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What changed in DXC Technology Co's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of DXC Technology Co's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+340 added−332 removedSource: 10-K (2024-05-17) vs 10-K (2023-05-19)

Top changes in DXC Technology Co's 2024 10-K

340 paragraphs added · 332 removed · 246 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

39 edited+22 added−20 removed20 unchanged
Biggest changeOur competitors include: • large multinational enterprises that offer some or all of the services and solutions that we offer; • smaller companies that offer focused services and solutions similar to those that we offer; • offshore service providers in lower-cost locations, particularly in India that sell directly to end-users; • solution or service providers that compete with us in a specific industry segment or service area; and • in-house functions of corporations that use their own resources rather than engaging an outside IT services provider. 5 The principal methods of competition in the markets for our solutions and services include: • vision and strategic advisory ability; • integrated solutions capabilities; • performance and reliability; • global and diverse talent; • delivery excellence and ongoing support; • responsiveness to customer needs; • competitive pricing of services; • technical and industry expertise; • reputation and experience; • quality of solutions and services; and • financial stability and strong corporate governance.
Biggest changeOur competitors include: • large multinational enterprises that offer some or all of the services and solutions that we offer; • smaller companies that offer focused services and solutions similar to those that we offer; • offshore service providers in lower-cost locations, particularly in India that sell directly to end-users; • solution or service providers that compete with us in a specific industry segment or service area; and • in-house functions of corporations that use their own resources rather than engaging an outside IT services provider.
Offerings such as DXC Modern Workplace, cloud migration services and data-driven sustainability services can directly reduce carbon emissions for our customers, based on reports from our customers. Additional information about our ESG initiatives is available on our website at http://dxc.com/us/en/about-us/corporate-responsibility .
Based on reports from our customers, offerings such as DXC Modern Workplace, cloud migration services and data-driven sustainability services can directly reduce carbon emissions for our customers. Additional information about our ESG initiatives is available on our website at http://dxc.com/us/en/about-us/corporate-responsibility .
For example, contract awards and certain revenue are often tied to the timing of our customers' fiscal year-ends, and we also experience seasonality related to our own fiscal year-end selling activities. Competition The IT and professional services markets we compete in are highly competitive and are not dominated by a single company or a small number of companies.
For example, contract awards and certain revenue are often tied to the timing of our customers' fiscal year-ends, and we also experience seasonality related to our own fiscal year-end selling activities. 4 Competition The IT and professional services markets we compete in are highly competitive and are not dominated by a single company or a small number of companies.
We are the engineers that enable our customers to take advantage of the latest digital platforms with both customized and pre-packaged applications, ensure resiliency, launch new products and enter new markets with minimal disruption. We help customers define, execute and manage their enterprise applications strategy. • Insurance Software and Business Process Services ("BPS").
We are the engineers that enable our customers to take advantage of the latest digital platforms with both customized and pre-packaged applications, ensure resiliency, launch new products and enter new markets with minimal disruption. We help customers define, execute and manage their enterprise applications strategy. • Insurance Software and Business Process Services.
We leverage our deep expertise in legacy IT and drive innovation with reliable, secure, mission-critical IT Outsourcing services – from compute and data center, to storage and backup, to network, to mainframe and to business continuity – providing a clear path to modernization. 4 • Modern Workplace.
We leverage our deep expertise in legacy IT and drive innovation with reliable, secure, mission-critical IT Outsourcing services – from compute and data center, to storage and backup, to network, to mainframe and to business continuity – providing a clear path to modernization. • Modern Workplace.
Our conservation efforts are supported in part by our shift to a virtual-first operating model, which enables our workforce to be largely remote and helps us reduce our overall energy consumption, which in turn helps to reduce our greenhouse gas emissions.
Our conservation efforts are supported in part by our shift to a virtual-first operating model, which enables our workforce to be largely remote and helps us reduce our overall direct energy consumption, which in turn helps to reduce our greenhouse gas emissions.
We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"), to provide solutions across our six differentiated offerings that modernize operations and drive innovation across our customers' entire IT estate. DXC was formed on April 1, 2017 by the merger of CSC and HPES (the "HPES Merger").
We operate through two segments: Global Business Services ("GBS") and Global Infrastructure Services ("GIS"), to provide solutions that modernize operations and drive innovation across our customers' entire IT estate. DXC was formed on April 1, 2017 by the merger of CSC and HPES (the "HPES Merger"). Segments and Services Our reportable segments are GBS and GIS.
ITEM 1. BUSINESS Overview DXC, a Nevada corporation, is a global IT services market leader. We provide mission-critical IT services that transform global businesses. We deliver excellence for our customers and colleagues around the world. Our more than 130,000 people in approximately 70 countries are entrusted by our customers, who represent approximately half of today’s Fortune 500 companies.
ITEM 1. BUSINESS Overview DXC, a Nevada corporation, is a global IT services market leader. We provide mission-critical IT services that transform global businesses. We deliver excellence for our customers and colleagues around the world. Our approximately 130,000 people in about 65 countries are entrusted by our customers, who represent close to half of today’s Fortune 500 companies.
DXC has been a signatory of the UN Global Compact ("UNGC") since the inception of our Company, and we are committed in our alignment with the UNGC's Ten Principles for responsible business practices.
DXC has been a signatory of the United Nations Global Compact ("UNGC") since the inception of our Company in 2017, and we are committed in our efforts to align with the UNGC's Ten Principles for responsible business practices.
Finch serves as Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing of DXC since April 2023. She previously served as Executive Vice President and Chief Human Resources Officer of DXC from October 2019 to April 2023. Before joining DXC, Ms.
She previously served as Executive Vice President and Chief Human Resources Officer of DXC from October 2019 to April 2023. Before joining DXC, Ms. Finch served as Executive Vice President and Chief Human Resources Officer of AECOM from September 2015 to October 2019.
The Nominating/Corporate Governance Committee of our Board has specific oversight of ESG. Our ESG leadership team regularly updates the committee on ESG status and provides an update to the full board annually. 6 Our ESG strategy reflects our ongoing commitment to being a responsible corporate citizen.
Our ESG leadership team updates the committee quarterly on ESG status and provides an update to the full Board annually. Our ESG strategy reflects our ongoing commitment to being a responsible corporate citizen.
Drumgoole was appointed Global Lead, Cloud Infrastructure and ITO in April 2023. He previously served as Executive Vice President and Chief Operating Officer of DXC from August 2021 to April 2023 and as Executive Vice President and Chief Information Officer of DXC from April 2020 to August 2021. Before joining DXC, Mr.
He previously served as Executive Vice President and Chief Operating Officer of DXC from August 2021 to April 2023 and as Executive Vice President and Chief Information Officer of DXC from April 2020 to August 2021. Before joining DXC, Mr.
We are proud to be part of the global movement to reduce the impact of climate change on the world, and we are dedicated to driving sustainable growth by setting ambitious, science-based emissions reduction targets.
We are proud to be part of the global movement to reduce the impact of climate change on the world, and we are dedicated to driving sustainable growth by setting ambitious emissions reduction targets, which have been validated by the Science Based Targets initiative (the "SBTi") under the SBTi corporate near-term criteria.
Voci served as Senior Manager, Audit and Risk Advisory Services at KPMG LLP from 2002 to 2004 and in various roles at Arthur Andersen LLP from 1994 to 2002. 10
Voci served as Senior Manager, Audit and Risk Advisory Services at KPMG LLP from 2002 to 2004 and in various roles at Arthur Andersen LLP from 1994 to 2002. Andrew Wilson serves as General Manager for Modern Workplace since October 2023.
We partner with insurance clients, to modernize and run IT systems, provide proprietary modular insurance software and platforms, and operate the full spectrum of insurance business process services. We also help operate and continuously improve bank cards, payment and lending processes and operations, and customer experience operations.
We partner with insurance clients, to modernize and run IT systems, provide proprietary modular insurance software and platforms, and operate the full spectrum of insurance business process services.
Environmental costs and accruals are presently not material to our operations, cash flows or financial position; and, we do not currently anticipate material capital expenditures for environmental control facilities.
Certain laws may also impose liability without regard to fault or the legality of the original conduct. Environmental costs and accruals are presently not material to our operations, cash flows or financial position; and, we do not currently anticipate material capital expenditures for environmental control facilities.
We leverage proven methodologies, intelligent automation and industry-leading partners to tailor security solutions to customers’ unique business needs. Our experts weave cyber resilience into IT security, operations and culture.
Our Security services help customers assess risk and proactively address all facets of the security environment, from threat intelligence to compliance. We leverage proven methodologies, intelligent automation and industry-leading partners to tailor security solutions to customers’ unique business needs. Our experts weave cyber resilience into IT security, operations and culture.
Voci was Global Controller Industrial Gases from 2014 to 2015, Global Controller Merchant Gases from 2011 to 2014, Director, Financial Planning & Analysis from 2007 to 2011 and Global Healthcare Controller from 2004 to 2007. Mr.
Prior to that, he spent eleven years at Air Products and Chemicals, Inc. (“APD”). While at APD from 2004 to 2015, Mr. Voci was Global Controller Industrial Gases from 2014 to 2015, Global Controller Merchant Gases from 2011 to 2014, Director, Financial Planning & Analysis from 2007 to 2011 and Global Healthcare Controller from 2004 to 2007. Mr.
He previously served as Executive Vice President of Global Delivery from April 2022 to April 2023 and as President of the Americas Region from June 2020 to April 2022. Before joining DXC, he served as Chief Operating Officer of Accumen Inc., a tech-enabled healthcare performance company, from July 2012 until June 2020. Before joining Accumen Inc., Mr.
Brady serves as Executive Vice President and Chief Operating Officer of DXC since April 2023. He previously served as Executive Vice President of Global Delivery from April 2022 to April 2023 and as President of the Americas Region from June 2020 to April 2022.
Before joining DXC, Mr. Voci served as Senior Vice President, Corporate Controller and principal accounting officer for CACI International Inc. from November 2018 to May 2021. From June 2018 to November 2018, Mr. Voci served as Vice President and Controller for the Innovation Systems Sector of Northrop Grumman Corporation. From 2016 to June 2018, Mr.
From June 2018 to November 2018, Mr. Voci served as Vice President and Controller for the Innovation Systems Sector of Northrop Grumman Corporation. From 2016 to June 2018, Mr. Voci served first as Vice President, Finance and then as Vice President, Controller and principal accounting officer of Orbital ATK (subsequently purchased by Northrop Grumman).
The information on our website is not incorporated by reference into, and is not a part of, this report. Information About Our Executive Officers Name Age Year First Elected as Officer Term as an Officer Position Held with the Registrant as of the filing date Family Relationship Michael J.
The information on our website is not incorporated by reference into, and is not a part of, this report. 7 Information About Our Executive Officers Name Age Year First Elected as Officer Term as an Officer Position Held with the Registrant as of the filing date Family Relationship Raul Fernandez 57 2023 Indefinite President and Chief Executive Officer None Rob Del Bene 64 2023 Indefinite Executive Vice President and Chief Financial Officer None Howard Boville 56 2023 Indefinite General Manager, Applications Services and Artificial Intelligence None James M.
Drumgoole serves on the Board of Directors of PetSmart; on the Advisory Board of Florida International University’s College of Engineering & Computing; and on the Board of Directors of ONUG, a forum for IT business leaders interested in open technologies. Christopher A. Voci was appointed Senior Vice President, Corporate Controller and Principal Accounting Officer in June 2021.
Drumgoole serves on the Board of Directors of Kodiak Gas Services; on the Advisory Board of Florida International University’s College of Engineering & Computing; and on the Board of Directors of ONUG, a forum for IT business leaders interested in open technologies. Mr. Drumgoole previously served on the Board of Directors of PetSmart. Matthew K.
DXC is firmly committed to seeking to prevent modern slavery and the exploitation of vulnerable groups. Our main human rights–related focus areas are adopting policies and practices aimed at preventing human rights abuses through our large and diverse global supply chain and supporting a diverse and inclusive corporate culture.
Our main human rights–related focus areas are adopting policies and practices aimed at preventing human rights abuses through our large and diverse global supply chain and supporting a diverse and inclusive corporate culture. DXC’s Responsible Supply Chain Principles outline the human rights and environmental stewardship we expect from our suppliers.
Environmental, Social and Governance (ESG) The governance of DXC's ESG program is a multitiered process involving our Board of Directors (the "Board"), members of our executive staff and internal leadership. Our Board provides oversight of our ESG program, enabling us to have the governance, long-term strategy and processes to manage ESG outcomes and meet the needs of our stakeholders.
Our Board provides oversight of our ESG program, enabling us to have the governance, long-term strategy and processes to manage ESG outcomes and meet the needs of our stakeholders. The Nominating/Corporate Governance Committee of our Board has specific oversight of ESG.
See Note 20 - "Segment and Geographic Information" for additional information related to our reportable segments, including the disclosure of segment revenues, segment profit, and financial information by geographic area. Sales and Marketing We market and sell our services to customers through our direct sales force, which operates out of various locations around the world.
See Note 19 - "Segment and Geographic Information" for additional information related to our reportable segments, including the disclosure of segment revenues, segment profit, and financial information by geographic area.
Brady served in a variety of leadership positions at Accenture from June 2006 until July 2012. Prior to that, Mr. Brady served 20 years at Honeywell in a variety of leadership roles, most recently as vice president of Integrated Supply Chain for the aerospace engines business. 9 Christopher R.
Brady served 20 years at Honeywell in a variety of leadership roles, most recently as vice president of Integrated Supply Chain for the aerospace engines business. Christopher R. Drumgoole serves as General Manager, Cloud Infrastructure and ITO since April 2023.
Global Infrastructure Services GIS provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers. GIS offerings include: • Security. Our Security services help customers assess risk and proactively address all facets of the security environment, from threat intelligence to compliance.
We also help operate and continuously improve bank cards, payment and lending processes and operations, and customer experience operations. 3 Global Infrastructure Services GIS provides a portfolio of technology offerings that deliver predictable outcomes and measurable results while reducing business risk and operational costs for customers. GIS offerings include: • Security.
As our patent portfolio has been built over time, the remaining terms of the individual patents across the patent portfolio vary. We believe that our patents and patent applications are important for maintaining the competitive differentiation of our solutions and services and enhancing our freedom to sell solutions and services in markets in which we choose to participate.
We believe that our patents and patent applications are important for maintaining the competitive differentiation of our solutions and services and enhancing our freedom to sell solutions and services in markets in which we choose to participate. 5 Additionally, we own or have rights to various trademarks, service marks, and trade names that are used in the operation of our business.
However, we could incur substantial costs including clean-up costs, fines and civil or criminal sanctions and third-party damage or personal injury claims if we were to violate or become liable under existing and future environmental laws or legislation. To limit future risks, DXC has committed to set near-term company-wide emission reductions in line with the Science Based Targets initiative (SBTi).
However, we could incur substantial costs including clean-up costs, fines and civil or criminal sanctions and third-party damage or personal injury claims if we were to violate or become liable under existing and future environmental laws or legislation. Human Capital Management As a leading global information technology services company, we attract highly skilled and educated people from around the world.
Additionally, we own or have rights to various trademarks, service marks, and trade names that are used in the operation of our business. We also own or have the rights to copyrights that protect the content of our products and other proprietary materials.
We also own or have the rights to copyrights that protect the content of our products and other proprietary materials. In addition to developing our intellectual property portfolio, we license intellectual property rights from third parties as we deem appropriate.
Inclusion & Diversity We are committed to an inclusive and diverse workforce. The DXC Global Diversity and Non-Discrimination Policy guides our engagement in management and hiring practices that promote diversity and inclusion. Human Rights We are committed to the protection and advancement of human rights and to enabling our operations in communities around the world to function with integrity.
Human Rights We are committed to the protection and advancement of human rights and to enabling our operations in communities around the world to function with integrity. DXC is firmly committed to seeking to prevent modern slavery and the exploitation of vulnerable groups.
The markets in which we sell our solutions, services and products occasionally experience weak economic conditions that may negatively affect sales. We also experience some seasonal trends in the sale of our services.
No individual customer exceeded 10% of our consolidated revenues for fiscal 2024, fiscal 2023, or fiscal 2022. Seasonality General economic conditions have an impact on our business and financial results. The markets in which we sell our solutions, services and products occasionally experience weak economic conditions that may negatively affect sales.
In addition to developing our intellectual property portfolio, we license intellectual property rights from third parties as we deem appropriate. We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest.
We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest. Environmental, Social and Governance (ESG) The governance of DXC's ESG program is a multitiered process involving our Board of Directors (the "Board"), members of our executive staff and internal leadership.
Brady 56 2023 Indefinite Executive Vice President and Chief Operating Officer None Christopher R. Drumgoole 48 2021 Indefinite Global Lead, Cloud Infrastructure and ITO None Christopher A. Voci 51 2021 Indefinite Senior Vice President, Corporate Controller and Principal Accounting Officer None 8 Business Experience of Executive Officers Michael J. Salvino serves as Chairman, President and Chief Executive Officer of DXC.
Voci 52 2021 Indefinite Senior Vice President, Corporate Controller and Principal Accounting Officer None Andrew Wilson 58 2023 Indefinite General Manager, Modern Workplace None Business Experience of Executive Officers Raul Fernandez serves as President and Chief Executive Officer of DXC since February 1, 2024.
Ms. Finch also served as VP Human Resources of Abilizer Solutions Inc. from 2000 to 2001. William L. Deckelman, Jr. serves as Executive Vice President and General Counsel of DXC since September 2020. He previously served as Executive Vice President, General Counsel and Secretary of DXC since the completion of the HPES Merger. Prior to that, Mr.
Ms. Finch also served as VP Human Resources of Abilizer Solutions Inc. from 2000 to 2001. Christopher A. Voci serves as Senior Vice President, Corporate Controller and Principal Accounting Officer since June 2021. Before joining DXC, Mr. Voci served as Senior Vice President, Corporate Controller and principal accounting officer for CACI International Inc. from November 2018 to May 2021.
Through our global learning management ecosystem, we offer hundreds of learning programs as well as a career development system to help employees reach their potential. Providing ways to learn, grow, and explore new and challenging opportunities contributes to our ability to retain a motivated, knowledgeable workforce. Assessing employee abilities and contributions is a cornerstone of development at DXC.
Encouraging continuous learning, personal growth, and exploration of new opportunities contributes to our ability to retain a motivated and knowledgeable workforce. At DXC, assessing employee abilities and recognizing their contributions is fundamental to our development approach. Our self-directed learning culture allows employees to learn at their own pace and in an environment that suits their preferences.
Human Capital Management As a leading global information technology services company, we attract highly skilled and educated people. As of March 31, 2023, we employed more than 130,000 people worldwide. At DXC we value our people and the opportunity to engage with them - we are at our best when our people feel valued and respected.
At DXC, we value our people and the opportunity to engage with them - we are at our best when our people feel valued and respected. 6 Value of Employee Engagement We prioritize our employees and actively take steps to enhance their engagement.
Various platforms like Global Talent Management, Coaching & Mentoring, Career Development programs, and global recognition are also used to improve employee experiences and engagement. 7 Training and Education We view professional development as a corporate responsibility - a strategic investment in our employees’ and the company’s future.
Training and Development At DXC, we consider professional development a corporate responsibility and a strategic investment in both our employees’ growth and the Company’s future. Through our global learning management ecosystem, we provide a wide range of learning programs and a robust career development system to empower employees to reach their full potential.
Salvino 57 2019 Indefinite Chairman, President and Chief Executive Officer None Kenneth P. Sharp 52 2020 Indefinite Executive Vice President and Chief Financial Officer None Mary E. Finch 54 2019 Indefinite Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing None William L. Deckelman, Jr. 65 2017 Indefinite Executive Vice President and General Counsel None James M.
Brady 57 2023 Indefinite Executive Vice President and Chief Operating Officer None Christopher R. Drumgoole 49 2021 Indefinite General Manager, Cloud Infrastructure & ITO None Matthew K. Fawcett 56 2024 Indefinite Executive Vice President and General Counsel None Mary E. Finch 55 2019 Indefinite Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing & Communication None Christopher A.
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Transformation Journey DXC's transformation journey focuses on building stronger relationships with customers, its people, and unlocking value across our six offerings.
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Important Divestitures During the past three fiscal years, we completed certain divestitures, including: • During fiscal 2023, DXC completed the sale of its German financial services subsidiary to the FNZ Group. • During fiscal 2022, DXC completed the sale of its healthcare provider software business to Dedalus Holding S.p.A. • In addition, during the past three fiscal years, DXC completed the sale of certain insignificant businesses.
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Key transformation journey priorities include: • Inspire and Take Care of our Colleagues – Continuing to bring in new technology, account and delivery talent across the world, and making investments that recognize and reward our people • Focus on Customers – Strengthening our customer relationships and ensuring we are proactively delivering for customers • Optimize Costs – Optimizing value to better serve our customers by eliminating confusion and complexity • Seize the Market – Seizing the market opportunity by cross-selling and expanding what we do with our customers across the six offerings • Financial Foundation – Unlocking value by pursuing strategic alternatives, rationalizing our portfolio, and strengthening our balance sheet through creating a firm foundation that reflects our commitment to running a long-term sustainable business The Company will continue to focus on execution of its transformation journey in the next fiscal year, with a continued focus on our people, revenue stabilization, cost optimization and winning in the market.
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See Note 2 - "Divestitures" for further information on divestitures. Sales and Marketing We market and sell our services to customers through our direct sales force, which operates out of various locations around the world. Our customers include commercial businesses of many sizes and across many industries, as well as public sector enterprises.
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The Company is continuing with its portfolio-shaping efforts, making the right investments and divesting assets that the Company does not believe are well integrated with the six offerings and its strategic direction in order to better focus on its strategy. 3 Important Divestitures During the fourth quarter of fiscal 2023, DXC completed the sale of its German financial services subsidiary ("FDB" or the "FDB Business") to the FNZ Group ("FNZ") for €308 million (approximately $329 million), resulting in a pre-tax gain of approximately $215 million.
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We also experience some seasonal trends in the sale of our services.
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During the first quarter of fiscal 2022, DXC completed the sale of its healthcare provider software business (“HPS” or the “HPS Business”) to Dedalus Holding S.p.A. (“Dedalus”) for €468 million (approximately $551 million), resulting in a pre-tax gain on sale of $331 million. During fiscal 2021, DXC completed the sale of its U.S.
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The principal methods of competition in the markets for our solutions and services include: • vision and strategic advisory ability; • integrated solutions capabilities; • performance and reliability; • global and diverse talent; • delivery excellence and ongoing support; • responsiveness to customer needs; • competitive pricing of services; • technical and industry expertise; • reputation and experience; • quality of solutions and services; and • financial stability and strong corporate governance.
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State and Local Health and Human Services business ("HHS" or the "HHS Business") to Veritas Capital Fund Management, L.L.C. ("Veritas Capital") for approximately $5.0 billion, resulting in a pre-tax gain on sale of $2,014 million. See Note 2 - "Divestitures" for further information on divestitures. Segments and Services Our reportable segments are GBS and GIS.
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As our patent portfolio has been built over time, the remaining terms of the individual patents across the patent portfolio vary.
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Our customers include commercial businesses of many sizes and across many industries, as well as public sector enterprises. No individual customer exceeded 10% of our consolidated revenues for fiscal 2023, fiscal 2022, or fiscal 2021. Seasonality General economic conditions have an impact on our business and financial results.
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Drawing from feedback collected through regular engagement surveys, our management has introduced several initiatives to enhance the employee experience. These include measures such as rewards and recognition, transparent communication, process enhancements, and utilization of various platforms like Global Talent Management, Coaching & Mentoring, and Career Development programs. Additionally, global recognition efforts contribute to fostering positive employee experiences and engagement.
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Value of Employee Engagement We value our people and take various actions for employee engagement. Based on feedback received through periodic engagement surveys, management has implemented several initiatives to improve the employee experience through rewards and recognition, open communications and process improvement.
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Additionally, we emphasize the critical role of managers in supporting and guiding our people toward success. Inclusion & Diversity We are committed to an inclusive and diverse workforce and seek to promote inclusion and diversity in legally compliant manners, including maintenance of policies regarding non-discrimination, anti-harassment, and equal employment opportunity.
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Our self-directed learning culture encourages employees to learn at their own pace and in a learning environment of their preference. Key to our people development is the role managers play - we remain focused on equipping and enabling our people leaders so that our people have leaders that guide and support them in their development and success.
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He previously served as Interim President and Chief Executive Officer of DXC from December 18, 2023, to January 31, 2024. Mr. Fernandez has served as a member of our Board of Directors since August 13, 2020. He is Vice Chairman and co-owner of Monumental Sports & Entertainment, a private partnership which owns some of Washington, D.C.’s major sports franchises. Mr.
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He was appointed President and Chief Executive Officer of DXC in September 2019, has been a member of the Board since May 2019 and was appointed Chairman of the Board in July 2022. Prior to joining DXC, Mr.
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Fernandez brings more than three decades of executive experience scaling innovative and rapidly growing technology companies. Mr. Fernandez was the founder of Proxicom, which under his leadership evolved into a prominent early global provider of e-commerce solutions for Fortune 500 companies, Mr. Fernandez guided the growth of Proxicom from its launch in 1991 to public listing in 1999.
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Salvino served as managing director of Carrick Capital Partners from 2016 to 2019, where he was directly involved with Carrick's portfolio companies and in sourcing new investments, growing and managing large scale tech-enabled services businesses, specifically business process outsourcing, security and machine learning. Prior to his tenure at Carrick, from 2009 to 2016, Mr.
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Proxicom was acquired by Dimension Data. From 2000 to 2002, he served as Chief Executive Officer for Dimension Data North America, an information systems integration company, and as a director of its parent company, Dimension Data Holdings Plc, in 2001.
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Salvino served as group chief executive of Accenture Operations, where he led a team of more than 100,000 consulting and outsourcing professionals focused on providing business process outsourcing, infrastructure, security and cloud services to deliver business value and drive productivity and digital improvements for clients.
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He also served as Chairman and CEO for ObjectVideo, a leading developer of intelligent video surveillance software, which was sold to Alarm.com in 2017. He was also a member of President George W. Bush’s Council of Advisors on Science and Technology. Mr.
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P rior to that, he held leadership roles in the HR outsourcing business at Hewitt Associates Inc. and as president of the Americas Region at Exult Inc. Mr. Salvino is a board member of the Atrium Health Foundation, the largest healthcare system in the Carolinas, where he serves on the Investment Oversight Committee for both the hospital and the foundation.
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Fernandez has also served on the board of directors of several public companies, including Broadcom, Inc. from January 2020 to April 2024, GameStop Corp. from April 2019 to June 2021, and Kate Spade & Co. from 2000 until its acquisition by Coach, Inc. in July 2017. Mr.
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Mr. Salvino graduated from Marietta College with a Bachelor of Science degree in industrial engineering. He is a member of the Board of Visitors of the Duke University Pratt School of Engineering. Kenneth P. Sharp became the Executive Vice President and Chief Financial Officer of DXC in November 2020. Prior to joining DXC, Mr.
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Fernandez currently serves on the board of directors of NeuroSync, a neuro health technology company that utilizes artificial intelligence to develop eye-tracking software and analytic technologies to diagnose and treat neurological impairments and brain health conditions, RemoteRetail, a technology and services company that offers enterprise customers a cloudbased marketplace for their hybrid workforces, and URBANEER, an urban innovation company designing and engineering next generation living spaces.
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Sharp served as Vice President and Chief Financial Officer, Defense Systems Sector for Northrop Grumman (“NOC”) from June 2018 to November 2020. From January 2016 to June 2018, Mr. Sharp served as Senior Vice President, Finance of Orbital ATK (subsequently purchased by NOC).
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He is also on the Strategic Advisory Board of Volition Capital, a Boston-based growth equity firm, and is a Special Advisor to Carrick Capital Partners, a growth-oriented investment firm. Rob Del Bene serves as the Executive Vice President and Chief Financial Officer of DXC since June 2023. Before joining DXC, Mr.
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Prior to that, he served as Senior Vice President, Chief Accounting Officer and Corporate Controller of Leidos, Inc. (formerly SAIC, Inc.). Before joining Leidos, Mr. Sharp spent a decade at CSC, the predecessor company to DXC and eight years at Ernst & Young. Mr. Sharp also served in the United States Marine Corps. Mary E.
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Del Bene spent 42 years at IBM where he served in various senior finance roles, including most recently as General Manager, IBM Technology Lifecycle Services, IBM’s $6 billion technology support business. He also served as IBM’s Vice President and Controller; General Manager, IBM Global Financing; and Vice President and Treasurer, along with other senior roles.
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Finch served as Executive Vice President and Chief Human Resources Officer of AECOM from September 2015 to October 2019.
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Howard Boville serves as General Manager for Applications Services and Artificial Intelligence since September 2023. Before joining DXC, he served as Senior Vice President and Head of IBM Cloud Platform & Technology Lifecycle Services from April 2020 to September 2023. Prior to his role at IBM, Mr.
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Deckelman served as Executive Vice President, General Counsel and Secretary of CSC. Mr.
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Boville served as Chief Technology Officer at Bank of America from August 2021 to April 2020. He joined Bank of America in August 2012 from British Telecom, where he served in its Global Services Division. Mr. Boville currently serves on the board of Entrust, a global leader in trusted identities, payments and data protection. 8 James M.
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Deckelman joined CSC in January 2008 and served as Vice President, General Counsel and Secretary from 2008 to 2012, as Executive Vice President and General Counsel from 2012 to 2014, and as Executive Vice President, General Counsel and Secretary from August 2014 until the completion of the HPES Merger. Prior to joining CSC, Mr.
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Before joining DXC, he served as Chief Operating Officer of Accumen Inc., a tech-enabled healthcare performance company, from July 2012 until June 2020. Before joining Accumen Inc., Mr. Brady served in a variety of leadership positions at Accenture from June 2006 until July 2012. Prior to that, Mr.
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Deckelman served as Executive Vice President and General Counsel of Affiliated Computer Services Inc. from 2000 to 2008, served as a director from 2000 to 2003, and previously held various executive positions there from 1989 to 1995. James M. Brady serves as Executive Vice President and Chief Operating Officer of DXC since April 2023.
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Fawcett serves as Executive Vice President and General Counsel of DXC since April 2024. Before joining DXC, he served at NetApp as Executive Vice President and Chief Strategy Officer from December 2021 to February 2023, as Chief Strategy and Legal Officer from June 2021 to December 2021, and as General Counsel from September 2010 to June 2021.
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Voci served first as Vice President, Finance and then as Controller and Chief Accounting Officer of Orbital ATK (subsequently purchased by Northrop Grumman). Prior to that, he spent eleven years at Air Products and Chemicals, Inc. (“APD”). While at APD from 2004 to 2015, Mr.
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Prior to NetApp, Mr. Fawcett was Senior Vice President and General Counsel for JDS Uniphase from 1999 until August 2010. Mary E. Finch serves as Executive Vice President, Chief Human Resources Officer and Global Lead, Marketing of DXC since April 2023.
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Before joining DXC, he served as Chief Digital Officer and Corporate Vice President of Microsoft from January 2020 to December 2022. Prior to that, he served in a variety of leadership positions at Accenture during his 27-year tenure with the company, including as Chief Information Officer from September 2013 to December 2019. Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we are unable to compete in these highly competitive markets, our results of operations may be materially and adversely affected. • If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. • Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third parties fail to deliver on commitments or otherwise breach obligations to our customers. • We are subject to a series of risks relating to climate change and natural disasters; and increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could also adversely impact our business. • We may not be able to attract and retain qualified personnel. • Prolonged periods of inflation where we do not have adequate inflation protections in our customer contracts could increase costs, have an adverse effect on general economic conditions and impact consumer budgeting. • Our international operations are exposed to risks, including fluctuations in exchange rates. • Failure to comply with federal, state, local and foreign laws and regulations could result in costs or sanctions that adversely affect our business.
Biggest changeRisk Factor Summary Risks Related to Our Business • We may not succeed in our strategic objectives. • We are vulnerable to security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data. • We are subject to obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data. • We are vulnerable to product and service quality issues. • We may fail to continue to develop and expand service offerings to address emerging demands. • We may fail to compete in certain markets or continue to expand our capacity, and are subject to risks, in certain offshore locations. • We may fail to maintain our credit rating, manage working capital, refinance and raise additional capital. • Changes to our business model may be hard to understand by the market and we may fail to meet our guidance. • Our business and financial results could be materially adversely affected by public health crises. • Our indebtedness could have a material adverse effect on our financial condition and results of operations. • Our primary markets are highly competitive. • We may fail to accurately estimate the cost of services and the timeline for completion of contracts. • We or our third parties may fail to deliver on commitments or otherwise breach obligations to our customers. • We are subject to a series of risks relating to climate change and natural disasters; and increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could also adversely impact our business. • We may fail to attract and retain qualified personnel. • Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, and could adversely impact our profitability and results of operations. • Our international operations are exposed to risks, including fluctuations in exchange rates. 10 • Failure to comply with federal, state, local and foreign laws and regulations could result in costs or sanctions that adversely affect our business.
We also manage IT infrastructure and systems (collectively, “IT Systems”) of our own and of customers, and we rely on third parties who provide various critical hardware, software and services to support our IT Systems and business operations.
We also rely on and manage IT infrastructure and systems (collectively, “IT Systems”) of our own and of customers, and we rely on third parties who provide various critical hardware, software and services to support our IT Systems and business operations.
Divestiture transactions also involve significant challenges and risks, including: • the potential loss of key customers, suppliers, vendors and other key business partners; • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations; • difficulty in making new and strategic hires of new employees; • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations; • customers delaying or deferring decisions or ending their relationships with us; • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus; • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process; • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs; • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage; • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order consummate any such transactions; • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting; and • contractual terms limiting our ability to compete for or perform certain contracts or services.
Divestiture transactions also involve significant challenges and risks, including: • the potential loss of key customers, suppliers, vendors and other key business partners; • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations; • difficulty in making new and strategic hires of new employees; • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations; • customers delaying or deferring decisions or ending their relationships with us; • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus; • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process; 31 • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs; • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage; • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order consummate any such transactions; • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting; and • contractual terms limiting our ability to compete for or perform certain contracts or services.
Competitive bidding is expensive and presents a number of risks, including: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us; • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design; • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding; • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts; and • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
Competitive bidding is expensive and presents a number of risks, including: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us; • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design; 29 • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding; • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts; and • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
In addition, if we are unable to successfully implement our partnership strategies or our strategic partners do not fulfill their obligations or otherwise prove disadvantageous to our business, our investments in these partnerships and our anticipated business expansion could be adversely affected. 32 Changes in U.S. tax legislation may materially affect our financial condition, results of operations and cash flows.
In addition, if we are unable to successfully implement our partnership strategies or our strategic partners do not fulfill their obligations or otherwise prove disadvantageous to our business, our investments in these partnerships and our anticipated business expansion could be adversely affected. Changes in U.S. tax legislation may materially affect our financial condition, results of operations and cash flows.
Portions of our infrastructure and IT Systems 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.
Finally, portions of our infrastructure and IT Systems 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.
This liability could restrict cash available for our operations, capital expenditures and other requirements, and may materially affect our financial condition and liquidity. 34 In addition, pursuant to the Employee Matters Agreement, DXC assumed certain other defined benefit pension liabilities in a number of non-U.S. countries (including the U.K., Germany and Switzerland).
This liability could restrict cash available for our operations, capital expenditures and other requirements, and may materially affect our financial condition and liquidity. In addition, pursuant to the Employee Matters Agreement, DXC assumed certain other defined benefit pension liabilities in a number of non-U.S. countries (including the U.K., Germany and Switzerland).
Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows. We also must manage leadership development and succession planning throughout our business.
Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows. 22 We also must manage leadership development and succession planning throughout our business.
While incidents experienced thus far have not resulted in significant disruption to our business, it is possible that we or a critical service provider could suffer a severe attack or incident, with potentially material adverse effects on our business, reputation, customer relations, results of operations or financial condition.
While incidents experienced thus far have not resulted in material disruption to our business, it is possible that we or a critical service provider could suffer a severe attack or incident, with potentially material adverse effects on our business, reputation, customer relations, results of operations or financial condition.
Also, we believe that our ability to match revenues and expenses in a given currency will decrease as more work is performed at offshore locations that use a different currency from where we generate our revenue. 24 We may use forward and option contracts to protect against currency exchange rate risks.
Also, we believe that our ability to match revenues and expenses in a given currency will decrease as more work is performed at offshore locations that use a different currency from where we generate our revenue. We may use forward and option contracts to protect against currency exchange rate risks.
We also indemnify certain vendors and customers against claims of intellectual property infringement made by third parties arising from the use by such vendors and customers of software products and services and certain other matters. Some of the applicable indemnification arrangements may not be subject to maximum loss clauses.
We also indemnify certain vendors and customers against claims of intellectual property infringement made by third parties arising from the use by such vendors and customers of our software products and services and certain other matters. Some of the applicable indemnification arrangements may not be subject to maximum loss clauses.
Any failure to achieve our financial goals could negatively impact our reputation, harm investor confidence in us, and cause the market price of our common stock to decline. We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
Any failure to achieve our financial goals could negatively impact our reputation, harm investor confidence in us, and cause the market price of our common stock to decline. 28 We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
For more information, see our risk factor “Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business." We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
For more information, see our risk factor “Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business." 25 We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
In addition, detecting, investigating and resolving actual or alleged violations of the FCPA or other anti-bribery violations is expensive and could consume significant time and attention of our senior management. 17 Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets.
In addition, detecting, investigating and resolving actual or alleged violations of the FCPA or other anti-bribery violations is expensive and could consume significant time and attention of our senior management. 16 Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets.
We operate in approximately 70 countries in an increasingly complex regulatory environment. Among other things, we provide complex industry-specific insurance processing in the U.K., which is regulated by authorities in the U.K. and elsewhere, such as the U.K.’s Financial Conduct Authority and His Majesty’s Treasury and the U.S. Department of Treasury, which increases our exposure to compliance risk.
We operate in approximately 65 countries in an increasingly complex regulatory environment. Among other things, we provide complex industry-specific insurance processing in the U.K., which is regulated by authorities in the U.K. and elsewhere, such as the U.K.’s Financial Conduct Authority and His Majesty’s Treasury and the U.S. Department of Treasury, which increases our exposure to compliance risk.
As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may continue to experience, higher than anticipated levels of employee attrition. These risks to attracting and retaining the necessary talent may be exacerbated by recent labor constraints and inflationary pressures on employee wages and benefits.
As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may experience in the future, higher than anticipated levels of employee attrition. These risks to attracting and retaining the necessary talent may be exacerbated by recent labor constraints and inflationary pressures on employee wages and benefits.
We may be exposed to negative publicity and other potential risks if we are unable to maintain effective disclosure controls and internal controls over financial reporting.
We may be exposed to negative publicity and other potential risks if we are unable to maintain effective disclosure controls and internal control over financial reporting.
Our cash flows, results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures. 20 If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Our commercial contracts are typically awarded on a competitive basis.
Our cash flows, results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures. 19 If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected. Our commercial contracts are typically awarded on a competitive basis.
Moreover, we may experience loss of market share if we are unable to provide competitive products and services that incorporate climate-change mitigations, and if we are unable to achieve and sustain a carbon-neutral business model in a meaningful time frame, we could lose stockholder confidence, resulting in loss of business and loss of access to the financial markets.
Moreover, we may experience loss of market share if we are unable to provide competitive products and services that incorporate climate-change mitigations, and if we are unable to achieve and sustain a carbon-neutral business model in a meaningful time frame, we could lose stockholder or customer confidence, resulting in loss of business and loss of access to the financial markets.
For more details, including on current tax examinations of our income tax returns by tax authorities, see Note 15 – “Income Taxes.” We may be adversely affected by disruptions in the credit markets, including disruptions that reduce our customers' access to credit and increase the costs to our customers of obtaining credit.
For more details, including on current tax examinations of our income tax returns by tax authorities, see Note 14 – “Income Taxes.” We may be adversely affected by disruptions in the credit markets, including disruptions that reduce our customers' access to credit and increase the costs to our customers of obtaining credit.
Increasing temperatures resulting from global warming could lead to increasing energy costs and unfavorable operating cost impacts, as well as extreme weather events that could cause loss of power to data centers and service disruptions, resulting in contractual fines or loss of business.
Increasing temperatures resulting from global warming could lead to increasing energy costs and unfavorable operating cost impacts, as well as extreme weather events that could cause loss of power or water access to data centers and service disruptions, resulting in contractual fines or loss of business.
As noted in Note 21 - "Commitments and Contingencies," we are currently party to a number of disputes that involve or may involve litigation or arbitration, including securities litigation in which we and certain of our current or former officers and directors have been named as defendants.
As noted in Note 20 - "Commitments and Contingencies," we are currently party to a number of disputes that involve or may involve litigation or arbitration, including securities litigation in which we and certain of our current or former officers and directors have been named as defendants.
As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) public health crisis such as the COVID-19 pandemic and government responses, (2) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future and (3) the possibility that the U.S.
As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) public health crisis such as the COVID-19 pandemic and government responses, (2) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future, (3) currency exchange risks, and (4) the possibility that the U.S.
In addition, we may commit to certain initiatives or goals and we may not ultimately be able to achieve such commitments or goals due to cost, technological constraints, or other factors that are within or outside of our control.
In addition, we may commit to certain initiatives or goals and we may not ultimately achieve such commitments or goals due to cost, technological constraints, or other factors that are within or outside of our control.
In addition, businesses in the countries in which we operate are subject to local, legal and political environments and regulations including with respect to employment, tax, statutory supervision and reporting and trade restriction, along with industry regulations such as regulation by bank regulators in the U.S. and Europe.
In addition, businesses in the countries in which we operate are subject to local, legal and political environments and regulations including with respect to employment, tax, statutory supervision and reporting and trade restriction, along with industry regulations such as regulation by bank regulators in the U.S. and Europe. These regulations and environments are also subject to change.
Our ability to develop and implement innovative technology solutions that meet evolving customer needs in analytics, software engineering, applications, business process services, digital cloud, information technology outsourcing and consulting, and in areas such as artificial intelligence, automation, Internet of Things and software as-a-service solutions, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
Our ability to develop and implement innovative technology solutions that meet evolving customer needs in analytics, software engineering, applications, business process services, digital cloud, information technology (“IT”) outsourcing and consulting, and in areas such as AI, automation, Internet of Things and software as-a-service solutions, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. 22 While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect.
Such increased scrutiny may result in increased costs, enhanced compliance or disclosure obligations, or other adverse impacts on our business, financial condition or results of operations. 21 While we have in the past and may at times continue to engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others), such initiatives may be costly and may not have the desired effect.
We expect increasing cybersecurity, data privacy and information security obligations around the world to impose additional regulatory pressures on our customers’ businesses and, indirectly, on our operations, or lead to inquiries, investigations or enforcement actions. In the United States, we are seeing increasing obligations and expectations from government and non-government customers.
We expect increasing cybersecurity and data privacy obligations around the world to impose additional regulatory pressures on our customers’ businesses and, indirectly, on our operations, or lead to inquiries, investigations, litigation or enforcement actions. In the United States, we are seeing increasing regulatory obligations and expectations imposed on our government and non-government customers.
Approximately 70% of revenues earned during fiscal 2023 were derived from sales denominated in currencies other than the U.S. dollar and are expected to continue to represent a significant portion of our revenues.
Approximately 71% of revenues earned during fiscal 2024 were derived from sales denominated in currencies other than the U.S. dollar and are expected to continue to represent a significant portion of our revenues.
We have implemented several restructuring plans to realign our cost structure due to the changing nature of our business and to achieve operating efficiencies to reduce our costs. We may not be able to obtain the costs savings and benefits that were initially anticipated in connection with our restructuring plans.
We have implemented several restructuring plans and may continue to implement cost-takeout measures to realign our cost structure with the changing nature of our business and to achieve operating efficiencies to reduce our costs. We may not be able to obtain the costs savings and benefits that were initially anticipated in connection with our restructuring plans.
Prolonged periods of inflation where we do not have adequate inflation protections in our customer contracts could increase costs, have an adverse effect on general economic conditions and impact consumer budgeting, which could impact our profitability and have a material adverse effect on our business and results of operations.
Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, which could impact our profitability and have a material adverse effect on our business and results of operations, especially for customer contracts where we do not have adequate inflation protections.
Our competitiveness is based on factors including technology, innovation, performance, price, quality, reliability, brand, reputation, range of products and services, account relationships, customer training, service and support and security.
Our competitiveness is based on factors including technology (including building AI capabilities into our offerings), innovation, performance, price, quality, reliability, brand, reputation, range of products and services, account relationships, customer training, service and support and security.
We may also incur costs and liability (whether contractual or otherwise), such as monetary damages resulting from litigation, remediation costs, and regulatory actions, fines or penalties. Any of the foregoing, or a combination of the foregoing, could have a material impact on our results of operations or financial condition.
A successful cyberattack may cause us to incur costs and liability (whether contractual or otherwise), such as monetary damages resulting from litigation, remediation costs, and regulatory actions, fines or penalties. Any of the foregoing, or a combination of the foregoing, could have a material impact on our results of operations or financial condition.
The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to litigation or regulatory scrutiny and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us and the market price of our common stock.
The existence of any material weakness in our internal control over financial reporting could also result in errors in our financial statements that could require us to restate our financial statements, cause us to fail to meet our reporting obligations, subject us to litigation or regulatory scrutiny and cause stockholders to lose confidence in our reported financial information, all of which could materially and adversely affect us and the market price of our common stock. 27 We could suffer additional losses due to asset impairment charges.
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.
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 personal data and other sensitive 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. 14 Product and service quality issues could impact the Company’s business, operating results and financial condition.
If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.
If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected. 15 Our ability to compete in certain markets we serve is dependent on our ability to continue to expand our capacity in certain offshore locations.
Federal Reserve, along with central banks around the world, has raised benchmark interest rates and signaled expectations of additional rate increases; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability for debt financing; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • placing us at a competitive disadvantage compared to less leveraged competitors; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • causing us to reduce or eliminate our return of cash to our stockholders, including via dividends and share repurchases.
Federal Reserve, along with central banks around the world, has raised benchmark interest rates significantly; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability for debt financing; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • placing us at a competitive disadvantage compared to less leveraged competitors; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • causing us to reduce or eliminate our return of cash to our stockholders, including via dividends and share repurchases. 18 In addition, we could be unable to refinance our outstanding indebtedness on reasonable terms or at all.
Additionally, any future impasse impacting the U.S. federal government’s ability to reach an agreement on the federal budget, debt ceiling or any future U.S. federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S. federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows.
Additionally, any future impasse impacting the U.S. federal government’s ability to reach an agreement on the federal budget, debt ceiling or any future U.S. federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S. federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows. 30 If our customer contracts are terminated, if we are suspended or disbarred from government work, or our ability to compete for new contracts is adversely affected, our financial performance could suffer.
For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales.
For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales as well as unfavorable operating cost impacts.
In order to achieve successful acquisitions, we will need to: • integrate the operations and business cultures, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems; • maintain third-party relationships previously established by acquired companies; • attract and retain senior management and key personnel at acquired businesses; and • manage new business lines, as well as acquisition-related workload. 31 Existing contractual restrictions may limit our ability to engage in certain integration activities for varying periods.
In order to achieve successful acquisitions, we will need to: • integrate the operations and business cultures, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems; • maintain third-party relationships previously established by acquired companies; • attract and retain senior management and key personnel at acquired businesses; and • manage new business lines, as well as acquisition-related workload.
If, notwithstanding the conclusions expressed in these opinions, the NPS Separation were determined to be taxable, CSC and CSC stockholders that received CSRA Inc. ("CSRA") stock in the NPS Separation could incur significant tax liabilities.
If, notwithstanding the conclusions expressed in these opinions, the NPS Separation were determined to be taxable, CSC and CSC stockholders that received CSRA Inc.
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 customers, including sensitive customer transaction data.
Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments increase the likelihood that our encryption and other algorithms that we use to protect our data and that of customers, including sensitive customer transaction data, may fail.
In a time of uncertainty, our customers may reduce spending or have difficulty in budgeting for external IT services, delay procurement of products and services from us or delay their payment for products and services we have already provided, and we may have difficulty closing new deals in the event of an economic slowdown, all of which could adversely affect our profitability, results of operations and cash flow.
In a time of uncertainty, our customers may reduce spending or have difficulty in budgeting for external IT services, delay procurement of products and services from us or delay their payment for products and services we have already provided, and we may have difficulty closing new deals in the event of an economic slowdown, all of which could adversely affect our profitability, results of operations and cash flow. 23 Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control.
Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors. • We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business. 11 • We may inadvertently infringe on the intellectual property rights of others and our inability to procure third-party licenses may result in decreased revenue or increased costs. • Disruption of our supply chain could adversely impact our business. • We may be exposed to negative publicity and other potential risks if we are unable to maintain effective disclosure controls and internal controls over financial reporting. • We could suffer additional losses due to asset impairment charges. • We may not be able to pay dividends or repurchase shares of our common stock that we announced previously. • Pending litigations may have a material and adverse impact on our profitability and liquidity. • Disruptions in the credit markets may reduce our customers' access to credit and increase the costs to our customers of obtaining credit, and our hedging program is subject to counterparty default risk. • We may not achieve revenue and profit objectives if we fail to competitively bid on our projects effectively. • If our customers experience financial difficulties, we may not be able to collect our receivables. • If we are unable to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements, our operating results and cash flows will suffer. • Our strategic transactions may prove unsuccessful. • Changes in tax rates, tax laws, and the timing and outcome of tax examinations could affect our results of operations.
Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors. • Our restructuring plans may not benefit us and may adversely affect our business. • We may be subject to intellectual property related risks and may fail to procure necessary third-party licenses. • Disruption of our supply chain could adversely impact our business. • We may fail to maintain effective disclosure controls and internal control over financial reporting. • We could suffer additional losses due to asset impairment charges. • We may fail to pay dividends or repurchase shares of our common stock that we announced previously. • Pending litigations may have a material and adverse impact on our profitability and liquidity. • Disruptions in the credit markets may reduce our customers' access to credit and increase the costs to our customers of obtaining credit, and our hedging program is subject to counterparty default risk. • We may not achieve revenue and profit objectives if we fail to competitively bid on our projects effectively. • If our customers experience financial difficulties, we may not be able to collect our receivables. • We may fail to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements. • Our strategic transactions may prove unsuccessful. • Changes in tax rates, tax laws, and uncertainty of tax examinations could affect our results of operations. • The price of our securities may be volatile.
We are closely monitoring the developing situation and are committed to caring for our colleagues in the region. The ongoing conflict could cause harm to our team members and otherwise impair their ability to work for extended periods of time, as well as disrupt telecommunications systems, banks and other critical infrastructure necessary to conduct business in Ukraine.
The ongoing conflict could cause harm to our team members and otherwise impair their ability to work for extended periods of time, as well as disrupt telecommunications systems, banks and other critical infrastructure necessary to conduct business in Ukraine.
In the event that one or more customers or suppliers' defaults on its payment or delivery obligations, we could incur significant losses, which may harm our business, reputation, results of operations, cash flows and financial condition.
In the event that one or more customers or suppliers' defaults on its payment or delivery obligations, we could incur significant losses, which may harm our business, reputation, results of operations, cash flows and financial condition. In addition, customers may decide to downsize, defer or cancel contracts, which could negatively affect our revenues.
If the HPES Merger were determined to be taxable, previous holders of CSC common stock would be considered to have made a taxable disposition of their shares to HPES, and such stockholders would generally recognize taxable gain or loss on their receipt of HPES common stock in the HPES Merger.
If the HPES Merger were determined to be taxable, previous holders of CSC common stock would be considered to have made a taxable disposition of their shares to HPES, and such stockholders would generally recognize taxable gain or loss on their receipt of HPES common stock in the HPES Merger. 33 We assumed certain material pension benefit obligations in connection with the HPES Merger.
Negative or uncertain political climates in countries or locations where we operate, such as Ukraine, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our operations or cause us to exit certain markets. 16 The ongoing conflict between Russia and Ukraine has impacted our business and financial performance in that region.
Negative or uncertain political climates in countries or locations where we operate, such as Ukraine, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our operations or cause us to exit certain markets.
In the event of a counterparty default, we could incur significant losses, which may harm our business and financial condition. In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty.
In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty.
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.
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.
We are experiencing, and may continue to experience, delays and shortages of certain necessary components to the services and solutions we offer our clients resulting from issues with the global supply chain, the economic downturns, the rising inflation, the COVID-19 pandemic, the conflict between Russia and Ukraine, and any disruptions at our suppliers.
We have experienced, and may continue to experience, delays and shortages of certain necessary components to the services and solutions we offer our clients resulting from issues with the global supply chain, the economic downturns, the rising inflation, the conflicts between Russia and Ukraine and conflicts in the Middle East, and any disruptions at our suppliers.
However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
However, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. There can be no assurance that all control issues or fraud will be detected.
An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations. For example, in response to increasing inflation, the U.S.
An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations. For example, in response to increasing inflation, the U.S. Federal Reserve, along with central banks around the world, has been raising interest rates.
We could suffer additional losses due to asset impairment charges. We acquired substantial goodwill and other intangibles as a result of the HPES Merger and the Luxoft Acquisition, increasing our exposure to this risk.
We acquired substantial goodwill and other intangibles as a result of the HPES Merger and the Luxoft Acquisition, increasing our exposure to this risk.
The opinions of counsel we received were based on, among other things, various factual representations and assumptions, as well as certain undertakings made by DXC, Perspecta and CSRA.
("CSRA") stock in the NPS Separation could incur significant tax liabilities. 34 The opinions of counsel we received were based on, among other things, various factual representations and assumptions, as well as certain undertakings made by DXC, Perspecta and CSRA.
Additionally, inflation has risen worldwide and the United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase, it can also push up the costs of labor and our employee compensation expenses.
Additionally, inflation has risen worldwide and the United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase, it can also push up the costs of labor and our employee compensation expenses. There is no assurance that our revenues will increase at the same rate to maintain the same level of profitability.
Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control. Our exposure to currencies other than the U.S. dollar may impact our results, as they are expressed in U.S. dollars. Currency variations also contribute to variations in sales of products and services in affected jurisdictions.
Our exposure to currencies other than the U.S. dollar may impact our results, as they are expressed in U.S. dollars. Currency variations also contribute to variations in sales of products and services in affected jurisdictions.
Negative impacts from COVID-19 could continue to affect our ability to perform under our contracts with customers. 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.
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.
We assumed certain material pension benefit obligations in connection with the HPES Merger. These liabilities and the related future funding obligations could restrict our cash available for operations, capital expenditures and other requirements, and may materially adversely affect our financial condition and liquidity.
These liabilities and the related future funding obligations could restrict our cash available for operations, capital expenditures and other requirements, and may materially adversely affect our financial condition and liquidity.
Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers are not sufficient to make up any shortfall by other customers.
Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers are not sufficient to make up any shortfall by other customers. In addition, we face significant competition from competitors, new players and our own customers in developing AI capabilities.
We may not be successful in meeting these or any other challenges encountered in connection with historical and future acquisitions. Even if we successfully integrate, we cannot predict with certainty if or when these cost and revenue synergies, growth opportunities and benefits will occur, nor the extent to which they actually will be achieved.
Even if we successfully integrate, we cannot predict with certainty if or when these cost and revenue synergies, growth opportunities and benefits will occur, nor the extent to which they actually will be achieved.
For more information about our restructuring plans, see Note 13 - "Restructuring Costs." 26 In the course of providing services to customers, we may inadvertently infringe on the intellectual property rights of others and be exposed to claims for damages.
For more information about our restructuring plans, see Note 12 - "Restructuring Costs." We may inadvertently infringe on the intellectual property rights of others and be exposed to claims for damages, and our intellectual property rights may be infringed by third parties.
Technological developments may materially affect the cost and use of technology by our customers. Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future.
Technological developments may materially affect the cost and use of technology by our customers. Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future. For example, our competitors may introduce new product and service offerings that utilize AI and machine learning.
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 may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, litigation, fines and penalties.
Compliance with privacy and security laws, requirements and regulations may result in cost increases due to expanded compliance obligations, potential systems changes, the development of additional administrative processes and increased enforcement actions, litigation, fines and penalties.
Our customers' contracts with U.S. government agencies are also subject to audits and investigations, which may include a review of performance on contracts, pricing practices, cost structure, and compliance with applicable laws and regulations. 30 Any failure on our part to comply with the specific provisions in customer contracts or any violation of government contracting regulations or other requirements could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments, and, in the case of government contracts, fines and suspension from future government contracting.
Any failure on our part to comply with the specific provisions in customer contracts or any violation of government contracting regulations or other requirements could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments, and, in the case of government contracts, fines and suspension from future government contracting.
At any given time, we may be engaged in discussions or negotiations with respect to one or more transactions, including acquisitions, divestitures or spin-offs, strategic partnerships or other transaction involving one or more of our businesses. Any of these transactions could be material to our business, financial condition, results of operations and cash flows.
Our strategic transactions may prove unsuccessful and our profitability may be materially and adversely affected. At any given time, we may be engaged in discussions or negotiations with respect to one or more transactions, including acquisitions, divestitures or spin-offs, strategic partnerships or other transaction involving one or more of our businesses.
There can be no assurance that the outcomes from these examinations will not have a material adverse effect on our financial condition and operating results. 33 Risks Related to our Completed Strategic Transactions We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation (the "Distribution") were determined not to qualify for tax-free treatment, which could materially adversely affect our financial condition.
Risks Related to our Completed Strategic Transactions We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation (the "Distribution") were determined not to qualify for tax-free treatment, which could materially adversely affect our financial condition.
Public health crises, such as the COVID-19 pandemic, have caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies. 18 Negative impacts to our business have occurred, and may occur in the future, including disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our customers or our subcontractors, or the requirements to deliver our services remotely.
Negative impacts to our business have occurred, and may occur in the future, including disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our customers or our subcontractors, or the requirements to deliver our services remotely.
Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion (“GloBE”) Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis.
Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion (“GloBE”) Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis. Such rules are being or may be implemented in many jurisdictions, including the United States.
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 or other business impact.
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.
If we fail to effectively manage our leadership changes, including ongoing organizational and strategic changes, our business, financial condition, results of operations, cash flows and reputation, as well as our ability to successfully attract, motivate and retain key employees, could be harmed. 23 In addition, uncertainty around future employment opportunities, facility locations, organizational and reporting structures, and other related concerns may impair our ability to attract and retain qualified personnel.
If we fail to effectively manage our leadership changes, including ongoing organizational and strategic changes, our business, financial condition, results of operations, cash flows and reputation, as well as our ability to successfully attract, motivate and retain key employees, could be harmed.
These incidents can result in significant disruption to our business (for example, due to ransomware or denial-of-service) through an impact on our operations or those of our clients, employees, vendors or other partners; compromise, corruption or loss of data (including proprietary, confidential or otherwise sensitive or valuable information) belonging to us, our clients, employees, vendors or partners; reputational damage, and injury to customer relationships.
These incidents can result in disruption to our business (for example, due to ransomware or denial-of-service) through an impact on our IT Systems and/or the compromise, corruption or loss of data belonging to us or our clients, employees, vendors or other partners.
The declaration and payment of future dividends, the amount of any such dividends, and the establishment of record and payment dates for dividends, if any, are subject to final determination by our Board after review of our current strategy and financial performance and position, among other things. 28 The Board’s determinations regarding dividends and share repurchases will depend on a variety of factors, including net income, cash flow generated from operations, amount and location of our cash and investment balances, overall liquidity position and potential alternative uses of cash, such as acquisitions, as well as economic conditions and expected future financial results.
The Board’s determinations regarding dividends and share repurchases will depend on a variety of factors, including net income, cash flow generated from operations, amount and location of our cash and investment balances, overall liquidity position and potential alternative uses of cash, such as acquisitions, as well as economic conditions and expected future financial results.
Environmental costs and accruals are presently not material to our operations, cash flows or financial position; and, we do not currently anticipate material capital expenditures for environmental control facilities.
Certain laws may also impose liability without regard to fault or the legality of the original conduct. Environmental costs and accruals are presently not material to our operations, cash flows or financial position; and, we do not currently anticipate material capital expenditures for environmental control facilities.
Furthermore, even if we are successful with our cost-takeout efforts, we may not see the benefits of such efforts on our financial condition, results of operations and cash flows. Additionally, as a result of our restructuring, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods.
Furthermore, even if we are successful with our cost-takeout efforts, we may not see the benefits of such efforts on our financial condition, results of operations and cash flows.
These liabilities and future funding obligations could restrict our cash available for operations, capital expenditures and other requirements. • The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders.
These liabilities and future funding obligations could restrict our cash available for operations, capital expenditures and other requirements. • The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders. 11 Risks Related to Our Business We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows.
We have indebtedness totaling approximately $4.4 billion as of March 31, 2023 (including capital lease obligations). We may incur substantial additional indebtedness in the future for many reasons, including to fund acquisitions.
We have indebtedness, which could have a material adverse effect on our business, financial condition and results of operations. We have indebtedness totaling approximately $4.1 billion as of March 31, 2024 (including capital lease obligations). We may incur substantial additional indebtedness in the future for many reasons, including to fund acquisitions.
This has caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
Such offerings could render some of our offerings obsolete or harm our ability to negotiate for favorable terms. This has caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers.
Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers. For example, we recently entered a strategic partnership with a third-party cloud infrastructure provider to accelerate customer cloud adoption and digital transformation.
We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for taxes.
We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for taxes.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table provides a summary of properties we owned and leased as of March 31, 2023: Approximate Square Feet (in millions) Geographic Area Owned Leased Total United States 2.3 1.3 3.6 EMEA 0.9 3.4 4.3 APAC 0.9 3.3 4.2 All other 0.6 0.2 0.8 Real estate in restructuring — 1.6 1.6 Inactive space 0.7 0.2 0.9 Sublet space 0.4 — 0.4 Assets held for sale 0.4 — 0.4 Total 6.2 10.0 16.2 Approximate Square Feet (in millions) Type Owned Leased Total Offices 1.9 6.2 8.1 Data centers 2.8 2.0 4.8 Real estate in restructuring — 1.6 1.6 Inactive space 0.7 0.2 0.9 Sublet space 0.4 — 0.4 Assets held for sale 0.4 — 0.4 Total 6.2 10.0 16.2 We believe that the facilities described above are suitable and adequate to meet our current and anticipated requirements.
Biggest changeThe following table provides a summary of properties we owned and leased as of March 31, 2024: Approximate Square Feet (in millions) Geographic Area Owned Leased Total United States 2.1 0.8 2.9 EMEA 0.9 2.8 3.7 APAC 0.9 1.8 2.7 All other 0.8 0.1 0.9 Real estate in restructuring — 1.7 1.7 Inactive space 1.0 0.4 1.4 Sublet space 0.4 — 0.4 Assets held for sale 0.1 — 0.1 Total 6.2 7.6 13.8 Approximate Square Feet (in millions) Type Owned Leased Total Offices 1.7 4.1 5.8 Data centers 3.0 1.4 4.4 Real estate in restructuring — 1.7 1.7 Inactive space 1.0 0.4 1.4 Sublet space 0.4 — 0.4 Assets held for sale 0.1 — 0.1 Total 6.2 7.6 13.8 We believe that the facilities described above are suitable and adequate to meet our current and anticipated requirements.
ITEM 2. PROPERTIES Our corporate headquarters is located at a leased facility in Ashburn, VA. We own or lease numerous offices and data centers in approximately 370 locations around the world. We do not identify properties by segment, as they are interchangeable in nature and used by both segments.
ITEM 2. PROPERTIES Our corporate headquarters is located at a leased facility in Ashburn, VA. We own or lease numerous offices and data centers in approximately 360 locations around the world. We do not identify properties by segment, as they are interchangeable in nature and used by both segments.
As we transition to a more permanent virtual model, we believe we will have excess facilities space. See Note 8 - "Property and Equipment," which provides additional information related to our land, buildings and leasehold improvements, and Note 5 - "Leases," which provides additional information related to our real estate lease commitments.
See Note 7 - "Property and Equipment," which provides additional information related to our land, buildings and leasehold improvements, and Note 5 - "Leases," which provides additional information related to our real estate lease commitments.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−1 removed3 unchanged
Biggest changeComparison of Five Year Cumulative Total Return The following table provides total shareholder returns assuming $100 was invested on April 2, 2018, with annual returns using our fiscal year-end date: Company/Market/Peer Group 2019 2020 2021 2022 2023 DXC Technology Company (24.6) % (77.7) % 127.6 % 4.2 % (20.7) % S&P 500 Index 12.0 % (7.0) % 56.4 % 15.6 % (7.7) % S&P North American Technology Index 19.0 % 3.8 % 72.0 % 8.7 % (11.7) % Equity Compensation Plans See Part III, Item 12 of this Annual Report on Form 10-K for information regarding our equity compensation plans.
Biggest changeComparison of Five Year Cumulative Total Return The following table provides total shareholder returns assuming $100 was invested on April 1, 2019, with annual returns using our fiscal year-end date: Company/Market/Peer Group 2020 2021 2022 2023 2024 DXC Technology Company (80.0) % 140.0 % 4.0 % (22.0) % (17.0) % S&P 500 Index (10.0) % 54.0 % 14.0 % (9.0) % 28.0 % S&P North American Technology Index 1.0 % 71.0 % 8.0 % (12.0) % 52.0 % S&P 600 Index (28.0) % 93.0 % — % (10.0) % 14.0 % S&P 600 Information Technology Index (13.0) % 92.0 % 2.0 % (5.0) % 6.0 % Securities Authorized for Issuance Under Equity Compensation Plans See Part III, Item 12 of this Annual Report on Form 10-K for information regarding our equity compensation plans.
See Note 16 - "Stockholders' Equity" for more information. 37 Performance Graph The following graph compares the cumulative return on our common stock for the most recent five years, with the cumulative return on the Standard & Poor’s 500 Stock Index ("S&P 500 Index") and the Standard & Poor’s North American Technology Index ("S&P North American Technology Index").
See Note 15 - "Stockholders' Equity" for more information. 39 Performance Graph The following graph compares the cumulative return on our common stock for the most recent five years, with the cumulative return on the Standard & Poor’s 600 Stock Index ("S&P 600 Index"), Standard & Poor's 600 Information Technology Index ("S&P 600 Information Technology Index"), Standard & Poor’s 500 Stock Index ("S&P 500 Index"), and Standard & Poor’s North American Technology Index ("S&P North American Technology Index").
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol "DXC." Number of Holders As of May 8, 2023, there were 38,901 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock trades on the New York Stock Exchange under the symbol "DXC." Number of Holders As of May 6, 2024, there were 37,204 holders of record of our common stock.
The graph assumes that $100 was invested at the market close on April 2, 2018 (the first trading day of fiscal 2019) in our common stock, the S&P 500 Index, and the S&P North American Technology Index and that dividends have been reinvested. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
The graph assumes that $100 was invested at the market close on April 1, 2019 (the first trading day of fiscal 2020) in our common stock, and the relevant comparison indices. The stock price performance of the following graph is not necessarily indicative of future stock price performance.
Dividends The Board indefinitely suspended the Company’s cash dividend payment beginning in the first quarter of fiscal 2021.
Dividends The Board indefinitely suspended the Company’s cash dividend payment beginning in the first quarter of fiscal 2021. As of March 31, 2024, the Company does not intend to reinstate its quarterly cash dividends.
Issuer Purchases of Equity Securities Share repurchase activity during the three months ended March 31, 2023 was as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs January 1, 2023 to January 31, 2023 710,633 $ 28.38 710,633 $ 810,962,128 February 1, 2023 to February 28, 2023 4,351,381 $ 28.61 4,351,381 $ 686,464,022 March 1, 2023 to March 31, 2023 8,460,167 $ 24.96 8,460,167 $ 475,271,849 Total 13,522,181 $ 26.32 13,522,181 On April 3, 2017, we announced the establishment of a share repurchase plan approved by the Board with an initial authorization of $2.0 billion for future repurchases of outstanding shares of our common stock.
Issuer Purchases of Equity Securities Share repurchase activity during the three months ended March 31, 2024 was as follows: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs January 1, 2024 to January 31, 2024 3,644,527 $ 23.05 3,644,527 $ 645,471,510 February 1, 2024 to February 29, 2024 1,372,062 $ 21.57 1,372,062 $ 615,871,715 March 1, 2024 to March 31, 2024 1,153,314 $ 20.81 1,153,314 $ 591,871,924 Total 6,169,903 $ 22.30 6,169,903 On April 3, 2017, we announced the establishment of a share repurchase plan approved by the Board with an initial authorization of $2.0 billion for future repurchases of outstanding shares of our common stock.
On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization.
On November 8, 2018, our Board approved an incremental $2.0 billion share repurchase authorization. During fiscal 2024, DXC completed the remaining share repurchases under the above authorizations. On May 18, 2023, DXC announced that its Board approved an incremental $1.0 billion share repurchase authorization.
Removed
On November 8, 2018, our Board approved an incremental $2.0 billion share repurchase authorization. Under these approved share repurchase plans, on February 2, 2022, we announced our intention and subsequently completed the repurchase of $1.0 billion of our outstanding shares of common stock in the open market prior to the issuance of this Annual Report on Form 10-K.
Added
Going forward, the Company will replace the S&P 500 Index and the S&P North American Technology Index with the S&P 600 Index and the S&P 600 Information Technology Index, as we concluded that the companies included therein are our closer competitors or are of a more similar size with us.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

78 edited+17 added−25 removed46 unchanged
Biggest changeA reconciliation of reported results to non-GAAP results is as follows: Fiscal Year Ended March 31, 2023 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration-Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification, Arbitration Loss, and SEC Matter Gains and Losses on Dispositions Impairment Losses Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results (Loss) income before income taxes (885) 216 16 402 83 (190) 19 1,431 — 1,092 Income tax (benefit) expense (319) 44 3 81 31 25 4 291 120 280 Net (loss) income (566) 172 13 321 52 (215) 15 1,140 (120) 812 Less: net income attributable to non-controlling interest, net of tax 2 — — — — — — 2 — 4 Net (loss) income attributable to DXC common stockholders $ (568) $ 172 $ 13 $ 321 $ 52 $ (215) $ 15 $ 1,138 (120) $ 808 Effective Tax Rate 36.0 % 25.6 % Basic EPS $ (2.48) $ 0.75 $ 0.06 $ 1.40 $ 0.23 $ (0.94) $ 0.07 $ 4.97 $ (0.52) $ 3.53 Diluted EPS $ (2.48) $ 0.74 $ 0.06 $ 1.38 $ 0.22 $ (0.92) $ 0.06 $ 4.89 $ (0.52) $ 3.47 Weighted average common shares outstanding for: Basic EPS 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 Diluted EPS 228.99 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 47 Fiscal Year Ended March 31, 2022 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration- Related Costs Amortization of Acquired Intangible Assets Impairment Losses Gains and Losses on Dispositions Pension and OPEB Actuarial and Settlement Gains and Losses Debt Extinguishment Costs Tax Adjustment Non-GAAP Results Income before income taxes 1,141 318 26 434 31 (341) (684) 311 — 1,236 Income tax expense 405 65 7 90 7 (104) (171) 73 (43) 329 Net income 736 253 19 344 24 (237) (513) 238 43 907 Less: net income attributable to non-controlling interest, net of tax 18 — — — — — (5) — — 13 Net income attributable to DXC common stockholders $ 718 $ 253 $ 19 $ 344 $ 24 $ (237) $ (508) $ 238 $ 43 $ 894 Effective Tax Rate 35.5 % 26.6 % Basic EPS $ 2.87 $ 1.01 $ 0.08 $ 1.38 $ 0.10 $ (0.95) $ (2.03) $ 0.95 $ 0.17 $ 3.58 Diluted EPS $ 2.81 $ 0.99 $ 0.07 $ 1.35 $ 0.09 $ (0.93) $ (1.99) $ 0.93 $ 0.17 $ 3.50 Weighted average common shares outstanding for: Basic EPS 250.02 250.02 250.02 250.02 250.02 250.02 250.02 250.02 250.02 250.02 Diluted EPS 255.21 255.21 255.21 255.21 255.21 255.21 255.21 255.21 255.21 255.21 Reconciliations of revenue growth to organic revenue growth are as follows: Fiscal Years Ended March 31, 2023 March 31, 2022 Total revenue growth (11.3) % (8.3) % Foreign currency 6.0 % (0.8) % Acquisitions and divestitures 2.6 % 6.5 % Organic revenue growth (2.7) % (2.6) % GBS revenue growth (8.4) % (8.9) % Foreign currency 5.9 % (0.4) % Acquisitions and divestitures 4.9 % 13.2 % GBS organic revenue growth 2.4 % 3.9 % GIS revenue growth (13.8) % (7.7) % Foreign currency 6.0 % (1.2) % Acquisitions and divestitures 0.6 % 0.5 % GIS organic revenue growth (7.2) % (8.4) % 48 Reconciliations of net (loss) income to adjusted EBIT are as follows: Fiscal Years Ended (in millions) March 31, 2023 March 31, 2022 Net (loss) income $ (566) $ 736 Income tax (benefit) expense (319) 405 Interest income (135) (65) Interest expense 200 204 EBIT (820) 1,280 Restructuring costs 216 318 Transaction, separation and integration-related costs 16 26 Amortization of acquired intangible assets 402 434 Merger-related indemnification 46 — SEC Matter 8 — Gains on dispositions (190) (341) Arbitration loss 29 — Impairment losses 19 31 Pension and OPEB actuarial and settlement losses (gains) 1,431 (684) Debt extinguishment costs — 311 Adjusted EBIT $ 1,157 $ 1,375 49 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of March 31, 2023, our cash and cash equivalents ("cash") were $1.9 billion, of which $0.7 billion was held outside of the U.S.
Biggest changeTax adjustments for fiscal 2023 include $(5) million changes in valuation allowances on deferred tax assets, $(28) million of adjustments to transition tax, and $(87) million of revaluation of deferred taxes resulting from changes in non-U.S. jurisdiction tax rates. 49 A reconciliation of reported results to non-GAAP results is as follows: Fiscal Year Ended March 31, 2024 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration-Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification Gains and Losses on Dispositions Impairment Losses Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results Income before income taxes 109 111 7 354 16 (115) 5 445 — 932 Income tax expense 23 23 1 75 14 (26) 1 109 97 317 Net income 86 88 6 279 2 (89) 4 336 (97) 615 Less: net loss attributable to non-controlling interest, net of tax (5) — — — — — (4) 2 — (7) Net income attributable to DXC common stockholders $ 91 $ 88 $ 6 $ 279 $ 2 $ (89) $ 8 $ 334 (97) $ 622 Effective Tax Rate 21.1 % 34.0 % Basic EPS $ 0.46 $ 0.45 $ 0.03 $ 1.42 $ 0.01 $ (0.45) $ 0.04 $ 1.71 $ (0.50) $ 3.18 Diluted EPS $ 0.46 $ 0.44 $ 0.03 $ 1.40 $ 0.01 $ (0.45) $ 0.04 $ 1.68 $ (0.49) $ 3.13 Weighted average common shares outstanding for: Basic EPS 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 195.80 Diluted EPS 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 198.78 Fiscal Year Ended March 31, 2023 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration- Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification, Arbitration Loss, and SEC Matter Gains and Losses on Dispositions Impairment Losses Pension and OPEB Actuarial and Settlement Gains and Losses Tax Adjustment Non-GAAP Results (Loss) income before income taxes (885) 216 16 402 83 (190) 19 1,431 — 1,092 Income tax (benefit) expense (319) 44 3 81 31 25 4 291 120 280 Net (loss) income (566) 172 13 321 52 (215) 15 1,140 (120) 812 Less: net income attributable to non-controlling interest, net of tax 2 — — — — — — 2 — 4 Net (loss) income attributable to DXC common stockholders $ (568) $ 172 $ 13 $ 321 $ 52 $ (215) $ 15 $ 1,138 $ (120) $ 808 Effective Tax Rate 36.0 % 25.6 % Basic EPS $ (2.48) $ 0.75 $ 0.06 $ 1.40 $ 0.23 $ (0.94) $ 0.07 $ 4.97 $ (0.52) $ 3.53 Diluted EPS $ (2.48) $ 0.74 $ 0.06 $ 1.38 $ 0.22 $ (0.92) $ 0.06 $ 4.89 $ (0.52) $ 3.47 Weighted average common shares outstanding for: Basic EPS 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 228.99 Diluted EPS 228.99 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 232.62 50 Reconciliations of revenue growth to organic revenue growth are as follows: Fiscal Years Ended March 31, 2024 March 31, 2023 Total revenue growth (5.3) % (11.3) % Foreign currency (0.7) % 6.0 % Acquisitions and divestitures 1.9 % 2.6 % Organic revenue growth (4.1) % (2.7) % GBS revenue growth (2.0) % (8.4) % Foreign currency (0.4) % 5.9 % Acquisitions and divestitures 3.8 % 4.9 % GBS organic revenue growth 1.4 % 2.4 % GIS revenue growth (8.3) % (13.8) % Foreign currency (1.0) % 6.0 % Acquisitions and divestitures — % 0.6 % GIS organic revenue growth (9.3) % (7.2) % Reconciliations of net income (loss) to adjusted EBIT are as follows: Fiscal Years Ended (in millions) March 31, 2024 March 31, 2023 Net income (loss) $ 86 $ (566) Income tax expense (benefit) 23 (319) Interest income (214) (135) Interest expense 298 200 EBIT 193 (820) Restructuring costs 111 216 Transaction, separation and integration-related costs 7 16 Amortization of acquired intangible assets 354 402 Merger-related indemnification 16 46 SEC Matter — 8 Gains on dispositions (115) (190) Arbitration loss — 29 Impairment losses 5 19 Pension and OPEB actuarial and settlement losses 445 1,431 Adjusted EBIT $ 1,016 $ 1,157 51 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of March 31, 2024, our cash and cash equivalents ("cash") were $1.2 billion, of which $0.6 billion was held outside of the U.S.
These methods involve significant judgments and estimates that we assess periodically by considering market and entity-specific factors, such as type of customer, features of the products or services and market conditions. 53 Once the total revenues have been allocated to the various performance obligations and lease components, revenues for each are recognized based on the relevant revenue recognition method for each.
These methods involve significant judgments and estimates that we assess periodically by considering market and entity-specific factors, such as type of customer, features of the products or services and market conditions. Once the total revenues have been allocated to the various performance obligations and lease components, revenues for each are recognized based on the relevant revenue recognition method for each.
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS, incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis.
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS is incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis.
(2) Amounts represent scheduled interest payments on long-term debt. Critical Accounting Estimates The preparation of the financial statements, in accordance with 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.
(2) Amounts represent scheduled interest payments on long-term debt. 54 Critical Accounting Estimates The preparation of the financial statements, in accordance with 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.
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 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 materially from those estimates.
Contracts with multiple performance obligations Many of our contracts re quire us to provide a range of services or performance obligations to our customers, which may include a combination of services, products or both and may also contain leases embedded in those arrangements.
Contracts with multiple performance obligations Many of our contracts re quire us to provide a range of services or performance obligations to our customers, which may include a combination of services and products and may also contain leases embedded in those arrangements.
As a result, significant judgment may be required to determine the appropriate accounting, including whether the elements specified in contracts with multiple performance obligations should be treated as separate performance obligations for revenue recognition purposes, and, when considered appropriate, how the total transaction price should be allocated among the performance obligations and any lease components and the timing of revenue recognition for each.
Significant judgment may be required to determine the appropriate accounting, including whether the elements specified in contracts with multiple performance obligations should be treated as separate performance obligations for revenue recognition purposes, and, when considered appropriate, how the total transaction price should be allocated among the performance obligations and any lease components and the timing of revenue recognition for each.
(5) Impairment losses for fiscal 2023 include an $8 million impairment charge for customer related intangible assets and an $11 million impairment charge associated with a strategic investment.
Impairment losses for fiscal 2023 include an $8 million impairment charge for customer related intangible assets and an $11 million impairment charge associated with a strategic investment.
The discount rate used in an income approach is based on our weighted-average cost of capital and may be adjusted for the relevant risks associated with business-specific characteristics and any uncertainty related to a reporting unit's ability to execute on the projected future cash flows.
The discount rate used in an income approach is based on our weighted-average cost of capital and may be adjusted for the relevant risks associated with business-specific characteristics and any uncertainty related to a reporting unit's ability to generate the projected future cash flows.
As of March 31, 2023, our credit ratings were as follows: Rating Agency Long Term Ratings Short Term Ratings Outlook Fitch BBB F-2 Stable Moody's Baa2 P-2 Stable S&P BBB- - Stable 51 For information on the risk s of ratings downgrades, see Part I, Item 1A - "Risk Factors" subsection titled " Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets .
As of March 31, 2024, our credit ratings were as follows: Rating Agency Long Term Ratings Short Term Ratings Outlook Fitch BBB F-2 Stable Moody's Baa2 P-2 Stable S&P BBB- - Stable For information on the risk s of ratings downgrades, see Part I, Item 1A - "Risk Factors" subsection titled " Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets .
If the likelihood of an adverse outcome is probable and the amount is estimable, we accrue a liability in accordance with ASC 450 "Contingencies." Significant changes in the estimates or assumptions used in assessing the likelihood of an adverse outcome could have a material effect on our results of operations. 56
If the likelihood of an adverse outcome is probable and the amount is estimable, we accrue a liability in accordance with ASC 450 "Contingencies." Significant changes in the estimates or assumptions used in assessing the likelihood of an adverse outcome could have a material effect on our results of operations. 58
The MD&A is organized in the following sections: • Background • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates The following discussion includes a comparison of our results of operations and liquidity and capital resources for fiscal 2023 and fiscal 2022.
The MD&A is organized in the following sections: • Background • Results of Operations • Liquidity and Capital Resources • Critical Accounting Estimates The following discussion includes a comparison of our results of operations and liquidity and capital resources for fiscal 2024 and fiscal 2023.
" 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.
" 53 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 and beyond.
No liabilities related to these arrangements are reflected in the Company's balance sheets. See Note 4 - "Receivables" and Note 21 - "Commitments and Contingencies" for additional information regarding these off-balance sheet arrangements.
No liabilities related to these arrangements are reflected in the Company's balance sheets. See Note 4 - "Receivables" and Note 20 - "Commitments and Contingencies" for additional information regarding these off-balance sheet arrangements.
Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense and cash tax payments of approximately $477 million (including estimated interest and penalties) for the unreserved portion of these items if we do not prevail.
Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense of approximately $507 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $582 million, if we do not prevail.
Our weighted average rates used were: March 31, 2023 March 31, 2022 Discount rates 2.7 % 2.0 % Expected long-term rates of return on assets 4.3 % 4.4 % The assumption for the expected long-term rate of return on plan assets is impacted by the expected asset mix of the plan; judgments regarding the correlation between historical excess returns and future excess returns and expected investment expenses.
Our weighted average rates used were: March 31, 2024 March 31, 2023 Discount rates 4.5 % 2.7 % Expected long-term rates of return on assets 6.0 % 4.3 % The assumption for the expected long-term rate of return on plan assets is impacted by the expected asset mix of the plan; judgments regarding the correlation between historical excess returns and future excess returns and expected investment expenses.
These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, non-GAAP EPS, organic revenue growth, and constant currency revenues.
These non-GAAP financial measures include earnings before interest and taxes (“EBIT”), adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, non-GAAP EPS, organic revenue growth, constant currency revenues, and free cash flow.
A comparison of our results of operations and liquidity and capital resources for fiscal 2022 and fiscal 2021 may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the Securities and Exchange Commission on May 26, 2022.
A comparison of our results of operations and liquidity and capital resources for fiscal 2023 and fiscal 2022 may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” on Form 10-K filed with the Securities and Exchange Commission on May 19, 2023.
The identification of reporting units involves consideration of components of the operating segments and whether or not there is discrete financial information available that is regularly reviewed by management. Additionally, we consider whether or not it is reasonable to aggregate any of the identified components that have similar economic characteristics.
The identification of reporting units requires consideration of components of the operating segments and whether or not there is discrete financial information available that is regularly reviewed by management. Additionally, we consider whether or not it is reasonable to aggregate components that have similar economic characteristics.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A") 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 fiscal year ended March 31, 2023 and our financial condition as of March 31, 2023.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Introduction The purpose of the Management's Discussion and Analysis ( “ 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 fiscal year ended March 31, 2024 and our financial condition as of March 31, 2024.
HP Inc. and HPE litigation (2) ; and indemnification on the Company’s final liability to HPE on the Oracle v. HPE litigation.
HP Inc. and HPE litigation; and the Company’s final liability to HPE on the Oracle v. HPE litigation.
We recorded a valuation allowance against deferred tax assets of approximately $2.1 billion as of March 31, 2023, due to uncertainties related to the ability to utilize these assets.
We recorded a valuation allowance against deferred tax assets of approximately $2.3 billion as of March 31, 2024, due to uncertainties related to the ability to utilize these assets.
Debt Financing The following table summarizes our total debt: As of (in millions) March 31, 2023 March 31, 2022 Short-term debt and current maturities of long-term debt $ 500 $ 900 Long-term debt, net of current maturities 3,900 4,065 Total debt $ 4,400 $ 4,965 The $0.6 billion decrease in total debt during fiscal 2023 was primarily due to net decreases in commercial paper borrowings, finance lease liabilities and borrowings for asset financing.
Debt Financing The following table summarizes our total debt: As of (in millions) March 31, 2024 March 31, 2023 Short-term debt and current maturities of long-term debt $ 271 $ 500 Long-term debt, net of current maturities 3,818 3,900 Total debt $ 4,089 $ 4,400 The $0.3 billion decrease in total debt during fiscal 2024 was primarily due to net decreases in finance lease liabilities, borrowings for asset financing, and commercial paper borrowings.
For more information, see "Non-GAAP Financial Measures." The unfavorable foreign currency exchange rate impact is primarily driven by the strengthening of the U.S. dollar against the British Pound, Euro, and Australian Dollar.
For more information, see "Non-GAAP Financial Measures." The favorable foreign currency exchange rate impact is primarily driven by the weakening of the U.S. dollar against the British Pound and Euro.
The estimates used to calculate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors.
The assumptions used to estimate the fair value of a reporting unit change from year to year based on operating results, market conditions, and other factors.
The 8.4% decrease against the comparative period includes a 5.9% unfavorable foreign currency exchange rate impact and a 4.9% decline in revenue from the disposition of certain businesses, partially offset by 2.4% organic revenue growth from additional services provided to new and existing customers.
The 2.0% decrease against the comparative period includes a 3.8% decline in revenue from the disposition of certain businesses, 42 partially offset by 1.4% organic revenue growth from additional services provided to new and existing customers and a 0.4% favorable foreign currency exchange rate impact.
Changes in these estimates and assumptions include a significant change in the business climate, established business plans, operating performance indicators or competition which could materially affect the determination of fair value for each reporting unit.
Changes in these assumptions may be impacted by a significant change in the business climate, established business plans, operating performance indicators or competition which could materially affect the estimates of fair value for each reporting unit.
For a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors." Global Business Services GBS revenues were $7.0 billion for fiscal 2023, a decrease of $638 million or 8.4% compared to fiscal 2022.
For a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors." Global Business Services GBS revenues were $6.8 billion for fiscal 2024, a decrease of $140 million or 2.0% compared to fiscal 2023.
The IRS examined several issues for these tax years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs and tax planning strategies in previous years.
The IRS examined several issues for these tax years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs, foreign exchange losses, and a third-party financing transaction in previous years.
Taxes Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2023 and 2022 was (36.0)% and 35.5%, respectively.
Taxes Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2024 and 2023 was 21.1% and (36.0)%, respectively.
For contracts with multiple performance obligations and lease components, we allocate the contract’s transaction price to each performance obligation and lease component based on the relative standalone selling price of each distinct good or service in the contract.
For contracts with multiple performance obligations and lease components, we allocate the contract’s transaction price to each performance obligation and lease component based on the relative standalone selling price.
The following table provides the impact changes in the weighted-average assumptions would have had on our net periodic pension benefits and settlement and contractual termination charges for fiscal 2023: (in millions) Change Approximate Change in Net Periodic Pension Expense Approximate Change in Settlement, Contractual Termination, and Mark-to-Market Charges Expected long-term return on plan assets 0.5% $ (49) $ 49 Expected long-term return on plan assets (0.5)% $ 49 $ (49) Discount rate 0.5% $ 18 $ (416) Discount rate (0.5)% $ (23) $ 462 55 Valuation of Assets We review long-lived assets, intangible assets, and goodwill for impairment in accordance with our accounting policy disclosed in Note 1 - "Summary of Significant Accounting Policies." Assessing the fair value of assets involves significant estimates and assumptions including estimation of future cash flows, the timing of such cash flows, and discount rates reflecting the risk inherent in projecting future cash flows.
The following table provides the impact that changes in the weighted-average assumptions would have had on our net periodic pension benefits and settlement and contractual termination charges for fiscal 2024: (in millions) Change Approximate Change in Net Periodic Pension Expense Approximate Change in Settlement, Contractual Termination, and Mark-to-Market Charges Expected long-term return on plan assets 50 basis points $ (38) $ 38 Expected long-term return on plan assets (50) basis points $ 38 $ (38) Discount rate 50 basis points $ 10 $ (441) Discount rate (50) basis points $ (13) $ 497 57 Valuation of Assets We review long-lived assets, intangible assets, and goodwill for impairment in accordance with our accounting policy disclosed in Note 1 - "Summary of Significant Accounting Policies." Assessing the fair value of assets involves significant judgment including estimation of future cash flows, the timing of such cash flows, and discount rates reflecting the risk inherent in projecting future cash flows.
The 11.3% decrease against the comparative period includes a 6.0% unfavorable foreign currency exchange rate impact, a 2.6% decline in revenue from the disposition of certain businesses, and a 2.7% decline in organic revenue. Organic revenue growth is a non-GAAP measure.
The 5.3% decrease against the comparative period includes a 0.7% favorable foreign currency exchange rate impact, a 1.9% decline in revenue from the disposition of certain businesses, and a 4.1% decline in organic revenue. Organic revenue growth is a non-GAAP measure.
Costs to obtain contracts with customers Accounting for the costs to obtain contracts with customers requires significant judgments and estimates with regards to the determination of sales commission payments that qualify for deferral of costs and the related amortization period.
This determination requires significant judgment, which could impact the timing of revenue recognition. 55 Costs to obtain contracts with customers Accounting for the costs to obtain contracts with customers requires significant judgments and estimates with regards to the determination of sales commission payments that qualify for deferral of costs and the related amortization period.
The following earnings are considered indefinitely reinvested: approximately $484 million that could be subject to U.S. federal tax when repatriated to the U.S. under section 1.245A-5(b) of the final Treasury regulations; and approximately $200 million of our accumulated earnings in India. A portion of these indefinitely reinvested earnings may be subject to foreign and U.S. state tax consequences when remitted.
Such earnings and all current foreign earnings are not indefinitely reinvested. The following earnings are considered indefinitely reinvested: approximately $480 million that could be subject to U.S. federal tax when repatriated to the U.S. under section 1.245A-5(b) of the final Treasury regulations; and approximately $200 million of our accumulated earnings in India.
Diluted earnings per share for fiscal 2022 includes $0.99 per share of restructuring costs, $0.07 per share of transaction, separation and integration-related costs, $1.35 per share of amortization of acquired intangible assets, $0.09 per share of impairment losses, $(0.93) per share of net gains on dispositions, $(1.99) per share of pension and OPEB actuarial and settlement gains, $0.93 per share of debt extinguishment costs, and $0.17 per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation. 44 Non-GAAP Financial Measures We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC.
Diluted EPS for fiscal 2024 includes $0.44 per share of restructuring costs, $0.03 per share of transaction, separation and integration-related costs, $1.40 per share of amortization of acquired intangible assets, $0.01 per share of merger-related indemnification, $0.04 per share of impairment losses, $1.68 per share of pension and OPEB actuarial and settlement losses, $(0.45) per share of net gains on dispositions, and $(0.49) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation. 46 Non-GAAP Financial Measures We present non-GAAP financial measures of performance which are derived from the statements of operations of DXC.
Contract modifications are reviewed to determine whether they should be accounted for as part of the original contract, the termination of an existing contract and the creation of a new contract, or as a separate contract, and whether they modify an embedded lease. This determination requires significant judgment, which could impact the timing of revenue recognition.
Contract modifications are reviewed to determine whether they should be accounted for as part of the original contract, the termination of an existing contract and the creation of a new contract, or as a separate contract, and whether they modify an embedded lease.
A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 15 - "Income Taxes." In fiscal 2023, the ETR was primarily impacted by: • A reduction in base erosion and transition taxes, which increased income tax benefit and decreased the ETR by $81 million and 9.1%, respectively. • Income tax and foreign tax credits, which increased income tax benefit and decreased the ETR by $71 million and 8.0%, respectively, offset by tax expense on U.S. international tax inclusions which decreased tax benefit and increased the ETR by $51 million and 5.8%, respectively. • Non-taxable gains and losses from business divestitures, which increased income tax benefit and decreased the ETR by $67 million and 7.6%, respectively.
A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes." In fiscal 2024, the ETR was primarily impacted by: • Changes in foreign jurisdictional losses that decreased the ETR by $160 million and 146.8%, respectively, with an offsetting increase in the ETR due to an increase in the valuation allowance of the same amount. • Income tax and foreign tax credits, which decreased income tax expense and decreased the ETR by $101 million and 92.7%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and increased the ETR by $39 million and 35.8%, respectively. • Foreign withholding taxes, which increased income tax expense and increased the ETR by $64 million and 58.7%, respectively. 45 In fiscal 2023, the ETR was primarily impacted by: • A reduction in base erosion and transition taxes, which increased income tax benefit and decreased the ETR by $81 million and 9.1%, respectively. • Income tax and foreign tax credits, which increased income tax benefit and decreased the ETR by $71 million and 8.0%, respectively, offset by tax expense on U.S. international tax inclusions which decreased tax benefit and increased the ETR by $51 million and 5.8%, respectively. • Non-taxable gains and losses on business divestitures, which increased income tax benefit and decreased the ETR by $67 million and 7.6%, respectively.
(6) • Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation. Income tax expense (benefit) of merger and divestitures is separately computed based on the underlying transaction.
Future discrete reversals of valuation allowances are likewise excluded. (2) • Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of merger and divestitures is separately computed based on the underlying transaction.
Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future.
This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures." Total revenue for fiscal 2023 was $14.4 billion, a decrease of $1,835 million or 11.3%, as compared to the same period a year ago.
This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures." Total revenue for fiscal 2024 was $13.7 billion, a decrease of $763 million or 5.3%, compared to the prior fiscal year.
These obligations are pursuant to HPES merger. • SEC Matter - represents the Company’s liability related to a previously disclosed investigation into its historical determination and disclosure of certain “transaction, separation, and integration-related costs” as part of the Company’s non-GAAP adjustments.
These obligations are related to the HPES merger. • SEC Matter - represents the Company’s liability related to a previously disclosed investigation into its historical determination and disclosure of certain “transaction, separation, and integration-related costs” as part of the Company’s non-GAAP adjustments. • Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.
Gross margin (Revenues less COS as a percentage of revenue) was 22.1% and 22.0% for fiscal 2023 and 2022, respectively. Selling, General and Administrative Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $1.4 billion for fiscal 2023, a decrease of $33 million compared to the prior fiscal year.
Gross margin (Revenues less COS as a percentage of revenue) was 22.6% for fiscal 2024, an increase of 50 basis points against the prior fiscal year. Selling, General and Administrative Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $1.2 billion for fiscal 2024, a decrease of $131 million compared to the prior fiscal year.
We determine whether it is more likely than not a tax position will be sustained upon examination by the appropriate taxing authorities before any portion of the tax benefit is recorded in our financial statements and only the portion of the tax benefit that is measured as greater than 50% likely to be realized upon settlement with a taxing authority (that has full knowledge of all relevant information) is recognized.
However, valuation allowances are subject to change in future reporting periods due to changes in various factors such as when inputs or estimates used in determining valuation allowances significantly change or upon the receipt of new information. 56 We determine whether it is more likely than not a tax position will be sustained upon examination by the appropriate taxing authorities before any portion of the tax benefit is recorded in our financial statements and only the portion of the tax benefit that is measured as greater than 50% likely to be realized upon settlement with a taxing authority (that has full knowledge of all relevant information) is recognized.
The Company will continue to evaluate its position based on its future strategy and cash needs. 54 Considerations impacting the recoverability of deferred tax assets include the period of expiration of the tax asset, planned use of the tax asset, historical and projected taxable income as well as deferred tax liabilities for the tax jurisdiction to which the tax asset relates.
Considerations impacting the recoverability of deferred tax assets include the period of expiration of the tax asset, planned use of the tax asset, historical and projected taxable income as well as deferred tax liabilities for the tax jurisdiction to which the tax asset relates.
We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented. There are limitations to the use of the non-GAAP financial measures presented in this report.
This approach is used for all results where the functional currency is not the U.S. dollar. We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented.
The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carry-forwards, would be approximately $16 million. Earnings Per Share (EPS) Diluted (loss) earnings per share for fiscal 2023 was $(2.48), as compared to $2.81 in fiscal 2022.
The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $17 million. Earnings Per Share (EPS) Diluted EPS for fiscal 2024 was $0.46, an increase of $2.94 compared to the prior fiscal year.
The change was primarily due to: • cash outflows from business dispositions of $147 million in fiscal 2023 caused by net cash deposit outflows from the sale of the FDB Business, compared with a cash inflow of $533 million in fiscal 2022 resulting from various business divestitures in fiscal 2022. • an $80 million year-over-year decrease in cash outflows from capital expenditures primarily from software purchased and developed. • $71 million of incremental proceeds from sales of assets, partially offset by a $46 million decrease in proceeds from short-term and other investing activities.
The change was primarily due to: • cash inflows of $26 million in fiscal 2024 resulting from various business divestitures, compared with cash outflows from business dispositions of $147 million in fiscal 2023 caused by net cash deposit outflows from the sale of the FDB Business; and • a $73 million year-over-year decrease in cash outflows from capital expenditures; partially offset by • a decrease in proceeds from sale of assets and other investing activities of $96 million and $6 million, respectively.
Depreciation and Amortization Depreciation expense was $519 million for fiscal 2023, a decrease of $106 million compared to the prior fiscal year. The decrease in depreciation expense was primarily due to lower average net property and equipment balances and a favorable foreign currency exchange rate impact of $30 million for fiscal 2023.
The decrease in depreciation expense was primarily due to lower average net property and equipment balances. Amortization expense was $971 million for fiscal 2024, a decrease of $29 million compared to the prior fiscal year.
Tax Court, and consequently these years will remain open until such proceedings have concluded. The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025. The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2020 to September 30, 2024.
The Company’s fiscal years 2009, 2010, and 2013 are in the U.S. Tax Court, and consequently these years will remain open until such proceedings have concluded. The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025.
The following table summarizes our cash flow activity: Fiscal Year Ended (in millions) March 31, 2023 March 31, 2022 Change Net cash provided by (used in): Operating activities $ 1,415 $ 1,501 $ (86) Investing activities (635) (60) (575) Financing activities (1,507) (1,818) 311 Effect of exchange rate changes on cash and cash equivalents (97) 29 (126) Cash classified within current assets held for sale 10 52 (42) Net decrease in cash and cash equivalents $ (814) $ (296) $ (518) Cash and cash equivalents at beginning of year 2,672 2,968 Cash and cash equivalents at end of year $ 1,858 $ 2,672 Operating cash flow Net cash provided by operating activities was $1,415 million and $1,501 million, respectively, in fiscal 2023 and fiscal 2022, a decrease of $86 million compared to the prior fiscal year.
The following table summarizes our cash flow activity: Fiscal Year Ended (in millions) March 31, 2024 March 31, 2023 Change Net cash provided by (used in): Operating activities $ 1,361 $ 1,415 $ (54) Investing activities (491) (635) 144 Financing activities (1,487) (1,507) 20 Effect of exchange rate changes on cash and cash equivalents (17) (97) 80 Cash classified within current assets held for sale — 10 (10) Net decrease in cash and cash equivalents $ (634) $ (814) $ 180 Cash and cash equivalents at beginning of year 1,858 2,672 Cash and cash equivalents at end of year $ 1,224 $ 1,858 Operating cash flow Net cash provided by operating activities was $1,361 million and $1,415 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year decrease of $54 million.
(7) Tax adjustment for fiscal 2023 includes $(87) million net revaluation of deferred taxes resulting from changes in non-US jurisdiction tax rates, $(28) million of adjustments to transition tax, and $(5) million for changes in valuation allowances on deferred tax assets.
(3) Tax adjustments for fiscal 2024 include $(92) million of changes in valuation allowances on deferred tax assets, $(7) million of adjustments to transition tax, and $2 million of revaluation of deferred taxes resulting from changes in non-U.S. jurisdiction tax rates.
Financing cash flow Net cash used in financing activities was $1,507 million and $1,818 million, respectively, in fiscal 2023 and fiscal 2022, a change of $311 million compared to the prior fiscal year.
Financing cash flow Net cash used in financing activities was $1,487 million and $1,507 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year change of $20 million.
The following table contains certain key working capital metrics: As of March 31, 2023 March 31, 2022 March 31, 2021 Days of sales outstanding in accounts receivable 67 69 66 Days of purchases outstanding in accounts payable (50) (45) (40) Cash conversion cycle 17 24 26 50 Investing cash flow Net cash used in investing activities was $635 million and $60 million, respectively, in fiscal 2023 and fiscal 2022, a change of $575 million compared to the prior fiscal year.
The following table contains certain key working capital metrics: Three months ended March 31, 2024 March 31, 2023 March 31, 2022 Days of sales outstanding in accounts receivable 69 67 70 Days of purchases outstanding in accounts payable (64) (51) (45) Cash conversion cycle 5 16 25 52 Investing cash flow Net cash used in investing activities was $491 million and $635 million, respectively, in fiscal 2024 and fiscal 2023, reflecting a year-over-year change of $144 million.
Results of Operations The following table provides financial data for fiscal 2023 and 2022: Fiscal Years Ended (In millions, except per-share amounts) March 31, 2023 March 31, 2022 Revenues $ 14,430 $ 16,265 (Loss) income before income taxes (885) 1,141 Income tax (benefit) expense (319) 405 Net (loss) income $ (566) $ 736 Diluted (loss) income per common share: $ (2.48) $ 2.81 39 Revenues Our revenues by geography and operating segments are provided below: Fiscal Years Ended Fiscal Year Ended (in millions) March 31, 2023 March 31, 2022 Percentage Change Constant Currency March 31, 2023 (1) Percentage Change in Constant Currency (1) Geographic Market United States $ 4,320 $ 4,775 (9.5) % $ 4,320 (9.5) % United Kingdom 1,883 2,295 (18.0) % 2,137 (6.9) % Other Europe 4,429 5,117 (13.4) % 4,849 (5.2) % Australia 1,449 1,549 (6.5) % 1,566 1.1 % Other International 2,349 2,529 (7.1) % 2,524 (0.2) % Total Revenues $ 14,430 $ 16,265 (11.3) % $ 15,396 (5.3) % Reportable Segments GBS $ 6,960 $ 7,598 (8.4) % $ 7,406 (2.5) % GIS 7,470 8,667 (13.8) % 7,990 (7.8) % Total Revenues $ 14,430 $ 16,265 (11.3) % $ 15,396 (5.3) % (1) 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.
For more information see “Non-GAAP Financial Measures.” • Revenues of $13.67 billion, down 5.3% compared to prior year period, and down 4.1% on an organic basis; • Diluted earnings (loss) per share of $0.46, compared to $(2.48) in fiscal 2023; adjusted diluted earnings per share of $3.13, compared to $3.47 in fiscal 2023, a decrease of 9.8%; • Operating cash flow of $1,361 million, less capital expenditures of $605 million, resulted in free cash flow of $756 million; • Returned $883 million to shareholders through share repurchases in fiscal 2024. 41 Results of Operations The following table provides financial data for fiscal 2024 and 2023: Fiscal Years Ended (In millions, except per-share amounts) March 31, 2024 March 31, 2023 Revenues $ 13,667 $ 14,430 Income (loss) before income taxes 109 (885) Income tax expense (benefit) 23 (319) Net income (loss) $ 86 $ (566) Diluted income (loss) per common share: $ 0.46 $ (2.48) Revenues Our revenues by geography and operating segments are provided below: Fiscal Years Ended Fiscal Year Ended (in millions) March 31, 2024 March 31, 2023 Percentage Change Constant Currency March 31, 2024 (1) Percentage Change in Constant Currency (1) Geographic Market United States $ 3,909 $ 4,320 (9.5) % $ 3,909 (9.5) % United Kingdom 1,881 1,883 (0.1) % 1,802 (4.3) % Other Europe 4,267 4,429 (3.7) % 4,130 (6.8) % Australia 1,261 1,449 (13.0) % 1,312 (9.5) % Other International 2,349 2,349 — % 2,418 2.9 % Total Revenues $ 13,667 $ 14,430 (5.3) % $ 13,571 (6.0) % Reportable Segments GBS $ 6,820 $ 6,960 (2.0) % $ 6,796 (2.4) % GIS 6,847 7,470 (8.3) % 6,775 (9.3) % Total Revenues $ 13,667 $ 14,430 (5.3) % $ 13,571 (6.0) % (1) 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.
The decrease was primarily due to: • a decrease in net income, net of adjustments of $455 million. • a $369 million favorable change in working capital during fiscal 2023 compared to fiscal 2022 primarily from improvements in our cash collections and payables cycles.
The decrease was primarily due to: • a decrease in net income, net of adjustments of $214 million; partially offset by • a $160 million favorable change in working capital primarily from improvements in our cash conversion cycle.
We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court. We do not expect the U.S. Tax Court matters to be resolved in the next 12 months. The Company’s fiscal years 2009, 2010, 2011 and 2013 are in the U.S.
We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court. During fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years.
The lower net cash used in financing activities was primarily due to: • a $479 million decrease in payments on capital leases and borrowings for asset financings, as the Company continues reducing the volume of these financing arrangements. • a $216 million decrease in cash outflows from net borrowings on long term debt, including the payment of debt extinguishment costs in fiscal 2022. • a $73 million increase in cash inflows from other financing activities, primarily due to a fiscal 2022 $85 million repayment of a liability resulting from a financing transaction entered in fiscal 2017. • a $406 million increase in cash outflows from net repayments on commercial paper borrowings, as the Company reduced its activity in the European commercial paper market due to lower operating cash requirements. • $51 million of higher cash outflows from increased share repurchase activity and related taxes paid on net share settlements.
The change was primarily due to: • a $140 million decrease in cash outflows from commercial paper payments, net of borrowings; • an $81 million decrease in payments on capital leases and borrowings for asset financings, as the Company continues reducing the volume of these financing arrangements; and • $63 million in payments on long term debt in fiscal 2023 that did not occur in fiscal 2024; partially offset by • a $249 million increase in cash used for share repurchase activity and related taxes paid on net share settlements; and • a $15 million increase in cash outflows from other financing activities.
Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Revenues.” 45 Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2023 March 31, 2022 Dollar Percent (Loss) income before income taxes $ (885) $ 1,141 $ (2,026) (177.6) % Non-GAAP income before income taxes $ 1,092 $ 1,236 $ (144) (11.7) % Net (loss) income $ (566) $ 736 $ (1,302) (176.9) % Adjusted EBIT $ 1,157 $ 1,375 $ (218) (15.9) % Reconciliation of Non-GAAP Financial Measures Our non-GAAP adjustments include: • Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges. • Transaction, separation and integration-related (“TSI”) costs – includes costs related to integration, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions.
Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Revenues.” Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2024 March 31, 2023 Dollar (1) Percent (1) Income (loss) before income taxes $ 109 $ (885) $ 994 112.3 % Non-GAAP income before income taxes $ 932 $ 1,092 $ (160) (14.7) % Net income (loss) $ 86 $ (566) $ 652 115.2 % Adjusted EBIT $ 1,016 $ 1,157 $ (141) (12.2) % (1) The dollar and percent change for the Income (loss) before income taxes and Net income (loss) includes the Pension and OPEB actuarial and settlement gains and losses that were $445 million and $1,431 million for the fiscal years ended March 31, 2024 and March 31, 2023, respectively. 48 Reconciliation of Non-GAAP Financial Measures Our non-GAAP adjustments include: • Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges. • Transaction, separation and integration-related (“TSI”) costs – includes costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing. • Amortization of acquired intangible assets – includes amortization of intangible assets acquired through business combinations. • Pension and OPEB actuarial and settlement gains and losses – pension and OPEB actuarial mark to market adjustments and settlement gains and losses. • Merger related indemnification – in fiscal 2024, primarily represents the Company’s current estimate of potential liability to HPE for tax related indemnifications; and in fiscal 2023, represents the Company’s then current estimate of potential liability to HPE for tax related indemnifications; indemnification on the Forsyth v.
Gain on Disposition of Businesses During fiscal 2023, DXC sold its FDB business, resulting in a pre-tax gain of $215 million. During fiscal 2023, DXC also sold certain insignificant businesses that resulted in a net loss of $25 million. During fiscal 2022, DXC sold its HPS business resulting in a pre-tax gain on sale of $331 million.
During fiscal 2023, the Company had a net gain of $190 million from the disposition of certain businesses, including a pre-tax gain of $215 million from the sale of its FDB business partially offset by a loss of $25 million from the sale of certain insignificant businesses.
During fiscal 2023, management approved global cost savings initiatives designed to better align our workforce and facility structures. Total restructuring costs recorded, net of reversals, during fiscal 2023 were $216 million, a decrease of $102 million compared to the prior fiscal year. See Note 13 - "Restructuring Costs" for additional information about our restructuring actions.
Total restructuring costs recorded, net of reversals, during fiscal 2024 were $111 million, a decrease of $105 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses. See Note 12 - "Restructuring Costs" for additional information about our restructuring actions.
The $1,437 million decrease in expenses was primarily due to a favorable foreign currency exchange rate impact of $761 million, a decrease in volumes from divestitures and lower revenue levels, and a reduction in professional services and contractor-related expenses from our cost optimization efforts.
The $670 million decrease in expenses against the prior fiscal year was primarily due to a reduction in labor costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts, partially offset by a $9 million severance expense in the third quarter of fiscal 2024 related to the departure of the Company’s prior Chief Executive Officer and an unfavorable foreign currency exchange rate impact of $64 million.
The 13.8% decrease against the comparative period includes a 6.0% unfavorable foreign currency exchange rate impact, 0.6% decline in revenue from the disposition of certain businesses, and a 7.2% decline in organic revenue from project completions, early terminations, and lower resale revenue. 40 Costs and Expenses Our total costs and expenses were as follows: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2023 March 31, 2022 Dollar Percent Costs of services (excludes depreciation and amortization and restructuring costs) $ 11,246 $ 12,683 $ (1,437) (11.3) % Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 1,375 1,408 (33) (2.3) Depreciation and amortization 1,519 1,717 (198) (11.5) Restructuring costs 216 318 (102) (32.1) Interest expense 200 204 (4) (2.0) Interest income (135) (65) (70) 107.7 Debt extinguishment costs — 311 (311) (100.0) Gain on disposition of businesses (190) (371) 181 (48.8) Other expense (income), net 1,084 (1,081) 2,165 (200.3) Total costs and expenses $ 15,315 $ 15,124 $ 191 1.3 % Costs of Services Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), were $11.2 billion for fiscal 2023, a decrease of $1,437 million compared to the prior fiscal year.
Costs and Expenses Our total costs and expenses were as follows: Dollar Amount Fiscal Years Ended Change (in millions) March 31, 2024 March 31, 2023 Dollar Percent Costs of services (excludes depreciation and amortization and restructuring costs) $ 10,576 $ 11,246 $ (670) (6.0) % Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 1,244 1,375 (131) (9.5) Depreciation and amortization 1,404 1,519 (115) (7.6) Restructuring costs 111 216 (105) (48.6) Interest expense 298 200 98 49.0 Interest income (214) (135) (79) 58.5 Gain on disposition of businesses (79) (190) 111 (58.4) Other expense (income), net 218 1,084 (866) (79.9) Total costs and expenses $ 13,558 $ 15,315 $ (1,757) (11.5) % Costs of Services Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), were $10.6 billion for fiscal 2024, a decrease of $670 million compared to the prior fiscal year.
Cash Commitments For a description of the Company’s cash commitments to debt, leases, pension and other benefit plans, and minimum purchase commitments, refer to “Note 11 - Debt”, Note 5 - "Leases”, "Note 21 - Commitments and Contingencies", and “Note 14 - Pension and Other Benefit Plans ”for the estimated future benefit payments under our Pension and OPEB plans. 52 Our other cash commitments as of March 31, 2023, were as follows: (in millions) Less than 1 year 2-3 years 4-5 years More than 5 years Total U.S.
Cash Commitments For a description of the Company’s cash commitments to debt, leases, pension and other benefit plans, and minimum purchase commitments, refer to “Note 10 - Debt,” Note 5 - "Leases,” "Note 20 - Commitments and Contingencies," and “Note 13 - Pension and Other Benefit Plans,” for the estimated future benefit payments under our Pension and OPEB plans.
Share Repurchases S ee Note 16 - "Stockholders' Equity." Dividends To maintain our financial flexibility, we continued to suspend payment of quarterly dividends for fiscal 2023.
Our liquidity of $4.4 billion as of March 31, 2024, includes $1.2 billion of cash and cash equivalents and $3.2 billion of available borrowings under our revolving credit facility. Share Repurchases S ee Note 15 - "Stockholders' Equity." Dividends To maintain our financial flexibility, we continued to suspend payment of quarterly dividends for fiscal 2024.
Other Expense (Income), Net Other expense (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.
During fiscal 2023, the Company had a net gain of $190 million from the disposition of certain businesses, including a pre-tax gain of $215 million from the sale of its FDB business, partially offset by a loss of $25 million from the sale of certain insignificant businesses. 44 Other Expense (Income), Net Other expense (income), net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, gains on sales of assets, and other miscellaneous gains and losses.
See Note 14 - "Pension and Other Benefit Plans" for additional information. • a foreign currency gain of $15 million in fiscal 2023 versus a $13 million loss in fiscal 2022 primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program. • a $2 million of increase in gains from sales of assets. • a $51 million decrease in other losses, primarily due to a greater amount of impairment losses in the comparative period.
The change against the prior fiscal year was primarily due to: • net periodic pension income decreased by $106 million primarily due to changes in expected returns on assets and other actuarial assumptions; • pension and OPEB actuarial and settlement losses decreased by $986 million from mark-to-market adjustments and other settlement gains and losses; • foreign currency gains decreased $8 million primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program; • a decrease in gains from sales of assets of $50 million; and • an increase in other gains of $44 million, primarily from the sale of a strategic investment in fiscal 2024 and an impairment loss recorded in fiscal 2023.
Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.
Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis. (3) (1) During fiscal 2024, the Company sold insignificant businesses and a strategic investment and made adjustments to estimated amounts from prior years’ dispositions that resulted in a net gain of $115 million.
Amortization expense was $1,000 million for fiscal 2023, a decrease of $92 million compared to the prior fiscal year.
SG&A as a percentage of revenue was 9.1% for fiscal 2024, a favorable decrease of 40 basis points against the prior fiscal year. 43 Depreciation and Amortization Depreciation expense was $433 million for fiscal 2024, a decrease of $86 million compared to the prior fiscal year.
The components of other expense (income), net for fiscal 2023 and 2022 were as follows: Fiscal Years Ended (in millions) March 31, 2023 March 31, 2022 Dollar Change Non-service cost components of net periodic pension expense (income) $ 1,180 $ (1,066) $ 2,246 Foreign currency (gain) loss (15) 13 (28) Gain on sale of assets (90) (88) (2) Other loss 9 60 (51) Total $ 1,084 $ (1,081) $ 2,165 42 Other expense (income), net, was $1,084 million and $(1,081) million in fiscal 2023 and fiscal 2022, respectively, a change of $2,165 million compared to the prior fiscal year that was primarily due to: • net periodic pension expense increased by $2,246 million primarily due to a $1,070 million mark-to-market pension loss in fiscal 2023 versus a $664 million gain in fiscal 2022, a $361 million settlement loss in fiscal 2023 related to the buy-out of a defined benefit pension plan in the U.K., and $131 million less pension income in fiscal 2023 due to changes in expected returns on assets and other actuarial assumptions.
The components of other expense (income), net for fiscal 2024 and 2023 were as follows: Fiscal Years Ended (in millions) March 31, 2024 March 31, 2023 Dollar Change Non-service cost components of net periodic pension (income) expense $ (145) $ (251) $ 106 Pension and OPEB actuarial and settlement losses (gains) 445 1,431 (986) Foreign currency (gain) loss (7) (15) 8 Gain on sale of assets (40) (90) 50 Other (gain) loss (35) 9 (44) Total $ 218 $ 1,084 $ (866) Other expense (income), net, was $218 million in fiscal 2024, a decrease of $866 million against the prior fiscal year.
The redemption of the mandatorily redeemable preferred stock outstanding and a favorable foreign currency exchange rate impact also contributed to the decrease in total debt during fiscal 2023. We were in compliance with all financial covenants associated with our borrowings as of March 31, 2023 and March 31, 2022.
We were in compliance with all financial covenants associated with our borrowings as of March 31, 2024 and March 31, 2023.
Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. This approach is used for all results where the functional currency is not the U.S. dollar.
Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. Organic revenue is calculated as constant currency revenue excluding the impact of mergers, acquisitions or similar transactions until the one-year anniversary of the transaction and excluding revenues of divestitures during the reporting period.
Any such changes could significantly affect the amounts reported in the consolidated financial statements in the year these changes occur. The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S. tax upon repatriation. Such earnings and all current foreign earnings are not indefinitely reinvested.
When and how these rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S. and non-U.S. jurisdictions. The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S. tax upon repatriation.
The Company expects to reach resolution for fiscal and tax return years 2009 through 2020 no earlier than fiscal 2025. 43 The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions.
The Company expects to reach resolution for fiscal and tax return years 2009 through 2021 no earlier than the end of fiscal year 2026, except fiscal year 2012 for which the statute closes in fiscal year 2025, and potentially the years subject to litigation which may be resolved in fiscal year 2025.
Interest Expense and Interest Income For fiscal 2023, net interest expense (interest expense less interest income) was $65 million, a decrease of $74 million as compared to the prior fiscal year.
Interest Expense and Interest Income For fiscal 2024, net interest expense (interest expense less interest income) was $84 million, an increase of $19 million as compared to the prior fiscal year. The increase in net interest expense against the comparative period was primarily due to higher interest rates globally that increased interest expense from securitization and commercial paper borrowings.
The $33 million decrease in SG&A expenses was primarily due to a favorable foreign currency exchange rate impact of $68 million, lower real estate costs and other professional and contractor-related expenses, and a $10 million decrease in transaction, separation and integration-related (“TSI”) costs, partially offset by a $46 million charge for merger-related indemnification expenses, $29 million for arbitration losses, and $8 million for the SEC Matter.
The $131 million decrease in expenses against the prior fiscal year was primarily due to a reduction of $30 million in costs related to merger related indemnification expenses, a decrease of $9 million in transaction, separation and integration-related (“TSI”) costs, and lower professional services and other vendor-related expenses in fiscal 2024.
Our customers include commercial businesses of many sizes and in many industries and public sector clients.
Our customers include commercial businesses of many sizes and in many industries and public sector clients. Key Metrics Key metrics for fiscal 2024 compared to fiscal 2023 are included below. We have presented organic revenue and diluted earnings per share on a non-GAAP basis.
The decrease in earnings per share was due to a decrease of $1,286 million in net income attributable to DXC common stockholders.
The increase in diluted EPS against the prior fiscal year was primarily due to an increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.
Removed
Global Infrastructure Services GIS revenues were $7.5 billion for fiscal 2023, a decrease of $1,197 million or 13.8% compared to fiscal 2022.
Added
Global Infrastructure Services GIS revenues were $6.8 billion for fiscal 2024, a decrease of $623 million or 8.3% compared to fiscal 2023. The 8.3% decrease against the comparative period includes a 1.0% favorable foreign currency exchange rate impact offset by a 9.3% decline in organic revenue from project completions, early terminations, and lower resale revenue.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInterest Rate Risk As of March 31, 2023, we had outstanding debt with varying maturities for an aggregate carrying amount of $4.4 billion, of which $0.1 billion was floating interest rate debt. As of March 31, 2023, an assumed 10% unfavorable change in interest rates would not be material to our consolidated results of operations or cash flows.
Biggest changeInterest Rate Risk As of March 31, 2024, we had outstanding debt with varying maturities for an aggregate carrying amount of $4.1 billion, of which none was floating interest rate debt. As of March 31, 2024, an assumed 10% unfavorable change in interest rates would not be material to our consolidated results of operations or cash flows.
Therefore, the changes in fair value of these forward contracts are recorded in accumulated other comprehensive (loss) income, net of taxes in the statements of comprehensive income and subsequently classified into net income in the period the hedged transactions are recognized in net income.
Therefore, the changes in fair value of these forward contracts are recorded in accumulated other comprehensive loss, net of taxes in the statements of comprehensive income and subsequently classified into net income in the period the hedged transactions are recognized in net income.
For the year ended March 31, 2023, a hypothetical 10% increase (decrease) in the value of the U.S. dollar against all currencies would have decreased (increased) revenues by approximately 7%, or $1.0 billion. The majority of this fluctuation would be offset by expenses incurred in local currency.
For the year ended March 31, 2024, a hypothetical 10% increase (decrease) in the value of the U.S. dollar against all currencies would have decreased (increased) revenues by approximately 7.1%, or $1.0 billion. The majority of this fluctuation would be offset by expenses incurred in local currency.
A change in interest rates related to our long-term debt would not have a material impact on our balance sheet as we do not record our debt at fair value. 57
A change in interest rates related to our long-term debt would not have a material impact on our balance sheet as we do not record our debt at fair value. 59
However, due to our increased use of offshore labor centers, we have become more exposed to fluctuations in foreign currency exchange rates. We experienced significant foreign currency fluctuations during fiscal 2023 due primarily to the volatility of the Euro, British Pound, and Australian Dollar in relation to the U.S. dollar.
However, due to our increased use of offshore labor centers, we have become more exposed to fluctuations in foreign currency exchange rates. We experienced significant foreign currency fluctuations during both fiscal years 2024 and 2023 due primarily to the volatility of the Euro, British Pound, and Australian Dollar in relation to the U.S. dollar.
We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than U.S. dollar; see Note 12 - "Revenue." During fiscal 2023, approximately 70% of our revenues were generated outside of the United States.
We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than U.S. dollar; see Note 11 - "Revenue." During fiscal 2024, approximately 71% of our revenues were generated outside of the United States.
Removed
Significant foreign currency fluctuations during fiscal 2022 were due primarily to the volatility of the Euro, British Pound, Canadian Dollar, and Australian Dollar in relation to the U.S. dollar.

Other DXC 10-K year-over-year comparisons