☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
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.)
|
||||
|
|
|
|
|
|
|
1775 Tysons Boulevard
|
|
|
|
|
||
Tysons
|
,
|
Virginia
|
|
22102
|
||
(Address of principal executive offices)
|
|
(Zip Code)
|
||||
|
|
|
|
|
|
|
Large Accelerated Filer
|
x
|
|
|
Accelerated Filer
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-accelerated Filer
|
o
|
|
|
Smaller reporting company
|
☐
|
|
||
|
|
|
|
Emerging growth company
|
☐
|
|
Item
|
|
|
Page
|
|
|
|
|
|
|
|
|
1.
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
||
1A.
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
5.
|
|
||
6.
|
|
|
|
Three Months Ended
|
||||||
(in millions, except per-share amounts)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
|
|
|
|
|
||||
Revenues
|
|
$
|
4,502
|
|
|
$
|
4,890
|
|
|
|
|
|
|
||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
3,629
|
|
|
3,622
|
|
||
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
539
|
|
|
507
|
|
||
Depreciation and amortization
|
|
492
|
|
|
470
|
|
||
Restructuring costs
|
|
72
|
|
|
142
|
|
||
Interest expense
|
|
106
|
|
|
91
|
|
||
Interest income
|
|
(23
|
)
|
|
(30
|
)
|
||
Other income, net
|
|
(88
|
)
|
|
(118
|
)
|
||
Total costs and expenses
|
|
4,727
|
|
|
4,684
|
|
||
|
|
|
|
|
||||
(Loss) income before income taxes
|
|
(225
|
)
|
|
206
|
|
||
Income tax (benefit) expense
|
|
(26
|
)
|
|
38
|
|
||
Net (loss) income
|
|
(199
|
)
|
|
168
|
|
||
Less: net income attributable to non-controlling interest, net of tax
|
|
6
|
|
|
5
|
|
||
Net (loss) income attributable to DXC common stockholders
|
|
$
|
(205
|
)
|
|
$
|
163
|
|
|
|
|
|
|
||||
(Loss) income per common share:
|
|
|
|
|
||||
Basic
|
|
$
|
(0.81
|
)
|
|
$
|
0.61
|
|
Diluted
|
|
$
|
(0.81
|
)
|
|
$
|
0.61
|
|
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||||
|
|
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(199
|
)
|
|
$
|
168
|
|
||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
||||||
|
Foreign currency translation adjustments, net of tax benefit of $7 and $12
|
|
(3
|
)
|
|
(135
|
)
|
|||
|
Cash flow hedges adjustments, net of tax expense of $3 and $0
|
|
11
|
|
|
4
|
|
|||
|
Available-for-sale securities, net of tax expense of $0 and $1
|
|
4
|
|
|
1
|
|
|||
|
Pension and other post-retirement benefit plans, net of tax:
|
|
|
|
|
|||||
|
|
Amortization of prior service cost, net of tax benefit of $1 and $0
|
|
(9
|
)
|
|
(1
|
)
|
||
|
Pension and other post-retirement benefit plans, net of tax
|
|
(9
|
)
|
|
(1
|
)
|
|||
Other comprehensive income (loss), net of taxes
|
|
3
|
|
|
(131
|
)
|
||||
Comprehensive (loss) income
|
|
(196
|
)
|
|
37
|
|
||||
|
Less: comprehensive income (loss) attributable to non-controlling interest
|
|
5
|
|
|
(19
|
)
|
|||
Comprehensive (loss) income attributable to DXC common stockholders
|
|
$
|
(201
|
)
|
|
$
|
56
|
|
|
|
As of
|
||||||
(in millions, except per-share and share amounts)
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
5,509
|
|
|
$
|
3,679
|
|
Receivables and contract assets, net of allowance of $104 and $74
|
|
4,271
|
|
|
4,392
|
|
||
Prepaid expenses
|
|
667
|
|
|
646
|
|
||
Other current assets
|
|
261
|
|
|
270
|
|
||
Total current assets
|
|
10,708
|
|
|
8,987
|
|
||
|
|
|
|
|
||||
Intangible assets, net of accumulated amortization of $4,627 and $4,347
|
|
5,540
|
|
|
5,731
|
|
||
Operating right-of-use assets, net
|
|
1,602
|
|
|
1,428
|
|
||
Goodwill
|
|
2,057
|
|
|
2,017
|
|
||
Deferred income taxes, net
|
|
285
|
|
|
265
|
|
||
Property and equipment, net of accumulated depreciation of $4,072 and $3,818
|
|
3,503
|
|
|
3,547
|
|
||
Other assets
|
|
4,199
|
|
|
4,031
|
|
||
Total Assets
|
|
$
|
27,894
|
|
|
$
|
26,006
|
|
|
|
|
|
|
||||
LIABILITIES and EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Short-term debt and current maturities of long-term debt
|
|
1,682
|
|
|
1,276
|
|
||
Accounts payable
|
|
1,522
|
|
|
1,598
|
|
||
Accrued payroll and related costs
|
|
766
|
|
|
630
|
|
||
Current operating lease liabilities
|
|
488
|
|
|
482
|
|
||
Accrued expenses and other current liabilities
|
|
2,756
|
|
|
2,801
|
|
||
Deferred revenue and advance contract payments
|
|
1,030
|
|
|
1,021
|
|
||
Income taxes payable
|
|
81
|
|
|
87
|
|
||
Total current liabilities
|
|
8,325
|
|
|
7,895
|
|
||
|
|
|
|
|
||||
Long-term debt, net of current maturities
|
|
10,334
|
|
|
8,672
|
|
||
Non-current deferred revenue
|
|
733
|
|
|
735
|
|
||
Non-current operating lease liabilities
|
|
1,208
|
|
|
1,063
|
|
||
Non-current income tax liabilities and deferred tax liabilities
|
|
1,075
|
|
|
1,157
|
|
||
Other long-term liabilities
|
|
1,277
|
|
|
1,355
|
|
||
Total Liabilities
|
|
22,952
|
|
|
20,877
|
|
||
|
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
DXC stockholders’ equity:
|
|
|
|
|
||||
Preferred stock, par value $.01 per share, 1,000,000 shares authorized, none issued as of June 30, 2020 and March 31, 2020
|
|
—
|
|
|
—
|
|
||
Common stock, par value $.01 per share, 750,000,000 shares authorized, 256,382,532 issued as of June 30, 2020 and 255,674,040 issued as of March 31, 2020
|
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
|
10,729
|
|
|
10,714
|
|
||
Accumulated deficit
|
|
(5,386
|
)
|
|
(5,177
|
)
|
||
Accumulated other comprehensive loss
|
|
(599
|
)
|
|
(603
|
)
|
||
Treasury stock, at cost, 2,291,790 and 2,148,708 shares as of June 30, 2020 and March 31, 2020
|
|
(154
|
)
|
|
(152
|
)
|
||
Total DXC stockholders’ equity
|
|
4,593
|
|
|
4,785
|
|
||
Non-controlling interest in subsidiaries
|
|
349
|
|
|
344
|
|
||
Total Equity
|
|
4,942
|
|
|
5,129
|
|
||
Total Liabilities and Equity
|
|
$
|
27,894
|
|
|
$
|
26,006
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net (loss) income
|
|
$
|
(199
|
)
|
|
$
|
168
|
|
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
496
|
|
|
474
|
|
||
Operating right-of-use expense
|
|
156
|
|
|
176
|
|
||
Pension & other post-employment benefits, actuarial & settlement losses
|
|
2
|
|
|
—
|
|
||
Share-based compensation
|
|
16
|
|
|
18
|
|
||
Loss (gain) on dispositions
|
|
4
|
|
|
(8
|
)
|
||
Provision for losses on accounts receivable
|
|
35
|
|
|
(4
|
)
|
||
Unrealized foreign currency exchange gain
|
|
(11
|
)
|
|
(14
|
)
|
||
Other non-cash charges, net
|
|
7
|
|
|
(1
|
)
|
||
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
|
|
|
|
|
||||
Increase in assets
|
|
(100
|
)
|
|
(335
|
)
|
||
Decrease in operating lease liability
|
|
(156
|
)
|
|
(174
|
)
|
||
Decrease in other liabilities
|
|
(131
|
)
|
|
(366
|
)
|
||
Net cash provided by (used in) operating activities
|
|
119
|
|
|
(66
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of property and equipment
|
|
(95
|
)
|
|
(105
|
)
|
||
Payments for transition and transformation contract costs
|
|
(82
|
)
|
|
(72
|
)
|
||
Software purchased and developed
|
|
(48
|
)
|
|
(63
|
)
|
||
Payments for acquisitions, net of cash acquired
|
|
(10
|
)
|
|
(1,911
|
)
|
||
Cash collections related to deferred purchase price receivable
|
|
159
|
|
|
371
|
|
||
Proceeds from sale of assets
|
|
6
|
|
|
21
|
|
||
Short-term investing
|
|
—
|
|
|
(75
|
)
|
||
Other investing activities, net
|
|
9
|
|
|
12
|
|
||
Net cash used in investing activities
|
|
(61
|
)
|
|
(1,822
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Borrowings of commercial paper
|
|
748
|
|
|
1,401
|
|
||
Repayments of commercial paper
|
|
(317
|
)
|
|
(1,401
|
)
|
||
Borrowings under lines of credit
|
|
2,500
|
|
|
—
|
|
||
Repayment of borrowings under lines of credit
|
|
(750
|
)
|
|
—
|
|
||
Borrowings on long-term debt, net of discount
|
|
993
|
|
|
2,198
|
|
||
Principal payments on long-term debt
|
|
(1,084
|
)
|
|
(509
|
)
|
||
Payments on finance leases and borrowings for asset financing
|
|
(245
|
)
|
|
(210
|
)
|
||
Proceeds from stock options and other common stock transactions
|
|
—
|
|
|
7
|
|
||
Taxes paid related to net share settlements of share-based compensation awards
|
|
(3
|
)
|
|
(12
|
)
|
||
Repurchase of common stock and advance payment for accelerated share repurchase
|
|
—
|
|
|
(500
|
)
|
||
Dividend payments
|
|
(53
|
)
|
|
(51
|
)
|
||
Other financing activities, net
|
|
(3
|
)
|
|
(36
|
)
|
||
Net cash provided by financing activities
|
|
1,786
|
|
|
887
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(14
|
)
|
|
(30
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
|
1,830
|
|
|
(1,031
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
3,679
|
|
|
2,899
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
5,509
|
|
|
$
|
1,868
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||||||||||
(in millions, except shares in thousands)
|
Common Stock
|
Additional
Paid-in Capital
|
Accumulated Deficit
|
Accumulated
Other
Comprehensive Loss
|
Treasury Stock (1)
|
Total
DXC Equity
|
Non-
Controlling Interest
|
Total Equity
|
|||||||||||||||||||
Shares
|
|
Amount
|
|||||||||||||||||||||||||
Balance at March 31, 2020
|
255,674
|
|
|
$
|
3
|
|
$
|
10,714
|
|
$
|
(5,177
|
)
|
$
|
(603
|
)
|
$
|
(152
|
)
|
$
|
4,785
|
|
$
|
344
|
|
$
|
5,129
|
|
Cumulative effect of adopting ASU 2016-13
|
|
|
|
|
(4
|
)
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||||||||||
Net loss
|
|
|
|
|
(205
|
)
|
|
|
(205
|
)
|
6
|
|
(199
|
)
|
|||||||||||||
Other comprehensive income
|
|
|
|
|
|
4
|
|
|
4
|
|
(1
|
)
|
3
|
|
|||||||||||||
Share-based compensation expense
|
|
|
|
15
|
|
|
|
|
15
|
|
|
15
|
|
||||||||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
(2
|
)
|
(2
|
)
|
|
(2
|
)
|
||||||||||||||
Stock option exercises and other common stock transactions
|
709
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|||||||||||||
Balance at June 30, 2020
|
256,383
|
|
|
$
|
3
|
|
$
|
10,729
|
|
$
|
(5,386
|
)
|
$
|
(599
|
)
|
$
|
(154
|
)
|
$
|
4,593
|
|
$
|
349
|
|
$
|
4,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Three Months Ended June 30, 2019
|
||||||||||||||||||||||||||
(in millions, except shares in thousands)
|
Common Stock
|
Additional
Paid-in Capital
|
Retained Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Treasury Stock
|
Total
DXC Equity
|
Non-
Controlling Interest
|
Total Equity
|
|||||||||||||||||||
Shares
|
|
Amount
|
|||||||||||||||||||||||||
Balance at March 31, 2019
|
270,214
|
|
|
$
|
3
|
|
$
|
11,301
|
|
$
|
478
|
|
$
|
(244
|
)
|
$
|
(136
|
)
|
$
|
11,402
|
|
$
|
323
|
|
$
|
11,725
|
|
Net income
|
|
|
|
|
163
|
|
|
|
163
|
|
5
|
|
168
|
|
|||||||||||||
Other comprehensive loss
|
|
|
|
|
|
(107
|
)
|
|
(107
|
)
|
(24
|
)
|
(131
|
)
|
|||||||||||||
Share-based compensation expense
|
|
|
|
18
|
|
|
|
|
18
|
|
|
18
|
|
||||||||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
(13
|
)
|
(13
|
)
|
|
(13
|
)
|
||||||||||||||
Share repurchase program
|
(7,360
|
)
|
|
|
(410
|
)
|
(90
|
)
|
|
|
(500
|
)
|
|
(500
|
)
|
||||||||||||
Stock option exercises and other common stock transactions
|
855
|
|
|
|
7
|
|
|
|
|
7
|
|
|
7
|
|
|||||||||||||
Dividends declared ($0.21 per share)
|
|
|
|
|
(57
|
)
|
|
|
(57
|
)
|
|
(57
|
)
|
||||||||||||||
Balance at June 30, 2019
|
263,709
|
|
|
$
|
3
|
|
$
|
10,916
|
|
$
|
494
|
|
$
|
(351
|
)
|
$
|
(149
|
)
|
$
|
10,913
|
|
$
|
304
|
|
$
|
11,217
|
|
Date Issued and ASU
|
Date Adopted and Method
|
Description
|
Impact
|
June 2016
ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”
|
April 1, 2020
Modified Retrospective
|
This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.
|
The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.
|
August 2018
ASU 2018-15,
"Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"
|
April 1, 2020
Prospective
|
This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.
|
The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.
|
Date Issued and ASU
|
DXC Effective Date
|
Description
|
Impact
|
December 2019
ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"
|
Fiscal 2022
|
This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. Early adoption of this update is permitted.
|
The Company is currently evaluating the potential impact this standard may have on its financial statements in future reporting periods.
|
(in millions)
|
|
Fair Value
|
||
Cash and cash equivalents
|
|
$
|
113
|
|
Accounts receivable
|
|
233
|
|
|
Other current assets
|
|
15
|
|
|
Total current assets
|
|
361
|
|
|
Property and equipment
|
|
31
|
|
|
Intangible assets
|
|
577
|
|
|
Other assets
|
|
99
|
|
|
Total assets acquired
|
|
1,068
|
|
|
Accounts payable, accrued payroll, accrued expenses, and other current liabilities
|
|
(121
|
)
|
|
Deferred revenue
|
|
(8
|
)
|
|
Long-term deferred tax liabilities and income tax payable
|
|
(106
|
)
|
|
Other liabilities
|
|
(72
|
)
|
|
Total liabilities assumed
|
|
(307
|
)
|
|
Net identifiable assets acquired
|
|
761
|
|
|
Goodwill
|
|
1,262
|
|
|
Total consideration transferred
|
|
$
|
2,023
|
|
|
|
Estimated Useful Lives (Years)
|
Customer related intangibles
|
|
10
|
Trade names
|
|
20
|
Developed technology
|
|
3
|
Third-party purchased software
|
|
3
|
|
|
Three Months Ended
|
||||||
(in millions, except per-share amounts)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Net (loss) income attributable to DXC common shareholders:
|
|
$
|
(205
|
)
|
|
$
|
163
|
|
|
|
|
|
|
||||
Common share information:
|
|
|
|
|
||||
Weighted average common shares outstanding for basic EPS
|
|
253.63
|
|
|
267.00
|
|
||
Dilutive effect of stock options and equity awards
|
|
—
|
|
|
1.97
|
|
||
Weighted average common shares outstanding for diluted EPS
|
|
253.63
|
|
|
268.97
|
|
||
|
|
|
|
|
||||
(Loss) Earnings per share:
|
|
|
|
|
||||
Basic
|
|
$
|
(0.81
|
)
|
|
$
|
0.61
|
|
Diluted
|
|
$
|
(0.81
|
)
|
|
$
|
0.61
|
|
|
|
Three Months Ended
|
||||
|
|
June 30, 2020(1)
|
|
June 30, 2019
|
||
Stock Options
|
|
1,749,189
|
|
|
4,824
|
|
Restricted Stock Units
|
|
3,149,436
|
|
|
589,569
|
|
Performance Stock Units
|
|
233,762
|
|
|
—
|
|
(in millions)
|
|
As of and for the Three Months Ended
|
||
|
|
June 30, 2019
|
||
Beginning balance
|
|
$
|
574
|
|
Transfers of receivables
|
|
1,214
|
|
|
Collections
|
|
(1,265
|
)
|
|
Change in funding availability
|
|
2
|
|
|
Ending balance
|
|
$
|
525
|
|
(in millions)
|
|
As of June 30, 2020
|
||
Beginning balance
|
|
$
|
103
|
|
Transfers of receivables
|
|
417
|
|
|
Collections
|
|
(420
|
)
|
|
Change in funding availability
|
|
2
|
|
|
Facility amendments
|
|
(102
|
)
|
|
Ending balance
|
|
$
|
—
|
|
(in millions)
|
|
As of and for the Three Months Ended
|
||
|
|
June 30, 2020
|
||
Beginning balance
|
|
$
|
74
|
|
Impact of adoption of the Credit Loss Standard
|
|
4
|
|
|
Provisions for expected credit losses
|
|
35
|
|
|
Write-offs charged against the allowance
|
|
(9
|
)
|
|
Ending balance
|
|
$
|
104
|
|
(in millions)
|
|
Three Months Ended June 30, 2020
|
|
Three Months Ended June 30, 2019
|
||||
Operating lease cost
|
|
$
|
156
|
|
|
$
|
176
|
|
Short-term lease cost
|
|
15
|
|
|
10
|
|
||
Variable lease cost
|
|
8
|
|
|
15
|
|
||
Sublease income
|
|
(12
|
)
|
|
(9
|
)
|
||
Total operating costs
|
|
$
|
167
|
|
|
$
|
192
|
|
|
|
|
|
|
||||
Finance lease cost:
|
|
|
|
|
||||
Amortization of right-of-use assets
|
|
$
|
116
|
|
|
$
|
109
|
|
Interest on lease liabilities
|
|
14
|
|
|
17
|
|
||
Total finance lease cost
|
|
$
|
130
|
|
|
$
|
126
|
|
(in millions)
|
|
Three Months Ended June 30, 2020
|
|
Three Months Ended June 30, 2019
|
||||
Cash paid for amounts included in the measurement of:
|
|
|
|
|
||||
Operating cash flows from operating leases
|
|
$
|
156
|
|
|
$
|
174
|
|
Operating cash flows from finance leases
|
|
$
|
14
|
|
|
$
|
17
|
|
Financing cash flows from finance leases
|
|
$
|
138
|
|
|
$
|
145
|
|
|
|
|
|
As of
|
||||||
(in millions)
|
|
Balance Sheet Line Item
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
Assets:
|
|
|
|
|
|
|
||||
ROU operating lease assets
|
|
Operating right-of-use assets, net
|
|
$
|
1,602
|
|
|
$
|
1,428
|
|
ROU finance lease assets
|
|
Property and Equipment, net
|
|
1,137
|
|
|
1,220
|
|
||
Total
|
|
|
|
$
|
2,739
|
|
|
$
|
2,648
|
|
|
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
|
||||
Current
|
|
|
|
|
|
|
||||
Operating lease
|
|
Current operating lease liabilities
|
|
$
|
488
|
|
|
$
|
482
|
|
Finance lease
|
|
Short-term debt and current maturities of long-term debt
|
|
432
|
|
|
444
|
|
||
Total
|
|
|
|
$
|
920
|
|
|
$
|
926
|
|
|
|
|
|
|
|
|
||||
Non-current
|
|
|
|
|
|
|
||||
Operating lease
|
|
Non-current operating lease liabilities
|
|
$
|
1,208
|
|
|
$
|
1,063
|
|
Finance lease
|
|
Long-term debt, net of current maturities
|
|
583
|
|
|
602
|
|
||
Total
|
|
|
|
$
|
1,791
|
|
|
$
|
1,665
|
|
|
|
As of
|
||||
|
|
June 30, 2020
|
|
March 31, 2020
|
||
Weighted Average remaining lease term:
|
|
Years
|
||||
Operating leases
|
|
4.9
|
|
|
4.8
|
|
Finance leases
|
|
2.7
|
|
|
2.7
|
|
|
|
|
|
|
||
Weighted average remaining discount rate:
|
|
Rate
|
||||
Operating leases
|
|
4.1
|
%
|
|
4.0
|
%
|
Finance leases
|
|
4.2
|
%
|
|
6.4
|
%
|
Fiscal year
|
|
Operating Leases
|
|
|
||||||||
(in millions)
|
|
Real Estate
|
|
Equipment
|
|
Finance Leases
|
||||||
Remainder of 2021
|
|
$
|
356
|
|
|
$
|
51
|
|
|
$
|
345
|
|
2022
|
|
403
|
|
|
38
|
|
|
370
|
|
|||
2023
|
|
321
|
|
|
18
|
|
|
223
|
|
|||
2024
|
|
248
|
|
|
10
|
|
|
99
|
|
|||
2025
|
|
168
|
|
|
5
|
|
|
23
|
|
|||
Thereafter
|
|
261
|
|
|
3
|
|
|
1
|
|
|||
Total lease payments
|
|
1,757
|
|
|
125
|
|
|
1,061
|
|
|||
Less: imputed interest
|
|
(181
|
)
|
|
(5
|
)
|
|
(46
|
)
|
|||
Total payments
|
|
$
|
1,576
|
|
|
$
|
120
|
|
|
$
|
1,015
|
|
|
|
Fair Value Hierarchy
|
||||||||||||||
(in millions)
|
|
June 30, 2020
|
||||||||||||||
Assets:
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Money market funds and money market deposit accounts
|
|
$
|
706
|
|
|
$
|
706
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.S. treasury bills(1)
|
|
500
|
|
|
500
|
|
|
—
|
|
|
—
|
|
||||
Time deposits(1)
|
|
305
|
|
|
305
|
|
|
—
|
|
|
—
|
|
||||
Other debt securities(2)
|
|
56
|
|
|
—
|
|
|
53
|
|
|
3
|
|
||||
Total assets
|
|
$
|
1,567
|
|
|
$
|
1,511
|
|
|
$
|
53
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Total liabilities
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
|
March 31, 2020
|
||||||||||||||
Assets:
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Money market funds and money market deposit accounts
|
|
$
|
156
|
|
|
$
|
156
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Time deposits(1)
|
|
595
|
|
|
595
|
|
|
—
|
|
|
—
|
|
||||
Other debt securities(2)
|
|
51
|
|
|
—
|
|
|
48
|
|
|
3
|
|
||||
Deferred purchase price receivable
|
|
103
|
|
|
—
|
|
|
—
|
|
|
103
|
|
||||
Total assets
|
|
$
|
905
|
|
|
$
|
751
|
|
|
$
|
48
|
|
|
$
|
106
|
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
Total liabilities
|
|
$
|
46
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
46
|
|
|
|
|
|
For the Three Months Ended
|
||||||
(in millions)
|
|
Statement of Operations Line Item
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Foreign currency forward contracts
|
|
Other expense (income), net
|
|
$
|
25
|
|
|
$
|
19
|
|
|
|
Derivative Assets
|
||||||||
|
|
|
|
As of
|
||||||
(in millions)
|
|
Balance Sheet Line Item
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
|
|
|
|
||||
Derivatives designated for hedge accounting:
|
|
|
||||||||
Foreign currency forward contracts
|
|
Other current assets
|
|
$
|
2
|
|
|
$
|
—
|
|
Total fair value of derivatives designated for hedge accounting
|
|
$
|
2
|
|
|
$
|
—
|
|
||
|
|
|
||||||||
Derivatives not designated for hedge accounting:
|
|
|
||||||||
Foreign currency forward contracts
|
|
Other current assets
|
|
$
|
3
|
|
|
$
|
16
|
|
Total fair value of derivatives not designated for hedge accounting
|
|
$
|
3
|
|
|
$
|
16
|
|
|
|
Derivative Liabilities
|
||||||||
|
|
|
|
As of
|
||||||
(in millions)
|
|
Balance Sheet Line Item
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
|
|
|
|
|
|
|
||||
Derivatives designated for hedge accounting:
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
Accrued expenses and other current liabilities
|
|
$
|
8
|
|
|
$
|
20
|
|
Total fair value of derivatives designated for hedge accounting:
|
|
$
|
8
|
|
|
$
|
20
|
|
||
|
|
|
|
|
|
|||||
Derivatives not designated for hedge accounting:
|
|
|
|
|
||||||
Foreign currency forward contracts
|
|
Accrued expenses and other current liabilities
|
|
$
|
5
|
|
|
$
|
12
|
|
Total fair value of derivatives not designated for hedge accounting
|
|
$
|
5
|
|
|
$
|
12
|
|
|
|
As of June 30, 2020
|
||||||||||
(in millions)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Software
|
|
$
|
4,086
|
|
|
$
|
2,729
|
|
|
$
|
1,357
|
|
Customer related intangible assets
|
|
5,843
|
|
|
1,859
|
|
|
3,984
|
|
|||
Other intangible assets
|
|
238
|
|
|
39
|
|
|
199
|
|
|||
Total intangible assets
|
|
$
|
10,167
|
|
|
$
|
4,627
|
|
|
$
|
5,540
|
|
|
|
As of March 31, 2020
|
||||||||||
(in millions)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Software
|
|
$
|
4,048
|
|
|
$
|
2,614
|
|
|
$
|
1,434
|
|
Customer related intangible assets
|
|
5,795
|
|
|
1,697
|
|
|
4,098
|
|
|||
Other intangible assets
|
|
235
|
|
|
36
|
|
|
199
|
|
|||
Total intangible assets
|
|
$
|
10,078
|
|
|
$
|
4,347
|
|
|
$
|
5,731
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Intangible asset amortization
|
|
$
|
253
|
|
|
$
|
236
|
|
Transition and transformation contract cost amortization(1)
|
|
61
|
|
|
67
|
|
||
Total amortization expense
|
|
$
|
314
|
|
|
$
|
303
|
|
(1)
|
Transaction and transformation contract costs are included within other assets on the balance sheet.
|
Fiscal Year
|
|
(in millions)
|
|
|
Remainder of 2021
|
|
$
|
743
|
|
2022
|
|
$
|
940
|
|
2023
|
|
$
|
860
|
|
2024
|
|
$
|
753
|
|
2025
|
|
$
|
668
|
|
(in millions)
|
|
GBS
|
|
GIS
|
|
Total
|
||||||
Goodwill, gross
|
|
$
|
6,507
|
|
|
$
|
5,066
|
|
|
$
|
11,573
|
|
Accumulated impairment losses
|
|
(4,490
|
)
|
|
(5,066
|
)
|
|
(9,556
|
)
|
|||
Balance as of March 31, 2020, net
|
|
$
|
2,017
|
|
|
$
|
—
|
|
|
$
|
2,017
|
|
|
|
|
|
|
|
|
||||||
Acquisitions
|
|
16
|
|
|
—
|
|
|
16
|
|
|||
Foreign currency translation
|
|
24
|
|
|
—
|
|
|
24
|
|
|||
|
|
|
|
|
|
|
||||||
Goodwill, gross
|
|
6,547
|
|
|
5,066
|
|
|
11,613
|
|
|||
Accumulated impairment losses
|
|
(4,490
|
)
|
|
(5,066
|
)
|
|
(9,556
|
)
|
|||
Balance as of June 30, 2020, net
|
|
$
|
2,057
|
|
|
$
|
—
|
|
|
$
|
2,057
|
|
(in millions)
|
|
Interest Rates
|
|
Fiscal Year Maturities
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
Short-term debt and current maturities of long-term debt
|
|
|
|
|
|
|
|
|
||||
Commercial paper(1)
|
|
(0.22)% - 0.44%
|
|
2021 - 2022
|
|
$
|
967
|
|
|
$
|
542
|
|
Current maturities of long-term debt
|
|
Various
|
|
2021 - 2022
|
|
283
|
|
|
290
|
|
||
Current maturities of finance lease liabilities
|
|
0.62% - 18.47%
|
|
2021
|
|
432
|
|
|
444
|
|
||
Short-term debt and current maturities of long-term debt
|
|
|
|
|
|
$
|
1,682
|
|
|
$
|
1,276
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt, net of current maturities
|
|
|
|
|
|
|
|
|
||||
AUD term loan
|
|
0.94% - 0.96%(2)
|
|
2022
|
|
344
|
|
|
489
|
|
||
GBP term loan
|
|
1.46%(3)
|
|
2022
|
|
369
|
|
|
556
|
|
||
EUR term loan
|
|
0.65%(4)
|
|
2022 - 2023
|
|
280
|
|
|
822
|
|
||
EUR term loan
|
|
0.80%(5)
|
|
2023 - 2024
|
|
839
|
|
|
821
|
|
||
USD term loan
|
|
1.42% - 2.24%(6)
|
|
2025
|
|
379
|
|
|
480
|
|
||
$274 million Senior notes
|
|
4.45%
|
|
2023
|
|
276
|
|
|
276
|
|
||
$171 million Senior notes
|
|
4.45%
|
|
2023
|
|
172
|
|
|
172
|
|
||
$500 million Senior notes
|
|
4.25%
|
|
2025
|
|
505
|
|
|
505
|
|
||
$500 million Senior notes
|
|
4.00%
|
|
2024
|
|
497
|
|
|
—
|
|
||
$500 million Senior notes
|
|
4.13%
|
|
2026
|
|
496
|
|
|
—
|
|
||
£250 million Senior notes
|
|
2.75%
|
|
2025
|
|
306
|
|
|
307
|
|
||
€650 million Senior notes
|
|
1.75%
|
|
2026
|
|
726
|
|
|
709
|
|
||
$500 million Senior notes
|
|
4.75%
|
|
2028
|
|
507
|
|
|
507
|
|
||
$234 million Senior notes
|
|
7.45%
|
|
2030
|
|
271
|
|
|
271
|
|
||
Revolving credit facility
|
|
1.27% - 2.08%
|
|
2024 - 2025
|
|
3,250
|
|
|
1,500
|
|
||
Lease credit facility
|
|
1.17% - 1.99%
|
|
2021 - 2023
|
|
8
|
|
|
11
|
|
||
Finance lease liabilities
|
|
0.62% - 18.47%
|
|
2021 - 2027
|
|
1,015
|
|
|
1,046
|
|
||
Borrowings for assets acquired under long-term financing
|
|
0.48% - 6.39%
|
|
2021 - 2028
|
|
740
|
|
|
802
|
|
||
Mandatorily redeemable preferred stock outstanding
|
|
6.00%
|
|
2023
|
|
62
|
|
|
62
|
|
||
Other borrowings
|
|
Various
|
|
2021 - 2022
|
|
7
|
|
|
70
|
|
||
Long-term debt
|
|
|
|
|
|
11,049
|
|
|
9,406
|
|
||
Less: current maturities
|
|
|
|
|
|
715
|
|
|
734
|
|
||
Long-term debt, net of current maturities
|
|
|
|
|
|
$
|
10,334
|
|
|
$
|
8,672
|
|
(1)
|
At DXC's option, DXC can borrow up to a maximum of €1 billion or its equivalent in €, £, and $. Under this existing €1.0 billion commercial paper program, the Company issued £600 million via direct sale to the Bank of England.
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
United States
|
|
$
|
1,709
|
|
|
$
|
1,851
|
|
United Kingdom
|
|
573
|
|
|
715
|
|
||
Australia
|
|
361
|
|
|
373
|
|
||
Other Europe
|
|
1,205
|
|
|
1,230
|
|
||
Other International
|
|
654
|
|
|
721
|
|
||
Total Revenues
|
|
$
|
4,502
|
|
|
$
|
4,890
|
|
|
|
As of
|
||||||
(in millions)
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
Trade receivables, net
|
|
$
|
2,986
|
|
|
$
|
3,059
|
|
Contract assets
|
|
$
|
442
|
|
|
$
|
454
|
|
Contract liabilities
|
|
$
|
1,763
|
|
|
$
|
1,756
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Balance, beginning of period
|
|
$
|
1,756
|
|
|
$
|
1,886
|
|
Deferred revenue
|
|
698
|
|
|
770
|
|
||
Recognition of deferred revenue
|
|
(719
|
)
|
|
(717
|
)
|
||
Currency translation adjustment
|
|
30
|
|
|
(5
|
)
|
||
Other
|
|
(2
|
)
|
|
(16
|
)
|
||
Balance, end of period
|
|
$
|
1,763
|
|
|
$
|
1,918
|
|
|
|
As of
|
||
(in millions)
|
|
June 30, 2020
|
||
Accrued expenses and other current liabilities
|
|
$
|
165
|
|
Other long-term liabilities
|
|
33
|
|
|
Total
|
|
$
|
198
|
|
|
|
Restructuring Liability as of March 31, 2020
|
|
Costs Expensed, Net of Reversals(1)
|
|
Costs Not Affecting Restructuring Liability(2)
|
|
Cash Paid
|
|
Other(3)
|
|
Restructuring Liability as of June 30, 2020
|
||||||||||||
Fiscal 2021 Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Workforce Reductions
|
|
$
|
—
|
|
|
$
|
78
|
|
|
$
|
(2
|
)
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
56
|
|
Facilities Costs
|
|
—
|
|
|
5
|
|
|
(1
|
)
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
||||||
Total
|
|
$
|
—
|
|
|
$
|
83
|
|
|
$
|
(3
|
)
|
|
$
|
(22
|
)
|
|
$
|
—
|
|
|
$
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fiscal 2020 Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Workforce Reductions
|
|
$
|
74
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
49
|
|
Facilities Costs
|
|
2
|
|
|
(4
|
)
|
|
4
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
||||||
Total
|
|
$
|
76
|
|
|
$
|
(5
|
)
|
|
$
|
5
|
|
|
$
|
(26
|
)
|
|
$
|
—
|
|
|
$
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fiscal 2019 Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Workforce Reductions
|
|
$
|
25
|
|
|
$
|
(2
|
)
|
|
$
|
(1
|
)
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
19
|
|
Facilities Costs
|
|
5
|
|
|
(3
|
)
|
|
2
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||||
Total
|
|
$
|
30
|
|
|
$
|
(5
|
)
|
|
$
|
1
|
|
|
$
|
(4
|
)
|
|
$
|
1
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Prior Year Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Workforce Reductions
|
|
$
|
24
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
$
|
18
|
|
Facilities Costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
|
$
|
24
|
|
|
$
|
(1
|
)
|
|
$
|
2
|
|
|
$
|
(8
|
)
|
|
$
|
1
|
|
|
$
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Acquired Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Workforce Reductions
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
38
|
|
Facilities Costs
|
|
$
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Total
|
|
$
|
50
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
49
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Service cost
|
|
$
|
22
|
|
|
$
|
23
|
|
Interest cost
|
|
58
|
|
|
60
|
|
||
Expected return on assets
|
|
(153
|
)
|
|
(161
|
)
|
||
Amortization of prior service costs
|
|
(2
|
)
|
|
(2
|
)
|
||
Contractual termination benefit
|
|
—
|
|
|
11
|
|
||
Curtailment gain
|
|
(9
|
)
|
|
—
|
|
||
Recognition of actuarial loss
|
|
11
|
|
|
—
|
|
||
Net periodic pension income
|
|
$
|
(73
|
)
|
|
$
|
(69
|
)
|
|
|
Fiscal 2020
|
|||||||||
Fiscal Period
|
|
Number of Shares Repurchased
|
|
Average Price Per Share
|
|
Amount (in millions)
|
|||||
1st Quarter
|
|
|
|
|
|
|
|||||
Open market purchases
|
|
5,510,415
|
|
|
$
|
54.44
|
|
|
$
|
300
|
|
Accelerated stock repurchases
|
|
1,849,194
|
|
|
54.08
|
|
|
100
|
|
||
1st Quarter Total
|
|
7,359,609
|
|
|
$
|
54.35
|
|
|
$
|
400
|
|
(in millions)
|
|
Foreign Currency Translation Adjustments
|
|
Cash Flow Hedges
|
|
Available-for-sale Securities
|
|
Pension and Other Post-retirement Benefit Plans
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at March 31, 2020
|
|
$
|
(851
|
)
|
|
$
|
(20
|
)
|
|
$
|
9
|
|
|
$
|
259
|
|
|
$
|
(603
|
)
|
Current-period other comprehensive income
|
|
(2
|
)
|
|
7
|
|
|
4
|
|
|
—
|
|
|
9
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
|
—
|
|
|
4
|
|
|
—
|
|
|
(9
|
)
|
|
(5
|
)
|
|||||
Balance at June 30, 2020
|
|
$
|
(853
|
)
|
|
$
|
(9
|
)
|
|
$
|
13
|
|
|
$
|
250
|
|
|
$
|
(599
|
)
|
(in millions)
|
|
Foreign Currency Translation Adjustments
|
|
Cash Flow Hedges
|
|
Available-for-sale Securities
|
|
Pension and Other Post-retirement Benefit Plans
|
|
Accumulated Other Comprehensive Loss
|
||||||||||
Balance at March 31, 2019
|
|
$
|
(517
|
)
|
|
$
|
(3
|
)
|
|
$
|
9
|
|
|
$
|
267
|
|
|
$
|
(244
|
)
|
Current-period other comprehensive loss
|
|
(111
|
)
|
|
6
|
|
|
1
|
|
|
|
|
|
(104
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
|
|
|
|
(2
|
)
|
|
|
|
|
(1
|
)
|
|
(3
|
)
|
|||||
Balance at June 30, 2019
|
|
$
|
(628
|
)
|
|
$
|
1
|
|
|
$
|
10
|
|
|
$
|
266
|
|
|
$
|
(351
|
)
|
|
|
As of June 30, 2020
|
||||
|
|
Reserved for Issuance
|
|
Available for Future Grants
|
||
DXC Employee Equity Plan
|
|
34,200,000
|
|
|
14,648,697
|
|
DXC Director Equity Plan
|
|
230,000
|
|
|
26,551
|
|
DXC Share Purchase Plan
|
|
250,000
|
|
|
191,728
|
|
Total
|
|
34,680,000
|
|
|
14,866,976
|
|
|
|
Number
of Option Shares
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
(in millions)
|
|||||
Outstanding as of March 31, 2020
|
|
1,869,815
|
|
|
$
|
29.92
|
|
|
4.27
|
|
$
|
—
|
|
Granted
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
|
(1,203
|
)
|
|
$
|
11.77
|
|
|
|
|
$
|
—
|
|
Canceled/Forfeited
|
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Expired
|
|
(48,980
|
)
|
|
$
|
25.46
|
|
|
|
|
|
||
Outstanding as of June 30, 2020
|
|
1,819,632
|
|
|
$
|
30.05
|
|
|
4.10
|
|
$
|
1
|
|
Vested and exercisable as of June 30, 2020
|
|
1,819,632
|
|
|
$
|
30.05
|
|
|
4.10
|
|
$
|
1
|
|
|
|
Employee Equity Plan
|
|
Director Equity Plan
|
||||||||||
|
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value |
|
Number of
Shares |
|
Weighted
Average
Grant Date
Fair Value
|
||||||
Outstanding as of March 31, 2020
|
|
4,174,476
|
|
|
$
|
55.45
|
|
|
114,615
|
|
|
$
|
37.69
|
|
Granted
|
|
7,135,966
|
|
|
$
|
16.23
|
|
|
12,900
|
|
|
$
|
14.36
|
|
Settled
|
|
(713,578
|
)
|
|
$
|
59.26
|
|
|
—
|
|
|
$
|
—
|
|
Canceled/Forfeited
|
|
(392,495
|
)
|
|
$
|
62.92
|
|
|
—
|
|
|
$
|
—
|
|
Outstanding as of June 30, 2020
|
|
10,204,369
|
|
|
$
|
27.47
|
|
|
127,515
|
|
|
$
|
35.33
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Total share-based compensation cost
|
|
$
|
16
|
|
|
$
|
18
|
|
Related income tax benefit
|
|
$
|
1
|
|
|
$
|
4
|
|
Total intrinsic value of options exercised
|
|
$
|
—
|
|
|
$
|
6
|
|
Tax benefits from exercised stock options and awards
|
|
$
|
3
|
|
|
$
|
9
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Cash paid for:
|
|
|
|
|
||||
Interest
|
|
$
|
103
|
|
|
$
|
91
|
|
Taxes on income, net of refunds (1)
|
|
$
|
31
|
|
|
$
|
43
|
|
|
|
|
|
|
||||
Non-cash activities:
|
|
|
|
|
||||
Operating:
|
|
|
|
|
||||
ROU assets obtained in exchange for lease, net (2)
|
|
$
|
275
|
|
|
$
|
(22
|
)
|
Prepaid assets acquired under long-term financing
|
|
$
|
2
|
|
|
$
|
30
|
|
Investing:
|
|
|
|
|
||||
Capital expenditures in accounts payable and accrued expenses
|
|
$
|
11
|
|
|
$
|
13
|
|
Capital expenditures through finance lease obligations
|
|
$
|
88
|
|
|
$
|
253
|
|
Assets acquired under long-term financing
|
|
$
|
2
|
|
|
$
|
235
|
|
(Decrease) increase in deferred purchase price receivable
|
|
$
|
(52
|
)
|
|
$
|
321
|
|
Contingent consideration
|
|
$
|
3
|
|
|
$
|
—
|
|
Financing:
|
|
|
|
|
||||
Dividends declared but not yet paid
|
|
$
|
1
|
|
|
$
|
57
|
|
•
|
Analytics and Engineering. GBS's portfolio of analytics services and extensive partner ecosystem help customers gain rapid insights, automate operations, and accelerate their digital transformation journeys. GBS provides software engineering and solutions that enable businesses to run and manage their mission-critical functions, transform their operations and develop new ways of doing business.
|
•
|
Applications. GBS uses advanced technologies and methods to accelerate the creation, modernization, delivery and maintenance of high-quality, secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership, across industries. GBS's vertical-specific IP includes solutions for insurance; banking and capital markets; and automotive, among others.
|
•
|
Cloud and Security. GIS helps customers to rapidly modernize by adapting legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments. GIS's security solutions help predict attacks, proactively respond to threats, ensure compliance and protect data, applications and infrastructure.
|
•
|
IT Outsourcing ("ITO"). GIS's ITO services support infrastructure, applications, and workplace IT operations, including hardware, software, physical/virtual end-user devices, collaboration tools, and IT support services. GIS helps customers securely optimize operations to ensure continuity of their systems and respond to new business and workplace demands, while achieving cost takeout, all with limited resources, expertise and budget.
|
(in millions)
|
|
GBS
|
|
GIS
|
|
Total Reportable Segments
|
|
All Other
|
|
Totals
|
||||||||||
Three Months Ended June 30, 2020
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
2,174
|
|
|
$
|
2,328
|
|
|
$
|
4,502
|
|
|
$
|
—
|
|
|
$
|
4,502
|
|
Segment profit
|
|
$
|
215
|
|
|
$
|
23
|
|
|
$
|
238
|
|
|
$
|
(48
|
)
|
|
$
|
190
|
|
Depreciation and amortization(1)
|
|
$
|
50
|
|
|
$
|
267
|
|
|
$
|
317
|
|
|
$
|
27
|
|
|
$
|
344
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Three Months Ended June 30, 2019
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
2,159
|
|
|
$
|
2,731
|
|
|
$
|
4,890
|
|
|
$
|
—
|
|
|
$
|
4,890
|
|
Segment profit
|
|
$
|
366
|
|
|
$
|
340
|
|
|
$
|
706
|
|
|
$
|
(54
|
)
|
|
$
|
652
|
|
Depreciation and amortization(1)
|
|
$
|
29
|
|
|
$
|
275
|
|
|
$
|
304
|
|
|
$
|
28
|
|
|
$
|
332
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Profit
|
|
|
|
|
||||
Total profit for reportable segments
|
|
$
|
238
|
|
|
$
|
706
|
|
All other loss
|
|
(48
|
)
|
|
(54
|
)
|
||
Interest income
|
|
23
|
|
|
30
|
|
||
Interest expense
|
|
(106
|
)
|
|
(91
|
)
|
||
Restructuring costs
|
|
(72
|
)
|
|
(142
|
)
|
||
Transaction, separation and integration-related costs
|
|
(110
|
)
|
|
(105
|
)
|
||
Amortization of acquired intangible assets
|
|
(148
|
)
|
|
(138
|
)
|
||
Pension and OPEB actuarial and settlement losses
|
|
(2
|
)
|
|
—
|
|
||
(Loss) income before income taxes
|
|
$
|
(225
|
)
|
|
$
|
206
|
|
Fiscal year
|
|
Minimum Purchase Commitment(1)
|
||
(in millions)
|
|
|||
Remainder of 2021
|
|
$
|
1,525
|
|
2022
|
|
624
|
|
|
2023
|
|
537
|
|
|
2024
|
|
261
|
|
|
2025
|
|
25
|
|
|
Total
|
|
$
|
2,972
|
|
(in millions)
|
|
Remainder of Fiscal 2021
|
|
Fiscal 2022
|
|
Fiscal 2023 and Thereafter
|
|
Totals
|
||||||||
Surety bonds
|
|
$
|
105
|
|
|
$
|
195
|
|
|
$
|
86
|
|
|
$
|
386
|
|
Letters of credit
|
|
99
|
|
|
109
|
|
|
400
|
|
|
608
|
|
||||
Stand-by letters of credit
|
|
64
|
|
|
11
|
|
|
26
|
|
|
101
|
|
||||
Totals
|
|
$
|
268
|
|
|
$
|
315
|
|
|
$
|
512
|
|
|
$
|
1,095
|
|
•
|
the uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions, stay-at-home orders, economic restrictions implemented to address the COVID-19 pandemic;
|
•
|
the current, and uncertain future, impact of the COVID-19 pandemic, as well as other emerging developments and disruption to economic activity, and their resulting impact on our clients that may affect our business, growth, prospects, financial condition, operating results, cash flows and liquidity;
|
•
|
changes in governmental regulations or the adoption of new laws or regulations that may make it more difficult or expensive to operate our business;
|
•
|
changes in senior management, the loss of key employees or the ability to retain and hire key personnel and maintain relationships with key business partners;
|
•
|
the risk of liability or damage to our reputation resulting from security breaches, cyber-attacks or disclosure of sensitive data or failure to comply with data protection laws and regulations, including the ransomware attack recently experienced by our subsidiary, Xchanging;
|
•
|
business interruptions in connection with our technology systems;
|
•
|
the competitive pressures faced by our business;
|
•
|
the effects of macroeconomic and geopolitical trends and events;
|
•
|
the need to manage third-party suppliers and the effective distribution and delivery of our products and services;
|
•
|
the protection of our intellectual property assets, including intellectual property licensed from third parties;
|
•
|
the risks associated with international operations;
|
•
|
the development and transition of new products and services and the enhancement of existing products and services to meet customer needs, respond to emerging technological trends and maintain and grow our customer relationships over time;
|
•
|
the ability to succeed in our strategic objectives, including strategic alternatives material for our business;
|
•
|
the ability to achieve the expected benefits of our restructuring plans;
|
•
|
the ability to maintain and grow our customer relationships over time and to comply with customer contracts or government contracting regulations or requirements;
|
•
|
the execution and performance of contracts by us and our suppliers, customers, clients and partners;
|
•
|
our credit rating and the ability to manage working capital, refinance and raise additional capital for future needs;
|
•
|
our substantial amount of indebtedness;
|
•
|
our ability to remediate any material weakness and maintain effective internal control over financial reporting;
|
•
|
the resolution of pending investigations, claims and disputes;
|
•
|
the integration of Computer Sciences Corporation's ("CSC") and Enterprise Services business of Hewlett Packard Enterprise Company's ("HPES") businesses, operations, and culture and the ability to operate as effectively and efficiently as expected, and the combined company's ability to successfully manage and integrate acquisitions generally;
|
•
|
the ability to realize the synergies and benefits expected to result from the merger of CSC and HPES (the "HPES Merger") within the anticipated time frame or in the anticipated amounts;
|
•
|
other risks related to the HPES Merger including anticipated tax treatment, unforeseen liabilities, and future capital expenditures;
|
•
|
the spin-off of our former U.S. public sector business and its related mergers with Vencore Holding Corp. and KeyPoint Government Solutions to form Perspecta Inc. (the "USPS") Separation and Mergers could result in substantial tax liability to DXC and our stockholders;
|
•
|
risks relating to the respective abilities of the parties to our acquisition of Luxoft Holding, Inc. to achieve the expected results therefrom;
|
•
|
risks relating to the consummation of the HHS Sale and the sale of our healthcare provider software business to Dedalus, and the ability to achieve the expected results therefrom; and
|
•
|
the other factors described in Part I Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 and Part II Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q.
|
•
|
Background
|
•
|
Results of Operations
|
•
|
Liquidity and Capital Resources
|
•
|
Off-Balance Sheet Arrangements
|
•
|
Contractual Obligations
|
•
|
Critical Accounting Policies and Estimates
|
|
|
Three Months Ended
|
||||||
(In millions, except per-share amounts)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
|
|
|
|
|
||||
Revenues
|
|
$
|
4,502
|
|
|
$
|
4,890
|
|
|
|
|
|
|
||||
(Loss) income, before income taxes
|
|
(225
|
)
|
|
206
|
|
||
Income tax (benefit) expense
|
|
(26
|
)
|
|
38
|
|
||
Net (loss) income
|
|
$
|
(199
|
)
|
|
$
|
168
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per share:
|
|
$
|
(0.81
|
)
|
|
$
|
0.61
|
|
•
|
Revenues for the first quarter of fiscal 2021 were $4.5 billion, a decrease of 7.9% as compared to the first quarter of fiscal 2020.
|
•
|
Net loss and diluted loss per share for the first quarter of fiscal 2021 were $199 million and $0.81, respectively, including the cumulative impact of certain items of $258 million, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and pension and other post-retirement benefit ("OPEB") actuarial and settlement losses. This compares with net income and diluted earnings per share of $168 million and $0.61, respectively, for the first quarter of fiscal 2020.
|
•
|
Our cash and cash equivalents were $5.5 billion as of June 30, 2020.
|
•
|
We generated $119 million of cash from operations during the first quarter of fiscal 2021, as compared to cash used of $66 million during the first quarter of fiscal 2020.
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
|
Change
|
|
Percentage Change
|
|||||||
GBS
|
|
$
|
2,174
|
|
|
$
|
2,159
|
|
|
$
|
15
|
|
|
0.7
|
%
|
GIS
|
|
2,328
|
|
|
2,731
|
|
|
(403
|
)
|
|
(14.8
|
)%
|
|||
Total Revenues
|
|
$
|
4,502
|
|
|
$
|
4,890
|
|
|
$
|
(388
|
)
|
|
(7.9
|
)%
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
(in millions)
|
|
Constant Currency June 30, 2020
|
|
June 30, 2019
|
|
Change
|
|
Percentage Change
|
|||||||
GBS
|
|
$
|
2,212
|
|
|
$
|
2,159
|
|
|
$
|
53
|
|
|
2.5
|
%
|
GIS
|
|
2,391
|
|
|
2,731
|
|
|
(340
|
)
|
|
(12.4
|
)%
|
|||
Total
|
|
$
|
4,603
|
|
|
$
|
4,890
|
|
|
$
|
(287
|
)
|
|
(5.9
|
)%
|
|
|
Three Months Ended
|
|
|
|||||||||||||
|
|
Amount
|
Percentage of Revenues
|
|
Percentage Point Change
|
||||||||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
|
June 30, 2020
|
|
June 30, 2019
|
|
||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
$
|
3,629
|
|
|
$
|
3,622
|
|
|
80.6
|
%
|
|
74.0
|
%
|
|
6.6
|
|
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
539
|
|
|
507
|
|
|
12.0
|
|
|
10.4
|
|
|
1.6
|
|
||
Depreciation and amortization
|
|
492
|
|
|
470
|
|
|
10.9
|
|
|
9.6
|
|
|
1.3
|
|
||
Restructuring costs
|
|
72
|
|
|
142
|
|
|
1.6
|
|
|
2.9
|
|
|
(1.3
|
)
|
||
Interest expense
|
|
106
|
|
|
91
|
|
|
2.4
|
|
|
1.9
|
|
|
0.5
|
|
||
Interest income
|
|
(23
|
)
|
|
(30
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|
0.1
|
|
||
Other income, net
|
|
(88
|
)
|
|
(118
|
)
|
|
(2.0
|
)
|
|
(2.4
|
)
|
|
0.4
|
|
||
Total costs and expenses
|
|
$
|
4,727
|
|
|
$
|
4,684
|
|
|
105.0
|
%
|
|
95.8
|
%
|
|
9.2
|
|
|
|
Three Months Ended
|
|
|
||||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
|
Change
|
||||||
(Loss) income before income taxes
|
|
$
|
(225
|
)
|
|
$
|
206
|
|
|
$
|
(431
|
)
|
Non-GAAP income before income taxes
|
|
$
|
107
|
|
|
$
|
591
|
|
|
$
|
(484
|
)
|
Net (loss) income
|
|
$
|
(199
|
)
|
|
$
|
168
|
|
|
$
|
(367
|
)
|
Adjusted EBIT
|
|
$
|
190
|
|
|
$
|
652
|
|
|
$
|
(462
|
)
|
•
|
Restructuring costs - reflects costs, net of reversals, related to workforce optimization and real estate charges.
|
•
|
Transaction, separation and integration-related costs - reflects costs to execute on strategic alternatives, costs related to integration planning, financing and advisory fees associated with the HPES Merger and other acquisitions and costs related to the separation of USPS.
|
•
|
Amortization of acquired intangible assets - reflects amortization of intangible assets acquired through business combinations.
|
•
|
Pension and OPEB actuarial and settlement gains and losses - reflects pension and OPEB actuarial and settlement gains and losses.
|
•
|
Income tax expense of non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.
|
|
|
Three Months Ended June 30, 2020
|
||||||||||||||||||||||
(in millions, except per-share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation and Integration-Related Costs
|
|
Amortization of Acquired Intangible Assets
|
|
Pension and OPEB Actuarial and Settlement Losses
|
|
Non-GAAP Results
|
||||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
$
|
3,629
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,629
|
|
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
539
|
|
|
—
|
|
|
(110
|
)
|
|
—
|
|
|
—
|
|
|
429
|
|
||||||
(Loss) income before income taxes
|
|
(225
|
)
|
|
72
|
|
|
110
|
|
|
148
|
|
|
2
|
|
|
107
|
|
||||||
Income tax (benefit) expense
|
|
(26
|
)
|
|
12
|
|
|
28
|
|
|
34
|
|
|
—
|
|
|
48
|
|
||||||
Net (loss) income
|
|
(199
|
)
|
|
60
|
|
|
82
|
|
|
114
|
|
|
2
|
|
|
59
|
|
||||||
Less: net income attributable to non-controlling interest, net of tax
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
||||||
Net (loss) income attributable to DXC common stockholders
|
|
$
|
(205
|
)
|
|
$
|
60
|
|
|
$
|
82
|
|
|
$
|
114
|
|
|
$
|
2
|
|
|
$
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Effective Tax Rate
|
|
11.6
|
%
|
|
|
|
|
|
|
|
|
|
44.9
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic EPS
|
|
$
|
(0.81
|
)
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.45
|
|
|
$
|
0.01
|
|
|
$
|
0.21
|
|
Diluted EPS
|
|
$
|
(0.81
|
)
|
|
$
|
0.24
|
|
|
$
|
0.32
|
|
|
$
|
0.45
|
|
|
$
|
0.01
|
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic EPS
|
|
253.63
|
|
|
253.63
|
|
|
253.63
|
|
|
253.63
|
|
|
253.63
|
|
|
253.63
|
|
||||||
Diluted EPS
|
|
253.63
|
|
|
254.41
|
|
|
254.41
|
|
|
254.41
|
|
|
254.41
|
|
|
254.41
|
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||||||
(in millions, except per-share amounts)
|
|
As Reported
|
|
Restructuring Costs
|
|
Transaction, Separation and Integration-Related Costs
|
|
Amortization of Acquired Intangible Assets
|
|
Non-GAAP Results
|
||||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
$
|
3,622
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,622
|
|
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
507
|
|
|
—
|
|
|
(105
|
)
|
|
—
|
|
|
$
|
402
|
|
||||
Income before income taxes
|
|
206
|
|
|
142
|
|
|
105
|
|
|
138
|
|
|
591
|
|
|||||
Income tax expense
|
|
38
|
|
|
28
|
|
|
22
|
|
|
31
|
|
|
119
|
|
|||||
Net income
|
|
168
|
|
|
114
|
|
|
83
|
|
|
107
|
|
|
472
|
|
|||||
Less: net income attributable to non-controlling interest, net of tax
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|||||
Net income attributable to DXC common stockholders
|
|
$
|
163
|
|
|
$
|
114
|
|
|
$
|
83
|
|
|
$
|
107
|
|
|
$
|
467
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Effective Tax Rate
|
|
18.4
|
%
|
|
|
|
|
|
|
|
20.1
|
%
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic EPS
|
|
$
|
0.61
|
|
|
$
|
0.43
|
|
|
$
|
0.31
|
|
|
$
|
0.40
|
|
|
$
|
1.75
|
|
Diluted EPS
|
|
$
|
0.61
|
|
|
$
|
0.42
|
|
|
$
|
0.31
|
|
|
$
|
0.40
|
|
|
$
|
1.74
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average common shares outstanding for:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic EPS
|
|
267.00
|
|
|
267.00
|
|
|
267.00
|
|
|
267.00
|
|
|
267.00
|
|
|||||
Diluted EPS
|
|
268.97
|
|
|
268.97
|
|
|
268.97
|
|
|
268.97
|
|
|
268.97
|
|
|
|
Three Months Ended
|
||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
||||
Net (loss) income
|
|
$
|
(199
|
)
|
|
$
|
168
|
|
Income tax (benefit) expense
|
|
(26
|
)
|
|
38
|
|
||
Interest income
|
|
(23
|
)
|
|
(30
|
)
|
||
Interest expense
|
|
106
|
|
|
91
|
|
||
EBIT
|
|
(142
|
)
|
|
267
|
|
||
Restructuring costs
|
|
72
|
|
|
142
|
|
||
Transaction, separation and integration-related costs
|
|
110
|
|
|
105
|
|
||
Amortization of acquired intangible assets
|
|
148
|
|
|
138
|
|
||
Pension and OPEB actuarial and settlement losses
|
|
2
|
|
|
—
|
|
||
Adjusted EBIT
|
|
$
|
190
|
|
|
$
|
652
|
|
|
|
Three Months Ended
|
|
|
||||||||
(in millions)
|
|
June 30, 2020
|
|
June 30, 2019
|
|
Change
|
||||||
Net cash provided by (used in) operating activities
|
|
$
|
119
|
|
|
$
|
(66
|
)
|
|
$
|
185
|
|
Net cash used in investing activities
|
|
(61
|
)
|
|
(1,822
|
)
|
|
1,761
|
|
|||
Net cash provided by financing activities
|
|
1,786
|
|
|
887
|
|
|
899
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(14
|
)
|
|
(30
|
)
|
|
16
|
|
|||
Net decrease in cash and cash equivalents
|
|
$
|
1,830
|
|
|
$
|
(1,031
|
)
|
|
$
|
2,861
|
|
Cash and cash equivalents at beginning-of-year
|
|
3,679
|
|
|
2,899
|
|
|
|
||||
Cash and cash equivalents at the end-of-period
|
|
$
|
5,509
|
|
|
$
|
1,868
|
|
|
|
|
|
As of
|
||||||
(in millions)
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
Short-term debt and current maturities of long-term debt
|
|
$
|
1,682
|
|
|
$
|
1,276
|
|
Long-term debt, net of current maturities
|
|
10,334
|
|
|
8,672
|
|
||
Total debt
|
|
$
|
12,016
|
|
|
$
|
9,948
|
|
|
|
As of
|
||||||
(in millions)
|
|
June 30, 2020
|
|
March 31, 2020
|
||||
Total debt
|
|
$
|
12,016
|
|
|
$
|
9,948
|
|
Cash and cash equivalents
|
|
5,509
|
|
|
3,679
|
|
||
Net debt(1)
|
|
$
|
6,507
|
|
|
$
|
6,269
|
|
|
|
|
|
|
||||
Total debt
|
|
$
|
12,016
|
|
|
$
|
9,948
|
|
Equity
|
|
4,942
|
|
|
5,129
|
|
||
Total capitalization
|
|
$
|
16,958
|
|
|
$
|
15,077
|
|
|
|
|
|
|
||||
Debt-to-total capitalization
|
|
70.9
|
%
|
|
66.0
|
%
|
||
Net debt-to-total capitalization(1)
|
|
38.4
|
%
|
|
41.6
|
%
|
Rating Agency
|
|
Long Term Ratings
|
|
Short Term Ratings
|
|
Outlook
|
Fitch
|
|
BBB
|
|
F-2
|
|
Stable
|
Moody's
|
|
Baa2
|
|
P-2
|
|
Negative
|
S&P
|
|
BBB-
|
|
-
|
|
Stable
|
|
|
As of
|
||
(in millions)
|
|
June 30, 2020
|
||
Cash and cash equivalents
|
|
$
|
5,509
|
|
Available borrowings under our revolving credit facility
|
|
750
|
|
|
Total liquidity
|
|
$
|
6,259
|
|
•
|
Management did not reassess in a timely manner the control activities related to goodwill impairment upon adoption of ASU 2017-04 which resulted in an immaterial out of period adjustment between quarters within fiscal 2020 related to the tax effect of the impairment recognized.
|
•
|
Management did not reassess the control and procedures related to the balance sheet classification of deferred revenue following a large and complex acquisition which resulted in an immaterial out of period adjustment to the balance sheets during the third quarter ended December 31, 2019.
|
•
|
Appointment of a new advisor reporting directly to our Chief Financial Officer with the appropriate level of knowledge and experience to help develop and execute the remediation plan.
|
•
|
Enhance periodic reviews by management and review existing documentation to determine if policies, procedures, and related control activities have continued relevance or need updating due to changes within the organization with a specific focus on the areas identified by the root cause analysis.
|
•
|
Align the Sarbanes-Oxley Act (“SOX") compliance function under the newly appointed Chief Risk Officer.
|
•
|
Establish periodic reporting of the remediation plan progress to the Audit Committee.
|
•
|
Expand SOX training and implementation of succession planning for SOX control owners.
|
|
|
|
DXC TECHNOLOGY COMPANY
|
|
|
|
|
Dated:
|
August 7, 2020
|
By:
|
/s/ Neil A. Manna
|
|
|
Name:
|
Neil A. Manna
|
|
|
Title:
|
Senior Vice President, Corporate Controller Principal Accounting Officer
|
(i)
|
DXC RECEIVABLES LLC (F/K/A CSC RECEIVABLES LLC), a Delaware limited liability company, as Seller (the “Seller”);
|
(ii)
|
DXC TECHNOLOGY COMPANY, a Nevada corporation, as Servicer (the “Servicer”);
|
(iii)
|
PNC BANK, NATIONAL ASSOCIATION, as a Committed Purchaser, as Group Agent for its Purchaser Group and as Administrative Agent (in such capacity, the “Administrative Agent”);
|
(iv)
|
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Committed Purchaser and as Group Agent for its Purchaser Group;
|
(v)
|
MUFG BANK, LTD. (F/K/A THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.), as a Committed Purchaser and as Group Agent for its Purchaser Group;
|
(vi)
|
FIFTH THIRD BANK, NATIONAL ASSOCIATION (F/K/A FIFTH THIRD BANK), as a Committed Purchaser and as Group Agent for its Purchaser Group;
|
(vii)
|
MIZUHO BANK, LTD., as a Committed Purchaser and as Group Agent for its Purchaser Group; and
|
(viii)
|
THE TORONTO DOMINION BANK, as a Committed Purchaser and as Group Agent for its Purchaser Group.
|
|
PNC BANK, NATIONAL
ASSOCIATION,
as Administrative Agent By: /s/ Christopher Blaney_________________
Name: Christopher Blaney
Title: Senior Vice President |
|
|
|
PNC BANK, NATIONAL
ASSOCIATION,
as a Committed Purchaser By: /s/ Christopher Blaney_________________
Name: Christopher Blaney
Title: Senior Vice President |
|
|
|
|
|
PNC BANK, NATIONAL
ASSOCIATION,
as Group Agent for its Purchaser Group By: /s/ Christopher Blaney_________________
Name: Christopher Blaney
Title: Senior Vice President |
|
WELLS FARGO, NATIONAL ASSOCIATION,
as a Committed Purchaser
By: /s/ Jonathan Davis__________________
Name: Jonathan Davis
Title: Asst Vice President
|
|
|
|
|
|
WELLS FARGO, NATIONAL ASSOCIATION,
as Group Agent for its Purchaser Group By: /s/ Jonathan Davis__________________ Name: Jonathan Davis
Title: Asst Vice President
|
|
MUFG BANK, LTD.,
as a Committed Purchaser By: /s/ Eric Williams____________________ Name: Eric Williams
Title: Managing Director
|
|
|
|
MUFG BANK, LTD.,
as Group Agent for its Purchaser Group By: /s/ Eric Williams____________________ Name: Eric Williams
Title: Managing Director
|
|
FIFTH THIRD BANK,
NATIONAL ASSOCIATION,
as a Committed Purchaser By: /s/ Brian J Gardner__________________ Name: Brian J Gardner
Title: Managing Director
|
|
|
|
|
|
FIFTH THIRD BANK,
NATIONAL ASSOCIATION,
as Group Agent for its Purchaser Group By: /s/ Brian J Gardner__________________ Name: Brian J Gardner
Title: Managing Director
|
|
MIZUHO BANK, LTD.,
as a Committed Purchaser By: /s/ Richard A. Burke_________________ Name: Richard A. Burke
Title: Managing Director
|
|
|
|
|
|
MIZUHO BANK, LTD.,
as Group Agent for its Purchaser Group By: /s/ Richard A. Burke_________________ Name: Richard A. Burke
Title: Managing Director
|
|
THE TORONTO DOMINION
BANK,
as a Committed Purchaser By: /s/ Luna Mills______________________ Name: Luna Mills
Title: Managing Director
|
|
|
|
|
|
THE TORONTO DOMINION
BANK,
as Group Agent for its Purchaser Group By: /s/ Luna Mills______________________ Name: Luna Mills
Title: Managing Director
|
|
|
(i)
|
DXC TECHNOLOGY COMPANY, as Servicer (the “Servicer”);
|
(ii)
|
DXC MS LLC, as exiting Originator under the Agreement described below (the “Exiting Originator”);
|
(iii)
|
THE VARIOUS PARTIES LISTED ON THE SIGNATURE PAGES HERETO AS REMAINING ORIGINATORS, as remaining Originators (collectively, the “Remaining Originators” and each, a “Remaining Originator”, and together with the Exiting Originator, the “Originators”); and
|
(iv)
|
DXC RECEIVABLES LLC (F/K/A CSC RECEIVABLES LLC), as Buyer under the Agreement described below (the “Buyer”).
|
1.
|
Grant of Award.
|
2.
|
Normal Settlement of RSUs at end of Performance Period.
|
3.
|
Effect of Termination of Employment; Approved Termination; Change in Control; Recoupment and Forfeiture.
|
4.
|
Withholding and Taxes.
|
5.
|
Recoupment and Forfeiture – Detrimental Activity.
|
6.
|
Employee Covenants.
|
7.
|
Registration of Units.
|
8.
|
Certain Corporate Transactions.
|
9.
|
Shareholder Rights.
|
10.
|
Assignment of Award.
|
11.
|
Notices.
|
12.
|
Stock Certificates.
|
13.
|
Successors and Assigns.
|
14.
|
Plan.
|
15.
|
No Employment Guaranteed.
|
16.
|
Nature of Company Restricted Stock Unit Grants.
|
17.
|
Governing Law; Consent to Jurisdiction; Venue.
|
18.
|
Entire Agreement; Amendment and Waivers.
|
19.
|
Section 409A Compliance.
|
The Employee acknowledges receipt of the Plan and a Prospectus relating to this Award, and further acknowledges that he or she has reviewed this Agreement and the related documents and accepts the provisions thereof.
|
1.
|
Definitions.
|
1.
|
Data Privacy.
|
FY21 PSU Payout Scale
|
||||
|
|
|
|
|
Performance
|
|
Target
|
|
Vesting
|
Level
|
|
Stock Price
|
|
Percentage
|
|
|
< $20.48
|
|
0%
|
Threshold
|
|
$20.48
|
|
40%
|
|
|
$21.62
|
|
60%
|
|
|
$22.80
|
|
80%
|
Target
|
|
$24.02
|
|
100%
|
|
|
$25.29
|
|
120%
|
|
|
$26.59
|
|
140%
|
|
|
$27.95
|
|
160%
|
|
|
$29.34
|
|
180%
|
Maximum
|
|
$30.79
|
|
200%
|
Title |
Date
|
Identifying Number
or Brief Description |
|
|
|
|
|
|
1.
|
Grant of Award.
|
2.
|
Settlement of RSUs.
|
3.
|
Effect of Termination of Employment; Approved Termination; Change in Control; Recoupment and Forfeiture.
|
4.
|
Withholding and Taxes.
|
5.
|
Recoupment and Forfeiture – Detrimental Activity.
|
6.
|
Employee Covenants.
|
7.
|
Registration of Units.
|
8.
|
Certain Corporate Transactions.
|
9.
|
Shareholder Rights.
|
10.
|
Assignment of Award.
|
11.
|
Notices.
|
12.
|
Successors and Assigns.
|
13.
|
Plan.
|
14.
|
No Employment Guaranteed.
|
15.
|
Nature of Company Restricted Stock Unit Grants.
|
16.
|
Governing Law; Consent to Jurisdiction; Venue.
|
17.
|
Entire Agreement; Amendment and Waivers.
|
18.
|
Section 409A Compliance.
|
The Employee acknowledges receipt of the Plan and a Prospectus relating to this Award, and further acknowledges that he or she has reviewed this Agreement and the related documents and accepts the provisions thereof.
|
1.
|
Definitions.
|
1.
|
Data Privacy.
|
Title |
Date
|
Identifying Number
or Brief Description |
|
|
|
|
|
|
|
|
|
|
|
Date:
|
August 7, 2020
|
|
|
/s/ Michael J. Salvino
|
|
|
|
|
Michael J. Salvino President and Chief Executive Officer
|
|
|
|
|
|
Date:
|
August 7, 2020
|
|
|
/s/ Paul N. Saleh
|
|
|
|
|
Paul N. Saleh
Executive Vice President and Chief Financial Officer
|
Dated:
|
August 7, 2020
|
|
/s/ Michael J. Salvino
|
|
|
|
Michael J. Salvino
President and Chief Executive Officer
|
|
|
|
|
Dated:
|
August 7, 2020
|
|
/s/ Paul N. Saleh
|
|
|
|
Paul N. Saleh
Executive Vice President and Chief Financial Officer |