities of debt, excluding finance lease liabilities, for fiscal years after March 31, 2025, are as follows:

Fiscal Year (in millions)

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Trade receivables, net Receivables and contract assets, net of allowance for doubtful accounts $ 2,041 $ 2,195

Contract assets Receivables and contract assets, net of allowance for doubtful accounts $ 362 $ 366

Contract assets

Receivables and contract assets, net of allowance for doubtful accounts $ 338 $ 362

Contract liabilities Deferred revenue and advance contract payments and Non-current deferred revenue $ 1,397 $ 1,537

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As a result, the disclosures below include the Company's U.S.

pension plans on a global consolidated basis.

pension and OPEB plans on a global consolidated basis.

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

The defined benefit pension plan in the U.K.

represents the largest plan.

The defined benefit pension plans in the U.K.

represents the largest plans.

In addition, healthcare, dental and life insurance benefits are also provided to certain non-U.S.

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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.

The Company accrued $ 0 million , $ 0 million and $ 4 million, for fiscal 2024, 2023 and 2022, respectively, as additional contractual termination benefits for certain employees as part of the Company's restructuring plans.

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 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.

The change in projected benefit obligation for fiscal year 2025 is primarily related to interest cost, benefits paid, and actuarial gains.

Actuarial gains were primarily due to discount rate increases in the U.K.

Projected Benefit Obligations

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Settlement/curtailment ( 23 ) ( 268 )

Actuarial loss (gain)

Actuarial (gain) loss

Benefits paid ( 286 ) ( 292 )

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Benefits paid ( 286 ) ( 292 )

Business/contract acquisitions/divestitures — ( 93 )

Contractual termination benefits — 1

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Amortization of prior service credit ( 5 ) ( 6 ) ( 7 )

Contractual termination benefit — — 4

Subtotal ( 108 ) ( 92 ) ( 178 )

Settlement/curtailment (gain) loss

Recognition of actuarial (gain) loss

( 232 ) 447 1,070

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 expense (income) are presented in other expense (income), net in the Company’s statements of operations.

Net periodic pension (income) expense

$ ( 340 ) $ 353 $ 1,253

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

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

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Fixed income commingled funds 38 323 — 361

Fixed income mutual funds — — — —

Corporate bonds — 3,678 91 3,769

Corporate and other bonds

1 3,145 — 3,146

Alternatives:

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Fixed income mutual funds — — — —

Corporate bonds 682 2,934 1 3,617

Corporate and other bonds

— 3,678 91 3,769

Alternatives:

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Purchases, sales and settlements ( 18 )

Transfers in and / or out of Level 3 —

Changes due to exchange rates 32

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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.

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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.

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.

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

Technology Matched Asset Plan.

Neither plan provides for employer contributions.

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Note 14 - Income Taxes

The sources of (loss) income from continuing operations, before income taxes, classified between domestic entities and those entities domiciled outside of the United States, are as follows:

The sources of income (loss) from continuing operations, before income taxes, classified between domestic entities and those entities domiciled outside of the United States, are as follows:

Fiscal Years Ended

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( 35 ) ( 416 ) ( 609 )

Total income tax (benefit) expense $ 23 $ ( 319 ) $ 405

The current federal (benefit) and tax expense for fiscal years 2024, 2023, and 2022 includes a $( 21 ) million, $( 61 ) million and $( 7 ) million transition tax benefit, respectively.

Total income tax expense (benefit)

$ 234 $ 23 $ ( 319 )

The current federal tax expense and (benefit) for fiscal years 2025, 2024, and 2023 includes a $ 0 million, $( 21 ) million and $( 61 ) million transition tax benefit, respectively.

The current expense (benefit) for fiscal years 2025, 2024, and 2023, includes interest and penalties of $ 14 million, $ 10 million and $ 1 million, respectively, for uncertain tax positions.

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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 $ 38 million tax indemnification receivable related to other tax payables, and a $ 92 million tax indemnification payable related to other tax receivables.

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

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

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

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

The Company generally will be responsible for tax liabilities arising prior to the USPS Separation, and

Perspecta is liable to the Company for income tax receivables related to pre-spin-off periods.

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.

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 $ 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.

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

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

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Indemnification costs 0.5 3.7 1.2

Interest on tax receivables

Other items, net 4.9 6.5 2.2

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In fiscal 2025, the ETR was primarily impacted by:

• The global mix of income and changes in foreign statutory tax rates, which increased the foreign tax rate differential and the ETR by $ 145 million and 23.0 %, respectively.

• Income tax and foreign tax credits, which decreased income tax expense and the ETR by $ 84 million and 13.3 %, respectively, offset by tax expense on U.S.

international tax inclusions, which increased tax expense and the ETR by $ 59 million and 9.4 %, respectively.

• The tax benefit of changes in uncertain tax positions related to the expiration of the statute of limitations and capitalized research and experimental expenditures, offset by the impact of increases in other uncertain tax positions and accrued interest, which decreased income tax expense and the ETR by $ 52 million and 8.3 %, respectively.

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.

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• Non-taxable gains and losses on business divestitures, which increased income tax benefit and decreased the ETR by $ 67 million and 7.6 %, respectively.

In fiscal 2022, the ETR was primarily impacted by:

• Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $ 174 million and 15.2 %, respectively.

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

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

The deferred tax assets (liabilities) were as follows:

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Deferred tax liabilities

Depreciation and amortization — ( 98 )

Operating right-of-use asset ( 127 ) ( 161 )

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(in millions) March 31, 2025 March 31, 2024

Liability for uncertain tax positions $ — $ ( 1 )

Income taxes payable $ ( 64 ) $ ( 134 )

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

The net decrease in the valuation allowance of $ 22 million in fiscal 2025 was primarily due to statutory corporate income tax rate changes which triggered a remeasurement of deferred tax balances and the associated valuation allowances.

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

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$ 5 $ — $ 5 2040 $ 5 $ — $ 5 2034

$ 2 $ — $ 2 2037 $ — $ — $ — N/A

$ 2 $ — $ 2 2038 $ 2 $ — $ 2 2037

Capital loss carryforwards

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The Company also has federal and state 163(j) interest deduction carryforward attributes of approximately $ 25 million and $ 1,230 million, respectively, that have no expiration.

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

tax upon repatriation.

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

The following earnings are considered indefinitely reinvested:

approximately $ 480 million that could be subject to U.S.

federal tax when repatriated to the U.S.

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

and approximately $ 200 million of our accumulated earnings in India.

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

state tax consequences when remitted.

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

As of March 31, 2025, the Company had undistributed earnings from foreign subsidiaries that were not indefinitely reinvested and had a deferred tax liability of $ 32 million for the estimated taxes associated with the repatriation of these earnings.

The Company also had undistributed earnings of approximately $ 1.4 billion and other outside basis differences in foreign subsidiaries that were indefinitely reinvested in foreign operations.

No taxes have been provided on the undistributed foreign earnings and outside basis differences that are indefinitely reinvested.

If future events, including material changes in estimates of cash, working capital and long-term investment requirements, necessitate that these earnings be distributed, an additional provision for taxes may apply, which could materially affect our future effective tax rate.

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

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Gross increases related to current year tax positions 15 8 8

Gross decreases related to current year tax positions

Settlements and statute of limitation expirations ( 55 ) ( 5 ) ( 43 )

Acquisitions and dispositions — — ( 36 )

Foreign exchange and others ( 1 ) — ( 2 )

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The Company’s liability for uncertain tax positions at March 31, 2025, March 31, 2024, and March 31, 2023, includes $ 336 million, $ 365 million and $ 368 million, respectively, related to amounts that, if recognized, would affect the effective tax rate (excluding related interest and penalties).

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 decrease in tax positions is primarily due to statute of limitation expirations and a change in the uncertain tax position related to 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, 2025, the Company had a net increase in interest expense of $ 14 million ($ 11 million net of tax), no changes in accrued expense for penalties and, as of March 31, 2025, recognized a liability for interest of $ 117 million ($ 89 million net of tax) and penalties of $ 3 million.

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.

The Company is currently under examination in several tax jurisdictions.

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India 2001 and forward

United Kingdom

2018 and forward

Tax Examinations

The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal 2009 through the tax year ended October 31, 2018.

With respect to CSC’s fiscal 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.

The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal years 2009 through the tax year ended October 31, 2018.

With respect to CSC’s fiscal years 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals.

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

The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs, foreign exchange losses, and a third-party financing transaction in previous years.

We have received notices of deficiency and a final partnership administrative adjustment with respect to fiscal years 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S.

Tax Court cases generally involve three primary issues.

The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $ 651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty.

The total cash tax payment the IRS is seeking is approximately $ 469 million, inclusive of penalties and interest, which continues to accrue.

The matter is currently scheduled for trial in August 2025.

The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $ 146 million, which the IRS has disputed.

The total cash tax payment the IRS is seeking is approximately $ 101 million, inclusive of penalties and interest, which continues to accrue.

In January 2025, the Court denied the IRS’s motion for summary judgment.

A trial date is pending.

The third issue primarily pertains to foreign currency losses from 2009 that the Company claimed in fiscal years 2010 and 2011 in the amount of $ 165 million, resulting from the depreciation of the U.S.

dollar against the Euro over an eight-year period (from 2001 to 2009) upon termination of a partnership interest involving two entities with different functional currencies.

The total cash tax payment the IRS is seeking is approximately $ 124 million, inclusive of penalties and interest, which continues to accrue.

This matter is currently pending a summary judgment motion from the IRS.

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 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.

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.

Tax Court, the above matters are not fully reserved and would result in incremental federal and state tax expense of approximately $ 544 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $ 623 million if we do not prevail.

These amounts are net of an expected $ 71 million interest deduction tax benefit.

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.

The Company notified the IRS promptly and filed for relief under Treas.

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

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

Tax Court, and consequently these years will remain open until such proceedings have concluded.

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 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 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.

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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.

As of March 31, 2025, approximately $ 592 million worth of shares remained available for repurchase under the plans or programs.

There were no share repurchases during fiscal 2025.

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

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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

In fiscal 2024, 2023 and 2022 the Company accepted 0 , 0 and 4,614 shares of its common stock, respectively, in lieu of cash in connection with the exercise of stock options.

In fiscal 2025, 2024 and 2023, the Company accepted 1,062,326 , 1,257,748 and 455,513 shares of its common stock, respectively, in lieu of cash in connection with the tax withholdings associated with the release of common stock upon vesting of restricted stock and RSUs.

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Balance at March 31, 2025 $ ( 948 ) $ ( 7 ) $ 193 $ ( 762 )

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

See Note 2 – “Divestitures” for additional information.

Note 16 - Stock Incentive Plans

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Restricted stock units ("RSUs") represent the right to receive one share of DXC common stock upon a future settlement date, subject to vesting and other terms and conditions of the award, plus any dividend equivalents accrued during the award period.

The RSU’s vest one-third ratably over a three-year period.

In general, if the employee’s status as a full-time employee is terminated prior to the vesting of the RSU grant in full, then the RSU grant is automatically canceled on the termination date and any unvested shares and dividend equivalents are forfeited.

Certain executives were awarded service-based "career share" RSUs for which the shares are settled over the 10 anniversaries following the executive's separation from service as a full-time employee, provided the executive complies with certain non-competition covenants during that period.

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

The Company also grants PSUs, which generally vest at the end of a three-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.

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

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

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

If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents shortly subsequent to the end of the performance period, subject to continued employment through the last day of the third fiscal year.

DXC also issued PSU awards that are considered to have a market condition.

Settlement of shares for these PSU awards will be made shortly subsequent to the end of third fiscal year, subject to certain market conditions and continued employment through the last day of the third fiscal year.

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

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Expired ( 32,366 ) $ 30.75

Outstanding 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 $ —

Granted — $ —

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503,579 503,579

The cash received from stock options exercised during fiscal 2024, 2023 and 2022 was $ 0 million, $ 1 million and $ 12 million, respectively.

Restricted Stock

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In our cash flow statement, we reflect the excise tax as a financing activity relating to the repurchase of common stock.

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:

Note 18 - Other (Income) Expense, Net

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

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

Fiscal Years Ended

1 unchanged sentence

March 31, 2025 March 31, 2024 March 31, 2023

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

Non-service cost components of net periodic pension income

$ ( 160 ) $ ( 145 ) $ ( 251 )

Pension and OPEB actuarial and settlement losses (gains)

Pension and OPEB actuarial and settlement (gains) losses

( 232 ) 445 1,431

Foreign currency (gain) loss

Foreign currency gains

( 4 ) ( 7 ) ( 15 )

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

Other (gain) loss

Loss (gain) on real estate and facility sales

23 ( 7 ) ( 21 )

Other miscellaneous (gains) and losses

( 3 ) ( 68 ) ( 60 )

Total $ ( 376 ) $ 218 $ 1,084

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As a result, and in accordance with accounting standards, operating segments are organized by the type of services provided.

DXC's chief operating decision maker ("CODM"), the chief executive officer, obtains, reviews, and manages the Company’s financial performance based on these segments.

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

Our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") serve as our Chief Operating Decision Makers ("CODM") and are responsible for obtaining, reviewing, and managing the Company’s financial performance based on these 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.

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.

The Company's CODM uses segment profit to measure operational strength and performance, assist in evaluation of underlying trends, and allocate resources through periodic budget and forecasting processes.

Segment profit is defined as segment revenues less costs of services, selling, general and administrative, depreciation and amortization, and other segment items.

The Company allocates certain costs such as real estate costs, information technology costs and costs for certain other shared corporate functions to it segments using a proportional share of either revenue or headcount for each segment.

The Company does not allocate to its segments certain operating expenses managed at the corporate level.

These unallocated expenses generally include certain corporate function costs, stock-based compensation expense, pension and OPEB actuarial and settlement gains and losses, restructuring costs, transaction, separation, and integration-related costs, amortization of acquired intangible assets, impairment losses, gains/(losses) on dispositions of businesses, gains/(losses) on real estate and facility sales, and other costs that do not reflect ongoing segment operating performance.

Segment Measures

The following table summarizes operating results regularly provided to the CODM by reportable segment and a reconciliation to the financial statements:

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

(in millions) GBS GIS Total Reportable Segments

Fiscal Year Ended March 31, 2025

Revenues $ 6,646 $ 6,225 $ 12,871

Segment Profit $ 835 $ 437 $ 1,272 $ ( 256 ) $ 1,016

Costs of services

( 5,081 ) ( 4,703 ) ( 9,784 )

Selling, general and administrative

( 630 ) ( 417 ) ( 1,047 )

Depreciation and amortization (1)

( 162 ) ( 686 ) ( 848 )

Other segment items (2)

Segment Profit $ 797 $ 451 $ 1,248

Fiscal Year Ended March 31, 2024

Revenues $ 6,820 $ 6,847 $ 13,667

Segment Profit $ 912 $ 507 $ 1,419 $ ( 262 ) $ 1,157

Costs of services

( 5,226 ) ( 5,332 ) ( 10,558 )

Selling, general and administrative

( 603 ) ( 384 ) ( 987 )

Depreciation and amortization (1)

( 186 ) ( 759 ) ( 945 )

Other segment items (2)

Segment Profit $ 835 $ 433 $ 1,268

Fiscal Year Ended March 31, 2023

Revenues $ 6,960 $ 7,470 $ 14,430

Segment Profit $ 1,160 $ 475 $ 1,635 $ ( 260 ) $ 1,375

Costs of services

( 5,237 ) ( 5,720 ) ( 10,957 )

Selling, general and administrative

( 710 ) ( 539 ) ( 1,249 )

Depreciation and amortization (1)

( 165 ) ( 853 ) ( 1,018 )

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $ 354 million, $ 402 million, and $ 434 million for fiscal 2024, 2023, and 2022, respectively.

Other segment items (2)

Segment Profit $ 912 $ 492 $ 1,404

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets.

(2) Other segment items as presented includes non-service cost components of net periodic pension income and other miscellaneous segment gains/(losses).

Reconciliation of Reportable Segment Profit to Consolidation

The Company's management uses segment profit as the measure for assessing performance of its segments.

Segment profit is defined as segment revenues less cost of services, segment selling, general and administrative, depreciation and amortization, and other income (excluding the movement in foreign currency exchange rates on DXC's foreign currency denominated assets and liabilities and the related economic hedges).

The Company does not allocate to its segments certain operating expenses managed at the corporate level.

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

Fiscal Years Ended

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Total profit for reportable segments $ 1,248 $ 1,268 $ 1,404

All other loss ( 256 ) ( 262 ) ( 260 )

Unallocated expenses

( 229 ) ( 259 ) ( 268 )

Subtotal $ 1,019 $ 1,009 $ 1,136

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Gains on dispositions 13 115 190

(Losses) gains on real estate and facility sales ( 23 ) 7 21

Arbitration loss — — ( 29 )

Impairment losses ( 17 ) ( 5 ) ( 19 )

Debt extinguishment cost — — ( 311 )

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

Pension and OPEB actuarial and settlement gains (losses)

232 ( 445 ) ( 1,431 )

Income (loss) before income taxes

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Contingencies

Forsyth, et al.

and Hewlett Packard Enterprise:

On August 18, 2016, this purported class and collective action was filed in the U.S.

District Court for the Northern District of California, against HP and HPE alleging violations of the Federal Age Discrimination in Employment Act (“ADEA”) and California state law, in connection with workforce reductions that occurred in or after August 2012 in California, and in or after as early as December 2014 in other U.S.

Former business units of HPE now owned by the Company, and former business units of the Company now owned by Peraton (formerly Perspecta), may be proportionately liable for any recovery by plaintiffs in this matter.

In December 2020, Plaintiffs filed a motion for preliminary certification of the collective action, which Defendants opposed.

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

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

In February 2022, the notice period closed.

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:

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

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

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

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

The trial date has since been extended to May 2026.

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

In July 2024, notice was provided to potential class members.

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.

On August 2, 2024, a purported class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against the Company and certain of its current and former officers.

The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and is premised on allegedly false and/or misleading statements regarding the Company’s transformation journey.

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

In March 2025, the Court entered an order granting the Company’s motion to dismiss the lawsuit and closing the case.

In April 2025, the deadline to file an appeal passed and no appeal was filed.

The matter is now closed.

After the filing of the August 2024 securities class action, five shareholder derivative suits were filed against the Company’s Board of Directors and certain of its current and former officers, alleging a breach of fiduciary duties arising from the claims asserted in the August 2024 securities class action.

Three derivative suits were filed in the United States District Court for the Eastern District of Virginia, and two derivative suits were filed in the District Court of the State of Nevada, Clark County.

All of the derivative suits had been temporarily stayed, pending an outcome in the August 2024 securities class action.

With the securities class action now dismissed and the matter closed, three of the five derivative suits have been voluntarily dismissed, including the two derivative suits pending in District Court of the State of Nevada, Clark County, and one of the derivative suits pending in the United States District Court for the Eastern District of Virginia.

The Company is pursuing dismissal of the two remaining derivative suits.

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

Tax Examinations:

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on its federal income tax returns for certain fiscal years and is in disagreement with the IRS on certain tax positions, which are currently being contested in the U.S.

For more detail, see Note 14 - "Income Taxes" for further information.

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

Department of the Treasury, Office of Foreign Assets Control (“OFAC”) regarding potential violations of U.S.

sanctions on Russia.

The self-disclosure pertains to the Company’s sale of Luxoft’s Russia business to IBS Holding LLC in April 2022, as part of the Company’s exit from the Russian market following Russia’s invasion of Ukraine.

The Company has also submitted an initial notification of voluntary self-disclosure to the U.S.

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

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.

For more detail, see Note 14 - "Income Taxes."

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 April 2019, the Company filed a lawsuit against Tata Consultancy Services Limited ("TCS") and Tata America International Corporation 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.

In June 2024, the Court entered a final order in the case, affirming the jury’s verdict in the Company’s favor and revising the monetary award to $ 56 million in compensatory damages and $ 112 million in punitive damages.

The Court also awarded the Company $ 26 million in prejudgment interest, post-judgment interest at an annual rate of 4.824 %, and its attorney’s fees and costs, in an amount to be determined in a later order.

The total award to the Company is $ 194 million, plus its attorney’s fees and costs.

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.

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

Court of Appeals for the Fifth Circuit.

In April 2025, the Court of Appeals heard oral argument on the appeal.

A decision from the Court of Appeals is pending.

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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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