DXC Technology CoDXC

DXC Technology Co Leases Disclosure

10-KFiled May 15, 20253 min read
Leases
The Company has operating and finance leases for data centers, corporate offices and certain equipment. Our leases have remaining lease terms of one to 10 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.
Operating Leases

The components of operating lease expense were as follows:
For the Fiscal Year Ended
(in millions)March 31, 2025March 31, 2024March 31, 2023
Operating lease cost$309 $353 $404 
Short-term lease cost 26 28 35 
Variable lease cost52 61 73 
Sublease income(17)(19)(18)
    Total operating costs$370 $423 $494 

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, 2025March 31, 2024March 31, 2023
Cash paid for amounts included in the measurement of operating lease liabilities – operating cash flows$309 $353 $404 
ROU assets obtained in exchange for operating lease liabilities(1)
$241 $175 $227 
    

(1) There were $703 million, $880 million, and $1,142 million in modifications and terminations in fiscal 2025, 2024, and 2023, 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 ItemMarch 31, 2025March 31, 2024
ROU operating lease assetsOperating right-of-use assets, net$635 $731 
Operating lease liabilitiesCurrent operating lease liabilities$227 $282 
Operating lease liabilities Non-current operating lease liabilities444 497 
Total operating lease liabilities $671 $779 

The weighted-average operating lease term was 3.8 years and 3.9 years as of March 31, 2025 and March 31, 2024, respectively. The weighted-average operating lease discount rate was 4.9% and 4.6% as of March 31, 2025 and March 31, 2024, respectively.

The following maturity analysis presents expected undiscounted cash payments for operating leases as of March 31, 2025:

Fiscal Year
(in millions)
20262027202820292030
Thereafter
Total
Operating lease payments
$251 $176 $146 $95 $34 $32 $734 
Less: imputed interest
(63)
Total operating lease liabilities
$671 
Finance Leases

The components of finance lease expense were as follows:

For the Fiscal Year Ended
(in millions)March 31, 2025March 31, 2024March 31, 2023
Finance lease cost:
     Amortization of right-of-use assets$81 $137 $218 
     Interest on lease liabilities14 15 17 
Total finance lease cost$95 $152 $235 

The following table provides supplemental cash flow information related to the Company’s finance leases:

For the Fiscal Year Ended
(in millions)March 31, 2025March 31, 2024March 31, 2023
Interest paid for finance lease liabilities – Operating cash flows$14 $15 $17 
Cash paid for amounts included in the measurement of finance lease obligations – financing cash flows200 240 315 
Total cash paid in the measurement of finance lease obligations$214 $255 $332 
Capital expenditures through finance lease obligations(1)
$24 $105 $102 
    

(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 ItemMarch 31, 2025March 31, 2024
ROU finance lease assetsProperty and Equipment, net $145 $264 
Finance lease Short-term debt and current maturities of long-term debt $123 $178 
Finance leaseLong-term debt, net of current maturities 155 242 
Total finance lease liabilities(1)
$278 $420 
    

(1) See Note 10 – “Debt” for further information on finance lease liabilities.

The weighted-average finance lease term was 2.7 years and 2.9 years as of March 31, 2025 and March 31, 2024, respectively. The weighted-average finance lease discount rate was 5.6% and 4.3% as of March 31, 2025 and March 31, 2024, respectively.
The following maturity analysis presents expected undiscounted cash payments for finance leases as of March 31, 2025:

Fiscal Year
(in millions)
20262027202820292030
Thereafter
Total
Finance lease payments
$135 $92 $51 $19 $1 $3 $301 
Less: imputed interest
(23)
Total finance lease liabilities
$278 
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Historical Timeline

Fiscal YearFiled
2025May 15, 2025Showing above
2024May 17, 2024

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.

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