DXC Technology CoDXC
DXC Technology Co Leases Disclosure
Leases
The Company has operating and finance leases for data centers, corporate offices, and certain equipment. Its leases have remaining lease terms of to 10 years, some of which include options to extend the leases for up to years, and some of which include options to terminate the leases within to three years.
Operating Leases
The components of operating lease expense were as follows:
| For the Fiscal Year Ended | ||||||||||||||||||||
| (in millions) | March 31, 2026 | March 31, 2025 | March 31, 2024 | |||||||||||||||||
| Operating lease cost | $ | 305 | $ | 309 | $ | 353 | ||||||||||||||
| Short-term lease cost | 14 | 26 | 28 | |||||||||||||||||
| Variable lease cost | 69 | 52 | 61 | |||||||||||||||||
| Sublease income | (13) | (17) | (19) | |||||||||||||||||
| Total operating costs | $ | 375 | $ | 370 | $ | 423 | ||||||||||||||
Cash payments made for variable lease costs and short-term leases are not included in the measurement of operating lease liabilities, and as such, are excluded from the supplemental cash flow information stated below.
| For the Fiscal Year Ended | ||||||||||||||||||||
| (in millions) | March 31, 2026 | March 31, 2025 | March 31, 2024 | |||||||||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows | $ | 305 | $ | 309 | $ | 353 | ||||||||||||||
ROU assets obtained in exchange for operating lease liabilities(1) | $ | 308 | $ | 241 | $ | 175 | ||||||||||||||
(1) There were $596 million, $703 million, and $880 million in modifications and terminations in fiscal 2026, 2025, and 2024, respectively. See Note 17 – "Cash Flows” for further information on non-cash activities affecting cash flows.
The following table presents operating lease balances:
| As of | ||||||||||||||||||||
| (in millions) | Balance Sheet Line Item | March 31, 2026 | March 31, 2025 | |||||||||||||||||
| ROU operating lease assets | Operating right-of-use assets, net | $ | 663 | $ | 635 | |||||||||||||||
| Operating lease liabilities | Current operating lease liabilities | $ | 232 | $ | 227 | |||||||||||||||
| Operating lease liabilities | Non-current operating lease liabilities | 463 | 444 | |||||||||||||||||
| Total operating lease liabilities | $ | 695 | $ | 671 | ||||||||||||||||
The weighted-average operating lease term was 3.7 years and 3.8 years as of March 31, 2026 and March 31, 2025, respectively. The weighted-average operating lease discount rate was 4.9% as of both March 31, 2026 and March 31, 2025, respectively.
The following maturity analysis presents expected undiscounted cash payments for operating leases as of March 31, 2026:
Fiscal Year | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2027 | 2028 | 2029 | 2030 | 2031 | Thereafter | Total | |||||||||||||||||||||||||||||||||||||
Operating lease payments | $ | 261 | $ | 213 | $ | 150 | $ | 58 | $ | 36 | $ | 48 | $ | 766 | ||||||||||||||||||||||||||||||
Less: imputed interest | (71) | |||||||||||||||||||||||||||||||||||||||||||
Total operating lease liabilities | $ | 695 | ||||||||||||||||||||||||||||||||||||||||||
Finance Leases
The components of finance lease expense were as follows:
| For the Fiscal Year Ended | ||||||||||||||||||||
| (in millions) | March 31, 2026 | March 31, 2025 | March 31, 2024 | |||||||||||||||||
| Amortization of right-of-use assets | $ | 48 | $ | 81 | $ | 137 | ||||||||||||||
| Interest on lease liabilities | 10 | 14 | 15 | |||||||||||||||||
| Total finance lease cost | $ | 58 | $ | 95 | $ | 152 | ||||||||||||||
The following table provides supplemental cash flow information related to the Company’s finance leases:
| For the Fiscal Year Ended | ||||||||||||||||||||
| (in millions) | March 31, 2026 | March 31, 2025 | March 31, 2024 | |||||||||||||||||
| Interest paid for finance lease liabilities – Operating cash flows | $ | 10 | $ | 14 | $ | 15 | ||||||||||||||
| Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows | 136 | 200 | 240 | |||||||||||||||||
| Total cash paid in the measurement of finance lease obligations | $ | 146 | $ | 214 | $ | 255 | ||||||||||||||
Capital expenditures through finance lease obligations(1) | $ | 7 | $ | 24 | $ | 105 | ||||||||||||||
(1) See Note 17 – ”Cash Flows” for further information on non-cash activities affecting cash flows.
The following table presents finance lease balances:
| As of | ||||||||||||||||||||
| (in millions) | Balance Sheet Line Item | March 31, 2026 | March 31, 2025 | |||||||||||||||||
| ROU finance lease assets | $ | 74 | $ | 145 | ||||||||||||||||
| Finance lease | $ | 92 | $ | 123 | ||||||||||||||||
| Finance lease | 82 | 155 | ||||||||||||||||||
Total finance lease liabilities(1) | $ | 174 | $ | 278 | ||||||||||||||||
(1) See Note 10 – “Debt” for further information on finance lease liabilities.
The weighted-average finance lease term was 2.3 years and 2.7 years as of March 31, 2026 and March 31, 2025, respectively. The weighted-average finance lease discount rate was 6.0% and 5.6% as of March 31, 2026 and March 31, 2025, respectively.
The following maturity analysis presents expected undiscounted cash payments for finance leases as of March 31, 2026:
Fiscal Year | ||||||||||||||||||||||||||||||||||||||||||||
(in millions) | 2027 | 2028 | 2029 | 2030 | 2031 | Thereafter | Total | |||||||||||||||||||||||||||||||||||||
Finance lease payments | $ | 99 | $ | 57 | $ | 24 | $ | 4 | $ | 1 | $ | 3 | $ | 188 | ||||||||||||||||||||||||||||||
Less: imputed interest | (14) | |||||||||||||||||||||||||||||||||||||||||||
Total finance lease liabilities | $ | 174 | ||||||||||||||||||||||||||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | May 8, 2026 | Showing above |
| 2025 | May 15, 2025 | |
| 2024 | May 17, 2024 | |
| 2023 | May 19, 2023 | |
| 2022 | May 26, 2022 | |
| 2021 | May 28, 2021 | |
| 2020 | Jun 1, 2020 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.