Introduction The purpose of the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“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 first quarter of fiscal 2027 and our financial condition as of June 30, 2026. 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 in the following sections: •Background •Results of Operations •Liquidity and Capital Resources •Critical Accounting Estimates The following discussion includes a comparison of our results of operations and liquidity and capital resources for the first quarters of fiscal 2027 and fiscal 2026. References are made throughout to the numbered Notes to the Condensed Consolidated Financial Statements (“Notes”) in this Quarterly Report on Form 10-Q. Background DXC is a leading enterprise technology and innovation partner delivering software, services, and solutions to global enterprises and public sector organizations — helping them harness AI to drive outcomes at a time of exponential change with speed. With deep expertise in Managed Infrastructure Services, Application Modernization, and Industry-Specific Software Solutions, DXC modernizes, secures, and operates some of the world’s most complex technology estates. We generate revenue by offering a broad range of information technology services and solutions to customers primarily in North America, Europe, Asia, and Australia. Our financial results are reported through three reportable segments that reflect the Company’s operational structure and how we deliver end-to-end IT solutions: Consulting & Engineering Services ("CES"), Global Infrastructure Services ("GIS"), and Insurance Software & Services ("Insurance"). Key Metrics Key revenue, profitability and cash flow metrics for the first quarter of fiscal 2027 compared to the first quarter of fiscal 2026 are included below. Organic revenue, adjusted earnings before income taxes, and adjusted diluted earnings per share are non-GAAP financial measures. For more information see “Non-GAAP Financial Measures.” •Revenues of $2,999 million, down 5.1% year-over-year (down 6.7% on an organic basis); •EBIT was $207 million, with a corresponding margin of 6.9%. Adjusted EBIT was $150 million, down 30.6% year-over-year with a corresponding margin of 5.0%; •Diluted earnings per share of $0.73, compared to $0.09 in the same period a year ago; adjusted diluted earnings per share of $0.40, compared to $0.68 in the same period a year ago; •Cash generated from operations was $418 million, less capital expenditures of $104 million, resulted in free cash flow of $314 million, compared to free cash flow of $97 million in the prior-year period. Free cash flow in fiscal 2027 includes cash proceeds of $214 million related to the litigation judgment obtained against TCS, as discussed further in Note 18 - “Commitments and Contingencies”; •Book-to-bill ratio (contract awards divided by quarterly revenue) of 0.99x, compared to 0.90x during fiscal 2026. 30 Segment Highlights Consulting & Engineering Services •Revenue was $1,231 million, down 1.2% year-over-year (down 3.0% on an organic basis). •Segment profit was $100 million, down 4.8% year-over-year, with a corresponding margin of 8.1%. •Book-to-bill ratio of 0.98x, compared to 1.19x during the first quarter of fiscal 2026. Global Infrastructure Services •Revenue was $1,449 million, down 9.4% year-over-year (down 11.1% on an organic basis). •Segment profit was $38 million, down 60.8% year-over-year, with a corresponding margin of 2.6%. •Book-to-bill ratio of 1.11x, compared to 0.74x during the first quarter of fiscal 2026. Insurance Software & Services •Revenue was $319 million, up 1.9% year-over-year (up 1.4% on an organic basis). •Segment profit was $34 million, up 3.0% year-over-year, with a corresponding margin of 10.7%. •Book-to-bill ratio of 0.54x, compared to 0.54x during the first quarter of fiscal 2026. 31 Results of Operations for the Three Months Ended June 30, 2026 and June 30, 2025 Revenues Our revenues by geography and operating segment are provided below: Three Months Ended Percentage Change Percentage of Revenue for the Three Months Ended (in millions) June 30, 2026 June 30, 2025 U.S. Dollars Constant Currency(1) June 30, 2026 June 30, 2025 Geographic Market United States $ 742 $ 828 (10.4) % (10.4) % 24.7 % 26.2 % United Kingdom 401 480 (16.5) % (16.7) % 13.4 % 15.2 % Other Europe 1,039 1,038 0.1 % (2.1) % 34.6 % 32.9 % Australia 288 259 11.2 % 0.4 % 9.6 % 8.2 % Other International 529 554 (4.5) % (4.2) % 17.6 % 17.5 % Total Revenues $ 2,999 $ 3,159 (5.1) % (6.7) % 100.0 % 100.0 % Reportable Segments CES $ 1,231 $ 1,246 (1.2) % (3.0) % 41.0 % 39.4 % GIS 1,449 1,600 (9.4) % (11.1) % 48.3 % 50.6 % Insurance 319 313 1.9 % 1.4 % 10.6 % 9.9 % Total Revenues $ 2,999 $ 3,159 (5.1) % (6.7) % 100.0 % 100.0 % (1) Constant currency revenues are a non-GAAP measure calculated by translating current period activity into U.S. dollars using the comparable prior period’s currency conversion rates. 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." For the first quarter of fiscal 2027, our total revenue was $3.0 billion, a decrease of $160 million or 5.1%, compared to the same period a year ago. The decrease against the comparative period includes a 6.7% decline in organic revenue partially offset by a 1.6% favorable foreign currency exchange rate impact. Organic revenue growth is a non-GAAP measure. For more information, see "Non-GAAP Financial Measures". 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, 2026. Costs and Expenses Our total costs and expenses are provided below: Dollar Amount Three Months Ended June 30, Change (in millions) 2026 2025 Dollar Percent Costs of services (excludes depreciation and amortization and restructuring costs) $ 2,388 $ 2,388 $ — — % Selling, general and administrative (excludes depreciation and amortization and restructuring costs) 328 394 (66) (16.8) % Depreciation and amortization 267 304 (37) (12.2) % Restructuring costs 26 37 (11) (29.7) % Interest expense 55 54 1 1.9 % Interest income (89) (46) (43) 93.5 % Other income, net (217) (39) (178) 456.4 % Total costs and expenses $ 2,758 $ 3,092 $ (334) (10.8) % 32 Costs of Services Costs of services, excluding depreciation and amortization and restructuring costs ("COS"), consist of expenses directly associated with revenue-generating activities. These expenses primarily include payroll and related employee benefit costs, subcontractor costs and other contract-related expenses, as well as technology, facilities, and other supporting infrastructure costs. COS was $2.4 billion for the first quarter of fiscal 2027, unchanged from the prior-year period. While the Company’s cost optimization initiatives reduced payroll and related employee benefit costs, professional services, and contractor-related expenses, cost reductions did not keep pace with the decline in revenue. As a result, gross margin was 20.4% for the first quarter of fiscal 2027, a decline of 400 basis points against the prior-year period. Selling, General and Administrative Selling, general and administrative expense, excluding depreciation and amortization and restructuring costs ("SG&A"), consist of the costs associated with personnel in non-client facing positions. These expenses primarily include payroll and related employee benefit costs, business development efforts, marketing and advertising activities, and other expenses such as information systems and office space. SG&A was $328 million for the first quarter of fiscal 2027, a decrease of $66 million (-16.8%) compared to the prior-year period. The decline was primarily driven by lower payroll and related employee benefit costs, as well as reduced professional services and contractor related expenses. SG&A as a percentage of revenue was 10.9% for the first quarter of fiscal 2027, an improvement of 160 basis points against the prior-year period. Depreciation and Amortization Depreciation and amortization was $267 million for the first quarter of fiscal 2027, a decrease of $37 million (-12.2%) compared to the prior-year period. Depreciation expense decreased by $12 million due to lower average net property and equipment balances. Amortization expense decreased by $25 million due to lower software amortization and transition and transformation contract cost balances. Restructuring Costs During fiscal 2027, management approved global cost savings initiatives designed to better align our workforce, facility and data center requirements. Total restructuring costs recorded, net of reversals, was $26 million for the first quarter of fiscal 2027, an $11 million decrease (-29.7%) compared to the prior-year period. See Note 10 – “Restructuring Costs” for additional information about our restructuring actions. Interest Income and Interest Expense Net interest income (interest expense less interest income) was $34 million for the first quarter of fiscal 2027, an increase of $42 million as compared to the prior-year period. Included in this amount is $46 million of interest income from the TCS litigation judgment, as discussed in Note 18 - “Commitments and Contingencies.” 33 Other Income, Net Other income, net includes non-service cost components of net periodic pension income, pension and other post-retirement benefit (“OPEB”) actuarial and settlement losses and (gains), movement in foreign currency exchange rates on our foreign currency denominated assets and liabilities and the related economic hedges, losses on real estate and facility sales, and other miscellaneous losses and (gains). The components of Other income, net were as follows: Three Months Ended (in millions) June 30, 2026 June 30, 2025 Dollar Change Non-service cost components of net periodic pension income $ (45) $ (43) $ (2) Foreign currency gain (1) (5) 4 Gain on litigation (168) — (168) Other miscellaneous (gain) loss (3) 9 (12) Total $ (217) $ (39) $ (178) Other income, net, increased $178 million compared to the prior-year period primarily due to: •pension income ($2 million) - increase in net periodic pension income, primarily due to changes in expected returns on assets and other actuarial assumptions; •foreign currency impact ($4 million) - change in foreign currency, 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; •gain on litigation ($168 million) - compensatory and punitive damages from the litigation judgment obtained against TCS; and •other miscellaneous items ($12 million) - the Company recognized a $14 million impairment of goodwill in the first quarter of fiscal 2026 related to the change in operating segments. Taxes Our effective tax rate (“ETR”) was 47.7% and 73.1% for the first quarter of fiscal 2027 and the first quarter of fiscal 2026, respectively. For the first quarter of fiscal 2027, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, and a reduction in a deferred tax asset for stock based compensation. For the first quarter of fiscal 2026, the primary drivers of the ETR were the global mix of income, U.S. tax on foreign income, the tax benefit of a worthless stock deduction under section 165(g) of the Internal Revenue Code related to DXC’s investment in a wholly owned subsidiary, and a reduction in a deferred tax asset for stock based compensation. Earnings Per Share Diluted EPS for the first quarter of fiscal 2027 was $0.73, compared to $0.09 in the first quarter of fiscal 2026. The increase in earnings per share was primarily due to the Company's increase in net income attributable to DXC common stockholders and a lower weighted average share count from the Company’s share repurchases. Diluted EPS for the first quarter of fiscal 2027 includes $0.08 per share of restructuring costs, $0.28 per share of amortization of acquired intangible assets, $(0.69) per share of gain on litigation award, and $(0.01) per share of gains on dispositions. 34 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, non-GAAP net income attributable to DXC common stockholders, non-GAAP EPS, organic revenue growth, constant currency revenues, and free cash flow. 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. We believe constant currency revenues provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars in the periods presented. See below for a description of the methodology we use to present constant currency revenues. 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. Another 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 impairment losses, which, if included, may result in a significant difference in period-over-period expense on a GAAP basis. We exclude impairment losses as these non-cash amounts reflect generally an acceleration of what would be multiple periods of expense and are not expected to occur frequently. Further, assets such as goodwill may be significantly impacted by market conditions outside of management’s control. Selected references are made to revenue growth on an “organic basis” so that certain financial results can be viewed without the impact of fluctuations in foreign currency rates and without the impacts of acquisitions and divestitures, thereby providing comparisons of operating performance from period to period of the business that we have owned during both periods presented. Organic revenue growth is calculated by dividing the year-over-year change in GAAP revenues attributed to organic growth by the GAAP revenues reported in the prior comparable period. Organic revenue is calculated as constant currency revenue excluding the impact of mergers, acquisitions or similar transactions until the one-year anniversary of the transaction and excluding revenues of divestitures during the reporting period. This approach is used for all results where the functional currency is not the U.S. dollar. We believe organic revenue growth provides investors with useful supplemental information about our revenues after excluding the effect of currency exchange rate fluctuations for currencies other than U.S. dollars and the effects of acquisitions and divestitures in both periods presented. Free cash flow represents cash flow from operations, less capital expenditures. Free cash flow is utilized by our management, investors, and analysts to evaluate cash available to pay debt, repurchase shares, and provide further investment in the business. 35 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—Revenues.” Certain non-GAAP financial measures and the respective most directly comparable financial measures calculated and presented in accordance with GAAP include: Dollar Amount Three Months Ended June 30, Change (in millions) 2026 2025 Dollar Percent Income before income taxes $ 241 $ 67 $ 174 NM(1) Non-GAAP income before income taxes $ 138 $ 208 $ (70) (33.7) % Net income $ 126 $ 18 $ 108 NM(1) Adjusted EBIT $ 150 $ 216 $ (66) (30.6) % (1) Calculation is not meaningful ("NM") due to the gain from the TCS litigation judgment, as discussed in Note 18 - “Commitments and Contingencies. Reconciliation of Non-GAAP Financial Measures Our non-GAAP adjustments include: •Restructuring costs – includes costs, net of reversals, related to workforce and real estate optimization and other similar charges. •Transaction, separation and integration-related (“TSI”) costs – includes third party costs related to integration, separation, planning, financing and advisory fees and other similar charges associated with mergers, acquisitions, strategic investments, joint ventures, and dispositions and other similar transactions incurred within one year of such transactions closing, except for costs associated with related disputes, which may arise more than one year after closing. •Amortization of acquired intangible assets – includes amortization of intangible assets acquired through business combinations. •Merger-related indemnification – represents the Company’s estimate of potential net liability for tax related indemnifications. •Gain on litigation award – reflects a gain related to the TCS litigation judgment. •Gains and losses on real estate and facility sales – gains and losses related to dispositions of real property. •Gains and losses on dispositions – gains and losses related to dispositions of businesses, strategic assets and interests in less than wholly-owned entities. •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. •Tax adjustments – discrete tax adjustments to impair or recognize certain deferred tax assets, adjustments for changes in tax legislation and the impact of merger and divestitures. Income tax expense of all other (non-discrete) non-GAAP adjustments is based on the difference in the GAAP annual effective tax rate (AETR) and overall non-GAAP provision (consistent with the GAAP methodology). 36 A reconciliation of reported results to non-GAAP results is as follows: Three Months Ended June 30, 2026 (in millions, except per-share amounts) As Reported Restructuring Costs Amortization of Acquired Intangible Assets Gain on Litigation Award Gains on Dispositions Non-GAAP Results Income before income taxes $ 241 $ 26 $ 87 $ (214) $ (2) $ 138 Income tax expense 115 12 40 (99) (1) 67 Net income 126 14 47 (115) (1) 71 Less: net income attributable to non-controlling interest, net of tax 4 — — — — 4 Net income attributable to DXC common stockholders $ 122 $ 14 $ 47 $ (115) $ (1) $ 67 Effective Tax Rate 47.7 % 48.6 % Basic EPS $ 0.75 $ 0.09 $ 0.29 $ (0.71) $ (0.01) $ 0.41 Diluted EPS $ 0.73 $ 0.08 $ 0.28 $ (0.69) $ (0.01) $ 0.40 Weighted average common shares outstanding for: Basic EPS 162.86 162.86 162.86 162.86 162.86 162.86 Diluted EPS 166.27 166.27 166.27 166.27 166.27 166.27 Three Months Ended June 30, 2025 (in millions, except per-share amounts) As Reported Restructuring Costs Transaction, Separation and Integration-Related Costs Amortization of Acquired Intangible Assets Merger Related Indemnification Impairment Losses Tax Adjustments Non-GAAP Results Income before income taxes $ 67 $ 37 $ 1 $ 87 $ 2 $ 14 $ — $ 208 Income tax expense 49 9 — 20 — 4 (2) 80 Net income 18 28 1 67 2 10 2 128 Less: net loss attributable to non-controlling interest, net of tax 2 — — — — — — 2 Net income attributable to DXC common stockholders $ 16 $ 28 $ 1 $ 67 $ 2 $ 10 $ 2 $ 126 Effective Tax Rate 73.1 % 38.5 % Basic EPS $ 0.09 $ 0.15 $ 0.01 $ 0.37 $ 0.01 $ 0.06 $ 0.01 $ 0.70 Diluted EPS $ 0.09 $ 0.15 $ 0.01 $ 0.36 $ 0.01 $ 0.05 $ 0.01 $ 0.68 Weighted average common shares outstanding for: Basic EPS 181.10 181.10 181.10 181.10 181.10 181.10 181.10 181.10 Diluted EPS 184.96 184.96 184.96 184.96 184.96 184.96 184.96 184.96 37 Reconciliations of revenue growth to organic revenue growth are as follows: Three Months Ended June 30, 2026 June 30, 2025 Total revenue growth (5.1) % (2.4) % Foreign currency (1.6) % (2.0) % Acquisition and divestitures — % 0.1 % Organic revenue growth (6.7) % (4.3) % CES revenue growth (1.2) % (2.7) % Foreign currency (1.8) % (2.0) % Acquisition and divestitures — % 0.3 % CES organic revenue growth (3.0) % (4.4) % GIS revenue growth (9.4) % (3.5) % Foreign currency (1.7) % (2.2) % Acquisition and divestitures — % — % GIS organic revenue growth (11.1) % (5.7) % Insurance revenue growth 1.9 % 5.4 % Foreign currency (0.5) % (1.8) % Acquisition and divestitures — % — % Insurance organic revenue growth 1.4 % 3.6 % Reconciliations of segment profit and adjusted EBIT to net income are as follows: Three Months Ended (in millions) June 30, 2026 June 30, 2025 Total profit for reportable segments $ 172 $ 235 Corporate expenses (22) (19) Adjusted EBIT 150 216 Restructuring costs (26) (37) Transaction, separation and integration-related costs — (1) Amortization of acquired intangibles (87) (87) Merger related indemnification — (2) Gain on litigation award 168 — Gains on dispositions 2 — Impairment losses — (14) EBIT 207 75 Interest income 89 46 Interest expense (55) (54) Income before income tax 241 67 Income tax expense 115 49 Net income $ 126 $ 18 38 Liquidity and Capital Resources Cash and Cash Equivalents and Cash Flows As of June 30, 2026, our cash and cash equivalents (“cash”) were $2.0 billion, of which $0.7 billion was held outside of the U.S. We maintain various multi-currency, multi-entity, cross-border, physical and notional cash pool arrangements with various counterparties to manage liquidity efficiently that enable 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 $0.1 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 $0.2 billion held by majority-owned consolidated subsidiaries where third-parties or public shareholders hold minority interests. The following table summarizes our cash flow activity: Three Months Ended (in millions) June 30, 2026 June 30, 2025 Change Net cash provided by (used in): Operating activities $ 418 $ 186 $ 232 Investing activities (99) (77) (22) Financing activities (120) (110) (10) Effect of exchange rate changes on cash and cash equivalents 21 (3) 24 Net increase (decrease) in cash and cash equivalents $ 220 $ (4) $ 224 Cash and cash equivalents at beginning of year 1,737 1,796 Cash and cash equivalents at the end of period $ 1,957 $ 1,792 Operating cash flow Net cash provided by operating activities was $418 million and $186 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year increase of $232 million. The increase was primarily due to: •a $147 million favorable change in net income, net of adjustments, primarily driven by the $214 million TCS litigation judgment; and •an $85 million favorable change in working capital due to lower working capital outflows during the first quarter of fiscal 2027 primarily as a result of lower annual executive compensation payments. The following table contains certain key working capital metrics: Three Months Ended June 30, 2026 June 30, 2025 Days of sales outstanding in accounts receivable 71 69 Days of purchases outstanding in accounts payable (57) (52) Cash conversion cycle 14 17 39 Investing cash flow Net cash used in investing activities was $99 million and $77 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $22 million. The change was primarily due to: •a $15 million increase in capital expenditures primarily from higher purchases of property and equipment; and •a $7 million decrease in proceeds from asset sales and other net investing activities. Financing cash flow Net cash used in financing activities was $120 million and $110 million, respectively, during the first quarters of fiscal 2027 and fiscal 2026, reflecting a year-over-year change of $10 million. The change was primarily due to: •a $21 million increase in share repurchase activity and related taxes paid on net share settlements; partially offset by •an $11 million decrease in payments on capital leases and borrowings for asset financing, as the Company continues reducing the volume of these financing arrangements. Debt Financing The following table summarizes our total debt: As of (in millions) June 30, 2026 March 31, 2026 Change Short-term debt and current maturities of long-term debt $ 501 $ 520 $ (19) Long-term debt, net of current maturities 3,003 3,032 (29) Total debt $ 3,504 $ 3,552 $ (48) The $48 million decrease in total debt during the first quarter of fiscal 2027 was driven by cash payments for finance leases and borrowings for asset financing exceeding new additions and the impact of the foreign currency exchange rate of U.S. dollar against the Euro. We were in compliance with all financial covenants associated with our borrowings as of June 30, 2026 and June 30, 2025. Our credit ratings are as follows: Rating Agency Long Term Ratings Short Term Ratings Outlook Fitch BBB- F3 Stable Moody’s Baa3 P-3 Stable S&P BBB- - Stable For information on the risks of ratings downgrades, see Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. 40 Liquidity We expect our existing cash and cash equivalents, together with cash generated from operations, will be sufficient to meet our normal operating requirements for the next 12 months and beyond. 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, including the issuance of capital market debt instruments such as commercial paper, and bonds. In addition, we currently utilize, and will further utilize accounts receivables, sales facilities, and 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 that require significant investment of cash during the initial phases of the contracts. The recovery of these investments is over the life of the contracts and is dependent upon our performance as well as customer acceptance. Our total liquidity of $5.0 billion as of June 30, 2026, includes $2.0 billion of cash and cash equivalents and $3.0 billion of available borrowings under our revolving credit facility. Share Repurchases See Note 13 – “Stockholders’ Equity.” Dividends To maintain our financial flexibility, we continue to suspend payment of quarterly dividends for fiscal 2027. Off-Balance Sheet Arrangements In the normal course of business, we are a 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 for the fiscal year ended March 31, 2026, other than as disclosed in Note 3 – “Receivables” and Note 18 – “Commitments and Contingencies.” Cash Commitments There have been no material changes, outside the ordinary course of business, to our cash commitments since March 31, 2026. For further information see “Cash Commitments” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. For our minimum purchase cash commitments in connection with our long-term purchase agreements with certain software, hardware, telecommunication, and other service providers, see Note 18 – “Commitments and Contingencies.” 41 Critical Accounting 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, defined benefit plans, valuation of assets, and loss accruals for contingencies and litigation. 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 June 30, 2026, there were no changes to our critical accounting policies and estimates from those described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026 except as mentioned in Note 1 – “Summary of Significant Accounting Policies.”