10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ____________

Commission File No.: 001-38033

	DXC TECHNOLOGY COMPANY
	(Exact name of registrant as specified in its charter)

Nevada			61-1800317
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
1775 Tysons Boulevard
Tysons	,	Virginia	22102
(Address of principal executive offices)			(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	DXC	New York Stock Exchange
2.750% Senior Notes Due 2025	DXC 25	New York Stock Exchange
1.750% Senior Notes Due 2026	DXC 26	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)

of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  x Yes  o No  

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	x	Accelerated Filer	o
Non-accelerated Filer	o	Smaller reporting company		☐
		Emerging growth company		☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

       ☐ Yes  x   No

254,593,993 shares of common stock, par value $0.01 per share, were outstanding on January 29, 2021.

TABLE OF CONTENTS

Item		Page
	PART I - FINANCIAL INFORMATION
1.	Financial Statements (unaudited)	1
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	50
3.	Quantitative and Qualitative Disclosures About Market Risk	69
4.	Controls and Procedures	69
	PART II - OTHER INFORMATION
1.	Legal Proceedings	72
1A.	Risk Factors	72
2.	Unregistered Sales of Equity Securities and Use of Proceeds	72
3.	Defaults Upon Senior Securities	73
4.	Mine Safety Disclosure	73
5.	Other Information	73
6.	Exhibits	73

PART I

ITEM 1. FINANCIAL STATEMENTS

Index to Condensed Consolidated Financial Statements

	Page
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended December 31, 2020 and December 31, 2019 (unaudited)	2
Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended December 31, 2020 and December 31, 2020 (unaudited)	3
Condensed Consolidated Balance Sheets as of December 31, 2020 and March 31, 2020 (unaudited)	4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended December 31, 2020 and December 31, 2019 (unaudited)	5
Condensed Consolidated Statements of Changes in Equity for the Three and Nine Months Ended December 31, 2020 and December 31, 2019 (unaudited)	6
Notes to Condensed Consolidated Financial Statements (unaudited)
Note 1–Summary of Significant Accounting Policies	8
Note 2–Recent Accounting Pronouncements	10
Note 3–Acquisitions	11
Note 4–Divestitures	12
Note 5–Earnings (Loss) Per Share	14
Note 6–Receivables	14
Note 7–Leases	17
Note 8–Fair Value	20
Note 9–Derivative and Hedging Activities	22
Note 10–Intangible Assets	25
Note 11–Goodwill	26
Note 12–Debt	27
Note 13–Revenue	28
Note 14–Restructuring Costs	30
Note 15–Pension and Other Benefit Plans	32
Note 16–Income Taxes	34
Note 17–Stockholders' Equity	35
Note 18–Stock Incentive Plans	36
Note 19–Cash Flows	38
Note 20–Segment Information	39
Note 21–Commitments and Contingencies	42

1

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended				Nine Months Ended
(in millions, except per-share amounts)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Revenues	$	4,288	$	5,021	$	13,344	$	14,762
Costs of services (excludes depreciation and amortization and restructuring costs)	3,333		3,827		10,525		11,128
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	517		518		1,595		1,514
Depreciation and amortization	475		479		1,492		1,416
Goodwill impairment losses	—		53		—		2,940
Restructuring costs	104		74		441		248
Interest expense	82		93		284		288
Interest income	(28)		(33)		(76)		(130)
Gain on disposition of businesses	(2,046)		—		(2,046)		—
Gain on arbitration award	—		—		—		(632)
Other income, net	(127)		(117)		(318)		(344)
Total costs and expenses	2,310		4,894		11,897		16,428
Income (loss) before income taxes	1,978		127		1,447		(1,666)
Income tax expense	875		37		789		191
Net income (loss)	1,103		90		658		(1,857)
Less: net income attributable to non-controlling interest, net of tax	5		8		9		17
Net income (loss) attributable to DXC common stockholders	$	1,098	$	82	$	649	$	(1,874)
Earnings (loss) per common share:
Basic	$	4.32	$	0.32	$	2.55	$	(7.20)
Diluted	$	4.29	$	0.32	$	2.54	$	(7.20)

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

2

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

			Three Months Ended				Nine Months Ended
(in millions)			December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net income (loss)			$	1,103	$	90	$	658	$	(1,857)
Other comprehensive income, net of taxes:
	Foreign currency translation adjustments, net of tax (1)		170		293		200		87
	Cash flow hedges adjustments, net of tax (2)		—		(8)		18		(6)
	Available-for-sale securities, net of tax (3)		(11)		—		(6)		2
	Pension and other post-retirement benefit plans, net of tax:
		Prior service cost, net of tax (4)	(1)		—		(1)		—
		Amortization of prior service cost, net of tax (5)	(2)		(2)		(12)		(6)
	Pension and other post-retirement benefit plans, net of tax		(3)		(2)		(13)		(6)
Other comprehensive income, net of taxes			156		283		199		77
Comprehensive income (loss)			1,259		373		857		(1,780)
	Less: comprehensive income attributable to non-controlling interest		6		39		12		26
Comprehensive income (loss) attributable to DXC common stockholders			$	1,253	$	334	$	845	$	(1,806)

(1) Tax benefit related to foreign currency translation adjustments was $9 and $31 for the three and nine months ended December 31, 2020, respectively, and $15 and $2 for the three and nine months ended December 31, 2019, respectively.

(2) Tax expense related to cash flow hedge adjustments was $0 and $6 for the three and nine months ended December 31, 2020, respectively. Tax benefit related to cash flow hedge adjustments was $1 and $1 for the three and nine months ended December 31, 2019, respectively.

(3) Tax benefit related to available-for-sale securities was $4 for the three and nine months ended December 31, 2020. Tax expense related to available-for-sale securities was $0 and $1 for the three and nine months ended December 31, 2019, respectively.

(4) There was no tax benefit related to prior service costs during the three and nine months ended December 31, 2020 and December 31, 2019, respectively.

(5) Tax benefit related to amortization of prior service costs was $1 and $3 for the three and nine months ended December 31, 2020, respectively, and $0 and $1 for the three and nine months ended December 31, 2019, respectively.

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

3

DXC TECHNOLOGY COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

	As of
(in millions, except per-share and share amounts)	December 31, 2020		March 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	3,919	$	3,679
Receivables and contract assets, net of allowance of $199 and $74	4,130		4,392
Prepaid expenses	586		646
Other current assets	470		270
Total current assets	9,105		8,987
Intangible assets, net of accumulated amortization of $4,545 and $4,347	4,019		5,731
Operating right-of-use assets, net	1,459		1,428
Goodwill	736		2,017
Deferred income taxes, net	315		265
Property and equipment, net of accumulated depreciation of $4,295 and $3,818	3,321		3,547
Other assets	4,679		4,031
Total Assets	$	23,634	$	26,006
LIABILITIES and EQUITY
Current liabilities:
Short-term debt and current maturities of long-term debt	$	795	$	1,276
Accounts payable	852		1,598
Accrued payroll and related costs	741		630
Current operating lease liabilities	450		482
Accrued expenses and other current liabilities	3,285		2,801
Deferred revenue and advance contract payments	1,102		1,021
Income taxes payable	1,045		87
Total current liabilities	8,270		7,895
Long-term debt, net of current maturities	5,444		8,672
Non-current deferred revenue	666		735
Non-current operating lease liabilities	1,113		1,063
Non-current income tax liabilities and deferred tax liabilities	792		1,157
Other long-term liabilities	1,354		1,355
Total Liabilities	17,639		20,877
Commitments and contingencies
DXC stockholders’ equity:
Preferred stock, par value $.01 per share, 1,000,000 shares authorized, none issued as of December 31, 2020 and March 31, 2020	—		—
Common stock, par value $.01 per share, 750,000,000 shares authorized, 256,800,719 issued as of December 31, 2020 and 255,674,040 issued as of March 31, 2020	3		3
Additional paid-in capital	10,748		10,714
Accumulated deficit	(4,533)		(5,177)
Accumulated other comprehensive loss	(407)		(603)
Treasury stock, at cost, 2,410,917 and 2,148,708 shares as of December 31, 2020 and March 31, 2020	(156)		(152)
Total DXC stockholders’ equity	5,655		4,785
Non-controlling interest in subsidiaries	340		344
Total Equity	5,995		5,129
Total Liabilities and Equity	$	23,634	$	26,006

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

4

DXC TECHNOLOGY COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash flows from operating activities:
Net income (loss)	$	658	$	(1,857)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,506		1,429
Goodwill impairment losses	—		2,940
Operating right-of-use expense	463		506
Pension and other post-employment benefits, actuarial and settlement losses	2		—
Share-based compensation	42		57
Deferred taxes	(319)		(28)
(Gain) loss on dispositions	(2,023)		6
Provision for losses on accounts receivable	52		—
Unrealized foreign currency exchange (gain) loss	(60)		14
Impairment losses and contract write-offs	68		20
Other non-cash charges, net	(2)		(13)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in assets	88		141
Decrease in operating lease liability	(463)		(506)
Increase (decrease) in other liabilities	392		(647)
Net cash provided by operating activities	404		2,062
Cash flows from investing activities:
Purchases of property and equipment	(215)		(240)
Payments for transition and transformation contract costs	(189)		(220)
Software purchased and developed	(209)		(178)
Payments for acquisitions, net of cash acquired	(10)		(1,997)
Business dispositions	4,942		—
Cash collections related to deferred purchase price receivable	159		513
Proceeds from sale of assets	27		55
Short-term investing	—		(75)
Other investing activities, net	(5)		20
Net cash provided by (used in) investing activities	4,500		(2,122)
Cash flows from financing activities:
Borrowings of commercial paper	854		4,010
Repayments of commercial paper	(1,327)		(3,893)
Borrowings under lines of credit	2,500		—
Repayment of borrowings under lines of credit	(4,000)		—
Borrowings on long-term debt, net of discount	993		2,198
Principal payments on long-term debt	(2,926)		(1,029)
Payments on finance leases and borrowings for asset financing	(694)		(646)
Proceeds from stock options and other common stock transactions	1		11
Taxes paid related to net share settlements of share-based compensation awards	(5)		(15)
Repurchase of common stock and advance payment for accelerated share repurchase	—		(736)
Dividend payments	(53)		(161)
Other financing activities, net	(14)		(44)
Net cash used in financing activities	(4,671)		(305)
Effect of exchange rate changes on cash and cash equivalents	20		26
Net increase (decrease) in cash and cash equivalents including cash classified within current assets held for sale	253		(339)
Less: cash classified within current assets held for sale	(13)		—
Net increase (decrease) in cash and cash equivalents	240		(339)
Cash and cash equivalents at beginning of year	3,679		2,899
Cash and cash equivalents at end of period	$	3,919	$	2,560

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

5

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

	Three Months Ended December 31, 2020
(in millions, except shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock (1)		Total DXC Equity		Non- Controlling Interest		Total Equity
	Shares	Amount
Balance at September 30, 2020	256,522	$	3	$	10,746	$	(5,631)	$	(562)	$	(155)	$	4,401	$	350	$	4,751
Net income						1,098						1,098		5		1,103
Other comprehensive income								155				155		1		156
Share-based compensation expense				1								1				1
Acquisition of treasury stock										(1)		(1)				(1)
Stock option exercises and other common stock transactions	279			1								1				1
Non-controlling interest distributions and other												—		(16)		(16)
Balance at December 31, 2020	256,801	$	3	$	10,748	$	(4,533)	$	(407)	$	(156)	$	5,655	$	340	$	5,995
	Three Months Ended December 31, 2019
(in millions, except shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock		Total DXC Equity		Non- Controlling Interest		Total Equity
	Shares	Amount
Balance at September 30, 2019	257,626	$	3	$	10,793	$	(1,668)	$	(428)	$	(150)	$	8,550	$	320	$	8,870
Net income						82						82		8		90
Other comprehensive income								252				252		31		283
Share-based compensation expense				6								6				6
Acquisition of treasury stock										(1)		(1)				(1)
Share repurchase program	(2,354)			(98)		12						(86)				(86)
Stock option exercises and other common stock transactions	334											—				—
Dividends declared ($0.21 per share)						(54)						(54)				(54)
Non-controlling interest distributions and other												—		(7)		(7)
Balance at December 31, 2019	255,606	$	3	$	10,701	$	(1,628)	$	(176)	$	(151)	$	8,749	$	352	$	9,101

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

6

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

	Nine Months Ended December 31, 2020
(in millions, except shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock (1)		Total DXC Equity		Non- Controlling Interest		Total Equity
	Shares	Amount
Balance at March 31, 2020	255,674	$	3	$	10,714	$	(5,177)	$	(603)	$	(152)	$	4,785	$	344	$	5,129
Cumulative effect of adopting ASU 2016-13						(4)						(4)				(4)
Net income						649						649		9		658
Other comprehensive income								196				196		3		199
Share-based compensation expense				33								33				33
Acquisition of treasury stock										(4)		(4)				(4)
Stock option exercises and other common stock transactions	1,127			1								1				1
Non-controlling interest distributions and other						(1)						(1)		(16)		(17)
Balance at December 31, 2020	256,801	$	3	$	10,748	$	(4,533)	$	(407)	$	(156)	$	5,655	$	340	$	5,995
	Nine Months Ended December 31, 2019
(in millions, except shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock		Total DXC Equity		Non- Controlling Interest		Total Equity
	Shares	Amount
Balance at March 31, 2019	270,214	$	3	$	11,301	$	478	$	(244)	$	(136)	$	11,402	$	323	$	11,725
Net loss						(1,874)						(1,874)		17		(1,857)
Other comprehensive income								68				68		9		77
Share-based compensation expense				55								55				55
Acquisition of treasury stock										(15)		(15)				(15)
Share repurchase program	(15,934)			(669)		(67)						(736)				(736)
Stock option exercises and other common stock transactions	1,326			14								14				14
Dividends declared ($0.63 per share)						(165)						(165)				(165)
Non-controlling interest distributions and other												—		3		3
Balance at December 31, 2019	255,606	$	3	$	10,701	$	(1,628)	$	(176)	$	(151)	$	8,749	$	352	$	9,101

    (1) 2,410,917 treasury shares as of December 31, 2020.

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

7

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1 - Summary of Significant Accounting Policies

Business

DXC Technology Company ("DXC," the "Company," "we," "us," or "our") helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to deploy its enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences.

HHS Sale

On October 1, 2020, DXC completed the sale of its U.S. State and Local Health and Human Services business ("HHS" or the "HHS Business") to Veritas Capital Fund Management, L.L.C. ("Veritas Capital") to form Gainwell Technologies. The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business together with future services to be provided by the Company for a total enterprise value of $5.0 billion, subject to net working capital adjustments and assumed liabilities. See Note 4 - Divestitures for further information.

HPS Sale

On July 17, 2020, DXC entered into a purchase agreement to sell (the "HPS Sale") its healthcare provider software business ("HPS" or the "HPS Business") to Dedalus Holding S.p.A. ("Dedalus") for €459 million (approximately $525 million), subject to certain adjustments. The HPS Sale is expected to close by March 2021, subject to meeting certain closing conditions.

Luxoft Acquisition

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

Basis of Presentation

In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the “financial statements,” (ii) the Condensed Consolidated Statements of Operations as the “statements of operations,” (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the "statements of comprehensive income," (iv) the Condensed Consolidated Balance Sheets as the “balance sheets,” and (v) the Condensed Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references throughout to numbered “Notes” refer to the numbered Notes in these Notes to Condensed Consolidated Financial Statements, unless otherwise noted.

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

8

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States ("GAAP"). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 ("fiscal 2020").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect amounts reported in the financial statements. The Company bases its estimates on assumptions regarding historical experience, currently available information and anticipated developments that it believes are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. The severity, magnitude and duration, as well as the economic consequences of the coronavirus disease 2019 ("COVID-19") pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of the Company's management, the accompanying financial statements of DXC contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.

Allowance for Credit Losses

Effective April 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” using the modified retrospective method. Refer to Note 2 - "Recent Accounting Pronouncements" and Note 6 - "Receivables" for further discussion of the impact of adoption and other required disclosures. The amendments in this update changed the guidance for credit losses to an expected loss model rather than an incurred loss model. Financial assets subject to impairment under an expected credit loss model include billed and unbilled receivables, other receivables, and contract assets. Certain off-balance sheet arrangements, such as financial guarantees associated with receivables securitization facilities, are also subject to the guidance of ASU 2016-13.

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

9

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 2 - Recent Accounting Pronouncements

During the nine months ended December 31, 2020, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:

Date Issued and ASU	Date Adopted and Method	Description	Impact
June 2016 ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	April 1, 2020 Modified Retrospective	This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.	The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.
August 2018 ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"	April 1, 2020 Prospective	This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.	The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.

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

Date Issued and ASU	DXC Effective Date	Description	Impact
December 2019 ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"	Fiscal 2022	This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. Early adoption of this update is permitted.	The Company is currently evaluating the potential impact this standard may have on its financial statements in future reporting periods.

Other recently issued ASUs effective after December 31, 2020 are not expected to have a material effect on DXC's consolidated financial statements.

10

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 3 - Acquisitions

Fiscal 2020 Acquisitions

Luxoft Acquisition

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

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

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

(in millions)	Fair Value
Cash and cash equivalents	$	113
Accounts receivable	233
Other current assets	15
Total current assets	361
Property and equipment	31
Intangible assets	577
Other assets	99
Total assets acquired	1,068
Accounts payable, accrued payroll, accrued expenses, and other current liabilities	(121)
Deferred revenue	(8)
Long-term deferred tax liabilities and income tax payable	(106)
Other liabilities	(72)
Total liabilities assumed	(307)
Net identifiable assets acquired	761
Goodwill	1,262
Total consideration transferred	$	2,023

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

11

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Below are the estimated useful lives of the acquired intangibles:

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

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

Note 4 - Divestitures

HHS Sale

On October 1, 2020, DXC completed the sale of its HHS Business to Veritas Capital. The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business for a total enterprise value of $5.0 billion (including $85 million related to future services to be provided by the Company). As part of the sale of the HHS business, $272 million of repurchased receivables, previously sold under the Milano Receivables Facility ("Milano Facility') (see Note 6 - "Receivables" to the financial statements), $12 million of prepaid maintenance, and $48 million of software licenses transferred to the HHS Business. DXC made payment for these assets during the third quarter of fiscal 2021.The repurchase of receivables and payment on prepaid maintenance are reported as operating cash outflows, and the payment for software license is considered an investing cash outflow. The HHS Sale resulted in a pre-tax gain on sale of $2,041 million, net of closing costs. The sale price is subject to adjustment based on changes in actual closing net working capital. Final potential working capital adjustments are pending. The sale was not subject to any financing condition or shareholder approval.

Approximately $3.5 billion of the sale proceeds were used to prepay $1,250 million of Revolver Credit Facility, £600 million of GBP commercial paper (approximately $772 million), and the following term loan facilities: €350 million of Euro Term Loan due fiscal 2024 (approximately $410 million), $381 million of USD Term loan due fiscal 2025, A$500 million of AUD Term Loan due fiscal 2022 (approximately $358 million), and €250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $292 million). See Note 12 - "Debt" to the financial statements.

Following the transaction close, DXC retains its remaining healthcare practice, relating to the pending HPS sale.

DXC's post-divesture relationship with the HHS Business is governed by the Purchase Agreement, which provides for the allocation of assets, employees, liabilities and obligations (including property, employee benefits, litigation, and tax-related assets and liabilities) between DXC and the HHS Business attributable to periods prior to, at and after divestment. In addition, DXC and the HHS Business have service and commercial contracts that generally extend through fiscal 2023.

12

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

As of September 30, 2020, the divestment of the HHS Business, reported as part of the GBS segment, met the requirements for presentation as assets held for sale under GAAP. However, it did not meet the requirements for presentation as discontinued operations as it did not represent a strategic shift that would have a major effect on DXC's operations and financial results and is included in income from continuing operations for the nine months ended December 31, 2020 and 2019 prior to its sale closing date.

The following is a summary of the assets and liabilities distributed as part of the HHS Sale on October 1, 2020:

(in millions)
Assets:
Cash and cash equivalents	$	8
Accounts receivable, net	295
Prepaid expenses	39
Other current assets	2
Total current assets	344
Intangible assets, net	1,308
Operating right-of-use assets, net	74
Goodwill	1,354
Property and equipment, net	46
Other assets	54
Total non-current assets	2,836
Total assets	$	3,180
Liabilities:
Accounts payable	$	79
Accrued payroll and related costs	13
Current operating lease liabilities	27
Accrued expenses and other current liabilities	36
Deferred revenue and advance contract payments	20
Total current liabilities	175
Non-current deferred revenue	32
Long-term operating lease liabilities	48
Other long term liabilities	2
Total long-term liabilities	82
Total liabilities	$	257

During the third quarter of fiscal 2021, the Company sold an insignificant business that resulted in a gain of $5 million.

13

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 5 - Earnings (Loss) per Share

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

	Three Months Ended				Nine Months Ended
(in millions, except per-share amounts)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net income (loss) attributable to DXC common shareholders:	$	1,098	$	82	$	649	$	(1,874)
Common share information:
Weighted average common shares outstanding for basic EPS	254.32		255.09		254.03		260.24
Dilutive effect of stock options and equity awards	1.43		0.96		1.17		—
Weighted average common shares outstanding for diluted EPS	255.75		256.05		255.20		260.24
Earnings (loss) per share:
Basic	$	4.32	$	0.32	$	2.55	$	(7.20)
Diluted	$	4.29	$	0.32	$	2.54	$	(7.20)

The following share-based equity awards were excluded from the computation of diluted EPS because inclusion of these awards would have had an anti-dilutive effect. The number of awards excluded were as follows:

	Three Months Ended		Nine Months Ended
	December 31, 2020	December 31, 2019	December 31, 2020	December 31, 2019
Stock Options	1,519,611	621,028	1,582,568	818,490
Restricted Stock Units	1,418,752	2,125,734	1,628,968	2,116,898
Performance-based Restricted Stock Units	836,866	—	723,754	351,410

14

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 6 - Receivables

Receivables Facility

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of December 31, 2020, the "Receivables Facility") with certain unaffiliated financial institutions (the "Purchasers") for the sale of commercial accounts receivable in the United States. Under the Receivables Facility, certain of the Company's subsidiaries (the "Sellers") sell accounts receivable to DXC Receivables LLC ("Receivables SPV"), a wholly owned bankruptcy-remote entity, in a true sale. Receivables SPV subsequently sells certain of the receivables in their entirety to the Purchasers pursuant to a receivables purchase agreement. The financial obligations of Receivables SPV to the Purchasers under the Receivables Facility are limited to the assets it owns and non-recourse to the Company. Sales of receivables by Receivables SPV occur continuously and are settled on a monthly basis. During the second quarter of fiscal 2021, Receivables SPV amended the Receivables Facility (the "Amendment") to decrease the facility limit from $600 million to $500 million and extend the termination date to August 5, 2021. For the nine months ended December 31, 2020, there is no deferred purchase price ("DPP") for receivables as the entire purchase price is paid in cash when the receivables are sold to the Purchasers. DPPs were previously realized by Receivables SPV upon the ultimate collection of the underlying receivables sold to the Purchasers. Cash receipts on the DPP were classified as cash flows from investing activities.

The amount available under the Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of December 31, 2020, the total availability under the Receivables Facility was $403 million, and the amount sold to the Purchasers was $407 million, which was derecognized from the Company's balance sheet. As of December 31, 2020, the Company recorded a $4 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability. The Receivables Facility is scheduled to terminate on August 5, 2021, but provides for one or more optional one-year extensions, if agreed to by the Purchasers. The Company uses the proceeds from the sale of receivables under the Receivables Facility for general corporate purposes.

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

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

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

(in millions)	As of and for the Nine Months Ended
	December 31, 2019
Beginning balance	$	574
Transfers of receivables	1,214
Collections	(1,265)
Change in funding availability	2
Facility amendments	(525)
Ending balance	$	—

Milano Receivables Facility

On October 1, 2020, and in connection with the consummation of the sale of the HHS Business, and at the direction of the purchaser of the HHS Business, the Milano Facility was terminated. For more information, refer to Note 4 - "Divestitures."

15

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

German Receivables Facility

On October 1, 2019, the Company executed an accounts receivable securitization facility (as amended, restated, supplemented or otherwise modified as of December 31, 2020, the "DE Receivables Facility") with certain unaffiliated financial institutions (the "DE Purchasers") for the sale of commercial accounts receivable in Germany. The DE Receivables Facility has a facility limit of €150 million (approximately $175 million as of December 31, 2020). Under the DE Receivables Facility, certain of the Company's subsidiaries organized in Germany (the "DE Sellers") sell accounts receivable to DXC ARFacility Designated Activity Company ("DE Receivables SPV"), a trust-owned bankruptcy-remote entity, in a true sale. DE Receivables SPV subsequently sells certain of the receivables in their entirety to the DE Purchasers pursuant to a receivables purchase agreement. Sales of receivables by DE Receivables SPV occur continuously and are settled on a monthly basis. During the first quarter of fiscal 2021, DE Receivables SPV amended the DE Receivables Facility ("DE Amendment"). Under the terms of the amended DE Receivables Facility, there is no longer any DPP for receivables as the entire purchase price is paid in cash when the receivables are sold to the DE Purchasers. Prior to the DE Amendment, DPPs were realized by DE Receivables SPV upon the ultimate collection of the underlying receivables sold to the DE Purchasers. Cash receipts on the DPPs were classified as cash flows from investing activities. The DPP balance was $102 million before the DE Amendment was executed. Upon execution of the DE Amendment, the DE Purchasers extinguished the DPP balance and returned title to the applicable underlying receivables to DE Receivables SPV. The DPP extinguishment was classified as a non-cash investing activity, please refer to Note 19 - "Cash Flows."

The amount available under the DE Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of December 31, 2020, the total availability under the DE Receivables Facility was approximately $123 million, and the amount sold to the DE Purchasers was $136 million, which was derecognized from the Company's balance sheet. As of December 31, 2020, the Company recorded a $13 million liability within accounts payable because the amount of cash proceeds received by the Company under the DE Receivables Facility was more than the total availability. The DE Receivables Facility is scheduled to terminate on September 30, 2021, but provides for one or more optional one-year extensions, if agreed to by the DE Purchasers. The Company uses the proceeds from DE Receivables SPV's sale of receivables under the DE Receivables Facility for general corporate purposes.

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

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

The following table is a reconciliation of the beginning and ending balances of the DPP for the DE Receivables Facility:

(in millions)	As of and for the Nine Months Ended December 31, 2020
Beginning balance	$	103
Transfers of receivables	417
Collections	(420)
Change in funding availability	2
Facility amendments	(102)
Ending balance	$	—

16

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Allowance

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

(in millions)	As of and for the Nine Months Ended
	December 31, 2020
Beginning balance	$	74
Impact of adoption of the Credit Loss Standard	4
Provisions for losses on accounts receivable	52
Other adjustments to allowance and write-off's	69
Ending balance	$	199

Note 7 - Leases

The Company has operating and finance leases for data centers, corporate offices, retail stores and certain equipment. Its leases have remaining lease terms of one to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Operating lease cost	$	156	$	166	$	463	$	506
Short-term lease cost	14		17		40		41
Variable lease cost	17		9		40		35
Sublease income	(10)		(9)		(32)		(28)
Total operating costs	$	177	$	183	$	511	$	554
Finance lease cost:
Amortization of right-of-use assets	$	107	$	90	$	322	$	339
Interest on lease liabilities	10		16		35		50
Total finance lease cost	$	117	$	106	$	357	$	389

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below. In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 19 - "Cash Flows."

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of:
Operating cash flows used in operating leases	$	463	$	506
Operating cash flows used in finance leases	$	35	$	50
Financing cash flows used in finance leases	$	430	$	436

17

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Supplemental balance sheet information related to leases was as follows:

		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Assets:
ROU operating lease assets	Operating right-of-use assets, net	$	1,459	$	1,428
ROU finance lease assets	Property and Equipment, net	971		1,220
Total		$	2,430	$	2,648
Liabilities:
Current
Operating lease	Current operating lease liabilities	$	450	$	482
Finance lease	Short-term debt and current maturities of long-term debt	431		444
Total		$	881	$	926
Non-current
Operating lease	Non-current operating lease liabilities	$	1,113	$	1,063
Finance lease	Long-term debt, net of current maturities	545		602
Total		$	1,658	$	1,665

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

	As of
	December 31, 2020		March 31, 2020
Weighted Average remaining lease term:	Years
Operating leases	4.8		4.8
Finance leases	2.7		2.7
Weighted average remaining discount rate:	Rate
Operating leases	4.0	%	4.0	%
Finance leases	3.8	%	6.4	%

18

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of December 31, 2020:

Fiscal year	Operating Leases
(in millions)	Real Estate		Equipment		Finance Leases
Remainder of 2021	$	117	$	15	$	128
2022	412		42		419
2023	337		24		275
2024	262		11		139
2025	192		5		48
Thereafter	297		3		6
Total lease payments	1,617		100		1,015
Less: imputed interest	(151)		(3)		(39)
Total payments	$	1,466	$	97	$	976

19

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 8 - Fair Value

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis excluding pension assets and derivative assets and liabilities. See Note 9 - "Derivative and Hedging Activities" for information about the fair value of the Company's derivative assets and liabilities. There were no transfers among any of the levels during the periods presented.

	Fair Value Hierarchy
(in millions)	December 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	262	$	262	$	—	$	—
U.S. treasury bills(1)	250		250		—		—
Time deposits(1)	349		349		—		—
Other debt securities(2)	62		—		59		3
Total assets	$	923	$	861	$	59	$	3
Liabilities:
Contingent consideration	$	40	$	—	$	—	$	40
Total liabilities	$	40	$	—	$	—	$	40

	March 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	156	$	156	$	—	$	—
Time deposits(1)	595		595		—		—
Other debt securities(2)	51		—		48		3
Deferred purchase price receivable	103		—		—		103
Total assets	$	905	$	751	$	48	$	106
Liabilities:
Contingent consideration	$	46	$	—	$	—	$	46
Total liabilities	$	46	$	—	$	—	$	46

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

(2) Other debt securities include available-for-sale investments with Level 2 inputs with cost bases of $59 million and $37 million, and unrealized gains of $0 million and $11 million, as of December 31, 2020 and March 31, 2020, respectively. During the quarter, previously held investments were sold and the proceeds were used to purchase new investments. The gain of $17 million from the sale was included in other income, net.

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

20

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Other Fair Value Disclosures

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

The Company estimates the fair value of its long-term debt primarily by using quoted prices obtained from third-party providers such as Bloomberg and by using an expected present value technique that is based on observable market inputs for instruments with similar terms currently available to the Company. The estimated fair value of the Company's long-term debt excluding finance lease liabilities was $5.5 billion and $8.2 billion as of December 31, 2020 and March 31, 2020, respectively as compared with carrying value of $5.2 billion and $8.4 billion as of December 31, 2020 and March 31, 2020, respectively. Long-term debt excluding finance lease liabilities is classified as Level 1 or Level 2 within the fair value hierarchy.

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

21

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 9 - Derivative and Hedging Activities

In the normal course of business, the Company is exposed to interest rate and foreign exchange rate fluctuations. As part of its risk management strategy, the Company uses derivative instruments, primarily foreign currency forward contracts and interest rate swaps, to hedge certain foreign currency and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not use derivative instruments for trading or any speculative purposes.

Derivatives Designated for Hedge Accounting

Cash flow hedges

The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Indian Rupee-denominated intercompany obligations and forecasted transactions. The notional amounts of foreign currency forward contracts designated as cash flow hedges as of December 31, 2020 and March 31, 2020 were $507 million and $455 million, respectively. As of December 31, 2020, the related forecasted transactions extend through March 2023.

For the three and nine months ended December 31, 2020 and December 31, 2019, respectively, the Company performed an assessment at the inception of the cash flow hedge transactions and determined that all critical terms of the hedging instruments and hedged items matched. The Company performs an assessment of critical terms on an on-going basis throughout the hedging period. During the three and nine months ended December 31, 2020 and December 31, 2019, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur. As of December 31, 2020, $2 million of the existing amount of gain related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in income from operation was $0 million and $(6) million for the three and nine months ended December 31, 2020, respectively. The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in other comprehensive income was $0 million and $18 million for the three and nine months ended December 31, 2020, respectively.

Derivatives Not Designated for Hedge Accounting

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

Foreign currency forward contracts

The Company manages the exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and forecasted transactions. The notional amounts of the foreign currency forward contracts outstanding as of December 31, 2020 and March 31, 2020 were $1.7 billion and $2.2 billion, respectively.

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

		For the Three Months Ended				For the Nine Months Ended
(in millions)	Statement of Operations Line Item	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Foreign currency forward contracts	Other expense (income), net	$	16	$	1	$	74	$	(21)

22

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Fair Value of Derivative Instruments

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

	Derivative Assets
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	9	$	—
Total fair value of derivatives designated for hedge accounting		$	9	$	—
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	6	$	16
Total fair value of derivatives not designated for hedge accounting		$	6	$	16

	Derivative Liabilities
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	5	$	20
Total fair value of derivatives designated for hedge accounting:		$	5	$	20
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	17	$	12
Total fair value of derivatives not designated for hedge accounting		$	17	$	12

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

Other Risks for Derivative Instruments

The Company is exposed to the risk of losses in the event of non-performance by the counterparties to its derivative contracts. The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty's obligations exceed the obligations of the Company with that counterparty. To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of the counterparties. With respect to its foreign currency derivatives, as of December 31, 2020, there were seven counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is not material.

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

23

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Non-Derivative Financial Instruments Designated for Hedge Accounting

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

Net Investment Hedges

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

As of December 31, 2020, DXC had $800 million of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. As of March 31, 2020, DXC had $1.9 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. For the three and nine months ended December 31, 2020, the pre-tax impact of gain (loss) on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $(36) million and $(125) million, respectively.

24

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 10 - Intangible Assets

Intangible assets consisted of the following:

	As of December 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,001	$	2,891	$	1,110
Customer related intangible assets	4,296		1,606		2,690
Other intangible assets	267		48		219
Total intangible assets	$	8,564	$	4,545	$	4,019

	As of March 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,048	$	2,614	$	1,434
Customer related intangible assets	5,795		1,697		4,098
Other intangible assets	235		36		199
Total intangible assets	$	10,078	$	4,347	$	5,731

The components of amortization expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Intangible asset amortization	$	224	$	272	$	735	$	747
Transition and transformation contract cost amortization(1)	66		71		194		197
Total amortization expense	$	290	$	343	$	929	$	944

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

Estimated future amortization related to intangible assets as of December 31, 2020 is as follows:

Fiscal Year	(in millions)
Remainder of 2021	$	236
2022	$	821
2023	$	740
2024	$	650
2025	$	535

25

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 11 - Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of December 31, 2020.

(in millions)	GBS		GIS		Total
Goodwill, gross	$	6,507	$	5,066	$	11,573
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of March 31, 2020, net	$	2,017	$	—	$	2,017
Acquisition related adjustments	18		—		18
Divestitures	(1,355)		—		(1,355)
Assets held for sale	(4)		—		(4)
Foreign currency translation	60		—		60
Goodwill, gross	5,226		5,066		10,292
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of December 31, 2020, net	$	736	$	—	$	736

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

Goodwill Impairment Analyses

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

The Company's annual goodwill impairment analysis, which was performed qualitatively during the three months ended September 30, 2020, did not result in an impairment charge.

At the end of the third quarter of fiscal 2021, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of its GBS reporting unit below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators and therefore, it was unnecessary to perform an interim goodwill impairment test as of December 31, 2020.

26

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 12 - Debt

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

(in millions)	Interest Rates	Fiscal Year Maturities	December 31, 2020		March 31, 2020
Short-term debt and current maturities of long-term debt
Commercial paper(1)	(0.22)% - 0.44%	2021 - 2022	$	112	$	542
Current maturities of long-term debt	Various	2021 - 2022	252		290
Current maturities of finance lease liabilities	0.62% - 18.47%	2021 - 2022	431		444
Short-term debt and current maturities of long-term debt			$	795	$	1,276
Long-term debt, net of current maturities
AUD term loan	0.94% - 0.96%	2022	—		489
GBP term loan	0.88% - 1.46%	2022	—		556
EUR term loan	0.65%	2022 - 2023	—		822
EUR term loan	0.80%(2)	2023 - 2024	488		821
USD term loan	1.40% - 2.24%	2025	—		480
$274 million Senior notes	4.45%	2023	276		276
$171 million Senior notes	4.45%	2023	172		172
$500 million Senior notes	4.25%	2025	504		505
$500 million Senior notes	4.00%	2024	497		—
$500 million Senior notes	4.13%	2026	496		—
£250 million Senior notes	2.75%	2025	339		307
€650 million Senior notes	1.75%	2026	792		709
$500 million Senior notes	4.75%	2028	507		507
$234 million Senior notes	7.45%	2030	269		271
Revolving credit facility	1.26% - 2.08%	2024 - 2025	—		1,500
Lease credit facility	1.15% - 1.99%	2021 - 2023	—		11
Finance lease liabilities	0.62% - 18.47%	2021 - 2027	976		1,046
Borrowings for assets acquired under long-term financing	0.00% - 6.39%	2021 - 2027	742		802
Mandatorily redeemable preferred stock outstanding	6.00%	2023	63		62
Other borrowings	Various	2021 - 2022	6		70
Long-term debt			6,127		9,406
Less: current maturities			683		734
Long-term debt, net of current maturities			$	5,444	$	8,672

(1)At DXC's option, DXC can borrow up to a maximum of €1 billion or its equivalent in €, £, and $.

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

Senior Notes and Term Loans

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

During the second quarter of fiscal 2021, the Company repaid the remaining £300 million GBP Term Loan due fiscal 2022.

During the third quarter of fiscal 2021, the Company used the proceeds from the sale of HHS Business to prepay approximately $1,441 million of term loan facilities detailed below under the heading "HHS Sale Use of Proceeds."

27

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

Revolving Credit Facility

During fiscal 2021, the Company borrowed the remaining $2.5 billion under the $4.0 billion credit facility agreement ("Credit Agreement") as a precautionary measure to increase its cash position and increase financial flexibility in light of continuing uncertainty in the global economy and financial capital markets resulting from COVID-19.

The Company repaid the full $4.0 billion during the first nine months of fiscal 2021, which became available under the revolving credit facility for redraw at the request of the Company.

HHS Sale Use of Proceeds

In October 2020, DXC sold the HHS business and used approximately $3.5 billion of the proceeds to prepay $1,250 million of Revolver Credit Facility, £600 million of GBP commercial paper (approximately $772 million), and the following term loan facilities: €350 million of Euro Term Loan due fiscal 2024 (approximately $410 million), $381 million of USD Term loan due fiscal 2025, A$500 million of AUD Term Loan due fiscal 2022 (approximately $358 million), and €250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $292 million).

Note 13 - Revenue

Revenue Recognition

The following table presents DXC's revenues disaggregated by geography, based on the location of incorporation of the DXC entity providing the related goods or services:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
United States	$	1,290	$	1,843	$	4,665	$	5,500
United Kingdom	607		707		1,759		2,100
Other Europe	1,335		1,329		3,784		3,819
Australia	377		380		1,128		1,119
Other International	679		762		2,008		2,224
Total Revenues	$	4,288	$	5,021	$	13,344	$	14,762

The revenue by geography pertains to both of the Company’s reportable segments. Refer to Note 20 - "Segment Information" for the Company’s segment disclosures.

Remaining Performance Obligations

Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that have not materialized and adjustments for currency. As of December 31, 2020, approximately $24 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 14% of these remaining performance obligations in fiscal 2021, with the remainder of the balance recognized thereafter.

28

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Contract Balances

The following table provides information about the balances of the Company's trade receivables and contract assets and contract liabilities:

	As of
(in millions)	December 31, 2020		March 31, 2020
Trade receivables, net	$	2,785	$	3,059
Contract assets	$	418	$	454
Contract liabilities	$	1,768	$	1,756

Change in contract liabilities were as follows:

	Nine Months Ended
(in millions)	December 31, 2020(1)		December 31, 2019
Balance, beginning of period	$	1,756	$	1,886
Deferred revenue	2,111		2,091
Recognition of deferred revenue	(2,137)		(2,137)
Currency translation adjustment	146		12
Other	(108)		(36)
Balance, end of period	$	1,768	$	1,816

(1)Other includes $54 million of contract liabilities related to the divested HHS business discussed in Note 4 - "Divestitures" and contract liabilities reclassified to assets held for sale.

29

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 14 - Restructuring Costs

The Company recorded restructuring costs of $104 million and $74 million, net of reversals, for the three months ended December 31, 2020 and December 31, 2019, respectively. For the nine months ended December 31, 2020 and December 31, 2019, the Company recorded restructuring costs of $441 million and $248 million, net of reversals, respectively. The costs recorded during the three and six months ended December 31, 2020 were largely a result of the Fiscal 2021 Plan (defined below).

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

	As of
(in millions)	December 31, 2020
Accrued expenses and other current liabilities	$	261
Other long-term liabilities	60
Total	$	321

Summary of Restructuring Plans

Fiscal 2021 Plan

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

Fiscal 2020 Plan

During fiscal 2020, management approved cost savings initiatives designed to reduce operating costs by re-balancing its workforce and facilities structures (the "Fiscal 2020 Plan"). The Fiscal 2020 Plan includes workforce optimization programs and facilities and data center rationalization. Costs incurred to date under the Fiscal 2020 Plan total $295 million, comprising $278 million in employee severance and $17 million of facilities costs.

Fiscal 2019 Plan

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

Other Prior Year Plans

In June 2017, management approved a post-HPES Merger (as defined below) restructuring plan to optimize the Company's operations in response to a continuing business contraction (the "Fiscal 2018 Plan"). The Fiscal 2018 Plan focuses mainly on optimizing specific aspects of global workforce, increasing the proportion of work performed in low cost offshore locations and re-balancing the organizational structure. Additionally, this plan included global facility restructuring, including a global data center restructuring program. Costs incurred to date under the Fiscal 2018 Plan total $987 million, comprising $791 million in employee severance and $196 million of facilities costs.

Acquired Restructuring Liabilities

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

30

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Restructuring Liability Reconciliations by Plan

	Restructuring Liability as of March 31, 2020		Costs Expensed, Net of Reversals(1)		Costs Not Affecting Restructuring Liability(2)		Cash Paid		Other(3)		Restructuring Liability as of December 31, 2020
Fiscal 2021 Plan
Workforce Reductions	$	—	$	416	$	(9)	$	(210)	$	9	$	206
Facilities Costs	—		25		(9)		(11)		(1)		4
Total	$	—	$	441	$	(18)	$	(221)	$	8	$	210
Fiscal 2020 Plan
Workforce Reductions (4)	$	74	$	7	$	2	$	(49)	$	5	$	39
Facilities Costs	2		(4)		4		(2)		—		—
Total	$	76	$	3	$	6	$	(51)	$	5	$	39
Fiscal 2019 Plan
Workforce Reductions	$	25	$	(2)	$	(3)	$	(13)	$	2	$	9
Facilities Costs	5		(3)		2		—		1		5
Total	$	30	$	(5)	$	(1)	$	(13)	$	3	$	14
Other Prior Year Plans
Workforce Reductions	$	24	$	1	$	2	$	(14)	$	2	$	15
Facilities Costs	—		—		—		—		—		—
Total	$	24	$	1	$	2	$	(14)	$	2	$	15
Acquired Liabilities
Workforce Reductions	$	39	$	1	$	—	$	(7)	$	1	$	34
Facilities Costs	11		—		1		(3)		—		9
Total	$	50	$	1	$	1	$	(10)	$	1	$	43

(1) Costs expensed, net of reversals include $11 million, $10 million, and $3 million of costs reversed from the Fiscal 2020 Plan, Fiscal 2019 Plan and Other Prior Year Plans, respectively.

(2) Costs Not Affecting Restructuring Liability include pension benefit augmentations recorded as a pension liability, asset impairments and restructuring costs associated with right-of-use assets.

(3)Other include foreign currency translation adjustments.

(4) Fiscal 2020 workforce reductions includes a $14 million adjustment to restructuring expense related to the prior year.

31

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 15 - Pension and Other Benefit Plans

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

Defined Benefit Plans

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

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

The components of net periodic pension income were:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Service cost	$	23	$	23	$	68	$	69
Interest cost	62		60		181		177
Expected return on assets	(163)		(161)		(477)		(476)
Amortization of prior service costs	(2)		(2)		(6)		(6)
Contractual termination benefit	—		—		3		17
Curtailment gain	—		—		(9)		—
Recognition of actuarial loss	—		—		11		—
Net periodic pension income	$	(80)	$	(80)	$	(229)	$	(219)

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

32

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Deferred Compensation Plans

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

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

Certain management and highly compensated employees are eligible to defer all, or a portion of, their regular salary that exceeds the limitation set forth in Internal Revenue Section 401(a)(17) and all or a portion of their incentive compensation. Non-employee directors are eligible to defer up to 100% of their cash compensation. The liability, which is included in other long-term liabilities in the Company's balance sheets, amounted to $45 million as of December 31, 2020 and $48 million as of March 31, 2020.

33

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 16 - Income Taxes

The Company's effective tax rate ("ETR") was 44.2% and 29.1% for the three months ended December 31, 2020 and December 31, 2019, respectively, and 54.5% and (11.5)% for the nine months ended December 31, 2020 and December 31, 2019, respectively. For the three and nine months ended December 31, 2020, the primary drivers of the ETR were the gain on sale of HHS Business, global mix of income and foreign tax credits. For the three months ended December 31, 2019, the primary drivers of the ETR were the impact of previously unrecognized tax effects on the tax deductible goodwill impaired during the fiscal 2020 second quarter, the global mix of income, an increase in prior year U.S. federal research and development income tax credits, and an increase in unrecognized tax benefits primarily related to audit activity. For the nine months ended December 31, 2019, the primary drivers of the ETR were the impact of the non-deductible goodwill impairment charge, the non-taxable gain on the arbitration award, the global mix of income, an increase in unrecognized tax benefits primarily related to audit activity, and an increase in prior year U.S. federal research and development income tax credits, net.

The majority of unremitted foreign earnings have been taxed in the U.S. We expect a significant portion of the unremitted earnings of our foreign subsidiaries will no longer be subject to U.S. federal income tax upon repatriation to the U.S. However, a portion of these earnings may still be subject to foreign and U.S. state tax consequences when remitted. Earnings in India are indefinitely reinvested. Other foreign earnings are not indefinitely reinvested except for approximately $547 million that could be taxable when repatriated to the U.S. under Treasury regulations that were issued during the first quarter of fiscal 2020.

In connection with the HPES Merger, the Company entered into a tax matters agreement with HPE. HPE generally will be responsible for pre-HPES Merger tax liabilities including adjustments made by tax authorities to HPES U.S. and non-U.S. income tax returns. Likewise, DXC is liable to HPE for income tax receivables and refunds which it receives related to pre-HPES Merger periods. Pursuant to the tax matters agreement, the Company recorded a net payable of $3 million due to $48 million of tax indemnification receivable related to uncertain tax positions net of related deferred tax benefits, $79 million of tax indemnification receivable related to other tax payables and $130 million of tax indemnification payable related to other tax receivables.

In connection with the USPS Separation, the Company entered into a tax matters agreement with Perspecta. Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the USPS Separation. Income tax liabilities transferred to Perspecta primarily relate to pre-HPES Merger periods, for which the Company is indemnified by HPE pursuant to the tax matters agreement between the Company and HPE. The Company remains liable to HPE for tax receivables and refunds which it receives from Perspecta related to pre-HPES Merger periods that were transferred to Perspecta. Pursuant to the tax matters agreement, the Company has recorded a tax indemnification receivable from Perspecta of $81 million and a tax indemnification payable to Perspecta of $44 million related to income tax and other tax liabilities.

The IRS is examining the Company's federal income tax returns for fiscal 2008 through the tax year ended October 31, 2018. With respect to CSC's fiscal 2008 through 2017 federal tax returns, the Company has entered into negotiations for a resolution on the years under audit through settlement with the IRS Office of Appeals. The IRS examined several issues for these years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have an agreement in principle as to some of these adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs and tax planning strategies in previous years. These matters present a potential federal and state tax cost of $410 million (excluding interest and penalties), in addition to other disagreed issues. We expect two years of these audits (fiscal 2010 and fiscal 2013) to proceed to Tax Court. We believe we will ultimately prevail on the technical merits of these issues. The Company has agreed to extend the statute of limitations for fiscal years 2008 through 2012 through August 31, 2021, and for fiscal year 2013 through March 31, 2021 to provide for IRS completion of their review. The Company has agreed to extend the statute of limitations for fiscal years 2014 through fiscal 2017 through October 31, 2021 to provide for IRS completion of their review.

34

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

The Company expects to reach a resolution for all years no earlier than the fourth quarter of fiscal 2022 except agreed issues related to fiscal 2008 through 2010 federal tax returns, which are expected to be resolved within twelve months.

In addition, the Company may settle certain other tax examinations, have lapses in statutes of limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. In the third quarter of fiscal 2021 the Company’s liability for uncertain tax positions decreased by $13 million (excluding interest and penalties and related tax attributes) primarily due to an audit settlement. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more-likely-than-not standard if such positions are not upheld. Conversely, the Company could settle positions by payment with the tax authorities for amounts lower than those that have been accrued or extinguish a position through less payment than previously estimated. The Company believes that the outcomes that are reasonably possible within the next 12 months may result in a reduction in liability for uncertain tax positions of $37 million, excluding interest, penalties and tax carry-forwards.

Note 17 - Stockholders' Equity

Share Repurchases

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

The shares repurchased are retired immediately and included in the category of authorized but unissued shares. The excess of purchase price over par value of the common shares is allocated between additional paid-in capital and retained earnings. There was no share repurchase activity during the nine months ended December 31, 2020. The details of shares repurchased during the nine months ended December 31, 2019 are shown below:

	Fiscal 2020
Fiscal Period	Number of Shares Repurchased	Average Price Per Share		Amount (in millions)
1st Quarter
Open market purchases	5,510,415	$	54.44	$	300
Accelerated stock repurchases	1,849,194	$	54.08	100
1st Quarter Total	7,359,609	$	54.35	400
2nd Quarter
Open market purchases	4,414,840	$	33.96	150
Accelerated stock repurchases	1,805,350	$	55.39	100
2nd Quarter Total	6,220,190	$	40.18	250
3rd Quarter
Open market purchases	2,353,852	$	36.68	86
Accelerated stock repurchases	—	$	—	—
3rd Quarter Total	2,353,852	$	36.68	86
Total	15,933,651	$	46.21	$	736

35

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Accumulated Other Comprehensive Loss

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

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2020	$	(851)	$	(20)	$	9	$	259	$	(603)
Current-period other comprehensive income	197		12		(6)		—		203
Amounts reclassified from accumulated other comprehensive loss	—		6		—		(13)		(7)
Balance at December 31, 2020	$	(654)	$	(2)	$	3	$	246	$	(407)

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2019	$	(517)	$	(3)	$	9	$	267	$	(244)
Current-period other comprehensive loss	78		(4)		2		—		76
Amounts reclassified from accumulated other comprehensive income (loss)	—		(2)		—		(6)		(8)
Balance at December 31, 2019	$	(439)	$	(9)	$	11	$	261	$	(176)

Note 18 - Stock Incentive Plans

Equity Plans

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

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

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

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DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

The DXC Share Purchase Plan allows DXC’s employees located in the United Kingdom to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date. There were 12,232 and 41,425 shares purchased under this plan during the three and nine months ended December 31, 2020.

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

	As of December 31, 2020
	Reserved for Issuance	Available for Future Grants
DXC Employee Equity Plan	51,200,000	32,794,274
DXC Director Equity Plan	745,000	435,951
DXC Share Purchase Plan	250,000	165,185
Total	52,195,000	33,395,410

Stock Options

	Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in millions)
Outstanding as of March 31, 2020	1,869,815	$	29.92	4.27	$	—
Granted	—	$	—
Exercised	(39,601)	$	17.43		$	—
Canceled/Forfeited	—	$	—
Expired	(82,614)	$	31.24
Outstanding as of December 31, 2020	1,747,600	$	30.11	3.73	$	3
Vested and exercisable as of December 31, 2020	1,747,600	$	30.11	3.73	$	3

Restricted Stocks

	Employee Equity Plan			Director Equity Plan
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of March 31, 2020	4,174,476	$	55.45	114,615	$	37.69
Granted	7,576,602	$	18.67	118,500	$	18.82
Settled	(1,045,190)	$	50.65	(48,455)	$	26.90
Canceled/Forfeited	(2,042,804)	$	36.14	—	$	—
Outstanding as of December 31, 2020	8,663,084	$	28.43	184,660	$	28.42

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DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Share-Based Compensation

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Total share-based compensation cost	$	6	$	9	$	42	$	57
Related income tax benefit	$	2	$	(3)	$	7	$	8
Total intrinsic value of options exercised	$	—	$	1	$	—	$	8
Tax benefits from exercised stock options and awards	$	1	$	3	$	5	$	13

As of December 31, 2020, total unrecognized compensation expense related to unvested DXC stock options and unvested DXC RSUs, net of expected forfeitures was $0 million and $146 million, respectively. The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 2.06 years.

Note 19 - Cash Flows

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

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for:
Interest	$	262	$	277
Taxes on income, net of refunds (1)	$	159	$	202
Non-cash activities:
Operating:
ROU assets obtained in exchange for lease, net (2)	$	449	$	314
Prepaid assets acquired under long-term financing	$	46	$	23
Investing:
Capital expenditures in accounts payable and accrued expenses	$	16	$	121
Capital expenditures through finance lease obligations	$	277	$	507
Assets acquired under long-term financing	$	26	$	282
(Decrease) increase in deferred purchase price receivable	$	(52)	$	58
Contingent consideration	$	2	$	19
Financing:
Dividends declared but not yet paid	$	—	$	54

(1) Income tax refunds were $31 million and $36 million for the nine months ended December 31, 2020 and December 31, 2019, respectively.

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

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DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 20 - Segment Information

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

Global Business Services ("GBS")

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

•Analytics and Engineering. GBS's portfolio of analytics services and extensive partner ecosystem help customers gain rapid insights, automate operations, and accelerate their digital transformation journeys. GBS provides software engineering and solutions that enable businesses to run and manage their mission-critical functions, transform their operations and develop new ways of doing business.

•Applications. GBS uses advanced technologies and methods to accelerate the creation, modernization, delivery and maintenance of high-quality, secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership, across industries. GBS's vertical-specific IP includes solutions for insurance; banking and capital markets; and automotive, among others.

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

Global Infrastructure Services ("GIS")

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

•Cloud and Security. GIS helps customers to rapidly modernize by adapting legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments. GIS's security solutions help predict attacks, proactively respond to threats, ensure compliance and protect data, applications and infrastructure.

•IT Outsourcing ("ITO"). GIS's ITO services support infrastructure, applications, and workplace IT operations, including hardware, software, physical/virtual end-user devices, collaboration tools, and IT support services. GIS helps customers securely optimize operations to ensure continuity of their systems and respond to new business and workplace demands, while achieving cost takeout, all with limited resources, expertise and budget.

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

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DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Segment Measures

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

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Three Months Ended December 31, 2020
Revenues	$	1,921	$	2,367	$	4,288	$	—	$	4,288
Segment profit	$	273	$	88	$	361	$	(61)	$	300
Depreciation and amortization(1)	$	53	$	281	$	334	$	27	$	361
Three Months Ended December 31, 2019
Revenues	$	2,359	$	2,662	$	5,021	$	—	$	5,021
Segment profit	$	353	$	232	$	585	$	(57)	$	528
Depreciation and amortization(1)	$	61	$	244	$	305	$	28	$	333

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Nine Months Ended December 31, 2020
Revenues	$	6,337	$	7,007	$	13,344	$	—	$	13,344
Segment profit	$	805	$	147	$	952	$	(179)	$	773
Depreciation and amortization(1)	$	162	$	839	$	1,001	$	77	$	1,078
Nine Months Ended December 31, 2019
Revenues	$	6,803	$	7,959	$	14,762	$	—	$	14,762
Segment profit	$	1,078	$	815	$	1,893	$	(184)	$	1,709
Depreciation and amortization(1)	$	128	$	771	$	899	$	82	$	981

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $114 million and $146 million for the three months ended December 31, 2020 and 2019, respectively, and $414 million and $435 million for the nine months ended December 31, 2020 and 2019, respectively.

40

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Reconciliation of Reportable Segment Profit to Consolidated Total

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

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Profit
Total profit for reportable segments	$	361	$	585	952		$	1,893
All other loss	(61)		(57)		(179)		(184)
Interest income	28		33		76		130
Interest expense	(82)		(93)		(284)		(288)
Restructuring costs	(104)		(74)		(441)		(248)
Transaction, separation and integration-related costs	(96)		(68)		(307)		(226)
Amortization of acquired intangible assets	(114)		(146)		(414)		(435)
Gain on disposition of businesses	2,046		—		2,046		—
Pension and OPEB actuarial and settlement losses	—		—		(2)		—
Goodwill impairment losses	—		(53)		—		(2,940)
Gain on arbitration award	—		—		—		632
Income (loss) before income taxes	$	1,978	$	127	$	1,447	$	(1,666)

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

41

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 21 - Commitments and Contingencies

Commitments

The Company signed long-term purchase agreements with certain software, hardware, telecommunication, and other service providers to obtain favorable pricing and terms for services, and products that are necessary for the operations of business activities. Under the terms of these agreements, the Company is contractually committed to purchase specified minimums over periods ranging from one to five years. If the Company does not meet the specified minimums, the Company would have an obligation to pay the service provider all, or a portion, of the shortfall. Minimum purchase commitments as of December 31, 2020 were as follows:

Fiscal year	Minimum Purchase Commitment (1)
(in millions)
Remainder of 2021	$	1,339
2022	1,093
2023	817
2024	227
Total	$	3,476

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

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

The Company also uses stand-by letters of credit, in lieu of cash, to support various risk management insurance policies. These letters of credit represent a contingent liability and the Company would only be liable if it defaults on its payment obligations on these policies. The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of December 31, 2020:

(in millions)	Remainder of Fiscal 2021		Fiscal 2022		Fiscal 2023 and Thereafter		Totals
Surety bonds	$	14	$	93	$	87	$	194
Letters of credit	37		147		527		711
Stand-by letters of credit	36		41		31		108
Totals	$	87	$	281	$	645	$	1,013

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

42

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Contingencies

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

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

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

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

In October 2020, the Company reached an agreement in principle with the plaintiffs to resolve the matter. The Company is finalizing a settlement agreement, which once executed, will be submitted to the Court for approval.

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

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

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

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

The Securities and Exchange Commission (“SEC”) has filed a complaint against Mr. Pulier alleging various claims, including for fraud and falsifying books and records (Securities and Exchange Commission v. Eric Pulier, Case No. 2:17-cv-07124). The case is scheduled for trial in April 2021.

43

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

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

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

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

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

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

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

44

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

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

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

In December 2020, Plaintiffs filed a motion for preliminary certification of the collective action, which Defendants intend to oppose. A hearing on the motion has been scheduled for April 15, 2021.

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

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

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

On January 29, 2019, the court granted HPE’s motion for summary judgment and denied Oracle’s motion for summary judgment, resolving the matter in HPE’s favor. Oracle appealed the judgment to the U.S. Court of Appeals for the Ninth Circuit. In August 2020, the court granted Oracle’s appeal in part. The case has been remanded to the District Court for further proceedings.

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

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

45

DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

On August 20, 2019, a purported class action lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, against the Company, directors of the Company, and a former officer of the Company, among other defendants. On September 16, 2019, a substantially similar purported class action lawsuit was filed in the United States District Court for the Northern District of California against the Company, directors of the Company, and a former officer of the Company, among other defendants. On November 8, 2019, a third purported class action lawsuit was filed in the Superior Court of the State of California, County of San Mateo, against the Company, directors of the Company, and a former officer of the Company, among other defendants. The third lawsuit was voluntarily dismissed by the plaintiff and re-filed in the Superior Court of the State of California, County of Santa Clara on November 26, 2019, and thereafter was consolidated with the earlier-filed action in the same court on December 10, 2019. The California lawsuits assert claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and are premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s prospects and expected performance. Plaintiff in the federal action filed an amended complaint on January 8, 2020. The putative class of plaintiffs in these cases includes all persons who acquired shares of the Company’s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC. On July 15, 2020, the Superior Court of California, County of Santa Clara, denied the Company’s motion to stay the state court case but extended the Company’s deadline to seek dismissal of the state action, until after a decision on the Company’s motion to dismiss the federal action. The Company has since moved to dismiss the state action, and the court has continued the motion until after the outcome of the federal action. On July 27, 2020, the United States District Court for the Northern District of California granted the Company’s motion to dismiss the federal action. The Court’s order permitted plaintiffs to amend and refile their complaint within 60 days, and on September 25, 2020, the plaintiffs filed an amended complaint. On November 12, 2020, the Company filed a motion to dismiss the amended complaint. A hearing on the motion is scheduled for April 29, 2021.

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

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

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

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

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DXC TECHNOLOGY COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Perspecta Arbitration: In October 2019, Perspecta Inc. (“Perspecta”) submitted a demand for arbitration claiming that in June 2018 DXC breached certain obligations under the Separation and Distribution Agreement ("SDA") between Perspecta and DXC and seeking at least $120 million in alleged damages. During the course of discovery, Perspecta increased the amount of its alleged damages, first to $500 million and then to over $800 million. Perspecta has since increased its damages calculations to include interest, bringing its total claim to $990 million. The Company believes there is no valid basis for Perspecta's claims for these amounts.

In its arbitration demand, Perspecta also challenges $39 million in invoices issued by DXC in June 2019 under its IT Services Agreement with Perspecta ("ITSA"). Perspecta subsequently challenged an additional $31 million sought by DXC in August 2020 under the ITSA. DXC believes the invoices were properly issued and the amounts are owed by Perspecta.

In October 2020, a hearing was held before an arbitration panel, during which the Company and Perspecta each presented evidence on the claims at issue. In December 2020, the parties presented closing arguments and the case was submitted. The parties are awaiting a decision from the arbitration panel.

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

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

•the uncertainty of the magnitude, duration, geographic reach, impact on the global economy and current and potential travel restrictions, stay-at-home orders, economic restrictions implemented to address the COVID-19 pandemic;

•the current, and uncertain future, impact of the COVID-19 pandemic, as well as other emerging developments and disruption to economic activity, and their resulting impact on our clients that may affect our business, growth, prospects, financial condition, operating results, cash flows and liquidity;

•changes in governmental regulations or the adoption of new laws or regulations that may make it more difficult or expensive to operate our business;

•changes in senior management, the loss of key employees or the ability to retain and hire key personnel and maintain relationships with key business partners;

•the risk of liability or damage to our reputation resulting from security breaches, cyber-attacks or disclosure of sensitive data or failure to comply with data protection laws and regulations, including the ransomware attack recently experienced by our subsidiary, Xchanging;

•business interruptions in connection with our technology systems;

•the competitive pressures faced by our business;

•the effects of macroeconomic and geopolitical trends and events;

•the need to manage third-party suppliers and the effective distribution and delivery of our products and services;

•the protection of our intellectual property assets, including intellectual property licensed from third parties;

•the risks associated with international operations;

•the development and transition of new products and services and the enhancement of existing products and services to meet customer needs, respond to emerging technological trends and maintain and grow our customer relationships over time;

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•the ability to succeed in our strategic objectives, including strategic alternatives material for our business;

•the ability to achieve the expected benefits of our restructuring plans;

•the ability to maintain and grow our customer relationships over time and to comply with customer contracts or government contracting regulations or requirements;

•the execution and performance of contracts by us and our suppliers, customers, clients and partners;

•our credit rating and the ability to manage working capital, refinance and raise additional capital for future needs;

•our substantial amount of indebtedness;

•our ability to remediate any material weakness and maintain effective internal control over financial reporting;

•the resolution of pending investigations, claims and disputes;

•the integration of Computer Sciences Corporation's ("CSC") and Enterprise Services business of Hewlett Packard Enterprise Company's ("HPES") businesses, operations, and culture and the ability to operate as effectively and efficiently as expected, and the combined company's ability to successfully manage and integrate acquisitions generally;

•the ability to realize the synergies and benefits expected to result from the merger of CSC and HPES (the "HPES Merger") within the anticipated time frame or in the anticipated amounts;

•other risks related to the HPES Merger including anticipated tax treatment, unforeseen liabilities, and future capital expenditures;

•the spin-off of our former U.S. public sector business and its related mergers with Vencore Holding Corp. and KeyPoint Government Solutions to form Perspecta Inc. (the "USPS") Separation and Mergers could result in substantial tax liability to DXC and our stockholders;

•risks relating to the respective abilities of the parties to our acquisition of Luxoft Holding, Inc. to achieve the expected results therefrom;

•risks relating to the consummation of sale of our healthcare provider software business to Dedalus, and the ability to achieve the expected results therefrom; and

•the other factors described in Part I Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020 and Part II Item 1A "Risk Factors" of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, September 30, 2020 and of this Quarterly Report on Form 10-Q.

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

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

Introduction

The purpose of the MD&A is to present information that management believes is relevant to an assessment and understanding of our results of operations and cash flows for the third quarter and first nine months of fiscal 2021 and our financial condition as of December 31, 2020. The MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and accompanying notes.

The MD&A is organized into the following sections:

•Background

•Results of Operations

•Liquidity and Capital Resources

•Off-Balance Sheet Arrangements

•Contractual Obligations

•Critical Accounting Policies and Estimates

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

Background

DXC Technology helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to deploy our enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences.

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

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Results of Operations

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

	Three Months Ended				Nine Months Ended
(In millions, except per-share amounts)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Revenues	$	4,288	$	5,021	$	13,344	$	14,762
Income (loss) before income taxes	1,978		127		1,447		(1,666)
Income tax expense	875		37		789		191
Net income (loss)	$	1,103	$	90	$	658	$	(1,857)
Diluted earnings (loss) per common share:	$	4.29	$	0.32	$	2.54	$	(7.20)

Fiscal 2021 Highlights

Financial highlights for the third quarter and first nine months of fiscal 2021 include the following:

•Revenues for the third quarter and first nine months of fiscal 2021 were $4.3 billion and $13.3 billion, respectively, a decrease of 14.6% and 9.6%, respectively, as compared to the third quarter and first nine months of fiscal 2020. These decreases were primarily due to the disposition of the HHS business at the beginning of the third quarter of fiscal 2021, project terminations, and changes in run volume. The decrease in revenue for the first nine months of fiscal 2021 was partially offset by contributions from our Luxoft acquisition which was executed during the first quarter of fiscal 2020. Refer to the section below captioned "Revenues."

•Net income and diluted earnings per share for the third quarter of fiscal 2021 were $1,103 million and $4.29, respectively. Net income increased by $1,013 million during the third quarter of fiscal 2021 as compared to the same period of the prior fiscal year. The increase was primarily due to gain on disposition of businesses and cost optimization realized in the current year, partially offset by a reduction in revenue previously mentioned and an increase in tax expense from prior year. Refer to the section below captioned "Cost and Expenses." Net income included the cumulative impact of certain items of $882 million during the quarter, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, and gain on disposition of businesses. This compares with net income and diluted earnings per share of $90 million and $0.32, respectively, for the third quarter of fiscal 2020.

•Net income and diluted earnings per share for the first nine months of fiscal 2021 were $658 million and $2.54, respectively. Net income increased by $2,515 million during the first nine months of fiscal 2021 as compared to the same period of the prior fiscal year. The increase was primarily due to goodwill impairment recognized in the prior year and gain on disposition of businesses and cost optimization realized in the current year partially offset by gain on arbitration in the prior year and a reduction in revenue in the current year previously mentioned. Refer to the section below captioned "Cost and Expenses." Net income included the cumulative impact of certain items of $217 million during the period, reflecting restructuring costs, transaction, separation and integration-related costs, amortization of acquired intangible assets, gain on disposition of businesses, pension and other post-retirement benefit ("OPEB") actuarial and settlement losses, and tax adjustment. This compares with net loss and diluted loss per share of $1,857 million and $7.20, respectively, for the first nine months of fiscal 2020.

•Our cash and cash equivalents were $3.9 billion as of December 31, 2020.

•We generated $404 million of cash from operations during the first nine months of fiscal 2021, as compared to $2,062 million during the first nine months of fiscal 2020.

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Revenues

	Three Months Ended
(in millions)	December 31, 2020		December 31, 2019		Change		Percentage Change
GBS	$	1,921	$	2,359	$	(438)	(18.6)	%
GIS	2,367		2,662		(295)		(11.1)	%
Total Revenues	$	4,288	$	5,021	$	(733)	(14.6)	%

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		Change		Percentage Change
GBS	$	6,337	$	6,803	$	(466)	(6.8)	%
GIS	7,007		7,959		(952)		(12.0)	%
Total Revenues	$	13,344	$	14,762	$	(1,418)	(9.6)	%

The decrease in revenues for the third quarter and first nine months of fiscal 2021, compared with the same periods in fiscal 2020, reflects the disposition of the HHS business at the beginning of the third quarter of fiscal 2021, project terminations, and changes in run volume. The decrease in revenue for the first nine months of fiscal 2021 was partially offset by contributions from our Luxoft acquisition which was executed during the first quarter of fiscal 2020. Revenues for the third quarter and first nine months of fiscal 2021 included favorable foreign currency exchange rate impacts of 2.3% and 0.6%, respectively. These impacts were primarily driven by the weakening of the U.S. dollar against the Euro, Australian Dollar, and British Pound during the third quarter and first nine months of fiscal 2021.

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

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

As a global company, over 65% of our revenues for the first nine months of fiscal 2021 were earned internationally. As a result, the comparison of revenues denominated in currencies other than the U.S. dollar, from period to period, is impacted by fluctuations in foreign currency exchange rates. Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. The table below summarizes our constant currency revenues:

	Three Months Ended
(in millions)	Constant Currency December 31, 2020		December 31, 2019		Change		Percentage Change
GBS	$	1,868	$	2,359	$	(491)	(20.8)	%
GIS	2,302		2,662		(360)		(13.5)	%
Total	$	4,170	$	5,021	$	(851)	(16.9)	%

	Nine Months Ended
(in millions)	Constant Currency December 31, 2020		December 31, 2019		Change		Percentage Change
GBS	$	6,287	$	6,803	$	(516)	(7.6)	%
GIS	6,962		7,959		(997)		(12.5)	%
Total	$	13,249	$	14,762	$	(1,513)	(10.2)	%

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Global Business Services

Our GBS revenues were $1,921 million in the third quarter and $6,337 million in the first nine months of fiscal 2021, a decrease of 18.6% and 6.8%, respectively, compared to the corresponding periods in fiscal 2020. GBS revenue in constant currency decreased 20.8% and 7.6% in the third quarter and first nine months of fiscal 2021, respectively, as compared to the corresponding periods in fiscal 2020. The decrease in GBS revenues for the third quarter and first nine months of fiscal 2021 were primarily due to the disposition of the HHS business at the beginning of the third quarter of fiscal 2021, project terminations, and change in run volumes. The decrease in revenue for the first nine months of fiscal 2021 was partially offset by contributions from our Luxoft acquisition which was executed during the first quarter of fiscal 2020.

For the third quarter and first nine months of fiscal 2021, GBS contract awards were $2.7 billion and $8.6 billion, respectively, as compared to $2.5 billion and $6.8 billion in the corresponding periods of fiscal 2020.

Global Infrastructure Services

Our GIS revenues were $2,367 million in the third quarter and $7,007 million in the first nine months of fiscal 2021, a decrease of 11.1% and 12.0%, respectively, compared to the corresponding periods in fiscal 2020. GIS revenue in constant currency decreased 13.5% and 12.5% in the third quarter and first nine months of fiscal 2021, respectively, as compared to the corresponding periods in fiscal 2020. The decrease in GIS revenues for the third quarter and first nine months of fiscal 2021 reflects project terminations, change in run volumes, and price-downs.

For the third quarter and first nine months of fiscal 2021, GIS contract awards were $2.2 billion and $6.5 billion, respectively, as compared to $2.8 billion and $6.5 billion in the corresponding periods of fiscal 2020.

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Costs and Expenses

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

	Three Months Ended
	Amount				Percentage of Revenues				Percentage Point Change
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Costs of services (excludes depreciation and amortization and restructuring costs)	$	3,333	$	3,827	77.8	%	76.2	%	1.6
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	517		518		12.1		10.3		1.8
Depreciation and amortization	475		479		11.1		9.5		1.6
Goodwill impairment losses	—		53		—		1.1		(1.1)
Restructuring costs	104		74		2.4		1.5		0.9
Interest expense	82		93		1.9		1.9		—
Interest income	(28)		(33)		(0.7)		(0.7)		—
Gain on disposition of businesses	(2,046)		—		(47.7)		—		(47.7)
Other income, net	(127)		(117)		(3.0)		(2.3)		(0.7)
Total costs and expenses	$	2,310	$	4,894	53.9	%	97.5	%	(43.6)

	Nine Months Ended
	Amount				Percentage of Revenues				Percentage Point Change
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Costs of services (excludes depreciation and amortization and restructuring costs)	$	10,525	$	11,128	78.9	%	75.3	%	3.6
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	1,595		1,514		12.0		10.3		1.7
Depreciation and amortization	1,492		1,416		11.2		9.6		1.6
Goodwill impairment losses	—		2,940		—		19.9		(19.9)
Restructuring costs	441		248		3.3		1.7		1.6
Interest expense	284		288		2.1		2.0		0.1
Interest income	(76)		(130)		(0.6)		(0.9)		0.3
Gain on disposition of businesses	(2,046)		—		(15.3)		—		(15.3)
Gain on arbitration award	—		(632)		—		(4.3)		4.3
Other income, net	(318)		(344)		(2.4)		(2.3)		(0.1)
Total costs and expenses	$	11,897	$	16,428	89.2	%	111.3	%	(22.1)

The 43.6 and 22.1 point decrease in total costs and expenses as a percentage of revenue for the third quarter and first nine months of fiscal 2021 primarily reflects the gain on disposition of businesses in the current year and our goodwill impairment losses incurred during the third quarter and first nine months of fiscal 2020 that didn’t occur in fiscal 2021.

Costs of Services

Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), was $3.3 billion and $10.5 billion for the third quarter and first nine months of fiscal 2021, respectively. COS decreased $494 million and $603 million during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. These decreases were primarily due to cost optimization savings realized during fiscal 2021. COS as a percentage of revenue increased 1.6 and 3.6 points, respectively, as compared to the same periods of the prior fiscal year. These point increases were driven by a reduction in revenue during the same periods of the current fiscal year.

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Selling, General, and Administrative

Selling, general, and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $517 million for the third quarter of fiscal 2021, consistent with the same period of the prior fiscal year. SG&A was $1,595 million for the first nine months of fiscal 2021, an increase of $81 million compared to the same period of the prior fiscal year. The increase during the first nine months of fiscal 2021 was driven by higher transaction, separation and integration-related costs.

Transaction, separation and integration-related costs of $96 million and $307 million were included in SG&A for the third quarter and first nine months of fiscal 2021, respectively, as compared to $68 million and $226 million for the comparable period of the prior fiscal year.

Depreciation and Amortization

Depreciation expense was $185 million and $563 million for the third quarter and first nine months of fiscal 2021, respectively. Depreciation expense increased $49 million and $91 million during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. The net increase in depreciation expense for the third quarter and first nine months of fiscal 2021 was due to an increase in assets placed into service.

Amortization expense was $290 million and $929 million for the third quarter and first nine months of fiscal 2021, respectively. Amortization expense decreased $53 million and $15 million during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. These decreases were primarily due to customer related intangibles related to the disposition of the HHS business at the beginning of the third quarter of fiscal 2021. See Note 4 - "Divestitures" for additional information.

Goodwill Impairment Losses

DXC recognized goodwill impairment charges totaling $53 million and $2,940 million for the third quarter and first nine months of fiscal 2020, respectively. The impairment charge was primarily as a result of a decline in market capitalization during the second quarter of fiscal 2020. See Note 11 - "Goodwill" for additional information.

Restructuring Costs

During fiscal 2021, management approved global cost savings initiatives designed to better align our workforce and facility structures. During the third quarter and first nine months of fiscal 2021, restructuring costs, net of reversals, were $104 million and $441 million, respectively, as compared to $74 million and $248 million during the same periods of the prior fiscal year. In addition, during the third quarter of fiscal 2021 workforce reductions includes a $14 million adjustment to restructuring expense related to the prior year.

For an analysis of changes in our restructuring liabilities by restructuring plan, see Note 14 - "Restructuring Costs" to the financial statements.

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Interest Expense and Interest Income

Interest expense was $82 million and $284 million for third quarter and first nine months of fiscal 2021, respectively. Interest expense decreased $11 million and $4 million during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. These decreases were primarily driven by lower interest rates on finance leases and a reduction in interest charges within our multicurrency cash pools. The decrease in interest expense for the first nine months of fiscal 2021 was partially offset by increased amounts drawn on our revolving credit facility.

Interest income was $28 million and $76 million for third quarter and first nine months of fiscal 2021, respectively. Interest income decreased $5 million and $54 million during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. The decrease during the third quarter of fiscal 2021 was primarily driven by lower income from our multicurrency cash pools and money market accounts. The decrease during the first nine months of fiscal 2021 was primarily driven by interest income in the second quarter of fiscal year 2020 related to arbitration discussed below under the caption “Gain on Arbitration Award."

Gain on Dispositions

During the third quarter of fiscal 2021, DXC sold its U.S. State and Local Health and Human Services business for a total enterprise value of $5.0 billion and resulted in an estimated pre-tax gain on sale of $2,041 million, net of closing costs. An insignificant business was also sold during the quarter that resulted in a gain of $5 million.

Gain on Arbitration Award

During the second quarter of fiscal 2020, DXC received final arbitration award proceeds of $666 million related to the HPE Enterprise Services merger completed in fiscal 2018. The arbitration award included $632 million in damages that were recorded as a gain. The remaining $34 million of the award related to pre-award interest. Dispute details are subject to confidentiality obligations.

Other Income, Net

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

Other income was $127 million and $318 million for the third quarter and first nine months of fiscal 2021, respectively, as compared to $117 million and $344 million during the same periods of the prior fiscal year.

The $10 million increase in other income, net for the third quarter of fiscal 2021, as compared to the same period of the prior fiscal year, was primarily due to a year-over-year increase in other gains related to sales of non-operating assets partially offset by foreign exchange hedging and revaluations.

The $26 million decrease in other income, net for the first nine months of fiscal 2021, as compared to the same period of the prior fiscal year, was primarily due to foreign exchange hedging and revaluations, partially offset by a year-over-year increase in gains related to sales of non-operating assets.

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Taxes

Our effective tax rate ("ETR") was 44.2% and 29.1% for the three months ended December 31, 2020 and December 31, 2019, respectively, and 54.5% and (11.5)% for the nine months ended December 31, 2020 and December 31, 2019, respectively. For the three and nine months ended December 31, 2020, the primary drivers of the ETR were the gain on sale of HHS Business, global mix of income and foreign tax credits. For the three months ended December 31, 2019, the primary drivers of the ETR were the impact of previously unrecognized tax effects on the tax deductible goodwill impaired during the fiscal 2020 second quarter, the global mix of income, an increase in prior year U.S. federal research and development income tax credits, and an increase in unrecognized tax benefits primarily related to audit activity. For the nine months ended December 31, 2019, the primary drivers of the ETR were the impact of the non-deductible goodwill impairment charge, the non-taxable gain on the arbitration award, the global mix of income, an increase in unrecognized tax benefits primarily related to audit activity, and an increase in prior year U.S. federal research and development income tax credits, net.

Earnings (Loss) Per Share

Diluted earnings per share for the third quarter and first nine months of fiscal 2021 was $4.29 and $2.54, respectively. Diluted earnings per share increased $3.97 and $9.74 during the third quarter and first nine months of fiscal 2021, respectively, as compared to the same periods of the prior fiscal year. This increase was due to an increase of $1,013 million and $2,515 million in net income for the third quarter and first nine months of fiscal 2021, respectively, over the same periods in the prior fiscal year.

Diluted earnings per share for the third quarter of fiscal 2021 includes $0.36 per share of restructuring costs, $0.31 per share of transaction, separation and integration-related costs, $0.34 per share of amortization of acquired intangible assets, and $(4.47) per share of gain on disposition of businesses.

Diluted earnings per share for the first nine months of fiscal 2021 includes $1.43 per share of restructuring costs, $0.93 per share of transaction, separation and integration-related costs, $1.25 per share of amortization of acquired intangible assets, $(4.48) per share of gain on disposition of businesses, $0.01 per share of pension and OPEB actuarial and settlement losses, and $0.01 of tax adjustment.

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Non-GAAP Financial Measures

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

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

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

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

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

Selected references are made on a “constant currency basis” so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates, thereby providing comparisons of operating performance from period to period. Financial results on a “constant currency basis” are non-GAAP measures calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This approach is used for all results where the functional currency is not the U.S. dollar. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Fiscal 2021 Highlights.”

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

	Three Months Ended
(in millions)	December 31, 2020		December 31, 2019		Change
Income before income taxes	$	1,978	$	127	$	1,851
Non-GAAP income before income taxes	$	246	$	468	$	(222)
Net Income	$	1,103	$	90	$	1,013
Adjusted EBIT	$	300	$	528	$	(228)

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		Change
Income (loss) before income taxes	$	1,447	$	(1,666)	$	3,113
Non-GAAP income before income taxes	$	565	$	1,551	$	(986)
Net income (loss)	$	658	$	(1,857)	$	2,515
Adjusted EBIT	$	773	$	1,709	$	(936)

Reconciliation of Non-GAAP Financial Measures

Our non-GAAP adjustments include:

•Restructuring costs - reflects costs, net of reversals, related to workforce optimization and real estate charges.

•Transaction, separation and integration-related (“TSI”) costs - reflects costs to execute on strategic alternatives, costs related to integration, planning, financing and advisory fees associated with the HPES Merger and other acquisitions and costs related to the separation of USPS and other divestitures.(1)

•Amortization of acquired intangible assets - reflects amortization of intangible assets acquired through business combinations.

•Gain on disposition of businesses - Reflects gains and losses related to sales of businesses.

•Pension and OPEB actuarial and settlement gains and losses - reflects pension and OPEB actuarial and settlement gains and losses.

•Goodwill impairment losses - reflects impairment losses on goodwill.

•Gain on arbitration award - reflects a gain related to the HPES merger arbitration award.

•Tax adjustment - for fiscal 2021 periods, reflects the impact of tax entries related to prior restructuring charges and an adjustment to the tax expense relating to USPS, and for fiscal 2020 periods, reflects the impact of tax entries related to prior restructuring charges. Income tax expense of non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.

(1) TSI costs for all periods presented include fees and other internal and external expenses associated with legal, accounting, consulting, due diligence, investment banking advisory, and other services, as well as financing fees, retention incentives, and resolution of transaction related claims in connection with, or resulting from, exploring or executing potential acquisitions, dispositions and strategic alternatives, whether or not announced or consummated.

TSI-Related Costs for Q3 FY21 include $77 million of costs to execute the strategic alternatives (including $52M for the sale of HHS which closed in October 2020 and $23M for the sale of the healthcare software business which is expected to close later this year); $7 million in expenses related to integration projects resulting from the CSC – HPE ES merger (including costs associated with continuing efforts to separate certain IT systems) and $12 million of costs incurred in connection with activities related to other acquisitions and divestitures.

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

	Three Months Ended December 31, 2020
(in millions, except per-share amounts)	As Reported			Restructuring Costs		Transaction, Separation and Integration-Related Costs		Amortization of Acquired Intangible Assets		Gain on Disposition of Businesses		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	3,333		$	—	$	—	$	—	$	—	$	3,333
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	517			—		(96)		—		—		421
Income (loss) before income taxes	1,978			104		96		114		(2,046)		246
Income tax expense (benefit)	875			11		16		26		(903)		25
Net income (loss)	1,103			93		80		88		(1,143)		221
Less: net income attributable to non-controlling interest, net of tax	5			—		—		—		—		5
Net income (loss) attributable to DXC common stockholders	$	1,098		$	93	$	80	$	88	$	(1,143)	$	216
Effective Tax Rate	44.2		%									10.2		%
Basic EPS	$	4.32		$	0.37	$	0.31	$	0.35	$	(4.49)	$	0.85
Diluted EPS	$	4.29		$	0.36	$	0.31	$	0.34	$	(4.47)	$	0.84
Weighted average common shares outstanding for:
Basic EPS	254.32			254.32		254.32		254.32		254.32		254.32
Diluted EPS	255.75			255.75		255.75		255.75		255.75		255.75

	Nine Months Ended December 31, 2020
(in millions, except per-share amounts)	As Reported			Restructuring Costs		Transaction, Separation and Integration-Related Costs		Amortization of Acquired Intangible Assets		Gain on Disposition of Businesses		Pension and OPEB Actuarial and Settlement Losses		Tax Adjustment		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	10,525		$	—	$	—	$	—	$	—	$	—	$	—	$	10,525
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	1,595			—		(314)		—		—		—		—		1,281
Income (loss) before income taxes	1,447			441		307		414		(2,046)		2		—		565
Income tax expense (benefit)	789			75		70		95		(903)		—		(2)		124
Net income (loss)	658			366		237		319		(1,143)		2		2		441
Less: net income attributable to non-controlling interest, net of tax	9			—		—		—		—		—		—		9
Net income (loss) attributable to DXC common stockholders	$	649		$	366	$	237	$	319	$	(1,143)	$	2	$	2	$	432
Effective Tax Rate	54.5		%													21.9		%
Basic EPS	$	2.55		$	1.44	$	0.93	$	1.26	$	(4.50)	$	0.01	$	0.01	$	1.70
Diluted EPS	$	2.54		$	1.43	$	0.93	$	1.25	$	(4.48)	$	0.01	$	0.01	$	1.69
Weighted average common shares outstanding for:
Basic EPS	254.03			254.03		254.03		254.03		254.03		254.03		254.03		254.03
Diluted EPS	255.20			255.20		255.20		255.20		255.20		255.20		255.20		255.20

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	Three Months Ended December 31, 2019
(in millions, except per-share amounts)	As Reported			Restructuring Costs		Transaction, Separation and Integration-Related Costs		Amortization of Acquired Intangible Assets		Goodwill Impairment Losses		Tax Adjustment		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	3,827		$	—	$	—	$	—	$	—	$	—	$	3,827
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	518			—		(68)		—		—		—		$	450
Income before income taxes	127			74		68		146		53		—		468
Income tax expense (benefit)	37			10		16		34		53		(10)		140
Net income	90			64		52		112		—		10		328
Less: net income attributable to non-controlling interest, net of tax	8			—		—		—		—		—		8
Net income attributable to DXC common stockholders	$	82		$	64	$	52	$	112	$	—	$	10	$	320
Effective Tax Rate	29.1		%											29.9		%
Basic EPS	$	0.32		$	0.25	$	0.20	$	0.44	$	—	$	0.04	$	1.25
Diluted EPS	$	0.32		$	0.25	$	0.20	$	0.44	$	—	$	0.04	$	1.25
Weighted average common shares outstanding for:
Basic EPS	255.09			255.09		255.09		255.09		255.09		255.09		255.09
Diluted EPS	256.05			256.05		256.05		256.05		256.05		256.05		256.05

	Nine Months Ended December 31, 2019
(in millions, except per-share amounts)	As Reported			Restructuring Costs		Transaction, Separation and Integration-Related Costs		Amortization of Acquired Intangible Assets		Goodwill Impairment Losses		Gain on Arbitration Award		Tax Adjustment		Non-GAAP Results
Costs of services (excludes depreciation and amortization and restructuring costs)	$	11,128		$	—	$	—	$	—	$	—	$	—	$	—	$	11,128
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	1,514			—		(226)		—		—		—		—		$	1,288
(Loss) income before income taxes	(1,666)			248		226		435		2,940		(632)		—		1,551
Income tax expense (benefit)	191			42		43		99		53		—		(39)		389
Net (loss) income	(1,857)			206		183		336		2,887		(632)		39		1,162
Less: net income attributable to non-controlling interest, net of tax	17			—		—		—		—		—		—		17
Net (loss) income attributable to DXC common stockholders	$	(1,874)		$	206	$	183	$	336	$	2,887	$	(632)	$	39	$	1,145
Effective Tax Rate	(11.5)		%													25.1		%
Basic EPS	$	(7.20)		$	0.79	$	0.70	$	1.29	$	11.09	$	(2.43)	$	0.15	$	4.40
Diluted EPS	$	(7.20)		$	0.79	$	0.70	$	1.28	$	11.03	$	(2.42)	$	0.15	$	4.38
Weighted average common shares outstanding for:
Basic EPS	260.24			260.24		260.24		260.24		260.24		260.24		260.24		260.24
Diluted EPS	260.24			261.69		261.69		261.69		261.69		261.69		261.69		261.69

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

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net income (loss)	$	1,103	$	90	$	658	$	(1,857)
Income tax expense	875		37		789		191
Interest income	(28)		(33)		(76)		(130)
Interest expense	82		93		284		288
EBIT	2,032		187		1,655		(1,508)
Restructuring costs	104		74		441		248
Transaction, separation and integration-related costs	96		68		307		226
Amortization of acquired intangible assets	114		146		414		435
Gain on disposition of businesses	(2,046)		—		(2,046)		—
Pension and OPEB actuarial and settlement losses	—		—		2		—
Goodwill impairment losses	—		53		—		2,940
Gain on arbitration award	—		—		—		(632)
Adjusted EBIT	$	300	$	528	$	773	$	1,709

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Liquidity and Capital Resources

Cash and Cash Equivalents and Cash Flows

As of December 31, 2020, our cash and cash equivalents ("cash") was $3.9 billion, of which $1.1 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash and pool arrangements with various counterparties to manage liquidity efficiently that enables participating subsidiaries to draw on the Company’s pooled resources to meet liquidity needs.

A significant portion of the cash held by our foreign subsidiaries is not expected to be impacted by U.S. federal income tax upon repatriation. However, a portion of this cash may still be subject to foreign and U.S. state income tax consequences upon future remittance. Therefore, if additional funds held outside the U.S. are needed for our operations in the U.S., we plan to repatriate these funds not designated as indefinitely reinvested.

We have $0.5 billion in cash held by foreign subsidiaries used for local operations that is subject to country-specific limitations which may restrict or result in increased costs in the repatriation of these funds. In addition, other practical considerations may limit our use of consolidated cash. This includes cash of $0.5 billion held in a German financial services subsidiary subject to regulatory requirements, and $0.2 billion held by majority owned consolidated subsidiaries where third-parties hold minority interests.

The following table summarizes our cash flow activity:

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		Change
Net cash provided by operating activities	$	404	$	2,062	$	(1,658)
Net cash provided by (used in) investing activities	4,500		(2,122)		6,622
Net cash used in financing activities	(4,671)		(305)		(4,366)
Effect of exchange rate changes on cash and cash equivalents	20		26		(6)
Cash classified within current assets held for sale	(13)		—		(13)
Net increase (decrease) in cash and cash equivalents	$	240	$	(339)	$	579
Cash and cash equivalents at beginning of year	3,679		2,899
Cash and cash equivalents at end of period	$	3,919	$	2,560

Operating cash flow

Net cash provided by operating activities during the first nine months of fiscal 2021 was $404 million as compared to $2,062 million during the comparable period of the prior fiscal year. The decrease of $1,658 million was due to a decrease in net income, net of adjustments of $2,687 million, including $272 million of repurchased receivables previously sold under the Milano Receivables Facility and $12 million of prepaid maintenance related to the sale of the HHS business. The decrease was partially offset by a decrease in working capital cash outflows of $1,029 million. Net loss, net of adjustments includes cash received on arbitration award of $668 million in the prior fiscal year.

Investing cash flow

Net cash provided by (used in) investing activities during the first nine months of fiscal 2021 was $4,500 million as compared to $(2,122) million during the comparable period of the prior fiscal year. The decrease in cash used of $6,622 million was primarily due to cash received from business dispositions of $4,942 million in fiscal 2021, a decrease in cash paid for acquisitions of $1,987 million, and the absence of short-term investing of $75 million in fiscal 2020. This was partially offset by a decrease in cash collections related to deferred purchase price receivable of $354 million and a $48 million increase in payments for software licenses related to the sale of the HHS business.

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Financing cash flow

Net cash used in financing activities during the first nine months of fiscal 2021 was $4,671 million as compared to $305 million during the comparable period of the prior fiscal year. The $4,366 million increase in cash used was primarily due to an increase in repayments, net of borrowings, of $3,102 million on term loans and other long-term debt, $1,500 million on lines of credit, and $590 million on commercial paper. In total, we used $3.5 billion of the net proceeds from the sale of the HHS business to repay debt during the quarter. These increases were partially offset by the absence of common stock repurchases and advance payment for accelerated share repurchase of $736 million in fiscal 2020, and a decrease in dividend payments of $108 million.

Capital Resources

See Note 21 - "Commitments and Contingencies" for a discussion of the general purpose of guarantees and commitments. The anticipated sources of funds to fulfill such commitments are listed below and under the subheading "Liquidity."

The following table summarizes our total debt:

	As of
(in millions)	December 31, 2020		March 31, 2020
Short-term debt and current maturities of long-term debt	$	795	$	1,276
Long-term debt, net of current maturities	5,444		8,672
Total debt	$	6,239	$	9,948

The $3.7 billion decrease in total debt during the first nine months of fiscal 2021 was primarily attributed to the prepayment of $1.5 billion of Revolver Credit Facility outstanding at fiscal year-end March 31, 2020, €402 million of Euro commercial paper, and the following term loan facilities: €750 million of Euro Term Loan due fiscal 2022 and 2023, A$800 million of AUD Term Loan due fiscal 2022, £450 million of GBP Term Loan due fiscal 2022, $481 million of USD Term Loan due fiscal 2025, and €350 million of Euro Term Loan due fiscal 2024. These were partially offset by the issuance of new senior notes with an aggregate principal of $1.0 billion, consisting of (i) $500 million of 4.00% Senior Notes due fiscal 2024 and (ii) $500 million of 4.13% Senior Notes due fiscal 2026.

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

In October 2020, we sold the HHS business and used approximately $3.5 billion of the proceeds to prepay $1,250 million of Revolver Credit Facility, £600 million of GBP commercial paper (approximately $772 million), €350 million of Euro Term Loan due fiscal 2024 (approximately $410 million), $381 million of USD Term loan due fiscal 2025, A$500 million of AUD Term Loan due fiscal 2022 (approximately $358 million), and €250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $292 million).

During fiscal 2021, we borrowed the remaining $2.5 billion under the $4.0 billion credit facility agreement and repaid the full $4.0 billion on the same. The purpose of the borrowing was to mitigate our reliance on volatile short-term commercial paper markets and to strengthen our cash and liquidity position given the uncertainties related to COVID-19 pandemic and its potential impact on our clients and our business. The credit facility repayment resulted from the availability of other liquidity resources. The entire $4.0 billion credit facility is available for redraw at our request.

We were in compliance with all financial covenants associated with our borrowings as of December 31, 2020 and December 31, 2019.

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The debt maturity chart below summarizes the future maturities of long-term debt principal for fiscal years subsequent to December 31, 2020, and excludes maturities of borrowings for assets acquired under long-term financing and finance lease liabilities. See Note 12 - "Debt" for more information.

The following table summarizes our capitalization ratios:

	As of
(in millions)	December 31, 2020			March 31, 2020
Total debt	$	6,239		$	9,948
Cash and cash equivalents(1)	3,919			3,679
Net debt(2)	$	2,320		$	6,269
Total debt	$	6,239		$	9,948
Equity	5,995			5,129
Total capitalization	$	12,234		$	15,077
Debt-to-total capitalization	51.0		%	66.0		%
Net debt-to-total capitalization(2)	19.0		%	41.6		%

(1) Includes previously described cash held outside of the U.S., at a German financial services subsidiary, and at majority owned consolidated subsidiaries.

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

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Our credit ratings are as follows:

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

See Note 21 - "Commitments and Contingencies" for a discussion of the general purpose of guarantees and commitments. The anticipated sources of funds to fulfill such commitments are listed below at "Liquidity."

Liquidity

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

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

The following table summarizes our total liquidity:

	As of
(in millions)	December 31, 2020
Cash and cash equivalents	$	3,919
Available borrowings under our revolving credit facility	4,000
Total liquidity	$	7,919

Share Repurchases

During the first quarter of fiscal 2018, our Board of Directors authorized the repurchase of up to $2.0 billion of our common stock and during the third quarter of fiscal 2019, our Board of Directors approved an incremental $2.0 billion share repurchase. This program became effective on April 3, 2017 with no end date established. There were no share repurchases during the third quarter ended December 31, 2020.

Dividends

To maintain our financial flexibility we continue to suspend payment of quarterly dividends.

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Off-Balance Sheet Arrangements

In the normal course of business, we are party to arrangements that include guarantees, the receivables securitization facility and certain other financial instruments with off-balance sheet risk, such as letters of credit and surety bonds. We also use performance letters of credit to support various risk management insurance policies. No liabilities related to these arrangements are reflected in our condensed consolidated balance sheets. There have been no material changes to our off-balance-sheet arrangements reported under Part II, Item 7 of our Annual Report on Form 10-K other than as disclosed below and in Note 6 - "Receivables" and Note 21 - "Commitments and Contingencies" to the financial statements in this Quarterly Report on Form 10-Q.

Contractual Obligations

With the exception of the new senior notes with an aggregate principal amount of $1.0 billion, consisting of (i) $500 million of 4.00% Senior Notes due fiscal 2024; and (ii) $500 million of 4.13% Senior Notes due fiscal 2026; prepayment of $1.5 billion of Revolver Credit Facility, €402 million of Euro commercial paper, and term loan facilities consisting of (i) €750 million of Euro Term Loan due fiscal 2023, (ii) A$800 million of AUD Term Loan due fiscal 2022, (iii) £450 million of GBP Term Loan due fiscal 2022, (iv) $481 million of USD Term Loan due fiscal 2025, and (v) €350 million of Euro Term Loan due fiscal 2024 as discussed above under the subheading "Capital Resources," there have been no material changes, outside the ordinary course of business, to our contractual obligations since March 31, 2020. For further information see "Contractual Obligations" in Item 7 of Part II of our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities. These estimates may change in the future if underlying assumptions or factors change. Accordingly, actual results could differ materially from our estimates under different assumptions, judgments or conditions. We consider the following policies to be critical because of their complexity and the high degree of judgment involved in implementing them: revenue recognition, income taxes, business combinations, defined benefit plans and valuation of assets. We have discussed the selection of our critical accounting policies and the effect of estimates with the audit committee of our board of directors. During the three months ended December 31, 2020, there were no changes to our accounting estimates from those described in our fiscal 2020 Annual Report on Form 10-K except as mentioned in Note 1 - "Summary of Significant Accounting Policies."

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

69

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2020 because of the material weakness in our internal control over financial reporting described below.

Control Activities

As previously disclosed during the third quarter of fiscal 2020, Management concluded there was a material weakness in internal controls over financial reporting related to the design and implementation of effective control activities based on the criteria established in the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control – Integrated Framework (2013). These control deficiencies constituted a material weakness in the aggregate related to reassessing policies and procedures, to determine their continued relevance, as impacted by complex transactions and processes.

As a result, we have concluded that there is a reasonable possibility that a material misstatement to our Condensed Consolidated Financial Statements would not be prevented or detected on a timely basis and therefore we concluded that the aggregation of these deficiencies represents a material weakness in our internal control over financial reporting as of December 31, 2020.

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

Remediation Plan

Management has taken and will continue to take significant and comprehensive actions to remediate the material weakness. Management has completed a detailed root cause analysis, which was designed to identify areas of focus where enhancements can be made to the internal control environment. While we have made progress in remediation of certain of the identified deficiencies that led to the material weakness, our focus is on creating a sustainable controls environment as we build out our remediation program.

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

•Align the Sarbanes-Oxley Act (“SOX") risk assessment and testing function under the newly appointed Chief Risk Officer with the traditional SOX controls responsibilities including material weakness remediation activities aligned directly under our new Chief Financial Officer.

•Established an enhanced material weakness remediation progress reporting process to the Audit Committee in Q4 FY20.

•Assessed and augmented personnel to ensure appropriate resources are in place to strengthen the overall control environment. We appointed a new Chief Financial Officer in Q3 FY21 with previous experience as a Chief Accounting Officer and in the remediation of material weaknesses. In addition, we hired new leadership in the Finance and Risk organizations with relevant controls and remediation experience in FY21.

•Evaluate and assess key enterprise controls and relevant policies focusing on thresholds, ownership, and accountability.

•Enhance our financial cadence and discipline including reviewing the underlying performance of the business and related balance sheet accounts.

•Standardize processes and rationalize controls across the enterprise to focus on risk.

70

These additional remediation efforts, identified to comprehensively address our analysis of the root causes, have begun and are expected to be completed in the subsequent quarters. Given the additional remediation activities we do not expect to be completed by the end of the fiscal year. After management’s remediation efforts are complete, subsequent testing is required to conclude that a material weakness no longer exists.

Our goal is to have enhanced control policies, procedures, processes in place as promptly as practicable, however we are not in a position to complete our remediation plan and concluded that our internal control over financial reporting is not designed or operating effectively as of the quarter ended December 31, 2020.

Changes in Internal Control over Financial Reporting

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

There were no changes in our internal control over financial reporting during the three months ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

71

PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 21 - "Commitments and Contingencies" to the financial statements under the caption “Contingencies” for information regarding legal proceedings in which we are involved.

ITEM 1A. RISK FACTORS

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

72

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

Unregistered Sales of Equity Securities

None during the period covered by this report.

Use of Proceeds

Not applicable.

Issuer Purchases of Equity Securities

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

There was no share repurchase activity during the three months and nine months ended December 31, 2020.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

73

ITEM 6. EXHIBITS

Exhibit Number	Description of Exhibit
31.1*	Section 302 Certification of the Chief Executive Officer
31.2*	Section 302 Certification of the Chief Financial Officer
32.1**	Section 906 Certification of Chief Executive Officer
32.2**	Section 906 Certification of Chief Financial Officer
101.INS	Interactive Data Files
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

    * Filed herewith

    ** Furnished herewith

74

SIGNATURES

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

			DXC TECHNOLOGY COMPANY
Dated:	February 4, 2021	By:	/s/ Neil A. Manna
		Name:	Neil A. Manna
		Title:	Senior Vice President, Corporate Controller Principal Accounting Officer and Authorized Signatory

75

EX-31.1

Exhibit 31.1

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

I, Michael J. Salvino, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:	February 4, 2021	/s/ Michael J. Salvino
		Michael J. Salvino President and Chief Executive Officer

EX-31.2

Exhibit 31.2

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

I, Kenneth P. Sharp, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:	February 4, 2021	/s/ Kenneth P. Sharp
		Kenneth P. Sharp Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

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

(1)The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

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

Dated:	February 4, 2021	/s/ Michael J. Salvino
		Michael J. Salvino President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

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

(1)The Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2020 (the "Report") fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

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

Dated:	February 4, 2021	/s/ Kenneth P. Sharp
		Kenneth P. Sharp Executive Vice President and Chief Financial Officer

XML

Cover Page - shares	9 Months Ended
	Dec. 31, 2020	Jan. 29, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	001-38033
Entity Registrant Name	DXC Technology Co
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	61-1800317
Entity Address, Address Line One	1775 Tysons Boulevard
Entity Address, City or Town	Tysons
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22102
City Area Code	703
Local Phone Number	245-9675
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		254,593,993
Entity Central Index Key	0001688568
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	DXC
Security Exchange Name	NYSE
Senior notes due 2025
Entity Information [Line Items]
Title of 12(b) Security	2.750% Senior Notes Due 2025
Trading Symbol	DXC 25
Security Exchange Name	NYSE
Senior notes due 2026
Entity Information [Line Items]
Title of 12(b) Security	1.750% Senior Notes Due 2026
Trading Symbol	DXC 26
Security Exchange Name	NYSE

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Revenues	$ 4,288	$ 5,021	$ 13,344	$ 14,762
Costs of services (excludes depreciation and amortization and restructuring costs)	3,333	3,827	10,525	11,128
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)	517	518	1,595	1,514
Depreciation and amortization	475	479	1,492	1,416
Goodwill impairment losses	0	53	0	2,940
Restructuring costs	104	74	441	248
Interest expense	82	93	284	288
Interest income	(28)	(33)	(76)	(130)
Gain on disposition of businesses	(2,046)	0	(2,046)	0
Gain on arbitration award	0	0	0	(632)
Other income, net	(127)	(117)	(318)	(344)
Total costs and expenses	2,310	4,894	11,897	16,428
Income (loss) before income taxes	1,978	127	1,447	(1,666)
Income tax expense	875	37	789	191
Net income (loss)	1,103	90	658	(1,857)
Less: net income attributable to non-controlling interest, net of tax	5	8	9	17
Net income (loss) attributable to DXC common stockholders	$ 1,098	$ 82	$ 649	$ (1,874)
Earnings Per Share [Abstract]
Basic (in dollars per share)	$ 4.32	$ 0.32	$ 2.55	$ (7.20)
Diluted (in dollars per share)	$ 4.29	$ 0.32	$ 2.54	$ (7.20)

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)		$ 1,103	$ 90	$ 658	$ (1,857)
Other comprehensive income, net of taxes:
Foreign currency translation adjustments, net of tax	[1]	170	293	200	87
Cash flow hedges adjustments, net of tax	[2]	0	(8)	18	(6)
Available-for-sale securities, net of tax	[3]	(11)	0	(6)	2
Prior service cost, net of tax	[4]	(1)	0	(1)	0
Pension and other post-retirement benefit plans, net of tax:
Amortization of prior service cost, net of tax	[5]	(2)	(2)	(12)	(6)
Pension and other post-retirement benefit plans, net of tax		(3)	(2)	(13)	(6)
Other comprehensive income, net of taxes		156	283	199	77
Comprehensive income (loss)		1,259	373	857	(1,780)
Less: comprehensive income attributable to non-controlling interest		6	39	12	26
Comprehensive income (loss) attributable to DXC common stockholders		$ 1,253	$ 334	$ 845	$ (1,806)

[1] Tax benefit related to foreign currency translation adjustments was $9 and $31 for the three and nine months ended December 31, 2020, respectively, and $15 and $2 for the three and nine months ended December 31, 2019, respectively.

[2] Tax expense related to cash flow hedge adjustments was $0 and $6 for the three and nine months ended December 31, 2020, respectively. Tax benefit related to cash flow hedge adjustments was $1 and $1 for the three and nine months ended December 31, 2019, respectively.

[3] Tax benefit related to available-for-sale securities was $4 for the three and nine months ended December 31, 2020. Tax expense related to available-for-sale securities was $0 and $1 for the three and nine months ended December 31, 2019, respectively.

[4] There was no tax benefit related to prior service costs during the three and nine months ended December 31, 2020 and December 31, 2019, respectively.

[5] Tax benefit related to amortization of prior service costs was $1 and $3 for the three and nine months ended December 31, 2020, respectively, and $0 and $1 for the three and nine months ended December 31, 2019, respectively.

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Foreign currency translation adjustments, tax expense (benefit)	$ (9)	$ (15)	$ (31)	$ (2)
Cash flow hedges adjustments, tax expense (benefit)	0	(1)	6	(1)
Tax expense (benefit) related to available-for-sale securities	(4)	0	(4)	1
Prior service cost, tax	0	0	0	0
Amortization of prior service cost, tax benefit	$ 1	$ 0	$ 3	$ 1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Current assets:
Cash and cash equivalents	$ 3,919	$ 3,679
Receivables and contract assets, net of allowance of $199 and $74	4,130	4,392
Prepaid expenses	586	646
Other current assets	470	270
Total current assets	9,105	8,987
Intangible assets, net of accumulated amortization of $4,545 and $4,347	4,019	5,731
Operating right-of-use assets, net	1,459	1,428
Goodwill	736	2,017
Deferred income taxes, net	315	265
Property and equipment, net of accumulated depreciation of $4,295 and $3,818	3,321	3,547
Other assets	4,679	4,031
Total Assets	23,634	26,006
Current liabilities:
Short-term debt and current maturities of long-term debt	795	1,276
Accounts payable	852	1,598
Accrued payroll and related costs	741	630
Current operating lease liabilities	450	482
Accrued expenses and other current liabilities	3,285	2,801
Deferred revenue and advance contract payments	1,102	1,021
Income taxes payable	1,045	87
Total current liabilities	8,270	7,895
Long-term debt, net of current maturities	5,444	8,672
Non-current deferred revenue	666	735
Non-current operating lease liabilities	1,113	1,063
Non-current income tax liabilities and deferred tax liabilities	792	1,157
Other long-term liabilities	1,354	1,355
Total Liabilities	17,639	20,877
Commitments and contingencies
DXC stockholders’ equity:
Preferred stock, par value $.01 per share, 1,000,000 shares authorized, none issued as of December 31, 2020 and March 31, 2020	0	0
Common stock, par value $.01 per share, 750,000,000 shares authorized, 256,800,719 issued as of December 31, 2020 and 255,674,040 issued as of March 31, 2020	3	3
Additional paid-in capital	10,748	10,714
Accumulated deficit	(4,533)	(5,177)
Accumulated other comprehensive loss	(407)	(603)
Treasury stock, at cost, 2,410,917 and 2,148,708 shares as of December 31, 2020 and March 31, 2020	(156)	(152)
Total DXC stockholders’ equity	5,655	4,785
Non-controlling interest in subsidiaries	340	344
Total Equity	5,995	5,129
Total Liabilities and Equity	$ 23,634	$ 26,006

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 199	$ 74
Intangible assets, accumulated amortization	4,545	4,347
Property and equipment, accumulated depreciation	$ 4,295	$ 3,818
DXC stockholders’ equity:
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	750,000,000	750,000,000
Common stock, issued (in shares)	256,800,719	255,674,040
Common stock in treasury, at cost (in shares)	2,410,917	2,148,708

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ 658	$ (1,857)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	1,506	1,429
Goodwill impairment losses	0	2,940
Operating right-of-use expense	463	506
Pension and other post-employment benefits, actuarial and settlement losses	2	0
Share-based compensation	42	57
Deferred taxes	(319)	(28)
(Gain) loss on dispositions	(2,023)	6
Provision for losses on accounts receivable	52	0
Unrealized foreign currency exchange (gain) loss	(60)	14
Impairment losses and contract write-offs	68	20
Other non-cash charges, net	(2)	(13)
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
Decrease in assets	88	141
Decrease in operating lease liability	(463)	(506)
Increase (decrease) in other liabilities	392	(647)
Net cash provided by operating activities	404	2,062
Cash flows from investing activities:
Purchases of property and equipment	(215)	(240)
Payments for transition and transformation contract costs	(189)	(220)
Software purchased and developed	(209)	(178)
Payments for acquisitions, net of cash acquired	(10)	(1,997)
Business dispositions	4,942	0
Cash collections related to deferred purchase price receivable	159	513
Proceeds from sale of assets	27	55
Short-term investing	0	(75)
Other investing activities, net	(5)	20
Net cash provided by (used in) investing activities	4,500	(2,122)
Cash flows from financing activities:
Borrowings of commercial paper	854	4,010
Repayments of commercial paper	(1,327)	(3,893)
Borrowings under lines of credit	2,500	0
Repayment of borrowings under lines of credit	(4,000)	0
Borrowings on long-term debt, net of discount	993	2,198
Principal payments on long-term debt	(2,926)	(1,029)
Payments on finance leases and borrowings for asset financing	(694)	(646)
Proceeds from stock options and other common stock transactions	1	11
Taxes paid related to net share settlements of share-based compensation awards	(5)	(15)
Repurchase of common stock and advance payment for accelerated share repurchase	0	(736)
Dividend payments	(53)	(161)
Other financing activities, net	(14)	(44)
Net cash used in financing activities	(4,671)	(305)
Effect of exchange rate changes on cash and cash equivalents	20	26
Net increase (decrease) in cash and cash equivalents including cash classified within current assets held for sale	253	(339)
Less: cash classified within current assets held for sale	(13)	0
Net increase (decrease) in cash and cash equivalents	240	(339)
Cash and cash equivalents at beginning of year	3,679	2,899
Cash and cash equivalents at end of period	$ 3,919	$ 2,560

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings (Accumulated Deficit)	Accumulated Other Comprehensive Loss	Treasury Stock		Total DXC Equity	Non- Controlling Interest	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjustment Retained Earnings (Accumulated Deficit)	Cumulative Effect, Period of Adoption, Adjustment Total DXC Equity
Balance (in shares) at Mar. 31, 2019		270,214,000
Beginning balance at Mar. 31, 2019	$ 11,725	$ 3	$ 11,301	$ 478	$ (244)	$ (136)		$ 11,402	$ 323
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	(1,857)			(1,874)				(1,874)	17
Other comprehensive income	77				68			68	9
Share-based compensation expense	55		55					55
Acquisition of treasury stock	(15)					(15)		(15)
Share repurchase program (in shares)		(15,934,000)
Share repurchase program	(736)		(669)	(67)				(736)
Stock option exercises and other common stock transactions (in shares)		1,326,000
Stock option exercises and other common stock transactions	14		14					14
Dividends declared	(165)			(165)				(165)
Non-controlling interest distributions and other	3							0	3
Balance (in shares) at Dec. 31, 2019		255,606,000
Ending balance at Dec. 31, 2019	9,101	$ 3	10,701	(1,628)	(176)	(151)		8,749	352
Balance (in shares) at Mar. 31, 2019		270,214,000
Beginning balance at Mar. 31, 2019	$ 11,725	$ 3	11,301	478	(244)	(136)		11,402	323
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Balance (in shares) at Mar. 31, 2020		255,674,000
Ending balance at Mar. 31, 2020	$ 5,129	$ 3	10,714	(5,177)	(603)	(152)	[1]	4,785	344	$ (4)	$ (4)	$ (4)
Balance (in shares) at Sep. 30, 2019		257,626,000
Beginning balance at Sep. 30, 2019	8,870	$ 3	10,793	(1,668)	(428)	(150)		8,550	320
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	90			82				82	8
Other comprehensive income	283				252			252	31
Share-based compensation expense	6		6					6
Acquisition of treasury stock	(1)					(1)		(1)
Share repurchase program (in shares)		(2,354,000)
Share repurchase program	(86)		(98)	12				(86)
Stock option exercises and other common stock transactions (in shares)		334,000
Dividends declared	(54)			(54)				(54)
Non-controlling interest distributions and other	(7)							0	(7)
Balance (in shares) at Dec. 31, 2019		255,606,000
Ending balance at Dec. 31, 2019	$ 9,101	$ 3	10,701	(1,628)	(176)	(151)		8,749	352
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury shares (in shares)	2,148,708
Balance (in shares) at Mar. 31, 2020		255,674,000
Beginning balance at Mar. 31, 2020	$ 5,129	$ 3	10,714	(5,177)	(603)	(152)	[1]	4,785	344	$ (4)	$ (4)	$ (4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	658			649				649	9
Other comprehensive income	199				196			196	3
Share-based compensation expense	33		33					33
Acquisition of treasury stock	(4)					(4)	[1]	(4)
Stock option exercises and other common stock transactions (in shares)		1,127,000
Stock option exercises and other common stock transactions	1		1					1
Non-controlling interest distributions and other	(17)			(1)				(1)	(16)
Balance (in shares) at Dec. 31, 2020		256,801,000
Ending balance at Dec. 31, 2020	5,995	$ 3	10,748	(4,533)	(407)	(156)	[1]	5,655	340
Balance (in shares) at Sep. 30, 2020		256,522,000
Beginning balance at Sep. 30, 2020	4,751	$ 3	10,746	(5,631)	(562)	(155)	[1]	4,401	350
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	1,103			1,098				1,098	5
Other comprehensive income	156				155			155	1
Share-based compensation expense	1		1					1
Acquisition of treasury stock	(1)					(1)	[1]	(1)
Stock option exercises and other common stock transactions (in shares)		279,000
Stock option exercises and other common stock transactions	1		1					1
Non-controlling interest distributions and other	(16)							0	(16)
Balance (in shares) at Dec. 31, 2020		256,801,000
Ending balance at Dec. 31, 2020	$ 5,995	$ 3	$ 10,748	$ (4,533)	$ (407)	$ (156)	[1]	$ 5,655	$ 340
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury shares (in shares)	2,410,917

[1] 2,410,917 treasury shares as of December 31, 2020.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited) (Parenthetical) - $ / shares	3 Months Ended	9 Months Ended
	Dec. 31, 2019	Dec. 31, 2019
Statement of Stockholders' Equity [Abstract]
Cash dividends declared (in dollars per share)	$ 0.21	$ 0.63

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Summary of Significant Accounting Policies

9 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Business

DXC Technology Company ("DXC," the "Company," "we," "us," or "our") helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. With decades of driving innovation, the world’s largest companies trust DXC to deploy its enterprise technology stack to deliver new levels of performance, competitiveness and customer experiences.

HHS Sale

On October 1, 2020, DXC completed the sale of its U.S. State and Local Health and Human Services business ("HHS" or the "HHS Business") to Veritas Capital Fund Management, L.L.C. ("Veritas Capital") to form Gainwell Technologies. The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business together with future services to be provided by the Company for a total enterprise value of $5.0 billion, subject to net working capital adjustments and assumed liabilities. See Note 4 - Divestitures for further information.

HPS Sale

On July 17, 2020, DXC entered into a purchase agreement to sell (the "HPS Sale") its healthcare provider software business ("HPS" or the "HPS Business") to Dedalus Holding S.p.A. ("Dedalus") for €459 million (approximately $525 million), subject to certain adjustments. The HPS Sale is expected to close by March 2021, subject to meeting certain closing conditions.

Luxoft Acquisition

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

Basis of Presentation

In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the “financial statements,” (ii) the Condensed Consolidated Statements of Operations as the “statements of operations,” (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the "statements of comprehensive income," (iv) the Condensed Consolidated Balance Sheets as the “balance sheets,” and (v) the Condensed Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references throughout to numbered “Notes” refer to the numbered Notes in these Notes to Condensed Consolidated Financial Statements, unless otherwise noted.

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

The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States ("GAAP"). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 ("fiscal 2020").

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect amounts reported in the financial statements. The Company bases its estimates on assumptions regarding historical experience, currently available information and anticipated developments that it believes are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. The severity, magnitude and duration, as well as the economic consequences of the coronavirus disease 2019 ("COVID-19") pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of the Company's management, the accompanying financial statements of DXC contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.

Allowance for Credit Losses

Effective April 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” using the modified retrospective method. Refer to Note 2 - "Recent Accounting Pronouncements" and Note 6 - "Receivables" for further discussion of the impact of adoption and other required disclosures. The amendments in this update changed the guidance for credit losses to an expected loss model rather than an incurred loss model. Financial assets subject to impairment under an expected credit loss model include billed and unbilled receivables, other receivables, and contract assets. Certain off-balance sheet arrangements, such as financial guarantees associated with receivables securitization facilities, are also subject to the guidance of ASU 2016-13.

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

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Recent Accounting Pronouncements

9 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

During the nine months ended December 31, 2020, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:

Date Issued and ASU	Date Adopted and Method	Description	Impact
June 2016 ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	April 1, 2020 Modified Retrospective	This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.	The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.
August 2018 ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"	April 1, 2020 Prospective	This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.	The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.

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

Date Issued and ASU	DXC Effective Date	Description	Impact
December 2019 ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"	Fiscal 2022	This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. Early adoption of this update is permitted.	The Company is currently evaluating the potential impact this standard may have on its financial statements in future reporting periods.

Other recently issued ASUs effective after December 31, 2020 are not expected to have a material effect on DXC's consolidated financial statements.

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Acquisitions

9 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Acquisitions

Acquisitions

Fiscal 2020 Acquisitions

Luxoft Acquisition

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

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

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

(in millions)	Fair Value
Cash and cash equivalents	$	113
Accounts receivable	233
Other current assets	15
Total current assets	361
Property and equipment	31
Intangible assets	577
Other assets	99
Total assets acquired	1,068
Accounts payable, accrued payroll, accrued expenses, and other current liabilities	(121)
Deferred revenue	(8)
Long-term deferred tax liabilities and income tax payable	(106)
Other liabilities	(72)
Total liabilities assumed	(307)
Net identifiable assets acquired	761
Goodwill	1,262
Total consideration transferred	$	2,023

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

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

Below are the estimated useful lives of the acquired intangibles:

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

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

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Divestitures

9 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Divestitures

HHS Sale

On October 1, 2020, DXC completed the sale of its HHS Business to Veritas Capital. The sale was accomplished by the cash purchase of all equity interests and assets attributable to the HHS Business for a total enterprise value of $5.0 billion (including $85 million related to future services to be provided by the Company). As part of the sale of the HHS business, $272 million of repurchased receivables, previously sold under the Milano Receivables Facility ("Milano Facility') (see Note 6 - "Receivables" to the financial statements), $12 million of prepaid maintenance, and $48 million of software licenses transferred to the HHS Business. DXC made payment for these assets during the third quarter of fiscal 2021.The repurchase of receivables and payment on prepaid maintenance are reported as operating cash outflows, and the payment for software license is considered an investing cash outflow. The HHS Sale resulted in a pre-tax gain on sale of $2,041 million, net of closing costs. The sale price is subject to adjustment based on changes in actual closing net working capital. Final potential working capital adjustments are pending. The sale was not subject to any financing condition or shareholder approval.

Approximately $3.5 billion of the sale proceeds were used to prepay $1,250 million of Revolver Credit Facility, £600 million of GBP commercial paper (approximately $772 million), and the following term loan facilities: €350 million of Euro Term Loan due fiscal 2024 (approximately $410 million), $381 million of USD Term loan due fiscal 2025, A$500 million of AUD Term Loan due fiscal 2022 (approximately $358 million), and €250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $292 million). See Note 12 - "Debt" to the financial statements.

Following the transaction close, DXC retains its remaining healthcare practice, relating to the pending HPS sale.

DXC's post-divesture relationship with the HHS Business is governed by the Purchase Agreement, which provides for the allocation of assets, employees, liabilities and obligations (including property, employee benefits, litigation, and tax-related assets and liabilities) between DXC and the HHS Business attributable to periods prior to, at and after divestment. In addition, DXC and the HHS Business have service and commercial contracts that generally extend through fiscal 2023.

As of September 30, 2020, the divestment of the HHS Business, reported as part of the GBS segment, met the requirements for presentation as assets held for sale under GAAP. However, it did not meet the requirements for presentation as discontinued operations as it did not represent a strategic shift that would have a major effect on DXC's operations and financial results and is included in income from continuing operations for the nine months ended December 31, 2020 and 2019 prior to its sale closing date.

The following is a summary of the assets and liabilities distributed as part of the HHS Sale on October 1, 2020:

(in millions)
Assets:
Cash and cash equivalents	$	8
Accounts receivable, net	295
Prepaid expenses	39
Other current assets	2
Total current assets	344
Intangible assets, net	1,308
Operating right-of-use assets, net	74
Goodwill	1,354
Property and equipment, net	46
Other assets	54
Total non-current assets	2,836
Total assets	$	3,180
Liabilities:
Accounts payable	$	79
Accrued payroll and related costs	13
Current operating lease liabilities	27
Accrued expenses and other current liabilities	36
Deferred revenue and advance contract payments	20
Total current liabilities	175
Non-current deferred revenue	32
Long-term operating lease liabilities	48
Other long term liabilities	2
Total long-term liabilities	82
Total liabilities	$	257

During the third quarter of fiscal 2021, the Company sold an insignificant business that resulted in a gain of $5 million.

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Earnings (Loss) per Share

9 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Earnings (Loss) per Share

Earnings (Loss) per Share

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

	Three Months Ended				Nine Months Ended
(in millions, except per-share amounts)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net income (loss) attributable to DXC common shareholders:	$	1,098	$	82	$	649	$	(1,874)
Common share information:
Weighted average common shares outstanding for basic EPS	254.32		255.09		254.03		260.24
Dilutive effect of stock options and equity awards	1.43		0.96		1.17		—
Weighted average common shares outstanding for diluted EPS	255.75		256.05		255.20		260.24
Earnings (loss) per share:
Basic	$	4.32	$	0.32	$	2.55	$	(7.20)
Diluted	$	4.29	$	0.32	$	2.54	$	(7.20)

The following share-based equity awards were excluded from the computation of diluted EPS because inclusion of these awards would have had an anti-dilutive effect. The number of awards excluded were as follows:

	Three Months Ended		Nine Months Ended
	December 31, 2020	December 31, 2019	December 31, 2020	December 31, 2019
Stock Options	1,519,611	621,028	1,582,568	818,490
Restricted Stock Units	1,418,752	2,125,734	1,628,968	2,116,898
Performance-based Restricted Stock Units	836,866	—	723,754	351,410

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Receivables

9 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Receivables

Receivables

Receivables Facility

The Company has an accounts receivable sales facility (as amended, restated, supplemented or otherwise modified as of December 31, 2020, the "Receivables Facility") with certain unaffiliated financial institutions (the "Purchasers") for the sale of commercial accounts receivable in the United States. Under the Receivables Facility, certain of the Company's subsidiaries (the "Sellers") sell accounts receivable to DXC Receivables LLC ("Receivables SPV"), a wholly owned bankruptcy-remote entity, in a true sale. Receivables SPV subsequently sells certain of the receivables in their entirety to the Purchasers pursuant to a receivables purchase agreement. The financial obligations of Receivables SPV to the Purchasers under the Receivables Facility are limited to the assets it owns and non-recourse to the Company. Sales of receivables by Receivables SPV occur continuously and are settled on a monthly basis. During the second quarter of fiscal 2021, Receivables SPV amended the Receivables Facility (the "Amendment") to decrease the facility limit from $600 million to $500 million and extend the termination date to August 5, 2021. For the nine months ended December 31, 2020, there is no deferred purchase price ("DPP") for receivables as the entire purchase price is paid in cash when the receivables are sold to the Purchasers. DPPs were previously realized by Receivables SPV upon the ultimate collection of the underlying receivables sold to the Purchasers. Cash receipts on the DPP were classified as cash flows from investing activities.

The amount available under the Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of December 31, 2020, the total availability under the Receivables Facility was $403 million, and the amount sold to the Purchasers was $407 million, which was derecognized from the Company's balance sheet. As of December 31, 2020, the Company recorded a $4 million liability within accounts payable because the amount of cash proceeds received by the Company under the Receivables Facility was more than the total availability. The Receivables Facility is scheduled to terminate on August 5, 2021, but provides for one or more optional one-year extensions, if agreed to by the Purchasers. The Company uses the proceeds from the sale of receivables under the Receivables Facility for general corporate purposes.

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

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

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

(in millions)	As of and for the Nine Months Ended
	December 31, 2019
Beginning balance	$	574
Transfers of receivables	1,214
Collections	(1,265)
Change in funding availability	2
Facility amendments	(525)
Ending balance	$	—

Milano Receivables Facility

On October 1, 2020, and in connection with the consummation of the sale of the HHS Business, and at the direction of the purchaser of the HHS Business, the Milano Facility was terminated. For more information, refer to Note 4 - "Divestitures."

German Receivables Facility

On October 1, 2019, the Company executed an accounts receivable securitization facility (as amended, restated, supplemented or otherwise modified as of December 31, 2020, the "DE Receivables Facility") with certain unaffiliated financial institutions (the "DE Purchasers") for the sale of commercial accounts receivable in Germany. The DE Receivables Facility has a facility limit of €150 million (approximately $175 million as of December 31, 2020). Under the DE Receivables Facility, certain of the Company's subsidiaries organized in Germany (the "DE Sellers") sell accounts receivable to DXC ARFacility Designated Activity Company ("DE Receivables SPV"), a trust-owned bankruptcy-remote entity, in a true sale. DE Receivables SPV subsequently sells certain of the receivables in their entirety to the DE Purchasers pursuant to a receivables purchase agreement. Sales of receivables by DE Receivables SPV occur continuously and are settled on a monthly basis. During the first quarter of fiscal 2021, DE Receivables SPV amended the DE Receivables Facility ("DE Amendment"). Under the terms of the amended DE Receivables Facility, there is no longer any DPP for receivables as the entire purchase price is paid in cash when the receivables are sold to the DE Purchasers. Prior to the DE Amendment, DPPs were realized by DE Receivables SPV upon the ultimate collection of the underlying receivables sold to the DE Purchasers. Cash receipts on the DPPs were classified as cash flows from investing activities. The DPP balance was $102 million before the DE Amendment was executed. Upon execution of the DE Amendment, the DE Purchasers extinguished the DPP balance and returned title to the applicable underlying receivables to DE Receivables SPV. The DPP extinguishment was classified as a non-cash investing activity, please refer to Note 19 - "Cash Flows."

The amount available under the DE Receivables Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after deducting excess concentrations. As of December 31, 2020, the total availability under the DE Receivables Facility was approximately $123 million, and the amount sold to the DE Purchasers was $136 million, which was derecognized from the Company's balance sheet. As of December 31, 2020, the Company recorded a $13 million liability within accounts payable because the amount of cash proceeds received by the Company under the DE Receivables Facility was more than the total availability. The DE Receivables Facility is scheduled to terminate on September 30, 2021, but provides for one or more optional one-year extensions, if agreed to by the DE Purchasers. The Company uses the proceeds from DE Receivables SPV's sale of receivables under the DE Receivables Facility for general corporate purposes.

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

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

The following table is a reconciliation of the beginning and ending balances of the DPP for the DE Receivables Facility:

(in millions)	As of and for the Nine Months Ended December 31, 2020
Beginning balance	$	103
Transfers of receivables	417
Collections	(420)
Change in funding availability	2
Facility amendments	(102)
Ending balance	$	—

Allowance

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

(in millions)	As of and for the Nine Months Ended
	December 31, 2020
Beginning balance	$	74
Impact of adoption of the Credit Loss Standard	4
Provisions for losses on accounts receivable	52
Other adjustments to allowance and write-off's	69
Ending balance	$	199

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Leases

9 Months Ended

Dec. 31, 2020

Leases [Abstract]

Leases

Leases

The Company has operating and finance leases for data centers, corporate offices, retail stores and certain equipment. Its leases have remaining lease terms of one to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Operating lease cost	$	156	$	166	$	463	$	506
Short-term lease cost	14		17		40		41
Variable lease cost	17		9		40		35
Sublease income	(10)		(9)		(32)		(28)
Total operating costs	$	177	$	183	$	511	$	554
Finance lease cost:
Amortization of right-of-use assets	$	107	$	90	$	322	$	339
Interest on lease liabilities	10		16		35		50
Total finance lease cost	$	117	$	106	$	357	$	389

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below. In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 19 - "Cash Flows."

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of:
Operating cash flows used in operating leases	$	463	$	506
Operating cash flows used in finance leases	$	35	$	50
Financing cash flows used in finance leases	$	430	$	436

Supplemental balance sheet information related to leases was as follows:

		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Assets:
ROU operating lease assets	Operating right-of-use assets, net	$	1,459	$	1,428
ROU finance lease assets	Property and Equipment, net	971		1,220
Total		$	2,430	$	2,648
Liabilities:
Current
Operating lease	Current operating lease liabilities	$	450	$	482
Finance lease	Short-term debt and current maturities of long-term debt	431		444
Total		$	881	$	926
Non-current
Operating lease	Non-current operating lease liabilities	$	1,113	$	1,063
Finance lease	Long-term debt, net of current maturities	545		602
Total		$	1,658	$	1,665

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

	As of
	December 31, 2020		March 31, 2020
Weighted Average remaining lease term:	Years
Operating leases	4.8		4.8
Finance leases	2.7		2.7
Weighted average remaining discount rate:	Rate
Operating leases	4.0	%	4.0	%
Finance leases	3.8	%	6.4	%

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of December 31, 2020:

Fiscal year	Operating Leases
(in millions)	Real Estate		Equipment		Finance Leases
Remainder of 2021	$	117	$	15	$	128
2022	412		42		419
2023	337		24		275
2024	262		11		139
2025	192		5		48
Thereafter	297		3		6
Total lease payments	1,617		100		1,015
Less: imputed interest	(151)		(3)		(39)
Total payments	$	1,466	$	97	$	976

Leases

Leases

The Company has operating and finance leases for data centers, corporate offices, retail stores and certain equipment. Its leases have remaining lease terms of one to 12 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within one to three years.

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Operating lease cost	$	156	$	166	$	463	$	506
Short-term lease cost	14		17		40		41
Variable lease cost	17		9		40		35
Sublease income	(10)		(9)		(32)		(28)
Total operating costs	$	177	$	183	$	511	$	554
Finance lease cost:
Amortization of right-of-use assets	$	107	$	90	$	322	$	339
Interest on lease liabilities	10		16		35		50
Total finance lease cost	$	117	$	106	$	357	$	389

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below. In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 19 - "Cash Flows."

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of:
Operating cash flows used in operating leases	$	463	$	506
Operating cash flows used in finance leases	$	35	$	50
Financing cash flows used in finance leases	$	430	$	436

Supplemental balance sheet information related to leases was as follows:

		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Assets:
ROU operating lease assets	Operating right-of-use assets, net	$	1,459	$	1,428
ROU finance lease assets	Property and Equipment, net	971		1,220
Total		$	2,430	$	2,648
Liabilities:
Current
Operating lease	Current operating lease liabilities	$	450	$	482
Finance lease	Short-term debt and current maturities of long-term debt	431		444
Total		$	881	$	926
Non-current
Operating lease	Non-current operating lease liabilities	$	1,113	$	1,063
Finance lease	Long-term debt, net of current maturities	545		602
Total		$	1,658	$	1,665

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

	As of
	December 31, 2020		March 31, 2020
Weighted Average remaining lease term:	Years
Operating leases	4.8		4.8
Finance leases	2.7		2.7
Weighted average remaining discount rate:	Rate
Operating leases	4.0	%	4.0	%
Finance leases	3.8	%	6.4	%

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of December 31, 2020:

Fiscal year	Operating Leases
(in millions)	Real Estate		Equipment		Finance Leases
Remainder of 2021	$	117	$	15	$	128
2022	412		42		419
2023	337		24		275
2024	262		11		139
2025	192		5		48
Thereafter	297		3		6
Total lease payments	1,617		100		1,015
Less: imputed interest	(151)		(3)		(39)
Total payments	$	1,466	$	97	$	976

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Fair Value

9 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value

Fair Value

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis excluding pension assets and derivative assets and liabilities. See Note 9 - "Derivative and Hedging Activities" for information about the fair value of the Company's derivative assets and liabilities. There were no transfers among any of the levels during the periods presented.

	Fair Value Hierarchy
(in millions)	December 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	262	$	262	$	—	$	—
U.S. treasury bills(1)	250		250		—		—
Time deposits(1)	349		349		—		—
Other debt securities(2)	62		—		59		3
Total assets	$	923	$	861	$	59	$	3
Liabilities:
Contingent consideration	$	40	$	—	$	—	$	40
Total liabilities	$	40	$	—	$	—	$	40

	March 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	156	$	156	$	—	$	—
Time deposits(1)	595		595		—		—
Other debt securities(2)	51		—		48		3
Deferred purchase price receivable	103		—		—		103
Total assets	$	905	$	751	$	48	$	106
Liabilities:
Contingent consideration	$	46	$	—	$	—	$	46
Total liabilities	$	46	$	—	$	—	$	46

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

(2) Other debt securities include available-for-sale investments with Level 2 inputs with cost bases of $59 million and $37 million, and unrealized gains of $0 million and $11 million, as of December 31, 2020 and March 31, 2020, respectively. During the quarter, previously held investments were sold and the proceeds were used to purchase new investments. The gain of $17 million from the sale was included in other income, net.

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

Other Fair Value Disclosures

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

The Company estimates the fair value of its long-term debt primarily by using quoted prices obtained from third-party providers such as Bloomberg and by using an expected present value technique that is based on observable market inputs for instruments with similar terms currently available to the Company. The estimated fair value of the Company's long-term debt excluding finance lease liabilities was $5.5 billion and $8.2 billion as of December 31, 2020 and March 31, 2020, respectively as compared with carrying value of $5.2 billion and $8.4 billion as of December 31, 2020 and March 31, 2020, respectively. Long-term debt excluding finance lease liabilities is classified as Level 1 or Level 2 within the fair value hierarchy.

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

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Derivative and Hedging Activities

9 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and Hedging Activities

Derivative and Hedging Activities

In the normal course of business, the Company is exposed to interest rate and foreign exchange rate fluctuations. As part of its risk management strategy, the Company uses derivative instruments, primarily foreign currency forward contracts and interest rate swaps, to hedge certain foreign currency and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not use derivative instruments for trading or any speculative purposes.

Derivatives Designated for Hedge Accounting

Cash flow hedges

The Company has designated certain foreign currency forward contracts as cash flow hedges to reduce foreign currency risk related to certain Indian Rupee-denominated intercompany obligations and forecasted transactions. The notional amounts of foreign currency forward contracts designated as cash flow hedges as of December 31, 2020 and March 31, 2020 were $507 million and $455 million, respectively. As of December 31, 2020, the related forecasted transactions extend through March 2023.

For the three and nine months ended December 31, 2020 and December 31, 2019, respectively, the Company performed an assessment at the inception of the cash flow hedge transactions and determined that all critical terms of the hedging instruments and hedged items matched. The Company performs an assessment of critical terms on an on-going basis throughout the hedging period. During the three and nine months ended December 31, 2020 and December 31, 2019, respectively, the Company had no cash flow hedges for which it was probable that the hedged transaction would not occur. As of December 31, 2020, $2 million of the existing amount of gain related to the cash flow hedge reported in accumulated other comprehensive loss is expected to be reclassified into earnings within the next 12 months.

The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in income from operation was $0 million and $(6) million for the three and nine months ended December 31, 2020, respectively. The pre-tax gain (loss) on derivatives designated for hedge accounting recognized in other comprehensive income was $0 million and $18 million for the three and nine months ended December 31, 2020, respectively.

Derivatives Not Designated for Hedge Accounting

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

Foreign currency forward contracts

The Company manages the exposure to fluctuations in foreign currencies by using short-term foreign currency forward contracts to hedge certain foreign currency denominated assets and liabilities, including intercompany accounts and forecasted transactions. The notional amounts of the foreign currency forward contracts outstanding as of December 31, 2020 and March 31, 2020 were $1.7 billion and $2.2 billion, respectively.

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

		For the Three Months Ended				For the Nine Months Ended
(in millions)	Statement of Operations Line Item	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Foreign currency forward contracts	Other expense (income), net	$	16	$	1	$	74	$	(21)

Fair Value of Derivative Instruments

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

	Derivative Assets
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	9	$	—
Total fair value of derivatives designated for hedge accounting		$	9	$	—
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	6	$	16
Total fair value of derivatives not designated for hedge accounting		$	6	$	16

	Derivative Liabilities
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	5	$	20
Total fair value of derivatives designated for hedge accounting:		$	5	$	20
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	17	$	12
Total fair value of derivatives not designated for hedge accounting		$	17	$	12

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

Other Risks for Derivative Instruments

The Company is exposed to the risk of losses in the event of non-performance by the counterparties to its derivative contracts. The amount subject to credit risk related to derivative instruments is generally limited to the amount, if any, by which a counterparty's obligations exceed the obligations of the Company with that counterparty. To mitigate counterparty credit risk, the Company regularly reviews its credit exposure and the creditworthiness of the counterparties. With respect to its foreign currency derivatives, as of December 31, 2020, there were seven counterparties with concentration of credit risk, and based on gross fair value, the maximum amount of loss that the Company could incur is not material.

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

Non-Derivative Financial Instruments Designated for Hedge Accounting

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

Net Investment Hedges

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

As of December 31, 2020, DXC had $800 million of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. As of March 31, 2020, DXC had $1.9 billion of foreign currency-denominated debt designated as hedges of net investments in non-U.S. subsidiaries. For the three and nine months ended December 31, 2020, the pre-tax impact of gain (loss) on foreign currency-denominated debt designated for hedge accounting recognized in other comprehensive income was $(36) million and $(125) million, respectively.

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Intangible Assets

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consisted of the following:

	As of December 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,001	$	2,891	$	1,110
Customer related intangible assets	4,296		1,606		2,690
Other intangible assets	267		48		219
Total intangible assets	$	8,564	$	4,545	$	4,019

	As of March 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,048	$	2,614	$	1,434
Customer related intangible assets	5,795		1,697		4,098
Other intangible assets	235		36		199
Total intangible assets	$	10,078	$	4,347	$	5,731

The components of amortization expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Intangible asset amortization	$	224	$	272	$	735	$	747
Transition and transformation contract cost amortization(1)	66		71		194		197
Total amortization expense	$	290	$	343	$	929	$	944

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

Estimated future amortization related to intangible assets as of December 31, 2020 is as follows:

Fiscal Year	(in millions)
Remainder of 2021	$	236
2022	$	821
2023	$	740
2024	$	650
2025	$	535

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Goodwill

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of December 31, 2020.

(in millions)	GBS		GIS		Total
Goodwill, gross	$	6,507	$	5,066	$	11,573
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of March 31, 2020, net	$	2,017	$	—	$	2,017
Acquisition related adjustments	18		—		18
Divestitures	(1,355)		—		(1,355)
Assets held for sale	(4)		—		(4)
Foreign currency translation	60		—		60
Goodwill, gross	5,226		5,066		10,292
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of December 31, 2020, net	$	736	$	—	$	736

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

Goodwill Impairment Analyses

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

The Company's annual goodwill impairment analysis, which was performed qualitatively during the three months ended September 30, 2020, did not result in an impairment charge.

At the end of the third quarter of fiscal 2021, the Company assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of its GBS reporting unit below its carrying amount and require goodwill to be tested for impairment. The Company determined that there have been no such indicators and therefore, it was unnecessary to perform an interim goodwill impairment test as of December 31, 2020.

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Debt

9 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt

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

(in millions)	Interest Rates	Fiscal Year Maturities	December 31, 2020		March 31, 2020
Short-term debt and current maturities of long-term debt
Commercial paper(1)	(0.22)% - 0.44%	2021 - 2022	$	112	$	542
Current maturities of long-term debt	Various	2021 - 2022	252		290
Current maturities of finance lease liabilities	0.62% - 18.47%	2021 - 2022	431		444
Short-term debt and current maturities of long-term debt			$	795	$	1,276
Long-term debt, net of current maturities
AUD term loan	0.94% - 0.96%	2022	—		489
GBP term loan	0.88% - 1.46%	2022	—		556
EUR term loan	0.65%	2022 - 2023	—		822
EUR term loan	0.80%(2)	2023 - 2024	488		821
USD term loan	1.40% - 2.24%	2025	—		480
$274 million Senior notes	4.45%	2023	276		276
$171 million Senior notes	4.45%	2023	172		172
$500 million Senior notes	4.25%	2025	504		505
$500 million Senior notes	4.00%	2024	497		—
$500 million Senior notes	4.13%	2026	496		—
£250 million Senior notes	2.75%	2025	339		307
€650 million Senior notes	1.75%	2026	792		709
$500 million Senior notes	4.75%	2028	507		507
$234 million Senior notes	7.45%	2030	269		271
Revolving credit facility	1.26% - 2.08%	2024 - 2025	—		1,500
Lease credit facility	1.15% - 1.99%	2021 - 2023	—		11
Finance lease liabilities	0.62% - 18.47%	2021 - 2027	976		1,046
Borrowings for assets acquired under long-term financing	0.00% - 6.39%	2021 - 2027	742		802
Mandatorily redeemable preferred stock outstanding	6.00%	2023	63		62
Other borrowings	Various	2021 - 2022	6		70
Long-term debt			6,127		9,406
Less: current maturities			683		734
Long-term debt, net of current maturities			$	5,444	$	8,672

(1)At DXC's option, DXC can borrow up to a maximum of €1 billion or its equivalent in €, £, and $.

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

Senior Notes and Term Loans

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

During the second quarter of fiscal 2021, the Company repaid the remaining £300 million GBP Term Loan due fiscal 2022.

During the third quarter of fiscal 2021, the Company used the proceeds from the sale of HHS Business to prepay approximately $1,441 million of term loan facilities detailed below under the heading "HHS Sale Use of Proceeds."

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

Revolving Credit Facility

During fiscal 2021, the Company borrowed the remaining $2.5 billion under the $4.0 billion credit facility agreement ("Credit Agreement") as a precautionary measure to increase its cash position and increase financial flexibility in light of continuing uncertainty in the global economy and financial capital markets resulting from COVID-19.

The Company repaid the full $4.0 billion during the first nine months of fiscal 2021, which became available under the revolving credit facility for redraw at the request of the Company.

HHS Sale Use of Proceeds

In October 2020, DXC sold the HHS business and used approximately $3.5 billion of the proceeds to prepay $1,250 million of Revolver Credit Facility, £600 million of GBP commercial paper (approximately $772 million), and the following term loan facilities: €350 million of Euro Term Loan due fiscal 2024 (approximately $410 million), $381 million of USD Term loan due fiscal 2025, A$500 million of AUD Term Loan due fiscal 2022 (approximately $358 million), and €250 million of Euro Term Loan due fiscal 2022 and 2023 (approximately $292 million).

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Revenue

9 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Revenue

Revenue Recognition

The following table presents DXC's revenues disaggregated by geography, based on the location of incorporation of the DXC entity providing the related goods or services:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
United States	$	1,290	$	1,843	$	4,665	$	5,500
United Kingdom	607		707		1,759		2,100
Other Europe	1,335		1,329		3,784		3,819
Australia	377		380		1,128		1,119
Other International	679		762		2,008		2,224
Total Revenues	$	4,288	$	5,021	$	13,344	$	14,762

The revenue by geography pertains to both of the Company’s reportable segments. Refer to Note 20 - "Segment Information" for the Company’s segment disclosures.

Remaining Performance Obligations

Remaining performance obligations represent the aggregate amount of the transaction price in contracts allocated to performance obligations not delivered, or partially undelivered, as of the end of the reporting period. Remaining performance obligation estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that have not materialized and adjustments for currency. As of December 31, 2020, approximately $24 billion of revenue is expected to be recognized from remaining performance obligations. We expect to recognize revenue on approximately 14% of these remaining performance obligations in fiscal 2021, with the remainder of the balance recognized thereafter.

Contract Balances

The following table provides information about the balances of the Company's trade receivables and contract assets and contract liabilities:

	As of
(in millions)	December 31, 2020		March 31, 2020
Trade receivables, net	$	2,785	$	3,059
Contract assets	$	418	$	454
Contract liabilities	$	1,768	$	1,756

Change in contract liabilities were as follows:

	Nine Months Ended
(in millions)	December 31, 2020(1)		December 31, 2019
Balance, beginning of period	$	1,756	$	1,886
Deferred revenue	2,111		2,091
Recognition of deferred revenue	(2,137)		(2,137)
Currency translation adjustment	146		12
Other	(108)		(36)
Balance, end of period	$	1,768	$	1,816

(1)Other includes $54 million of contract liabilities related to the divested HHS business discussed in Note 4 - "Divestitures" and contract liabilities reclassified to assets held for sale

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Restructuring Costs

9 Months Ended

Dec. 31, 2020

Restructuring Costs [Abstract]

Restructuring Costs

Restructuring Costs

The Company recorded restructuring costs of $104 million and $74 million, net of reversals, for the three months ended December 31, 2020 and December 31, 2019, respectively. For the nine months ended December 31, 2020 and December 31, 2019, the Company recorded restructuring costs of $441 million and $248 million, net of reversals, respectively. The costs recorded during the three and six months ended December 31, 2020 were largely a result of the Fiscal 2021 Plan (defined below).

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

	As of
(in millions)	December 31, 2020
Accrued expenses and other current liabilities	$	261
Other long-term liabilities	60
Total	$	321

Summary of Restructuring Plans

Fiscal 2021 Plan

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

Fiscal 2020 Plan

During fiscal 2020, management approved cost savings initiatives designed to reduce operating costs by re-balancing its workforce and facilities structures (the "Fiscal 2020 Plan"). The Fiscal 2020 Plan includes workforce optimization programs and facilities and data center rationalization. Costs incurred to date under the Fiscal 2020 Plan total $295 million, comprising $278 million in employee severance and $17 million of facilities costs.

Fiscal 2019 Plan

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

Other Prior Year Plans

In June 2017, management approved a post-HPES Merger (as defined below) restructuring plan to optimize the Company's operations in response to a continuing business contraction (the "Fiscal 2018 Plan"). The Fiscal 2018 Plan focuses mainly on optimizing specific aspects of global workforce, increasing the proportion of work performed in low cost offshore locations and re-balancing the organizational structure. Additionally, this plan included global facility restructuring, including a global data center restructuring program. Costs incurred to date under the Fiscal 2018 Plan total $987 million, comprising $791 million in employee severance and $196 million of facilities costs.

Acquired Restructuring Liabilities

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

Restructuring Liability Reconciliations by Plan

	Restructuring Liability as of March 31, 2020		Costs Expensed, Net of Reversals(1)		Costs Not Affecting Restructuring Liability(2)		Cash Paid		Other(3)		Restructuring Liability as of December 31, 2020
Fiscal 2021 Plan
Workforce Reductions	$	—	$	416	$	(9)	$	(210)	$	9	$	206
Facilities Costs	—		25		(9)		(11)		(1)		4
Total	$	—	$	441	$	(18)	$	(221)	$	8	$	210
Fiscal 2020 Plan
Workforce Reductions (4)	$	74	$	7	$	2	$	(49)	$	5	$	39
Facilities Costs	2		(4)		4		(2)		—		—
Total	$	76	$	3	$	6	$	(51)	$	5	$	39
Fiscal 2019 Plan
Workforce Reductions	$	25	$	(2)	$	(3)	$	(13)	$	2	$	9
Facilities Costs	5		(3)		2		—		1		5
Total	$	30	$	(5)	$	(1)	$	(13)	$	3	$	14
Other Prior Year Plans
Workforce Reductions	$	24	$	1	$	2	$	(14)	$	2	$	15
Facilities Costs	—		—		—		—		—		—
Total	$	24	$	1	$	2	$	(14)	$	2	$	15
Acquired Liabilities
Workforce Reductions	$	39	$	1	$	—	$	(7)	$	1	$	34
Facilities Costs	11		—		1		(3)		—		9
Total	$	50	$	1	$	1	$	(10)	$	1	$	43

(1) Costs expensed, net of reversals include $11 million, $10 million, and $3 million of costs reversed from the Fiscal 2020 Plan, Fiscal 2019 Plan and Other Prior Year Plans, respectively.

(2) Costs Not Affecting Restructuring Liability include pension benefit augmentations recorded as a pension liability, asset impairments and restructuring costs associated with right-of-use assets.

(3)Other include foreign currency translation adjustments.

(4) Fiscal 2020 workforce reductions includes a $14 million adjustment to restructuring expense related to the prior year.

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Pension and Other Benefit Plans

9 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Pension and Other Benefit Plans

Pension and Other Benefit Plans

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

Defined Benefit Plans

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

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

The components of net periodic pension income were:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Service cost	$	23	$	23	$	68	$	69
Interest cost	62		60		181		177
Expected return on assets	(163)		(161)		(477)		(476)
Amortization of prior service costs	(2)		(2)		(6)		(6)
Contractual termination benefit	—		—		3		17
Curtailment gain	—		—		(9)		—
Recognition of actuarial loss	—		—		11		—
Net periodic pension income	$	(80)	$	(80)	$	(229)	$	(219)

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

Deferred Compensation Plans

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

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

Certain management and highly compensated employees are eligible to defer all, or a portion of, their regular salary that exceeds the limitation set forth in Internal Revenue Section 401(a)(17) and all or a portion of their incentive compensation. Non-employee directors are eligible to defer up to 100% of their cash compensation. The liability, which is included in other long-term liabilities in the Company's balance sheets, amounted to $45 million as of December 31, 2020 and $48 million as of March 31, 2020.

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Income Taxes

9 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate ("ETR") was 44.2% and 29.1% for the three months ended December 31, 2020 and December 31, 2019, respectively, and 54.5% and (11.5)% for the nine months ended December 31, 2020 and December 31, 2019, respectively. For the three and nine months ended December 31, 2020, the primary drivers of the ETR were the gain on sale of HHS Business, global mix of income and foreign tax credits. For the three months ended December 31, 2019, the primary drivers of the ETR were the impact of previously unrecognized tax effects on the tax deductible goodwill impaired during the fiscal 2020 second quarter, the global mix of income, an increase in prior year U.S. federal research and development income tax credits, and an increase in unrecognized tax benefits primarily related to audit activity. For the nine months ended December 31, 2019, the primary drivers of the ETR were the impact of the non-deductible goodwill impairment charge, the non-taxable gain on the arbitration award, the global mix of income, an increase in unrecognized tax benefits primarily related to audit activity, and an increase in prior year U.S. federal research and development income tax credits, net.

The majority of unremitted foreign earnings have been taxed in the U.S. We expect a significant portion of the unremitted earnings of our foreign subsidiaries will no longer be subject to U.S. federal income tax upon repatriation to the U.S. However, a portion of these earnings may still be subject to foreign and U.S. state tax consequences when remitted. Earnings in India are indefinitely reinvested. Other foreign earnings are not indefinitely reinvested except for approximately $547 million that could be taxable when repatriated to the U.S. under Treasury regulations that were issued during the first quarter of fiscal 2020.

In connection with the HPES Merger, the Company entered into a tax matters agreement with HPE. HPE generally will be responsible for pre-HPES Merger tax liabilities including adjustments made by tax authorities to HPES U.S. and non-U.S. income tax returns. Likewise, DXC is liable to HPE for income tax receivables and refunds which it receives related to pre-HPES Merger periods. Pursuant to the tax matters agreement, the Company recorded a net payable of $3 million due to $48 million of tax indemnification receivable related to uncertain tax positions net of related deferred tax benefits, $79 million of tax indemnification receivable related to other tax payables and $130 million of tax indemnification payable related to other tax receivables.

In connection with the USPS Separation, the Company entered into a tax matters agreement with Perspecta. Pursuant to the tax matters agreement, the Company generally will be responsible for tax liabilities arising prior to the USPS Separation. Income tax liabilities transferred to Perspecta primarily relate to pre-HPES Merger periods, for which the Company is indemnified by HPE pursuant to the tax matters agreement between the Company and HPE. The Company remains liable to HPE for tax receivables and refunds which it receives from Perspecta related to pre-HPES Merger periods that were transferred to Perspecta. Pursuant to the tax matters agreement, the Company has recorded a tax indemnification receivable from Perspecta of $81 million and a tax indemnification payable to Perspecta of $44 million related to income tax and other tax liabilities.

The IRS is examining the Company's federal income tax returns for fiscal 2008 through the tax year ended October 31, 2018. With respect to CSC's fiscal 2008 through 2017 federal tax returns, the Company has entered into negotiations for a resolution on the years under audit through settlement with the IRS Office of Appeals. The IRS examined several issues for these years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have an agreement in principle as to some of these adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs and tax planning strategies in previous years. These matters present a potential federal and state tax cost of $410 million (excluding interest and penalties), in addition to other disagreed issues. We expect two years of these audits (fiscal 2010 and fiscal 2013) to proceed to Tax Court. We believe we will ultimately prevail on the technical merits of these issues. The Company has agreed to extend the statute of limitations for fiscal years 2008 through 2012 through August 31, 2021, and for fiscal year 2013 through March 31, 2021 to provide for IRS completion of their review. The Company has agreed to extend the statute of limitations for fiscal years 2014 through fiscal 2017 through October 31, 2021 to provide for IRS completion of their review.

The Company expects to reach a resolution for all years no earlier than the fourth quarter of fiscal 2022 except agreed issues related to fiscal 2008 through 2010 federal tax returns, which are expected to be resolved within twelve months.

In addition, the Company may settle certain other tax examinations, have lapses in statutes of limitations, or voluntarily settle income tax positions in negotiated settlements for different amounts than the Company has accrued as uncertain tax positions. In the third quarter of fiscal 2021 the Company’s liability for uncertain tax positions decreased by $13 million (excluding interest and penalties and related tax attributes) primarily due to an audit settlement. The Company may need to accrue and ultimately pay additional amounts for tax positions that previously met a more-likely-than-not standard if such positions are not upheld. Conversely, the Company could settle positions by payment with the tax authorities for amounts lower than those that have been accrued or extinguish a position through less payment than previously estimated. The Company believes that the outcomes that are reasonably possible within the next 12 months may result in a reduction in liability for uncertain tax positions of $37 million, excluding interest, penalties and tax carry-forwards.

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Stockholders' Equity

9 Months Ended

Dec. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders' Equity

Share Repurchases

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

The shares repurchased are retired immediately and included in the category of authorized but unissued shares. The excess of purchase price over par value of the common shares is allocated between additional paid-in capital and retained earnings. There was no share repurchase activity during the nine months ended December 31, 2020. The details of shares repurchased during the nine months ended December 31, 2019 are shown below:

	Fiscal 2020
Fiscal Period	Number of Shares Repurchased	Average Price Per Share		Amount (in millions)
1st Quarter
Open market purchases	5,510,415	$	54.44	$	300
Accelerated stock repurchases	1,849,194	$	54.08	100
1st Quarter Total	7,359,609	$	54.35	400
2nd Quarter
Open market purchases	4,414,840	$	33.96	150
Accelerated stock repurchases	1,805,350	$	55.39	100
2nd Quarter Total	6,220,190	$	40.18	250
3rd Quarter
Open market purchases	2,353,852	$	36.68	86
Accelerated stock repurchases	—	$	—	—
3rd Quarter Total	2,353,852	$	36.68	86
Total	15,933,651	$	46.21	$	736

Accumulated Other Comprehensive Loss

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

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2020	$	(851)	$	(20)	$	9	$	259	$	(603)
Current-period other comprehensive income	197		12		(6)		—		203
Amounts reclassified from accumulated other comprehensive loss	—		6		—		(13)		(7)
Balance at December 31, 2020	$	(654)	$	(2)	$	3	$	246	$	(407)

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2019	$	(517)	$	(3)	$	9	$	267	$	(244)
Current-period other comprehensive loss	78		(4)		2		—		76
Amounts reclassified from accumulated other comprehensive income (loss)	—		(2)		—		(6)		(8)
Balance at December 31, 2019	$	(439)	$	(9)	$	11	$	261	$	(176)

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Stock Incentive Plans

9 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Incentive Plans

Stock Incentive Plans

Equity Plans

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

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

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

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

The DXC Share Purchase Plan allows DXC’s employees located in the United Kingdom to purchase shares of DXC’s common stock at the fair market value of such shares on the applicable purchase date. There were 12,232 and 41,425 shares purchased under this plan during the three and nine months ended December 31, 2020.

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

	As of December 31, 2020
	Reserved for Issuance	Available for Future Grants
DXC Employee Equity Plan	51,200,000	32,794,274
DXC Director Equity Plan	745,000	435,951
DXC Share Purchase Plan	250,000	165,185
Total	52,195,000	33,395,410

Stock Options

	Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in millions)
Outstanding as of March 31, 2020	1,869,815	$	29.92	4.27	$	—
Granted	—	$	—
Exercised	(39,601)	$	17.43		$	—
Canceled/Forfeited	—	$	—
Expired	(82,614)	$	31.24
Outstanding as of December 31, 2020	1,747,600	$	30.11	3.73	$	3
Vested and exercisable as of December 31, 2020	1,747,600	$	30.11	3.73	$	3

Restricted Stocks

	Employee Equity Plan			Director Equity Plan
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of March 31, 2020	4,174,476	$	55.45	114,615	$	37.69
Granted	7,576,602	$	18.67	118,500	$	18.82
Settled	(1,045,190)	$	50.65	(48,455)	$	26.90
Canceled/Forfeited	(2,042,804)	$	36.14	—	$	—
Outstanding as of December 31, 2020	8,663,084	$	28.43	184,660	$	28.42

Share-Based Compensation

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Total share-based compensation cost	$	6	$	9	$	42	$	57
Related income tax benefit	$	2	$	(3)	$	7	$	8
Total intrinsic value of options exercised	$	—	$	1	$	—	$	8
Tax benefits from exercised stock options and awards	$	1	$	3	$	5	$	13

As of December 31, 2020, total unrecognized compensation expense related to unvested DXC stock options and unvested DXC RSUs, net of expected forfeitures was $0 million and $146 million, respectively. The unrecognized compensation expense for unvested RSUs is expected to be recognized over a weighted-average period of 2.06 years.

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Cash Flows

9 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Cash Flows

Cash Flows

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

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for:
Interest	$	262	$	277
Taxes on income, net of refunds (1)	$	159	$	202
Non-cash activities:
Operating:
ROU assets obtained in exchange for lease, net (2)	$	449	$	314
Prepaid assets acquired under long-term financing	$	46	$	23
Investing:
Capital expenditures in accounts payable and accrued expenses	$	16	$	121
Capital expenditures through finance lease obligations	$	277	$	507
Assets acquired under long-term financing	$	26	$	282
(Decrease) increase in deferred purchase price receivable	$	(52)	$	58
Contingent consideration	$	2	$	19
Financing:
Dividends declared but not yet paid	$	—	$	54

(1) Income tax refunds were $31 million and $36 million for the nine months ended December 31, 2020 and December 31, 2019, respectively.

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

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Segment Information

9 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

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

Global Business Services ("GBS")

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

•Analytics and Engineering. GBS's portfolio of analytics services and extensive partner ecosystem help customers gain rapid insights, automate operations, and accelerate their digital transformation journeys. GBS provides software engineering and solutions that enable businesses to run and manage their mission-critical functions, transform their operations and develop new ways of doing business.

•Applications. GBS uses advanced technologies and methods to accelerate the creation, modernization, delivery and maintenance of high-quality, secure applications allowing customers to innovate faster while reducing risk, time to market, and total cost of ownership, across industries. GBS's vertical-specific IP includes solutions for insurance; banking and capital markets; and automotive, among others.

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

Global Infrastructure Services ("GIS")

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

•Cloud and Security. GIS helps customers to rapidly modernize by adapting legacy apps to cloud, migrate the right workloads, and securely manage their multi-cloud environments. GIS's security solutions help predict attacks, proactively respond to threats, ensure compliance and protect data, applications and infrastructure.

•IT Outsourcing ("ITO"). GIS's ITO services support infrastructure, applications, and workplace IT operations, including hardware, software, physical/virtual end-user devices, collaboration tools, and IT support services. GIS helps customers securely optimize operations to ensure continuity of their systems and respond to new business and workplace demands, while achieving cost takeout, all with limited resources, expertise and budget.

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

Segment Measures

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

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Three Months Ended December 31, 2020
Revenues	$	1,921	$	2,367	$	4,288	$	—	$	4,288
Segment profit	$	273	$	88	$	361	$	(61)	$	300
Depreciation and amortization(1)	$	53	$	281	$	334	$	27	$	361
Three Months Ended December 31, 2019
Revenues	$	2,359	$	2,662	$	5,021	$	—	$	5,021
Segment profit	$	353	$	232	$	585	$	(57)	$	528
Depreciation and amortization(1)	$	61	$	244	$	305	$	28	$	333

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Nine Months Ended December 31, 2020
Revenues	$	6,337	$	7,007	$	13,344	$	—	$	13,344
Segment profit	$	805	$	147	$	952	$	(179)	$	773
Depreciation and amortization(1)	$	162	$	839	$	1,001	$	77	$	1,078
Nine Months Ended December 31, 2019
Revenues	$	6,803	$	7,959	$	14,762	$	—	$	14,762
Segment profit	$	1,078	$	815	$	1,893	$	(184)	$	1,709
Depreciation and amortization(1)	$	128	$	771	$	899	$	82	$	981

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $114 million and $146 million for the three months ended December 31, 2020 and 2019, respectively, and $414 million and $435 million for the nine months ended December 31, 2020 and 2019, respectively.

Reconciliation of Reportable Segment Profit to Consolidated Total

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

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Profit
Total profit for reportable segments	$	361	$	585	952		$	1,893
All other loss	(61)		(57)		(179)		(184)
Interest income	28		33		76		130
Interest expense	(82)		(93)		(284)		(288)
Restructuring costs	(104)		(74)		(441)		(248)
Transaction, separation and integration-related costs	(96)		(68)		(307)		(226)
Amortization of acquired intangible assets	(114)		(146)		(414)		(435)
Gain on disposition of businesses	2,046		—		2,046		—
Pension and OPEB actuarial and settlement losses	—		—		(2)		—
Goodwill impairment losses	—		(53)		—		(2,940)
Gain on arbitration award	—		—		—		632
Income (loss) before income taxes	$	1,978	$	127	$	1,447	$	(1,666)

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

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Commitments and Contingencies

9 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

The Company signed long-term purchase agreements with certain software, hardware, telecommunication, and other service providers to obtain favorable pricing and terms for services, and products that are necessary for the operations of business activities. Under the terms of these agreements, the Company is contractually committed to purchase specified minimums over periods ranging from one to five years. If the Company does not meet the specified minimums, the Company would have an obligation to pay the service provider all, or a portion, of the shortfall. Minimum purchase commitments as of December 31, 2020 were as follows:

Fiscal year	Minimum Purchase Commitment (1)
(in millions)
Remainder of 2021	$	1,339
2022	1,093
2023	817
2024	227
Total	$	3,476

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

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

The Company also uses stand-by letters of credit, in lieu of cash, to support various risk management insurance policies. These letters of credit represent a contingent liability and the Company would only be liable if it defaults on its payment obligations on these policies. The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of December 31, 2020:

(in millions)	Remainder of Fiscal 2021		Fiscal 2022		Fiscal 2023 and Thereafter		Totals
Surety bonds	$	14	$	93	$	87	$	194
Letters of credit	37		147		527		711
Stand-by letters of credit	36		41		31		108
Totals	$	87	$	281	$	645	$	1,013

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

Contingencies

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

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

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

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

In October 2020, the Company reached an agreement in principle with the plaintiffs to resolve the matter. The Company is finalizing a settlement agreement, which once executed, will be submitted to the Court for approval.

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

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

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

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

The Securities and Exchange Commission (“SEC”) has filed a complaint against Mr. Pulier alleging various claims, including for fraud and falsifying books and records (Securities and Exchange Commission v. Eric Pulier, Case No. 2:17-cv-07124). The case is scheduled for trial in April 2021.

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

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

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

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

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

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

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

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

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

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

In December 2020, Plaintiffs filed a motion for preliminary certification of the collective action, which Defendants intend to oppose. A hearing on the motion has been scheduled for April 15, 2021.

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

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

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

On January 29, 2019, the court granted HPE’s motion for summary judgment and denied Oracle’s motion for summary judgment, resolving the matter in HPE’s favor. Oracle appealed the judgment to the U.S. Court of Appeals for the Ninth Circuit. In August 2020, the court granted Oracle’s appeal in part. The case has been remanded to the District Court for further proceedings.

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

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

On August 20, 2019, a purported class action lawsuit was filed in the Superior Court of the State of California, County of Santa Clara, against the Company, directors of the Company, and a former officer of the Company, among other defendants. On September 16, 2019, a substantially similar purported class action lawsuit was filed in the United States District Court for the Northern District of California against the Company, directors of the Company, and a former officer of the Company, among other defendants. On November 8, 2019, a third purported class action lawsuit was filed in the Superior Court of the State of California, County of San Mateo, against the Company, directors of the Company, and a former officer of the Company, among other defendants. The third lawsuit was voluntarily dismissed by the plaintiff and re-filed in the Superior Court of the State of California, County of Santa Clara on November 26, 2019, and thereafter was consolidated with the earlier-filed action in the same court on December 10, 2019. The California lawsuits assert claims under Sections 11, 12 and 15 of the Securities Act of 1933, as amended, and are premised on allegedly false and/or misleading statements, and alleged non-disclosure of material facts, regarding the Company’s prospects and expected performance. Plaintiff in the federal action filed an amended complaint on January 8, 2020. The putative class of plaintiffs in these cases includes all persons who acquired shares of the Company’s common stock pursuant to the offering documents filed with the Securities and Exchange Commission in connection with the April 2017 transaction that formed DXC. On July 15, 2020, the Superior Court of California, County of Santa Clara, denied the Company’s motion to stay the state court case but extended the Company’s deadline to seek dismissal of the state action, until after a decision on the Company’s motion to dismiss the federal action. The Company has since moved to dismiss the state action, and the court has continued the motion until after the outcome of the federal action. On July 27, 2020, the United States District Court for the Northern District of California granted the Company’s motion to dismiss the federal action. The Court’s order permitted plaintiffs to amend and refile their complaint within 60 days, and on September 25, 2020, the plaintiffs filed an amended complaint. On November 12, 2020, the Company filed a motion to dismiss the amended complaint. A hearing on the motion is scheduled for April 29, 2021.

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

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

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

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

Perspecta Arbitration: In October 2019, Perspecta Inc. (“Perspecta”) submitted a demand for arbitration claiming that in June 2018 DXC breached certain obligations under the Separation and Distribution Agreement ("SDA") between Perspecta and DXC and seeking at least $120 million in alleged damages. During the course of discovery, Perspecta increased the amount of its alleged damages, first to $500 million and then to over $800 million. Perspecta has since increased its damages calculations to include interest, bringing its total claim to $990 million. The Company believes there is no valid basis for Perspecta's claims for these amounts.

In its arbitration demand, Perspecta also challenges $39 million in invoices issued by DXC in June 2019 under its IT Services Agreement with Perspecta ("ITSA"). Perspecta subsequently challenged an additional $31 million sought by DXC in August 2020 under the ITSA. DXC believes the invoices were properly issued and the amounts are owed by Perspecta.

In October 2020, a hearing was held before an arbitration panel, during which the Company and Perspecta each presented evidence on the claims at issue. In December 2020, the parties presented closing arguments and the case was submitted. The parties are awaiting a decision from the arbitration panel.

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

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

In order to make this report easier to read, DXC refers throughout to (i) the interim unaudited Condensed Consolidated Financial Statements as the “financial statements,” (ii) the Condensed Consolidated Statements of Operations as the “statements of operations,” (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss) as the "statements of comprehensive income," (iv) the Condensed Consolidated Balance Sheets as the “balance sheets,” and (v) the Condensed Consolidated Statements of Cash Flows as the “statements of cash flows.” In addition, references throughout to numbered “Notes” refer to the numbered Notes in these Notes to Condensed Consolidated Financial Statements, unless otherwise noted.

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

The financial statements of the Company have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission for quarterly reports and accounting principles generally accepted in the United States ("GAAP"). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. These financial statements should therefore be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2020 ("fiscal 2020").

Use of Estimates

Use of EstimatesThe preparation of financial statements in conformity with GAAP requires the Company's management to make estimates and assumptions that affect amounts reported in the financial statements. The Company bases its estimates on assumptions regarding historical experience, currently available information and anticipated developments that it believes are reasonable and appropriate. However, because the use of estimates involves an inherent degree of uncertainty, actual results could differ from those estimates. The severity, magnitude and duration, as well as the economic consequences of the coronavirus disease 2019 ("COVID-19") pandemic, are uncertain, rapidly changing and difficult to predict. Therefore, accounting estimates and assumptions may change over time in response to COVID-19 and may change materially in future periods. In the opinion of the Company's management, the accompanying financial statements of DXC contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company's financial statements. The results of operations for the interim periods are not necessarily indicative of the results to be expected for the full fiscal year.

Allowance for Credit Losses

Allowance for Credit Losses

Effective April 1, 2020, the Company adopted Accounting Standards Update ("ASU") 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” using the modified retrospective method. Refer to Note 2 - "Recent Accounting Pronouncements" and Note 6 - "Receivables" for further discussion of the impact of adoption and other required disclosures. The amendments in this update changed the guidance for credit losses to an expected loss model rather than an incurred loss model. Financial assets subject to impairment under an expected credit loss model include billed and unbilled receivables, other receivables, and contract assets. Certain off-balance sheet arrangements, such as financial guarantees associated with receivables securitization facilities, are also subject to the guidance of ASU 2016-13.

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

Recent Accounting Pronouncements

During the nine months ended December 31, 2020, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:

Date Issued and ASU	Date Adopted and Method	Description	Impact
June 2016 ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	April 1, 2020 Modified Retrospective	This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.	The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.
August 2018 ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"	April 1, 2020 Prospective	This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.	The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.

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

Date Issued and ASU	DXC Effective Date	Description	Impact
December 2019 ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"	Fiscal 2022	This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. Early adoption of this update is permitted.	The Company is currently evaluating the potential impact this standard may have on its financial statements in future reporting periods.

Other recently issued ASUs effective after December 31, 2020 are not expected to have a material effect on DXC's consolidated financial statements.

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Recent Accounting Pronouncements (Tables)

9 Months Ended

Dec. 31, 2020

Accounting Policies [Abstract]

Schedule of Recently Adopted Accounting Pronouncements and New Accounting Pronouncements

During the nine months ended December 31, 2020, DXC adopted the following Accounting Standards Updates ("ASU") issued by the Financial Accounting Standards Board:

Date Issued and ASU	Date Adopted and Method	Description	Impact
June 2016 ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”	April 1, 2020 Modified Retrospective	This update requires the measurement and recognition of expected credit losses using the current expected credit loss model for financial assets held at amortized cost, which includes the Company’s trade accounts receivable, certain financial instruments and contract assets. It replaces the existing incurred loss impairment model with an expected loss methodology. The recorded credit losses are adjusted each period for changes in expected lifetime credit losses. The standard requires a cumulative effect adjustment to the statement of financial position as of the beginning of the first reporting period in which the guidance is effective.	The Company adopted this standard using the modified retrospective approach and recorded an immaterial cumulative effect adjustment in retained earnings as of April 1, 2020.
August 2018 ASU 2018-15, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract"	April 1, 2020 Prospective	This update helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance for determining when the arrangement includes a software license. Entities have the option to apply this standard prospectively to all implementation costs incurred after the date of adoption or retrospectively.	The Company adopted this standard using the prospective method and determined that the adoption of ASU 2018-15 had no material impact to its condensed consolidated financial statements.

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

Date Issued and ASU	DXC Effective Date	Description	Impact
December 2019 ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes"	Fiscal 2022	This update is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. Early adoption of this update is permitted.	The Company is currently evaluating the potential impact this standard may have on its financial statements in future reporting periods.

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Acquisitions (Tables)

9 Months Ended

Dec. 31, 2020

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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

(in millions)	Fair Value
Cash and cash equivalents	$	113
Accounts receivable	233
Other current assets	15
Total current assets	361
Property and equipment	31
Intangible assets	577
Other assets	99
Total assets acquired	1,068
Accounts payable, accrued payroll, accrued expenses, and other current liabilities	(121)
Deferred revenue	(8)
Long-term deferred tax liabilities and income tax payable	(106)
Other liabilities	(72)
Total liabilities assumed	(307)
Net identifiable assets acquired	761
Goodwill	1,262
Total consideration transferred	$	2,023

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

Below are the estimated useful lives of the acquired intangibles:

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

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Divestitures (Tables)

9 Months Ended

Dec. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Assets and Liabilities Distributed

The following is a summary of the assets and liabilities distributed as part of the HHS Sale on October 1, 2020:

(in millions)
Assets:
Cash and cash equivalents	$	8
Accounts receivable, net	295
Prepaid expenses	39
Other current assets	2
Total current assets	344
Intangible assets, net	1,308
Operating right-of-use assets, net	74
Goodwill	1,354
Property and equipment, net	46
Other assets	54
Total non-current assets	2,836
Total assets	$	3,180
Liabilities:
Accounts payable	$	79
Accrued payroll and related costs	13
Current operating lease liabilities	27
Accrued expenses and other current liabilities	36
Deferred revenue and advance contract payments	20
Total current liabilities	175
Non-current deferred revenue	32
Long-term operating lease liabilities	48
Other long term liabilities	2
Total long-term liabilities	82
Total liabilities	$	257

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Earnings (Loss) per Share (Tables)

9 Months Ended

Dec. 31, 2020

Earnings Per Share [Abstract]

Schedule of Earnings (Loss) per Share

The following table reflects the calculation of basic and diluted EPS:

	Three Months Ended				Nine Months Ended
(in millions, except per-share amounts)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Net income (loss) attributable to DXC common shareholders:	$	1,098	$	82	$	649	$	(1,874)
Common share information:
Weighted average common shares outstanding for basic EPS	254.32		255.09		254.03		260.24
Dilutive effect of stock options and equity awards	1.43		0.96		1.17		—
Weighted average common shares outstanding for diluted EPS	255.75		256.05		255.20		260.24
Earnings (loss) per share:
Basic	$	4.32	$	0.32	$	2.55	$	(7.20)
Diluted	$	4.29	$	0.32	$	2.54	$	(7.20)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The number of awards excluded were as follows:

	Three Months Ended		Nine Months Ended
	December 31, 2020	December 31, 2019	December 31, 2020	December 31, 2019
Stock Options	1,519,611	621,028	1,582,568	818,490
Restricted Stock Units	1,418,752	2,125,734	1,628,968	2,116,898
Performance-based Restricted Stock Units	836,866	—	723,754	351,410

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Receivables (Tables)

9 Months Ended

Dec. 31, 2020

Receivables [Abstract]

Summary of Transfer of Assets Accounted for as Sales, Deferred Purchase Price

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

(in millions)	As of and for the Nine Months Ended
	December 31, 2019
Beginning balance	$	574
Transfers of receivables	1,214
Collections	(1,265)
Change in funding availability	2
Facility amendments	(525)
Ending balance	$	—

The following table is a reconciliation of the beginning and ending balances of the DPP for the DE Receivables Facility:

(in millions)	As of and for the Nine Months Ended December 31, 2020
Beginning balance	$	103
Transfers of receivables	417
Collections	(420)
Change in funding availability	2
Facility amendments	(102)
Ending balance	$	—

Summary of Allowance for Doubtful Accounts for Trade Accounts Receivable

The following table presents the activity in the allowance for doubtful accounts for trade accounts receivable:

(in millions)	As of and for the Nine Months Ended
	December 31, 2020
Beginning balance	$	74
Impact of adoption of the Credit Loss Standard	4
Provisions for losses on accounts receivable	52
Other adjustments to allowance and write-off's	69
Ending balance	$	199

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Leases (Tables)

9 Months Ended

Dec. 31, 2020

Leases [Abstract]

Components of Lease Expense and Supplemental Cash Flow Information Related to Leases

The components of lease expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Operating lease cost	$	156	$	166	$	463	$	506
Short-term lease cost	14		17		40		41
Variable lease cost	17		9		40		35
Sublease income	(10)		(9)		(32)		(28)
Total operating costs	$	177	$	183	$	511	$	554
Finance lease cost:
Amortization of right-of-use assets	$	107	$	90	$	322	$	339
Interest on lease liabilities	10		16		35		50
Total finance lease cost	$	117	$	106	$	357	$	389

Supplemental Balance Sheet Information Related to Leases

Cash payments made from variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, and as such, are excluded from the supplemental cash flow information stated below. In addition, for the supplemental non-cash information on operating and finance leases, please refer to Note 19 - "Cash Flows."

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for amounts included in the measurement of:
Operating cash flows used in operating leases	$	463	$	506
Operating cash flows used in finance leases	$	35	$	50
Financing cash flows used in finance leases	$	430	$	436

Supplemental balance sheet information related to leases was as follows:

		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Assets:
ROU operating lease assets	Operating right-of-use assets, net	$	1,459	$	1,428
ROU finance lease assets	Property and Equipment, net	971		1,220
Total		$	2,430	$	2,648
Liabilities:
Current
Operating lease	Current operating lease liabilities	$	450	$	482
Finance lease	Short-term debt and current maturities of long-term debt	431		444
Total		$	881	$	926
Non-current
Operating lease	Non-current operating lease liabilities	$	1,113	$	1,063
Finance lease	Long-term debt, net of current maturities	545		602
Total		$	1,658	$	1,665

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

	As of
	December 31, 2020		March 31, 2020
Weighted Average remaining lease term:	Years
Operating leases	4.8		4.8
Finance leases	2.7		2.7
Weighted average remaining discount rate:	Rate
Operating leases	4.0	%	4.0	%
Finance leases	3.8	%	6.4	%

Maturities of Lease Liabilities

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of December 31, 2020:

Fiscal year	Operating Leases
(in millions)	Real Estate		Equipment		Finance Leases
Remainder of 2021	$	117	$	15	$	128
2022	412		42		419
2023	337		24		275
2024	262		11		139
2025	192		5		48
Thereafter	297		3		6
Total lease payments	1,617		100		1,015
Less: imputed interest	(151)		(3)		(39)
Total payments	$	1,466	$	97	$	976

Maturities of Lease Liabilities

The following maturity analysis presents expected undiscounted cash payments for operating and finance leases on an annual basis as of December 31, 2020:

Fiscal year	Operating Leases
(in millions)	Real Estate		Equipment		Finance Leases
Remainder of 2021	$	117	$	15	$	128
2022	412		42		419
2023	337		24		275
2024	262		11		139
2025	192		5		48
Thereafter	297		3		6
Total lease payments	1,617		100		1,015
Less: imputed interest	(151)		(3)		(39)
Total payments	$	1,466	$	97	$	976

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Fair Value (Tables)

9 Months Ended

Dec. 31, 2020

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis excluding pension assets and derivative assets and liabilities. See Note 9 - "Derivative and Hedging Activities" for information about the fair value of the Company's derivative assets and liabilities. There were no transfers among any of the levels during the periods presented.

	Fair Value Hierarchy
(in millions)	December 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	262	$	262	$	—	$	—
U.S. treasury bills(1)	250		250		—		—
Time deposits(1)	349		349		—		—
Other debt securities(2)	62		—		59		3
Total assets	$	923	$	861	$	59	$	3
Liabilities:
Contingent consideration	$	40	$	—	$	—	$	40
Total liabilities	$	40	$	—	$	—	$	40

	March 31, 2020
Assets:	Fair Value		Level 1		Level 2		Level 3
Money market funds and money market deposit accounts	$	156	$	156	$	—	$	—
Time deposits(1)	595		595		—		—
Other debt securities(2)	51		—		48		3
Deferred purchase price receivable	103		—		—		103
Total assets	$	905	$	751	$	48	$	106
Liabilities:
Contingent consideration	$	46	$	—	$	—	$	46
Total liabilities	$	46	$	—	$	—	$	46

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

(2) Other debt securities include available-for-sale investments with Level 2 inputs with cost bases of $59 million and $37 million, and unrealized gains of $0 million and $11 million, as of December 31, 2020 and March 31, 2020, respectively. During the quarter, previously held investments were sold and the proceeds were used to purchase new investments. The gain of $17 million from the sale was included in other income, net.

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Derivative and Hedging Activities (Tables)

9 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Not Designated For Hedge Accounting

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

		For the Three Months Ended				For the Nine Months Ended
(in millions)	Statement of Operations Line Item	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Foreign currency forward contracts	Other expense (income), net	$	16	$	1	$	74	$	(21)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following tables present the fair values of derivative instruments included in the balance sheets:

	Derivative Assets
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	9	$	—
Total fair value of derivatives designated for hedge accounting		$	9	$	—
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Other current assets	$	6	$	16
Total fair value of derivatives not designated for hedge accounting		$	6	$	16

	Derivative Liabilities
		As of
(in millions)	Balance Sheet Line Item	December 31, 2020		March 31, 2020
Derivatives designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	5	$	20
Total fair value of derivatives designated for hedge accounting:		$	5	$	20
Derivatives not designated for hedge accounting:
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	17	$	12
Total fair value of derivatives not designated for hedge accounting		$	17	$	12

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Intangible Assets (Tables)

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Amortizable Intangible Assets

Intangible assets consisted of the following:

	As of December 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,001	$	2,891	$	1,110
Customer related intangible assets	4,296		1,606		2,690
Other intangible assets	267		48		219
Total intangible assets	$	8,564	$	4,545	$	4,019

	As of March 31, 2020
(in millions)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Software	$	4,048	$	2,614	$	1,434
Customer related intangible assets	5,795		1,697		4,098
Other intangible assets	235		36		199
Total intangible assets	$	10,078	$	4,347	$	5,731

Schedule of Components of Amortization Expense

The components of amortization expense were as follows:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Intangible asset amortization	$	224	$	272	$	735	$	747
Transition and transformation contract cost amortization(1)	66		71		194		197
Total amortization expense	$	290	$	343	$	929	$	944

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

Estimated Future Amortization of Intangible Assets

Estimated future amortization related to intangible assets as of December 31, 2020 is as follows:

Fiscal Year	(in millions)
Remainder of 2021	$	236
2022	$	821
2023	$	740
2024	$	650
2025	$	535

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Goodwill (Tables)

9 Months Ended

Dec. 31, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Changes in the Carrying Amount of Goodwill by Segment

The following table summarizes the changes in the carrying amount of goodwill, by segment, as of December 31, 2020.

(in millions)	GBS		GIS		Total
Goodwill, gross	$	6,507	$	5,066	$	11,573
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of March 31, 2020, net	$	2,017	$	—	$	2,017
Acquisition related adjustments	18		—		18
Divestitures	(1,355)		—		(1,355)
Assets held for sale	(4)		—		(4)
Foreign currency translation	60		—		60
Goodwill, gross	5,226		5,066		10,292
Accumulated impairment losses	(4,490)		(5,066)		(9,556)
Balance as of December 31, 2020, net	$	736	$	—	$	736

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Debt (Tables)

9 Months Ended

Dec. 31, 2020

Debt Disclosure [Abstract]

Schedule of Debt

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

(in millions)	Interest Rates	Fiscal Year Maturities	December 31, 2020		March 31, 2020
Short-term debt and current maturities of long-term debt
Commercial paper(1)	(0.22)% - 0.44%	2021 - 2022	$	112	$	542
Current maturities of long-term debt	Various	2021 - 2022	252		290
Current maturities of finance lease liabilities	0.62% - 18.47%	2021 - 2022	431		444
Short-term debt and current maturities of long-term debt			$	795	$	1,276
Long-term debt, net of current maturities
AUD term loan	0.94% - 0.96%	2022	—		489
GBP term loan	0.88% - 1.46%	2022	—		556
EUR term loan	0.65%	2022 - 2023	—		822
EUR term loan	0.80%(2)	2023 - 2024	488		821
USD term loan	1.40% - 2.24%	2025	—		480
$274 million Senior notes	4.45%	2023	276		276
$171 million Senior notes	4.45%	2023	172		172
$500 million Senior notes	4.25%	2025	504		505
$500 million Senior notes	4.00%	2024	497		—
$500 million Senior notes	4.13%	2026	496		—
£250 million Senior notes	2.75%	2025	339		307
€650 million Senior notes	1.75%	2026	792		709
$500 million Senior notes	4.75%	2028	507		507
$234 million Senior notes	7.45%	2030	269		271
Revolving credit facility	1.26% - 2.08%	2024 - 2025	—		1,500
Lease credit facility	1.15% - 1.99%	2021 - 2023	—		11
Finance lease liabilities	0.62% - 18.47%	2021 - 2027	976		1,046
Borrowings for assets acquired under long-term financing	0.00% - 6.39%	2021 - 2027	742		802
Mandatorily redeemable preferred stock outstanding	6.00%	2023	63		62
Other borrowings	Various	2021 - 2022	6		70
Long-term debt			6,127		9,406
Less: current maturities			683		734
Long-term debt, net of current maturities			$	5,444	$	8,672

(1)At DXC's option, DXC can borrow up to a maximum of €1 billion or its equivalent in €, £, and $.

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

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Revenue (Tables)

9 Months Ended

Dec. 31, 2020

Revenue from Contract with Customer [Abstract]

Summary of Revenue Disaggregated by Geography

The following table presents DXC's revenues disaggregated by geography, based on the location of incorporation of the DXC entity providing the related goods or services:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
United States	$	1,290	$	1,843	$	4,665	$	5,500
United Kingdom	607		707		1,759		2,100
Other Europe	1,335		1,329		3,784		3,819
Australia	377		380		1,128		1,119
Other International	679		762		2,008		2,224
Total Revenues	$	4,288	$	5,021	$	13,344	$	14,762

Summary of Contract Assets and Liabilities

The following table provides information about the balances of the Company's trade receivables and contract assets and contract liabilities:

	As of
(in millions)	December 31, 2020		March 31, 2020
Trade receivables, net	$	2,785	$	3,059
Contract assets	$	418	$	454
Contract liabilities	$	1,768	$	1,756

Change in contract liabilities were as follows:

	Nine Months Ended
(in millions)	December 31, 2020(1)		December 31, 2019
Balance, beginning of period	$	1,756	$	1,886
Deferred revenue	2,111		2,091
Recognition of deferred revenue	(2,137)		(2,137)
Currency translation adjustment	146		12
Other	(108)		(36)
Balance, end of period	$	1,768	$	1,816

(1)Other includes $54 million of contract liabilities related to the divested HHS business discussed in Note 4 - "Divestitures" and contract liabilities reclassified to assets held for sale

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Restructuring Costs (Tables)

9 Months Ended

Dec. 31, 2020

Restructuring Costs [Abstract]

Schedule of Restructuring Expense

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

	As of
(in millions)	December 31, 2020
Accrued expenses and other current liabilities	$	261
Other long-term liabilities	60
Total	$	321

Schedule of Restructuring Liability

Restructuring Liability Reconciliations by Plan

	Restructuring Liability as of March 31, 2020		Costs Expensed, Net of Reversals(1)		Costs Not Affecting Restructuring Liability(2)		Cash Paid		Other(3)		Restructuring Liability as of December 31, 2020
Fiscal 2021 Plan
Workforce Reductions	$	—	$	416	$	(9)	$	(210)	$	9	$	206
Facilities Costs	—		25		(9)		(11)		(1)		4
Total	$	—	$	441	$	(18)	$	(221)	$	8	$	210
Fiscal 2020 Plan
Workforce Reductions (4)	$	74	$	7	$	2	$	(49)	$	5	$	39
Facilities Costs	2		(4)		4		(2)		—		—
Total	$	76	$	3	$	6	$	(51)	$	5	$	39
Fiscal 2019 Plan
Workforce Reductions	$	25	$	(2)	$	(3)	$	(13)	$	2	$	9
Facilities Costs	5		(3)		2		—		1		5
Total	$	30	$	(5)	$	(1)	$	(13)	$	3	$	14
Other Prior Year Plans
Workforce Reductions	$	24	$	1	$	2	$	(14)	$	2	$	15
Facilities Costs	—		—		—		—		—		—
Total	$	24	$	1	$	2	$	(14)	$	2	$	15
Acquired Liabilities
Workforce Reductions	$	39	$	1	$	—	$	(7)	$	1	$	34
Facilities Costs	11		—		1		(3)		—		9
Total	$	50	$	1	$	1	$	(10)	$	1	$	43

(1) Costs expensed, net of reversals include $11 million, $10 million, and $3 million of costs reversed from the Fiscal 2020 Plan, Fiscal 2019 Plan and Other Prior Year Plans, respectively.

(2) Costs Not Affecting Restructuring Liability include pension benefit augmentations recorded as a pension liability, asset impairments and restructuring costs associated with right-of-use assets.

(3)Other include foreign currency translation adjustments.

(4) Fiscal 2020 workforce reductions includes a $14 million adjustment to restructuring expense related to the prior year.

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Pension and Other Benefit Plans (Tables)

9 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Schedule of Defined Benefit Plans Disclosures

The components of net periodic pension income were:

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Service cost	$	23	$	23	$	68	$	69
Interest cost	62		60		181		177
Expected return on assets	(163)		(161)		(477)		(476)
Amortization of prior service costs	(2)		(2)		(6)		(6)
Contractual termination benefit	—		—		3		17
Curtailment gain	—		—		(9)		—
Recognition of actuarial loss	—		—		11		—
Net periodic pension income	$	(80)	$	(80)	$	(229)	$	(219)

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Stockholders' Equity (Tables)

9 Months Ended

Dec. 31, 2020

Equity [Abstract]

Class of Treasury Stock

The details of shares repurchased during the nine months ended December 31, 2019 are shown below:

	Fiscal 2020
Fiscal Period	Number of Shares Repurchased	Average Price Per Share		Amount (in millions)
1st Quarter
Open market purchases	5,510,415	$	54.44	$	300
Accelerated stock repurchases	1,849,194	$	54.08	100
1st Quarter Total	7,359,609	$	54.35	400
2nd Quarter
Open market purchases	4,414,840	$	33.96	150
Accelerated stock repurchases	1,805,350	$	55.39	100
2nd Quarter Total	6,220,190	$	40.18	250
3rd Quarter
Open market purchases	2,353,852	$	36.68	86
Accelerated stock repurchases	—	$	—	—
3rd Quarter Total	2,353,852	$	36.68	86
Total	15,933,651	$	46.21	$	736

Schedule of Accumulated Other Comprehensive Income (Loss)

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

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2020	$	(851)	$	(20)	$	9	$	259	$	(603)
Current-period other comprehensive income	197		12		(6)		—		203
Amounts reclassified from accumulated other comprehensive loss	—		6		—		(13)		(7)
Balance at December 31, 2020	$	(654)	$	(2)	$	3	$	246	$	(407)

(in millions)	Foreign Currency Translation Adjustments		Cash Flow Hedges		Available-for-sale Securities		Pension and Other Post-retirement Benefit Plans		Accumulated Other Comprehensive Loss
Balance at March 31, 2019	$	(517)	$	(3)	$	9	$	267	$	(244)
Current-period other comprehensive loss	78		(4)		2		—		76
Amounts reclassified from accumulated other comprehensive income (loss)	—		(2)		—		(6)		(8)
Balance at December 31, 2019	$	(439)	$	(9)	$	11	$	261	$	(176)

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Stock Incentive Plans (Tables)

9 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Share Based Compensation Shares Authorized Under Stock Option Plans

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

	As of December 31, 2020
	Reserved for Issuance	Available for Future Grants
DXC Employee Equity Plan	51,200,000	32,794,274
DXC Director Equity Plan	745,000	435,951
DXC Share Purchase Plan	250,000	165,185
Total	52,195,000	33,395,410

Disclosure of Share Based Compensation Arrangements by Share Based Payment Award

Stock Options

	Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (in millions)
Outstanding as of March 31, 2020	1,869,815	$	29.92	4.27	$	—
Granted	—	$	—
Exercised	(39,601)	$	17.43		$	—
Canceled/Forfeited	—	$	—
Expired	(82,614)	$	31.24
Outstanding as of December 31, 2020	1,747,600	$	30.11	3.73	$	3
Vested and exercisable as of December 31, 2020	1,747,600	$	30.11	3.73	$	3

Restricted Stocks

	Employee Equity Plan			Director Equity Plan
	Number of Shares	Weighted Average Grant Date Fair Value		Number of Shares	Weighted Average Grant Date Fair Value
Outstanding as of March 31, 2020	4,174,476	$	55.45	114,615	$	37.69
Granted	7,576,602	$	18.67	118,500	$	18.82
Settled	(1,045,190)	$	50.65	(48,455)	$	26.90
Canceled/Forfeited	(2,042,804)	$	36.14	—	$	—
Outstanding as of December 31, 2020	8,663,084	$	28.43	184,660	$	28.42

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

Share-Based Compensation

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Total share-based compensation cost	$	6	$	9	$	42	$	57
Related income tax benefit	$	2	$	(3)	$	7	$	8
Total intrinsic value of options exercised	$	—	$	1	$	—	$	8
Tax benefits from exercised stock options and awards	$	1	$	3	$	5	$	13

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Cash Flows (Tables)

9 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Elements [Abstract]

Cash Payments for Interest on Indebtedness and for Taxes

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

	Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019
Cash paid for:
Interest	$	262	$	277
Taxes on income, net of refunds (1)	$	159	$	202
Non-cash activities:
Operating:
ROU assets obtained in exchange for lease, net (2)	$	449	$	314
Prepaid assets acquired under long-term financing	$	46	$	23
Investing:
Capital expenditures in accounts payable and accrued expenses	$	16	$	121
Capital expenditures through finance lease obligations	$	277	$	507
Assets acquired under long-term financing	$	26	$	282
(Decrease) increase in deferred purchase price receivable	$	(52)	$	58
Contingent consideration	$	2	$	19
Financing:
Dividends declared but not yet paid	$	—	$	54

(1) Income tax refunds were $31 million and $36 million for the nine months ended December 31, 2020 and December 31, 2019, respectively.

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

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Segment Information (Tables)

9 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Operating Results by Reportable Segment

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

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Three Months Ended December 31, 2020
Revenues	$	1,921	$	2,367	$	4,288	$	—	$	4,288
Segment profit	$	273	$	88	$	361	$	(61)	$	300
Depreciation and amortization(1)	$	53	$	281	$	334	$	27	$	361
Three Months Ended December 31, 2019
Revenues	$	2,359	$	2,662	$	5,021	$	—	$	5,021
Segment profit	$	353	$	232	$	585	$	(57)	$	528
Depreciation and amortization(1)	$	61	$	244	$	305	$	28	$	333

(in millions)	GBS		GIS		Total Reportable Segments		All Other		Totals
Nine Months Ended December 31, 2020
Revenues	$	6,337	$	7,007	$	13,344	$	—	$	13,344
Segment profit	$	805	$	147	$	952	$	(179)	$	773
Depreciation and amortization(1)	$	162	$	839	$	1,001	$	77	$	1,078
Nine Months Ended December 31, 2019
Revenues	$	6,803	$	7,959	$	14,762	$	—	$	14,762
Segment profit	$	1,078	$	815	$	1,893	$	(184)	$	1,709
Depreciation and amortization(1)	$	128	$	771	$	899	$	82	$	981

(1) Depreciation and amortization as presented excludes amortization of acquired intangible assets of $114 million and $146 million for the three months ended December 31, 2020 and 2019, respectively, and $414 million and $435 million for the nine months ended December 31, 2020 and 2019, respectively.

Reconciliation of Consolidated Operating Income to Income Before Taxes

	Three Months Ended				Nine Months Ended
(in millions)	December 31, 2020		December 31, 2019		December 31, 2020		December 31, 2019
Profit
Total profit for reportable segments	$	361	$	585	952		$	1,893
All other loss	(61)		(57)		(179)		(184)
Interest income	28		33		76		130
Interest expense	(82)		(93)		(284)		(288)
Restructuring costs	(104)		(74)		(441)		(248)
Transaction, separation and integration-related costs	(96)		(68)		(307)		(226)
Amortization of acquired intangible assets	(114)		(146)		(414)		(435)
Gain on disposition of businesses	2,046		—		2,046		—
Pension and OPEB actuarial and settlement losses	—		—		(2)		—
Goodwill impairment losses	—		(53)		—		(2,940)
Gain on arbitration award	—		—		—		632
Income (loss) before income taxes	$	1,978	$	127	$	1,447	$	(1,666)

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Commitments and Contingencies (Tables)

9 Months Ended

Dec. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Long-term Purchase Agreements

Minimum purchase commitments as of December 31, 2020 were as follows:

Fiscal year	Minimum Purchase Commitment (1)
(in millions)
Remainder of 2021	$	1,339
2022	1,093
2023	817
2024	227
Total	$	3,476

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

Schedule of Expiration of Financial Guarantees and Stand-by Letters of Credit Outstanding

The following table summarizes the expiration of the Company’s financial guarantees and stand-by letters of credit outstanding as of December 31, 2020:

(in millions)	Remainder of Fiscal 2021		Fiscal 2022		Fiscal 2023 and Thereafter		Totals
Surety bonds	$	14	$	93	$	87	$	194
Letters of credit	37		147		527		711
Stand-by letters of credit	36		41		31		108
Totals	$	87	$	281	$	645	$	1,013

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Summary of Significant Accounting Policies - Narrative (Details) € in Millions, $ in Millions	6 Months Ended
	Mar. 31, 2021 EUR (€)	Mar. 31, 2021 USD ($)	Oct. 01, 2020 USD ($)
HHS Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction consideration			$ 5,000
HPS Business | Forecast
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Amount of cash consideration received	€ 459	$ 525

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Acquisitions - Luxoft, Narrative (Details) - Luxoft Holding Inc. $ in Billions	Jun. 14, 2019 USD ($)
Business Acquisition [Line Items]
Total consideration transferred	$ 2.0
Percentage of business acquired	100.00%

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Acquisitions - Luxoft Acquisition, Purchase Price Allocation (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020	Jun. 14, 2019
Business Acquisition [Line Items]
Goodwill	$ 736	$ 2,017
Luxoft Holding Inc.
Business Acquisition [Line Items]
Cash and cash equivalents			$ 113
Accounts receivable			233
Other current assets			15
Total current assets			361
Property and equipment			31
Intangible assets			577
Other assets			99
Total assets acquired			1,068
Accounts payable, accrued payroll, accrued expenses, and other current liabilities			(121)
Deferred revenue			(8)
Long-term deferred tax liabilities and income tax payable			(106)
Other liabilities			(72)
Total liabilities assumed			(307)
Net identifiable assets acquired			761
Goodwill			1,262
Total consideration transferred			$ 2,023

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Acquisitions - Luxoft, Intangible Assets (Details) - Luxoft Holding Inc.	Jun. 14, 2019
Customer related intangibles
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	10 years
Trade names
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	20 years
Developed technology
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	3 years
Third-party purchased software
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Lives (Years)	3 years

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Divestitures - Narrative (Details) € in Millions, £ in Millions, $ in Millions, $ in Millions		1 Months Ended				3 Months Ended				9 Months Ended
	Oct. 01, 2020 USD ($)	Oct. 31, 2020 USD ($)	Oct. 31, 2020 GBP (£)	Oct. 31, 2020 AUD ($)	Oct. 31, 2020 EUR (€)	Dec. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 AUD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on disposition of businesses						$ 2,046			$ 0	$ 2,046	$ 0
Repayments of debt		$ 3,500								2,926	$ 1,029
Commercial paper
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		772	£ 600
Term loan
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt						1,441
Term loan | Term Loan Payable, EUR, Due 2023-2024
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		410			€ 350
Term loan | Term Loan Payable, USD, Due 2025
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		381					$ 100
Term loan | Term Loan Payable, AUD, Due 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		358		$ 500				$ 300
Term loan | Term Loan Payable, EUR, Due 2022-2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		292			€ 250
Revolving credit facility | Line of Credit
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Repayments of debt		$ 1,250								$ 4,000
HHS Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transaction consideration	$ 5,000
Portion of consideration related to future services to be provided	85
Gain on disposition of businesses	$ 2,041
HHS Business | Milano Purchasers
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Commercial accounts receivable transferred						272
Prepaid maintenance transferred						12
Software licenses transferred						48
Individually Insignificant Disposal Group
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain on disposition of businesses						$ 5

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Divestitures - Schedule of Assets and Liabilities Held for Sale (Details) - HHS Business - Discontinued Operations, Disposed of by Sale $ in Millions	Dec. 31, 2020 USD ($)
Assets:
Cash and cash equivalents	$ 8
Accounts receivable, net	295
Prepaid expenses	39
Other current assets	2
Total current assets	344
Intangible assets, net	1,308
Operating right-of-use assets, net	74
Goodwill	1,354
Property and equipment, net	46
Other assets	54
Total non-current assets	2,836
Total assets	3,180
Liabilities:
Accounts payable	79
Accrued payroll and related costs	13
Current operating lease liabilities	27
Accrued expenses and other current liabilities	36
Deferred revenue and advance contract payments	20
Total current liabilities	175
Non-current deferred revenue	32
Long-term operating lease liabilities	48
Other long term liabilities	2
Total long-term liabilities	82
Total liabilities	$ 257

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Earnings (Loss) per Share - Schedule of Earnings (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Net Income (Loss) Attributable to Parent [Abstract]
Net income (loss) attributable to DXC common shareholders:	$ 1,098	$ 82	$ 649	$ (1,874)
Common share information:
Weighted average common shares outstanding for basic and diluted net (loss) EPS (in shares)	254,320	255,090	254,030	260,240
Dilutive effect of stock options and equity awards (in shares)	1,430	960	1,170	0
Weighted Average Number of Shares Outstanding, Diluted	255,750	256,050	255,200	260,240
Earnings (loss) per share:
Basic (in dollars per share)	$ 4.32	$ 0.32	$ 2.55	$ (7.20)
Diluted (in dollars per share)	$ 4.29	$ 0.32	$ 2.54	$ (7.20)

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Earnings (Loss) per Share - Schedule of Antidilutive Securities (Details) - shares	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted EPS (in shares)	1,519,611	621,028	1,582,568	818,490
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted EPS (in shares)	1,418,752	2,125,734	1,628,968	2,116,898
Performance-based Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of diluted EPS (in shares)	836,866	0	723,754	351,410

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Receivables - Narrative (Details)	9 Months Ended
	Dec. 31, 2020 USD ($) extension	Dec. 31, 2020 EUR (€) extension	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)
Purchasers
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Receivables facility, amount	$ 500,000,000		$ 600,000,000
Deferred purchase price for receivables	0				$ 0	$ 574,000,000
Availability under receivable facility	403,000,000
Drawn amount	407,000,000
Liability for excess cash proceeds	$ 4,000,000
Number of extensions | extension	1	1
Extension term	1 year
Gain (loss) on sale of receivables	$ 0
DE Purchasers
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Receivables facility, amount	175,000,000	€ 150,000,000		$ 102,000,000
Deferred purchase price for receivables	0			$ 103,000,000
Availability under receivable facility	123,000,000
Drawn amount	$ 136,000,000
Number of extensions | extension	1	1
Extension term	1 year
Liability within accounts payable	$ 13,000,000

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Receivables - Schedule of DFP (Details) - USD ($)	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Purchasers
Transfer of Financial Assets Accounted for as Sales, Deferred Purchase Price [Roll Forward]
Beginning balance		$ 574,000,000
Transfers of receivables		1,214,000,000
Collections		(1,265,000,000)
Change in funding availability		2,000,000
Facility amendments		(525,000,000)
Ending balance	$ 0	$ 0
DE Purchasers
Transfer of Financial Assets Accounted for as Sales, Deferred Purchase Price [Roll Forward]
Beginning balance	103,000,000
Transfers of receivables	417,000,000
Collections	(420,000,000)
Change in funding availability	2,000,000
Facility amendments	(102,000,000)
Ending balance	$ 0

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Receivables - Allowance for Doubtful Accounts (Details) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 74
Provision for losses on accounts receivable	52	$ 0
Other adjustments to allowance and write-off's	69
Ending balance	199
Cumulative Effect, Period of Adoption, Adjustment
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 4

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Leases - Narrative (Details)	9 Months Ended
	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Extension term	10 years
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease term	1 year
Termination term	1 year
Maximum
Lessee, Lease, Description [Line Items]
Remaining lease term	12 years
Termination term	3 years

XML

Leases - Components of Lease Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Leases [Abstract]
Operating lease cost	$ 156	$ 166	$ 463	$ 506
Short-term lease cost	14	17	40	41
Variable lease cost	17	9	40	35
Sublease income	(10)	(9)	(32)	(28)
Total operating costs	177	183	511	554
Finance lease cost:
Amortization of right-of-use assets	107	90	322	339
Interest on lease liabilities	10	16	35	50
Total finance lease cost	$ 117	$ 106	$ 357	$ 389

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Leases - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Cash paid for amounts included in the measurement of:
Operating cash flows used in operating leases	$ 463	$ 506
Operating cash flows used in finance leases	35	50
Financing cash flows used in finance leases	$ 430	$ 436

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Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Assets:
ROU operating lease assets	$ 1,459	$ 1,428
ROU finance lease assets	971	1,220
Total	2,430	2,648
Current
Operating lease	450	482
Finance lease	431	444
Total	881	926
Non-current
Operating lease	1,113	1,063
Finance lease	545	602
Total	$ 1,658	$ 1,665
Weighted Average remaining lease term:
Operating leases	4 years 9 months 18 days	4 years 9 months 18 days
Finance leases	2 years 8 months 12 days	2 years 8 months 12 days
Weighted average remaining discount rate:
Operating leases	4.00%	4.00%
Finance leases	3.80%	6.40%
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization	us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:DebtCurrent	us-gaap:DebtCurrent
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:LongTermDebtNoncurrent	us-gaap:LongTermDebtNoncurrent

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Leases - Maturities of Lease Liabilities, Topic 842 (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Finance Leases
Remainder of 2021	$ 128
2022	419
2023	275
2024	139
2025	48
Thereafter	6
Total lease payments	1,015
Less: imputed interest	(39)
Total payments	976	$ 1,046
Real Estate
Operating Leases
Remainder of 2021	117
2022	412
2023	337
2024	262
2025	192
Thereafter	297
Total lease payments	1,617
Less: imputed interest	(151)
Total payments	1,466
Equipment
Operating Leases
Remainder of 2021	15
2022	42
2023	24
2024	11
2025	5
Thereafter	3
Total lease payments	100
Less: imputed interest	(3)
Total payments	$ 97

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Fair Value - Fair Value Measurements on a Recurring Basis (Details) - Recurring - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Assets:
Other debt securities	$ 62	$ 51
Deferred purchase price receivable		103
Total assets	923	905
Liabilities:
Contingent consideration	40	46
Total liabilities	40	46
Level 1
Assets:
Other debt securities	0	0
Deferred purchase price receivable		0
Total assets	861	751
Liabilities:
Contingent consideration	0	0
Total liabilities	0	0
Level 2
Assets:
Other debt securities	59	48
Deferred purchase price receivable		0
Total assets	59	48
Liabilities:
Contingent consideration	0	0
Total liabilities	0	0
Cost basis	59	37
Unrealized gains	0	11
Level 2 | Other Income, Net
Liabilities:
Unrealized gains	17
Level 3
Assets:
Other debt securities	3	3
Deferred purchase price receivable		103
Total assets	3	106
Liabilities:
Contingent consideration	40	46
Total liabilities	40	46
Money market funds and money market deposit accounts
Assets:
Cash and cash equivalents	262	156
Money market funds and money market deposit accounts | Level 1
Assets:
Cash and cash equivalents	262	156
Money market funds and money market deposit accounts | Level 2
Assets:
Cash and cash equivalents	0	0
Money market funds and money market deposit accounts | Level 3
Assets:
Cash and cash equivalents	0	0
U.S. treasury bills
Assets:
Cash and cash equivalents	250
U.S. treasury bills | Level 1
Assets:
Cash and cash equivalents	250
U.S. treasury bills | Level 2
Assets:
Cash and cash equivalents	0
U.S. treasury bills | Level 3
Assets:
Cash and cash equivalents	0
Time deposits
Assets:
Cash and cash equivalents	349	595
Time deposits | Level 1
Assets:
Cash and cash equivalents	349	595
Time deposits | Level 2
Assets:
Cash and cash equivalents	0	0
Time deposits | Level 3
Assets:
Cash and cash equivalents	$ 0	$ 0

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Fair Value - Other Fair Value Disclosures (Details) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, net of current maturities	$ 5,444		$ 8,672
Tangible asset impairment charges	0	$ 0
Impairment of intangible assets	0	0
Impairment of other intangible assets	0	$ 0
Fair value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, net of current maturities	5,500		8,200
Carrying value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, net of current maturities	$ 5,200		$ 8,400

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Derivative and Hedging Activities - Narrative (Details) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) counterparty	Dec. 31, 2019 USD ($)	Mar. 31, 2020 USD ($)
Derivative [Line Items]
Foreign currency cash flow hedge gain (loss) to be reclassified during next 12 months	$ 2		$ 2
Number of counterparties with concentration of credit risk | counterparty			7
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency forward contracts
Derivative [Line Items]
Notational amount of derivative	507		$ 507		$ 455
Designated as Hedging Instrument | Net Investment Hedging
Derivative [Line Items]
Pretax gain (loss) on derivative instruments	0	$ 0	(6)	$ 18
Designated as Hedging Instrument | Net Investment Hedging | Foreign currency denominated debt
Derivative [Line Items]
Notational amount of derivative	800		800		1,900
Pretax gain (loss) on derivatives designated for hedge accounting included other comprehensive loss	(36)		(125)
Not Designated as Hedging Instrument | Foreign currency forward contracts
Derivative [Line Items]
Notational amount of derivative	$ 1,700		$ 1,700		$ 2,200

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Derivative and Hedging Activities - Nondesignated Hedging (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Other expense (income), net | Foreign currency forward contracts | Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Pretax loss (gain) on derivative instruments	$ 16	$ 1	$ 74	$ (21)

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Derivative and Hedging Activities - Fair Value (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Designated as Hedging Instrument | Fair Value Hedging
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	$ 9	$ 0
Derivative liability, fair value	5	20
Designated as Hedging Instrument | Fair Value Hedging | Foreign currency forward contracts | Other current assets
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	9	0
Designated as Hedging Instrument | Fair Value Hedging | Foreign currency forward contracts | Accrued expenses and other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	5	20
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	6	16
Derivative liability, fair value	17	12
Not Designated as Hedging Instrument | Foreign currency forward contracts | Other current assets
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	6	16
Not Designated as Hedging Instrument | Foreign currency forward contracts | Accrued expenses and other current liabilities
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	$ 17	$ 12

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Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 8,564	$ 10,078
Accumulated Amortization	4,545	4,347
Net Carrying Value	4,019	5,731
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	4,001	4,048
Accumulated Amortization	2,891	2,614
Net Carrying Value	1,110	1,434
Customer related intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	4,296	5,795
Accumulated Amortization	1,606	1,697
Net Carrying Value	2,690	4,098
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	267	235
Accumulated Amortization	48	36
Net Carrying Value	$ 219	$ 199

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Intangible Assets - Components of Amortization Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 290	$ 343	$ 929	$ 944
Intangible asset amortization
Finite-Lived Intangible Assets [Line Items]
Amortization expense	224	272	735	747
Transition and transformation contract cost amortization
Finite-Lived Intangible Assets [Line Items]
Amortization expense	$ 66	$ 71	$ 194	$ 197

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Intangible Assets - Estimated Future Amortization (Details) $ in Millions	Dec. 31, 2020 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2021	$ 236
2022	821
2023	740
2024	650
2025	$ 535

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Goodwill (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Changes in the carrying amount of goodwill by segment [Roll Forward]
Goodwill, gross			$ 11,573
Accumulated impairment losses			(9,556)
Balance as of March 31, 2020, net			2,017
Acquisition related adjustments			18
Divestitures			(1,355)
Assets held for sale			(4)
Foreign currency translation			60
Goodwill, gross	$ 10,292		10,292
Accumulated impairment losses	(9,556)		(9,556)
Balance as of December 31, 2020, net	736		736
Goodwill impairment losses	0	$ 53	0	$ 2,940
GBS
Changes in the carrying amount of goodwill by segment [Roll Forward]
Goodwill, gross			6,507
Accumulated impairment losses			(4,490)
Balance as of March 31, 2020, net			2,017
Acquisition related adjustments			18
Divestitures			(1,355)
Assets held for sale			(4)
Foreign currency translation			60
Goodwill, gross	5,226		5,226
Accumulated impairment losses	(4,490)		(4,490)
Balance as of December 31, 2020, net	736		736
GIS
Changes in the carrying amount of goodwill by segment [Roll Forward]
Goodwill, gross			5,066
Accumulated impairment losses			(5,066)
Balance as of March 31, 2020, net			0
Acquisition related adjustments			0
Divestitures			0
Assets held for sale			0
Foreign currency translation			0
Goodwill, gross	5,066		5,066
Accumulated impairment losses	(5,066)		(5,066)
Balance as of December 31, 2020, net	$ 0		$ 0

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Debt - Schedule of Debt (Details)	9 Months Ended
	Dec. 31, 2020 USD ($)	Dec. 31, 2020 EUR (€)	Dec. 31, 2020 GBP (£)	Sep. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)
Short-term debt and current maturities of long-term debt
Euro-denominated commercial paper	$ 112,000,000				$ 542,000,000
Current maturities of long-term debt	252,000,000				290,000,000
Current maturities of finance lease liabilities	431,000,000				444,000,000
Short-term debt and current maturities of long-term debt	795,000,000				1,276,000,000
Long-term debt, net of current maturities
Finance lease liabilities	976,000,000				1,046,000,000
Long-term debt	6,127,000,000				9,406,000,000
Less: current maturities	683,000,000				734,000,000
Long-term debt, net of current maturities	5,444,000,000				8,672,000,000
Term loan | Term Loan Payable, AUD, Due 2022
Long-term debt, net of current maturities
Long-term debt	0				489,000,000
Term loan | Term Loan Payable, GBP, Due 2022
Long-term debt, net of current maturities
Long-term debt	0				556,000,000
Term loan | Term Loan Payable, EUR, Due 2022-2023
Long-term debt, net of current maturities
Long-term debt	$ 0				822,000,000
Debt Information [Abstract]
Effective interest rate	0.65%	0.65%	0.65%
Term loan | Term Loan Payable, EUR, Due 2023-2024
Long-term debt, net of current maturities
Long-term debt	$ 488,000,000				821,000,000
Debt Information [Abstract]
Effective interest rate	0.80%	0.80%	0.80%
Term loan | Term Loan Payable, USD, Due 2025
Long-term debt, net of current maturities
Long-term debt	$ 0				480,000,000
Senior notes | Senior notes due 2023
Long-term debt, net of current maturities
Long-term debt	$ 276,000,000				276,000,000
Debt Information [Abstract]
Effective interest rate	4.45%	4.45%	4.45%
Face amount	$ 274,000,000
Senior notes | Senior notes due 2023
Long-term debt, net of current maturities
Long-term debt	$ 172,000,000				172,000,000
Debt Information [Abstract]
Effective interest rate	4.45%	4.45%	4.45%
Face amount	$ 171,000,000
Senior notes | Senior notes due 2025
Long-term debt, net of current maturities
Long-term debt	$ 504,000,000				505,000,000
Debt Information [Abstract]
Effective interest rate	4.25%	4.25%	4.25%
Face amount	$ 500,000,000
Senior notes | Senior Notes, Due 2024
Long-term debt, net of current maturities
Long-term debt	$ 497,000,000				0
Debt Information [Abstract]
Effective interest rate	4.00%	4.00%	4.00%	4.00%
Face amount	$ 500,000,000			$ 500,000,000
Senior notes | Senior Notes, Due 2026
Long-term debt, net of current maturities
Long-term debt	$ 496,000,000				0
Debt Information [Abstract]
Effective interest rate	4.13%	4.13%	4.13%	4.13%
Face amount	$ 500,000,000			$ 500,000,000
Senior notes | Senior notes due 2025
Long-term debt, net of current maturities
Long-term debt	$ 339,000,000				307,000,000
Debt Information [Abstract]
Effective interest rate	2.75%	2.75%	2.75%
Face amount | £			£ 250,000,000
Senior notes | Senior notes due 2026
Long-term debt, net of current maturities
Long-term debt	$ 792,000,000				709,000,000
Debt Information [Abstract]
Effective interest rate	1.75%	1.75%	1.75%
Face amount | €		€ 650,000,000
Senior notes | Senior notes due 2028
Long-term debt, net of current maturities
Long-term debt	$ 507,000,000				507,000,000
Debt Information [Abstract]
Effective interest rate	4.75%	4.75%	4.75%
Face amount	$ 500,000,000
Senior notes | Senior notes due 2030
Long-term debt, net of current maturities
Long-term debt	$ 269,000,000				271,000,000
Debt Information [Abstract]
Effective interest rate	7.45%	7.45%	7.45%
Face amount	$ 234,000,000
Secured debt | Lease credit facility
Long-term debt, net of current maturities
Long-term debt	0				11,000,000
Borrowings for assets acquired under long-term financing
Long-term debt, net of current maturities
Long-term debt	742,000,000				802,000,000
Mandatorily redeemable preferred stock outstanding
Long-term debt, net of current maturities
Long-term debt	$ 63,000,000				62,000,000
Debt Information [Abstract]
Effective interest rate	6.00%	6.00%	6.00%
Other borrowings
Long-term debt, net of current maturities
Long-term debt	$ 6,000,000				70,000,000
Minimum | Term loan | Term Loan Payable, AUD, Due 2022
Debt Information [Abstract]
Effective interest rate	0.94%	0.94%	0.94%
Minimum | Term loan | Term Loan Payable, GBP, Due 2022
Debt Information [Abstract]
Effective interest rate	0.88%	0.88%	0.88%
Minimum | Term loan | Term Loan Payable, USD, Due 2025
Debt Information [Abstract]
Effective interest rate	1.40%	1.40%	1.40%
Minimum | Secured debt | Lease credit facility
Debt Information [Abstract]
Effective interest rate	1.15%	1.15%	1.15%
Minimum | Finance lease liabilities
Debt Information [Abstract]
Effective interest rate	0.62%	0.62%	0.62%
Minimum | Borrowings for assets acquired under long-term financing
Debt Information [Abstract]
Effective interest rate	0.00%	0.00%	0.00%
Maximum | Term loan | Term Loan Payable, AUD, Due 2022
Debt Information [Abstract]
Effective interest rate	0.96%	0.96%	0.96%
Maximum | Term loan | Term Loan Payable, GBP, Due 2022
Debt Information [Abstract]
Effective interest rate	1.46%	1.46%	1.46%
Maximum | Term loan | Term Loan Payable, USD, Due 2025
Debt Information [Abstract]
Effective interest rate	2.24%	2.24%	2.24%
Maximum | Secured debt | Lease credit facility
Debt Information [Abstract]
Effective interest rate	1.99%	1.99%	1.99%
Maximum | Finance lease liabilities
Debt Information [Abstract]
Effective interest rate	18.47%	18.47%	18.47%
Maximum | Borrowings for assets acquired under long-term financing
Debt Information [Abstract]
Effective interest rate	6.39%	6.39%	6.39%
EURIBOR | Minimum | Term loan | Term Loan Payable, EUR, Due 2023-2024
Debt Information [Abstract]
Basis spread on variable rate	0.55%
EURIBOR | Maximum | Term loan | Term Loan Payable, EUR, Due 2023-2024
Debt Information [Abstract]
Basis spread on variable rate	1.05%
Commercial paper
Debt Information [Abstract]
Maximum borrowing capacity | €		€ 1,000,000,000
Commercial paper | Minimum
Debt Information [Abstract]
Weighted average interest rate, short- term debt	(0.22%)	(0.22%)	(0.22%)
Commercial paper | Maximum
Debt Information [Abstract]
Weighted average interest rate, short- term debt	0.44%	0.44%	0.44%
Finance Lease Liabilities | Minimum
Debt Information [Abstract]
Effective interest rate	0.62%	0.62%	0.62%
Finance Lease Liabilities | Maximum
Debt Information [Abstract]
Effective interest rate	18.47%	18.47%	18.47%
Revolving credit facility | Line of Credit
Long-term debt, net of current maturities
Long-term debt	$ 0				$ 1,500,000,000
Debt Information [Abstract]
Maximum borrowing capacity	$ 4,000,000,000.0
Revolving credit facility | Minimum | Line of Credit
Debt Information [Abstract]
Effective interest rate	1.26%	1.26%	1.26%
Revolving credit facility | Maximum | Line of Credit
Debt Information [Abstract]
Effective interest rate	2.08%	2.08%	2.08%

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Debt - Narrative (Details) $ in Millions	1 Months Ended				3 Months Ended							9 Months Ended
	Oct. 31, 2020 USD ($)	Oct. 31, 2020 GBP (£)	Oct. 31, 2020 AUD ($)	Oct. 31, 2020 EUR (€)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 GBP (£)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 GBP (£)	Jun. 30, 2020 AUD ($)	Jun. 30, 2020 EUR (€)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2020 GBP (£)	Dec. 31, 2020 EUR (€)
Debt Instrument [Line Items]
Repayments of debt	$ 3,500,000,000											$ 2,926,000,000	$ 1,029,000,000
Commercial paper
Debt Instrument [Line Items]
Maximum borrowing capacity | €															€ 1,000,000,000
Repayments of debt	772,000,000	£ 600,000,000
Senior notes | Senior Notes Due 2024 and 2026
Debt Instrument [Line Items]
Principal amount						$ 1,000,000,000.0
Senior notes | Senior Notes, Due 2024
Debt Instrument [Line Items]
Principal amount					$ 500,000,000	$ 500,000,000						$ 500,000,000
Effective interest rate					4.00%	4.00%						4.00%		4.00%	4.00%
Senior notes | Senior Notes, Due 2026
Debt Instrument [Line Items]
Principal amount					$ 500,000,000	$ 500,000,000						$ 500,000,000
Effective interest rate					4.13%	4.13%						4.13%		4.13%	4.13%
Senior notes | Senior notes due 2025
Debt Instrument [Line Items]
Principal amount | £														£ 250,000,000
Effective interest rate					2.75%							2.75%		2.75%	2.75%
Senior notes | Senior notes due 2026
Debt Instrument [Line Items]
Principal amount | €															€ 650,000,000
Effective interest rate					1.75%							1.75%		1.75%	1.75%
Term loan
Debt Instrument [Line Items]
Repayments of debt					$ 1,441,000,000
Term loan | Term Loan Payable, EUR, Due 2023
Debt Instrument [Line Items]
Repayments of debt | €											€ 500,000,000
Term loan | Term Loan Payable, EUR, Due 2022-2023
Debt Instrument [Line Items]
Effective interest rate					0.65%							0.65%		0.65%	0.65%
Repayments of debt	292,000,000			€ 250,000,000
Term loan | Term Loan Payable, GBP, Due 2022
Debt Instrument [Line Items]
Repayments of debt | £							£ 300,000,000		£ 150,000,000
Term loan | Term Loan Payable, AUD, Due 2022
Debt Instrument [Line Items]
Repayments of debt	358,000,000		$ 500							$ 300
Term loan | Term Loan Payable, USD, Due 2025
Debt Instrument [Line Items]
Repayments of debt	381,000,000							$ 100,000,000
Term loan | Term Loan Payable, EUR, Due 2023-2024
Debt Instrument [Line Items]
Effective interest rate					0.80%							0.80%		0.80%	0.80%
Repayments of debt	410,000,000			€ 350,000,000
Revolving credit facility | Line of Credit
Debt Instrument [Line Items]
Proceeds from debt issuance						$ 2,500,000,000
Maximum borrowing capacity					$ 4,000,000,000.0							$ 4,000,000,000.0
Repayments of debt	$ 1,250,000,000											$ 4,000,000,000.0

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Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Revenues	$ 4,288	$ 5,021	$ 13,344	$ 14,762
United States
Disaggregation of Revenue [Line Items]
Revenues	1,290	1,843	4,665	5,500
United Kingdom
Disaggregation of Revenue [Line Items]
Revenues	607	707	1,759	2,100
Other Europe
Disaggregation of Revenue [Line Items]
Revenues	1,335	1,329	3,784	3,819
Australia
Disaggregation of Revenue [Line Items]
Revenues	377	380	1,128	1,119
Other International
Disaggregation of Revenue [Line Items]
Revenues	$ 679	$ 762	$ 2,008	$ 2,224

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Revenue - Narrative (Details) $ in Billions	Dec. 31, 2020 USD ($)
Revenue from Contract with Customer [Abstract]
Remaining performance obligation	$ 24
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation percentage	14.00%
Remaining performance obligation period	3 months

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Revenue - Contract Balances (Details) - USD ($) $ in Millions	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019
Revenue from Contract with Customer [Abstract]
Trade receivables, net	$ 2,785	$ 3,059
Contract assets	418	454
Contract liabilities	$ 1,768	$ 1,756	$ 1,816	$ 1,886

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Revenue - Change in Contract Liabilities (Details) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Balance, beginning of period	$ 1,756	$ 1,886
Deferred revenue	2,111	2,091
Recognition of deferred revenue	(2,137)	(2,137)
Currency translation adjustment	146	12
Other	(108)	(36)
Balance, end of period	1,768	$ 1,816
HHS Business
Disaggregation of Revenue [Line Items]
Other	$ (54)

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Restructuring Costs (Details) $ in Millions	Dec. 31, 2020 USD ($)
Restructuring Reserve [Abstract]
Accrued expenses and other current liabilities	$ 261
Other long-term liabilities	60
Total	$ 321

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Restructuring Costs - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring costs	$ 104	$ 74	$ 441	$ 248
Fiscal 2020 Plan
Restructuring Cost and Reserve [Line Items]
Restructuring costs			3
Cost incurred to date	295		295
Fiscal 2020 Plan | Employee Severance
Restructuring Cost and Reserve [Line Items]
Restructuring costs			7
Cost incurred to date	278		278
Fiscal 2020 Plan | Facilities Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs			(4)
Cost incurred to date	17		17
Fiscal 2019 Plan
Restructuring Cost and Reserve [Line Items]
Restructuring costs			(5)
Cost incurred to date	477		477
Fiscal 2019 Plan | Employee Severance
Restructuring Cost and Reserve [Line Items]
Restructuring costs			(2)
Cost incurred to date	336		336
Fiscal 2019 Plan | Facilities Costs
Restructuring Cost and Reserve [Line Items]
Restructuring costs			(3)
Cost incurred to date	141		141
Fiscal 2018 Plan
Restructuring Cost and Reserve [Line Items]
Cost incurred to date	987		987
Fiscal 2018 Plan | Employee Severance
Restructuring Cost and Reserve [Line Items]
Cost incurred to date	791		791
Fiscal 2018 Plan | Facilities Costs
Restructuring Cost and Reserve [Line Items]
Cost incurred to date	$ 196		$ 196

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Restructuring Costs - Restructuring Liability (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Restructuring Reserve [Roll Forward]
Costs Expensed, Net of Reversals	$ 104	$ 74	$ 441	$ 248
Restructuring Liability, ending balance	321		321
Fiscal 2021 Plan
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			0
Costs Expensed, Net of Reversals			441
Costs Not Affecting Restructuring Liability			(18)
Cash Paid			(221)
Other			8
Restructuring Liability, ending balance	210		210		$ 0
Fiscal 2021 Plan | Workforce Reductions
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			0
Costs Expensed, Net of Reversals			416
Costs Not Affecting Restructuring Liability			(9)
Cash Paid			(210)
Other			9
Restructuring Liability, ending balance	206		206		0
Fiscal 2021 Plan | Facilities Costs
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			0
Costs Expensed, Net of Reversals			25
Costs Not Affecting Restructuring Liability			(9)
Cash Paid			(11)
Other			(1)
Restructuring Liability, ending balance	4		4		0
Fiscal 2020 Plan
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			76
Costs Expensed, Net of Reversals			3
Costs Not Affecting Restructuring Liability			6
Cash Paid			(51)
Other			5
Restructuring Liability, ending balance	39		39		76
Costs expensed, net of reversals			11
Fiscal 2020 Plan | Workforce Reductions
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			74
Costs Expensed, Net of Reversals			7
Costs Not Affecting Restructuring Liability			2
Cash Paid			(49)
Other			5
Restructuring Liability, ending balance	39		39		74
Costs expensed, net of reversals					14
Fiscal 2020 Plan | Facilities Costs
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			2
Costs Expensed, Net of Reversals			(4)
Costs Not Affecting Restructuring Liability			4
Cash Paid			(2)
Other			0
Restructuring Liability, ending balance	0		0		2
Fiscal 2019 Plan
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			30
Costs Expensed, Net of Reversals			(5)
Costs Not Affecting Restructuring Liability			(1)
Cash Paid			(13)
Other			3
Restructuring Liability, ending balance	14		14		30
Costs expensed, net of reversals			10
Fiscal 2019 Plan | Workforce Reductions
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			25
Costs Expensed, Net of Reversals			(2)
Costs Not Affecting Restructuring Liability			(3)
Cash Paid			(13)
Other			2
Restructuring Liability, ending balance	9		9		25
Fiscal 2019 Plan | Facilities Costs
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			5
Costs Expensed, Net of Reversals			(3)
Costs Not Affecting Restructuring Liability			2
Cash Paid			0
Other			1
Restructuring Liability, ending balance	5		5		5
Other Prior Year Plans
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			24
Costs Expensed, Net of Reversals			1
Costs Not Affecting Restructuring Liability			2
Cash Paid			(14)
Other			2
Restructuring Liability, ending balance	15		15		24
Costs expensed, net of reversals			3
Other Prior Year Plans | Workforce Reductions
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			24
Costs Expensed, Net of Reversals			1
Costs Not Affecting Restructuring Liability			2
Cash Paid			(14)
Other			2
Restructuring Liability, ending balance	15		15		24
Other Prior Year Plans | Facilities Costs
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			0
Costs Expensed, Net of Reversals			0
Costs Not Affecting Restructuring Liability			0
Cash Paid			0
Other			0
Restructuring Liability, ending balance	0		0		0
Acquired Liabilities
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			50
Costs Expensed, Net of Reversals			1
Costs Not Affecting Restructuring Liability			1
Cash Paid			(10)
Other			1
Restructuring Liability, ending balance	43		43		50
Acquired Liabilities | Workforce Reductions
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			39
Costs Expensed, Net of Reversals			1
Costs Not Affecting Restructuring Liability			0
Cash Paid			(7)
Other			1
Restructuring Liability, ending balance	34		34		39
Acquired Liabilities | Facilities Costs
Restructuring Reserve [Roll Forward]
Restructuring Liability, beginning balance			11
Costs Expensed, Net of Reversals			0
Costs Not Affecting Restructuring Liability			1
Cash Paid			(3)
Other			0
Restructuring Liability, ending balance	$ 9		$ 9		$ 11

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Pension and Other Benefit Plans - Narrative (Details) - USD ($) $ in Millions	3 Months Ended			9 Months Ended
	Dec. 31, 2020	Jun. 30, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Deferred compensation plan, liability	$ 45			$ 45		$ 48
Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Net loss from remeasurement of plan assets and liabilities	(80)		$ (80)	(229)	$ (219)
Curtailment gain	0		0	9	0
Recognition of actuarial loss	$ 0		$ 0	$ 11	$ 0
Foreign Plan [Member] | Pension Plans, Defined Benefit
Defined Benefit Plan Disclosure [Line Items]
Net loss from remeasurement of plan assets and liabilities		$ 2
Curtailment gain		9
Recognition of actuarial loss		$ 11
Directors
Defined Benefit Plan Disclosure [Line Items]
Maximum deferral percentage				100.00%

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Pension and Other Benefit Plans - Pension Plan, Net Periodic Costs and Other Changes (Details) - Pension Plans, Defined Benefit - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 23	$ 23	$ 68	$ 69
Interest cost	62	60	181	177
Expected return on assets	(163)	(161)	(477)	(476)
Amortization of prior service costs	(2)	(2)	(6)	(6)
Contractual termination benefit	0	0	3	17
Curtailment gain	0	0	(9)	0
Recognition of actuarial loss	0	0	11	0
Net periodic pension income	$ (80)	$ (80)	$ (229)	$ (219)

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Income Tax Contingency [Line Items]
Effective income tax rate	44.20%	29.10%	54.50%	(11.50%)
Foreign earnings not indefinitely reinvested	$ 547		$ 547
Potential federal and state tax cost	410		410
Decrease in liability for uncertain tax positions	13
Reasonably possible reduction in liability for uncertain tax positions	37		37
HPES
Income Tax Contingency [Line Items]
Tax indemnification payable, net	3		3
Tax indemnification receivable, uncertain tax positions	48		48
Tax indemnification receivable, tax indemnification payable	79		79
Tax indemnification payable	130		130
Perspecta
Income Tax Contingency [Line Items]
Tax indemnification payable	44		44
Tax indemnification receivable	$ 81		$ 81

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Stockholders' Equity - Share Repurchases (Details) - USD ($)	3 Months Ended			9 Months Ended
	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Dec. 31, 2020	Dec. 31, 2019	Nov. 08, 2018	Apr. 03, 2017
Equity [Abstract]
Initial authorization							$ 2,000,000,000.0
Additional authorization						$ 2,000,000,000.0
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased (in shares)	2,353,852	6,220,190	7,359,609	0	15,933,651
Average price per share (in dollars per share)	$ 36.68	$ 40.18	$ 54.35		$ 46.21
Amount	$ 86,000,000	$ 250,000,000	$ 400,000,000		$ 736,000,000
Open market purchases
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased (in shares)	2,353,852	4,414,840	5,510,415
Average price per share (in dollars per share)	$ 36.68	$ 33.96	$ 54.44
Amount	$ 86,000,000	$ 150,000,000	$ 300,000,000
Accelerated stock repurchases
Equity, Class of Treasury Stock [Line Items]
Number of shares repurchased (in shares)	0	1,805,350	1,849,194
Average price per share (in dollars per share)	$ 0	$ 55.39	$ 54.08
Amount	$ 0	$ 100,000,000	$ 100,000,000

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Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	$ 5,129	$ 11,725
Current-period other comprehensive income (loss)	203	76
Amounts reclassified from accumulated other comprehensive loss	(7)	(8)
Ending balance	5,995	9,101
Foreign Currency Translation Adjustments
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	(851)	(517)
Current-period other comprehensive income (loss)	197	78
Amounts reclassified from accumulated other comprehensive loss	0	0
Ending balance	(654)	(439)
Cash Flow Hedges
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	(20)	(3)
Current-period other comprehensive income (loss)	12	(4)
Amounts reclassified from accumulated other comprehensive loss	6	(2)
Ending balance	(2)	(9)
Available-for-sale Securities
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	9	9
Current-period other comprehensive income (loss)	(6)	2
Amounts reclassified from accumulated other comprehensive loss	0	0
Ending balance	3	11
Pension and Other Post-retirement Benefit Plans
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	259	267
Current-period other comprehensive income (loss)	0	0
Amounts reclassified from accumulated other comprehensive loss	(13)	(6)
Ending balance	246	261
Accumulated Other Comprehensive Loss
AOCI Including Portion Attributable to Noncontrolling Interest [Abstract]
Beginning balance	(603)	(244)
Ending balance	$ (407)	$ (176)

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Stock Incentive Plans - Narrative (Details) $ in Millions	3 Months Ended	9 Months Ended
	Dec. 31, 2020 USD ($) shares	Dec. 31, 2020 USD ($) anniversary shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Plan term		10 years
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $	$ 0	$ 0
Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares to be received (in shares) | shares	1	1
Total unrecognized compensation expense related to unvested awards, net of expected forfeitures | $	$ 146	$ 146
Weighted average period over which cost is expected to be recognized (in years)		2 years 21 days
Restricted Stock Units | Five Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual installments		5 years
Restricted Stock Units | Ten Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual installments		10 years
Restricted Stock Units | Fifteen Years
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Annual installments		15 years
Restricted Stock Units | Service-based RSU's
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of anniversaries over which shares are settled | anniversary		10
Performance-based Restricted Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years
Performance period		3 years
Award vesting rights, percentage		25.00%
DXC Share Purchase Plan | Stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares purchased under plan (in shares) | shares	12,232	41,425

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Stock Incentive Plans - Schedule of Share Based Compensation Shares Authorized (Details) - $ / shares	Dec. 31, 2020	Mar. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Reserved for issuance (in shares)	52,195,000
Available for future grants (in shares)	33,395,410
DXC Employee Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved for issuance (in shares)	51,200,000
Available for future grants (in shares)	32,794,274
DXC Director Equity Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved for issuance (in shares)	745,000
Available for future grants (in shares)	435,951
DXC Share Purchase Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Reserved for issuance (in shares)	250,000
Available for future grants (in shares)	165,185

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Stock Incentive Plans - Schedule of Options (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Additional Disclosures
Total intrinsic value of options exercised	$ 0	$ 1	$ 0	$ 8
Stock Options
Number of Option Shares
Outstanding beginning of period (in shares)			1,869,815
Granted (in shares)			0
Exercised (in shares)			(39,601)
Canceled/Forfeited (in shares)			0
Expired (in shares)			(82,614)
Outstanding end of period (in shares)	1,747,600		1,747,600		1,869,815
Weighted Average Exercise Price
Weighted average exercise price - beginning of period (in dollars per share)			$ 29.92
Weighted average exercise price - granted (in dollars per share)			0
Weighted average exercise price - exercised (in dollars per share)			17.43
Weighted average exercise price - canceled/forfeited (in dollars per share)			0
Weighted average exercise price - expired (in dollars per share)			31.24
Weighted average exercise price - end of period (in dollars per share)	$ 30.11		$ 30.11		$ 29.92
Additional Disclosures
Weighted average remaining contractual life (in years)			3 years 8 months 23 days		4 years 3 months 7 days
Aggregate intrinsic value	$ 3		$ 3		$ 0
Total intrinsic value of options exercised			$ 0
Vested and Exercisable
Outstanding (in shares)	1,747,600		1,747,600
Weighted average exercise price (in dollars per share)	$ 30.11		$ 30.11
Weighted average remaining contractual term			3 years 8 months 23 days
Aggregate intrinsic value	$ 3		$ 3

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Stock Incentive Plans - Schedule of RSUs (Details) - Restricted Stock Units	9 Months Ended
	Dec. 31, 2020 $ / shares shares
DXC Employee Equity Plan
Number of Shares
Equity instruments other than options nonvested - beginning balance (in shares) | shares	4,174,476
Equity instruments other than options nonvested - granted (in shares) | shares	7,576,602
Equity instruments other than options nonvested - settled (in shares) | shares	(1,045,190)
Equity instruments other than options nonvested - canceled/forfeited (in shares) | shares	(2,042,804)
Equity instruments other than options nonvested - ending balance (in shares) | shares	8,663,084
Weighted Average Grant Date Fair Value
Weighted average fair value other than options - beginning balance (in dollars per share) | $ / shares	$ 55.45
Weighted average fair value other than options - granted (in dollars per share) | $ / shares	18.67
Weighted average fair value other than options - settled (in dollars per share) | $ / shares	50.65
Weighted average fair value other than options - canceled/forfeited (in dollars per share) | $ / shares	36.14
Weighted average fair value other than options - ending balance (in dollars per share) | $ / shares	$ 28.43
DXC Director Equity Plan
Number of Shares
Equity instruments other than options nonvested - beginning balance (in shares) | shares	114,615
Equity instruments other than options nonvested - granted (in shares) | shares	118,500
Equity instruments other than options nonvested - settled (in shares) | shares	(48,455)
Equity instruments other than options nonvested - canceled/forfeited (in shares) | shares	0
Equity instruments other than options nonvested - ending balance (in shares) | shares	184,660
Weighted Average Grant Date Fair Value
Weighted average fair value other than options - beginning balance (in dollars per share) | $ / shares	$ 37.69
Weighted average fair value other than options - granted (in dollars per share) | $ / shares	18.82
Weighted average fair value other than options - settled (in dollars per share) | $ / shares	26.90
Weighted average fair value other than options - canceled/forfeited (in dollars per share) | $ / shares	0
Weighted average fair value other than options - ending balance (in dollars per share) | $ / shares	$ 28.42

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Stock Incentive Plans - Schedule of Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement [Abstract]
Total share-based compensation cost	$ 6	$ 9	$ 42	$ 57
Related income tax benefit	2	(3)	7	8
Total intrinsic value of options exercised	0	1	0	8
Tax benefits from exercised stock options and awards	$ 1	$ 3	$ 5	$ 13

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Cash Flows (Details) - USD ($) $ in Millions	9 Months Ended		12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Mar. 31, 2020
Cash paid for:
Interest	$ 262	$ 277
Taxes on income, net of refunds	159	202
Operating:
ROU assets obtained in exchange for lease, net	449	314
Prepaid assets acquired under long-term financing	46	23
Investing:
Capital expenditures in accounts payable and accrued expenses	16	121
Capital expenditures through finance lease obligations	277	507
Assets acquired under long-term financing	26	282
(Decrease) increase in deferred purchase price receivable	(52)	58
Contingent consideration	2	19
Financing:
Dividends declared but not yet paid	0	54
Income tax refunds	$ 31	$ 36
Change in lease classification from operating to finance lease			$ 87

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Segment Information - Segment Measures (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Revenues	$ 4,288	$ 5,021	$ 13,344	$ 14,762
Segment profit	300	528	773	1,709
Depreciation and amortization	361	333	1,078	981
Amortization of acquired intangible assets	114	146	414	435
Operating segments
Segment Reporting Information [Line Items]
Revenues	4,288	5,021	13,344	14,762
Segment profit	361	585	952	1,893
Depreciation and amortization	334	305	1,001	899
Operating segments | GBS
Segment Reporting Information [Line Items]
Revenues	1,921	2,359	6,337	6,803
Segment profit	273	353	805	1,078
Depreciation and amortization	53	61	162	128
Operating segments | GIS
Segment Reporting Information [Line Items]
Revenues	2,367	2,662	7,007	7,959
Segment profit	88	232	147	815
Depreciation and amortization	281	244	839	771
All Other
Segment Reporting Information [Line Items]
Revenues	0	0	0	0
Segment profit	(61)	(57)	(179)	(184)
Depreciation and amortization	$ 27	$ 28	$ 77	$ 82

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Segment Information - Reconciliation of Reportable Segment Profit to Consolidated (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Segment profit	$ 300	$ 528	$ 773	$ 1,709
Interest income	28	33	76	130
Interest expense	(82)	(93)	(284)	(288)
Restructuring costs	(104)	(74)	(441)	(248)
Transaction, separation and integration-related costs	(96)	(68)	(307)	(226)
Amortization of acquired intangible assets	(114)	(146)	(414)	(435)
Gain on disposition of businesses	2,046	0	2,046	0
Pension and OPEB actuarial and settlement losses	0	0	(2)	0
Goodwill impairment losses	0	(53)	0	(2,940)
Gain on arbitration award	0	0	0	632
Income (loss) before income taxes	1,978	127	1,447	(1,666)
Operating segments
Segment Reporting Information [Line Items]
Segment profit	361	585	952	1,893
All Other
Segment Reporting Information [Line Items]
Segment profit	$ (61)	$ (57)	$ (179)	$ (184)

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Commitments and Contingencies (Details) $ in Millions	9 Months Ended
	Dec. 31, 2020 USD ($)
Minimum purchase commitments [Abstract]
Remainder of 2021	$ 1,339
2022	1,093
2023	817
2024	227
Total	$ 3,476
Minimum
Long-term Purchase Commitment [Line Items]
Long-term purchase commitment, period	1 year
Maximum
Long-term Purchase Commitment [Line Items]
Long-term purchase commitment, period	5 years

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Commitments and Contingencies - Guarantor Obligations (Details) $ in Millions	Dec. 31, 2020 USD ($)
Guarantor Obligations [Line Items]
Remainder of Fiscal 2021	$ 87
Fiscal 2022	281
Fiscal 2023 and Thereafter	645
Total	1,013
Surety bonds
Guarantor Obligations [Line Items]
Remainder of Fiscal 2021	14
Fiscal 2022	93
Fiscal 2023 and Thereafter	87
Total	194
Letters of credit
Guarantor Obligations [Line Items]
Remainder of Fiscal 2021	37
Fiscal 2022	147
Fiscal 2023 and Thereafter	527
Total	711
Stand-by letters of credit
Guarantor Obligations [Line Items]
Remainder of Fiscal 2021	36
Fiscal 2022	41
Fiscal 2023 and Thereafter	31
Total	$ 108

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Commitments and Contingencies - Contingencies (Details) $ in Thousands			1 Months Ended									6 Months Ended	9 Months Ended	10 Months Ended
	Feb. 21, 2020 USD ($)	Aug. 06, 2019 USD ($)	Aug. 31, 2020 USD ($)	Jul. 31, 2020 USD ($)	Dec. 31, 2019 plaintiff	Oct. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($) plaintiff	Mar. 31, 2019 lawsuit officer	Oct. 31, 2018 plaintiff	Oct. 31, 2015 USD ($)	Oct. 02, 2015 administrator	Dec. 31, 2020 USD ($) individual	Dec. 31, 2020 USD ($)	Feb. 02, 2017 joint_venture	Feb. 29, 2016
Loss Contingencies [Line Items]
Number of partially-owned joint ventures involved in possible sanctions law violations | joint_venture															2
Strauch Fair Labor Standards Act Collective Action
Loss Contingencies [Line Items]
Number of plaintiffs | administrator												4,000
Number of system administrators filed consents with court to participate in FLSA collective | administrator												1,000
Number of individuals involved in collective action | individual													800
Amount awarded to plaintiffs		$ 18,750		$ 8,100
Loss contingency, damages sought							$ 14,100
Kemper Corporate Services, Inc. v. Computer Sciences Corporation
Loss Contingencies [Line Items]
Payments for litigation settlement	$ 60,000
Amount recovered from insurance carriers														$ 12,500
In re DXC Technology Company Securities Litigation
Loss Contingencies [Line Items]
Lawsuits filed | lawsuit									3
Perspecta-related Disputes, Separation and Distribution Agreement
Loss Contingencies [Line Items]
Loss contingency, damages sought						$ 120,000
Perspecta-related Disputes, Separation and Distribution Agreement, Increase One
Loss Contingencies [Line Items]
Loss contingency, damages sought													$ 500,000
Perspecta-related Disputes, Separation and Distribution Agreement, Increase Two
Loss Contingencies [Line Items]
Loss contingency, damages sought													800,000
Perspecta-related Disputes, Separation and Distribution Agreement, Increase Three
Loss Contingencies [Line Items]
Loss contingency, damages sought													$ 990,000
Perspecta-related Disputes, IT Services Agreement
Loss Contingencies [Line Items]
Loss contingency, damages sought			$ 31,000					$ 39,000
Settled litigation | Computer Sciences Corporation v. Eric Pulier et al.
Loss Contingencies [Line Items]
Loss contingency, legal fees percentage																80.00%
Settled litigation | Kemper Corporate Services, Inc. v. Computer Sciences Corporation
Loss Contingencies [Line Items]
Loss contingency, damages sought											$ 84,200
Settled litigation | Forsyth et al. v. HP Inc. and Hewlett Packard Enterprise
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff					142
Pending litigation | Kemper Corporate Services, Inc. v. Computer Sciences Corporation
Loss Contingencies [Line Items]
Loss contingency, damages sought											$ 100,000
Pending litigation | Forsyth et al. v. HP Inc. and Hewlett Packard Enterprise
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff								145		16
Officer | In re DXC Technology Company Securities Litigation
Loss Contingencies [Line Items]
Number of defendants | officer									1
Employees of Former Business Units of HPE | Settled litigation | Forsyth et al. v. HP Inc. and Hewlett Packard Enterprise
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff					35					7