DXC DXC Technology Co.

Risks

• We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows.
• Strategic alternatives we are considering may not achieve the results we expect, could result in operating difficulties, harm to one or more of our businesses and negative impacts our financial condition, results of operations and cash flows.
• We expect our business and financial results to potentially be negatively impacted by the recent COVID-19 outbreak as well as other recent developments.
• We could be held liable for damages, our reputation could suffer, or we may experience service interruptions from security breaches, cyber-attacks or disclosure of confidential information or personal data, which could cause significant financial loss.
• Achieving our growth objectives may prove unsuccessful. We may be unable to identify future attractive acquisitions and strategic partnerships, which may adversely affect our growth. In addition, if we are unable to integrate acquisitions and implement strategic partnerships or achieve anticipated revenue improvements and cost reductions, our profitability may be materially and adversely affected.
• Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including the demand for digital technologies and services, may impact our future growth. If we are not successful in meeting these business challenges, our results of operations and cash flows may be materially and adversely affected.
• Our ability to compete in certain markets we serve is dependent on our ability to continue to expand our capacity in certain offshore locations. However, as our presence in these locations increases, we are exposed to risks inherent to these locations which may adversely affect our revenue and profitability.
• Our credit rating and ability to manage working capital, refinance and raise additional capital for future needs, could adversely affect our liquidity, capital position, borrowing, cost and access to capital markets.
• We have a substantial amount of indebtedness, which could have a material adverse effect on our business, financial condition and results of operations.
• Our primary markets are highly competitive. If we are unable to compete in these highly competitive markets, our results of operations may be materially and adversely affected.
• If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected.
• Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third parties fail to deliver on commitments or if we incur legal liability in connection with providing our services and solutions.
• Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel.
• Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control.
• Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business and results of operations.
• We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
• In the course of providing services to customers, we may inadvertently infringe on the intellectual property rights of others and be exposed to claims for damages.
• We have identified a material weakness in our internal control over financial reporting. Without effective internal control over financial reporting, we may fail to detect or prevent a material misstatement in our financial statements, which could materially harm our business, our reputation and our stock price.
• We could suffer additional losses due to asset impairment charges.
• We may not be able to pay dividends or repurchase shares of our common stock in accordance with our announced intent or at all.
• We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
• We may be adversely affected by disruptions in the credit markets, including disruptions that reduce our customers' access to credit and increase the costs to our customers of obtaining credit.
• Our hedging program is subject to counterparty default risk.
• We derive significant revenues and profit from contracts awarded through competitive bidding processes, which can impose substantial costs on us and we may not achieve revenue and profit objectives if we fail to bid on these projects effectively.
• If our customers experience financial difficulties, we may not be able to collect our receivables, which would materially and adversely affect our profitability and cash flows from operations.
• If we are unable to maintain and grow our customer relationships over time, our operating results and cash flows will suffer. Failure to comply with customer contracts or government contracting regulations or requirements could adversely affect our business, results of operations and cash flows.
• Recent U.S. tax legislation may materially affect our financial condition, results of operations and cash flows.
• Changes in our tax rates could affect our future results.
• We may not realize the anticipated benefits from the HPES Merger.
• The integration following the HPES Merger may continue to present significant challenges.
• We could have an indemnification obligation to HPE if the stock distribution in connection with the HPES business separation (the "Distribution") were determined not to qualify for tax-free treatment, which could materially adversely affect our financial condition.
• If the HPES Merger does not qualify as a reorganization under Section 368(a) of the Code, CSC's former stockholders may incur significant tax liabilities.
• We assumed certain material pension benefit obligations in connection with the HPES Merger. These liabilities and the related future funding obligations could restrict our cash available for operations, capital expenditures and other requirements, and may materially adversely affect our financial condition and liquidity.
• The Luxoft Acquisition may result in disruptions to relationships with customers and other business partners.
• The actions required to implement the Luxoft Acquisition will take management time and attention and may require us to incur additional costs.
• The USPS Separation and Mergers and NPS Separation could result in substantial tax liability to DXC and our stockholders.
• The HHS Sale is contingent upon the satisfaction of a number of conditions, and the transaction may not be consummated on the terms or timeline currently contemplated, or at all.
• The proposed transaction may result in disruptions to relationships with customers and other business partners or may not achieve the intended results.
• The actions required to implement the HHS Sale will take significant management time and attention and will require us to incur significant costs.