DXC Technology Co (Form: 10-Q, Received: 08/07/2020 06:31:44)

false--03-31Q120210001688568DXC Technology CoP3YP1YP1YP1Yus-gaap:AccountingStandardsUpdate201613Member740000001040000000.210.017500000007500000002556740402563825322740000001710000005000000005000000002340000000.01990.00960.02240.06390.18470.18470.01170.00940.01420.00480.00620.00620.00650.00800.0146us-gaap:DebtCurrentus-gaap:DebtCurrentus-gaap:LongTermDebtNoncurrentus-gaap:LongTermDebtNoncurrentus-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization 000000100000010000000030000001200000070000000.010.01100000010000000038180000004072000000P9M0.00440.0022002148708 0001688568 2020-04-01 2020-06-30 0001688568 dxc:SeniorNotesDue2026OneMember 2020-04-01 2020-06-30 0001688568 dxc:SeniorNotesDue2025OneMember 2020-04-01 2020-06-30 0001688568 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001688568 2020-07-31 0001688568 2019-04-01 2019-06-30 0001688568 2020-03-31 0001688568 2020-06-30 0001688568 2019-06-30 0001688568 2019-03-31 0001688568 us-gaap:CommonStockMember 2020-03-31 0001688568 us-gaap:RetainedEarningsMember 2019-06-30 0001688568 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0001688568 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0001688568 us-gaap:ParentMember 2019-04-01 2019-06-30 0001688568 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember 2020-03-31 0001688568 us-gaap:NoncontrollingInterestMember 2020-06-30 0001688568 us-gaap:RetainedEarningsMember 2020-06-30 0001688568 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0001688568 us-gaap:ParentMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001688568 us-gaap:TreasuryStockMember 2020-06-30 0001688568 us-gaap:ParentMember 2019-06-30 0001688568 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0001688568 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-06-30 0001688568 us-gaap:CommonStockMember 2019-06-30 0001688568 us-gaap:CommonStockMember 2019-03-31 0001688568 us-gaap:CommonStockMember 2020-06-30 0001688568 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0001688568 us-gaap:TreasuryStockMember 2020-03-31 0001688568 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0001688568 us-gaap:RetainedEarningsMember 2019-03-31 0001688568 us-gaap:TreasuryStockMember 2019-06-30 0001688568 us-gaap:ParentMember 2020-03-31 0001688568 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001688568 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0001688568 us-gaap:TreasuryStockMember 2020-04-01 2020-06-30 0001688568 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:RetainedEarningsMember 2020-03-31 0001688568 srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember us-gaap:ParentMember 2020-03-31 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0001688568 us-gaap:TreasuryStockMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001688568 us-gaap:TreasuryStockMember 2019-03-31 0001688568 us-gaap:ParentMember 2020-06-30 0001688568 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001688568 us-gaap:NoncontrollingInterestMember 2019-03-31 0001688568 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001688568 us-gaap:ParentMember 2019-03-31 0001688568 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0001688568 us-gaap:NoncontrollingInterestMember 2019-06-30 0001688568 us-gaap:RetainedEarningsMember 2020-03-31 0001688568 us-gaap:NoncontrollingInterestMember 2020-03-31 0001688568 2019-04-01 2020-03-31 0001688568 us-gaap:DisposalGroupHeldforsaleNotDiscontinuedOperationsMember dxc:HumanServicesBusinessMember 2020-03-09 0001688568 dxc:LuxoftHoldingInc.Member dxc:ComputerSoftwareIntangibleAssetThirdPartyPurchasedSoftwareMember 2019-06-14 2019-06-14 0001688568 dxc:LuxoftHoldingInc.Member dxc:ComputerSoftwareIntangibleAssetDevelopedTechnologyMember 2019-06-14 2019-06-14 0001688568 dxc:LuxoftHoldingInc.Member us-gaap:TradeNamesMember 2019-06-14 2019-06-14 0001688568 dxc:LuxoftHoldingInc.Member us-gaap:CustomerRelatedIntangibleAssetsMember 2019-06-14 2019-06-14 0001688568 dxc:LuxoftHoldingInc.Member 2019-06-14 0001688568 dxc:LuxoftHoldingInc.Member 2019-06-14 2019-06-14 0001688568 us-gaap:RestrictedStockUnitsRSUMember 2019-04-01 2019-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeStockOptionMember 2019-04-01 2019-06-30 0001688568 us-gaap:PerformanceSharesMember 2019-04-01 2019-06-30 0001688568 us-gaap:PerformanceSharesMember 2020-04-01 2020-06-30 0001688568 dxc:DEPurchasersMember 2020-04-01 2020-06-30 0001688568 dxc:DEPurchasersMember 2020-06-30 0001688568 dxc:DEPurchasersMember 2020-03-31 0001688568 dxc:MilanoPurchasersMember 2020-06-30 0001688568 dxc:PurchasersMember 2020-06-30 0001688568 dxc:PurchasersMember 2020-03-31 0001688568 dxc:MilanoPurchasersMember 2020-04-01 2020-06-30 0001688568 dxc:PurchasersMember 2020-04-01 2020-06-30 0001688568 dxc:PurchasersMember 2019-04-01 2019-06-30 0001688568 dxc:PurchasersMember 2019-06-30 0001688568 dxc:PurchasersMember 2019-03-31 0001688568 us-gaap:EquipmentMember 2020-06-30 0001688568 us-gaap:RealEstateMember 2020-06-30 0001688568 srt:MinimumMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember 2020-04-01 2020-06-30 0001688568 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001688568 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0001688568 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-06-30 0001688568 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0001688568 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-06-30 0001688568 us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:USTreasurySecuritiesMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:BankTimeDepositsMember us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-06-30 0001688568 us-gaap:DesignatedAsHedgingInstrumentMember 2020-04-01 2020-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-03-31 0001688568 dxc:ForeignCurrencyDenominatedDebtMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0001688568 dxc:ForeignCurrencyDenominatedDebtMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-04-01 2020-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 dxc:ForeignCurrencyDenominatedDebtMember us-gaap:NetInvestmentHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0001688568 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0001688568 us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0001688568 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 us-gaap:NondesignatedMember 2020-06-30 0001688568 us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-06-30 0001688568 us-gaap:NondesignatedMember 2020-03-31 0001688568 us-gaap:OtherCurrentAssetsMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-03-31 0001688568 dxc:AccruedExpensesAndOtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-03-31 0001688568 dxc:AccruedExpensesAndOtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember 2020-06-30 0001688568 dxc:AccruedExpensesAndOtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-06-30 0001688568 dxc:AccruedExpensesAndOtherCurrentLiabilitiesMember us-gaap:ForeignExchangeForwardMember us-gaap:FairValueHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2020-03-31 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember us-gaap:OtherOperatingIncomeExpenseMember 2019-04-01 2019-06-30 0001688568 us-gaap:ForeignExchangeForwardMember us-gaap:NondesignatedMember us-gaap:OtherOperatingIncomeExpenseMember 2020-04-01 2020-06-30 0001688568 us-gaap:ComputerSoftwareIntangibleAssetMember 2020-03-31 0001688568 us-gaap:CustomerRelatedIntangibleAssetsMember 2020-03-31 0001688568 us-gaap:OtherIntangibleAssetsMember 2020-03-31 0001688568 dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember 2020-04-01 2020-06-30 0001688568 dxc:IntangibleAssetsOtherThanTransitionAndTransformationContractCostsMember 2019-04-01 2019-06-30 0001688568 dxc:TransitionAndTransformationContractCostsMember 2020-04-01 2020-06-30 0001688568 dxc:TransitionAndTransformationContractCostsMember 2019-04-01 2019-06-30 0001688568 us-gaap:ComputerSoftwareIntangibleAssetMember 2020-06-30 0001688568 us-gaap:CustomerRelatedIntangibleAssetsMember 2020-06-30 0001688568 us-gaap:OtherIntangibleAssetsMember 2020-06-30 0001688568 dxc:GBSSegmentMember 2020-04-01 2020-06-30 0001688568 dxc:GISSegmentMember 2020-03-31 0001688568 dxc:GISSegmentMember 2020-06-30 0001688568 dxc:GBSSegmentMember 2020-06-30 0001688568 dxc:GBSSegmentMember 2020-03-31 0001688568 dxc:GISSegmentMember 2020-04-01 2020-06-30 0001688568 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-06-30 0001688568 dxc:SeniorNotesDue2023Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:TermLoanPayableGBPDue2022Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 dxc:SeniorNotesDue2023Member us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2026OneMember us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2026TwoMember us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:TermLoanPayableEURDue20222023Member us-gaap:NotesPayableToBanksMember 2020-03-31 0001688568 us-gaap:NotesPayableOtherPayablesMember 2020-03-31 0001688568 dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 dxc:SeniorNotesDue2023TwoMember us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2030Member us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:TermLoanPayableGBPDue2022Member us-gaap:NotesPayableToBanksMember 2020-03-31 0001688568 dxc:SeniorNotesDue2025Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:SeniorNotesDue2024Member us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2030Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:TermLoanPayableEURDue20232024Member us-gaap:NotesPayableToBanksMember 2020-03-31 0001688568 dxc:SeniorNotesDue2028Member us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2023TwoMember us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:SeniorNotesDue2024Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:SeniorNotesDue2025Member us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2028Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember 2020-06-30 0001688568 dxc:LeaseCreditFacilityVariousMember us-gaap:SecuredDebtMember 2020-06-30 0001688568 dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember 2020-03-31 0001688568 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-03-31 0001688568 us-gaap:NotesPayableOtherPayablesMember 2020-06-30 0001688568 dxc:SeniorNotesDue2026OneMember us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:SeniorNotesDue2026TwoMember us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember 2020-03-31 0001688568 dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember 2020-03-31 0001688568 dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 dxc:LeaseCreditFacilityVariousMember us-gaap:SecuredDebtMember 2020-03-31 0001688568 us-gaap:MandatorilyRedeemablePreferredStockMember 2020-06-30 0001688568 dxc:SeniorNotesDue2025OneMember us-gaap:SeniorNotesMember 2020-03-31 0001688568 dxc:SeniorNotesDue2025OneMember us-gaap:SeniorNotesMember 2020-06-30 0001688568 dxc:TermLoanPayableEURDue20222023Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 us-gaap:MandatorilyRedeemablePreferredStockMember 2020-03-31 0001688568 dxc:TermLoanPayableEURDue20232024Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 us-gaap:CommercialPaperMember 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember dxc:BankBillSwapRateMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember dxc:BankBillSwapRateMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableEURDue20222023Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 dxc:TermLoanPayableGBPDue2022Member us-gaap:NotesPayableToBanksMember 2020-04-01 2020-06-30 0001688568 us-gaap:RevolvingCreditFacilityMember us-gaap:LineOfCreditMember 2020-04-01 2020-06-30 0001688568 dxc:TermLoanPayableEURDue20222023Member us-gaap:NotesPayableToBanksMember 2020-04-01 2020-06-30 0001688568 dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableEURDue20232024Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 dxc:TermLoanPayableGBPDue2022Member us-gaap:NotesPayableToBanksMember dxc:ThreeMonthLondonInterbankOfferedRateLIBORMember 2020-04-01 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember us-gaap:BaseRateMember 2020-04-01 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableEURDue20222023Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember 2020-04-01 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableEURDue20232024Member us-gaap:NotesPayableToBanksMember dxc:EURIBORMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember us-gaap:BaseRateMember 2020-04-01 2020-06-30 0001688568 dxc:SeniorNotesDue2026TwoandSeniorNotes2024Member us-gaap:SeniorNotesMember 2020-06-30 0001688568 us-gaap:CommercialPaperMember 2020-04-01 2020-06-30 0001688568 srt:MinimumMember dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember 2020-06-30 0001688568 srt:MaximumMember dxc:LeaseCreditFacilityVariousMember us-gaap:SecuredDebtMember 2020-06-30 0001688568 srt:MinimumMember dxc:FinanceLeaseLiabilityCurrentMember 2020-06-30 0001688568 srt:MaximumMember us-gaap:CommercialPaperMember 2020-06-30 0001688568 srt:MaximumMember dxc:FinanceLeaseLiabilityCurrentMember 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 srt:MinimumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 srt:MaximumMember dxc:BorrowingsForAssetsAcquiredUnderLongTermFinancingMember 2020-06-30 0001688568 srt:MinimumMember dxc:FinanceLeaseLiabilityNoncurrentMember 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableAUDDue2022Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 srt:MaximumMember dxc:FinanceLeaseLiabilityNoncurrentMember 2020-06-30 0001688568 srt:MinimumMember dxc:LeaseCreditFacilityVariousMember us-gaap:SecuredDebtMember 2020-06-30 0001688568 srt:MaximumMember dxc:TermLoanPayableUSDDue2025Member us-gaap:NotesPayableToBanksMember 2020-06-30 0001688568 srt:MinimumMember us-gaap:CommercialPaperMember 2020-06-30 0001688568 country:AU 2019-04-01 2019-06-30 0001688568 country:GB 2020-04-01 2020-06-30 0001688568 country:GB 2019-04-01 2019-06-30 0001688568 dxc:OtherEuropeMember 2019-04-01 2019-06-30 0001688568 country:US 2020-04-01 2020-06-30 0001688568 dxc:OtherInternationalMember 2019-04-01 2019-06-30 0001688568 dxc:OtherEuropeMember 2020-04-01 2020-06-30 0001688568 country:US 2019-04-01 2019-06-30 0001688568 dxc:OtherInternationalMember 2020-04-01 2020-06-30 0001688568 country:AU 2020-04-01 2020-06-30 0001688568 2020-07-01 2020-06-30 0001688568 dxc:AcquiredLiabilitiesMember 2020-04-01 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2021PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2019PlanMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2020PlanMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2020PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2019PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:AcquiredLiabilitiesMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2020PlanMember 2020-04-01 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2019PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:AcquiredLiabilitiesMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2021PlanMember 2020-04-01 2020-06-30 0001688568 dxc:RestructuringPlanOtherPriorYearPlansMember 2020-04-01 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2019PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:AcquiredLiabilitiesMember 2020-03-31 0001688568 dxc:AcquiredLiabilitiesMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2019PlanMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2021PlanMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:AcquiredLiabilitiesMember 2020-03-31 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-04-01 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2020PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2019PlanMember 2020-03-31 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2020PlanMember 2020-03-31 0001688568 dxc:RestructuringPlanFiscal2021PlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-03-31 0001688568 dxc:RestructuringPlanOtherPriorYearPlansMember 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2021PlanMember 2020-03-31 0001688568 dxc:RestructuringPlanOtherPriorYearPlansMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2021PlanMember 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2020PlanMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2020PlanMember 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:AcquiredLiabilitiesMember 2020-04-01 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2019PlanMember 2020-03-31 0001688568 dxc:RestructuringPlanFiscal2021PlanMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2019PlanMember 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2020PlanMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2021PlanMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2020PlanMember 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2019PlanMember 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2021PlanMember 2020-03-31 0001688568 dxc:AcquiredLiabilitiesMember 2020-06-30 0001688568 us-gaap:FacilityClosingMember dxc:AcquiredLiabilitiesMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanOtherPriorYearPlansMember 2020-03-31 0001688568 us-gaap:FacilityClosingMember dxc:RestructuringPlanFiscal2018PlanMember 2020-06-30 0001688568 dxc:RestructuringPlanFiscal2018PlanMember 2020-06-30 0001688568 us-gaap:EmployeeSeveranceMember dxc:RestructuringPlanFiscal2018PlanMember 2020-06-30 0001688568 us-gaap:PensionPlansDefinedBenefitMember 2019-04-01 2019-06-30 0001688568 us-gaap:PensionPlansDefinedBenefitMember 2020-04-01 2020-06-30 0001688568 country:GB us-gaap:PensionPlansDefinedBenefitMember 2020-04-01 2020-06-30 0001688568 srt:DirectorMember 2020-04-01 2020-06-30 0001688568 srt:MaximumMember 2020-06-30 0001688568 dxc:PerspectaMember 2020-06-30 0001688568 dxc:HewlettPackardEnterpriseServicesMember 2020-06-30 0001688568 srt:MinimumMember 2020-06-30 0001688568 dxc:AcceleratedShareRepurchaseAgreementMember 2019-04-01 2019-06-30 0001688568 dxc:OpenMarketPurchasesMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-03-31 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2019-06-30 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-03-31 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-06-30 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-06-30 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-04-01 2019-06-30 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-06-30 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2020-06-30 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2020-03-31 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-06-30 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2020-04-01 2020-06-30 0001688568 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2020-03-31 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-06-30 0001688568 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-03-31 0001688568 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-03-31 0001688568 us-gaap:AccumulatedTranslationAdjustmentMember 2020-06-30 0001688568 2017-04-03 0001688568 2018-11-08 0001688568 us-gaap:EmployeeStockOptionMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeStockOptionMember 2020-06-30 0001688568 us-gaap:EmployeeStockOptionMember 2020-03-31 0001688568 us-gaap:EmployeeStockOptionMember 2018-04-01 2019-03-31 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCEmployeeEquityPlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCDirectorEquityPlanMember 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCDirectorEquityPlanMember 2020-04-01 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCEmployeeEquityPlanMember 2020-03-31 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCEmployeeEquityPlanMember 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember dxc:DXCDirectorEquityPlanMember 2020-03-31 0001688568 dxc:AnniversaryOneMember us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 us-gaap:PerformanceSharesMember 2020-04-01 2020-06-30 0001688568 dxc:AnniversaryThreeMember us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 us-gaap:EmployeeStockMember dxc:DXCSharePurchasePlanMember 2020-04-01 2020-06-30 0001688568 dxc:AnniversaryTwoMember us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 us-gaap:RestrictedStockUnitsRSUMember 2020-06-30 0001688568 dxc:ServiceBasedRsusMember us-gaap:RestrictedStockUnitsRSUMember 2020-04-01 2020-06-30 0001688568 dxc:DXCSharePurchasePlanMember 2020-06-30 0001688568 dxc:DXCEmployeeEquityPlanMember 2020-06-30 0001688568 dxc:DXCDirectorEquityPlanMember 2020-06-30 0001688568 us-gaap:MaterialReconcilingItemsMember 2019-04-01 2019-06-30 0001688568 us-gaap:OperatingSegmentsMember dxc:GBSSegmentMember 2020-04-01 2020-06-30 0001688568 us-gaap:MaterialReconcilingItemsMember 2020-04-01 2020-06-30 0001688568 us-gaap:OperatingSegmentsMember 2020-04-01 2020-06-30 0001688568 us-gaap:OperatingSegmentsMember dxc:GBSSegmentMember 2019-04-01 2019-06-30 0001688568 us-gaap:OperatingSegmentsMember 2019-04-01 2019-06-30 0001688568 us-gaap:OperatingSegmentsMember dxc:GISSegmentMember 2020-04-01 2020-06-30 0001688568 us-gaap:OperatingSegmentsMember dxc:GISSegmentMember 2019-04-01 2019-06-30 0001688568 dxc:LettersOfCreditPerformanceGuaranteeMember 2020-06-30 0001688568 dxc:SuretyBondsPerformanceGuaranteeMember 2020-06-30 0001688568 us-gaap:FinancialStandbyLetterOfCreditMember 2020-06-30 0001688568 dxc:InreDXCTechnologyCompanySecuritiesLitigationMember srt:OfficerMember 2019-03-01 2019-03-31 0001688568 dxc:PerspectarelatedDisputesITServicesAgreementMember 2020-04-01 2020-06-30 0001688568 dxc:EmployeesofFormerBusinessUnitsofHPEMember dxc:Forsythetal.v.HPInc.andHewlettPackardEnterpriseMember us-gaap:SettledLitigationMember 2018-10-01 2018-10-31 0001688568 dxc:PerspectarelatedDisputesSeparationandDistributionAgreementMember 2019-10-01 2019-10-31 0001688568 dxc:EmployeesofFormerBusinessUnitsofHPEMember dxc:Forsythetal.v.HPInc.andHewlettPackardEnterpriseMember us-gaap:SettledLitigationMember 2019-12-01 2019-12-31 0001688568 dxc:Forsythetal.v.HPInc.andHewlettPackardEnterpriseMember us-gaap:SettledLitigationMember 2019-12-01 2019-12-31 0001688568 dxc:PerspectarelatedDisputesSeparationandDistributionAgreementIncreaseOneMember 2020-04-01 2020-06-30 0001688568 dxc:VincentForcierv.ComputerSciencesCorporationandTheCityofNewYorkMember 2020-06-01 2020-06-30 0001688568 dxc:StrauchFairLaborStandardsActCollectiveActionMember 2020-04-01 2020-06-30 0001688568 dxc:StrauchFairLaborStandardsActCollectiveActionMember us-gaap:SubsequentEventMember 2020-07-01 2020-07-31 0001688568 dxc:StrauchFairLaborStandardsActCollectiveActionMember 2019-08-06 2019-08-06 0001688568 dxc:PerspectarelatedDisputesSeparationandDistributionAgreementIncreaseTwoMember 2020-04-01 2020-06-30 0001688568 dxc:KemperCorporateServicesInc.v.ComputerSciencesCorporationMember us-gaap:SettledLitigationMember 2017-10-01 2017-10-31 0001688568 dxc:KemperCorporateServicesInc.v.ComputerSciencesCorporationMember us-gaap:PendingLitigationMember 2015-10-01 2015-10-31 0001688568 2017-02-02 0001688568 dxc:Forsythetal.v.HPInc.andHewlettPackardEnterpriseMember us-gaap:PendingLitigationMember 2019-06-01 2019-06-30 0001688568 dxc:Forsythetal.v.HPInc.andHewlettPackardEnterpriseMember us-gaap:PendingLitigationMember 2018-10-01 2018-10-31 0001688568 dxc:KemperCorporateServicesInc.v.ComputerSciencesCorporationMember 2020-02-21 2020-06-30 0001688568 dxc:InreDXCTechnologyCompanySecuritiesLitigationMember 2019-03-01 2019-03-31 0001688568 dxc:ComputerSciencesCorporationv.EricPulieretal.Member us-gaap:SettledLitigationMember 2016-02-29 0001688568 dxc:StrauchFairLaborStandardsActCollectiveActionMember 2014-03-29 2015-04-03 0001688568 dxc:PerspectarelatedDisputesSeparationandDistributionAgreementIncreaseThreeMember 2020-04-01 2020-06-30 0001688568 dxc:KemperCorporateServicesInc.v.ComputerSciencesCorporationMember 2020-02-21 2020-02-21 0001688568 dxc:StrauchFairLaborStandardsActCollectiveActionMember 2019-09-01 2019-09-30 0001688568 dxc:DedalusHoldingS.p.AMember us-gaap:SubsequentEventMember 2020-07-17 2020-07-17 xbrli:shares xbrli:pure iso4217:EUR dxc:extension dxc:counterparty iso4217:USD xbrli:shares iso4217:USD iso4217:GBP dxc:plaintiff dxc:individual dxc:lawsuit dxc:joint_venture dxc:officer dxc:administrator dxc:anniversary

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 June 30, 2020



☐	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 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)

Registrant's telephone number, including area code: (703) 245-9675



Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	DXC	New York Stock Exchange
2.750% Senior Notes Due 2025	DXC 25	New York Stock Exchange
1.750% Senior Notes Due 2026	DXC 26	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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 Filer	x	Accelerated Filer	o

Non-accelerated Filer	o	Smaller 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

254,194,590 shares of common stock, par value $0.01 per share, were outstanding on July 31, 2020.

TABLE OF CONTENTS



Item		Page
	PART I - FINANCIAL INFORMATION

1.	Financial Statements (unaudited)	1
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	47
3.	Quantitative and Qualitative Disclosures About Market Risk	61
4.	Controls and Procedures	61

	PART II - OTHER INFORMATION

1.	Legal Proceedings	64
1A.	Risk Factors	64
2.	Unregistered Sales of Equity Securities and Use of Proceeds	67
3.	Defaults Upon Senior Securities	67
4.	Mine Safety Disclosure	67
5.	Other Information	68
6.	Exhibits	68

PART I

ITEM 1. FINANCIAL STATEMENTS

Index to Condensed Consolidated Financial Statements




	Page
Condensed Consolidated Statements of Operations for the Three Months Ended June 30, 2020 and June 30, 2019 (unaudited)	2

Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three Months Ended June 30, 2020 and June 30, 2019 (unaudited)	3

Condensed Consolidated Balance Sheets as of June 30, 2020 and March 31, 2020 (unaudited)	4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended June 30, 2020 and June 30, 2019 (unaudited)	5

Condensed Consolidated Statements of Changes in Equity for the Three Months Ended June 30, 2020 and June 30, 2019 (unaudited)	6

Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1–Summary of Significant Accounting Policies	7
Note 2–Recent Accounting Pronouncements	9
Note 3–Acquisitions	10
Note 4–Earnings (Loss) Per Share	11
Note 5–Receivables	12
Note 6–Leases	15
Note 7–Fair Value	18
Note 8–Derivative and Hedging Activities	20
Note 9–Intangible Assets	23
Note 10–Goodwill	24
Note 11–Debt	25
Note 12–Revenue	26
Note 13–Restructuring Costs	28
Note 14–Pension and Other Benefit Plans	30
Note 15–Income Taxes	31
Note 16–Stockholders' Equity	32
Note 17–Stock Incentive Plans	33
Note 18–Cash Flows	35
Note 19–Segment Information	36
Note 20–Commitments and Contingencies	38
Note 21–Subsequent Events	44

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)



	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

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

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



			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

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

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)



	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

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

DXC TECHNOLOGY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)



	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

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

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



	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

⁽¹⁾ 2,291,790 treasury shares as of June 30, 2020.

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

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. With decades of driving innovation, the world’s largest companies trust DXC to deploy its enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences.

HHS Sale

On March 9, 2020, DXC entered into a definitive agreement to sell (the “HHS Sale”) its U.S. State and Local Health and Human Services business (the “HHS Business”) to Veritas Capital Fund Management, L.L.C. for $5.0 billion in cash. The HHS Business is an end-to-end provider of technology-enabled, mission critical solutions that are fundamental to the administration and operations of health programs throughout the United States. The transaction is expected to close by September 2020, but no later than December 2020, subject to the satisfaction of certain closing conditions. Following the transaction close, DXC will retain its remaining healthcare practice, servicing customers across the healthcare continuum, including payers, providers and life sciences firms.

Luxoft Acquisition

On June 14, 2019, DXC completed its acquisition of Luxoft Holding, Inc. ("Luxoft"), a global digital strategy and software engineering firm (the "Luxoft Acquisition"). The acquisition builds on DXC’s unique value proposition as an end-to-end, mainstream IT and digital services market leader, and strengthens the Company’s ability to design and deploy transformative digital solutions for clients at scale. See Note 3 - "Acquisitions" for further information.

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 (Loss) Income as the "statements of comprehensive income," (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 throughout to numbered “Notes” refer to the numbered Notes in these Notes to Condensed Consolidated Financial Statements, unless otherwise noted.

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 attributable to non-controlling interests are presented separately in the statements of comprehensive income. All intercompany transactions and balances have been eliminated.

The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission 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, 2020 ("fiscal 2020").

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Use of Estimates

The preparation of financial statements in conformity with GAAP, requires the Company's management to make estimates and assumptions that affect amounts reported in the financial statements. 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. The severity, magnitude and duration, as well as the economic consequences of the coronavirus disease 2019 ("COVID-19") pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of the Company's management, the accompanying financial statements of DXC contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's 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.

Allowance for Credit Losses

Effective April 1, 2020, the Company adopted ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” using the modified retrospective method. Refer to Note 2 - "Recent Accounting Pronouncements" and Note 5 - "Receivables" for further discussion of the impact of adoption and other required disclosures. The amendments in this update changed the guidance for credit losses to an expected loss model rather than an incurred loss model. Financial assets subject to impairment under an expected credit loss model include billed and unbilled receivables, other receivables, and contract assets. Certain off-balance sheet arrangements, such as financial guarantees associated with receivables securitization facilities, are also subject to the guidance of ASU 2016-13.

Under an expected credit loss model, the Company immediately recognizes an estimate of credit losses expected to occur over the remaining life of financial assets that are in the scope of ASU 2016-13. DXC considers all available relevant information when estimating expected credit losses, including past events, current market conditions and forecasts and their implications for expected credit losses.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 2 - Recent Accounting Pronouncements

During the three months ended June 30, 2020, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:



Date Issued and ASU	Date Adopted and Method	Description	Impact
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.

The following ASUs were recently issued but have not yet been adopted by DXC:



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.

Other recently issued ASUs effective after June 30, 2020 are not expected to have a material effect on DXC's consolidated financial statements.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 3 - Acquisitions

Fiscal 2020 Acquisitions

Luxoft Acquisition

On June 14, 2019, DXC completed the acquisition of Luxoft, a digital service provider whose offerings encompass strategic consulting, custom software development services, and digital solution engineering for total consideration of $2.0 billion. The acquisition will combine Luxoft’s digital engineering capabilities with DXC’s expertise in IT modernization and integration. The purchase agreement (“Merger Agreement”) was entered into by DXC and Luxoft on January 6, 2019 and the transaction was closed on June 14, 2019 (the "acquisition date.")

The transaction between DXC and Luxoft is an acquisition, with DXC as the acquirer and Luxoft as the acquiree, based on the fact that DXC acquired 100% of the equity interests and voting rights in Luxoft, and that DXC is the entity that transferred the cash consideration.

The Company's allocation of the purchase price to the assets acquired and liabilities assumed as of the Luxoft acquisition date is as follows:



(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

Goodwill represents the excess of the purchase price over the fair value of identifiable assets acquired and liabilities assumed at the acquisition date. The goodwill recognized with the acquisition was attributable to the synergies expected to be achieved by combining the businesses of DXC and Luxoft, expected future contracts and the acquired workforce. The cost-saving opportunities are expected to include improved operating efficiencies and asset optimization. The total goodwill arising from the acquisition was allocated to Global Business Services ("GBS") and is not deductible for tax purposes. See Note 10 - "Goodwill."

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The Company valued current assets and liabilities using existing carrying values as an estimate of the approximate fair value of those items at the acquisition date except for certain contract receivables for which the Company determined fair value based on a cost plus margin approach. The Company valued acquired property and equipment using predominately the direct capitalization method of the income approach and in certain specific cases, the Company determined that the net book value represents the fair value. The Company valued customer relationships using the multi-period excess earnings method under the income approach and valued trade names and developed technology using a relief from royalty method under the income approach. The Company determined that the net book value of the purchased software represents the fair value.

Below are the estimated useful lives of the acquired intangibles:



		Estimated Useful Lives (Years)
Customer related intangibles		10
Trade names		20
Developed technology		3
Third-party purchased software		3

The Company valued deferred tax liabilities based on statutory tax rates in the jurisdictions of the legal entities where the acquired non-current assets and liabilities are taxed.

Note 4 - Earnings (Loss) per Share

Basic earnings (loss) 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 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

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 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	—

⁽¹⁾ Due to the Company's net loss for the three months ended June 30, 2020, stock options, restricted stock units and performance stock units were excluded from the computation of dilutive EPS because they would have had an anti-dilutive effect.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 5 - Receivables

Receivables Facility

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of June 30, 2020, the "Receivables Facility") with certain unaffiliated financial institutions (the "Purchasers") for the sale of commercial accounts receivable in the United States. Under the Receivables Facility, certain of the Company's subsidiaries (the "Sellers") sell accounts receivable to DXC Receivables LLC ("Receivables SPV"), a wholly owned bankruptcy-remote entity, in a true sale. Receivables SPV subsequently sells certain of the receivables in their entirety to the Purchasers pursuant to a receivables purchase agreement. The financial obligations of Receivables SPV to the Purchasers under the Receivables Facility are limited to the assets it owns and non-recourse to the Company. Sales of receivables by Receivables SPV occur continuously and are settled on a monthly basis. During the first quarter of fiscal 2021, Receivables SPV amended the Receivables Facility (the "Amendment") to decrease the facility limit from $750 million to $600 million and extend the termination date to August 19, 2020. Under the terms of the Receivables Facility, there is no longer any deferred purchase price ("DPP") for receivables as the entire purchase price is paid in cash when the receivables are sold to the Purchasers. Prior to the Amendment, DPPs were realized by Receivables SPV upon the ultimate collection of the underlying receivables sold to the Purchasers. Cash receipts on the DPP were classified as cash flows from investing activities.

The amount available under the Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of June 30, 2020, the total availability under the Receivables Facility was $324 million, and the amount sold to the Purchasers was $403 million, which was derecognized from the Company's balance sheet. As of June 30, 2020, the Company recorded a $79 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability. The Receivables Facility is scheduled to terminate on August 19, 2020, but provides for one or more optional one-year extensions, if agreed to by the Purchasers. The Company uses the proceeds from the sale of receivables under the Receivables Facility for general corporate purposes.

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.

While the Company guarantees certain non-financial performance obligations of the Sellers, the Purchasers bear customer credit risk associated with the receivables sold under the Receivables Facility and have recourse in the event of credit-related customer non-payment solely to the assets of the Receivables SPV.

The following table is a reconciliation of the beginning and ending balance of the DPP:



(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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Milano Receivables Facility

On June 5, 2020, the Company entered into an accounts receivable securitization facility (the "Milano Facility") with certain unaffiliated financial institutions (the "Milano Purchasers") for the sale of commercial accounts receivable related to Medicaid Management Information Systems ("MMiS") contracts in the United States. The Milano Facility is scheduled to terminate on June 4, 2021, but provides for one or more optional one-year extensions, if agreed to by the Purchasers. The Milano Facility has a facility limit of $275 million. Under the Milano Facility, certain of the Company's subsidiaries (the "Milano Sellers") sell MMiS accounts receivable to Milano Receivables Funding LLC ("Milano Receivables SPV"), a wholly owned bankruptcy-remote entity, in a true sale. Milano Receivables SPV subsequently sells the receivables in their entirety to the Milano Purchasers pursuant to a receivables purchase agreement. The financial obligations of Milano Receivables SPV to the Milano Purchasers under the Milano Facility are limited to the assets it owns and non-recourse to the Company. Sales of MMiS receivables by Milano Receivables SPV occur continuously and are settled on a monthly basis.

The amount available under the Milano Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of June 30, 2020, the total availability under the Milano Facility was approximately $251 million, and the amount sold to the Milano Purchasers was $263 million, which was derecognized from the Company's balance sheet. As of June 30, 2020, the Company recorded a $12 million liability within accounts payable because the amount of cash proceeds received by the Company under the Milano Facility was more than the total availability. The Company uses the proceeds from the sale of receivables under the Milano Facility for general corporate purposes.

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.

While the Company guarantees certain non-financial performance obligations of the Milano Sellers, the Milano Purchasers bear customer credit risk associated with the receivables sold under the Milano Facility and have recourse in the event of credit-related customer non-payment solely to the assets of the Milano Receivables SPV.

German Receivables Facility

On October 1, 2019, the Company executed an accounts receivable securitization facility (as amended, restated, supplemented or otherwise modified as of June 30, 2020, the "DE Receivables Facility") with certain unaffiliated financial institutions (the "DE Purchasers") for the sale of commercial accounts receivable in Germany. The DE Receivables Facility has a facility limit of €200 million (approximately $225 million as of June 30, 2020). Under the DE Receivables Facility, certain subsidiaries of the Company organized in Germany (the "DE Sellers") sell accounts receivable to DXC ARFacility Designated Activity Company ("DE Receivables SPV"), a trust-owned bankruptcy-remote entity, in a true sale. Pursuant to a receivables purchase agreement, DE Receivables SPV subsequently sells the receivables to the DE Purchasers in return for payments of capital. Sales of receivables by DE Receivables SPV occur continuously and are settled on a monthly basis. During the first quarter of fiscal 2021, DE Receivables SPV amended the DE Receivables Facility. Under the terms of the DE Receivables Facility, there is no longer any DPP for receivables as the entire purchase price is paid in cash when the receivables are sold to the DE Purchasers. Prior to the Amendment, DPPs were realized by DE Receivables SPV upon the ultimate collection of the underlying receivables sold to the DE Purchasers. Cash receipts on the DPPs were classified as cash flows from investing activities. The DPP balance was $102 million before the Amendment was executed. Upon execution of the Amendment, the Purchasers extinguished the DPP balance and returned title to the applicable underlying receivables to DE Receivables SPV. The DPP extinguishment was classified as a non-cash investing activity, please refer to Note 18 - "Cash Flows."

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The amount available under the DE Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of June 30, 2020, the total availability under the DE Receivables Facility was approximately $116 million, and the amount sold to the DE Purchasers was $123 million, which was derecognized from the Company's balance sheet. As of June 30, 2020, the Company recorded a $7 million liability within accounts payable because the amount of cash proceeds received by the Company under the DE Receivables Facility was more than the total availability. The DE Receivables Facility is scheduled to terminate on September 30, 2020, but provides for one or more optional one-year extensions, if agreed to by the DE Purchasers. The Company uses the proceeds from DE Receivables SPV's sale of receivables under the DE Receivables Facility for general corporate purposes.

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.

Certain obligations of DE Sellers under the DE Receivables Facility and certain DXC subsidiaries located in Germany, as initial servicers, are guaranteed by the Company under a performance guaranty, made in favor of an administrative agent on behalf of the DE Purchasers. However, the performance guaranty does not cover DE Receivables SPV’s obligations to pay yield, fees or invested amounts to the administrative agent or any of the DE Purchasers.

The following table is a reconciliation of the beginning and ending balances of the DPP:



(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	$	—

Allowance for Doubtful Accounts

The Company calculates expected credit losses for trade accounts receivable based on historical credit loss rates for each aging category as adjusted for the current market conditions and forecasts about future economic conditions. The following table presents the activity in the allowance for doubtful accounts for trade accounts receivable:



(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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 6 - Leases

The Company has operating and finance leases for data centers, corporate offices, retail stores and certain equipment. Its leases have remaining lease terms of 1 to 13 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 to 3 years.

The components of lease expense were as follows:



(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

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below. In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 18 - "Cash Flows."

Supplemental Cash Flow information related to leases was as follows:



(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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Supplemental Balance Sheet information related to leases was as follows:



		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

The following table provides information on the weighted average remaining lease term and weighted average discount rate for operating and finance leases:



	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	%

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of June 30, 2020:



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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 7 - 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 8 - "Derivative and Hedging Activities" for information about the fair value of the Company's derivative assets and liabilities. There were no transfers between any of the levels during the periods presented.



	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

⁽¹⁾ Cost basis approximated fair value due to the short period of time to maturity.

⁽²⁾ Other debt securities include available-for-sale investments with Level 2 inputs that have a cost basis of $38 million and $37 million, and unrealized gains of $15 million and $11 million, as of June 30, 2020 and March 31, 2020, respectively.

The fair value of money market funds, money market deposit accounts, U.S. Treasury bills with less than three months maturity and time deposits, included in cash and cash equivalents, are based on quoted market prices. The fair value of other debt securities, included in other long-term assets, is based on actual market prices. The fair value of the DPPs, included in receivables, net, is determined by calculating the expected amount of cash to be received and is principally based on unobservable inputs consisting primarily of the face amount of the receivables adjusted for anticipated credit losses. The fair value of contingent consideration, included in other liabilities, is based on contractually defined targets of financial performance and other considerations.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Other Fair Value Disclosures

The carrying amounts of the Company’s financial instruments with short-term maturities, primarily accounts receivable, accounts payable, short-term debt, and financial liabilities included in other accrued liabilities, are deemed to approximate their market values due to their short-term nature. If measured at fair value, these financial instruments would be classified as Level 2 or Level 3 within the fair value hierarchy.

The Company estimates the fair value of its long-term debt, primarily by using quoted prices obtained from third-party providers such as Bloomberg, and by using an expected present value technique that is based on observable market inputs for instruments with similar terms currently available to the Company. The estimated fair value of the Company's long-term debt, excluding finance lease liabilities, was $10.2 billion and $8.2 billion as of June 30, 2020 and March 31, 2020, respectively, as compared with carrying value of $10.0 billion and $8.4 billion as of June 30, 2020 and March 31, 2020, respectively. If measured at fair value, long-term debt, excluding finance lease liabilities would be classified as Level 1 or Level 2 within the fair value hierarchy.

Non-financial assets such as goodwill, tangible assets, intangible assets and other contract related long-lived assets are recorded at fair value in the period they are initially recognized, and such fair value may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The fair value measurements, in such instances, would be classified as Level 3 within the fair value hierarchy. There were no significant impairments recorded during the fiscal period covered by this report.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 8 - Derivative and Hedging Activities

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 Indian Rupee-denominated intercompany obligations and forecasted transactions. The notional amounts of foreign currency forward contracts designated as cash flow hedges as of June 30, 2020 and March 31, 2020 were $450 million and $455 million, respectively. As of June 30, 2020, the related forecasted transactions extend through September 2022.

For the three months ended June 30, 2020 and June 30, 2019, respectively, the Company performed an assessment at the inception of the cash flow hedge transactions and determined that all critical terms of the hedging instruments and hedged items matched. The Company performs an assessment of critical terms on an on-going basis throughout the hedging period. During the three months ended June 30, 2020 and June 30, 2019, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur. As of June 30, 2020, $6 million of the existing amount of loss related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

Net investment hedges

During the fiscal year ended March 31, 2019, the Company designated certain foreign currency forward contracts as net investment hedges to protect its investment in certain foreign operations against adverse changes in exchange rates between the Euro and the U.S. dollar. These contracts were de-designated and settled during the fiscal year ended March 31, 2020, and as of June 30, 2020, there were none outstanding.

During the three months ended June 30, 2020, the pre-tax gain (loss) on derivatives designated for hedge accounting recognized in other comprehensive income (loss) was $11 million and in loss from operations was $(4) million.

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 to.

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 notional amounts of the foreign currency forward contracts outstanding as of June 30, 2020 and March 31, 2020 were $2.1 billion and $2.2 billion, respectively.

The following table presents the pretax amounts impacting income related to designated and non-designated foreign currency forward contracts:



		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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

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:



	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

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 which 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 June 30, 2020, there were no counterparties with concentration of credit risk.

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.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

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 loss when such net investments are sold or substantially liquidated.

As of June 30, 2020, DXC had $1.4 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. For the three months ended June 30, 2020, the pre-tax impact of loss on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive loss was $27 million. As of March 31, 2020, DXC had $1.9 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 9 - Intangible Assets

Intangible assets consisted of the following:



	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

The components of amortization expense were as follows:



	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.

Estimated future amortization related to intangible assets as of June 30, 2020 is as follows:



Fiscal Year	(in millions)
Remainder of 2021	$	743
2022	$	940
2023	$	860
2024	$	753
2025	$	668

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 10 - Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of June 30, 2020.



(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

The addition to goodwill was due to an insignificant acquisition. 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. As of June 30, 2020, 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 June 30, 2020.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 11 - Debt

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



(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.

⁽²⁾ Variable interest rate equal to the bank bill swap bid rate for a one-, two-, three- or six-month interest period plus 0.60% to 0.95% based on the published credit ratings of DXC.

⁽³⁾ Three-month LIBOR rate plus 0.80%.

⁽⁴⁾ At DXC's option, the EUR term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin between 0.40% and 0.9%, based on published credit ratings of DXC.

⁽⁵⁾ At DXC's option, the EUR term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin between 0.55% and 1.05%, based on published credit ratings of DXC.

⁽⁶⁾ At DXC's option, the USD term loan bears interest at the Eurocurrency Rate for a one-, two-, three-, or six-month interest period, plus a margin between 1.00% and 1.50%, based on published credit ratings of DXC or the Base Rate plus a margin between 0.00% and 0.50%, based on published credit ratings of DXC.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Senior Notes and Term Loans

During the first quarter of fiscal 2021, the Company issued two senior notes with an aggregate principal of $1.0 billion, consisting of (i) $500 million of 4.00% Senior Notes due fiscal 2024, and (ii) $500 million of 4.13% Senior Notes due fiscal 2026. The proceeds from these notes were applied towards the early prepayment of our term loan facilities, including prepayment of €500 million of Euro Term Loan due fiscal 2023, £150 million of GBP Term Loan due fiscal 2022, A$300 million of AUD Term Loan due fiscal 2022, and $100 million of USD Term Loan due fiscal 2025.

Interest on the Company's term loans is payable monthly or quarterly in arrears at the election of the borrowers. The Company fully and unconditionally guarantees term loans issued by its 100% owned subsidiaries. The interest on the Company's senior notes is payable semi-annually in arrears, except for interest on the £250 million Senior Notes due 2025 and the €650 million Senior Notes due 2026, which are payable annually in arrears. Generally, the Company's notes are redeemable at the Company's discretion at the then-applicable redemption premium plus accrued interest.

Revolving Credit Facility

During the first quarter of fiscal 2021, the Company borrowed the remaining $2.5 billion under the $4.0 billion credit facility agreement ("Credit Agreement") as a precautionary measure to increase its cash position and increase financial flexibility in light of continuing uncertainty in the global economy and financial capital markets resulting from the COVID-19 pandemic. During the quarter, the Company repaid $750 million, which became available under the revolving credit facility for redraw at the request of the Company.

The Company expects to use the proceeds from the borrowings under the Credit Agreement for working capital, general corporate purposes or other purposes permitted under the Credit Agreement. Borrowings under the Credit Agreement will bear interest at a variable rate based on LIBOR or on a base rate, plus an individual margin based on DXC’s long-term debt rating.

Note 12 - 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 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

The revenue by geography pertains to both of the Company’s reportable segments. Refer to Note 19 - "Segment Information" for the Company’s segment disclosures.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Remaining Performance Obligations

Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency. As of June 30, 2020, approximately $23 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 35% of these remaining performance obligations in fiscal 2021, 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)	June 30, 2020		March 31, 2020
Trade receivables, net	$	2,986	$	3,059
Contract assets	$	442	$	454
Contract liabilities	$	1,763	$	1,756

Change in contract liabilities were as follows:



	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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 13 - Restructuring Costs

The Company recorded restructuring costs of $72 million and $142 million, net of reversals, for the three months ended June 30, 2020 and June 30, 2019, respectively. The costs recorded during the three months ended June 30, 2020 were largely a result of the Fiscal 2021 Plan (defined below).

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



	As of
(in millions)	June 30, 2020
Accrued expenses and other current liabilities	$	165
Other long-term liabilities	33
Total	$	198

Summary of Restructuring Plans

Fiscal 2021 Plan

During fiscal 2021, management approved global cost savings initiatives designed to better align the Company's workforce and facility structures (the "Fiscal 2021 Plan").

Fiscal 2020 Plan

During fiscal 2020, management approved cost savings initiatives designed to reduce operating costs by re-balancing its workforce and facilities structures (the "Fiscal 2020 Plan"). The Fiscal 2020 Plan includes workforce optimization programs and facilities and data center rationalization. Costs incurred to date under the Fiscal 2020 Plan total $287 million, comprising $270 million in employee severance and $17 million of facilities costs.

Fiscal 2019 Plan

During fiscal 2019, management approved global cost savings initiatives designed to better align the Company's organizational structure with its strategic initiatives and continue the integration of the Enterprise Services business of Hewlett Packard Enterprise Company ("HPES") and other acquisitions (the "Fiscal 2019 Plan"). The Fiscal 2019 Plan includes workforce optimization and rationalization of facilities and data center assets. Costs incurred to date under the Fiscal 2019 Plan total $477 million, comprising $336 million in employee severance and $141 million of facilities costs.

Other Prior Year Plans

In June 2017, management approved a post-HPES Merger (as defined below) restructuring plan to optimize the Company's operations in response to a continuing business contraction (the "Fiscal 2018 Plan"). The Fiscal 2018 Plan focuses mainly on optimizing specific aspects of global workforce, increasing the proportion of work performed in low cost offshore locations and re-balancing the pyramid structure. Additionally, this plan included global facility restructuring, including a global data center restructuring program. Costs incurred to date under the Fiscal 2018 Plan total $985 million, comprising $789 million in employee severance and $196 million of facilities costs.

Acquired Restructuring Liabilities

As a result of the merger of Computer Sciences Corporation ("CSC") and HPES ("HPES Merger"), DXC acquired restructuring liabilities under restructuring plans that were initiated for HPES under plans approved by the HPE Board of Directors.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Restructuring Liability Reconciliations by Plan



	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

⁽¹⁾ Costs expensed, net of reversals include $6 million, $7 million, and $3 million of costs reversed from the Fiscal 2020 Plan, Fiscal 2019 Plan and Other Prior Year Plans, respectively.

⁽²⁾Pension benefit augmentations recorded as a pension liability, asset impairments and restructuring costs associated with right-of-use assets.

⁽³⁾Foreign currency translation adjustments.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 14 - Pension and Other Benefit Plans

The Company offers a number of pension and other post-retirement benefit ("OPEB") plans, life insurance benefits, deferred compensation and defined contribution plans. Most of the Company's pension plans are not admitting new participants; therefore, changes to pension liabilities are primarily due to market fluctuations of investments for existing participants and changes in interest rates.

Defined Benefit Plans

The Company sponsors a number of defined benefit and post-retirement medical benefit plans for the benefit of eligible employees. The benefit obligations of the Company's U.S. pension, U.S. OPEB, and non-U.S. OPEB represent an insignificant portion of the Company's pension and other post-retirement benefits. As a result, the disclosures below include the Company's U.S. and non-U.S. pension plans on a global consolidated basis.

During the three months ended June 30, 2020, the Company remeasured plan assets and liabilities as of June 1, 2020 under certain U.K. pension plans due to the end of a public sector contract. The remeasurement resulted in a net loss of $2 million, comprising a curtailment gain of $9 million and an actuarial loss of $11 million. The net loss was recognized within other income.

The components of net periodic pension income were:



	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	)

The service cost component of net periodic pension income is presented in cost of services and selling, general and administrative and the other components of net periodic pension income are presented in other income, net, except for contractual termination benefit which is included in restructuring, in the Company’s statements of operations.

Deferred Compensation Plans

Effective as of the HPES Merger, DXC assumed sponsorship of the Computer Sciences Corporation Deferred Compensation Plan, which was renamed the “DXC Technology Company Deferred Compensation Plan” (the “DXC DCP”) and adopted the Enterprise Services Executive Deferred Compensation Plan (the “ES DCP”). Both plans are non-qualified deferred compensation plans maintained for a select group of management, highly compensated employees and non-employee directors.

The DXC DCP covers eligible employees who participated in CSC’s Deferred Compensation Plan prior to the HPES Merger. The ES DCP covers eligible employees who participated in the HPE Executive Deferred Compensation Plan prior to the HPES Merger. Both plans allow participating employees to defer the receipt of current compensation to a future distribution date or event above the amounts that may be deferred under DXC’s tax-qualified 401(k) plan, the DXC Technology Matched Asset Plan. Neither plan provides for employer contributions. As of April 3, 2017, the ES DCP does not admit new participants.

Certain management and highly compensated employees are eligible to defer all, or a portion of, their regular salary that exceeds the limitation set forth in Internal Revenue Section 401(a)(17) and all or a portion of their incentive compensation.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Non-employee directors are eligible to defer up to 100% of their cash compensation. The liability, which is included in other long-term liabilities in the Company's balance sheets, amounted to $49 million as of June 30, 2020 and $48 million as of March 31, 2020.

Note 15 - Income Taxes

The Company's effective tax rate ("ETR") was 11.6% and 18.4% for the three months ended June 30, 2020 and June 30, 2019, respectively. For the three months ended June 30, 2020, the primary drivers of the ETR were the global mix of income, adjustment of the prior tax provisions due to the filing of tax returns in non-U.S. jurisdictions and generation of additional foreign tax credits in the U.S. For the three months ended June 30, 2019, the primary drivers of the ETR were the global mix of income and the reduction of our estimated fiscal 2019 base erosion anti-avoidance tax ("BEAT") for the October 31, 2019 tax year due to electing out of additional first year bonus depreciation.

The majority of unremitted foreign earnings have been taxed in the U.S. We expect a significant portion of the unremitted earnings of our foreign subsidiaries will no longer be subject to U.S. federal income tax upon repatriation to the U.S. However, a portion of these earnings may still be subject to foreign and U.S. state tax consequences when remitted. Earnings in India are indefinitely reinvested. Other foreign earnings are not indefinitely reinvested except for approximately $501 million that could be taxable when repatriated to the U.S. under Treasury regulations that were issued during the first quarter of fiscal 2020.

In connection with the HPES Merger, the Company entered into a tax matters agreement with HPE. HPE generally will be responsible for pre-HPES Merger tax liabilities including adjustments made by tax authorities to HPES U.S. and non-U.S. income tax returns. Likewise, DXC is liable to HPE for income tax receivables and refunds which it receives related to pre-HPES Merger periods. Pursuant to the tax matters agreement, the Company recorded a net receivable of $16 million due to $44 million of tax indemnification receivable related to uncertain tax positions net of related deferred tax benefits, $86 million of tax indemnification receivable related to other tax payables and $114 million of tax indemnification payable related to other tax receivables.

In connection with the USPS Separation, the Company entered into a tax matters agreement with Perspecta. Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the USPS Separation. Income tax liabilities transferred to Perspecta primarily relate to pre-HPES Merger periods, for which the Company is indemnified by HPE pursuant to the tax matters agreement between the Company and HPE. The Company remains liable to HPE for tax receivables and refunds which it receives from Perspecta related to pre-HPES Merger periods that were transferred to Perspecta. Pursuant to the tax matters agreement, the Company has recorded a tax indemnification receivable from Perspecta of $66 million and a tax indemnification payable to Perspecta of $45 million related to income tax and other tax liabilities.

The IRS is examining the Company's federal income tax returns for fiscal 2008 through tax year ended October 31, 2019. With respect to CSC's fiscal 2008 through 2010 federal tax returns, the Company previously entered into negotiations for a resolution through settlement with the IRS Office of Appeals. The IRS examined several issues for this audit that resulted in various audit adjustments. The Company and the IRS Office of Appeals have an agreement in principle as to some, but not all of these adjustments. The Company has agreed to extend the statute of limitations associated with this audit through March 31, 2021.

The Company has agreed to extend the statute of limitations associated with the fiscal years 2011 through 2013 through December 31, 2020. The Company has agreed to extend the statute of limitations for fiscal years 2014 through fiscal 2016 through December 31, 2020 and for the employment tax audit of fiscal years 2015 and 2016 until January 31, 2021. The Company expects to reach a resolution for all years no earlier than the second quarter of fiscal 2022 except agreed issues related to fiscal 2008 through 2010 and fiscal 2011 through 2013 federal tax returns, which are expected to be resolved within twelve months.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

In addition, the Company may settle certain other tax examinations, have lapses in statutes of limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more-likely-than-not standard if such positions are not upheld. Conversely, the Company could settle positions by payment with the tax authorities for amounts lower than those that have been accrued or extinguish a position through payment. The Company believes that the outcomes that are reasonably possible within the next 12 months may result in a reduction in liability for uncertain tax positions of $23 million to $28 million, excluding interest, penalties and tax carry-forwards.

Note 16 - Stockholders' Equity

Share Repurchases

On April 3, 2017, DXC announced the establishment of a share repurchase program approved by the Board of Directors with an initial authorization of $2.0 billion for future repurchases of outstanding shares of DXC common stock. On November 8, 2018, DXC's Board of Directors approved an incremental $2.0 billion share repurchase authorization. An expiration date has not been established for this repurchase plan. Share repurchases may be made from time to time through various means, including in open market purchases, 10b5-1 plans, privately-negotiated transactions, accelerated stock repurchases, block trades and other transactions, in compliance with Rule 10b-18 under the Exchange Act as well as, to the extent applicable, other federal and state securities laws and other legal requirements. The timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time.

The shares repurchased are retired immediately and included in the category of authorized but unissued shares. The excess of purchase price over par value of the common shares is allocated between additional paid-in capital and retained earnings. There was no share repurchase activity during the three months ended June 30, 2020. The details of shares repurchased during the three months ended June 30, 2019 are shown below:



	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

Accumulated Other Comprehensive Loss

The following table shows the changes in accumulated other comprehensive income (loss), net of taxes:



(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	)

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued



(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	)

Note 17 - Stock Incentive Plans

Equity Plans

The Compensation Committee of the Board of Directors (the "Board") has broad authority to grant awards and otherwise administer the DXC Employee Equity Plan. The plan became effective March 30, 2017 and will continue in effect for a period of 10 years thereafter, unless earlier terminated by the Board. The Board has the authority to amend the plan in such respects as it deems desirable, subject to approval of DXC’s stockholders for material modifications.

RSUs represent the right to receive one share of DXC common stock upon a future settlement date, subject to vesting and other terms and conditions of the award, plus any dividend equivalents accrued during the award period. In general, if the employee’s status as a full-time employee is terminated prior to the vesting of the RSU grant in full, then the RSU grant is automatically canceled on the termination date and any unvested shares and dividend equivalents are forfeited. Certain executives were awarded service-based "career share" RSUs for which the shares are settled over the 10 anniversaries following the executive's separation from service as a full-time employee, provided the executive complies with certain non-competition covenants during that period. The Company also grants PSUs, which generally vest over a period of 3 years. The number of PSUs that ultimately vest is dependent upon the Company’s achievement of certain specified financial performance criteria over a three-year period. If the specified performance criteria are met, awards are settled for shares of DXC common stock and dividend equivalents upon the filing with the SEC of the Annual Report on Form 10-K for the last fiscal year of the performance period. PSU awards include the potential for up to 25% of the shares granted to be earned after the first and second fiscal years if certain of the Company's performance targets are met early, subject to vesting based on the participant's continued employment through the end of the three-year performance period.

In fiscal 2021, DXC issued awards that are considered to have a market condition. A Monte Carlo simulation model was used for the valuation of the grants. Settlement of shares for the fiscal 2021 PSU awards will be made at the end of the third fiscal year subject to certain compounded annual growth rates of the stock price and continued employment through the last day of the third fiscal year.

The terms of the DXC Director Equity Plan allow DXC to grant RSU awards to non-employee directors of DXC. Such RSU awards vest in full at the earlier of (i) the first anniversary of the grant date or (ii) the next annual meeting date, and are automatically redeemed for DXC common stock and dividend equivalents either at that time or, if an RSU deferral election form is submitted, upon the date or event elected by the director. Distributions made upon a director’s separation from the Board may occur in either a lump sum or in annual installments over periods of 5, 10, or 15 years, per the director’s election. In addition, RSUs vest in full upon a change in control of DXC.

The DXC Share Purchase Plan allows DXC’s employees located in the United Kingdom to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date. There were 14,882 shares purchased under this plan during the three months ended June 30, 2020.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The Board has reserved for issuance shares of DXC common stock, par value $0.01 per share, under each of the plans as detailed below:



	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

Stock Options



	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

Restricted Stock



	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

Share-Based Compensation



	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

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

As of June 30, 2020, total unrecognized compensation expense related to unvested DXC stock options and unvested DXC RSUs, net of expected forfeitures was $0 million and $194 million, respectively. The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 2.33 years.

Note 18 - Cash Flows

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



	Three Months Ended
(in millions)	June 30, 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

⁽¹⁾ Income tax refunds were $18 million and $13 million for the three months ended June 30, 2020 and June 30, 2019, respectively.

⁽²⁾ Net of $87 million change in lease classification from operating to finance lease in fiscal 2020.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 19 - Segment Information

DXC has a matrix form of organization and is managed in several different and overlapping groupings including services, industries and geographic regions. As a result, and in accordance with accounting standards, operating segments are organized by the type of services provided. DXC's chief operating decision maker ("CODM"), the chief executive officer, obtains, reviews, and manages the Company’s financial performance based on these segments. The CODM uses these results, in part, to evaluate the performance of, and allocate resources to, each of the segments.

Global Business Services ("GBS")

GBS provides innovative technology solutions that help its customers address key business challenges and accelerate digital transformations tailored to each customers industry and specific objectives. GBS enterprise technology stack offerings include:


•	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.

GBS offerings also includes business process services, which include digital integration and optimization of front and back office processes, and agile process automation. This helps companies to reduce cost, and minimize business disruption, human error, and operational risk while improving customer experiences.

Global Infrastructure Services ("GIS")

GIS provides a portfolio of technology offerings that deliver predictable outcomes and measurable results, while reducing business risk and operational costs for customers. GIS enterprise stack elements include:


•	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.

GIS offerings also include workplace and mobility services to fit its customer's employee, business and IT needs from intelligent collaboration, modern device management, digital support services Internet of Things ("IoT") and mobility services, providing a consumer-like, digital experience.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Segment Measures

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



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

⁽¹⁾Depreciation and amortization as presented excludes amortization of acquired intangible assets of $148 million and $138 million for the three months ended June 30, 2020 and 2019, respectively.

Reconciliation of Reportable Segment Profit to Consolidated Total

The Company's management uses segment profit as the measure for assessing performance of its segments. Segment profit is defined as segment revenue less cost of services, segment selling, general and administrative, depreciation and amortization, and other income (excluding the movement in foreign currency exchange rates on DXC's foreign currency denominated assets and liabilities and the related economic hedges). The Company does not allocate to its segments certain operating expenses managed at the corporate level. These unallocated costs include certain corporate function costs, stock-based compensation expense, pension and OPEB actuarial and settlement gains and losses, restructuring costs, transaction, separation and integration-related costs and amortization of acquired intangible assets.



	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

Management does not use total assets by segment to evaluate segment performance or allocate resources. As a result, assets are not tracked by segment and therefore, total assets by segment is not disclosed.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 20 - Commitments and Contingencies

Commitments

The Company signed long-term purchase agreements with certain software, hardware, telecommunication, and other service providers to obtain favorable pricing and terms for services, and products that are necessary for the operations of business activities. Under the terms of these agreements, the Company is contractually committed to purchase specified minimums over periods ranging from 1 to 5 years. If the Company does not meet the specified minimums, the

Company would have an obligation to pay the service provider all, or a portion, of the shortfall. Minimum purchase commitments as of June 30, 2020 were as follows:



Fiscal year	Minimum Purchase Commitment⁽¹⁾
(in millions)	Minimum Purchase Commitment⁽¹⁾
Remainder of 2021	$	1,525
2022	624
2023	537
2024	261
2025	25
Total	$	2,972

⁽¹⁾A significant portion of the minimum purchase commitments for fiscal 2021 relate to the amounts committed under the HPE preferred vendor agreements.

In the normal course of business, the Company may provide certain clients with financial performance guarantees, and at times performance letters of credit or surety bonds. In general, the Company would only be liable for the amounts of these guarantees in the event that non-performance by the Company permits termination of the related contract by the Company’s client. The Company believes it is in compliance with its performance obligations under all service contracts for which there is a financial performance guarantee, and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its consolidated results of operations or financial position.

The Company also uses stand-by letters of credit, in lieu of cash, to support various risk management insurance policies. These letters of credit represent a contingent liability and the Company would only be liable if it defaults on its payment obligations on these policies. The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of June 30, 2020:



(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 Company generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of their intellectual property rights, including rights in patents (with or without geographic limitations), copyrights, trademarks, and trade secrets. DXC’s indemnification of its licensees relates to costs arising from court awards, negotiated settlements, and the related legal and internal costs of those licensees. The Company maintains the right, at its own cost, to modify or replace software in order to eliminate any infringement. The Company has not incurred any significant costs related to licensee software indemnification.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Contingencies

Vincent Forcier v. Computer Sciences Corporation and The City of New York: On October 27, 2014, the United States Attorney’s Office for the Southern District of New York and the Attorney General for the State of New York filed complaints-in-intervention on behalf of the United States and the State of New York, respectively, against CSC and The City of New York, based on a qui tam complaint originally filed under seal in 2012 by Vincent Forcier, a former employee of CSC. The complaints allege that from 2008 to 2012 New York City and CSC, in its role as fiscal agent for New York City’s Early Intervention Program ("EIP"), violated the federal and state False Claims Acts and various common law standards by allegedly orchestrating a billing fraud against Medicaid through the misapplication of default billing codes and the failure to exhaust private insurance coverage before submitting claims to Medicaid. The lawsuits seek treble statutory damages, other civil penalties and attorneys’ fees and costs.

In June 2016, the Court dismissed Forcier’s amended complaint in its entirety. With regard to the complaints-in-intervention, the Court dismissed the federal claims alleging misuse of default diagnosis codes when the provider had entered an invalid code, and the state claims alleging failure to reimburse Medicaid when claims were subsequently paid by private insurance. The Court allowed the remaining claims to proceed. In September 2016, the United States and the State of New York each filed amended complaints-in-intervention, asserting additional claims that the compensation provisions of CSC’s contract with New York City rendered it ineligible to serve as a billing agent under state law.

CSC filed motions to dismiss and in August 2017, the Court granted in part and denied in part CSC's motions. In January 2018, CSC asserted a counterclaim against the State of New York on a theory of contribution and indemnification. The court denied the State's motion to dismiss CSC's counterclaim with respect to liability for claims not arising under the Federal False Claims Act.

In June 2020, the Parties executed a stipulation resolving the matter and dismissing the action. The Company agreed to pay a total of $1.85 million, to be split between the United States and the State of New York. In July 2020, the stipulation was approved by the Court and the case was dismissed.

Strauch Fair Labor Standards Act Collective Action: On July 1, 2014, several plaintiffs filed an action in the U.S. District Court for the District of Connecticut on behalf of themselves and a putative nationwide collective of CSC system administrators, alleging CSC’s failure to properly classify these employees as non-exempt under the federal Fair Labor Standards Act ("FLSA"). Plaintiffs alleged similar state-law Rule 23 class claims pursuant to Connecticut and California statutes. Plaintiffs claimed double overtime damages, liquidated damages, and other amounts and remedies.

In 2015 the Court entered an order granting conditional certification under the FLSA of the collective of over 4,000 system administrators. Approximately 1,000 system administrators filed consents with the Court to participate in the FLSA collective. The class/collective action is currently made up of approximately 800 individuals who held the title of associate professional or professional system administrator.

In June 2017, the Court granted Rule 23 certification of a Connecticut state-law class and a California state-law class consisting of professional system administrators and associate professional system administrators. Senior professional system administrators were found not to qualify for Rule 23 certification under the state-law claims. CSC sought permission to appeal the Rule 23 decision to the Second Circuit Court of Appeals, which was denied.

In December 2017, a jury trial was held and a verdict was returned in favor of plaintiffs. On August 6, 2019, the Court issued an order awarding plaintiffs $18.75 million in damages. In September 2019, Plaintiffs filed a motion seeking $14.1 million in attorneys’ fees and costs. In July 2020, the Court issued an order awarding Plaintiffs $8.1 million in attorneys’ fees and costs. The Company disagrees with the jury verdict, the damages award, and the fee award, and is appealing the judgment of the Court.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Computer Sciences Corporation v. Eric Pulier, et al.: On May 12, 2015, CSC filed a civil complaint in the Court of Chancery of the State of Delaware against Eric Pulier, the former CEO of Service Mesh Inc. ("SMI"), which CSC had acquired in November 2013. The complaint asserted claims for fraud, breach of contract and breach of fiduciary duty, based on allegations that Mr. Pulier had engaged in fraudulent transactions with two employees of the Commonwealth Bank of Australia Ltd. (“CBA”). The Court dismissed CSC’s claim for breach of the implied covenant of good faith, but allowed substantially all of the remaining claims to proceed. Mr. Pulier asserted counter-claims for breach of contract, fraud, negligent representation, rescission, and violations of the California Blue Sky securities law, all of which the Court dismissed in whole or in part, except for claims for breach of Mr. Pulier’s retention agreement.

In July 2017, the Court granted a motion by the United States for a 90-day stay of discovery pending the completion of a criminal investigation by the U.S. Attorney’s Office for the Central District of California. In September 2017, a federal grand jury returned an indictment against Mr. Pulier, charging him with conspiracy, securities and wire fraud, obstruction of justice, and other violations of federal law (United States v. Eric Pulier, CR 17-599-AB). The Government sought an extension of the stay which the Delaware Chancery Court granted.

In December 2018, the Government filed an application to dismiss the indictment against Mr. Pulier, which was granted, and the indictment was dismissed with prejudice. In March 2019, the Delaware Chancery Court lifted the stay and denied CSC’s motion for a temporary restraining order and preliminary injunction with respect to certain of Mr. Pulier’s assets.

In August 2019, the Company entered into an agreement with Mr. Pulier, resolving all claims and counterclaims in the Delaware litigation through the division of amounts previously held in escrow for post-closing disputes.

The Securities and Exchange Commission (“SEC”) has filed a complaint against Mr. Pulier alleging various claims, including for fraud and falsifying books and records (Securities and Exchange Commission v. Eric Pulier, Case No. 2:17-cv-07124). The Court has set a trial date of December 1, 2020.

In February 2016, Mr. Pulier filed a complaint in Delaware Chancery Court seeking advancement of his legal fees and costs in the civil and criminal actions, pursuant to the terms of his agreements with SMI. The Court ruled that CSC Agility Platform - as the successor to SMI - is liable for advancing 80% of Mr. Pulier’s fees and costs in the civil and criminal actions. Pursuant to agreements with SMI, Mr. Pulier is obligated to repay all amounts advanced to him if it should ultimately be determined that he is not entitled to indemnification.

The Company remains obligated to advance amounts for Mr. Pulier’s legal fees and costs to defend the SEC action against him.

Kemper Corporate Services, Inc. v. Computer Sciences Corporation: In October 2015, Kemper Corporate Services, Inc. (“Kemper”) filed a demand for arbitration against CSC with the American Arbitration Association (“AAA”), alleging that CSC breached the terms of a 2009 Master Software License and Services Agreement and related Work Orders (the “Agreement”) by failing to complete a software translation and implementation plan by certain contractual deadlines. Kemper claimed breach of contract, seeking approximately $100 million in damages. CSC answered the demand for arbitration denying Kemper’s claims and asserting a counterclaim for unpaid invoices for services rendered by CSC.

A single arbitrator conducted an evidentiary hearing on the merits of the claims and counterclaims in April 2017. In October 2017, the arbitrator issued a partial final award, finding for Kemper on its breach of contract theory, awarding Kemper $84.2 million in compensatory damages plus prejudgment interest, denying Kemper’s claim for rescission as moot, and denying CSC’s counterclaim. Kemper moved to confirm the award in federal district court in Texas.

CSC moved to vacate the award, and in August 2018, the Magistrate Judge issued its Report and Recommendation denying CSC's vacatur motion. In September 2018, the District Court summarily accepted the Report and Recommendation without further briefing and entered a Final Judgment in the case. The Company promptly filed a notice of appeal to the Fifth Circuit Court of Appeals. Following the submission of briefs, oral argument was held on September 5, 2019. On January 10, 2020, the Court of Appeals issued a decision denying the Company’s appeal. On January 24, 2020, the Company filed a Petition for Rehearing, seeking review by the entire en banc Court of Appeals. On February 14, 2020, the Court of Appeals denied the Company's Petition.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The Company has been pursuing coverage for the full scope of the award, interest, and legal fees and expenses, under the Company's applicable insurance policies. Certain carriers have accepted coverage while others have denied coverage. On February 21, 2020, the Company paid the balance of the judgment, which net of insurance recovery totalled $60 million. The Company has since recovered an additional $12.5 million from its insurance carriers. The Company continues to pursue recovery with its insurance carriers.

Forsyth, et al. v. HP Inc. and Hewlett Packard Enterprise: On August 18, 2016, this purported class and collective action was filed in the U.S. District Court for the Northern District of California, against HP and HPE alleging violations of the Federal Age Discrimination in Employment Act (“ADEA”), the California Fair Employment and Housing Act, California public policy and the California Business and Professions Code. Former business units of HPE now owned by the Company may be proportionately liable for any recovery by plaintiffs in this matter.

Plaintiffs seek to certify a nationwide class action under the ADEA comprised of all U.S. residents employed by defendants who had their employment terminated pursuant to a work force reduction (“WFR”) plan and who were 40 years of age or older at the time of termination. The class seeks to cover those impacted by WFRs on or after December 2014. Plaintiffs also seek to represent a Rule 23 class under California law comprised of all persons 40 years of age or older employed by defendants in the state of California and terminated pursuant to a WFR plan on or after August 18, 2012.

In January 2017, defendants filed a partial motion to dismiss and a motion to compel arbitration of claims by certain named and opt-in plaintiffs who had signed release agreements as part of their WFR packages. In September 2017, the Court denied the partial motion to dismiss without prejudice, but granted defendants’ motions to compel arbitration for those named and opt-in plaintiffs. The Court has stayed the entire action pending arbitration for these individuals, and administratively closed the case.

A mediation was held in October 2018 with the 16 named and opt-in plaintiffs who were involved in the case at that time. A settlement was reached, which included seven plaintiffs who were employed by former business units of HPE that are now owned by the Company. In June 2019, a second mediation was held with 145 additional opt-in plaintiffs who were compelled to arbitration pursuant to their release agreements. In December 2019, a settlement was reached with 142 of the opt-in plaintiffs, 35 of whom were employed by former business units of HPE that are now owned by the Company, and for which the Company is liable.

Former business units of the Company now owned by Perspecta may be proportionately liable for any recovery by plaintiffs in this matter.

Oracle America, Inc., et al. v. Hewlett Packard Enterprise Company: On March 22, 2016, Oracle filed a complaint against HPE in the Northern District of California, alleging copyright infringement, interference with contract, intentional interference with prospective economic relations, and unfair competition. The litigation relates in part to former business units of HPE that are now owned by the Company. The Company may be required to indemnify HPE for a portion of any recovery by Oracle in the litigation related to these business units.

Oracle’s claims arise primarily out of HPE’s prior relationship with a third-party maintenance provider named Terix Computer Company, Inc. (“Terix”). Oracle claims that Terix infringed its copyrights while acting as HPE’s subcontractor for certain customers of HPE’s multivendor support business. Oracle claims that HPE is liable for vicarious and contributory infringement arising from the alleged actions of Terix and for direct infringement arising from its own alleged conduct.

On June 14, 2018, the court heard oral argument on the parties’ cross-motions for summary judgment. On January 29, 2019, the court granted HPE’s motion for summary judgment and denied Oracle’s motion for summary judgment, resolving the matter in HPE’s favor. Oracle has appealed the judgment to the U.S. Court of Appeals for the Ninth Circuit. The parties have submitted their briefs in the appellate case, and oral argument was held on June 8, 2020. The case has been submitted and a decision is now pending.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

In re DXC Technology Company Securities Litigation: On December 27, 2018, a purported class action lawsuit was filed in the United States District Court for the Eastern District of Virginia against the Company and two of its current officers. The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and is premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s business, operations, prospects and performance during the proposed class period of February 8, 2018 to November 6, 2018. The Company moved to dismiss the claims in their entirety, and on June 2, 2020, the court granted the Company’s motion, dismissing all claims and entering judgment in the Company’s favor. On July 1, 2020, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Fourth Circuit. The appeal remains pending.

In March 2019, three related shareholder derivative lawsuits were filed in the Eighth Judicial District Court of the State of Nevada, in and for Clark County, against one of the Company’s current officers and a former officer as well as members of the Company’s board of directors, asserting claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment. By agreement of the parties and order of the court, those lawsuits were consolidated on July 18, 2019, and are presently stayed pending the outcome of the appeal of the Eastern District of Virginia matter.

On August 20, 2019, a purported class action lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, against the Company, directors of the Company, and a former officer of the Company, among other defendants. On September 16, 2019, a substantially similar purported class action lawsuit was filed in the United States District Court for the Northern District of California against the Company, directors of the Company, and a former officer of the Company, among other defendants. On November 8, 2019, a third purported class action lawsuit was filed in the Superior Court of the State of California, County of San Mateo, against the Company, directors of the Company, and a former officer of the Company, among other defendants. The third lawsuit was voluntarily dismissed by the plaintiff and re-filed in the Superior Court of the State of California, County of Santa Clara on November 26, 2019, and thereafter was consolidated with the earlier-filed action in the same court on December 10, 2019. The California lawsuits assert claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and are premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s prospects and expected performance. Plaintiff in the federal action filed an amended complaint on January 8, 2020. The putative class of plaintiffs in these cases includes all persons who acquired shares of the Company’s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC. On July 15, 2020, the Superior Court of California, County of Santa Clara, denied the Company’s motion to stay the state court case but extended the Company’s deadline to seek dismissal of the state action, until after a decision on the Company’s motion to dismiss the federal action. On July 27, 2020, the United States District Court for the Northern District of California granted the Company’s motion to dismiss the federal action. The Court’s order permits plaintiffs to amend and refile their complaint within 60 days.

On October 2, 2019, a shareholder derivative lawsuit was filed in the Eighth Judicial District Court of the State of Nevada, in and for Clark County, asserting various claims, including for breach of fiduciary duty and unjust enrichment, and challenging certain sales of securities by officers under Rule 10b5-1 plans. The shareholder filed this action after making a demand on the board of directors, alleging breaches of fiduciary duty, corporate waste and disclosure violations, and demanding that the Board take certain actions to evaluate the allegations and respond. The Company’s board of directors analyzed the demand, and has determined to defer its decision on the demand pending developments in the securities and derivative lawsuits described above. The Company moved to dismiss the complaint on the basis that the Board’s decision to defer action was not a refusal of the demand and was within its discretion. The Company’s motion to dismiss was denied on January 22, 2020. By agreement of the parties and order of the court, the case is presently stayed, pending the outcome of the appeal of the Eastern District of Virginia matter.

On March 31, 2020, a group of individual shareholders filed a complaint in the United States District Court for the Northern District of California, asserting non-class claims based on allegations substantially similar to those at issue in the earlier-filed putative class action complaints pending in the Northern District of California and Eastern District of Virginia. The plaintiffs assert claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and under Sections 11 and 15 of the Securities Act of 1933, as amended. On April 29, 2020, the court granted an administrative motion to relate the case with the earlier-filed putative class action pending in the Northern District of California. And on May 13, 2020, the parties filed a stipulation requesting to stay the case subject to resolution of the motions to dismiss in the Northern District of California and Eastern District of Virginia class actions.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

The Company believes that the lawsuits described above are without merit, and it intends to vigorously defend them.

Voluntary Disclosure of Certain Possible Sanctions Law Violations: On February 2, 2017, CSC submitted an initial notification of voluntary disclosure to the U.S. Department of Treasury, Office of Foreign Assets Control ("OFAC") regarding certain possible violations of U.S. sanctions laws pertaining to insurance premium data and claims data processed by two partially-owned joint ventures of Xchanging, which CSC acquired during the first quarter of fiscal 2017. A copy of the disclosure was also provided to Her Majesty’s Treasury Office of Financial Sanctions Implementation in the United Kingdom. The Company provided supplemental information to OFAC on January 31, 2020.

Perspecta Arbitration: In October 2019, Perspecta Inc. (“Perspecta”) submitted a demand for arbitration claiming that in June 2018 DXC breached certain obligations under the Separation and Distribution Agreement ("SDA") between Perspecta and DXC and seeking at least $120 million in alleged damages. During the course of discovery, Perspecta increased the amount of its alleged damages, first to $500 million and then to over $800 million. Perspecta has since increased its damages calculations to include interest, bringing its total claim to $990 million. The Company believes there is no valid basis for Perspecta's claims for these amounts. In its arbitration demand, Perspecta also challenges $39 million in invoices issued by DXC in June 2019 under its IT Services Agreement with Perspecta. DXC believes the invoices were properly issued and the amounts are owed by Perspecta. DXC believes that Perspecta's claims are without merit and intends to vigorously defend itself.

In addition to the matters noted above, the Company is currently subject in the normal course of business to various claims and contingencies arising from, among other things, disputes with customers, vendors, employees, contract counterparties and other parties, as well as securities matters, environmental matters, matters concerning the licensing and use of intellectual property, and inquiries and investigations by regulatory authorities and government agencies. Some of these disputes involve or may involve litigation. The financial statements reflect the treatment of claims and contingencies based on management's view of the expected outcome. DXC consults with outside legal counsel on issues related to litigation and regulatory compliance and seeks input from other experts and advisors with respect to matters in the ordinary course of business. Although the outcome of these and other matters cannot be predicted with certainty, and the impact of the final resolution of these and other matters on the Company’s results of operations in a particular subsequent reporting period could be material and adverse, management does not believe based on information currently available to the Company, that the resolution of any of the matters currently pending against the Company will have a material adverse effect on the financial position of the Company or the ability of the Company to meet its financial obligations as they become due. Unless otherwise noted, the Company is unable to determine at this time a reasonable estimate of a possible loss or range of losses associated with the foregoing disclosed contingent matters.

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - continued

Note 21 - Subsequent Events

Ransomware Attack

On July 5, 2020, the Company announced the ransomware attack of its subsidiary, Xchanging. DXC has confirmed containment of the incident in the immediate days following identification with minimal impact on Xchanging customers; no loss of DXC or Xchanging customer data; no impact on the wider Xchanging or DXC IT estates; and full restoration of Xchanging customer operations.

Proposed Sale of Healthcare Provider Software Business

On July 17, 2020, the Company entered into a purchase agreement with Dedalus Holding S.p.A. ("Dedalus"), a company organized under the laws of Italy, pursuant to which Dedalus will acquire DXC’s healthcare provider software business for a purchase price of €459 million (approximately $525 million), subject to certain adjustments. The closing of the transaction is subject to certain conditions for the benefit of DXC and Dedalus, including (i) receipt of certain regulatory consents, (ii) the absence of any injunction or other order from a governmental authority that prevents the closing, and (iii) subject to certain exceptions, the accuracy of the representations and warranties of, and compliance with covenants by, the other party. In addition, the closing is subject to certain conditions for the benefit of Dedalus, including (i) the absence of a material adverse effect on the business or the ability of DXC to consummate the transaction and (ii) receipt of certain customer consents.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

All statements and assumptions contained in this Quarterly Report on Form 10-Q and in the documents incorporated by reference that do not directly and exclusively relate to historical facts constitute “forward-looking statements.” Forward-looking statements often include words such as “anticipates,” “believes,” “estimates,” “expects,” “forecast,” “goal,” “intends,” “objective,” “plans,” “projects,” “strategy,” “target,” and “will” and words and terms of similar substance in discussions of future operating or financial performance. These statements represent current expectations and beliefs, and no assurance can be given that the results described in such statements will be achieved.

Forward-looking statements include, among other things, statements with respect to our financial condition, results of operations, cash flows, business strategies, operating efficiencies or synergies, divestitures, competitive position, growth opportunities, share repurchases, dividend payments, plans and objectives of management and other matters. Such statements are subject to numerous assumptions, risks, uncertainties and other factors that could cause actual results to differ materially from those described in such statements, many of which are outside of our control. Furthermore, many of these risks and uncertainties are currently amplified by and may continue to be amplified by or may, in the future, be amplified by, the coronavirus disease 2019 (“COVID-19”) pandemic and the impact of varying private and governmental responses that affect our customers, employees, vendors and the economies and communities where they operate.

Important factors that could cause actual results to differ materially from those described in forward-looking statements include, but are not limited to:


•	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.

No assurance can be given that any goal or plan set forth in any forward-looking statement can or will be achieved, and readers are cautioned not to place undue reliance on such statements which speak only as of the date they are made. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of unanticipated events, except as required by law.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

The purpose of the MD&A is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the first quarter of fiscal 2021 and our financial condition as of June 30, 2020. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.

The MD&A is organized in the following sections:


•	Background


•	Results of Operations


•	Liquidity and Capital Resources


•	Off-Balance Sheet Arrangements


•	Contractual Obligations


•	Critical Accounting Policies and Estimates

The following discussion includes a comparison of our results of operations and liquidity and capital resources for the first quarters of fiscal 2021 and fiscal 2020.

Background

DXC Technology 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. With decades of driving innovation, the world’s largest companies trust DXC to deploy our enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences.

We generate revenue by offering a wide range of information technology services and solutions primarily in North America, Europe, Asia and Australia. We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"). We market and sell our services directly to clients through our direct sales force operating out of sales offices around the world. Our clients include commercial businesses of many sizes and in many industries and public sector enterprises.

Results of Operations

The following table sets forth certain financial data for the first quarters of fiscal 2021 and fiscal 2020:



	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

Fiscal 2021 Highlights

Financial highlights for the first quarter of fiscal 2021 include the following:


•	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.

Revenues



	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	)%

The decrease in revenues for the first quarter of fiscal 2021, compared with fiscal 2020 of the same period, reflects terminations, price-downs, and demand weakness related to the COVID-19 pandemic. This was partially offset by contributions from our Luxoft acquisition. Fiscal 2021 revenues included an unfavorable foreign currency exchange rate impact of 2.0%, primarily driven by the strengthening of the U.S. dollar against the Euro and British Pound.

During the first quarters of fiscal 2021 and fiscal 2020, the distribution of our revenues across geographies was as follows:

For the discussion of risks associated with our foreign operations, see Part 1, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

As a global company, over 62% of our revenues for the first quarter of fiscal 2021 were earned internationally. As a result, the comparison of revenues denominated in currencies other than the U.S. dollar, from period to period, is impacted by fluctuations in foreign currency exchange rates. Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. The table below summarizes our constant currency revenues:



	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	)%

Global Business Services

Our GBS revenues were $2,174 million in the quarter compared to $2,159 million for the prior year. GBS revenue increased 0.7% year-over-year, including an unfavorable foreign currency exchange rate impact of 1.8%. GBS revenue in constant currency increased 2.5% year-over-year primarily as a result of contributions from our Luxoft acquisition. This was partially offset by project run-offs, completions, and terminations.

For the first quarter of fiscal 2021, GBS contract awards were $3.5 billion as compared to $2.4 billion during the first quarter of fiscal 2020.

Global Infrastructure Services

Our GIS revenues were $2,328 million in the quarter compared to $2,731 million for the prior year. GIS revenue decreased 14.8% year-over-year, including an unfavorable foreign currency exchange rate impact of 2.4%. GIS revenue in constant currency decreased 12.4% year-over-year as a result of terminations, price-downs, and project run-offs.

For the first quarter of fiscal 2021, GIS contract awards were $1.8 billion as compared to $1.8 billion during the first quarter of fiscal 2020.

Costs and Expenses

Our total costs and expenses are shown in the tables below:



	Three Months Ended
	Amount						Percentage of Revenues				Percentage Point Change
(in millions)	June 30, 2020			June 30, 2019			June 30, 2020		June 30, 2019		Percentage Point Change
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

Total costs and expenses were consistent in the first quarter of fiscal 2021 compared to the same period in the prior fiscal year. The 9.2 point increase in total costs and expenses as a percentage of revenue for the first quarter of fiscal 2021 was primarily driven by a reduction in revenue for the first quarter of fiscal 2021 compared to the same period in the prior fiscal year.

Costs of Services

Cost of services, excluding depreciation and amortization and restructuring costs ("COS"), was $3.6 billion for the first quarter of fiscal 2021, consistent with the comparable period of the prior fiscal year. Within COS for the first quarter of fiscal 2021 is a $26 million one-time accrual relating to the settlement of customer disputes. This was partially offset by cost optimization savings realized during the quarter. COS as a percentage of revenue increased 6.6 points primarily driven by a reduction in revenue compared to the same period in the prior fiscal year.

Selling, General, and Administrative

Selling, general, and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $539 million for the first quarter of fiscal 2021, consistent with the comparable period of the prior fiscal year.

Transaction, separation and integration-related costs of $110 million were included in SG&A for the first quarter of fiscal 2021, as compared to $105 million for the comparable period of the prior fiscal year.

Depreciation and Amortization

Depreciation expense was $178 million and amortization expense was $314 million for the first quarter of fiscal 2021, consistent with the comparable period of the prior fiscal year.

Restructuring Costs

During fiscal 2021, management approved global cost savings initiatives designed to designed to better align the our workforce and facility structures. During the first quarter of fiscal 2021, restructuring costs, net of reversals, were $72 million, as compared to $142 million during the same period of the prior fiscal year.

For an analysis of changes in our restructuring liabilities by restructuring plan, see Note 13 - "Restructuring Costs" to the financial statements.

Interest Expense and Interest Income

Interest expense for the first quarter of fiscal 2021 increased $15 million over the same period in the prior fiscal year due to an increase in borrowings and asset financing activities. See the "Capital Resources" caption below and Note 11 - “Debt” for additional information.

Interest income for the first quarter of fiscal 2021 decreased $7 million over the same period in the prior fiscal year primarily driven by lower yields within our money market accounts.

Other Income, Net

Other income, net comprises non-service cost components of net periodic pension income, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, equity earnings of unconsolidated affiliates and other miscellaneous gains and losses.

The $30 million decrease in other income, net for the first quarter of fiscal 2021, as compared to the same period of the prior fiscal year, was due to a year-over-year decrease of $9 million in other gains related to sales of non-operating assets, year-over-year decrease of $9 million in non-service components of net periodic pension income and a year-over-year unfavorable foreign currency impact of $12 million.

Taxes

Our effective tax rate ("ETR") was 11.6% and 18.4% for the three months ended June 30, 2020 and June 30, 2019, respectively. For the three months ended June 30, 2020, the primary drivers of the ETR were the global mix of income, adjustment of the prior tax provisions due to the filing of tax returns in non-U.S. jurisdictions and generation of additional foreign tax credits in the U.S. For the three months ended June 30, 2019, the primary drivers of the ETR were the global mix of income and the reduction of our estimated fiscal 2019 base erosion anti-avoidance tax ("BEAT") for the October 31, 2019 tax year due to electing out of additional first year bonus depreciation.

Earnings (Loss) Per Share

Diluted EPS for the first quarter of fiscal 2021 decreased $1.42 from the same period in the prior fiscal year. This decrease was due to a decrease of $367 million in net income.

Diluted EPS for the first quarter of fiscal 2021 includes $0.24 per share of restructuring costs, $0.32 per share of transaction, separation and integration-related costs, $0.45 per share of amortization of acquired intangible assets, and $0.01 per share of pension and OPEB actuarial and settlement losses.

Non-GAAP Financial Measures

We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC. These non-GAAP financial measures include earnings before interest and taxes ("EBIT"), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income and non-GAAP EPS, constant currency revenues, net debt and net debt-to-total capitalization.

We present these non-GAAP financial measures to provide investors with meaningful supplemental financial information, in addition to the financial information presented on a GAAP basis. Non-GAAP financial measures exclude certain items from GAAP results which DXC management believes are not indicative of core operating performance. DXC management believes these non-GAAP measures allow investors to better understand the financial performance of DXC exclusive of the impacts of corporate-wide strategic decisions. DXC management believes that adjusting for these items provides investors with additional measures to evaluate the financial performance of our core business operations on a comparable basis from period to period. DXC management believes the non-GAAP measures provided are also considered important measures by financial analysts covering DXC, as equity research analysts continue to publish estimates and research notes based on our non-GAAP commentary, including our guidance around non-GAAP EPS targets.

Non-GAAP financial measures exclude certain items from GAAP results which DXC management believes are not indicative of operating performance such as the amortization of acquired intangible assets and transaction, separation and integration-related costs.

Incremental amortization of intangible assets acquired through business combinations may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangibles assets as these non-cash amounts are inconsistent in amount and frequency and are significantly impacted by the timing and/or size of acquisitions. Although DXC management excludes amortization of acquired intangible assets primarily customer related intangible assets, from its non-GAAP expenses, we believe that it is important for investors to understand that such intangible assets were recorded as part of purchase accounting and support revenue generation. Any future transactions may result in a change to the acquired intangible asset balances and associated amortization expense.

There are limitations to the use of the non-GAAP financial measures presented in this report. One of the limitations is that they do not reflect complete financial results. We compensate for this limitation by providing a reconciliation between our non-GAAP financial measures and the respective most directly comparable financial measure calculated and presented in accordance with GAAP. Additionally, other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes between companies.

Non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include:



	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	)

Reconciliation of Non-GAAP Financial Measures

Our non-GAAP adjustments include:


•	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.

A reconciliation of reported results to non-GAAP results is as follows:



	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

A reconciliation of net income to adjusted EBIT is as follows:



	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

Liquidity and Capital Resources

Cash and Cash Equivalents and Cash Flows

As of June 30, 2020, our cash and cash equivalents ("cash") was $5.5 billion, of which $1.6 billion was held outside of the U.S. As of March 31, 2020, our cash was $3.7 billion, of which $1.2 billion was held outside of the U.S. A substantial portion of funds can be returned to the U.S. from funds advanced previously to finance our foreign acquisition initiatives. As a result of the Tax Cuts and Jobs Act of 2017, and after the mandatory one-time income inclusion (deemed repatriation) of the historically untaxed earnings of our foreign subsidiaries and current income inclusions for global intangible low taxed income, we expect a significant portion of the cash held by our foreign subsidiaries will no longer be subject to U.S. federal income tax consequences upon subsequent repatriation to the U.S. However, a portion of this cash may still be subject to foreign and U.S. state income tax consequences upon future remittance. Therefore, if additional funds held outside the U.S. are needed for our operations in the U.S., we plan to repatriate these funds not designated as indefinitely reinvested.

The following table summarizes our cash flow activity:



	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

Operating cash flow

Net cash provided by (used in) operating activities during the first quarter of fiscal 2021 was $119 million as compared to $(66) million during the comparable period of the prior fiscal year. The increase of $185 million was due to a decrease in working capital cash outflows of $488 million offset by a decrease in net income, net of adjustments of $303 million.

Investing cash flow

Net cash used in investing activities during the first quarter of fiscal 2021 was $61 million as compared to $1,822 million during the comparable period of the prior fiscal year. The decrease in cash used of $1,761 million was primarily due to a decrease in cash paid for acquisitions of $1,901 million and short-term investing of $75 million in fiscal 2020, offset by a decrease in cash collections related to deferred purchase price receivable of $212 million.

Financing cash flow

Net cash provided by financing activities during the first quarter of fiscal 2021 was $1,786 million as compared to $887 million during the comparable period of the prior fiscal year. The $899 million increase was primarily due to borrowings under lines of credit of $2,500 million, absence of common stock repurchases and advance payment for accelerated share repurchase of $500 million in fiscal 2020, and an increase of commercial paper borrowings, net of repayments of $431 million. This was partially offset by a decrease in borrowings on term loans and other long-term debt of $1,205 million, repayments of borrowings under lines of credit of $750 million, and an increase in payments on long-term debt of $575 million.

Capital Resources

See Note 20 - "Commitments and Contingencies" for a discussion of the general purpose of guarantees and commitments. The anticipated sources of funds to fulfill such commitments are listed below and under the subheading "Liquidity."

The following table summarizes our total debt:



	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

The $2.1 billion increase in total debt during the first quarter of fiscal 2021 was primarily attributed to the $1.8 billion net borrowing from the credit facility agreement ("Credit Agreement") and the new senior notes with an aggregate principal of $1.0 billion, consisting of (i) $500 million of 4.00% Senior Notes due fiscal 2024, and (ii) $500 million of 4.13% Senior Notes due fiscal 2026. The purpose of the draw from the Credit Agreement was to secure liquidity as additional cash on hand to support our liquidity resources during the COVID-19 pandemic and to mitigate the uncertainties caused by volatile capital markets, changing governmental policies, and evolving impact on world economies. The proceeds from the new notes were applied towards the early prepayment of our term loan facilities, including prepayment of €500 million of Euro Term Loan due fiscal 2023, £150 million of GBP Term Loan due fiscal 2022, A$300 million of AUD Term Loan due fiscal 2022, and $100 million of USD Term Loan due fiscal 2025.

During the quarter, we applied for and were confirmed eligible to participate in the Bank of England’s (“BOE”) COVID Corporate Funding Facility, a BOE program that provides term liquidity funding to investment grade corporate issuers with significant operations in the UK, in order to stabilize and facilitate continued access to sterling commercial paper markets. At our option, we can borrow up to a maximum of €1 billion or its equivalent in Euro, British Pound and U.S. dollar. On June 15, 2020, DXC Capital Funding DAC (previously named DXC Capital Funding Limited), an indirect subsidiary of the Company, issued £600 million in commercial paper maturing May 2021 under its existing €1.0 billion commercial paper program via direct sale to the BOE.

We also repaid $750 million on the previously drawn Credit Agreement that was used to mitigate our reliance on volatile short-term commercial paper markets during the quarter. Thus, this amount became available under the revolving credit facility for redraw at the request of the Company.

We were in compliance with all financial covenants associated with our borrowings as of June 30, 2020 and June 30, 2019.

The debt maturity chart below summarizes the future maturities of long-term debt principal for fiscal years subsequent to June 30, 2020 and excludes maturities of borrowings for assets acquired under long-term financing and finance lease liabilities. See Note 11 - "Debt" for more information.

The following table summarizes our capitalization ratios:



	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		%

⁽¹⁾Net debt and Net debt-to-total capitalization are non-GAAP measures used by management to assess our ability to service our debts using only our cash and cash equivalents. We present these non-GAAP measures to assist investors in analyzing our capital structure in a more comprehensive way compared to gross debt based ratios alone.

Our credit ratings are as follows:



Rating Agency	Long Term Ratings	Short Term Ratings	Outlook
Fitch	BBB	F-2	Stable
Moody's	Baa2	P-2	Negative
S&P	BBB-	-	Stable

On June 10, Fitch downgraded DXC’s long-term credit ratings by one notch, to BBB from BBB+, and changed DXC’s outlook to Stable from Negative. Also, on July 2, S&P downgraded DXC’s long-term credit ratings by one notch, to BBB- from BBB, and changed DXC’s outlook to Stable from Negative.

Liquidity

We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months. We expect to continue to use cash generated by operations as a primary source of liquidity; however, should we require funds greater than that generated from our operations to fund discretionary investment activities, such as business acquisitions, we have the ability to raise capital through the issuance of capital market debt instruments such as commercial paper, term loans, and bonds. In addition, we currently utilize, and will further utilize our cross currency cash pool for liquidity needs. However, there is no guarantee that we will be able to obtain debt financing, if required, on terms and conditions acceptable to us, if at all, in the future.

Our exposure to operational liquidity risk is primarily from long-term contracts which require significant investment of cash during the initial phases of contracts. The recovery of these investments is over the life of contracts and is dependent upon our performance as well as customer acceptance.

The following table summarizes our total liquidity:



	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

Share Repurchases

During the first quarter of fiscal 2018, our Board of Directors authorized the repurchase of up to $2.0 billion of our common stock and during the third quarter of fiscal 2019, our Board of Directors approved an incremental $2.0 billion share repurchase. This program became effective on April 3, 2017 with no end date established. There were no share repurchases during the first quarter ended June 30, 2020.

Dividends

To enhance our financial flexibility under current uncertain market conditions, we have elected to suspend payment of quarterly dividends. This decision will be reevaluated by our Board of Directors as market conditions stabilize.

Off-Balance Sheet Arrangements

In the normal course of business, we are party to arrangements that include guarantees, the receivables securitization facility and certain other financial instruments with off-balance sheet risk, such as letters of credit and surety bonds. We also use performance letters of credit to support various risk management insurance policies. No liabilities related to these arrangements are reflected in our condensed consolidated balance sheets. There have been no material changes to our off-balance-sheet arrangements reported under Part II, Item 7 of our Annual Report on Form 10-K other than as disclosed below and in Note 5 - "Receivables" and Note 20 - "Commitments and Contingencies" to the financial statements in this Quarterly Report on Form 10-Q.

Contractual Obligations

With the exception of the net borrowings under the Credit Agreement of $1.8 billion and the new senior notes with an aggregate principal amount of $1.0 billion, consisting of (i) $500 million of 4.00% Senior Notes due fiscal 2024; and (ii) $500 million of 4.13% Senior Notes due fiscal 2026 as discussed above under the subheading "Capital Resources," there have been no material changes, outside the ordinary course of business, to our contractual obligations since March 31, 2020. For further information see "Contractual Obligations" in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. These estimates may change in the future if underlying assumptions or factors change. Accordingly, actual results could differ materially from our estimates under different assumptions, judgments or conditions. We consider the following policies to be critical because of their complexity and the high degree of judgment involved in implementing them: revenue recognition, income taxes, business combinations, defined benefit plans and valuation of assets. We have discussed the selection of our critical accounting policies and the effect of estimates with the audit committee of our board of directors. During the three months ended June 30, 2020, there were no changes to our accounting estimates from those described in our fiscal 2020 Annual Report on Form 10-K except as mentioned in Note 1 - "Summary of Significant Accounting Policies."

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For quantitative and qualitative disclosures about market risk affecting DXC, see "Quantitative and Qualitative Disclosures About Market Risk" in Item 7A of Part II of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020. Our exposure to market risk has not changed materially since March 31, 2020.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2020 because of the material weakness in our internal control over financial reporting described below.

Control Activities

As previously disclosed during the third quarter of fiscal 2020, Management concluded there was a material weakness in internal controls over financial reporting related to the design and implementation of effective control activities based on the criteria established in the COSO framework. These control deficiencies constituted a material weakness in the

aggregate related to reassessing policies and procedures, to determine their continued relevance, as impacted by complex transactions and processes.

Deficiencies that contributed to the aggregation included:


•	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.

As a result, we have concluded that there is a reasonable possibility that a material misstatement to our Condensed Consolidated Financial Statements would not be prevented or detected on a timely basis and therefore we concluded that the aggregation of these deficiencies represents a material weakness in our internal control over financial reporting as of June 30, 2020.

Notwithstanding the identified material weakness, management believes that the Condensed Consolidated Financial Statements and related financial information included in this 10-Q fairly present, in all material respects, our balance sheets, statements of operations, comprehensive (loss) income and cash flows as of and for the periods presented.

Remediation Plan

Our remediation efforts are ongoing. Management continues to implement remediation actions to address the specific control deficiencies that, in the aggregate, led to a material weakness. Additionally, Management has completed a detailed root cause analysis which was designed to identify areas of focus where enhancements can be made to the internal control environment to support the continued timely reassessment of policies and procedures and reduce the occurrence of future deficiencies caused by complex transactions and processes. Management has remediated certain of the identified control deficiencies that lead to the material weakness.

The following activities are designed as part of this remediation plan:


•	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.

Management continues to be actively engaged to take steps to remediate the material weakness noted above, including (1) appointment of an external advisor to lead the remediation activities (2) hiring a new Global SOX Director reporting to the Chief Risk Officer (3) establishment of progress reporting to the Audit Committee and (4) establishment of a control owner transition process. In additional to the items noted above, Management has developed expanded SOX training to be incorporated in the onboarding process and evaluated management level reporting to identify key performance indicators for monitoring. These additional remediation efforts have begun and are expected to be completed in the subsequent quarters. While we have made significant progress, there has not been sufficient time to resolve the material weakness in internal control over financial reporting.

As we continue to improve the effectiveness of our internal control over financial reporting, we may supplement our remediation activities as our work progresses where appropriate. Our goal is to have enhanced control policies, procedures, processes in place as promptly as practicable. However, due to the nature of the work and subsequent testing required to conclude that a material weakness no longer exists, we are not in a position to complete our

remediation plan and concluded that our internal control over financial reporting is not designed or operating effectively as of the quarter ended June 30,2020.

Changes in Internal Control over Financial Reporting

In addition to the remediation efforts described above, we adopted ASC 326 effective April 1, 2020, as described in Note 2 - “Recent Accounting Pronouncements” to the financial statements during the first quarter of fiscal 2021. We began using a new model and redesigned certain processes and controls relating to our reserves and expected losses.

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 20 - "Commitments and Contingencies" to the financial statements under the caption “Contingencies” for information regarding legal proceedings in which we are involved.

ITEM 1A. RISK FACTORS

Our operations and financial results are subject to various risks and uncertainties, which may materially and adversely affect our business, financial condition, and results of operations, and the actual outcome of matters as to which forward-looking statements are made in this Quarterly Report on Form 10-Q. In such case, the trading price for DXC common stock could decline, and you could lose all or part of your investment. Past performance may not be a reliable indicator of future financial performance and historical trends should not be used to anticipate results or trends in future periods. Future performance and historical trends may be adversely affected by the aforementioned risks, and other variables and risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect our business, financial condition, and results of operations or the price of our common stock in the future. Apart from the risk factors disclosed below, there have been no material changes in the three months ended June 30, 2020 to the risk factors described in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Our business and financial results have been adversely affected and could continue to be materially adversely affected by the COVID-19 pandemic.

The COVID-19 pandemic has caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies in the countries where we operate or our customers are located or the industries in which we and our customers compete. The COVID-19 pandemic and the actions taken by governments, businesses and individuals to curtail the spread of the disease have negatively impacted, and are expected to continue to negatively impact, our business, results of operations, cash flows and financial condition.

Negative impacts that have occurred, or may occur in the future, include disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our clients or our subcontractors, or the requirements to deliver our services by working remotely. This could potentially affect our ability to perform under our contracts with customers. Cost increases may not be recoverable from customers or covered by insurance, which could impact our profitability. If a business interruption occurs and we are unsuccessful in our continuing efforts to minimize the impact of these events, our business, results of operations, financial position, and cash flows could be materially adversely affected.

In addition, the COVID-19 pandemic has resulted in a widespread global health crisis that is adversely affecting the economies and financial markets of many countries, which could result in an economic downturn that may negatively affect demand for our services, including the financial failure of some of our clients. This economic downturn, depending upon its severity and duration, could also lead to the deterioration of worldwide credit and financial markets that could limit our customers’ ability or willingness to pay us in a timely manner and our ability to obtain external financing to fund our operations and capital expenditures, result in losses on our holdings of cash and investments due to failures of financial institutions and other parties, and result in a higher rate of losses on our accounts receivables due to credit defaults.

Our financial results may also be materially and adversely impacted by a variety of factors related to COVID-19 that have not yet been determined, including potential impairments of goodwill and other assets, and changes to our contingent liabilities, for which actual amounts may materially exceed management estimates, and our calculation of global tax liabilities. Even after the COVID-19 pandemic has subsided, depending upon its duration and potential recurrence, and the governmental policies in response thereto, we may continue to experience materially adverse impacts to our business as a result of its global economic impact, including any recession that may occur or be continuing as a result.

We continue to evaluate the extent to which COVID-19 has impacted us and our employees, customers and suppliers and the extent to which it and other emerging developments will impact us and our employees, customers and suppliers in the future. We caution investors that any of the items mentioned above could have material and adverse impacts on our current and future business, results of operations, cash flows and financial condition.

To the extent the COVID-19 pandemic and the resulting economic disruption continue to adversely affect our business and financial results, it may also have the effect of heightening many of the other risks described in the “Risk Factors” section of our Annual Report on Form 10-K, such as those relating to our level of indebtedness, our ability to generate sufficient cash flows to service our indebtedness and to comply with the covenants contained in the agreements that govern our indebtedness and our counterparty credit risk.

We have identified a material weakness in our internal control over financial reporting. Without effective internal control over financial reporting, we may fail to detect or prevent a material misstatement in our financial statements, which could materially harm our business, our reputation and our stock price.

While we have not identified any material misstatements in our previously reported consolidated financial statements, as previously disclosed in our Quarterly Report for the quarterly period ended December 31, 2019, our management identified a material weakness in our internal control over financial reporting as of December 31, 2019 related to reassessing policies and procedures to determine their continued relevance, as impacted by complex transactions and processes. See "Item 4. Controls and Procedures." Without effective internal control over financial reporting, we may fail to detect or prevent a material misstatement in our financial statements. In that event, we may be required to restate our financial statements. A restatement or an unremediated material weakness could result in a loss of confidence in us by our investors, customers, regulators and/or counterparties. In addition, our remediation efforts are still ongoing and if we are unable to promptly remediate the material weakness identified above, or if we were to conclude in the future that we have one or more additional weaknesses, our investors, regulators, customers and/or counterparties may lose confidence in our reported financial information. Additionally, management may be required to devote significant time and incur significant expense to remediate the material weakness, and management may not be able to complete such remediation in a timely manner. Any of the foregoing could materially harm our business, our reputation and the market price of our common stock.

We could be held liable for damages, our reputation could suffer, or we may experience service interruptions from security breaches, cyber-attacks or disclosure of confidential information or personal data, which could cause significant financial loss.

As a provider of IT services to private and public sector customers operating in a number of regulated industries and countries, we store and process increasingly large amounts of data for our clients, including sensitive and personally identifiable information. We also manage IT infrastructure of our own and of clients. We possess valuable proprietary information, including copyrights, trade secrets and other intellectual property and, we collect and store certain personal and financial information from customers and employees. Our security measures designed to identify and protect against security breaches and cyber-attacks may fail to detect, prevent or adequately respond to a future threat incident.

The continued occurrence of high-profile data breaches and cyber-attacks, including by state actors, reflects an external environment that is increasingly hostile to information and corporate security. Cybersecurity incidents can result from unintentional events or deliberate attacks by insiders or third parties, including criminals, competitors, nation-states, and hacktivists. Like other companies, we face an evolving array of cybersecurity and data security threats that pose risks to us and our clients. We can also be harmed by attacks on third parties, such as denial-of-service attacks. We see regular unauthorized efforts to access our systems, which we evaluate for severity and frequency. For example, in July 2020, certain systems of our subsidiary, Xchanging, experienced a ransomware attack. See Note 21 - "Subsequent Events" to the financial statements. While incidents experienced thus far have not resulted in significant disruption to our business, it is possible that we could suffer a severe attack or incident, with potentially material and adverse effects on our business, reputation, customer relations, results of operations or financial condition. We could be exposed to regulatory actions, client attrition due to reputational concerns or otherwise, containment and remediation expenses, and claims brought by our clients or others for breaching contractual confidentiality and security provisions or data protection laws. We must expend capital and other resources to protect against attempted security breaches and cyber-attacks and to alleviate problems caused by successful breaches or attacks. The cost, potential monetary damages and operational consequences of responding to breaches and cyber-attacks and implementing remediation measures could be significant and may be in excess of insurance policy limits or be not covered by our insurance at all.

We rely on internal and external information and technological systems to manage our operations and are exposed to risk of loss resulting from breaches in the security or other failures of these systems. Security breaches such as through an advanced persistent threat attack, or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us, our clients or our customers, could expose us to risk of loss of this information, regulatory scrutiny, actions and penalties, extensive contractual liability and other litigation, reputational harm, and a loss of customer confidence which could potentially have an adverse impact on future business with current and potential customers. Moreover, failure to maintain effective internal accounting controls related to data security breaches and cybersecurity in general could impact our ability to produce timely and accurate financial statements and could subject us to regulatory scrutiny.

Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments may result in a compromise or breach of the algorithms that we use to protect our data and that of clients, including sensitive customer transaction data. A party who is able to circumvent our security measures or those of our contractors, partners or vendors could access our systems and misappropriate proprietary information, the confidential data of our customers, employees or business partners or cause interruption in our or their operations.

Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers have deployed and may continue to develop and deploy ransomware, malware and other malicious software programs through phishing and other methods that attack our products or otherwise exploit any security vulnerabilities of these products. In addition, sophisticated hardware and operating system software and applications produced or procured from third parties may contain defects in design or manufacture, including “bugs” and other problems that could unexpectedly interfere with the security and operation of our systems, or harm those of third parties with whom we may interact. The costs to eliminate or alleviate cyber or other security problems, including ransomware, malware, bugs, malicious software programs and other security vulnerabilities, could be significant, and our efforts to address these problems may not be successful and could result in interruptions, delays, cessation of service and loss of existing or potential customers, which may impede our sales, distribution or other critical functions.

Increasing cybersecurity, data privacy and information security obligations around the world could also impose additional regulatory pressures on our customers’ businesses and, indirectly, on our operations, or lead to inquiries or enforcement actions. In the United States, we are seeing increasing obligations and expectations from federal and non-federal customers. In response, some of our customers have sought, and may continue to seek, to contractually impose certain strict data privacy and information security obligations on us. Some of our customer contracts may not limit our liability for the loss of confidential information. If we are unable to adequately address these concerns, our business and results of operations could suffer.

Compliance with new privacy and security laws, requirements and regulations, such as the European Union General Data Protection Regulation, which became effective in May 2018, where required or undertaken by us, may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, fines and penalties. While we strive to comply with all applicable data protection laws and regulations, as well as internal privacy policies, any failure or perceived failure to comply or any misappropriation, loss or other unauthorized disclosure of sensitive or confidential information may result in proceedings or actions against us by government or other entities, private lawsuits against us (including class actions) or the loss of customers, which could potentially have an adverse effect on our business, reputation and results of operations.

Portions of our infrastructure also may experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time. We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be expensive, time-consuming, disruptive and resource intensive. Such disruptions could adversely impact our ability to fulfill orders and respond to customer requests and interrupt other processes. Delayed sales, lower margins or lost customers resulting from these disruptions could reduce our revenues, increase our expenses, damage our reputation, and adversely affect our stock price.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

None during the period covered by this report.

Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

On April 3, 2017, DXC announced the establishment of a share repurchase plan approved by the Board of Directors with an initial authorization of $2.0 billion for future repurchases of outstanding shares of DXC common stock. On November 8, 2018, DXC's Board of Directors approved an incremental $2.0 billion share repurchase. An expiration date has not been established for this repurchase plan. Share repurchases may be made from time to time through various means, including in open market purchases, 10b5-1 plans, privately-negotiated transactions, accelerated stock repurchases, block trades and other transactions, in compliance with Rule 10b-18 under the Exchange Act, as well as, to the extent applicable, other federal and state securities laws and other legal requirements. The timing, volume, and nature of share repurchases pursuant to the share repurchase plan are at the discretion of management and may be suspended or discontinued at any time.

There was no share repurchase activity during the three months ended June 30, 2020.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS



Exhibit Number	Description of Exhibit
4.1	Eighth Supplemental Indenture, dated April 21, 2020, between DXC Technology Company and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to DXC Technology Company’s Current Report on Form 8-K (filed April 21, 2020) (file no. 001-38033))
4.2	Form of DXC Technology Company’s 4.000% Senior Notes due 2023 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.1 to DXC Technology Company’s Current Report on Form 8-K (filed April 21, 2020) (file no. 001-38033))
4.3	Form of DXC Technology Company’s 4.125% Senior Notes due 2025 (included in Exhibit 4.1) (incorporated by reference to Exhibit 4.1 to DXC Technology Company’s Current Report on Form 8-K (filed April 21, 2020) (file no. 001-38033))
10.1	Ninth Amendment to the Receivables Purchase Agreement dated as of May 29, 2020, among DXC Receivables LLC (f/k/a CSC Receivables LLC), as Seller, DXC Technology Company, as Servicer, PNC Bank, National Association, as Administrative Agent, and the persons from time to time party thereto as Purchasers and Group Agents (filed herewith)
10.2	Fifth Amendment to the Purchase and Sale Agreement dated as of May 29, 2020, among DXC Technology Company, as Servicer, DXC MS LLC as exiting Originator, DXC Receivables LLC (f/k/a CSC Receivables LLC), as Buyer and the various parties listed as remaining Originators (filed herewith)
10.3*	Form of Performance Based Restricted Stock Unit Award under the DXC Technology Company 2017 Omnibus Incentive Plan (filed herewith)
10.4*	Form of Service Based Restricted Stock Unit Award under the DXC Technology Company 2017 Omnibus Incentive Plan (filed herewith)
31.1**	Section 302 Certification of the Chief Executive Officer
31.2**	Section 302 Certification of the Chief Financial Officer
32.1***	Section 906 Certification of Chief Executive Officer
32.2***	Section 906 Certification of Chief Financial Officer
101.INS	Interactive Data Files
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management contract or compensatory plan or agreement

** Filed herewith

*** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



			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

Exhibit 10.1

NINTH AMENDMENT TO THE
RECEIVABLES PURCHASE AGREEMENT

This NINTH AMENDMENT TO THE RECEIVABLES PURCHASE AGREEMENT (this “Amendment”), dated as of May 29, 2020, is entered into by and among the following parties:


(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.

Capitalized terms used but not otherwise defined herein (including such terms used above) have the respective meanings assigned thereto in the Receivables Purchase Agreement described below.

BACKGROUND

A. The parties hereto (other than the Originator) have entered into a Receivables Purchase Agreement, dated as of December 21, 2016 (such date, the “Original Closing Date”) (as amended, restated, supplemented or otherwise modified through the date hereof, the “Receivables Purchase Agreement”).

B. Concurrently herewith, the Seller, as buyer, the Servicer, DXC MS LLC (the “Exiting Originator”), Alliance-One Services, Inc., Computer Sciences Corporation, CSC Consulting, Inc., CSC Covansys Corporation, CSC Cybertek Corporation, CSC Puerto Rico, LLC, DXC Technology Services LLC, Mynd Corporation, PDA Software Services LLC and Tribridge Holdings, LLC are entering into that certain Fifth Amendment to the Purchase and Sale Agreement, dated as of the date hereof (the “Sale Agreement Amendment”).

C. Concurrently herewith, the Exiting Originator, DXC Technology Services LLC, the Seller and the Administrative Agent, are entering into that certain Assignment Agreement (the “Assignment Agreement” and together with the Sale Agreement Amendment, the “Milano Facility Release Documents”), dated as of the date hereof, whereby the Seller agrees to sell back certain Receivables originated by the Exiting Originator and DXC Technology Services LLC to the Exiting Originator and DXC Technology Services LLC, respectively.

D. Contemporaneously with the effectiveness of the Milano Facility, the Administrative Agent, MUFG Bank, Ltd., as administrative agent with respect to the Milano Facility, and DXC are entering to that certain Intercreditor Agreement, dated as of the date hereof (the “Milano Facility Intercreditor Agreement”).

E. Concurrently herewith, the parties hereto and PNC Capital Markets LLC, as Structuring Agent, are entering into that certain Sixth Amended and Restated Fee Letter, dated as of the date hereof (the “Amended Fee Letter”).

F. The parties hereto desire to amend the Receivables Purchase Agreement as set forth herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1.Amendments to the Receivables Purchase Agreement. The Receivables Purchase Agreement is hereby amended as shown on the marked pages of the Receivables Purchase Agreement attached hereto as Exhibit A.

SECTION 3. Notices and Consents.

(a) Notice of Entry into the Milano Facility Release Documents. The Seller hereby provides notice of its entry into the Milano Facility Release Documents along with duly executed copies of each Milano Facility Release Document and requests that each of the parties hereto acknowledge and consent to the execution of the Milano Facility Release Documents.

(b) Consent to Entry into the Milano Facility Release Documents. Each of the parties hereto acknowledges, consents and agrees to the terms of each of the Milano Facility Release Documents and waives any otherwise applicable conditions precedent thereto under the Receivables Purchase Agreement and the other Transactions Documents (other than as set forth herein).

(c) Consent to Entry into the Milano Facility Intercreditor Agreement. Each of the parties hereto acknowledges, consents and agrees to the terms of the Milano Facility Intercreditor Agreement, which will be substantially in the form and substance as hereto in Exhibit D, which may be amended after the date hereof by the Administrative Agent and the Servicer.

(d) Consent to Filing Certain UCC Financing Statements. In connection with the execution of the Milano Facility Release Documents, each of the parties hereto hereby consents to the filing of the financing statements attached hereto as Exhibit C.

SECTION 4. Representations and Warranties of the Seller and Servicer. Each of the Seller and the Servicer hereby represents and warrants, as to itself, to the Administrative Agent, each Purchaser and each Group Agent, as follows:

(a) Representations and Warranties. Immediately after giving effect to this Amendment, the representations and warranties made by such Person in the Transaction Documents to which it is a party are true and correct as of the date hereof (unless stated to relate solely to an earlier date, in which case such representations or warranties were true and correct as of such earlier date).

(b) Enforceability. This Amendment and each other Transaction Document to which it is a party, as amended hereby, constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with its respective terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law.

(c) No Termination Event. No event has occurred and is continuing, or would result from the transactions contemplated hereby, that constitutes an Event of Termination, Non-Reinvestment Event, Unmatured Event of Termination or Unmatured Non-Reinvestment Event.

SECTION 5. Effect of Amendment. All provisions of the Receivables Purchase Agreement and the other Transaction Documents, as expressly amended and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes effective, all references in the Receivables Purchase Agreement (or in any other Transaction Document) to “this Receivables Purchase Agreement”, “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Receivables Purchase Agreement shall be deemed to be references to the Receivables Purchase Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Receivables Purchase Agreement other than as set forth herein.

SECTION 6. Effectiveness. This Amendment shall become effective as of the date hereof upon receipt by the Administrative Agent of each of the documents, agreements (in fully executed form), opinions of counsel, lien search results, UCC filings, certificates and other deliverables listed on the closing memorandum attached as Exhibit B hereto, in each case, in form and substance acceptable to the Administrative Agent.

SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or e-mail transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 8. GOVERNING LAW. THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).

SECTION 9. Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Receivables Purchase Agreement or any provision hereof or thereof.

[Signature Pages Follow.]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment by their duly authorized officers as of the date first above written.

DXC RECEIVABLES LLC,
as Seller

By: /s/ H.C. Charles Diao
Name: H.C. Charles Diao
Title: President and Treasurer

DXC TECHNOLOGY COMPANY,
as Servicer

By: /s/ H.C. Charles Diao
Name: H.C. Charles Diao

Title: Senior Vice President, Treasury and Corporate Development



	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

Exhibit A

Amendments to the Receivables Purchase Agreement

[Attached]

Exhibit B

Closing Memorandum

[Attached]

Exhibit C

UCC Financing Statements

[Attached]

Exhibit D

Form of Milano Facility Intercreditor Agreement

[Attached]

Exhibit 10.2

FIFTH AMENDMENT TO THE
PURCHASE AND SALE AGREEMENT

This FIFTH AMENDMENT TO THE PURCHASE AND SALE AGREEMENT (this “Amendment”), dated as of May 29, 2020 (such date, the “Fifth Amendment Effective Date”), is entered into by and among the following parties:


(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”).

Capitalized terms used but not otherwise defined herein (including such terms used above) have the respective meanings assigned thereto in the Agreement described below.

BACKGROUND

A.The Originators, the Servicer and the Buyer entered into that certain Purchase and Sale Agreement, dated as of December 21, 2016 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Agreement”).

B.Concurrently herewith, the Servicer, the Buyer, as seller, the Committed Purchasers, the Group Agents and the Administrative Agent are entering into that certain Ninth Amendment to the Receivables Purchase Agreement, dated as of the date hereof (the “Receivables Purchase Agreement Amendment”).

C.The Exiting Originator desires to no longer be party to the Agreement as an Originator thereunder on the Fifth Amendment Effective Date.

D.The parties hereto desire to amend the Agreement as set forth herein.

NOW, THEREFORE, with the intention of being legally bound hereby, and in consideration of the mutual undertakings expressed herein, each party to this Amendment hereby agrees as follows:

SECTION 1. Amendments to the Agreement. The Agreement is hereby amended as follows:

(a) Article X of the Agreement is hereby amended by adding the following new Section 10.15 to the end thereof:

10.15 Milano Facility Intercreditor Agreement. Each Originator that is or that becomes a party hereto acknowledges and agrees that it (i) has received and reviewed a copy of the Milano Facility Intercreditor Agreement, (ii) consents to the Servicer’s and the Buyer’s entry into the Milano Facility Intercreditor Agreement and (iii) will comply with the terms of the Milano Facility Intercreditor Agreement.

(b) Schedule I of the Agreement is hereby replaced in its entirety with the schedule attached hereto as Schedule I.

(d) Schedule III of the Agreement is hereby replaced in its entirety with the schedule attached hereto as Schedule III.

SECTION 2. Release of Exiting Originator. The parties hereto hereby agree that upon the effectiveness of this Amendment, the Exiting Originator shall no longer be a party to the Agreement or any other Transaction Document and shall no longer have any obligations or rights thereunder (other than such obligations which by their express terms survive termination of the Agreement or such other Transaction Document).

SECTION 3. Delegation and Assumption of Exiting Originator’s Obligations. Effective immediately prior to the removal of the Exiting Originator as a party to the Agreement pursuant to Section 2 above, the Exiting Originator hereby delegates to the Remaining Originators, and the Remaining Originators hereby assume all of the Exiting Originator’s duties, obligations and liabilities, to the extent if any, under the Agreement and each of the other Transaction Documents.

SECTION 4. Cancellation of Subordinated Notes. The Exiting Originator represents and warrants to the other parties hereto that it (a) currently holds the Subordinated Note made by the Buyer to the Exiting Originator (the “Exiting Originator Note”) and (b) has not sold, pledged, assigned, or otherwise transferred the Exiting Originator Note or any interest therein. The Exiting Originator acknowledges and agrees that all the Buyer’s outstanding obligations (including, without limitation, any payment obligations) under the Exiting Originator Note have been finally and fully paid and performed on or prior to the Fifth Amendment Effective Date. The Exiting Originator Note is hereby cancelled and shall have no further force or effect.

SECTION 5. Consent to Entry into the Milano Facility Intercreditor Agreement. Each of the parties hereto acknowledges, consents and agrees to the terms of the Milano Facility Intercreditor Agreement, which may be amended after the date hereof by the Administrative Agent and the Servicer.

SECTION 6. Representations and Warranties of the Remaining Originators. The Remaining Originators hereby represent and warrant to each of the parties hereto as of the date hereof as follows:

(a) Representations and Warranties. The representations and warranties made by such Person in the Agreement and each of the other Transaction Documents to which it is a party are true and correct as of the date hereof (unless such representations or warranties relate to an earlier date, in which case as of such earlier date).

(b) Enforceability. The execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, the Agreement (as amended hereby) and the other Transaction Documents to which it is a party are within its organizational powers and have been duly authorized by all necessary action on its part, and this Amendment, the Agreement (as amended hereby) and the other Transaction Documents to which it is a party are (assuming due authorization and execution by the other parties thereto) its valid and legally binding obligations, enforceable in accordance with its terms, except (x) the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws from time to time in effect relating to creditors’ rights, and (y) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

(c) No Event of Default; No Purchase and Sale Termination Event. No Event of Termination, Unmatured Event of Termination, Non-Reinvestment Event, Unmatured Non-Reinvestment Event, Purchase and Sale Termination Event or Unmatured Purchase and Sale Termination Event has occurred and is continuing, or would occur as a result of this Amendment or the transactions contemplated hereby.

SECTION 7. Effect of Amendment; Ratification. All provisions of the Agreement and the other Transaction Documents, as expressly amended and modified by this Amendment, shall remain in full force and effect. After this Amendment becomes effective, all references in the Agreement (or in any other Transaction Document) to “this Purchase and Sale Agreement”, “this Agreement”, “hereof”, “herein” or words of similar effect referring to the Agreement shall be deemed to be references to the Agreement as amended by this Amendment. This Amendment shall not be deemed, either expressly or impliedly, to waive, amend or supplement any provision of the Agreement other than as set forth herein. The Agreement, as amended by this Amendment, is hereby ratified and confirmed in all respects.

SECTION 8. Effectiveness. This Amendment shall become effective as of the Fifth Amendment Effective Date upon (a) receipt by the Buyer and the Administrative Agent’s receipt of counterparts to this Amendment executed by each of the parties hereto, and (b) the effectiveness of the Receivables Purchase Agreement Amendment.

SECTION 9. Severability. Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SECTION 10. Transaction Document. This Amendment shall be a Transaction Document for purposes of the Receivables Purchase Agreement.

SECTION 11. Counterparts. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or e-mail transmission shall be effective as delivery of a manually executed counterpart hereof.

SECTION 12. GOVERNING LAW AND JURISDICTION.

(a) THIS AMENDMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO ANY OTHER CONFLICTS OF LAW PROVISIONS THEREOF).

(b) EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AMENDMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. THE PARTIES HERETO AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

SECTION 13. Section Headings. The various headings of this Amendment are included for convenience only and shall not affect the meaning or interpretation of this Amendment, the Agreement or any provision hereof or thereof.

[SIGNATURE PAGES FOLLOW]

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

DXC RECEIVABLES LLC,

as Buyer

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

DXC TECHNOLOGY COMPANY,
as Servicer

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: Senior Vice President, Treasury and

Corporate Development

DXC TECHNOLOGY SERVICES LLC,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

ALLIANCE-ONE SERVICES, INC.,
as a Remaining Originator

By: /s/ Phillip Charles Ratcliff_________________

Name: Phillip Charles Ratcliff

Title: President

COMPUTER SCIENCES CORPORATION,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

CSC CONSULTING, INC.,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

CSC CYBERTEK CORPORATION,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

MYND CORPORATION,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

PDA SOFTWARE SERVICES LLC,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

CSC PUERTO RICO, LLC,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

CSC COVANSYS CORPORATION,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

TRIBRIDGE HOLDINGS, LLC,
as a Remaining Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

DXC MS LLC,
as an Exiting Originator

By:_/s/_ H.C. Charles Diao___________________

Name: H.C. Charles Diao

Title: President and Treasurer

Acknowledged by:

PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent

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

Schedule I

LIST AND LOCATION OF EACH ORIGINATOR

Schedule II

LOCATION OF BOOKS AND RECORDS OF ORIGINATORS

Schedule III

TRADE NAMES

Exhibit 10.3

DXC TECHNOLOGY COMPANY

2017 OMNIBUS INCENTIVE PLAN

PERFORMANCE BASED RESTRICTED STOCK UNIT

AWARD AGREEMENT


1.	Grant of Award.

This Agreement (“Agreement”) is made and entered into as of «Grant_Date_x» (the “Grant Date”) by and between DXC Technology Company, a Nevada corporation (the “Company”), and «Name_x», a full-time employee of the Company and/or one or more of its Subsidiaries (the “Employee”).

This Agreement granting the Employee an award under the Plan (the “Award”) shall be subject to all of the terms and conditions set forth in the DXC Technology Company 2017 Omnibus Incentive Plan (the “Plan”) and this Agreement. Except as defined in Appendix A, capitalized terms shall have the same meanings ascribed to them under the Plan.

This Award is subject to the data privacy provisions set forth in Appendix B.

Award Granted: «Shares_Granted_x» Restricted Stock Units (the “Target Units”)


2.	Normal Settlement of RSUs at end of Performance Period.

(a) The total number of RSU Shares delivered in settlement of this Award shall be between 0% and 200%, inclusive, of the number of Target Units, and, except as otherwise provided in this Agreement, shall be determined by the Committee pursuant to Appendix C to this Agreement based on the Company’s Stock Price Appreciation performance for the FY2021 – FY2023 performance period (the “Performance Period”). Dividend Equivalents will be paid with respect to such RSU Shares delivered in settlement at the same time as the Restricted Stock Units (“RSUs”) are settled.

(b) For purposes of this Section 2, this Award shall be settled on the Scheduled Settlement Date.

(c) Any RSU Shares the Employee receives in settlement of the RSUs shall be subject to any holding period requirements or other restrictions set forth in the Company’s stock ownership guidelines applicable to the Employee, as in effect from time to time. The Employee acknowledges that he may be prohibited from selling or otherwise disposing of such RSU Shares while subject to such guidelines.


3.	Effect of Termination of Employment; Approved Termination; Change in Control; Recoupment and Forfeiture.

(a) Age 62 or Older Other than for Cause, death or Disability with at least 10 Years of Service; Approved Termination. If:

(i) the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated after the end of Fiscal Year 2021 and during Fiscal Year 2022 or Fiscal Year 2023 at age 62 or older for no reason, or for any reason other than Cause, death or Disability, and the Employee shall have been (or for any other purpose shall have been treated as if he or she had been) a continuous employee of the Company or its Subsidiaries for at least 10 years immediately prior to the date of termination of employment status; or

(ii) the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated at any time on or before the end of Fiscal Year 2023 and such termination is specifically approved by the Committee for purposes of this Section 3(a),

then the Company shall settle a fraction of the RSUs that otherwise would settle in accordance with Section 2 and Appendix C of this Agreement on the Scheduled Settlement Date. This fraction will be determined by calculating the number of full months of continuous service with the Company or its Subsidiaries that the Employee has completed since the Grant Date and then dividing this number by 36. If the Employee’s status as an employee of the Company or any of its Subsidiaries terminates pursuant to this Section 3(a) after the end of Fiscal Year 2023, then the Company shall settle the RSUs in accordance with Section 2 and Appendix C of this Agreement, without pro-ration, on the Scheduled Settlement Date.

(b) Death or Disability.

(i) If, on or before the end of Fiscal Year 2023, the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated by reason of the death or Disability of the Employee, then, one calendar month after the Employee’s status as an employee of the Company or its Subsidiaries is terminated (the “Employment Termination Date”) the Company shall settle the RSUs in full by delivering a pro-rated amount of 100% of the Target Units, with such pro-ration based on the Employee’s period of service during the Performance Period.

(ii) If, after the end of Fiscal Year 2023 and prior to the Scheduled Settlement Date, the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated by reason of the death or Disability of the Employee, then the Company shall settle the RSUs in accordance with Section 2 and Appendix C of this Agreement, without pro-ration, as soon as practicable after the Employment Termination Date, but in no event later than the Scheduled Settlement Date.

(iii) If settlement is by reason of termination due to death, settlement shall be to the beneficiary designated by the Employee for such purpose.

(c) Cancellation of RSUs upon Other Termination of Employment. If, on or before the end of Fiscal Year 2023, the Employee’s status as an employee of the Company or any of its Subsidiaries terminates for any reason (or no reason), other than pursuant to Section 3(a) or (b) hereof, then the RSUs and all related Dividend Equivalents shall automatically be cancelled as of the close of business on the Employment Termination Date. If the Employee’s status as an employee of the Company or any of its Subsidiaries terminates for any reason (or no reason), other than pursuant to Section 3(a) or (b) hereof, after the end of Fiscal Year 2023, then the Company shall settle the RSUs in accordance with Section 2 and Appendix C of this Agreement on the Scheduled Settlement Date.

(d) Change in Control.

(i) Upon a Change in Control that occurs on or before the end of Fiscal Year 2023 while Employee is employed by the Company or its Subsidiaries, 100% of the Target Units shall, subject to Section 18 of the Plan, vest and be settled in accordance with the following terms of this Section 3(d)(i), without regard to Section 2 or Appendix C hereof. Following the Change in Control, the RSUs shall vest based solely on the passage of time and the Employee’s continued employment with the Company (including any successor to the Company resulting from the Change in Control) and its Subsidiaries as follows: (x) if the Change in Control happens on or before the first anniversary of the Grant Date, the RSUs shall vest in substantially equal thirds on the first, second and third anniversaries of the Grant Date; (y) if the Change in Control happens after the first anniversary of the Grant Date but on or before the second anniversary of the Grant Date, the RSUs shall vest in substantially equal halves on the second and third anniversaries of the Grant Date; and (z) if the Change in Control happens after the second anniversary of the Grant Date, the RSUs shall vest in their entirety on the third anniversary of the Grant Date. The RSUs shall be subject to all other terms and conditions of this Agreement; provided, however, that if, on or within two (2) years after the date of the Change in Control and prior to when the RSUs have vested in full, the Employee experiences a Qualifying Termination Without Cause, or the Employee’s status as an employee of the Company (including any successor to the Company resulting from the Change in Control) or any of its Subsidiaries is terminated as a result of the Employee’s death or Disability or pursuant to Section 3(a) above, then the RSUs shall automatically vest in full as of the Employment Termination Date. Settlement of any RSUs (and any related Dividend Equivalents) that vest pursuant to this Section 3(d)(i) shall occur on or as soon as administratively practicable (but, subject to Section 19 below, in no event later than 2.5 months) after the applicable vesting date. For purposes of the preceding sentence, a “Qualifying Termination Without Cause” shall mean the Employee’s status as an employee of the Company (including any successor to the Company resulting from the Change in Control) or any of its subsidiaries is terminated by the Company without Cause at a time when the Employee is meeting performance expectations, as determined by the Company in its sole discretion.

(ii) Upon a Change in Control that occurs after the end of Fiscal Year 2023 and prior to the Scheduled Settlement Date, the Company shall settle the RSUs in accordance with Section 2 and Appendix C of this Agreement, without pro ration, as soon as practicable after the Change in Control, but in no event later than the Scheduled Settlement Date

(e) Recoupment and Forfeiture. Settlement of all or a portion of the Award pursuant to this Section 3 is subject to the forfeiture provisions of this Section 3. Settlement of all or a portion of the Award is subject to recoupment by the Company pursuant to Section 5.

(f) Leave of Absence. If the Employee is granted a leave of absence (including a military leave of absence), the Employee and the Company each reasonably anticipate that the Employee will return to active employment and either (x) the leave of absence is to be for not more than six months or (y) at all times during the leave of absence the Employee has a statutory or contractual right to return to work, then for purposes of this Award: (i) while on leave of absence the Employee shall be treated as if he were an active employee; (ii) if the Employee’s leave of absence is terminated and the Employee does not timely return to active employment, the date of the end of the leave of absence shall be treated as the Employment Termination Date; (iii) if the Employee’s leave of absence is terminated and the Employee timely returns to active employment, he shall be treated as if active employment had continued uninterrupted during the leave of absence; and (iv) if the Employee’s leave of absence continues to the Scheduled Settlement Date or any other date for settlement of the RSUs as provided under this Award, any RSUs which the Employee would otherwise be entitled to receive if he were an active employee shall be settled on such date.


4.	Withholding and Taxes.

(a) If the Company and/or the Employer are obligated to withhold an amount on account of any federal, state or local tax imposed as a result of the grant or settlement of the RSUs pursuant to this Agreement (collectively, “Taxes”), including, without limitation, any federal, state or other income tax, or any F.I.C.A., state disability insurance tax or other employment tax (the date upon which the Company and/or the Employer becomes so obligated shall be referred to herein as the “Withholding Date”), then the Employee shall pay to the Company on the Withholding Date, the aggregate amount that the Company and the Employer are so obligated to withhold, as such amount shall be determined by the Company (the “Withholding Liability”), which payment shall be made by the automatic cancellation by the Company of a portion of the RSU Shares; provided that the Company is not then prohibited from purchasing or acquiring such shares of Common Stock (such shares to be valued on the basis of the aggregate Fair Market Value thereof on the Withholding Date, plus the value of the Dividend Equivalents associated with such shares on the Withholding Date); and provided further that the RSU Shares to be cancelled shall be those that would otherwise have been delivered to the Employee the soonest upon settlement of the RSUs; and provided further, however, that the Employee may, on or before the Withholding Date, irrevocably elect to instead pay to the Company, by check or wire transfer delivered or made within one business day after the Withholding Date, an amount equal to or greater than the Withholding Liability.

(b) The Employee acknowledges that neither the Company nor the Employer has made any representation or given any advice to the Employee with respect to Taxes.


5.	Recoupment and Forfeiture – Detrimental Activity.

(a) Refund of Stock Value. If the Employee engages in Detrimental Activity (as defined below in Section 5(c)) during the time periods set forth in each provision of Section 5(c), then, if the RSUs were settled within the one year period prior to the occurrence of such event, the Employee shall immediately deliver to the Company an amount in cash equal to the (i) aggregate Fair Market Value, determined as of such Settlement Date, of all RSU Shares which were delivered to the Employee or cancelled in payment of Taxes on such Settlement Date and (ii) Dividend Equivalents paid to the Employee in respect of those RSU Shares.

(b) Forfeiture of RSUs. If the Employee engages in Detrimental Activity prior to the final Settlement Date for the RSUs, the RSUs and all related Dividend Equivalents shall be terminated and forfeited.

(i) engaging, directly or indirectly, in any business activity (A) competitive with the activity of the Company and/or any of its Subsidiaries, or (B) in conflict with the interests of the Company and/or any of its Subsidiaries during the term of employment and a period of two years thereafter;

(ii) at any time willfully disclosing, other than in the course of the business of Company and/or its Subsidiares, to any third party trade secret or other confidential material or information belonging to the Company and/or any of its Subsidiaries;

(iii) at any time failing to abide by Employee’s contractual obligations to assign all intellectual property to the Company and/or any of its Subsidiaries;

(iv) failing to abide by any other contractual obligations to the Company and/or any of its Subsidiaries, as set forth in those contracts (including Section 6 below), including (A) obligations not to solicit employees of the Company and/or any of its Subsidiaries to perform services for others, and (B) obligations not to solicit business from clients, vendors or business partners of the Company and/or any of its Subsidiaries;

(v) engaging during the term of employment in any action that warrants or results in termination of Employee’s employment for “Cause,” as defined in Appendix A;

(vi) any other willful action determined by the Company to be injurious, detrimental or prejudicial to any of the interests of the Company and/or any of its Subsidiaries during the term of employment and a period of two years thereafter.

(d) State-Specific Exclusions. To the extent the Employee primarily resides and works in California, Oklahoma or Nebraska, Section 5(c)(i) of the definition of Detrimental Conduct shall not apply. In addition, to the extent the Employee primarily resides and works in California, the Employee will have the right to modify Section 5 and choose the application of California law to Section 5 of this Agreement in accordance with California Labor Code §925. If this occurs, then Section 5(c)(iv) of the definition of Detrimental Activity shall be deemed modified so that it only prohibits conduct by the Employee that involves the misappropriation of a trade secret of the Company and/or any of its Subsidiaries; provided, however, that the Company and/or any of its Subsidiaries shall continue to retain all of their rights in trade secrets and nothing in this Agreement shall be construed eliminate, reduce or adversely affect the rights that the Company and/or any of its Subsidiaries would otherwise have related to the protection of their trade secrets absent this Agreement.

(e) As an additional condition of receiving this Award, the Employee agrees and acknowledges that the Award shall be subject to repayment to the Company in whole or in part in the event of a financial restatement or in such other circumstances as may be required by applicable law or as may be provided in any clawback policy that is adopted by the Company and applicable to the Employee.


6.	Employee Covenants.

(a) Non-Disclosure and Non-Use of Confidential Information. The Company and/or any of its Subsidiaries shall provide the Employee with access to Confidential Information in the course of performance of the Employee’s duties. Except for in performance of the Employee’s duties for the Company and/or any of its Subsidiaries, the Employee agrees not to disclose, use, copy, take, download, upload, duplicate or otherwise permit the use, disclosure, copying, taking, downloading, uploading, or duplication of any Confidential Information during or following his/her employment with the Company and/or any of its Subsidiaries. The Employee agrees to take all reasonable steps and precautions to prevent any unauthorized disclosure, use, copying or duplication of Confidential Information. The Employee shall promptly report to the Company and/or any of its Subsidiaries any actual or suspected violation of confidentiality obligations toward the Company and/or any of its Subsidiaries and will take all reasonable further steps requested by the Company and/or any of its Subsidiaries to prevent, control or remedy any such violation. The Employee acknowledges and agrees that the Employee shall have no ownership or privacy interest in materials or information that is stored on or transmitted using property or equipment or rights leased, licensed or owned by the Company and/or any of its Subsidiaries, even if the Employee claims an ownership or privacy interest in such materials or information. The Employee agrees that to any extent that the Employee uses the Company’s and/or any of its Subsidiaries’ resources for such materials and information, the Employee forfeits any privacy and ownership interest in them and agrees that they shall be subject to ownership, access, use and disclosure by the Company and/or any of its Subsidiaries at any time without notice to or further consent of the Employee.

(b) Non-Solicitation of the Company’s Employees, Clients, and Prospective Clients. In exchange for the Company’s provision to the Employee of the good and valuable consideration set forth above, during the Non-Solicitation Period, the Employee shall not, without the express, prior written consent of DXC’s General Counsel, engage, in the Restricted Area, in any of the conduct described below, either directly or indirectly, individually or as an employee, agent, contractor, consultant, member, partner, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly held corporation) or in any other capacity for any person, firm, partnership or corporation other than the Company and/or any of its Subsidiaries:

(i) solicit (or contact in any manner which could reasonably be construed as solicitation), hire or employ, attempt to hire or employ, retain as or attempt to retain as a consultant or an independent contractor, any current employee of the Company and/or any of its Subsidiaries or any person who was an employee of the Company and/or any of its Subsidiaries within the 6-month period preceding such solicitation, contact, hiring or employment, or attempted hiring or employment;

(ii) solicit (or contact in any manner which could reasonably be construed as solicitation) any Client or Prospective Client for the purpose of selling or providing solutions, products and/or services competitive with Services provided by or offered by the Company and/or any of its Subsidiaries, or divert or cause a reduction in the business between the Company and/or any of its Subsidiaries and any Client or Prospective Client. The Employee understands and acknowledges, however, that this non-solicitation obligation shall not apply if (i) the Client or Prospective Client chose to seek such Services from the Employee without the Employee having taken any steps to solicit its business, and (ii) the Employee has otherwise complied with the restrictive covenants set forth herein; or

(iii) solicit or communicate with any vendor, supplier, subcontractor, or partner of the Company and/or any of its Subsidiaries with which the Employee worked or about which the Employee received Confidential Information, at any time during the 12-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries, for the purpose of persuading or assisting such vendor, supplier, subcontractor, or partner to terminate, or modify to the detriment of the Company and/or any of its Subsidiaries, any business relationship with the Company and/or any of its Subsidiaries.

(c) (i) Non-Competition. In exchange for the Company’s provision to the Employee of the good and valuable consideration set forth above, during the Non-Competition Period, the Employee shall not, without the express, prior written consent of DXC’s General Counsel, in the Restricted Area, either directly or indirectly, individually or as an employee, agent, contractor, consultant, member, partner, officer, director or stockholder (other than as a stockholder of less than 5% of the equities of a publicly held corporation) or in any other capacity for any person, firm, partnership or corporation other than the Company and/or any of its Subsidiaries, provide Restricted Services for or on behalf of a Competitor.

(i) Non-Competition Restriction in the Event of a Reduction in Force. In the event the Employee’s employment is terminated by the Company and/or any of its Subsidiaries due to a reduction in force, reorganization or similar type of restructuring, the Company and/or any of its Subsidiaries may choose to enforce the provisions of Section 6(c)(i) to the extent permitted by applicable law, including by providing the Employee additional salary, benefits, or severance pay (collectively “Severance Pay”) during the Non-Competition Period. If the Company and/or any of its Subsidiaries choose to make such an offer of Severance Pay, they may, in their discretion, condition the Employee’s receipt of Severance Pay on the Employee’s execution of a release of claims against the Company and/or any of its Subsidiaries.

(d) State-Specific Exclusions. To the extent the Employee primarily resides and works in California, Oklahoma or Nebraska, the Employee will not be subject to the terms of Section 6(c). In addition, to the extent the Employee primarily resides and works in California, the Employee will have the right to modify Section 6 as set forth in this paragraph and choose the application of California law to Section 6 of this Agreement in accordance with California Labor Code §925. If this occurs, then the restrictions in Section 6(b) shall be deemed modified so that they only prohibit conduct by the Employee that involves the misappropriation of a trade secret of the Company and/or any of its Subsidiaries.

(e) Notice of Post-Employment Activities. If the Employee accepts a position with a Competitor at any time within twenty-four months following termination of employment with the Company and/or any of its Subsidiaries, the Employee must promptly give written notice to the senior Human Resources manager for the business sector in which the Employee worked, with a copy to DXC's General Counsel, and must provide DXC with the information it needs about the Employee’s new position to determine whether such position would likely lead to a violation of this Agreement (except that the Employee need not provide any information that would include the Competitor's confidential information or trade secrets). The Employee consents to the Company and/or any of its Subsidiaries notifying his or her new employer of the Employee’s rights and obligations under this Agreement.

(f) Compliance with Defend Trade Secrets Act. The Employee acknowledges that he or she is hereby notified that, in accordance with the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1833, the Employee will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. If the Employee files a lawsuit for retaliation against the Company and/or any of its Subsidiaries for reporting a suspected violation of law, the Employee may disclose the trade secrets of the Company and/or any of its Subsidiaries to the Employee’s attorney and use the trade secret information in the court proceeding if the Employee files any document containing the trade secret under seal, and does not disclose the trade secret, except pursuant to court order.

(g) Inventions. The Employee acknowledges and agrees that as a function of the Employee’s employment with the Company and/or any of its Subsidiaries, the Employee may solely or jointly conceive, develop, reduce to practice or otherwise produce inventions, software, computer programs, algorithms, source code, discoveries, know-how, innovations, enhancements, designs, developments, improvements, techniques, technology, concepts, methods, processes, ideas, trade secrets and other forms of intellectual property and works of authorship, whether or not any of the foregoing constitute trade secrets, and whether or not eligible for copyright, trademark and patent protection (collectively “Inventions”). The Employee shall make prompt and full disclosure to the Company and/or any of its Subsidiaries, shall hold in trust for the sole benefit of the Company and/or any of its Subsidiaries, and hereby assigns exclusively to the Company without additional compensation or consideration to the Employee all the Employee’s rights, title and interest in and to any and all Inventions that the Employee solely or jointly may conceive, develop, reduce to practice or otherwise produce during the Employee’s employment with the Company and/or any of its Subsidiaries, including, without limitation, all patent rights, copyright rights, trade secret rights, and all other intellectual property rights therein. The Employee waives and quitclaims to the Company any and all claims of any nature whatsoever that the Employee now or hereafter may have for infringement of any patent or other intellectual property right relating to any Invention so assigned to the Company. The Employee agrees to perform all actions reasonably requested by the Company to establish and confirm the Company’s ownership of Inventions, including, without limitation, signing and delivering to the Company (during and after employment) any other documents that the Company considers desirable to provide evidence of (a) the assignment of all rights of the Employee, if any, in any Inventions and (b) the Company ‘s ownership of such Inventions. If the Company is unable to secure the Employee’s signature on any document necessary to apply for, prosecute or obtain or enforce any patent, copyright, or other right or protection relating to any Invention, whether due to the Employee’s mental or physical incapacity or any other cause, the Employee hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Employee’s agent and attorney-in-fact, to act for and in the Employee’s behalf to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance and enforcement of patents, copyrights, or other rights or protections, with the same force and effect as if executed and delivered by the Employee. The Employee will assist the Company in applying for, prosecuting, obtaining, or enforcing any patent, copyright, or other right or protection relating to any Invention, all at the Company’s expense but without compensation to the Employee in excess of the Employee’s salary or wages. If the Company requires any assistance after termination of the Employee’s employment, the Employee will be compensated for time actually spent in providing that assistance at an hourly rate equivalent to the Employee’s salary or wages during the last period of employment with the Company and/or any of its Subsidiaries. Notwithstanding the foregoing, the Employee’s assignment of Inventions to the Company by way of this Section shall not apply to any Invention that: (i) was completely developed and reduced to practice entirely by the Employee prior to employment with the Company and/or any of its Subsidiaries without using any equipment, supplies, facilities, services, or Confidential Information of the Company and/or any of its Subsidiaries; (ii) does not relate to the business of the Company and/or any of its Subsidiaries, or to the actual or demonstrably anticipated research or development of the Company and/or any of its Subsidiaries; (iii) does not result from any work performed by the Employee for the Company and/or any of its Subsidiaries; or (iv) qualifies as an invention under applicable law in the Employee’s state of domicile. The Employee has been given the opportunity to set forth, on the form set forth as Appendix D, a list describing all such Inventions that (x) the Employee wishes to have excluded from this Agreement, and (b) have arisen since the last time (if any) that the Employee signed a transfer of rights agreement in favor of the Company. If the Employee has completed Appendix D, the Employee must promptly sign it (as indicated) and send the form to the Stock Plan Administration (“SPA”) department. If no such form is sent to SPA, the Employee represents that there are no such Inventions. The parties acknowledge that the Company and/or any of its Subsidiaries may not necessarily agree with all of the Employee’s assertions of ownership and reserves the right to review and make its own determinations regarding same. As to any Invention in which the Employee has an interest at any time prior to or during the Employee’s employment with the Company and/or any of its Subsidiaries, if the Employee uses or incorporates such an Invention in any released or unreleased product, service, program, process, machine, development or work in progress of the Company and/or any of its Subsidiaries, or if the Employee permits the Company and/or its Subsidiaries to use or incorporate such an Invention, the Company and/or its Subsidiaries shall be granted and shall have an irrevocable, perpetual, royalty-free, worldwide license to exercise any and all rights with respect to such Invention, including the right to protect, make, have made, use, sell, copy, disclose, modify, prepare derivative works of that Invention without restriction and the right to sublicense those rights to others.

(h) Copyrights. The Employee acknowledges and agrees that any and all copyrightable works prepared by him or her within the scope of the Employee’s employment by the Company and/or its Subsidiaries and/or its predecessors in interest shall be works made for hire, that the Company and/or its Subsidiaries shall own all rights under copyright in and to such works, and that the Company and/or its Subsidiaries shall be considered the author of all such works. If and to the extent that any jurisdiction should fail to deem any such work to be a work made for hire owned by the Company and/or any of its Subsidiaries, the Employee hereby irrevocably assigns to the Company and/or any of its Subsidiaries all rights, title and interest in and to such work, including the right to sue, counterclaim and recover for all past, present and future infringement, misappropriation or dilution thereof, oral rights, and all rights corresponding thereto throughout the world. To the extent moral rights may not be assigned, the Employee hereby waives the benefit or protection of same, and waives all rights under the Visual Artists Rights Act.

(i) Injunctive Relief and Damages.

(i) Injunctive Relief. The Employee acknowledges and agrees that if the Employee were to breach, or threaten to breach, any of the covenants set forth in Section 6 hereof, the Company and/or any of its Subsidiaries would suffer immediate and irreparable harm and would therefore be entitled to specific performance through equitable relief, including injunctive relief, ordered by a court of appropriate jurisdiction, without the need to post any bond. The Employee therefore consents and stipulates to the entry of such injunctive relief in an appropriate court prohibiting the Employee from breaching this Agreement.

(ii) Damages. Nothing in this Section shall diminish the right of the Company and/or any of its Subsidiaries to claim and recover money damages, including the value and return of equity as provided in Section 6, in addition to injunctive relief or any other remedy provided by law or under this Agreement.

(j) Effect on Other Rights and Remedies. The rights of the Company set forth in this Section 6 shall not limit or restrict in any manner any rights or remedies which the Company or any of its affiliates may have under law or under any separate employment, confidentiality or other agreement with the Employee or otherwise with respect to the events described in Section 6 hereof.

(k) Reasonableness, Reformation and Revival. The Employee agrees that the terms and conditions set forth in this Section 6 are fair and reasonable and are reasonably required for the protection of the interests of the Company. The Employee further agrees that if the Employee violates the provisions of Sections 6(b) or 6(c) of this Agreement (if applicable) that the number of days that the Employee is in violation will be added to any periods of limitation on the activities specified herein. However, if the scope of any provision contained in Section 6 is too broad to permit enforcement of such provision to its full extent, then the Company and the Employee agree that, in accordance with Nevada law, the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area and that the court shall revise the restrictions contained herein to cover the maximum period, scope and area permitted by law, and enforce this Agreement as reformed or modified. Subject to the provisions of the foregoing sentence, whenever possible, each provision of this this Section 6 will be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Section 6 is held to be prohibited by or invalid under applicable law, such provision, to the extent of such prohibition or invalidity, shall be deemed not to be a part of this Agreement, and shall not invalidate the remainder of such provision or the remaining provisions of this Agreement. The Employee specifically agrees that each provision and subsection of Section 6 is independent of and severable from the others, and may be enforced independently, which shall, as applicable, continue in full force and effect after the expiration or termination of this Agreement.


7.	Registration of Units.

The Employee’s right to receive the RSU Shares shall be evidenced by book entry (or by such other manner as the Committee may determine).


8.	Certain Corporate Transactions.

In the event that the outstanding securities of any class then comprising the RSU Shares are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or the like, then, unless the Committee shall determine otherwise, the term “RSU Shares,” as used in this Agreement, shall, from and after the date of such event, include such cash, property and/or securities so distributed in respect of the RSU Shares, or into or for which the RSU Shares are so increased, decreased, exchanged or converted.


9.	Shareholder Rights.

The Employee shall have no rights of a shareholder with respect to RSU Shares subject to this Award unless and until such time as the Award has been settled by the transfer of shares of Common Stock to the Employee.


10.	Assignment of Award.

Except as otherwise permitted by the Committee, the Employee’s rights under the Plan and this Agreement are personal; no assignment or transfer of the Employee’s rights under and interest in this Award may be made by the Employee other than by will or by the laws of descent and distribution.


11.	Notices.

Unless the Company notifies the Employee in writing of a different procedure, any notice or other communication to the Company with respect to this Award shall be in writing and shall be:

(a) by registered or certified United States mail, postage prepaid, to DXC Technology Company, Attn: Corporate Secretary, 1775 Tysons Blvd, Tysons, VA 22102; or

(b) by hand delivery or otherwise to DXC Technology Company, Attn: Corporate Secretary, 1775 Tysons Blvd, Tysons, VA 22102.

Any notices provided for in this Agreement or in the Plan shall be given in writing and shall be deemed effectively delivered or given upon receipt or, in the case of notices delivered by the Company to the Employee, five days after deposit in the United States mail, postage prepaid, addressed to the Employee at the address specified at the end of this Agreement or at such other address as the Employee hereafter designates by written notice to the Company.


12.	Stock Certificates.

Certificates representing the Common Stock issued pursuant to the Award will bear all legends required by law and necessary or advisable to effectuate the provisions of the Plan and this Award. The Company may place a “stop transfer” order against shares of the Common Stock issued pursuant to this Award until all restrictions and conditions set forth in the Plan or this Agreement and in the legends referred to in this Section 12 have been complied with.


13.	Successors and Assigns.

This Agreement shall bind and inure to the benefit of and be enforceable by the Employee, the Company and/or any of its Subsidiaries, and their respective permitted successors and assigns (including personal representatives, heirs and legatees), except that the Employee may not assign any rights or obligations under this Agreement except to the extent and in the manner expressly permitted herein. Notwithstanding the foregoing, the rights and obligations of the Company and/or any of its Subsidiaries under this Agreement may, without the consent of the Employee, be assigned in whole or in part by the Company and/or any of its Subsidiaries, in their sole discretion, to any subsidiary, venture or affiliate of the Company or successor in interest to any portion of the business or assets of the Company and/or any of its Subsidiaries.


14.	Plan.

The RSUs are granted pursuant to the Plan, as in effect on the Grant Date, and are subject to all the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that no such amendment shall deprive the Employee, without his or her consent, of the RSUs or of any of the Employee’s rights under this Agreement. The interpretation and construction by the Committee of the Plan, this Agreement and such rules and regulations as may be adopted by the Committee for the purpose of administering the Plan shall be final and binding upon the Employee. Until the RSUs are settled in full, the Company shall, upon written request therefor, send a copy of the Plan, in its then-current form, to the Employee.


15.	No Employment Guaranteed.

No provision of this Agreement shall (a) be deemed to form an employment contract or relationship with the Company and/or its Subsidiaries, (b) confer upon the Employee any right to be or continue to be in the employ of the Company and/or its Subsidiaries, (c) affect the right of the Company and/or any of its Subsidiaries to terminate the employment of the Employee, with or without Cause, or (d) confer upon the Employee any right to participate in any employee welfare or benefit plan or other program of the Company and/or its Subsidiaries other than the Plan. The Employee hereby acknowledges and agrees that the Company and/or any of its Subsidiaries may terminate the employment of the Employee at any time and for any reason, or for no reason, unless applicable law provides otherwise or unless the Employee and the Company and/or any of its Subsidiaries are parties to a written employment agreement that expressly provides otherwise.


16.	Nature of Company Restricted Stock Unit Grants.

The Employee acknowledges and agrees that:

(a) the Plan was established voluntarily by the Company, it is discretionary in nature and it may be modified, suspended or terminated by the Company at any time, as provided in the Plan and this Agreement;

(b) the Company grants RSUs voluntarily and on an occasional basis, and the receipt of the RSUs by the Employee does not create any contractual or other right to receive any future grant of RSUs, or any benefits in lieu of a grant of RSUs;

(c) all decisions with respect to future grants of RSUs by the Company will be made in the sole discretion of the Company;

(d) the Employee is voluntarily participating in the Plan; and

(e) the future value of the RSUs is unknown and cannot be predicted with certainty.


17.	Governing Law; Consent to Jurisdiction; Venue.

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada, United States of America, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. Any action, suit or proceeding to enforce the terms and provisions of this Agreement, or to resolve any dispute or controversy arising under or in any way relating to this Agreement, shall be brought exclusively in the state or federal courts in the State of Nevada, United States of America, and the parties hereto hereby consent to the jurisdiction of such courts and waive any objection to venue in such courts, whether on the basis of the doctrine of “forum non conveniens” or otherwise. If the Employee has received this or any other document related to the Plan translated into a language other than English, and the translated version is different than the English version, the English version will control.


18.	Entire Agreement; Amendment and Waivers.

This Agreement embodies the entire understanding and agreement of the parties with respect to the subject matter hereof, and no promise, condition, representation or warranty, express or implied, not stated or incorporated by reference herein, shall bind either party hereto. Notwithstanding the foregoing, should the Employee and the Company and/or any of its Subsidiaries be parties to another agreement with provisions regarding confidentiality, non-disclosure, non-competition, non-solicitation of clients, prospective clients or employees, and all related definitions thereof, or any other restrictive covenants included in this Agreement, such similar provisions of any other such agreement shall remain in full force and effect. None of the terms and conditions of this Agreement may be amended, modified, waived or canceled except by a writing, signed by the parties hereto specifying such amendment, modification, waiver or cancellation. A waiver by either party at any time of compliance with any of the terms and conditions of this Agreement shall not be considered a modification, cancellation or consent to a future waiver of such terms and conditions or of any preceding or succeeding breach thereof, unless expressly so stated. Any failure or delay on the part of either party to exercise any remedy or right under this Agreement shall not operate as a waiver. The failure of either party to require performance of any of the terms, covenants, or provisions of this Agreement by the other party shall not constitute a waiver of any of the rights under the Agreement. No forbearance by either party to exercise any rights or privileges under this Agreement shall be construed as a waiver, but all rights and privileges shall continue in effect as if no forbearance had occurred. No covenant or condition of this Agreement may be waived except by the written consent of the waiving party.


19.	Section 409A Compliance.

Payments under this Agreement are designed to be made in a manner that is exempt from or compliant with Section 409A of the U.S. Internal Revenue Code (the “Code”) as a “short-term deferral,” and the provisions of this Agreement will be administered, interpreted and construed accordingly (or disregarded to the extent such provision cannot be so administered, interpreted, or construed).

Notwithstanding anything to the contrary in this Agreement, if, upon the advice of its counsel, the Company determines that the settlement of an RSU Share pursuant to this Agreement is or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A (“409A Taxes”) as applicable at the time such settlement is otherwise required under this Agreement, then such payment may be delayed to the extent necessary to avoid 409A Taxes. In particular:

(a) if the Employee is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Employee’s “separation from service” (other than due to death) within the meaning of Section 1.409A-1(h) of the Treasury Regulations, such settlement shall be delayed until the earlier of (i) the first business day following the expiration of six months from the Employee’s separation from service, (ii) the date of the Employee’s death, or (iii) such earlier date as complies with the requirements of Section 409A (the “Settlement Delay Period”); and

(b) if all or any part of such RSU Share has been converted into cash pursuant to Section 8 hereof, then:

(i) upon settlement of such RSU Share, such cash shall be increased by an amount equal to interest thereon for the Settlement Delay Period at a rate equal to the default rate credited to amounts deferred under the Company’s Deferred Compensation Plan; provided, however, that such rate shall be calculated on a monthly average basis rather than a daily basis; and

(ii) the Company shall fund the payment of such cash to the Employee upon settlement of such RSU Share, including the interest to be paid with respect thereto (collectively, the “Delayed Cash Payment”), by establishing and irrevocably funding a trust for the benefit of the Employee, but only if the establishment of such trust does not result in any taxes or penalties becoming due under Section 409A(b). Such trust shall be a grantor trust described in Section 671 of the U.S. Internal Revenue Code and intended not to cause tax to be incurred by the Employee until amounts are paid out from the trust to the Employee. The trust shall provide for distribution of amounts to the Employee in order to pay taxes, if any, that become due on the amounts as to which payment is being delayed during the Settlement Delay Period pursuant to this Section 19, but only to the extent permissible under Section 409A of the U.S. Internal Revenue Code without the imposition of 409A Taxes. The establishment and funding of such trust shall not affect the obligation of the Company to pay the Delayed Cash Payment pursuant to this Section 19.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Grant Date.

EMPLOYEE

___________________________________________

«Name_x»

DXC TECHNOLOGY

___________________________________________

By: «Name_x»

Title:

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.

___________________________________________

«Name_x»

ACCEPTANCE DATE

Appendix A


1.	Definitions.

For purposes of this Agreement:

(a) “Cause” shall mean: (A) fraud, misappropriation, embezzlement or other act of material misconduct against the Company or any of its affiliates; (B) conviction of a felony involving a crime of moral turpitude; (C) willful and knowing violation of any rules or regulations of any governmental or regulatory body material to the business of the Company or its affiliates; or (D) substantial and willful failure to render services in accordance with the terms of his or her employment (other than as a result of illness, accident or other physical or mental incapacity), provided that (X) a demand for performance of services has been delivered to the Employee in writing by the Employee’s supervisor at least 60 days prior to termination identifying the manner in which such supervisor believes that the Employee has failed to perform and (Y) the Employee has thereafter failed to remedy such failure to perform.

(b) “Client” means:

(i) any individual, business entity or other enterprise with respect to which the Employee provided solutions, products, and/or services of the Company and/or any of its Subsidiaries (“Services”) during the 24-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries;

(ii) any individual, business entity or other enterprise with which the Employee transacted business on behalf of the Company and/or any of its Subsidiaries during 24-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries; and

(iii) any individual, business entity or other enterprise with respect to which the Employee possessed Confidential Information during the 12-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries.

(i) an individual, business entity or other enterprise engaged or having publicly announced its intent to engage in business that is substantially similar to the business of the Company and/or any of its Subsidiaries; and

(ii) an individual, business entity or other enterprise that offers solutions, products and/or services capable of displacing any Services provided by the Company and/or any of its Subsidiaries and/or any of its Subsidiaries to any of its clients.

For purposes of this Agreement, the parties specifically agree (i) that the Company and/or any of its Subsidiaries are engaged in the business of providing technology-enabled solutions, products and services; (ii) that the Services and capabilities of the Company and/or its Subsidiaries include, but are not limited to, system design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting; and (iii) that the Company and/or its Subsidiaries actively solicits business from, and provides Services to, clients located throughout the United States and the world.

(d) “Confidential Information” means all confidential and/or proprietary business information and data, trade secrets, patents, copyrights, sales and financial data, pricing information, methods, technical information, and know-how information of the Company and/or any of its Subsidiaries relating to the business plans and strategies of the Company and/or any of its Subsidiaries including, but not limited to, information which is marked and/or defined as restricted information (such as DXC Confidential, DXC Internal Use Only, Financial Information, or Controlled Information), or otherwise prohibited from disclosure by DXC’s Confidential Information Policy and/or Code of Business Conduct. Confidential Information generally refers to information about or belonging to the Company and/or any of its Subsidiaries or third parties that is not publicly available and could cause harm if it was disclosed without permission. Examples include information about existing and proposed business ventures; corporate strategies; engineering ideas; pricing schedules; information that requires a security clearance to access; customers and/or prospects names and lists; marketing plans and procedures; research and development plans; methods of doing business (both technical and non-technical); information relating to the design, architecture, flowcharts, source or object code and documentation of any and all computer software products that the Company and/or any of its Subsidiaries has developed, acquired or licensed or is in the process of developing, acquiring or licensing or shall develop, acquire or license in the future; hardware and database technologies or technological information; designs, process and systems information; confidential intellectual property; employee staffing and compensation information; and any other confidential or proprietary information which relates to the business of the Company and/or its Subsidiaries or to the business of any Client or Prospective Client or vendor of DXC or any other party with whom the Company and/or any of its Subsidiaries agrees to hold information in confidence, whether patentable, copyrightable or protectable as trade secrets or not. Confidential Information does not include information which is (i) already known by the Employee without an obligation of confidentiality, (ii) publicly known or becomes publicly known through no unauthorized act of the Employee, (iii) rightfully received from a third party without an obligation of confidentiality, or (iv) disclosed without similar restrictions by the Company and/or any of its Subsidiaries to a third party (other than an affiliate or customer of the Company and/or any of its Subsidiaries).

(e) “Employer” shall mean the Employee’s employer.

(f) “Non-Competition Period” means the time of the Employee’s employment and a period of 12 months following the termination of the Employee’s employment for any reason.

(g) “Non-Solicitation Period” means the time of the Employee’s employment and a period of 24 months following the termination of the Employee’s employment for any reason.

(h) “Prospective Client” means any individual, business entity or other enterprise which is not a Client but (a) whose business the Company and/or any of its Subsidiaries had solicited at any time during the 12-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries for any reason, and (b) concerning which solicitation the Employee obtained the Company’s and/or any of its Subsidiaries’ Confidential Information.

(i) “Restricted Area” means:

(i) any geographic area in the world for which the Employee had job responsibilities during the 12-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries for any reason;

(ii) any geographic area in the world where DXC engages in business activities and about which business the Employee obtained Confidential Information during the 12-month period preceding the termination of the Employee’s employment with the Company and/or any of its Subsidiaries for any reason; and

(iii) any geographic area in the world from which the Employee, by engaging in business, can threaten the legitimate business interests of the Company and/or any of its Subsidiaries in (i) preserving its client relationships and goodwill, and (ii) protecting its Confidential Information from misuse and/or disclosure.

(j) “Restricted Services” means:

(i) job duties or other business-related activities that are the same as or substantially similar to the job duties or business-related activities in which the Employee participated for the Company and/or any of its Subsidiaries in the 24-month period prior to the termination of the Employee’s employment for any reason; and

(ii) job duties or other business-related activities in which the Employee could reasonably be expected to use or disclose, intentionally or inadvertently, Confidential Information that the Employee received during the 12-month period prior to the termination of the Employee’s employment for any reason.

(k) “RSU Shares” shall mean the number of shares of Common Stock to be delivered upon settlement of the RSUs.

(l) “Scheduled Settlement Date” shall mean the date that is as soon as practicable after the date upon which the Company calculates the performance results for the Performance Period pursuant to Appendix C, but in no event later than December 31 of the calendar year in which Fiscal Year 2023 ends.

(m) “Settlement Date” shall mean, with respect to each RSU Share, the date upon which the RSU was settled by the delivery of such RSU Share to the Employee or the date upon which such RSU Share was cancelled in payment of Taxes (as defined in Section 4).

Appendix B


1.	Data Privacy.

(a) In order to implement, administer, manage and account for the Employee’s participation in the Plan, the Company and/or any of its Subsidiaries and/or the Employer may:

(i) collect and use certain personal data regarding the Employee, including, without limitation, the Employee’s name, home address and telephone number, work address and telephone number, work e-mail address, date of birth, social insurance or other identification number, term of employment, employment status, nationality and tax residence, and details regarding the terms and conditions, grant, vesting, cancellation, termination and expiration of all restricted stock units and other stock based incentives granted, awarded or sold to the Employee by the Company (collectively, the “Data”);

(ii) transfer the Data, in electronic or other form, to employees of the Company and/or any of its Subsidiaries, and to third parties, who are involved in the implementation, administration and/or management of, and/or accounting for, the Plan, which recipients may be located in the Employee’s country or in other countries that may have different data privacy laws and protections than the Employee’s country;

(iii) transfer the Data, in electronic or other form, to a broker or other third party with whom the Employee has elected to deposit any RSU Shares issued in settlement of the RSUs; and

(iv) retain the Data for only as long as may be necessary in order to implement, administer, manage and account for the Employee’s participation in the Plan.

(b) The Employee hereby consents to the collection, use, transfer and retention of the Data, as described in this Agreement, for the exclusive purpose of implementing, administering, managing and accounting for the Employee’s participation in the Plan.

(i) view the Data;

(ii) correct any inaccurate information included within the Data;

(iii) request additional information regarding the storage and processing of the Data;

(iv) request a list with the names and addresses of any potential recipients of the Data; and

(v) under certain circumstances and with certain consequences, prevent further use, transfer, retention and/or processing of the Data.

APPENDIX C

PERFORMANCE SCALE

The number of RSU Shares to be delivered upon settlement of the RSUs shall equal the product of the (x) Target Units multiplied by (y) the applicable Vesting Percentage determined by the Committee based upon the Company’s performance for the Performance Period pursuant to the FY21 PSU Payout Scale set forth below.

Performance Measurement

Performance will be measured based on where the End Price falls in relation to the Target Stock Prices at the end of the Performance Period as set forth in the table below. End Price means the average closing price per share of the Company’s common stock during the three-month period ending on the last day of the Performance Period. The Target Stock Prices will be adjusted by the Committee for stock splits or other similar changes in the capitalization of the Company during the Performance Period in accordance with Section 18 of the Plan.



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%

Vesting Percentages will be interpolated for above-threshold and below-maximum performance between the applicable vesting percentages.

APPENDIX D – EXCLUDED INVENTIONS

Below is a list of inventions that I believe are subject to exclusion pursuant to the terms of Paragraph 6(g) of my Fiscal 2021-23 Performance-Based Restricted Stock Unit Award Agreement.

I understand that, after filling out this form, I must sign it and return it to the DXC Stock Plan Administration (“SPA”) team at stockplanadmin@dxc.com with the subject line “FY21 PSU Grant – Excluded Inventions Form.”



Title	Date	Identifying Number or Brief Description

Signature_________________________________

Name: ___________________________________

Location: ________________________________

Exhibit 10.4

DXC TECHNOLOGY COMPANY

2017 OMNIBUS INCENTIVE PLAN

SERVICE BASED RESTRICTED STOCK UNIT

AWARD AGREEMENT


1.	Grant of Award.

This Award is subject to the data privacy provisions set forth in Appendix B.

Award Granted: «Shares_Granted_x» Restricted Stock Units (the “RSUs”)

Upon each of the dates indicated below (each, a “Vesting Date”), subject to the terms and conditions set forth herein, the RSUs shall vest with respect to the number indicated below across from such date:

Number of RSUs Vesting Date

1/3 of the RSUs Granted 1^st Anniversary of the Grant Date

1/3 of the RSUs Granted 2^nd Anniversary of the Grant Date

1/3 of the RSUs Granted 3^rd Anniversary of the Grant Date


2.	Settlement of RSUs.

(a) The RSUs shall be settled by the Company delivering to the Employee (or after the Employee’s death, the beneficiary designated by the Employee for such purpose), on the applicable Scheduled Settlement Date, a lump-sum cash payment equal to the product of (x) the Fair Market Value of one RSU Share on the applicable Vesting Date, multiplied by (y) the number of RSUs vesting on such date, together with any related Dividend Equivalents.

(b) Except as otherwise provided in this Agreement, the RSUs shall be settled on the applicable Scheduled Settlement Date.


3.	Effect of Termination of Employment; Approved Termination; Change in Control; Recoupment and Forfeiture.

(a) Age 62 or Older Other than for Cause, death or Disability with at least 10 Years of Service; Approved Termination. If, prior to the settlement of the RSUs in full:

(i) the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated at age 62 or older for no reason, or for any reason other than Cause, death or Disability, and the Employee shall have been (or for any other purpose shall have been treated as if he or she had been) a continuous employee of the Company or its Subsidiaries for at least 10 years immediately prior to the date of termination of employment status; or

(ii) the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated at any time during the term of the Award and such termination is specifically approved by the Committee for purposes of this Section 3(a),

then, as soon as practicable after the Employee’s status as an employee of the Company or its Subsidiaries is terminated (the “Employment Termination Date”), the Company shall settle a portion of the remaining unsettled RSUs and any related Dividend Equivalents. The portion of the RSUs settled will be determined by multiplying (x) the total number of RSUs granted under this Award by (y) a fraction, the numerator of which is the number of full months of continuous service with the Company or its Subsidiaries that the Employee has completed since the Grant Date and the denominator of which is the total number of full months from the Grant Date until the last scheduled Vesting Date under the Award, and then subtracting from the resulting product the total number of RSUs granted under this Award, if any, that have vested and been settled prior to the Employment Termination Date. The portion of the RSUs not settled in accordance with this section and any related Dividend Equivalents shall automatically be cancelled as of the close of business on the Employment Termination Date.

(b) Leave of Absence. If, prior to the settlement of the RSUs in full, the Employee is granted a leave of absence (including a military leave of absence), the Employee and the Company each reasonably anticipate that the Employee will return to active employment and either (x) the leave of absence is to be for not more than six months or (y) at all times during the leave of absence the Employee has a statutory or contractual right to return to work, then:

(i) while on leave of absence the Employee shall be treated as if he were an active employee;

(ii) if the Employee’s leave of absence is terminated and the Employee does not timely return to active employment, the date of the end of the leave of absence shall be treated as the Employment Termination Date;

(iii) if the Employee’s leave of absence is terminated and the Employee timely returns to active employment, he shall be treated as if active employment had continued uninterrupted during the leave of absence; and

(iv) if a Scheduled Settlement Date occurs during the Employee’s leave of absence, the applicable number of RSUs and any related Dividend Equivalents shall be settled on such date.

(i) Notwithstanding anything to the contrary in this Agreement, if, prior to the settlement in full of the RSUs, the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated by reason of death of the Employee, then, one calendar month after such death, the Company shall complete the settlement in full of the remaining unsettled RSUs and any related Dividend Equivalents.

(ii) If, prior to the settlement in full of the RSUs, the Employee’s status as an employee of the Company or any of its Subsidiaries is terminated by reason of the Disability of the Employee, then, one calendar month after the Employment Termination Date, the Company shall complete the settlement in full of the remaining unsettled RSUs and any related Dividend Equivalents.

(iii) If settlement is by reason of termination due to death, settlement shall be to the beneficiary designated by the Employee for such purpose.

(d) Cancellation of RSUs upon Other Termination of Employment. If, prior to the settlement in full of the RSUs, the Employee’s status as an employee of the Company or any of its Subsidiaries is voluntarily or involuntarily terminated other than pursuant to Section 3(a) or (c) hereof, then the remaining unsettled RSUs and all related Dividend Equivalents shall automatically be cancelled as of the close of business on the Employment Termination Date.

(e) Change in Control. Upon a Change in Control that occurs while the Employee is employed by the Company or its Subsidiaries, the RSUs shall, subject to Section 18 of the Plan, continue to vest based on the Employee’s continued employment with the Company (including any successor to the Company resulting from the Change in Control) and its Subsidiaries in accordance with the vesting schedule set forth in Section 2 and all other terms and conditions of this Agreement; provided, however, that if, on or within two (2) years after the date of the Change in Control and prior to when the RSUs have been settled in full, the Employee experiences a Qualifying Termination Without Cause, or the Employee’s status as an employee of the Company (including any successor to the Company resulting from the Change in Control) or any of its Subsidiaries is terminated as a result of the Employee’s death or Disability or pursuant to Section 3(a) above, then any unvested RSUs (and any related Dividend Equivalents) shall automatically vest in full as of the Employment Termination Date and shall be settled on or as soon as administratively practicable (but, subject to Section 18 below, in no event later than 2.5 months) after the Employment Termination Date. For purposes of the preceding sentence, a “Qualifying Termination Without Cause” shall mean the Employee’s status as an employee of the Company (including any successor to the Company resulting from the Change in Control) or any of its subsidiaries is terminated by the Company without Cause at a time when the Employee is meeting performance expectations, as determined by the Company in its sole discretion.

(f) Recoupment and Forfeiture. Settlement of all or a portion of the Award pursuant to this Section 3 is subject to the forfeiture provisions of this Section 3. Settlement of all or a portion of the Award is subject to recoupment by the Company pursuant to Section 5.


4.	Withholding and Taxes.

(b) The Employee acknowledges that neither the Company nor the Employer has made any representation or given any advice to the Employee with respect to Taxes.


5.	Recoupment and Forfeiture – Detrimental Activity.

(a) Refund of Stock Value. If the Employee engages in Detrimental Activity (as defined below in Section 5(c)) during the time periods set forth in each provision of Section 5(c), then, if the RSUs were settled within the one year period prior to the occurrence of such event, the Employee shall immediately deliver to the Company an amount in cash equal to the amount of the payment described in Section 2(a), before reduction for any applicable Withholding Liability.

(b) Forfeiture of RSUs. If the Employee engages in Detrimental Activity prior to the final settlement of the RSUs, all remaining unsettled RSUs and related Dividend Equivalents shall be terminated and forfeited.

(iii) at any time failing to abide by Employee’s contractual obligations to assign all intellectual property to the Company and/or any of its Subsidiaries;

(v) engaging during the term of employment in any action that warrants or results in termination of Employee’s employment for “Cause,” as defined in Appendix A;


6.	Employee Covenants.

(g) Inventions. The Employee acknowledges and agrees that as a function of the Employee’s employment with the Company and/or any of its Subsidiaries, the Employee may solely or jointly conceive, develop, reduce to practice or otherwise produce inventions, software, computer programs, algorithms, source code, discoveries, know-how, innovations, enhancements, designs, developments, improvements, techniques, technology, concepts, methods, processes, ideas, trade secrets and other forms of intellectual property and works of authorship, whether or not any of the foregoing constitute trade secrets, and whether or not eligible for copyright, trademark and patent protection (collectively “Inventions”). The Employee shall make prompt and full disclosure to the Company and/or any of its Subsidiaries, shall hold in trust for the sole benefit of the Company and/or any of its Subsidiaries, and hereby assigns exclusively to the Company without additional compensation or consideration to the Employee all the Employee’s rights, title and interest in and to any and all Inventions that the Employee solely or jointly may conceive, develop, reduce to practice or otherwise produce during the Employee’s employment with the Company and/or any of its Subsidiaries, including, without limitation, all patent rights, copyright rights, trade secret rights, and all other intellectual property rights therein. The Employee waives and quitclaims to the Company any and all claims of any nature whatsoever that the Employee now or hereafter may have for infringement of any patent or other intellectual property right relating to any Invention so assigned to the Company. The Employee agrees to perform all actions reasonably requested by the Company to establish and confirm the Company’s ownership of Inventions, including, without limitation, signing and delivering to the Company (during and after employment) any other documents that the Company considers desirable to provide evidence of (a) the assignment of all rights of the Employee, if any, in any Inventions and (b) the Company ‘s ownership of such Inventions. If the Company is unable to secure the Employee’s signature on any document necessary to apply for, prosecute or obtain or enforce any patent, copyright, or other right or protection relating to any Invention, whether due to the Employee’s mental or physical incapacity or any other cause, the Employee hereby irrevocably designates and appoints the Company and each of its duly authorized officers and agents as the Employee’s agent and attorney-in-fact, to act for and in the Employee’s behalf to execute and file any such document and to do all other lawfully permitted acts to further the prosecution, issuance and enforcement of patents, copyrights, or other rights or protections, with the same force and effect as if executed and delivered by the Employee. The Employee will assist the Company in applying for, prosecuting, obtaining, or enforcing any patent, copyright, or other right or protection relating to any Invention, all at the Company’s expense but without compensation to the Employee in excess of the Employee’s salary or wages. If the Company requires any assistance after termination of the Employee’s employment, the Employee will be compensated for time actually spent in providing that assistance at an hourly rate equivalent to the Employee’s salary or wages during the last period of employment with the Company and/or any of its Subsidiaries. Notwithstanding the foregoing, the Employee’s assignment of Inventions to the Company by way of this Section shall not apply to any Invention that: (i) was completely developed and reduced to practice entirely by the Employee prior to employment with the Company and/or any of its Subsidiaries without using any equipment, supplies, facilities, services, or Confidential Information of the Company and/or any of its Subsidiaries; (ii) does not relate to the business of the Company and/or any of its Subsidiaries, or to the actual or demonstrably anticipated research or development of the Company and/or any of its Subsidiaries; (iii) does not result from any work performed by the Employee for the Company and/or any of its Subsidiaries; or (iv) qualifies as an invention under applicable law in the Employee’s state of domicile. The Employee has been given the opportunity to set forth, on the form set forth as Appendix C, a list describing all such Inventions that (x) the Employee wishes to have excluded from this Agreement, and (b) have arisen since the last time (if any) that the Employee signed a transfer of rights agreement in favor of the Company. If the Employee has completed Appendix C, the Employee must promptly sign it (as indicated) and send the form to the Stock Plan Administration (“SPA”) department. If no such form is sent to SPA, the Employee represents that there are no such Inventions. The parties acknowledge that the Company and/or any of its Subsidiaries may not necessarily agree with all of the Employee’s assertions of ownership and reserves the right to review and make its own determinations regarding same. As to any Invention in which the Employee has an interest at any time prior to or during the Employee’s employment with the Company and/or any of its Subsidiaries, if the Employee uses or incorporates such an Invention in any released or unreleased product, service, program, process, machine, development or work in progress of the Company and/or any of its Subsidiaries, or if the Employee permits the Company and/or its Subsidiaries to use or incorporate such an Invention, the Company and/or its Subsidiaries shall be granted and shall have an irrevocable, perpetual, royalty-free, worldwide license to exercise any and all rights with respect to such Invention, including the right to protect, make, have made, use, sell, copy, disclose, modify, prepare derivative works of that Invention without restriction and the right to sublicense those rights to others.

(i) Injunctive Relief and Damages.

(ii) Damages. Nothing in this Section shall diminish the right of the Company and/or any of its Subsidiaries to claim and recover money damages, including the value and return of equity as provided in Section 5, in addition to injunctive relief or any other remedy provided by law or under this Agreement.


7.	Registration of Units.

The Employee’s right to receive the cash payment described in Section 2(a) shall be evidenced by book entry (or by such other manner as the Committee may determine).


8.	Certain Corporate Transactions.

In the event that the outstanding shares of Common Stock are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or the like, then, unless the Committee shall determine otherwise, the term “RSU Share,” as used in this Agreement, shall, from and after the date of such event, include such cash, property and/or securities so distributed in respect of the shares of Common Stock, or into or for which the shares of Common Stock are so increased, decreased, exchanged or converted.


9.	Shareholder Rights.

The Employee shall have no rights of a shareholder with respect to the RSUs subject to this Award.


10.	Assignment of Award.


11.	Notices.

Unless the Company notifies the Employee in writing of a different procedure, any notice or other communication to the Company with respect to this Award shall be in writing and shall be:

(a) by registered or certified United States mail, postage prepaid, to DXC Technology Company, Attn: Corporate Secretary, 1775 Tysons Blvd, Tysons, VA 22102; or

(b) by hand delivery or otherwise to DXC Technology Company, Attn: Corporate Secretary, 1775 Tysons Blvd, Tysons, VA 22102.


12.	Successors and Assigns.


13.	Plan.


14.	No Employment Guaranteed.


15.	Nature of Company Restricted Stock Unit Grants.

The Employee acknowledges and agrees that:

(c) all decisions with respect to future grants of RSUs by the Company will be made in the sole discretion of the Company;

(d) the Employee is voluntarily participating in the Plan; and

(e) the future value of the RSUs is unknown and cannot be predicted with certainty.


16.	Governing Law; Consent to Jurisdiction; Venue.


17.	Entire Agreement; Amendment and Waivers.


18.	Section 409A Compliance.

Notwithstanding anything to the contrary in this Agreement, if, upon the advice of its counsel, the Company determines that the settlement of an RSU pursuant to this Agreement is or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A (“409A Taxes”) as applicable at the time such settlement is otherwise required under this Agreement, then such payment may be delayed to the extent necessary to avoid 409A Taxes. In particular:

(b) upon settlement of such RSU, the cash payment described in Section 2(a) shall be increased by an amount equal to interest thereon for the Settlement Delay Period at a rate equal to the default rate credited to amounts deferred under the Company’s Deferred Compensation Plan; provided, however, that such rate shall be calculated on a monthly average basis rather than a daily basis.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Grant Date.

EMPLOYEE

___________________________________________

«Name_x»

DXC TECHNOLOGY

___________________________________________

By: «Name_x»

Title:

___________________________________________

«Name_x»

ACCEPTANCE DATE

Appendix A


1.	Definitions.

For purposes of this Agreement:

(b) “Client” means:

(e) “Employer” shall mean the Employee’s employer.

(f) “Non-Competition Period” means the time of the Employee’s employment and a period of 12 months following the termination of the Employee’s employment for any reason.

(g) “Non-Solicitation Period” means the time of the Employee’s employment and a period of 24 months following the termination of the Employee’s employment for any reason.

(i) “Restricted Area” means:

(j) “Restricted Services” means:

(k) “RSU Share” shall mean a share of Common Stock, subject to adjustment as described in Section 8 hereof.

(l) “Scheduled Settlement Date” shall mean the applicable Vesting Date with respect to a particular tranche of RSUs or as soon as practicable thereafter, but in no event later than March 15 of the calendar year following the calendar year that includes the applicable Vesting Date.

Appendix B


1.	Data Privacy.

(a) In order to implement, administer, manage and account for the Employee’s participation in the Plan, the Company and/or any of its Subsidiaries and/or the Employer may:

(iii) retain the Data for only as long as may be necessary in order to implement, administer, manage and account for the Employee’s participation in the Plan.

(i) view the Data;

(ii) correct any inaccurate information included within the Data;

(iii) request additional information regarding the storage and processing of the Data

(iv) request a list with the names and addresses of any potential recipients of the Data; and

(v) under certain circumstances and with certain consequences, prevent further use, transfer, retention and/or processing of the Data.

(vi)

APPENDIX C – EXCLUDED INVENTIONS

Below is a list of inventions that I believe are subject to exclusion pursuant to the terms of Paragraph 6(g) of my Fiscal 2021 Service-Based Restricted Stock Unit Award Agreement.

I understand that, after filling out this form, I must sign it and return it to the DXC Stock Plan Administration (“SPA”) department at stockplanadmin@dxc.com with the subject line “FY21 RSU Grant – Excluded Inventions Form.”



Title	Date	Identifying Number or Brief Description

Signature_________________________________

Name: ___________________________________

Location: ________________________________

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael J. Salvino, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DXC Technology Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	August 7, 2020	/s/ Michael J. Salvino
		Michael J. Salvino President and Chief Executive Officer

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Paul N. Saleh, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of DXC Technology Company;

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	August 7, 2020	/s/ Paul N. Saleh
		Paul N. Saleh Executive Vice President and Chief Financial Officer

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Michael J. Salvino, President and Chief Executive Officer of DXC Technology Company (the "Company"), hereby certify that, to my knowledge:

(1)The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2020, (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Dated:	August 7, 2020	/s/ Michael J. Salvino
		Michael J. Salvino President and Chief Executive Officer

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Paul N. Saleh, Executive Vice President and Chief Financial Officer of DXC Technology Company (the "Company"), hereby certify that, to my knowledge:

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Dated:	August 7, 2020	/s/ Paul N. Saleh
		Paul N. Saleh Executive Vice President and Chief Financial Officer