DXC Technology Co
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed May 15, 2025
DXC$14.86-2.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-03-31; filed 2024-05-17.
0001688568-24-000032
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-03-31; filed 2025-05-15.
0001688568-25-000029
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 178 previous paragraphs and 181 current paragraphs.
99 unchanged; 57 reworded; 23 added; 22 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
•Income before income taxes was $630 million; adjusted earnings before income taxes was $1,019 million, an increase of 1.0% on an adjusted basis;
Current report
•Book-to-bill ratio (contract awards divided by annual revenue) of 1.03x, compared to 0.91x during fiscal 2024.
Current report
(1)Income before income taxes, Net income, and Diluted earnings per common share include Pension and OPEB actuarial and settlement (gains) and losses that were $(232) million and $445 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.
Current report
Reportable Segment Results
Current report
•Revenue was $6.6 billion, down 2.6% year-over-year (down 1.0% on an organic basis).
Current report
•Segment profit was $797 million, down 4.6% year-over-year, with a corresponding margin of 12.0%.
Current report
•Book-to-bill ratio of 1.03x, compared to 0.96x during fiscal 2024.
Current report
•Revenue was $6.2 billion, down 9.1% year-over-year (down 8.2% on an organic basis).
Current report
•Segment profit was $451 million, up 4.2% year-over-year, with a corresponding margin of 7.2%.
Current report
•Book-to-bill ratio of 1.03x, compared to 0.86x during fiscal 2024.
Current report
Selling, general and administrative expense ("SG&A") was $1.3 billion for fiscal 2025, an increase of $104 million compared to the prior fiscal year. The increase in expenses against the prior fiscal year was primarily due to an alignment of business development expenses from COS in support of the offering model and an increase in transaction, separation and integration-related (“TSI”) costs, partially offset by lower merger-related indemnification expenses, lower share-based compensation and a gain from a legal settlement in fiscal 2025.
Current report
Other (Income) Expense, Net
Current report
•losses (gains) on real estate and facility were $23 million and $(7) million, respectively, a change of $30 million;
Current report
•The global mix of income and changes in foreign statutory tax rates, which increased the foreign tax rate differential and the ETR by $145 million and 23.0%, respectively.
Current report
•The tax benefit of changes in uncertain tax positions related to the expiration of the statute of limitations and capitalized research and experimental expenditures, offset by the impact of increases in other uncertain tax positions and accrued interest, which decreased income tax expense and the ETR by $52 million and 8.3%, respectively.
Current report
The U.S. Tax Court cases generally involve three primary issues. The first issue pertains to a capital loss the Company claimed in fiscal year 2013 in the amount of $651 million, which the IRS subsequently disallowed, and for which it proposed a substantial understatement penalty. The total cash tax payment the IRS is seeking is approximately $469 million, inclusive of penalties and interest, which continues to accrue. The matter is currently scheduled for trial in August 2025.
Current report
The second issue pertains to the Company’s deduction for restructuring expenses in fiscal year 2013 in the amount of $146 million, which the IRS has disputed. The total cash tax payment the IRS is seeking is approximately $101 million, inclusive of penalties and interest, which continues to accrue. In January 2025, the Court denied the IRS’s motion for summary judgment. A trial date is pending.
Current report
The third issue primarily pertains to foreign currency losses from 2009 that the Company claimed in fiscal years 2010 and 2011 in the amount of $165 million, resulting from the depreciation of the U.S. dollar against the Euro over an eight-year period (from 2001 to 2009) upon termination of a partnership interest involving two entities with different functional currencies. The total cash tax payment the IRS is seeking is approximately $124 million, inclusive of penalties and interest, which continues to accrue. This matter is currently pending a summary judgment motion from the IRS.
Current report
(2) Calculation is not meaningful ("NM") due to inclusion of Pension and OPEB actuarial and settlement gains and losses.
Current report
•Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property.(1)
Current report
(1) Starting in the fiscal quarter ended September 30, 2024, the Company’s reported non-GAAP financial results reflect an adjustment for gains and losses on real estate and facilities dispositions, which the Company’s current management believes are not reflective of the core operating performance of our business. For comparability purposes, historical non-GAAP financial measures set forth herein have been recast to reflect this change, which included gains on dispositions of real property of approximately $7 million for the fiscal year ended March 31, 2024.
Current report
•a $11 million unfavorable change in working capital due to higher working capital outflows during fiscal 2025.
Current report
As of March 31, 2025, the Company had undistributed earnings from foreign subsidiaries that were not indefinitely reinvested and had a deferred tax liability of $32 million for the estimated taxes associated with the repatriation of these earnings. The Company also had undistributed earnings of approximately $1.4 billion and other outside basis differences in foreign subsidiaries that were indefinitely reinvested in foreign operations. No taxes have been provided on the undistributed foreign earnings and outside basis differences that are indefinitely reinvested. If future events, including material changes in estimates of cash, working capital and long-term investment requirements, necessitate that these earnings be distributed, an additional provision for taxes may apply, which could materially affect our future effective tax rate.
Removed paragraphs (22)
Previous report
•Returned $883 million to shareholders through share repurchases in fiscal 2024.
Previous report
Total revenue for fiscal 2024 was $13.7 billion, a decrease of $763 million or 5.3%, compared to the prior fiscal year. The 5.3% decrease against the comparative period includes a 0.7% favorable foreign currency exchange rate impact, a 1.9% decline in revenue from the disposition of certain businesses, and a 4.1% decline in organic revenue. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures."
Previous report
The favorable foreign currency exchange rate impact is primarily driven by the weakening of the U.S. dollar against the British Pound and Euro.
Previous report
GBS revenues were $6.8 billion for fiscal 2024, a decrease of $140 million or 2.0% compared to fiscal 2023. The 2.0% decrease against the comparative period includes a 3.8% decline in revenue from the disposition of certain businesses, partially offset by 1.4% organic revenue growth from additional services provided to new and existing customers and a 0.4% favorable foreign currency exchange rate impact.
Previous report
GIS revenues were $6.8 billion for fiscal 2024, a decrease of $623 million or 8.3% compared to fiscal 2023. The 8.3% decrease against the comparative period includes a 1.0% favorable foreign currency exchange rate impact offset by a 9.3% decline in organic revenue from project completions, early terminations, and lower resale revenue.
Previous report
Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), were $10.6 billion for fiscal 2024, a decrease of $670 million compared to the prior fiscal year.
Previous report
Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), was $1.2 billion for fiscal 2024, a decrease of $131 million compared to the prior fiscal year.
Previous report
The $131 million decrease in expenses against the prior fiscal year was primarily due to a reduction of $30 million in costs related to merger related indemnification expenses, a decrease of $9 million in transaction, separation and integration-related (“TSI”) costs, and lower professional services and other vendor-related expenses in fiscal 2024. In addition, the prior year included a $29 million expense for arbitration-related losses and an $8 million expense for the SEC Matter. These decreases in expense were partially offset by a $5 million unfavorable foreign currency exchange rate impact.
Previous report
During fiscal 2023, the Company had a net gain of $190 million from the disposition of certain businesses, including a pre-tax gain of $215 million from the sale of its FDB business, partially offset by a loss of $25 million from the sale of certain insignificant businesses.
Previous report
Other Expense (Income), Net
Previous report
•a decrease in gains from sales of assets of $50 million; and
Previous report
•A reduction in base erosion and transition taxes, which increased income tax benefit and decreased the ETR by $81 million and 9.1%, respectively.
Previous report
•Non-taxable gains and losses on business divestitures, which increased income tax benefit and decreased the ETR by $67 million and 7.6%, respectively.
Previous report
•SEC Matter - represents the Company’s liability related to a previously disclosed investigation into its historical determination and disclosure of certain “transaction, separation, and integration-related costs” as part of the Company’s non-GAAP adjustments.
Previous report
•Arbitration loss - reflects losses arising from arbitration decisions in the third and fourth quarters of fiscal 2023.
Previous report
(1)During fiscal 2024, the Company sold insignificant businesses and a strategic investment and made adjustments to estimated amounts from prior years’ dispositions that resulted in a net gain of $115 million. During fiscal 2023, the Company had a net gain of $190 million from the disposition of certain businesses, including a pre-tax gain of $215 million from the sale of its FDB business partially offset by a loss of $25 million from the sale of certain insignificant businesses.
Previous report
(2) Impairment losses on dispositions for fiscal 2024 include $5 million of charges associated with certain strategic investments accounted for within Other income, net. Impairment losses on dispositions for fiscal 2024 included $4 million of Net income attributable to non-controlling interest, net of tax. Impairment losses for fiscal 2023 include an $8 million impairment charge for customer related intangible assets and an $11 million impairment charge associated with a strategic investment.
Previous report
(3)Tax adjustments for fiscal 2024 include $(92) million of changes in valuation allowances on deferred tax assets, $(7) million of adjustments to transition tax, and $2 million of revaluation of deferred taxes resulting from changes in non-U.S. jurisdiction tax rates. Tax adjustments for fiscal 2023 include $(5) million changes in valuation allowances on deferred tax assets, $(28) million of adjustments to transition tax, and $(87) million of revaluation of deferred taxes resulting from changes in non-U.S. jurisdiction tax rates.
Previous report
•a $160 million favorable change in working capital primarily from improvements in our cash conversion cycle.
Previous report
•cash inflows of $26 million in fiscal 2024 resulting from various business divestitures, compared with cash outflows from business dispositions of $147 million in fiscal 2023 caused by net cash deposit outflows from the sale of the FDB Business; and
Previous report
•$63 million in payments on long term debt in fiscal 2023 that did not occur in fiscal 2024; partially offset by
Previous report
The majority of our global unremitted foreign earnings have been taxed or would be exempt from U.S. tax upon repatriation. Such earnings and all current foreign earnings are not indefinitely reinvested. The following earnings are considered indefinitely reinvested: approximately $480 million that could be subject to U.S. federal tax when repatriated to the U.S. under section 1.245A-5(b) of the final Treasury regulations; and approximately $200 million of our accumulated earnings in India. A portion of these indefinitely reinvested earnings may be subject to foreign and U.S. state tax consequences when remitted. The Company will continue to evaluate its position based on its future strategy and cash needs.
Reworded paragraphs (57)
Previous wording
DXC helps global companies run their mission critical systems and operations while modernizing IT, optimizing data architectures, and ensuring security and scalability across public, private and hybrid clouds. The world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness, and customer experience across their IT estates.
Current wording
DXC 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. Many of the world’s largest companies and public sector organizations trust DXC to deploy services to drive new levels of performance, competitiveness, and customer experience across their IT estates.
Previous wording
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 customers through our direct sales offices around the world. Our customers include commercial businesses of many sizes and in many industries and public sector clients.
Current wording
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 customers through our direct sales force around the world. Our customers include commercial businesses of many sizes and in many industries and public sector clients.
Previous wording
Key metrics for fiscal 2024 compared to fiscal 2023 are included below. We have presented organic revenue and diluted earnings per share on a non-GAAP basis. For more information see “Non-GAAP Financial Measures.”
Current wording
Key profitability and cash flow metrics for fiscal 2025 compared to fiscal 2024 are included below. We have presented organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share on a non-GAAP basis. For more information see “Non-GAAP Financial Measures.”
Previous wording
•Revenues of $13.67 billion, down 5.3% compared to prior year period, and down 4.1% on an organic basis;
Current wording
•Revenues of $12.87 billion, down 5.8% compared to prior year period, and down 4.6% on an organic basis;
Previous wording
•Diluted earnings (loss) per share of $0.46, compared to $(2.48) in fiscal 2023; adjusted diluted earnings per share of $3.13, compared to $3.47 in fiscal 2023, a decrease of 9.8%;
Current wording
•Diluted earnings per share of $2.10, compared to $0.46 in fiscal 2024; adjusted diluted earnings per share of $3.43, compared to $3.10 in fiscal 2024, an increase of 10.6%;
Previous wording
•Operating cash flow of $1,361 million, less capital expenditures of $605 million, resulted in free cash flow of $756 million;
Current wording
•Cash generated from operations was $1,398 million, less capital expenditures of $711 million, resulted in free cash flow of $687 million.
Previous wording
(1) Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures."
Current wording
(1)Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. This information is consistent with how management views our revenues and evaluates our operating performance and trends. For more information, see "Non-GAAP Financial Measures."
Previous wording
For a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors."
Current wording
Total revenue for fiscal 2025 was $12.9 billion, a decline of $796 million or 5.8%, compared to the prior fiscal year, primarily driven by a 4.6% decline in organic revenue and a 1.0% unfavorable foreign currency exchange rate impact. Organic revenue is a non-GAAP measure, as discussed in our "Non-GAAP Financial Measures." In addition, for a discussion of risks associated with our foreign operations, see Part I, Item 1A - "Risk Factors."
Previous wording
The $670 million decrease in expenses against the prior fiscal year was primarily due to a reduction in labor costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts, partially offset by a $9 million severance expense in the third quarter of fiscal 2024 related to the departure of the Company’s prior Chief Executive Officer and an unfavorable foreign currency exchange rate impact of $64 million.
Current wording
Costs of services ("COS") were $9.8 billion for fiscal 2025, a decrease of $806 million compared to the prior fiscal year. The decrease in expenses against the prior fiscal year was primarily due to a decline in costs from lower revenue levels and a reduction in professional services and contractor-related expenses from our cost optimization efforts.
Previous wording
Gross margin (Revenues less COS as a percentage of revenue) was 22.6% for fiscal 2024, an increase of 50 basis points against the prior fiscal year.
Current wording
Gross margin (Revenues less COS as a percentage of revenue) was 24.1% for fiscal 2025, an increase of 150 basis points against the prior fiscal year.
Previous wording
SG&A as a percentage of revenue was 9.1% for fiscal 2024, a favorable decrease of 40 basis points against the prior fiscal year.
Current wording
SG&A as a percentage of revenue was 10.5% for fiscal 2025, an increase of 140 basis points against the prior fiscal year.
Previous wording
Depreciation expense was $433 million for fiscal 2024, a decrease of $86 million compared to the prior fiscal year. The decrease in depreciation expense was primarily due to lower average net property and equipment balances.
Current wording
Depreciation expense was $351 million for fiscal 2025, a decrease of $82 million compared to the prior fiscal year. The decrease in depreciation expense was primarily due to lower average net property and equipment balances.
Previous wording
Amortization expense was $971 million for fiscal 2024, a decrease of $29 million compared to the prior fiscal year. The decrease in amortization expense was primarily due to lower software amortization and customer related intangible amortization, partially offset by an increase in transition and transformation contract cost amortization.
Current wording
Amortization expense was $936 million for fiscal 2025, a decrease of $35 million compared to the prior fiscal year. The decrease in amortization expense was primarily due to lower software amortization.
Previous wording
During fiscal 2024, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. Total restructuring costs recorded, net of reversals, during fiscal 2024 were $111 million, a decrease of $105 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses.
Current wording
During fiscal 2025, management approved global cost savings initiatives designed to better align our workforce, facility, and data center requirements. Total restructuring costs recorded, net of reversals, during fiscal 2025 were $153 million, an increase of $42 million compared to the prior fiscal year, primarily from a reduction in workforce-related expenses.
Previous wording
For fiscal 2024, net interest expense (interest expense less interest income) was $84 million, an increase of $19 million as compared to the prior fiscal year.
Current wording
For fiscal 2025, net interest expense (interest expense less interest income) was $66 million, a decrease of $18 million as compared to the prior fiscal year.
Previous wording
The increase in net interest expense against the comparative period was primarily due to higher interest rates globally that increased interest expense from securitization and commercial paper borrowings.
Current wording
The decrease in net interest expense against the comparative period was primarily due to decreased interest expense from lower levels of asset financing and commercial paper, and higher net interest income from cash deposits.
Previous wording
During fiscal 2024, the Company sold insignificant businesses and a strategic investment, and made adjustments to estimated amounts from prior years' dispositions that resulted in a net gain of $79 million.
Current wording
During fiscal 2025 and fiscal 2024, the Company sold insignificant businesses and made adjustments to estimated amounts from prior years’ dispositions that resulted in a gain of $7 million and $79 million, respectively.
Previous wording
Other expense (income), net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, gains on sales of assets, and other miscellaneous gains and losses.
Current wording
Other (income) expense, net comprises non-service cost components of net periodic pension income, pension and OPEB actuarial and settlement (gains) losses, movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses (gains) on real estate and facility sales, and other miscellaneous (gains) and losses.
Previous wording
The components of other expense (income), net for fiscal 2024 and 2023 were as follows:
Current wording
The components of other (income) expense, net were as follows:
Previous wording
Other expense (income), net, was $218 million in fiscal 2024, a decrease of $866 million against the prior fiscal year. The change against the prior fiscal year was primarily due to:
Current wording
Other (income) expense, net, was $(376) million in fiscal 2025, a change of $594 million against the prior fiscal year. The change against the prior fiscal year was primarily due to:
Previous wording
•net periodic pension income decreased by $106 million primarily due to changes in expected returns on assets and other actuarial assumptions;
Current wording
•net periodic pension income increased by $15 million primarily due to changes in expected returns on assets and other actuarial assumptions;
Previous wording
•pension and OPEB actuarial and settlement losses decreased by $986 million from mark-to-market adjustments and other settlement gains and losses;
Current wording
•pension and OPEB actuarial and settlement (gains) losses were $(232) million and $445 million, respectively, a change of $677 million, from mark-to-market adjustments and other settlement (gains) losses;
Previous wording
•foreign currency gains decreased $8 million primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
Current wording
•foreign currency gains decreased $3 million, primarily due to movements of exchange rates on our foreign currency-denominated assets and liabilities, related hedges including forward contracts to manage our exposure to economic risk, and the cost of our hedging program;
Previous wording
•an increase in other gains of $44 million, primarily from the sale of a strategic investment in fiscal 2024 and an impairment loss recorded in fiscal 2023.
Current wording
•a decrease in other miscellaneous (gains) and losses of $65 million, primarily from impairment losses in fiscal 2025 and the gain on the sale of a strategic investment in fiscal 2024.
Previous wording
Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2024 and 2023 was 21.1% and (36.0)%, respectively. A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes."
Current wording
Our effective tax rate ("ETR") on income (loss) from continuing operations, before taxes, for fiscal 2025 and 2024 was 37.1% and 21.1%, respectively. A reconciliation of the differences between the U.S. federal statutory rate and the ETR, as well as other information about our income tax provision, is provided in Note 14 - "Income Taxes."
Previous wording
•Income tax and foreign tax credits, which increased income tax benefit and decreased the ETR by $71 million and 8.0%, respectively, offset by tax expense on U.S. international tax inclusions which decreased tax benefit and increased the ETR by $51 million and 5.8%, respectively.
Current wording
•Income tax and foreign tax credits, which decreased income tax expense and the ETR by $84 million and 13.3%, respectively, offset by tax expense on U.S. international tax inclusions, which increased tax expense and the ETR by $59 million and 9.4%, respectively.
Previous wording
The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal 2009 through the tax year ended October 31, 2018. With respect to CSC’s fiscal 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals. The IRS examined several issues for these tax years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs, foreign exchange losses, and a third-party financing transaction in previous years. As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S. Tax Court, these matters are not fully reserved and would result in incremental federal and state tax expense of approximately $507 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $582 million, if we do not prevail. We have received notices of deficiency with respect to fiscal 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court. During fiscal 2024, some of these cases were dismissed, but the dismissals were procedural in nature only and do not impact the Company’s potential liability for the aforementioned fiscal years. We expect court proceedings to progress during calendar year 2024 that may result in resolution of some or all of the litigation matters by the end of fiscal year 2025.
Current wording
The Internal Revenue Service (the “IRS”) has examined, or is examining, the Company’s federal income tax returns for fiscal years 2009 through the tax year ended October 31, 2018. With respect to CSC’s fiscal years 2009 through 2017 federal tax returns, the Company participated in settlement negotiations with the IRS Office of Appeals. The IRS examined several issues for these tax years that resulted in various audit adjustments. The Company and the IRS Office of Appeals have settled various audit adjustments, and we disagree with the IRS’ disallowance of certain losses and deductions resulting from restructuring costs, foreign exchange losses, and a third-party financing transaction in previous years.
Previous wording
During the third quarter of fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures. The Company notified the IRS in December of 2023 and filed for relief under Treas. Reg. Sec. 1.367(a)-8(p) in January 2024 to correct the issue.
Current wording
During fiscal 2024, the Company determined there were inadvertent omissions on previously filed tax returns related to gain recognition agreements and certain related tax forms and disclosures. The Company notified the IRS promptly and filed for relief under Treas. Reg. Sec. 1.367(a)-8(p) to correct the issue.
Previous wording
The Company’s fiscal years 2009, 2010, and 2013 are in the U.S. Tax Court, and consequently these years will remain open until such proceedings have concluded. The statute of limitations on assessments related to a refund claim for fiscal year 2012 is open through February 28, 2025. The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2025. The Company expects to reach resolution for fiscal and tax return years 2009 through 2021 no earlier than the end of fiscal year 2026, except fiscal year 2012 for which the statute closes in fiscal year 2025, and potentially the years subject to litigation which may be resolved in fiscal year 2025.
Current wording
The Company’s fiscal years 2009, 2010, and 2013 are in the U.S. Tax Court, and consequently these years will remain open until such proceedings have concluded. The Company has agreed to extend the statute of limitations for fiscal and tax return years 2014 through 2021 to December 31, 2025. The Company expects to reach resolution for fiscal and tax return years 2009 through 2011 no earlier than fiscal year 2026. The Company expects to reach resolution for fiscal and tax return years 2012 and 2013 no earlier than fiscal year 2028. The Company expects to reach resolution for fiscal and tax return years 2014 through 2021 no earlier than fiscal year 2026.
Previous wording
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future. The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $17 million.
Current wording
The Company may settle certain other tax examinations for different amounts than the Company has accrued as uncertain tax positions. Consequently, the Company may need to accrue and ultimately pay additional amounts or pay lower amounts than previously estimated and accrued when positions are settled in the future. The Company believes the outcomes that are reasonably possible within the next 12 months to result in a reduction in its liability for uncertain tax positions, excluding interest, penalties, and tax carryforwards, would be approximately $2 million.
Previous wording
Diluted EPS for fiscal 2024 was $0.46, an increase of $2.94 compared to the prior fiscal year. The increase in diluted EPS against the prior fiscal year was primarily due to an increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.
Current wording
Diluted EPS for fiscal 2025 was $2.10, an increase of $1.64 compared to the prior fiscal year. The increase in diluted EPS against the prior fiscal year was primarily due to an increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases.
Previous wording
Diluted EPS for fiscal 2024 includes $0.44 per share of restructuring costs, $0.03 per share of transaction, separation and integration-related costs, $1.40 per share of amortization of acquired intangible assets, $0.01 per share of merger-related indemnification, $0.04 per share of impairment losses, $1.68 per share of pension and OPEB actuarial and settlement losses, $(0.45) per share of net gains on dispositions, and $(0.49) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation.
Current wording
Diluted EPS for fiscal 2025 includes $0.65 per share of restructuring costs, $0.11 per share of transaction, separation and integration-related costs, $1.47 per share of amortization of acquired intangible assets, $(0.02) per share of merger-related indemnification, $0.09 per share of impairment losses, $(0.05) per share of net gains on dispositions, $0.08 per share of net losses on real estate and facility sales, $(0.89) per share of pension and OPEB actuarial and settlement gains, and $(0.09) per share of tax adjustments primarily relating to tax adjustments to impair or recognize certain deferred tax assets and adjustments for changes in tax legislation.
Previous wording
We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses.
Current wording
We believe EBIT, adjusted EBIT, non-GAAP income before income taxes, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS provide investors with useful supplemental information about our operating performance after excluding certain categories of expenses as well as gains and losses on certain dispositions and certain tax adjustments.
Previous wording
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS is incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangible 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.
Current wording
One category of expenses excluded from adjusted EBIT, non-GAAP income before income tax, non-GAAP net income, non-GAAP net income attributable to DXC common stockholders, and non-GAAP EPS, incremental amortization of intangible assets acquired through business combinations, if included, may result in a significant difference in period over period amortization expense on a GAAP basis. We exclude amortization of certain acquired intangible 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.
Previous wording
(1)The dollar and percent change for the Income (loss) before income taxes and Net income (loss) includes the Pension and OPEB actuarial and settlement gains and losses that were $445 million and $1,431 million for the fiscal years ended March 31, 2024 and March 31, 2023, respectively.
Current wording
(1)The dollar and percent change for Income before income taxes and Net income include Pension and OPEB actuarial and settlement (gains) and losses that were $(232) million and $445 million for the fiscal years ended March 31, 2025 and March 31, 2024, respectively.
Previous wording
•Merger related indemnification – in fiscal 2024, primarily represents the Company’s current estimate of potential liability to HPE for tax related indemnifications; and in fiscal 2023, represents the Company’s then current estimate of potential liability to HPE for tax related indemnifications; indemnification on the Forsyth v. HP Inc. and HPE litigation; and the Company’s final liability to HPE on the Oracle v. HPE litigation. These obligations are related to the HPES merger.
Current wording
•Merger related indemnification – in fiscal 2025 and fiscal 2024, represents the Company’s estimate of potential net liability to HPE for tax related indemnifications.
Previous wording
•Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.(1)
Current wording
•Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities.
Previous wording
•Impairment losses – non-cash charges associated with the permanent reduction in the value of the Company’s assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances). Future discrete reversals of valuation allowances are likewise excluded.(2)
Current wording
•Impairment losses – non-cash charges associated with the permanent reduction in the value of the Company’s assets (e.g., impairment of goodwill and other long-term assets including fixed assets and impairments to deferred tax assets for discrete changes in valuation allowances). Future discrete reversals of valuation allowances are likewise excluded.
Previous wording
•Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of merger and divestitures is separately computed based on the underlying transaction. Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.(3)
Current wording
•Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation, and adjustments to transition tax. Income tax expense (benefit) from the impact of mergers and divestitures is separately computed based on the underlying transaction. Income tax expense of all other (non-discrete) non-GAAP adjustments is computed by applying the jurisdictional tax rate to the pre-tax adjustments on a jurisdictional basis.
Previous wording
Reconciliations of net income (loss) to adjusted EBIT are as follows:
Current wording
Reconciliations of net income to adjusted EBIT are as follows:
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We have received notices of deficiency and a final partnership administrative adjustment with respect to fiscal years 2009, 2010, 2011 and 2013 and have timely filed petitions with the U.S. Tax Court.
Current report — wording carried from elsewhere
As we believe we will ultimately prevail on the technical merits of the disagreed items and are challenging them in the U.S. Tax Court, the above matters are not fully reserved and would result in incremental federal and state tax expense of approximately $544 million (including estimated interest and penalties) for the unreserved portion of these items and cash tax payments of approximately $623 million if we do not prevail. These amounts are net of an expected $71 million interest deduction tax benefit.