10-Q 1 dxc-20230930.htm 10-Q dxc-20230930
00016885683/312024Q2FalseP1Y0M0DP1Y0M0Dhttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2023#PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortizationhttp://fasb.org/us-gaap/2023#DebtCurrenthttp://fasb.org/us-gaap/2023#DebtCurrenthttp://fasb.org/us-gaap/2023#LongTermDebtNoncurrenthttp://fasb.org/us-gaap/2023#LongTermDebtNoncurrent600016885682023-04-012023-09-300001688568us-gaap:CommonStockMember2023-04-012023-09-300001688568dxc:SeniorNotesDue2026OneMember2023-04-012023-09-3000016885682023-10-23xbrli:shares00016885682023-07-012023-09-30iso4217:USD00016885682022-07-012022-09-3000016885682022-04-012022-09-30iso4217:USDxbrli:shares00016885682023-09-3000016885682023-03-3100016885682022-03-3100016885682022-09-300001688568us-gaap:CommonStockMember2023-06-300001688568us-gaap:AdditionalPaidInCapitalMember2023-06-300001688568us-gaap:RetainedEarningsMember2023-06-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001688568us-gaap:TreasuryStockCommonMember2023-06-300001688568us-gaap:ParentMember2023-06-300001688568us-gaap:NoncontrollingInterestMember2023-06-3000016885682023-06-300001688568us-gaap:RetainedEarningsMember2023-07-012023-09-300001688568us-gaap:ParentMember2023-07-012023-09-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001688568us-gaap:NoncontrollingInterestMember2023-07-012023-09-300001688568us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001688568us-gaap:TreasuryStockCommonMember2023-07-012023-09-300001688568us-gaap:CommonStockMember2023-07-012023-09-300001688568us-gaap:CommonStockMember2023-09-300001688568us-gaap:AdditionalPaidInCapitalMember2023-09-300001688568us-gaap:RetainedEarningsMember2023-09-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-300001688568us-gaap:TreasuryStockCommonMember2023-09-300001688568us-gaap:ParentMember2023-09-300001688568us-gaap:NoncontrollingInterestMember2023-09-300001688568us-gaap:CommonStockMember2022-06-300001688568us-gaap:AdditionalPaidInCapitalMember2022-06-300001688568us-gaap:RetainedEarningsMember2022-06-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001688568us-gaap:TreasuryStockCommonMember2022-06-300001688568us-gaap:ParentMember2022-06-300001688568us-gaap:NoncontrollingInterestMember2022-06-3000016885682022-06-300001688568us-gaap:RetainedEarningsMember2022-07-012022-09-300001688568us-gaap:ParentMember2022-07-012022-09-300001688568us-gaap:NoncontrollingInterestMember2022-07-012022-09-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001688568us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001688568us-gaap:TreasuryStockCommonMember2022-07-012022-09-300001688568us-gaap:CommonStockMember2022-07-012022-09-300001688568us-gaap:CommonStockMember2022-09-300001688568us-gaap:AdditionalPaidInCapitalMember2022-09-300001688568us-gaap:RetainedEarningsMember2022-09-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001688568us-gaap:TreasuryStockCommonMember2022-09-300001688568us-gaap:ParentMember2022-09-300001688568us-gaap:NoncontrollingInterestMember2022-09-300001688568us-gaap:CommonStockMember2023-03-310001688568us-gaap:AdditionalPaidInCapitalMember2023-03-310001688568us-gaap:RetainedEarningsMember2023-03-310001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001688568us-gaap:TreasuryStockCommonMember2023-03-310001688568us-gaap:ParentMember2023-03-310001688568us-gaap:NoncontrollingInterestMember2023-03-310001688568us-gaap:RetainedEarningsMember2023-04-012023-09-300001688568us-gaap:ParentMember2023-04-012023-09-300001688568us-gaap:NoncontrollingInterestMember2023-04-012023-09-300001688568us-gaap:AdditionalPaidInCapitalMember2023-04-012023-09-300001688568us-gaap:TreasuryStockCommonMember2023-04-012023-09-300001688568us-gaap:CommonStockMember2023-04-012023-09-300001688568us-gaap:CommonStockMember2022-03-310001688568us-gaap:AdditionalPaidInCapitalMember2022-03-310001688568us-gaap:RetainedEarningsMember2022-03-310001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001688568us-gaap:TreasuryStockCommonMember2022-03-310001688568us-gaap:ParentMember2022-03-310001688568us-gaap:NoncontrollingInterestMember2022-03-310001688568us-gaap:RetainedEarningsMember2022-04-012022-09-300001688568us-gaap:ParentMember2022-04-012022-09-300001688568us-gaap:NoncontrollingInterestMember2022-04-012022-09-300001688568us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-04-012022-09-300001688568us-gaap:AdditionalPaidInCapitalMember2022-04-012022-09-300001688568us-gaap:TreasuryStockCommonMember2022-04-012022-09-300001688568us-gaap:CommonStockMember2022-04-012022-09-300001688568us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberdxc:SeriesOfInsignificantDisposalGroupsMember2023-04-012023-09-300001688568us-gaap:DiscontinuedOperationsDisposedOfBySaleMemberdxc:SeriesOfInsignificantDisposalGroupsMember2022-04-012022-09-300001688568us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001688568us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001688568us-gaap:EmployeeStockOptionMember2023-04-012023-09-300001688568us-gaap:EmployeeStockOptionMember2022-04-012022-09-300001688568us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001688568us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001688568us-gaap:RestrictedStockUnitsRSUMember2023-04-012023-09-300001688568us-gaap:RestrictedStockUnitsRSUMember2022-04-012022-09-300001688568us-gaap:PerformanceSharesMember2023-07-012023-09-300001688568us-gaap:PerformanceSharesMember2022-07-012022-09-300001688568us-gaap:PerformanceSharesMember2023-04-012023-09-300001688568us-gaap:PerformanceSharesMember2022-04-012022-09-3000016885682022-04-012023-03-310001688568dxc:PurchasersMember2023-09-300001688568dxc:PurchasersMember2023-04-012023-09-300001688568srt:MinimumMember2023-04-012023-09-300001688568srt:MaximumMember2023-04-012023-09-30xbrli:pure0001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-09-300001688568us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001688568us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001688568us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-09-300001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-09-300001688568us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-09-300001688568us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-09-300001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:BankTimeDepositsMember2023-09-300001688568us-gaap:FairValueMeasurementsRecurringMember2023-09-300001688568us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001688568us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-09-300001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-09-300001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2023-03-310001688568us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001688568us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001688568us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-03-310001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-03-310001688568us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-03-310001688568us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:BankTimeDepositsMember2023-03-310001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Memberus-gaap:BankTimeDepositsMember2023-03-310001688568us-gaap:FairValueMeasurementsRecurringMember2023-03-310001688568us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001688568us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-03-310001688568us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2023-03-310001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2023-09-300001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:CashFlowHedgingMember2023-03-310001688568us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2023-09-300001688568us-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2023-03-310001688568us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMember2023-09-300001688568us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMember2023-03-310001688568us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberdxc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMember2023-09-300001688568us-gaap:FairValueHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMemberdxc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMember2023-03-310001688568us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2023-09-300001688568us-gaap:ForeignExchangeForwardMemberus-gaap:OtherCurrentAssetsMemberus-gaap:NondesignatedMember2023-03-310001688568dxc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2023-09-300001688568dxc:AccruedExpensesAndOtherCurrentLiabilitiesMemberus-gaap:ForeignExchangeForwardMemberus-gaap:NondesignatedMember2023-03-31dxc:counterparty0001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMemberdxc:ForeignCurrencyDenominatedDebtMember2023-09-300001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMemberdxc:ForeignCurrencyDenominatedDebtMember2023-03-310001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMemberdxc:ForeignCurrencyDenominatedDebtMember2023-07-012023-09-300001688568us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:NetInvestmentHedgingMemberdxc:ForeignCurrencyDenominatedDebtMember2023-04-012023-09-300001688568us-gaap:ComputerSoftwareIntangibleAssetMember2023-09-300001688568us-gaap:ComputerSoftwareIntangibleAssetMember2023-03-310001688568us-gaap:CustomerRelatedIntangibleAssetsMember2023-09-300001688568us-gaap:CustomerRelatedIntangibleAssetsMember2023-03-310001688568us-gaap:OtherIntangibleAssetsMember2023-09-300001688568us-gaap:OtherIntangibleAssetsMember2023-03-310001688568dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember2023-07-012023-09-300001688568dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember2022-07-012022-09-300001688568dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember2023-04-012023-09-300001688568dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember2022-04-012022-09-300001688568dxc:TransitionAndTransformationContractCostsMember2023-07-012023-09-300001688568dxc:TransitionAndTransformationContractCostsMember2022-07-012022-09-300001688568dxc:TransitionAndTransformationContractCostsMember2023-04-012023-09-300001688568dxc:TransitionAndTransformationContractCostsMember2022-04-012022-09-300001688568dxc:GBSSegmentMember2023-03-310001688568dxc:GISSegmentMember2023-03-310001688568dxc:GBSSegmentMember2023-04-012023-09-300001688568dxc:GISSegmentMember2023-04-012023-09-300001688568dxc:GBSSegmentMember2023-09-300001688568dxc:GISSegmentMember2023-09-300001688568srt:MinimumMemberus-gaap:CommercialPaperMember2023-09-300001688568srt:MaximumMemberus-gaap:CommercialPaperMember2023-09-300001688568dxc:FinanceLeaseLiabilityCurrentMembersrt:MinimumMember2023-09-300001688568dxc:FinanceLeaseLiabilityCurrentMembersrt:MaximumMember2023-09-300001688568dxc:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2023-09-30iso4217:EUR0001688568dxc:SeniorNotesDue2026Memberus-gaap:SeniorNotesMember2023-03-310001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2027TwoMember2023-09-300001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2027TwoMember2023-03-310001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2028OneMember2023-09-300001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2028OneMember2023-03-310001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2029Member2023-09-300001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2029Member2023-03-310001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2032Member2023-09-300001688568us-gaap:SeniorNotesMemberdxc:SeniorNotesDue2032Member2023-03-310001688568srt:MinimumMember2023-09-300001688568srt:MaximumMember2023-09-300001688568dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMembersrt:MinimumMember2023-09-300001688568srt:MaximumMemberdxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember2023-09-300001688568dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember2023-09-300001688568dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember2023-03-310001688568us-gaap:NotesPayableOtherPayablesMember2023-09-300001688568us-gaap:NotesPayableOtherPayablesMember2023-03-310001688568us-gaap:SeniorNotesMember2023-09-300001688568us-gaap:SeniorNotesMember2023-03-310001688568us-gaap:CommercialPaperMember2023-09-300001688568dxc:USDTermLoanMemberus-gaap:SecuredDebtMember2022-09-300001688568us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-09-300001688568us-gaap:EstimateOfFairValueFairValueDisclosureMember2023-03-310001688568us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-09-300001688568us-gaap:CarryingReportedAmountFairValueDisclosureMember2023-03-310001688568country:US2023-07-012023-09-300001688568country:US2022-07-012022-09-300001688568country:US2023-04-012023-09-300001688568country:US2022-04-012022-09-300001688568country:GB2023-07-012023-09-300001688568country:GB2022-07-012022-09-300001688568country:GB2023-04-012023-09-300001688568country:GB2022-04-012022-09-300001688568dxc:OtherEuropeMember2023-07-012023-09-300001688568dxc:OtherEuropeMember2022-07-012022-09-300001688568dxc:OtherEuropeMember2023-04-012023-09-300001688568dxc:OtherEuropeMember2022-04-012022-09-300001688568country:AU2023-07-012023-09-300001688568country:AU2022-07-012022-09-300001688568country:AU2023-04-012023-09-300001688568country:AU2022-04-012022-09-300001688568dxc:OtherInternationalMember2023-07-012023-09-300001688568dxc:OtherInternationalMember2022-07-012022-09-300001688568dxc:OtherInternationalMember2023-04-012023-09-300001688568dxc:OtherInternationalMember2022-04-012022-09-3000016885682023-10-012023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:EmployeeSeveranceMember2023-03-310001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:EmployeeSeveranceMember2023-04-012023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:EmployeeSeveranceMember2023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:FacilityClosingMember2023-03-310001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:FacilityClosingMember2023-04-012023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMemberus-gaap:FacilityClosingMember2023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMember2023-03-310001688568dxc:RestructuringPlanFiscal2024PlanMember2023-04-012023-09-300001688568dxc:RestructuringPlanFiscal2024PlanMember2023-09-300001688568us-gaap:EmployeeSeveranceMemberdxc:RestructuringPlanFiscal2023PlanMember2023-03-310001688568us-gaap:EmployeeSeveranceMemberdxc:RestructuringPlanFiscal2023PlanMember2023-04-012023-09-300001688568us-gaap:EmployeeSeveranceMemberdxc:RestructuringPlanFiscal2023PlanMember2023-09-300001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanFiscal2023PlanMember2023-03-310001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanFiscal2023PlanMember2023-04-012023-09-300001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanFiscal2023PlanMember2023-09-300001688568dxc:RestructuringPlanFiscal2023PlanMember2023-03-310001688568dxc:RestructuringPlanFiscal2023PlanMember2023-04-012023-09-300001688568dxc:RestructuringPlanFiscal2023PlanMember2023-09-300001688568dxc:RestructuringPlanOtherPriorYearPlansMemberus-gaap:EmployeeSeveranceMember2023-03-310001688568dxc:RestructuringPlanOtherPriorYearPlansMemberus-gaap:EmployeeSeveranceMember2023-04-012023-09-300001688568dxc:RestructuringPlanOtherPriorYearPlansMemberus-gaap:EmployeeSeveranceMember2023-09-300001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanOtherPriorYearPlansMember2023-03-310001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanOtherPriorYearPlansMember2023-04-012023-09-300001688568us-gaap:FacilityClosingMemberdxc:RestructuringPlanOtherPriorYearPlansMember2023-09-300001688568dxc:RestructuringPlanOtherPriorYearPlansMember2023-03-310001688568dxc:RestructuringPlanOtherPriorYearPlansMember2023-04-012023-09-300001688568dxc:RestructuringPlanOtherPriorYearPlansMember2023-09-300001688568country:IN2023-09-300001688568dxc:HewlettPackardEnterpriseServicesMember2017-04-010001688568dxc:PerspectaMember2019-03-3100016885682023-04-012023-06-3000016885682022-04-012022-06-300001688568us-gaap:AccumulatedTranslationAdjustmentMember2023-03-310001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-03-310001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-03-310001688568us-gaap:AccumulatedTranslationAdjustmentMember2023-04-012023-09-300001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-04-012023-09-300001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-04-012023-09-300001688568us-gaap:AccumulatedTranslationAdjustmentMember2023-09-300001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2023-09-300001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2023-09-300001688568us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-03-310001688568us-gaap:AccumulatedTranslationAdjustmentMember2022-04-012022-09-300001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-04-012022-09-300001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-04-012022-09-300001688568us-gaap:AccumulatedTranslationAdjustmentMember2022-09-300001688568us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-09-300001688568us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-09-300001688568us-gaap:RestrictedStockUnitsRSUMember2023-09-300001688568us-gaap:PerformanceSharesMember2023-04-012023-09-300001688568dxc:DXCEmployeeEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-03-310001688568dxc:DXCDirectorEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-03-310001688568dxc:DXCEmployeeEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-04-012023-09-300001688568dxc:DXCDirectorEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-04-012023-09-300001688568dxc:DXCEmployeeEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-09-300001688568dxc:DXCDirectorEquityPlanMemberus-gaap:RestrictedStockUnitsRSUMember2023-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GBSSegmentMember2023-07-012023-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GISSegmentMember2023-07-012023-09-300001688568us-gaap:OperatingSegmentsMember2023-07-012023-09-300001688568us-gaap:MaterialReconcilingItemsMember2023-07-012023-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GBSSegmentMember2022-07-012022-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GISSegmentMember2022-07-012022-09-300001688568us-gaap:OperatingSegmentsMember2022-07-012022-09-300001688568us-gaap:MaterialReconcilingItemsMember2022-07-012022-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GBSSegmentMember2023-04-012023-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GISSegmentMember2023-04-012023-09-300001688568us-gaap:OperatingSegmentsMember2023-04-012023-09-300001688568us-gaap:MaterialReconcilingItemsMember2023-04-012023-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GBSSegmentMember2022-04-012022-09-300001688568us-gaap:OperatingSegmentsMemberdxc:GISSegmentMember2022-04-012022-09-300001688568us-gaap:OperatingSegmentsMember2022-04-012022-09-300001688568us-gaap:MaterialReconcilingItemsMember2022-04-012022-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2023
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ____________

Commission File No.: 001-38033
DXC Logo_Purple+Black RGB.jpg
DXC TECHNOLOGY COMPANY
(Exact name of registrant as specified in its charter)
Nevada
61-1800317
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
20408 Bashan Drive, Suite 231
Ashburn, Virginia 20147
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (703) 972-7000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareDXCThe New York Stock Exchange
1.750% Senior Notes Due 2026DXC 26The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x Yes  o No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes  o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated Filero
Non-accelerated Filer oSmaller reporting company
☐
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
       ☐ Yes  x   No

193,643,560 shares of common stock, par value $0.01 per share, were outstanding on October 23, 2023.


TABLE OF CONTENTS





PART I

ITEM 1. FINANCIAL STATEMENTS

Index to Condensed Consolidated Financial Statements
Page



1

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Three Months EndedSix Months Ended
(in millions, except per-share amounts)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Revenues$3,436 $3,566 $6,882 $7,273 
Costs of services (excludes depreciation and amortization and restructuring costs)2,633 2,775 5,352 5,705 
Selling, general and administrative (excludes depreciation and amortization and restructuring costs)328 324 655 673 
Depreciation and amortization361 380 705 769 
Restructuring costs35 53 55 86 
Interest expense78 44 144 81 
Interest income(53)(28)(102)(48)
Loss on disposition of businesses2 32 7 3 
Other income, net(76)(68)(140)(172)
Total costs and expenses3,308 3,512 6,676 7,097 
Income before income taxes128 54 206 176 
Income tax expense29 26 65 45 
Net income99 28 141 131 
Less: net income attributable to non-controlling interest, net of tax— 1 6 2 
Net income attributable to DXC common stockholders$99 $27 $135 $129 
Income per common share:
Basic$0.49 $0.12 $0.66 $0.56 
Diluted$0.49 $0.12 $0.65 $0.55 


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




2


DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)

Three Months Ended
Six Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net income
$99 $28 $141 $131 
Other comprehensive loss, net of taxes:
Foreign currency translation adjustments, net of tax (1)
(40)(165)(6)(341)
Cash flow hedges adjustments, net of tax (2)
4 2 7 2 
Pension and other post-retirement benefit plans, net of tax:
Amortization of prior service cost, net of tax (3)
— (2)(2)(4)
Pension and other post-retirement benefit plans, net of tax— (2)(2)(4)
Other comprehensive loss, net of taxes
(36)(165)(1)(343)
Comprehensive income (loss)
63 (137)140 (212)
Less: comprehensive (loss) income attributable to non-controlling interest
(1)(3)5 (2)
Comprehensive income (loss) attributable to DXC common stockholders
$64 $(134)$135 $(210)
    
(1) Tax expense related to foreign currency translation adjustments was $2 and $2 for the three and six months ended September 30, 2023, respectively, and $4 and $9 for the three and six months ended September 30, 2022, respectively.
(2) Tax expense (benefit) related to cash flow hedges adjustments was $1 and $2 for the three and six months ended September 30, 2023, respectively, and $0 and $(1) for the three and six months ended September 30, 2022, respectively.
(3) Tax benefit related to amortization of prior service costs was $1 and $1 for the three and six months ended September 30, 2023, respectively, and $0 and $4 for the three and six months ended September 30, 2022, respectively.



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


3

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

As of
(in millions, except per-share and share amounts)September 30, 2023March 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$1,412 $1,858 
Receivables and contract assets, net of allowance of $56 and $47
3,146 3,441 
Prepaid expenses559 565 
Other current assets232 255 
Assets held for sale— 5 
Total current assets5,349 6,124 
Intangible assets, net of accumulated amortization of $5,751 and $5,670
2,436 2,569 
Operating right-of-use assets, net809 909 
Goodwill530 539 
Deferred income taxes, net542 460 
Property and equipment, net of accumulated depreciation of $3,874 and $4,111
1,810 1,979 
Other assets3,229 3,247 
Assets held for sale - non-current4 18 
Total Assets$14,709 $15,845 
LIABILITIES and EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt672 500 
Accounts payable618 782 
Accrued payroll and related costs600 569 
Current operating lease liabilities295 317 
Accrued expenses and other current liabilities1,569 1,836 
Deferred revenue and advance contract payments872 1,054 
Income taxes payable 98 120 
Liabilities related to assets held for sale— 9 
Total current liabilities4,724 5,187 
Long-term debt, net of current maturities3,791 3,900 
Non-current deferred revenue 706 788 
Non-current operating lease liabilities571 648 
Non-current income tax liabilities and deferred tax liabilities581 587 
Other long-term liabilities 869 912 
Liabilities related to assets held for sale - non-current— 3 
Total Liabilities11,242 12,025 
Commitments and contingencies
DXC stockholders’ equity:
Preferred stock, par value $0.01 per share, 1,000,000 shares authorized, none issued as of September 30, 2023 and March 31, 2023
— — 
Common stock, par value $0.01 per share, 750,000,000 shares authorized, 200,789,520 issued as of September 30, 2023 and 218,058,482 issued as of March 31, 2023
2 2 
Additional paid-in capital8,280 9,121 
Accumulated deficit(4,143)(4,665)
Accumulated other comprehensive loss(774)(774)
Treasury stock, at cost, 4,541,145 and 3,333,592 shares as of September 30, 2023 and March 31, 2023
(218)(187)
Total DXC stockholders’ equity3,147 3,497 
Non-controlling interest in subsidiaries320 323 
Total Equity3,467 3,820 
Total Liabilities and Equity$14,709 $15,845 

The accompanying notes are an integral part of these condensed consolidated financial statements.
4

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended
(in millions)September 30, 2023September 30, 2022
Cash flows from operating activities:
Net income$141 $131 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization719 786 
Operating right-of-use expense 181 214 
Share-based compensation47 55 
Deferred taxes(102)(103)
Gain on dispositions(39)(32)
Provision for losses on accounts receivable2 — 
Unrealized foreign currency exchange loss22 69 
Impairment losses and contract write-offs14 21 
Other non-cash charges, net— (2)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease (increase) in assets223 (185)
Decrease in operating lease liability(181)(214)
Decrease in other liabilities(652)(365)
Net cash provided by operating activities375 375 
Cash flows from investing activities:
Purchases of property and equipment(108)(146)
Payments for transition and transformation contract costs(110)(114)
Software purchased and developed(141)(110)
Business dispositions— 51 
Proceeds from sale of assets65 109 
Other investing activities, net10 17 
Net cash used in investing activities(284)(193)
Cash flows from financing activities:
Borrowings of commercial paper1,098 710 
Repayments of commercial paper(841)(657)
Principal payments on long-term debt— (1)
Payments on finance leases and borrowings for asset financing(231)(274)
Proceeds from stock options and other common stock transactions— 1 
Taxes paid related to net share settlements of share-based compensation awards(34)(14)
Repurchase of common stock and advance payment for accelerated share repurchase(505)(272)
Other financing activities, net(8)(6)
Net cash used in financing activities(521)(513)
Effect of exchange rate changes on cash and cash equivalents(16)(91)
Net decrease in cash and cash equivalents including cash classified within current assets held for sale(446)(422)
Cash classified within current assets held for sale— 10 
Net decrease in cash and cash equivalents(446)(412)
Cash and cash equivalents at beginning of year1,858 2,672 
Cash and cash equivalents at end of period$1,412 $2,260 

The accompanying notes are an integral part of these condensed consolidated financial statements.
5

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)


Three Months Ended September 30, 2023
(in millions, except
shares in thousands)		Common StockAdditional
Paid-in Capital		 Accumulated Deficit
Accumulated
Other
Comprehensive Loss
Treasury Stock(1)
Total
DXC Equity		Non-
Controlling Interest		Total Equity
SharesAmount
Balance at June 30, 2023
210,584 $2 $8,677 $(4,445)$(739)$(217)$3,278 $325 $3,603 
Net Income99 99 99 
Other comprehensive loss
(35)(35)(1)(36)
Share-based compensation expense23 23 23 
Acquisition of treasury stock(1)(1)(1)
Share repurchase program(2)
(9,958)(420)204 (216)(216)
Stock option exercises and other common stock transactions164 — — 
Non-controlling interest distributions and other(1)(1)(4)(5)
Balance at September 30, 2023
200,790$2 $8,280 $(4,143)$(774)$(218)$3,147 $320 $3,467 
Three Months Ended September 30, 2022
(in millions, except
shares in thousands)		Common StockAdditional
Paid-in Capital		Accumulated DeficitAccumulated
Other
Comprehensive Loss		Treasury Stock Total
DXC Equity		Non-
Controlling Interest		Total Equity
SharesAmount
Balance at June 30, 2022
232,995 $2 $9,708 $(4,239)$(563)$(183)$4,725 $324 $5,049 
Net income
27 27 1 28 
Other comprehensive loss(161)(161)(4)(165)
Share-based compensation expense25 25 25 
Acquisition of treasury stock(2)(2)(2)
Stock option exercises and other common stock transactions283 — — 
Non-controlling interest distributions and other1 1 1 
Balance at September 30, 2022
233,278 $2 $9,733 $(4,211)$(724)$(185)$4,615 $321 $4,936 
6

Six Months Ended September 30, 2023
(in millions, except
shares in thousands)		Common StockAdditional
Paid-in Capital		 Accumulated Deficit
Accumulated
Other
Comprehensive Loss
Treasury Stock(1)
Total
DXC Equity		Non-
Controlling Interest		Total Equity
SharesAmount
Balance at March 31, 2023
218,058 $2 $9,121 $(4,665)$(774)$(187)$3,497 $323 $3,820 
Net income135 135 6 141 
Other comprehensive loss
— (1)(1)
Share-based compensation expense45 45 45 
Acquisition of treasury stock(31)(31)(31)
Share repurchase program(2)
(20,934)(886)388(498)(498)
Stock option exercises and other common stock transactions3,666 — — 
Non-controlling interest distributions and other(1)(1)(8)(9)
Balance at September 30, 2023
200,790 $2 $8,280 $(4,143)$(774)$(218)$3,147 $320 $3,467 
Six Months Ended September 30, 2022
(in millions, except
shares in thousands)		Common StockAdditional
Paid-in Capital		Accumulated DeficitAccumulated
Other
Comprehensive Loss		Treasury Stock Total
DXC Equity		Non-
Controlling Interest		Total Equity
SharesAmount
Balance at March 31, 2022
240,508 $3 $10,057 $(4,450)$(385)$(173)$5,052 $323 $5,375 
Net income129 129 2 131 
Other comprehensive loss(339)(339)(4)(343)
Share-based compensation expense49 49 49 
Acquisition of treasury stock(12)(12)(12)
Share repurchase program(8,851)(1)(374)109(266)(266)
Stock option exercises and other common stock transactions1,621 1 1 1 
Non-controlling interest distributions and other1 1 1 
Balance at September 30, 2022
233,278 $2 $9,733 $(4,211)$(724)$(185)$4,615 $321 $4,936 
        
(1) 4,541,145 treasury shares as of September 30, 2023.
(2) On August 16, 2022, the U.S. Government enacted the Inflation Reduction Act (the “IRA”) into law. The IRA imposes a 1% excise tax on
share repurchases completed after December 31, 2022. We reflect the excise tax within equity as part of the repurchase of the common
stock.



The accompanying notes are an integral part of these condensed consolidated financial statements.
7


DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1 – Summary of Significant Accounting Policies

Business

DXC Technology Company (“DXC,” the “Company,” “we,” “us,” or “our”) helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. The world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness and customer experience across their IT estates.

Basis of Presentation

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

The accompanying financial statements include the accounts of DXC, its consolidated subsidiaries, and those business entities in which DXC maintains a controlling interest. Investments in business entities in which the Company does not have control, but has the ability to exercise significant influence over operating and financial policies, are accounted for by the equity method. Other investments are accounted for by the cost method. Non-controlling interests are presented as a separate component within equity in the balance sheets. Net earnings attributable to the non-controlling interests are presented separately in the statements of operations and comprehensive income (loss) attributable to non-controlling interests are presented separately in the statements of comprehensive income (loss). All intercompany transactions and balances have been eliminated. Certain amounts reported in the previous year have been reclassified to conform to the current year presentation.

The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for quarterly reports and accounting principles generally accepted in the United States (“GAAP”). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023 (“fiscal 2023”).
8
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


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 and liabilities as well as the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on assumptions regarding historical experience, currently available information, and anticipated developments that it believes are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. Estimates are used for, but are not limited to, contracts accounted for using the percentage-of-completion method, cash flows used in the evaluation of impairment of goodwill and other long-lived assets, reserves for uncertain tax positions, valuation allowances on deferred tax assets, loss accruals for litigation, and obligations related to our pension plans. In the opinion of the Company’s management, the accompanying financial statements contain all adjustments necessary, including those of a normal recurring nature, to fairly present the financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.

Recent Accounting Pronouncements

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

9
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 2 – Divestitures

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


Note 3 – Earnings per Share

Basic earnings per share (“EPS”) is computed using the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the incremental shares issuable upon the assumed exercise of stock options and equity awards. The following table reflects the calculation of basic and diluted EPS:

Three Months EndedSix Months Ended
(in millions, except per-share amounts)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Net income attributable to DXC common stockholders:
$99 $27 $135 $129 
Common share information:
Weighted average common shares outstanding for basic EPS201.72 229.96 205.90 231.21 
Dilutive effect of stock options and equity awards1.34 3.21 3.00 3.72 
Weighted average common shares outstanding for diluted EPS203.06 233.17 208.90 234.93 
Earnings per share:
Basic$0.49 $0.12 $0.66 $0.56 
Diluted$0.49 $0.12 $0.65 $0.55 

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. The number of awards excluded were as follows:

Three Months EndedSix Months Ended
September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Stock Options960,455 475,559 924,990 478,128 
Restricted Stock Units1,556,542 2,724,766 1,480,781 2,065,992 
Performance Stock Units1,700,588 1,079,287 35,604 721,803 


10
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 4 – Receivables

Allowance for Doubtful Accounts

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

As of
(in millions)September 30, 2023March 31, 2023
Beginning balance$47 $55 
Provisions for losses on accounts receivable2 (1)
Other adjustments to allowance and write-offs7 (7)
Ending balance$56 $47 

Receivables Facility

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of September 30, 2023, the “Receivables Facility”) with certain unaffiliated financial institutions (the “Purchasers”) for the sale of commercial accounts receivable in the United States up to a maximum amount of $400 million. The Receivables Facility was amended on July 28, 2023 extending the termination date to July 26, 2024.

As of September 30, 2023, the total availability under the Receivables Facility was $384 million and the amount sold to the Purchasers was $378 million, which was derecognized from the Company’s balance sheet. As of September 30, 2023, the Company recorded an asset of $6 million within accounts receivable because the amount of cash proceeds received by the Company under the Receivables Facility was less than the total availability.

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

Note 5 – Leases

The Company has operating and finance leases for data centers, corporate offices, and certain equipment. Its leases have remaining lease terms of one to ten years, some of which include options to extend the leases for up to ten years, and some of which include options to terminate the leases within one to three years.

Operating Leases

The components of operating lease expense were as follows:

Three Months EndedSix Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Operating lease cost$91 $108 $181 $214 
Short-term lease cost 9 11 16 19 
Variable lease cost 16 17 31 39 
Sublease income(6)(6)(10)(10)
Total operating costs$110 $130 $218 $262 

11
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


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

Six Months Ended
(in millions)September 30, 2023September 30, 2022
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows
$181 $214 
ROU assets obtained in exchange for operating lease liabilities(1)
$95 $117 
    
(1) Net of $557 million and $521 million in lease modifications and terminations during the first six months of fiscal 2024 and 2023, respectively. See Note 17 – “Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents operating lease balances:

As of
(in millions)Balance Sheet Line ItemSeptember 30, 2023March 31, 2023
ROU operating lease assetsOperating right-of-use assets, net$809 $909 
Operating lease liabilitiesCurrent operating lease liabilities$295 $317 
Operating lease liabilities Non-current operating lease liabilities571 648 
Total operating lease liabilities $866 $965 

The weighted-average operating lease term was 4.0 years and 3.9 years as of September 30, 2023 and March 31, 2023, respectively. The weighted-average operating lease discount rate was 4.4% and 3.9% as of September 30, 2023 and March 31, 2023, respectively.

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

Fiscal Year
(in millions)
Remainder of 2024
2025202620272028
Thereafter
Total
Operating lease payments
$169 $285 $196 $112 $89 $103 $954 
Less: imputed interest
(88)
Total operating lease liabilities
$866 

12
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Finance Leases

The components of finance lease expense were as follows:

Three Months EndedSix Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Amortization of right-of-use assets$37 $55 $79 $116 
Interest on lease liabilities3 4 7 9 
Total finance lease expense$40 $59 $86 $125 

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

(in millions)Six Months Ended September 30, 2023Six Months Ended September 30, 2022
Interest paid for finance lease liabilities – Operating cash flows
$7 $9 
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows
124 168 
Total cash paid in the measurement of finance lease obligations$131 $177 
Capital expenditures through finance lease obligations(1)
$41 $44 
    

(1) See Note 17 – ”Cash Flows” for further information on non-cash activities affecting cash flows.

The following table presents finance lease balances:

As of
(in millions)Balance Sheet Line ItemSeptember 30, 2023March 31, 2023
ROU finance lease assetsProperty and Equipment, net $327 $424 
Finance lease Short-term debt and current maturities of long-term debt $196 $215 
Finance leaseLong-term debt, net of current maturities 259 287 
Total finance lease liabilities(1)
$455 $502 
    

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

The weighted-average finance lease term was 2.9 years as of September 30, 2023 and March 31, 2023, respectively. The weighted-average finance lease discount rate was 3.8% and 3.4% as of September 30, 2023 and March 31, 2023, respectively.

13
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Fiscal Year
(in millions)
Remainder of 2024
2025202620272028
Thereafter
Total
Finance lease payments
$108 $173 $110 $64 $21 $4 $480 
Less: imputed interest
(25)
Total finance lease liabilities
$455 

Note 6 – Fair Value

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, excluding pension assets and derivative assets and liabilities. See Note 7 – “Derivative Instruments” for information about derivative assets and liabilities. Note 10 – “Debt” includes information about the estimated fair value of the Company’s long-term debt. There were no transfers between any of the levels during the periods presented.

Fair Value Hierarchy
(in millions)September 30, 2023
Assets:Fair ValueLevel 1Level 2Level 3
Money market funds and money market deposit accounts$32 $32 $— $— 
Time deposits(1)
136 136 — — 
Other securities(2)
46 — 44 2 
Total assets$214 $168 $44 $2 


March 31, 2023
Assets:Fair ValueLevel 1Level 2Level 3
Money market funds and money market deposit accounts$75 $75 $— $— 
Time deposits(1)
37 37 — — 
Other securities(2)
48 — 46 2 
Total assets$160 $112 $46 $2 
Liabilities:
Contingent consideration(3)
$2 $— $— $2 
Total liabilities$2 $— $— $2 
        

(1) Cost basis approximated fair value due to the short period of time to maturity.
(2) Other securities include available-for-sale equity security investments with Level 2 inputs that have a cost basis of $51 million and $52 million as of September 30, 2023 and March 31, 2023, respectively. For the periods presented, gains and losses are insignificant and are included in other income, net in the Company’s statements of operations.
(3) During the first six months of fiscal 2024, the Company completed the payment for its contingent consideration obligation.
14
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 7 – Derivative Instruments

In the normal course of business, the Company is exposed to interest rate and foreign exchange rate fluctuations. As part of its risk management strategy, the Company uses derivative instruments, primarily foreign currency forward contracts and interest rate swaps, to hedge certain foreign currency and interest rate exposures. 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 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 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, 2023 and March 31, 2023 were $889 million and $842 million, respectively. As of September 30, 2023, the related forecasted transactions extend through September 2025.

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

See Note 15 - “Stockholders’ Equity” for changes in accumulated other comprehensive loss, net of taxes, related to the Company’s derivatives designated for hedge accounting. As of September 30, 2023, $1 million of the existing amount of gain related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

Derivatives Not Designated for Hedge Accounting

The derivative instruments not designated as hedges for purposes of hedge accounting include certain short-term foreign currency forward contracts. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates.

Foreign currency forward contracts

The Company manages the exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and forecasted transactions. The net notional amounts of the foreign currency forward contracts outstanding as of September 30, 2023 and March 31, 2023 were $2.4 billion and $2.5 billion, respectively.
15
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


The following table presents the foreign currency (gain) loss to Other income, net:
For the Three Months EndedFor the Six Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Foreign currency remeasurement (1)
$25 $40 $21 $76 
Undesignated foreign currency forward contracts (2)
(26)(41)(30)(79)
Total - Foreign currency gain$(1)$(1)$(9)$(3)
        

(1) Movements from exchange rates on the Company’s foreign currency-denominated assets and liabilities.
(2) Movements from hedges used to manage the Company’s foreign currency remeasurement exposure, and the associated costs of the hedging program.


Fair Value of Derivative Instruments

All derivative instruments are recorded at fair value. The Company’s accounting treatment for these derivative instruments is based on its hedge designation. The following tables present the fair values of derivative instruments included in the balance sheets:

As of
(in millions)Balance Sheet Line ItemSeptember 30, 2023March 31, 2023
Derivatives designated for hedge accounting:
Foreign currency forward contractsOther current assets$9 $6 
Accrued expenses and other current liabilities$6 $13 
Derivatives not designated for hedge accounting:
Foreign currency forward contractsOther current assets$35 $15 
Accrued expenses and other current liabilities$13 $16 

The fair value of foreign currency forward contracts represents the estimated amount required to settle the contracts using current market exchange rates and is based on the period-end foreign currency exchange rates and forward points that are classified as Level 2 inputs.

Other Risks for Derivative Instruments

The Company is exposed to the risk of losses in the event of non-performance by the counterparties to its derivative contracts. The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty’s obligations exceed the obligations of the Company with that counterparty. 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, 2023, there were six counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is $21 million.

The Company also enters into enforceable master netting arrangements with some of its counterparties. However, for financial reporting purposes, it is the Company’s policy not to offset derivative assets and liabilities despite the existence of enforceable master netting arrangements. The potential effect of such netting arrangements on the Company’s balance sheets is not material for the periods presented.

16
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Non-Derivative Financial Instruments Designated for Hedge Accounting

The Company applies hedge accounting for foreign currency-denominated debt used to manage foreign currency exposures on its net investments in certain non-U.S. operations. To qualify for hedge accounting, the hedging instrument must be highly effective at reducing the risk from the exposure being hedged.

Net Investment Hedges

DXC seeks to reduce the impact of fluctuations in foreign exchange rates on its net investments in certain non-U.S. operations with foreign currency-denominated debt. For foreign currency-denominated debt designated as a hedge, the effectiveness of the hedge is assessed based on changes in spot rates. For qualifying net investment hedges, all gains or losses on the hedging instruments are included in currency translation. Gains or losses on individual net investments in non-U.S. operations are reclassified to earnings from accumulated other comprehensive income (loss) when such net investments are sold or substantially liquidated.

As of September 30, 2023 and March 31, 2023, DXC had $265 million and $272 million, respectively, of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. For the three and six months ended September 30, 2023, the pre-tax gain on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive loss was $8 million and $7 million, respectively.
17
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 8 – Intangible Assets

Intangible assets consisted of the following:

As of September 30, 2023As of March 31, 2023
(in millions)Gross Carrying ValueAccumulated AmortizationNet Carrying ValueGross Carrying ValueAccumulated AmortizationNet Carrying Value
Software$3,993 $3,205 $788 $4,009 $3,290 $719 
Customer related intangible assets
3,887 2,409 1,478 3,927 2,260 1,667 
Other intangible assets
307 137 170 303 120 183 
Total intangible assets$8,187 $5,751 $2,436 $8,239 $5,670 $2,569 


The components of amortization expense were as follows:

Three Months EndedSix Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
Intangible asset amortization$195 $198 $378 $397 
Transition and transformation contract cost amortization(1)
54 53 102 105 
Total amortization expense$249 $251 $480 $502 
        

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

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

Fiscal Year (in millions)
Remainder of 2024$402 
2025656 
2026588 
2027406 
2028170 
Thereafter214 
Total$2,436 

18
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 9 – Goodwill

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

(in millions)GBSGISTotal
Balance as of March 31, 2023, net$539 $— $539 
Foreign currency translation (9)— (9)
Balance as of September 30, 2023, net$530 $— $530 
Goodwill, gross5,020 5,066 10,086 
Accumulated impairment losses(4,490)(5,066)(9,556)
Balance as of September 30, 2023, net$530 $— $530 

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

Goodwill Impairment Analyses

The Company tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if circumstances change, or if an event occurs that would more likely than not reduce the fair value of a reporting unit below its carrying amount.

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

As of September 30, 2023, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators and therefore, it was unnecessary to perform an interim goodwill impairment test as of September 30, 2023.
19
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 10 – Debt

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

(in millions)Interest RatesFiscal Year Maturities
9/30/2023(1)
3/31/2023(1)
Short-term debt and
current maturities of long-term debt
Commercial paper(2)
4.08% - 4.33%
2024$348 $109 
Current maturities of long-term debtVarious2024 - 2025128 176 
Current maturities of finance lease liabilities
0.00% - 14.59%
2024 - 2025196 215 
Short-term debt and current maturities of long-term debt$672 $500 
Long-term debt, net of current maturities
€650 million Senior notes
1.75%2026687 704 
$700 million Senior notes
1.80%2027696 696 
€750 million Senior notes
0.45%2028790 810 
$650 million Senior notes
2.375%2029646 645 
€600 million Senior notes
0.95%2032630 646 
Finance lease liabilities
0.00% - 14.59%
2024 - 2029455 502 
Borrowings for assets acquired under long-term financing
0.00% - 9.78%
2024 - 2029209 285 
Other borrowingsVarious20242 3 
Long-term debt4,115 4,291 
Less: current maturities 324 391 
Long-term debt, net of current maturities$3,791 $3,900 
        

(1)The carrying amounts of the senior notes as of September 30, 2023 and March 31, 2023, include the remaining principal outstanding of $3,468 million and $3,523 million, respectively, net of total unamortized debt discounts and premiums, and deferred debt issuance costs of $19 million and $22 million, respectively.
(2)At DXC’s option, DXC can borrow up to a maximum of €1 billion or its equivalent in £ and $.

Term Loan

During the second quarter of fiscal 2023, the Company entered into a $500 million term loan credit agreement (as amended, the “USD Term Loan”) with certain unaffiliated financial institutions. The USD Term Loan was required to be drawn down by September 1, 2023. The Company did not draw on the USD Term Loan and the facility has been terminated during the second quarter of fiscal 2024.

Fair Value of Debt

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

20
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 11 – Revenue

Revenue Recognition

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 EndedSix Months Ended
(in millions)September 30, 2023September 30, 2022September 30, 2023September 30, 2022
United States$1,002 $1,093 $2,004 $2,224 
United Kingdom460 452 925 925 
Other Europe1,051 1,064 2,115 2,202 
Australia330 371 672 762 
Other International593 586 1,166 1,160 
Total Revenues$3,436 $3,566 $6,882 $7,273 

The revenue by geography pertains to both of the Company’s reportable segments. Refer to Note 18 – “Segment Information” for the Company’s segment disclosures.

Remaining Performance Obligations

As of September 30, 2023, approximately $18.5 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 24% of these remaining performance obligations in fiscal 2024, with the remainder of the balance recognized thereafter.

Contract Balances

The following table provides information about the balances of the Company’s trade receivables and contract assets and contract liabilities:
As of
(in millions)September 30, 2023March 31, 2023
Trade receivables, net $2,081 $2,269 
Contract assets $377 $366 
Contract liabilities$1,578 $1,842 

Change in contract liabilities were as follows:
Six Months Ended
(in millions)September 30, 2023September 30, 2022
Balance, beginning of period$1,842 $1,915 
Deferred revenue 873 1,075 
Recognition of deferred revenue(1,085)(1,145)
Currency translation adjustment(23)(168)
Other(29)(21)
Balance, end of period$1,578 $1,656 
21
DXC TECHNOLOGY COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)


Note 12 – Restructuring Costs

The composition of restructuring liabilities by financial statement line item is as follows:
As of
(in millions)September 30, 2023March 31, 2023
Accrued expenses and other current liabilities$60 $105 
Other long-