0001558370-24-008788 | 10-K | XBRL Viewer

BORROWINGS (Tables)

12 Months Ended

Mar. 31, 2024



			At March 31,
(Dollars in millions)	Interest Rate	Maturity	2024		2023
Unsecured floating-rate term loan	—	—	$	—	$	500
Commercial loan agreement	3.00%	July 2026		68		96
Unsecured senior notes due 2026	2.05%	October 2026		700		700
Unsecured senior notes due 2028	2.70%	October 2028		500		500
Unsecured senior notes due 2031	3.15%	October 2031		650		650
Unsecured senior notes due 2034	6.35% *	February 2034		500		—
Unsecured senior notes due 2041	4.10%	October 2041		550		550
Finance lease and other obligations	5.57% **	2024-2029		291		242
			$	3,259	$	3,238
Less: Unamortized discount				5		5
Less: Unamortized debt issuance costs				16		13
Less: Current portion of long-term debt				126		110
Total long-term debt			$	3,112	$	3,111

* Including the cross-currency swaps that the Company entered into subsequent to the issuance of the unsecured senior notes due 2034, the effective interest rate on such notes was approximately 3.84% for the quarter ended March 31,2024. For more information, see Note 7 – Financial Assets and Liabilities.

** Weighted-average discount rate

Schedule of contractual obligations of long-term debt outstanding


(Dollars in millions)*	Principal
Year ending March 31:
2025	$	29
2026		29
2027		710
2028		—
2029		500
Thereafter		1,700
Total	$	2,968

* Contractual obligations approximate scheduled repayments.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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+ Details

SIGNIFICANT ACCOUNTING POLICIES - Summary of Estimated Useful Lives (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2025	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021	Apr. 01, 2024
Property and Equipment
Depreciation	$ 246	$ 339		$ 834	$ 900	$ 1,300
Cumulative Effect, Period of Adoption, Adjustment
Property and Equipment
Depreciation			$ (180)
Buildings \| Minimum
Property and Equipment
Estimated useful lives (in years)				30 years
Buildings \| Maximum
Property and Equipment
Estimated useful lives (in years)				50 years
Land improvements
Property and Equipment
Estimated useful lives (in years)				20 years
Leasehold improvements \| Maximum
Property and Equipment
Estimated useful lives (in years)				10 years
Office and other equipment \| Minimum
Property and Equipment
Estimated useful lives (in years)				2 years
Office and other equipment \| Maximum
Property and Equipment
Estimated useful lives (in years)				20 years
Information technology equipment
Property and Equipment
Estimated useful lives (in years)				5 years			6 years
Information technology equipment (acquired as used) \| Minimum
Property and Equipment
Estimated useful lives (in years)				1 year 6 months
Information technology equipment (acquired as used) \| Maximum
Property and Equipment
Estimated useful lives (in years)				3 years
Information technology equipment (acquired as new)
Property and Equipment
Estimated useful lives (in years)				5 years
Information technology equipment (acquired as new) \| Expected
Property and Equipment
Estimated useful lives (in years)							6 years

REVENUE RECOGNITION (Tables)

12 Months Ended

Mar. 31, 2024

REVENUE RECOGNITION

Schedule of reconciliation of contract balances


	At March 31,
(Dollars in millions)	2024		2023
Accounts receivable (net of allowances for credit losses of $22 at March 31, 2024 and $32 at March 31, 2023) *	$	1,599	$	1,523
Contract assets **		30		30
Deferred income (current)		825		820
Deferred income (noncurrent)		314		362

*	Including unbilled receivable balances of $377 million at March 31, 2024 and $384 million at March 31, 2023.

Contract assets represent services performed by the Company prior to billing the client, which give the Company the right to consideration that is typically subject to milestone completion or client acceptance. They are included within prepaid expenses and other current assets in the Consolidated Balance Sheet.

Schedule of notes and accounts receivable allowance for expected credit losses


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Beginning balance	$	32	$	44	$	44	$	91
Additions (releases)		4		6		6		(23)
Write-offs		(4)		(13)		(4)		(5)
Other *		(9)		(5)		(2)		(19)
Ending balance	$	22	$	32	$	44	$	44

* Primarily represents translation adjustments.

Schedule of capitalized costs to acquire and fulfill customer contracts


	At March 31,
(Dollars in millions)	2024		2023
Deferred transition costs	$	753	$	856
Prepaid software costs		770		782
Capitalized costs to fulfill contracts		212		285
Capitalized costs to obtain contracts		265		313
Total deferred costs *	$	2,000	$	2,236

* Of the total deferred costs, $1,081 million was current and $920 million was noncurrent at March 31, 2024, and $1,070 million was current and $1,166 million was noncurrent at March 31, 2023.

SIGNIFICANT ACCOUNTING POLICIES - Transfers of Financial Assets and Supplier Financing Program (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Financing receivable sale agreement, term		6 months
Financing receivable sale agreement, renewal term		18 months
Financing receivable sale agreement, initial term		18 months
Financing receivables sold	$ 485	$ 3,600	$ 3,100	$ 2,500
Fees associated with the transfers of receivables	$ 7	$ 49	$ 47	$ 0
Supplier financing program, termination notice		180 days
Minimum
Supplier financing program, average term		90 days
Maximum
Supplier financing program, average term		120 days

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Mar. 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Basis of Presentation

We prepare our consolidated financial statements in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that impact the amounts reported and disclosed in our consolidated financial statements and the accompanying notes. We prepared these estimates based on the most current and best available information, but actual results could differ materially from these estimates and assumptions.

The financial statements and footnotes for the period from January 1 through November 3, 2021 (the “pre-Separation period”) reflect allocations of certain IBM corporate, infrastructure and shared services expenses using a variety of allocation methodologies that are appropriate for the type of allocated expense. Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount, gross profit, asset or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by Kyndryl during the periods presented.

For the periods subsequent to November 3, 2021, the financial statements are presented on a consolidated basis as the Company became a standalone public company.

The income tax provision included in these consolidated financial statements for the pre-Separation period was calculated using the separate return basis, as if Kyndryl filed separate tax returns. The calculation of income taxes on a hypothetical separate return basis requires a considerable amount of judgment and use of both estimates and allocations; pre-Separation current and deferred taxes may not be reflective of the actual tax balances subsequent to the Separation. Current income tax liabilities including amounts for unrecognized tax benefits related to Kyndryl’s activities included in the Parent’s income tax returns were assumed to be immediately settled with Parent through the Net Parent investment account in the Consolidated Balance Sheet and reflected in Net transfers from Parent in the Consolidated Statement of Cash Flows during these periods.

Transition Period

Transition Period

In January 2022, the Board of Directors of Kyndryl approved a change to the fiscal year-end of the Company from December 31 to March 31. The Company’s 2023 fiscal year began on April 1, 2022 and ended March 31, 2023, and the Company’s 2024 fiscal year began on April 1, 2023 and ended March 31, 2024. The Company filed a Transition Report on Form 10-QT for the period of January 1 to March 31, 2022 (the “Transition Period”) with the U.S. Securities and Exchange Commission (“SEC”) on May 13, 2022.

Principles of Consolidation

Principles of Consolidation

For the pre-Separation period, the accompanying financial statements were derived from the consolidated financial statements and accounting records of the former Parent as if the Company operated on a standalone basis and were prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. Historically, the Company consisted of the managed infrastructure services unit of IBM’s Global Technology Services segment and did not operate as a separate standalone company. All significant intercompany transactions during the pre-Separation period between Kyndryl and IBM have been included in the consolidated financial statements. Intercompany transactions between Kyndryl and IBM were considered to be effectively settled in the consolidated financial statements at the time the transaction was recorded.

After the Separation on November 3, 2021, the Company’s consolidated financial statements are based on our reported results as a standalone company. All significant transactions and intercompany accounts between Kyndryl entities were eliminated.

Within the financial statements and tables presented, certain columns and rows may not add due to the use of rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar amounts. Certain items have been recast to conform to current-period presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts that are reported in the consolidated financial statements and accompanying disclosures. Estimates are used in determining the following, among others: revenue, costs to complete service contracts, income taxes, pension assumptions, valuation of assets including goodwill and intangible assets, the depreciable and amortizable lives of long-lived assets, loss contingencies, allowance for credit losses, deferred transition costs and other matters. Estimates were also used in determining the allocation of costs and expenses from IBM for the pre-Separation period. These estimates are based on management’s knowledge of current events, historical experience and actions that the Company may undertake in the future and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may be different from these estimates.

Revenue

Revenue

The Company accounts for a contract with a client when it has written approval, the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection.

Revenue is recognized when, or as, control of a promised service or product transfers to a client, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The Company’s contracts may include terms that could cause variability in the transaction price, including, for example, rebates, volume discounts, service-level penalties and performance bonuses or other forms of variable consideration. In certain rare circumstances, if we grant the customer the right to return a product and receive a full or partial credit or refund of any consideration paid, the Company (i) recognizes revenue for the transferred products in the amount of consideration to which it expects to be entitled, (ii) records a refund liability and (iii) recognizes an asset for its right to recover products from customers on settling the refund liability.

The Company only includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The Company may not be able to reliably estimate variable consideration in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the Company’s experience with similar types of contracts is limited. Changes in estimates of variable consideration are included in Note 3 – Revenue Recognition.

The Company’s standard billing terms are that payment is due upon receipt of invoice, payable within 30 days. Invoices are generally issued as services are rendered and/or as control transfers, either at monthly or quarterly intervals or upon achievement of contractual milestones. In some services contracts, the Company bills the client prior to recognizing revenue from performing the services. In these cases, deferred income is presented in the Consolidated Balance Sheet. In other services contracts, the Company performs the services prior to billing the client. When the Company performs services prior to billing the client, the right to consideration is typically subject to milestone completion or client acceptance, and the amount is recorded as a contract asset. Contract assets are generally classified as current and are recorded on a net basis with deferred income (i.e., contract liabilities) at the contract level. Refer to Note 3 – Revenue Recognition for contract assets for the periods presented.

The Company’s rights to consideration are presented separately depending on whether those rights are conditional or unconditional; total conditional contract assets of $30 million at March 31, 2024 and 2023 are included in prepaid expenses and other current assets in the Consolidated Balance Sheet. Total unconditional contract assets (“unbilled accounts receivable”) of $377 million and $384 million at March 31, 2024 and 2023, respectively, are included in accounts receivable in the Consolidated Balance Sheet.

Additionally, in determining the transaction price, the Company would adjust the promised amount of consideration for the effects of the time value of money if the billing terms are not standard and the timing of payments agreed to by the parties to the contract provide the client or the Company with a significant benefit of financing, in which case the contract contains a significant financing component. As a practical expedient, the Company does not account for significant financing components if the period between when the Company transfers the promised product or service to the client and when the client pays for that product or service will be one year or less.

The Company may include subcontractor services or original equipment manufacturer (OEM) hardware and/or OEM software components in certain integrated services arrangements. In these types of arrangements, revenue from sales of OEM hardware and/or OEM software components or services is recorded net of costs when the Company is acting as an agent between the client and the vendor and gross when the Company is the principal for the transaction. To determine whether the Company is an agent or principal, the Company considers whether it obtains control of the products or services before they are transferred to the customer. In making this evaluation, several factors are considered, most notably whether the Company has primary responsibility for fulfillment to the client, as well as inventory risk and pricing discretion.

The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.

Performance Obligations

The Company’s capabilities as an infrastructure services company include offerings that often encompass multiple types of services and may integrate various OEM hardware and/or OEM software components. When an arrangement contains multiple separate performance obligations, revenue follows the specific revenue recognition policies for each performance obligation, depending on the type of offering. The Company determines if the products or services are distinct and allocates the consideration to each separate performance obligation on a relative standalone selling price basis. When products and services are not distinct, the Company determines an appropriate measure of progress based on the nature of its overall promise for the single performance obligation.

The revenue policies below are applied to each performance obligation, as applicable.

Standalone Selling Price

The Company allocates the transaction price to each performance obligation on a relative standalone selling price basis. The standalone selling price (SSP) is the price at which the Company would sell a promised product or service separately to a client. The Company establishes SSP based on management’s estimated selling price or observable prices of products or services sold separately in comparable circumstances to similar clients. For OEM hardware and/or OEM software components, the Company is able to establish SSP based on the cost from the vendor. The Company reassesses SSP ranges on a periodic basis or when facts and circumstances change.

In certain instances, the Company may not be able to establish an SSP range based on observable prices and the Company estimates SSP. The Company estimates SSP by considering multiple factors including, but not limited to, overall market conditions, including geographic or regional specific factors, competitive positioning, competitor actions, internal costs, profit objectives and pricing practices. Estimating SSP is a formal process that includes review and approval by the Company’s management.

Nature of Products and Services

The Company delivers transformation and secure cloud services capabilities, insights and depth of expertise to modernize and manage IT environments based on its customers’ needs. The Company offers services such as cloud managed services, application hosting and modernization, security and resiliency services, enterprise infrastructure services, digital workplace services, network services and distributed cloud services to support its customers through technological change. Many of these services can be delivered entirely or partially through cloud or as-a-service delivery models. The Company’s services are provided on a time-and-material basis, as a fixed-price contract or as a fixed-price-per-measure-of-output contract, and the contract terms range from less than one year to over 10 years. The Company typically satisfies the performance obligation and recognizes revenue over time in services arrangements because the client simultaneously receives and consumes the benefits provided as the Company performs the services.

In outsourcing, other managed services, application management and other cloud-based services arrangements, the Company determines whether the services performed during the initial phases of the arrangement, such as setup activities, are distinct. In most cases, the arrangement is a single performance obligation comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service). The Company applies a measure of progress (typically time-based) to any fixed consideration and allocates variable consideration to the distinct periods of service based on usage. As a result, revenue is generally recognized over the period the services are provided on a usage basis. This results in revenue recognition that corresponds with the value to the client of the services transferred to date relative to the remaining services promised.

Revenue from time-and-material contracts is recognized on an output basis as labor hours are delivered and/or direct expenses are incurred. Revenue from as-a-service type contracts is recognized either on a straight-line basis or on a usage basis, depending on the terms of the arrangement (such as whether the Company is standing ready to perform or whether the contract has usage-based metrics). If an as-a-service contract includes setup activities, those promises in the arrangement are evaluated to determine if they are distinct.

In design and build arrangements, revenue is recognized based on progress toward completion of the performance obligation using a cost-to-cost measure of progress (e.g., labor costs incurred to date as a percentage of the total estimated labor costs to fulfill the contract). The estimation of cost at completion is complex, subject to many variables and requires significant judgment. Changes in original estimates are reflected in revenue on a cumulative catch-up basis in the period in which the circumstances that gave rise to the revision become known by the Company. Refer to Note 3 – Revenue Recognition for the amount of revenue recognized in the reporting period on a cumulative catch-up basis (i.e., from performance obligations satisfied, or partially satisfied, in previous periods).

The Company performs ongoing profitability analyses of its design and build services contracts accounted for using a cost-to-cost measure of progress to determine whether the latest estimates of revenues, costs and profits require updating. If at any time these estimates indicate that the contract will be unprofitable, the entire estimated loss for the remainder of the contract is recorded immediately. For other types of services contracts, any losses are recorded as incurred.

The Company’s services offerings may include the integration and/or sale of OEM hardware and/or software components. Contracts that include hardware and/or software components are evaluated to determine if they are separate performance obligations as discussed in “Performance Obligations” above. For distinct OEM hardware sales, revenue is recognized when control has transferred to the customer, which typically occurs when the hardware has been shipped to the client, risk of loss has transferred to the client and the Company has a present right to payment for the hardware.

Cost of Services

Cost of Services

Recurring operating costs for services contracts are recognized as incurred. Certain eligible, nonrecurring costs (i.e., setup costs) incurred in the initial phases of outsourcing contracts and other cloud-based services contracts, are capitalized when the costs relate directly to the contract, the costs generate or enhance resources of the Company that will be used in satisfying the performance obligation in the future and the costs are expected to be recovered. These costs consist of transition and setup costs related to the installation of systems and processes and other deferred fulfillment costs, including, for example, prepaid assets used in services contracts (i.e., prepaid software or prepaid maintenance). Capitalized costs are amortized on a straight-line basis over the expected period of benefit, which approximates the pattern of transfer to the client of the services to which the asset relates and includes anticipated contract renewals or extensions. Additionally, fixed assets associated with these contracts are capitalized and depreciated on a straight-line basis over the expected useful life of the asset and recorded in cost of sales. If an asset is contract-specific and cannot be repurposed, then the depreciation period is the shorter of the useful life of the asset or the contract term. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. If the carrying amount is deemed not recoverable, an impairment loss is recognized. Refer to Note 3 – Revenue Recognition for the amount of deferred costs to fulfill a contract at March 31, 2024 and 2023.

In situations in which an outsourcing contract is terminated, the terms of the contract may require the client to reimburse the Company for the recovery of unbilled accounts receivable, unamortized deferred contract costs and additional costs incurred by the Company to transition the services.

Incremental Costs of Obtaining a Contract

Incremental costs of obtaining a contract (e.g., sales commissions) are capitalized and amortized on a straight-line basis, which approximates the pattern that the assets’ economic benefits are expected to be consumed, over the expected customer relationship period if the Company expects to recover those costs. The expected customer relationship period is determined based on the average customer relationship period, including expected renewals, for each offering type and ranges from three to six years. Expected renewal periods are only included in the expected customer relationship period if commission amounts paid upon renewal are not commensurate with amounts paid on the initial contract. Incremental costs of obtaining a contract include only those costs the Company incurs to obtain a contract that it would not have incurred if the contract had not been obtained. The Company has determined that certain commissions programs meet the requirements to be capitalized. For contracts shorter than one year, the Company has elected the practical expedient to recognize sales commissions as incurred. Additionally, some commission programs are

not subject to capitalization as the revenue for services is paid over time and the commission expense is paid and recognized as the related revenue is recognized.

Expense and Other (Income)

Expense and other income within the Company’s financial statements through the Separation reflect allocations to the Company by IBM based on direct usage, with the remainder allocated on a pro-rata basis of gross profit, headcount, assets or other measures the Company has determined as reasonable. Expense and other income within the Company’s consolidated financial statements for the periods from November 4, 2021 onward is based on our reported results as a standalone company.

Selling, General and Administrative

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expense is charged to income as incurred, except for certain sales commissions, which are capitalized and amortized. For further information regarding capitalizing sales commissions, see “Incremental Costs of Obtaining a Contract” above. Expenses of promoting and selling services are classified as selling expense and, in addition to sales commissions, include such items as compensation, advertising and travel. General and administrative expense includes such items as compensation, legal costs, office supplies, non-income taxes, insurance and office rental. In addition, general and administrative expense includes other operating items such as allowance for credit losses, amortization of certain intangible assets and research, development and engineering (“RD&E”) costs. Total RD&E costs were $58 million, $79 million, $23 million, and $63 million for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period), and the year ended December 31, 2021, respectively.

Advertising and promotional costs are expensed as incurred. Advertising and promotional expense, which includes media, agency and promotional expense directly incurred by the Company was $115 million, $136 million, $54 million, and $56 million for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period), and the year ended December 31, 2021, respectively. Costs related to the initial establishment of the Kyndryl brand are recorded in Transaction-related costs in the Consolidated Income Statement. All other advertising and promotional costs are recorded in SG&A expense in the Consolidated Income Statement.

Other Expense

Other expense primarily consists of (income) and expense related to certain components of retirement-related costs, including interest costs, expected return on plan assets, amortization of prior service costs (credits), curtailments and settlements and other net periodic benefit costs. Also included are gains and losses from foreign currency transactions.

Defined Benefit Pension and Nonpension Postretirement Benefit Plans

Defined Benefit Pension and Nonpension Postretirement Benefit Plans

Prior to the Separation, the defined benefit plans and nonpension postretirement benefit plans in which certain Kyndryl employees participated were sponsored by IBM. During this period, the Consolidated Income Statement reflected a proportional allocation of net period benefit cost based on headcount associated with the Company.

For defined benefit pension plans, the benefit obligation is the projected benefit obligation (PBO), which represents the actuarial present value of benefits expected to be paid upon retirement based on employee services already rendered and estimated future compensation levels. For nonpension postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation (APBO), which represents the actuarial present value of postretirement benefits attributed to employee services already rendered. The fair value of plan assets represents the current market value of assets held for the benefit of participants. For co-sponsored plans, the fair value of plan assets based on Company contributions, distributions and market returns and the benefit obligation attributed to employees of the Company are allocated to Kyndryl.

Overfunded plans, in which the fair value of plan assets exceeds the benefit obligation, are aggregated, and recorded in pension assets in the Consolidated Balance Sheet. Underfunded plans, in which the benefit obligation

exceeds the fair value of plan assets, are aggregated and the noncurrent portion of this excess is recorded in retirement and nonpension postretirement benefit obligations in the Consolidated Balance Sheet. The current portion of the benefit obligation in excess of the fair value of plan assets represents the actuarial present value of benefits payable in the next twelve months, measured on a plan-by-plan basis. The current portion of this obligation is recorded in accrued compensation and benefits in the Consolidated Balance Sheet.

Net periodic benefit cost of defined benefit pension and nonpension postretirement benefit plans is recorded in the Consolidated Income Statement and includes service cost, interest cost, expected return on plan assets, amortization of prior service costs (credits) and actuarial (gains) losses previously recognized as a component of other comprehensive income (loss) (OCI). The service cost component of net benefit cost is recorded in Cost of services and SG&A in the Consolidated Income Statement (unless eligible for capitalization) based on the employees’ respective functions. The other components of net benefit cost are presented separately from service cost within other expense in the Consolidated Income Statement.

Actuarial (gains) losses and prior service costs (credits) are recognized as a component of OCI in the Consolidated Statement of Comprehensive Income (Loss) as they arise. Those actuarial (gains) losses and prior service costs (credits) are subsequently recognized as a component of net periodic benefit cost pursuant to the recognition and amortization provisions of applicable accounting guidance. Actuarial (gains) losses arise as a result of differences between actual experience and assumptions or as a result of changes in actuarial assumptions. Prior service costs (credits) represent the cost of benefit changes attributable to prior service granted in plan amendments.

The measurement of benefit obligations and net periodic benefit cost is based on estimates and assumptions approved by the Company’s management. These valuations reflect the terms of the plans and use participant-specific information such as compensation, age and years of service, as well as certain assumptions, including estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates and mortality rates.

The Company participates in non-U.S. multi-employer pension plans and makes required contributions to those plans, which are recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions.

Defined Contribution Plans

Prior to the Separation, the Parent offered various defined contribution plans for U.S. and non-U.S. employees. In September 2021, in preparation for the Separation, Kyndryl established standalone defined contribution plans, and employees identified as Kyndryl employees were enrolled into these plans. Contribution expense associated with employer matching benefits is recorded when the employee renders service to the Company. The charge is recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions.

Stock-Based Compensation

Stock-Based Compensation

Stock-based compensation expense represents the cost related to stock-based awards granted to employees under Kyndryl’s stock-based compensation plan (the “Kyndryl Plan”). The Company establishes stock-based compensation values at the grant date, based on the estimated fair value of the award and recognizes the cost on a straight-line basis (net of actual forfeitures) over the requisite employee service period. Kyndryl grants the Company’s employees Restricted Stock Units (RSUs), market-conditioned stock units, performance-conditioned stock units and stock options. RSUs are stock units granted to employees that entitle the holder to shares of Kyndryl common stock as the award vests, typically over a one- to four-year period. Market-conditioned stock units are granted to employees with vesting conditions based on the Company’s achievement of a market condition and are cliff vested at the end of the three-year service period. Performance-conditioned stock units are granted to employees with vesting conditions based on the attainment of operational targets (e.g., signings and free cash flows) and are cliff vested at the end of the three-year performance period. Stock options are vested over a one- to four-year period and have a ten-year contractual term. As of March 31, 2024, 47.9 million shares of common stock have been approved to be granted to employees under the Kyndryl Plan. Dividend equivalents are not paid on the stock-based awards described above.

The fair value of the RSUs is determined on the grant date based on Kyndryl’s stock price, adjusted for the exclusion of dividend equivalents where applicable. The fair value of market-conditioned stock units is determined on the date of grant using a Monte Carlo simulation model which estimates the probability of satisfying market conditions. The fair value of the performance-conditioned stock units is determined on the grant date based on Kyndryl’s stock price and subsequently adjusted based on the probability of attainment. The fair value of stock options is determined on the grant date using a Black-Scholes model. Stock-based compensation cost is recorded in Cost of services and SG&A in the Consolidated Income Statement based on the employees’ respective functions.

Prior to the Separation, the Company participated in various IBM stock-based compensation plans, including incentive compensation plans. All awards granted under the plans were based on IBM’s common shares and, as such, were reflected in the former Parent’s Consolidated Statement of Stockholders’ Equity. For the pre-Separation period, stock-based compensation cost is based on the awards and terms previously granted by the former Parent to employees who exclusively supported Kyndryl operations. At the time of Kyndryl’s Spin-off, each outstanding IBM RSU and PSU held by a Kyndryl employee was converted into a Kyndryl RSU. The equity award exchange ratio was determined as the closing per share price of IBM shares on the last trading day prior to the Spin-off divided by the opening price of Kyndryl common stock on the first trading day following the Spin-off.

The Company records deferred tax assets for awards that result in tax deductions in the consolidated financial statements calculated based on the amount of compensation cost recognized and the relevant statutory tax rates. The differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the income tax return are recorded as a benefit or expense to the provision for income taxes in the Consolidated Income Statement.

Derivative Financial Instruments

Derivative Financial Instruments

Prior to the third quarter of 2021, Kyndryl did not independently execute derivative financial instruments to manage its foreign currency risk and instead participated in a centralized foreign currency hedging program administered by IBM. The hedging activity allocated to Kyndryl was for the management of the Company’s forecasted foreign currency expenses.

After the Separation, the Company started using derivative financial instruments to manage foreign currency risk. The Company does not use derivative financial instruments for trading or speculative purposes. Derivative financial instruments that qualify for hedge accounting are designated as either cash flow hedges or net investment hedges. Additionally, the Company may enter into derivative contracts that economically hedge certain risks, even when hedge accounting does not apply, or the Company elects not to apply hedge accounting.

Derivatives are recognized in the Consolidated Balance Sheet at fair value on a gross basis as either assets or liabilities and classified as current or noncurrent based upon whether the maturity of the instrument is less than or greater than twelve months.

Changes in the fair value of derivatives designated as cash flow hedges are recorded, net of applicable taxes, in OCI and subsequently reclassified into the same income statement line item as the hedged exposure when the underlying hedged item is recognized in earnings. Derivatives designated as net investment hedges are accounted for using the spot method, with changes in the fair value of the derivatives attributable to changes in spot rates recorded within foreign currency translation (“CTA”) as a component of other comprehensive income (loss) and remaining there until the hedged net investments are sold or substantially liquidated. The changes in the fair value of the derivatives that are attributable to changes in the difference between the forward rate and spot rate are excluded from the assessment of hedge effectiveness. The changes in fair value that are attributable to the excluded components are initially recorded in CTA and then recognized in interest expense on the Consolidated Income Statement over the life of the derivative instruments. Changes in fair value of derivatives not designated as hedges are reported in other expense in the Consolidated Income Statement. See Note 7 – Financial Assets and Liabilities for further information.

The cash flows associated with derivatives designated as cash flow hedges are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives designated as net

investment hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows, except for cash flows from the periodic interest settlements of cross-currency interest rate swaps designated as net investment hedges, which are reported as cash flows from operating activities in the Consolidated Statement of Cash Flows. Cash flows from derivatives not designated as hedges are reported as cash flows from investing activities in the Consolidated Statement of Cash Flows.

Translation of Non-U.S. Currency Amounts

Translation of Non-U.S. Currency Amounts

Assets and liabilities of non-U.S. subsidiaries that have a local functional currency are translated to U.S. dollars at year-end exchange rates. Translation adjustments are recorded in OCI. Income and expense items are translated at weighted-average rates of exchange prevailing during the year.

Property and equipment, deferred income and other non-monetary assets and liabilities of non-U.S. subsidiaries and branches that operate in U.S. dollars are translated at the approximate exchange rates prevailing when the Company acquired the assets or liabilities. All other assets and liabilities denominated in a currency other than U.S. dollars are translated at year-end exchange rates with the transaction gain or loss recognized in other expense. Income and expense items are translated at the weighted-average rates of exchange prevailing during the year. These translation gains and losses are included in net income for the period in which exchange rates change.

Cash and Cash Equivalents

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less on the date of purchase are considered to be cash equivalents.

Accounts Receivable and Allowance for Current Expected Credit Losses

Accounts Receivable and Allowance for Current Expected Credit Losses

The Company classifies the right to consideration in exchange for products or services transferred to a client as a receivable. Receivables are recorded concurrent with billing and delivery of a service to customers. An allowance for uncollectible receivables and contract assets, if needed, is estimated based on specific customer situations, current and future expected economic conditions and past experiences of losses, as well as an assessment of potential recoverability of the balance due.

Receivable losses are charged against the allowance in the period in which the receivable is deemed uncollectible. Subsequent recoveries, if any, are credited to the allowance. Write-offs of receivables and associated reserves occur to the extent that the customer is no longer in operation and/or there is no reasonable expectation of additional collections or repossession.

Transfers of Financial Assets

Transfers of Financial Assets

The Company has entered into agreements with third-party financial institutions to sell certain financial assets (primarily trade receivables) without recourse. The Company has determined these are true sales. The carrying value of the financial asset sold is derecognized, and a net gain or loss on the sale is recognized, at the time of the transfer. The first agreement, which was executed in November 2021 and subsequently amended, enabled us to sell certain of our trade receivables to the counterparty. The initial term of this agreement was 18 months, and the agreement automatically resets to a term of 18 months after every six months, unless either party elects not to extend. The second agreement was executed in June 2022 with a separate third-party financial institution and renews automatically on its anniversary date.

The net proceeds from these arrangements are reflected as cash provided by operating activities in the Consolidated Statement of Cash Flows. Gross proceeds from receivables sold to third parties and the financing division of our former Parent were $3.6 billion, $3.1 billion, $485 million, and $2.5 billion for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022, and the year ended December 31, 2021, respectively. The fees associated with the transfers of receivables were $49 million for the year ended March 31, 2024, $47 million for the year ended March 31, 2023, $7 million for the three months ended March 31, 2022, and not material for the year ended December 31, 2021.

Fair Value Measurement

Fair Value Measurement

In determining the fair value of its financial instruments, the Company uses methods and assumptions that are based on market conditions and risks existing at each balance sheet date. All methods of assessing fair value result in a general approximation of value, and such value may never actually be realized.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company classifies certain assets and liabilities based on the following fair value hierarchy:

●

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date;

●

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

●

Level 3 — Unobservable inputs for the asset or liability.

Items valued using internally generated models are classified according to the lowest level input or value driver that is significant to the valuation. The determination of fair value considers various factors including interest rate yield curves and time value underlying the financial instruments. For derivatives and debt securities, the Company uses a discounted cash flow analysis using discount rates commensurate with the duration of the instrument.

In determining the fair value of financial instruments, the Company considers certain market valuation adjustments to the “base valuations” using the methodologies described below for several parameters that market participants would consider in determining fair value:

●

Counterparty credit risk adjustments are applied to financial instruments, taking into account the actual credit risk of a counterparty as observed in the credit default swap market to determine the true fair value of such an instrument.

●

Credit risk adjustments are applied to reflect the Company’s own credit risk when valuing all liabilities measured at fair value. The methodology is consistent with that applied in developing counterparty credit risk adjustments, but incorporates the Company’s credit risk as observed in the credit default swap market.

Certain non-financial assets such as property, plant and equipment, operating right-of-use assets, land, goodwill and intangible assets are recorded at fair value or at cost, as appropriate, in the period they are initially recognized, and such fair value may be adjusted in subsequent periods if an event occurs or circumstances change that indicate that the asset may be impaired. The impairment models used for non-financial assets depend on the type of asset. The fair value measurements, in such instances, would be classified in Level 3 of the fair value hierarchy.

Supplier Financing Program

Supplier Financing Program

In the year ended March 31, 2024, the Company initiated a supplier financing program with a third-party financial institution under which the Company agrees to pay the financial institution the stated amounts of invoices from participating suppliers on the originally invoiced due date, which have an average term of 90 to 120 days. The financial institution offers earlier payment of the invoices at the sole discretion of the supplier for a discounted amount. The Company does not provide secured legal assets or other forms of guarantees under the arrangements. The Company is not a party to the arrangement between its suppliers and the financial institution. The Company or the financial institution may terminate the agreement upon at least 180 days notice. The Company’s obligations under this program continue to be recognized as accounts payable in the Consolidated Balance Sheet. The obligations outstanding under this program at March 31, 2024 were immaterial.

Leases

Leases

When procuring goods or services, the Company determines whether an arrangement contains a lease at its inception. As part of that evaluation, the Company considers whether there is an implicitly or explicitly identified asset in the arrangement and whether the Company, as the lessee, has the right to control the use of that asset. Leases are classified as either finance leases or operating leases.

The Company recognized right-of-use (“ROU”) assets and associated lease liabilities in the Consolidated Balance Sheet for leases with a term of more than twelve months when a majority percentage of utilization was attributed to the Company. The lease liabilities recognized pre-Separation were measured at the lease commencement date and determined using the present value of the lease payments not yet paid and the former Parent’s incremental borrowing rate, since they were negotiated by the former Parent prior to Separation. Any new or modified leases entered into after the Separation are measured at Kyndryl’s incremental borrowing rate, as the interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs, prepaid rent and lease incentives. The Company’s variable lease payments generally relate to payments tied to various indexes, non-lease components and payments above a contractual minimum fixed amount.

Operating leases are included in operating right-of-use assets net, operating lease liabilities (current and non-current) in the Consolidated Balance Sheet. Finance leases are included in property and equipment, current portion of long-term debt and long-term debt in the Consolidated Balance Sheet. The lease term includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

The Company made a policy election to not recognize leases with a lease term of twelve months or less in the Consolidated Balance Sheet.

For all asset classes, the Company has elected the lessee practical expedient to combine lease and non-lease components (e.g., maintenance services) and account for the combined unit as a single lease component. A significant portion of the Company’s lease portfolio is real estate leases, which are mainly accounted for as operating leases and are primarily used for corporate offices and data centers. The average term of the real estate leases is approximately five years. The Company also has equipment leases, such as for IT equipment and vehicles, which have lease terms that range from two to five years. For certain of these operating and finance leases, the Company applies a portfolio approach to account for the lease assets and lease liabilities.

Intangible Assets Including Goodwill

Intangible Assets Including Goodwill

Goodwill represents the excess of the purchase price over the fair value of net assets, including the amount assigned to identifiable intangible assets. The primary drivers that generate goodwill are the value of synergies between the acquired entities and the Company and the acquired assembled workforce, neither of which qualifies as a separately identifiable intangible asset. Goodwill recorded in an acquisition is assigned to applicable reporting units based on expected revenues or expected cash flows. Goodwill inherited from the former Parent pre-Separation represents the historical goodwill balances in IBM’s managed infrastructure services business arising from acquisitions specific to the Company. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their useful lives, which approximates the pattern that the assets’ economic benefits are expected to be consumed over time. Amortization of completed technology is recorded in cost of services, and amortization of all other intangible assets is recorded in SG&A expense. All costs related to internally developed computer software during the preliminary project stage and post-implementation operation stage are expensed as incurred. Costs incurred during application development stage are capitalized and included in intangibles and amortized over the estimated useful life of the software.

Impairment

Impairment

Long-lived assets, other than goodwill, are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The impairment test is based on undiscounted cash flows and, if impaired, the asset is written down to fair value based on either discounted cash flows or appraised values. Goodwill is

tested for impairment at least annually and whenever changes in circumstances indicate an impairment may exist. The goodwill impairment test is performed at the reporting unit level, which aligns with our operating segments. Impairment charges related to long-lived assets, intangible assets and goodwill, if any, are recorded as impairment expense in the Consolidated Income Statement.

Transaction-Related Costs (Benefits)

Transaction-Related Costs (Benefits)

The Company classifies certain expenses and benefits related to the Separation, acquisitions and divestitures (if any) as “transaction-related costs (benefits)” in the Consolidated Income Statement. Transaction-related costs include employee retention expenses, information technology costs, marketing expenses to establish the Kyndryl brand, legal, accounting, consulting and other professional service costs required to prepare for and execute the Separation, costs and benefits resulting from settlements with our former Parent associated with pre-Separation and Separation-related matters, and other costs related to contract and supplier novation and integration.

Workforce Rebalancing and Site-Rationalization Charges

Workforce Rebalancing and Site-Rationalization Charges

The Company has incurred workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets and charges related to lease terminations. We record a liability for employee termination benefits either when it is probable that an employee is entitled to it and the amount of the benefits can be reasonably estimated or when management has communicated the termination plan to employees. Workforce rebalancing charges are recorded as a separate line on the Consolidated Income Statement. Charges related to ceasing to use leased assets and owned fixed assets and charges related to lease terminations are recognized as cost of services or selling, general and administrative expenses based on our classification policy for each category. Refer to Note 19 – Workforce Rebalancing and Site-Rationalization Charges for details of this program.

Property and Equipment

Property and Equipment

Property and equipment are recorded at cost, or in the case of acquired property and equipment, at fair value at the date of the acquisition. Expenditures for repairs and maintenance costs are expensed as incurred, whereas expenditures that extend the life or increase the functionality of the asset are capitalized as additions to property and equipment. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is included in the determination of net income or loss.

In March 2024, the Company completed its assessment of the useful lives of its information technology equipment. Based on our usage experience and data analysis, the Company determined it should increase the estimated useful lives of its information technology equipment from five to six years. This change in accounting estimate will be effective beginning April 1, 2024 and applied on a prospective basis to these assets on the Company’s balance sheet as of March 31, 2024, as well as future asset purchases. Based on the net carrying value of information technology equipment, in the Company’s Consolidated Balance Sheet as of March 31, 2024, the Company estimates this change will decrease non-cash depreciation expense for fiscal year 2025 by approximately $180 million.

We compute depreciation expense on a straight-line method over the estimated useful lives of the assets as follows:


Classification		Estimated Useful Life
Buildings		30 to 50 years
Land improvements		20 years
Leasehold improvements*		Estimated useful life or term of lease
Office and other equipment		2 to 20 years
Information technology equipment (acquired as used)		1.5 to 3 years
Information technology equipment (acquired as new)**		5 years

* Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 10 years.

** Extended to six years effective April 1, 2024.

Environmental

Environmental

The costs of internal environmental protection programs that are preventative in nature are expensed as incurred. When a cleanup program becomes likely and it is probable that the Company will incur cleanup costs and those costs can be reasonably estimated, the Company accrues remediation costs for known environmental liabilities.

Income Taxes

Income Taxes

Prior to the Separation, our operations were included in the consolidated U.S. federal and certain state and local and foreign income tax returns filed by our former Parent. The Company also filed certain separate foreign income tax returns. For purposes of the historical periods presented on a “carve-out” basis, the income tax provisions have been calculated using the separate return basis, as if the Company filed separate tax returns. The separate return method applies the accounting guidance for income taxes to the standalone financial statements as if the Company were a separate taxpayer and a standalone enterprise for the periods presented. Tax attributes have been reported based on the hypothetical separate return basis results for the periods presented in the Company’s financial statements. The calculation of income taxes on a hypothetical separate return basis requires a considerable amount of judgment and use of both estimates and allocations; pre-Separation current and deferred taxes may not be reflective of the actual tax balances subsequent to the Separation.

Post-Separation, the income tax provisions are calculated based on Kyndryl’s operating footprint, as well as tax return elections and assertions. Prior to the Separation, current income tax liabilities including amounts for unrecognized tax benefits related to our activities included in IBM’s income tax returns were deemed to be immediately settled with IBM through the Net Parent investment account in the Consolidated Balance Sheet and reflected in Net transfers from Parent in the financing activities section in the Consolidated Statement of Cash Flows. Post-Separation, liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors.

Income tax expense is based on reported income before income taxes. Deferred income taxes reflect the tax effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. U.S. tax reform introduced Global Intangible Low-Taxed Income (“GILTI”), which subjects a U.S. shareholder to current tax on income earned by certain foreign subsidiaries. GAAP allows companies to either (i) recognize deferred taxes for temporary differences that are expected to reverse as GILTI in future years or (ii) account for taxes on GILTI as period costs in the year the tax is incurred. The Company has elected to recognize GILTI impact in the specific period in which it occurs.

Valuation allowances are recognized to reduce deferred tax assets to the amount that will more likely than not be realized. In assessing the need for a valuation allowance, management considers all available evidence for each jurisdiction including past operating results, estimates of future taxable income and the feasibility of ongoing tax planning strategies and actions. When there is a change in the determination as to the amount of deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to provision for income taxes in the period in which such determination is made.

The Company recognizes additional tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. The noncurrent portion of tax liabilities is included in other liabilities in the Consolidated Balance Sheet. To the extent that new information becomes available which causes the Company to change its judgment regarding the adequacy of existing tax liabilities, such changes to tax liabilities will impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.

Net Loss per Share

Net Loss per Share

Net loss per share is computed by dividing net loss for the period by the weighted-average number of common shares outstanding during the period. The calculation of basic and diluted earnings per share for the pre-Separation period was based on the number of shares outstanding on November 4, 2021. Refer to Note 6 – Net Loss per Share for a reconciliation as well as Note 15 – Stock-based Compensation for further discussion on awards.

BORROWINGS - Term Loan, Revolving Credit Facility, and Loan Agreement (Details) $ in Millions	1 Months Ended		12 Months Ended
	Nov. 30, 2021 USD ($)	Oct. 31, 2021 USD ($) item	Mar. 31, 2024 USD ($)	Mar. 31, 2023 USD ($)	Jun. 30, 2021 USD ($)
Line of Credit Facility [Line Items]
Debt issuance cost				$ 5
Number of consecutive fiscal quarters \| item		4
Net leverage ratio		3.50
Term Loan
Line of Credit Facility [Line Items]
Aggregate principal amount		$ 500
Credit facility term		3 years
Amount drawn	$ 500
Term Loan \| LIBOR
Line of Credit Facility [Line Items]
Debt instrument basis spread on variable rate (as a percent)		1.125%
Revolving Credit Facility
Line of Credit Facility [Line Items]
Aggregate principal amount		$ 3,150
Amount drawn			$ 0
Loan Agreement \| IBM
Line of Credit Facility [Line Items]
Aggregate principal amount					$ 140

CONSOLIDATED STATEMENT OF EQUITY - USD ($) shares in Millions, $ in Millions	Common Stock and Additional Paid-In Capital	Net Parent Investment	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Accumulated Deficit	Non-Controlling Interests	Total
Balance at the beginning of the period at Dec. 31, 2020		$ 6,023	$ (1,096)			$ 58	$ 4,985
Equity
Net income (loss)		(1,929)			$ (375)		(2,304)
Other comprehensive income (loss), net of tax			292				292
Issuance of common stock and reclassification of net transfers from Parent	$ 4,271	$ (4,095)	(339)				(163)
Issuance of common stock and reclassification of net transfers from parent (in shares)	224.1
Common stock issued under employee plans	$ 13						13
Common stock issued under employee plans (in shares)	0.1
Purchases of treasury stock				$ (1)			(1)
Purchases of treasury stock (in shares)	(0.0)
Changes in non-controlling interests						(56)	(56)
Balance at the end of the period at Dec. 31, 2021	$ 4,284		(1,143)	(1)	(375)	3	2,767
Balance at the end of the period (in shares) at Dec. 31, 2021	224.2
Equity
Net income (loss)					(229)		(229)
Other comprehensive income (loss), net of tax			54				54
Common stock issued under employee plans	$ 31						31
Common stock issued under employee plans (in shares)	0.5
Purchases of treasury stock				(3)			(3)
Purchases of treasury stock (in shares)	(0.2)
Changes in non-controlling interests						91	91
Balance at the end of the period at Mar. 31, 2022	$ 4,315		(1,089)	(4)	(605)	94	2,711
Balance at the end of the period (in shares) at Mar. 31, 2022	224.5
Equity
Net income (loss)					(1,374)		(1,374)
Other comprehensive income (loss), net of tax			27				27
Common stock issued under employee plans	$ 113						113
Common stock issued under employee plans (in shares)	4.8
Purchases of treasury stock				(19)			(19)
Purchases of treasury stock (in shares)	(1.7)
Changes in non-controlling interests						4	4
Balance at the end of the period at Mar. 31, 2023	$ 4,428		(1,062)	(23)	(1,978)	97	1,462
Balance at the end of the period (in shares) at Mar. 31, 2023	227.7
Equity
Net income (loss)					(340)		(340)
Other comprehensive income (loss), net of tax			(82)				(82)
Common stock issued under employee plans	$ 95						95
Common stock issued under employee plans (in shares)	4.1
Purchases of treasury stock				(22)			(22)
Purchases of treasury stock (in shares)	(1.4)
Changes in non-controlling interests						10	10
Balance at the end of the period at Mar. 31, 2024	$ 4,524		$ (1,145)	$ (45)	$ (2,319)	$ 107	$ 1,122
Balance at the end of the period (in shares) at Mar. 31, 2024	230.4

TRANSACTIONS WITH FORMER PARENT - Net Parent Investment (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
IBM \| Related Party
Related Party Transaction [Line Items]
Net Parent investment	$ 0	$ 0	$ 0	$ 0

EQUITY (Tables)

12 Months Ended

Mar. 31, 2024

EQUITY

Reclassifications and taxes related to items of other comprehensive income (loss)


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended March 31, 2024	Amount		Benefit		Amount
Foreign currency translation adjustments:
Foreign currency translation adjustments	$	(36)	$	—	$	(36)
Unrealized losses on net investment hedges		(11)		—		(11)
Total foreign currency translation adjustments	$	(47)	$	—	$	(47)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	22	$	(1)	$	21
Reclassification of (gains) losses to net income		(21)		—		(21)
Total unrealized gains (losses) on cash flow hedges	$	1	$	(1)	$	—
Retirement-related benefit plans*:
Prior service (credits) costs	$	(3)	$	1	$	(2)
Net gains (losses) arising during the period		(56)		10		(45)
Curtailments and settlements		10		(2)		8
Amortization of prior service (credits) costs		1		(0)		1
Amortization of net (gains) losses		5		(2)		3
Total retirement-related benefit plans	$	(42)	$	7	$	(36)
Other comprehensive income (loss)	$	(88)	$	6	$	(82)

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended March 31, 2023	Amount		Benefit		Amount
Foreign currency translation adjustments	$	(186)	$	—	$	(186)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	(4)	$	—	$	(4)
Reclassification of (gains) losses to net income		2		—		2
Total unrealized gains (losses) on cash flow hedges	$	(3)	$	—	$	(2)
Retirement-related benefit plans*:
Prior service (credits) costs	$	4	$	—	$	3
Net gains (losses) arising during the period		175		—		175
Curtailments and settlements		10		(2)		8
Amortization of prior service (credits) costs		1		—		1
Amortization of net (gains) losses		40		(11)		29
Total retirement-related benefit plans	$	229	$	(14)	$	215
Other comprehensive income (loss)	$	40	$	(14)	$	27

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the three months ended March 31, 2022:	Amount		Benefit		Amount
Foreign currency translation adjustments	$	(51)	$	—	$	(51)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period		1		—		1
Reclassification of (gains) losses to net income		(1)		—		(1)
Total unrealized gains (losses) on cash flow hedges	$	—	$	—	$	—
Retirement-related benefit plans*:
Net gains (losses) arising during the period	$	136	$	(45)	$	91
Curtailments and settlements		4		(1)		3
Amortization of net (gains) losses		16		(4)		12
Total retirement-related benefit plans	$	156	$	(50)	$	105
Other comprehensive income (loss)	$	105	$	(50)	$	54

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended December 31, 2021:	Amount		Benefit		Amount
Foreign currency translation adjustments	$	194	$	—	$	194
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) arising during the period		4		—		4
Reclassification of (gains) losses to net income		(1)		—		(1)
Total unrealized gains (losses) on cash flow hedges	$	3	$	—	$	3
Retirement-related benefit plans*:
Prior service (credits) costs	$	1	$	(2)	$	(1)
Net gains (losses) arising during the period		72		(17)		54
Curtailments and settlements		3		(1)		2
Amortization of net (gains) losses		51		(13)		38
Total retirement-related benefit plans	$	127	$	(33)	$	94
Other comprehensive income (loss)	$	324	$	(33)	$	292

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.

Accumulated other comprehensive income (loss), net of taxes


	Net Unrealized		Foreign Currency		Net Change in		Accumulated Other
	Gains (Losses)		Translation		Retirement-Related		Comprehensive
(Dollars in millions)	on Cash Flow Hedges		Adjustments*		Benefit Plans		Income (Loss)
December 31, 2020	$	—	$	(878)	$	(218)	$	(1,096)
Net transfers from Parent		—		—		(339)		(339)
Other comprehensive income (loss)		3		194		94		292
December 31, 2021	$	3	$	(684)	$	(463)	$	(1,143)
Other comprehensive income (loss)		—		(51)		105		54
March 31, 2022	$	3	$	(735)	$	(357)	$	(1,089)
Other comprehensive income (loss)		(2)		(186)		215		27
March 31, 2023	$	—	$	(921)	$	(142)	$	(1,062)
Other comprehensive income (loss)		—		(47)		(36)		(82)
March 31, 2024	$	—	$	(967)	$	(178)	$	(1,145)

*	Foreign currency translation adjustments are presented gross.

SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Mar. 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Kyndryl’s Spin-off

Kyndryl Holdings, Inc. (“we”, “the Company” or “Kyndryl”) is a leading technology services company and the largest IT infrastructure services provider in the world, serving thousands of enterprise customers whose operations span over 100 countries. Prior to November 3, 2021, the Company was wholly owned by International Business Machines Corporation (“IBM”, “Parent” or “former Parent”).

In November 2021, our former Parent effected the spin-off (the “Separation” or the “Spin-off”) of the infrastructure services unit of its Global Technology Services segment through the distribution of shares of Kyndryl’s common stock representing 80.1% of total shares outstanding to IBM stockholders. Kyndryl’s stock began trading as an independent company on November 4, 2021, and IBM disposed of its 19.9% retained interest in Kyndryl common stock in the year following the Spin-off. In connection with the Separation, the Company entered into several agreements with IBM governing the relationship of the parties following the Separation.

Description of Business

Our purpose is to design, build and manage secure and responsive private, public and multi-cloud environments to serve our customers’ needs and accelerate their digital transformations. We have a long track record of helping enterprises navigate major technological changes, particularly by enabling our customers to focus on the core aspects of their businesses during these shifts while trusting us with their most critical systems.

We provide engineering talent, operating solutions and insights derived from our knowledge and data around IT systems. This enables us to deliver advisory, implementation and managed services at scale across technology infrastructures that allow our customers to de-risk and realize the full value of their digital transformations. We do this while embracing new technologies and solutions and continually expanding our skills and capabilities, as we help advance the vital systems that power progress for our customers. We deliver technology services capabilities, insights and depth of expertise to modernize and manage IT environments based on our customers’ unique needs. We offer services across domains such as cloud services, core enterprise and zCloud services, applications, data and artificial intelligence services, digital workplace services, security and resiliency services and network and edge services as we continue to support our customers through technological change. Our services enable us to modernize and manage cloud and on-premises environments as “one” for our customers, enabling them to scale seamlessly. To deliver these services, we rely on our global team of skilled practitioners, consisting of approximately 80,000 professionals.

Basis of Presentation

For the periods subsequent to November 3, 2021, the financial statements are presented on a consolidated basis as the Company became a standalone public company.

Transition Period

Principles of Consolidation

Use of Estimates

Revenue

The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions.

Performance Obligations

The revenue policies below are applied to each performance obligation, as applicable.

Standalone Selling Price

Nature of Products and Services

Cost of Services

Incremental Costs of Obtaining a Contract

not subject to capitalization as the revenue for services is paid over time and the commission expense is paid and recognized as the related revenue is recognized.

Expense and Other (Income)

Selling, General and Administrative Expenses

Other Expense

Defined Benefit Pension and Nonpension Postretirement Benefit Plans

Defined Contribution Plans

Stock-Based Compensation

Derivative Financial Instruments

Translation of Non-U.S. Currency Amounts

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or less on the date of purchase are considered to be cash equivalents.

Accounts Receivable and Allowance for Current Expected Credit Losses

Transfers of Financial Assets

Fair Value Measurement

●

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date;

●

Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and

●

Level 3 — Unobservable inputs for the asset or liability.

●

Supplier Financing Program

Leases

The Company made a policy election to not recognize leases with a lease term of twelve months or less in the Consolidated Balance Sheet.

Intangible Assets Including Goodwill

Impairment

Transaction-Related Costs (Benefits)

Workforce Rebalancing and Site-Rationalization Charges

Property and Equipment

We compute depreciation expense on a straight-line method over the estimated useful lives of the assets as follows:


Classification		Estimated Useful Life
Buildings		30 to 50 years
Land improvements		20 years
Leasehold improvements*		Estimated useful life or term of lease
Office and other equipment		2 to 20 years
Information technology equipment (acquired as used)		1.5 to 3 years
Information technology equipment (acquired as new)**		5 years

* Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 10 years.

** Extended to six years effective April 1, 2024.

Environmental

Income Taxes

Net Loss per Share

TRANSACTIONS WITH FORMER PARENT - Related Party Revenue and Purchases (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

24 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

Mar. 31, 2024

Aug. 11, 2022

Revenues

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Cost of services

3,824

^[2]

4,318

13,189

^[2]

14,498

^[2]

16,550

^[2]

Payment for purchase of hardware from IBM

180

651

865

752

Other noncurrent assets

267

$ 67

Property and equipment, net

2,674

2,779

2,674

Revenues

236

154

287

704

Cost of services

924

$ 1,006

1,382

3,979

IBM

Ownership interest transferred

19.90%

IBM | Related Party

Revenues

236

287

704

Cost of services

924

1,400

4,000

Payment for purchase of hardware from IBM

$ 25

$ 299

Other noncurrent assets

$ 265

Property and equipment, net

$ 265

Upgraded hardware period

2 years

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021
[2]	Including related-party cost of service of $1,382 for the year ended March 31, 2023, $924 for the three months ended March 31, 2022, and $3,979 for the year ended December 31, 2021

FINANCIAL ASSETS AND LIABILITIES - Not Measured at Fair Value (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Financial assets and financial liabilities:
Derivative Asset, Statement of Financial Position [Extensible Enumeration]		Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current
Derivative Liability, Statement of Financial Position [Extensible Enumeration]		Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current
Derivative assets impacted by netting arrangements		$ 0	$ 0
Long-term debt		2,900	3,000
Long-term debt, fair value		2,600	2,500
Fees associated with the transfers of receivables	$ 7	49	47	$ 0
Time deposits
Financial assets and financial liabilities:
Impairments of non-financial assets	$ 0	0	0	$ 0
Level 2
Financial assets and financial liabilities:
Derivative assets		5	15
Derivative liabilities		18	9
Cash and cash equivalents
Financial assets and financial liabilities:
Time deposits, carrying value		$ 828	$ 814

STOCK-BASED COMPENSATION - RSUs, Market-Conditioned Stock Units and Performance-Conditioned Stock Units Awards Activity (Details) - $ / shares shares in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023
Weighted Average Grant Price
Ending balance (in dollars per share)		$ 28.78
Restricted stock units
Number of Units
Beginning balance (in shares)	10.2	9.4	9.8
Awards granted (in shares)	0.4	3.1	5.0
Awards vested (in shares)	(0.5)	(4.0)	(4.9)
Awards canceled/ forfeited (in shares)	(0.2)	(0.4)	(0.5)
Ending balance (in shares)	9.8	8.0	9.4
Weighted Average Grant Price
Beginning balance (in dollars per share)	$ 26.82	$ 18.43	$ 26.36
Awards granted (in dollars per share)	17.61	13.52	10.80
Awards vested (in dollars per share)	28.04	21.92	26.09
Awards canceled/ forfeited (in dollars per share)	28.44	17.43	23.09
Ending balance (in dollars per share)	$ 26.36	$ 15.33	$ 18.43
Market-Conditioned Performance Awards
Number of Units
Beginning balance (in shares)	1.8	2.3	1.8
Awards granted (in shares)	0.0	0.6	0.7
Awards canceled/ forfeited (in shares)		(0.1)	(0.2)
Ending balance (in shares)	1.8	2.9	2.3
Weighted Average Grant Price
Beginning balance (in dollars per share)	$ 15.14	$ 14.40	$ 15.14
Awards granted (in dollars per share)	0	14.10	12.51
Awards canceled/ forfeited (in dollars per share)		14.43	14.46
Ending balance (in dollars per share)	$ 15.14	$ 14.32	$ 14.40
Performance-based stock units
Number of Units
Beginning balance (in shares)		2.3
Awards granted (in shares)		2.0	2.5
Awards canceled/ forfeited (in shares)		(0.1)	(0.1)
Ending balance (in shares)		4.3	2.3
Weighted Average Grant Price
Beginning balance (in dollars per share)		$ 10.62
Awards granted (in dollars per share)		13.37	$ 10.62
Awards canceled/ forfeited (in dollars per share)		11.85	10.62
Ending balance (in dollars per share)		$ 12.28	$ 10.62

RETIREMENT-RELATED BENEFITS - Expected Benefit Payments (Details) - Defined Benefit Pension Plans $ in Millions	Mar. 31, 2024 USD ($)
Expected Benefit Payments
2025	$ 121
2026	119
2027	116
2028	118
2029	118
2030-2034	$ 596

EQUITY - AOCI Rollforward (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
EQUITY - AOCI Rollforward (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	$ 2,767	$ 1,462	$ 2,711	$ 4,985
Other comprehensive income (loss)	54	(82)	27	292
Balance at the end of the period	2,711	1,122	1,462	2,767
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(1,143)	(1,062)	(1,089)	(1,096)
Net transfers from Parent				(339)
Other comprehensive income (loss)	54	(82)	27	292
Balance at the end of the period	(1,089)	(1,145)	(1,062)	(1,143)
Unrealized Gains (Losses) on Cash Flow Hedges
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	3		3
Other comprehensive income (loss)			(2)	3
Balance at the end of the period	3			3
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(684)	(921)	(735)	(878)
Other comprehensive income (loss)	(51)	(47)	(186)	194
Balance at the end of the period	(735)	(967)	(921)	(684)
Net Change Retirement-Related Benefit Plans
Accumulated Other Comprehensive Income (Loss) (net of tax)
Balance at the beginning of the period	(463)	(142)	(357)	(218)
Net transfers from Parent				(339)
Other comprehensive income (loss)	105	(36)	215	94
Balance at the end of the period	$ (357)	$ (178)	$ (142)	$ (463)

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

- Definition

Amount after tax and reclassification adjustments of other comprehensive income (loss).

+ References

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Amount of equity (deficit) attributable to parent and noncontrolling interest. Excludes temporary equity.

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-Subparagraph (f)
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+ Details

TRANSITION PERIOD - Income Statement (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

TRANSITION PERIOD

Revenues

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Cost of services

3,824

^[2]

4,318

13,189

^[2]

14,498

^[2]

16,550

^[2]

Selling, general and administrative expenses

690

714

2,773

2,914

2,776

Workforce rebalancing charges

138

Transaction-related costs (benefits)

(46)

264

627

Interest expense

122

Other expense

Total costs and expenses

4,620

5,175

16,221

17,876

20,560

Income (loss) before income taxes

(189)

(403)

(168)

(851)

(1,903)

Provision for income taxes

172

524

402

Net income (loss)

$ (229)

$ (494)

$ (340)

$ (1,374)

$ (2,304)

NET LOSS PER SHARE

Basic earnings (loss) per share (in dollars per share)

$ (1.02)

$ (2.20)

$ (1.48)

$ (6.06)

$ (10.28)

Diluted earnings (loss) per share (in dollars per share)

$ (1.02)

$ (2.20)

$ (1.48)

$ (6.06)

$ (10.28)

Weighted-average basic shares outstanding (in shares)

224.4

224.1

229.2

226.7

224.1

Weighted-average diluted shares outstanding (in shares)

224.4

224.1

229.2

226.7

224.1

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021
[2]	Including related-party cost of service of $1,382 for the year ended March 31, 2023, $924 for the three months ended March 31, 2022, and $3,979 for the year ended December 31, 2021

SEGMENTS - Results of segments (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

Segment Information

Revenues

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Segment adjusted EBITDA

592

2,461

2,052

2,223

United States

Segment Information

Revenues

1,169

4,295

4,726

4,805

Segment adjusted EBITDA

248

781

839

842

Japan

Segment Information

Revenues

706

2,344

2,502

2,923

Segment adjusted EBITDA

154

361

407

501

Principal Markets

Segment Information

Revenues

1,579

5,823

5,957

7,085

Segment adjusted EBITDA

740

371

341

Strategic Markets

Segment Information

Revenues

978

3,590

3,840

3,844

Segment adjusted EBITDA

$ 92

$ 579

$ 436

$ 540

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021

- Definition

Amount of revenue recognized from goods sold, services rendered, insurance premiums, or other activities that constitute an earning process. Includes, but is not limited to, investment and interest income before deduction of interest expense when recognized as a component of revenue, and sales and trading gain (loss).

+ References

+ Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Mar. 31, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Rule 10b5-1 Arrangement Modified	false
Non-Rule 10b5-1 Arrangement Modified	false

INTANGIBLE ASSETS INCLUDING GOODWILL - Intangible Assets by Class (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Intangible asset balances by major asset class
Gross Carrying Amount	$ 339	$ 353
Accumulated Amortization	(150)	(182)
Net Carrying Amount	188	171
Net carrying amount of intangible assets increased	17
Capitalized software
Intangible asset balances by major asset class
Gross Carrying Amount	172	83
Accumulated Amortization	(48)	(15)
Net Carrying Amount	125	68
Intangible asset amortization expense	33
Customer relationships
Intangible asset balances by major asset class
Gross Carrying Amount	152	232
Accumulated Amortization	(96)	(141)
Net Carrying Amount	56	91
Completed technology
Intangible asset balances by major asset class
Gross Carrying Amount		20
Accumulated Amortization		(20)
Patents and trademarks
Intangible asset balances by major asset class
Gross Carrying Amount	14	18
Accumulated Amortization	(6)	(6)
Net Carrying Amount	$ 8	$ 13

RETIREMENT-RELATED BENEFITS - Defined Contribution Retirement Plans and Nonpension Postretirement (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Retirement-Related Benefit Plans Disclosures [Line Items]
Defined contribution plans cost	$ 35	$ 140	$ 142	$ 165
Retirement and nonpension postretirement benefit obligations		$ 500	504
Non Pension Postretirement Benefit Plans
Retirement-Related Benefit Plans Disclosures [Line Items]
Retirement and nonpension postretirement benefit obligations			$ 10

FINANCIAL ASSETS AND LIABILITIES - Derivative Financial Instruments (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Foreign exchange contracts \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 281	$ 283
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	1,624	$ 1,506
Cross-currency swap contracts \| Designated as hedging instruments \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Notional amount	$ 500

TRANSITION PERIOD

12 Months Ended

Mar. 31, 2024

TRANSITION PERIOD

TRANSITION PERIOD

NOTE 18. TRANSITION PERIOD

We are presenting our consolidated financial statements for the three-month period ended March 31, 2022, as required. The following tables provide certain unaudited comparative financial information for the same period of the prior year.


	Three Months Ended March 31,
(In millions, except per share amounts)	2022		2021 (unaudited)
Revenues *	$	4,431	$	4,771

Cost of services **	$	3,824	$	4,318
Selling, general and administrative expenses		690		714
Workforce rebalancing charges		—		52
Transaction-related costs		58		55
Interest expense		21		14
Other expenses		27		22
Total costs and expenses	$	4,620	$	5,175

Income (loss) before income taxes	$	(189)	$	(403)
Provision for income taxes	$	40	$	91
Net income (loss)	$	(229)	$	(494)

Basic earnings (loss) per share	$	(1.02)	$	(2.20)
Diluted earnings (loss) per share	$	(1.02)	$	(2.20)

Weighted-average basic shares outstanding		224.4		224.1
Weighted-average diluted shares outstanding		224.4		224.1

* Including related-party revenue of $236 million and $154 million for the three months ended March 31, 2022 and 2021, respectively

** Including related-party cost of services of $924 million and $1,006 million for the three months ended March 31, 2022 and 2021, respectively


	Three Months Ended March 31,
(Dollars in millions)	2022		2021 (unaudited)
Cash flows from operating activities:
Net income (loss)	$	(229)	$	(494)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization
Depreciation of property and equipment		246		339
Depreciation of right-of-use assets		103		99
Amortization of transition costs and prepaid software		319		323
Amortization of capitalized contract costs		136		160
Amortization of intangible assets		7		7
Stock-based compensation		31		16
Deferred taxes		(10)		17
Net (gain) loss on asset sales and other		12		(1)
Change in operating assets and liabilities:
Deferred costs (excluding amortization)		(672)		(548)
Right-of-use assets and liabilities (excluding depreciation)		(117)		(118)
Workforce rebalancing liabilities		(73)		(138)
Receivables		(31)		(138)
Accounts payable		384		(99)
Taxes (including items settled with former Parent in prior-year period)		(66)		74
Other assets and other liabilities		151		172
Net cash provided by (used in) operating activities	$	189	$	(328)

Cash flows from investing activities:
Payments for property and equipment	$	(180)	$	(180)
Proceeds from disposition of property and equipment		9		93
Other investing activities, net		(53)		(13)
Net cash used in investing activities	$	(225)	$	(100)

Cash flows from financing activities:
Debt repayments	$	(28)	$	(17)
Net transfers from Parent		—		460
Common stock repurchases for tax withholdings		(3)		—
Other financing activities, net		(12)		—
Net cash provided by (used in) financing activities	$	(43)	$	443

Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	(7)	$	(3)
Net change in cash, cash equivalents and restricted cash	$	(86)	$	13

Cash, cash equivalents and restricted cash at January 1	$	2,240	$	38
Cash, cash equivalents and restricted cash at March 31	$	2,154	$	50

Supplemental data
Income taxes paid, net of refunds received	$	47	$	—
Interest paid on debt	$	3	$	—

SIGNIFICANT ACCOUNTING POLICIES - Stock-Based Compensation (Details) shares in Millions	12 Months Ended
	Mar. 31, 2024 shares
Stock-Based Compensation
Contractual term	10 years
Shares authorized under existing stock based compensation plans (in shares)	47.9
Performance-based stock units
Stock-Based Compensation
Vesting period	3 years
Market-conditioned stock units
Stock-Based Compensation
Vesting period	3 years
Restricted stock units \| Minimum
Stock-Based Compensation
Vesting period	1 year
Restricted stock units \| Maximum
Stock-Based Compensation
Vesting period	4 years
Employee Stock Option [Member] \| Minimum
Stock-Based Compensation
Vesting period	1 year
Employee Stock Option [Member] \| Maximum
Stock-Based Compensation
Vesting period	4 years

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES (Details) - USD ($) $ in Millions	12 Months Ended		24 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024
RESTRUCTURING
Charges	$ 174	$ 135	$ 310
Restructuring and related expected costs		310
Workforce Rebalancing Charges
RESTRUCTURING
Charges	135	$ 55
Percentage of restructuring and related expected costs		60.00%
Liabilities Related to Ceasing to Use Leased Assets
RESTRUCTURING
Charges	14	$ 69
Percentage of restructuring and related expected costs		40.00%
Operating Segments
RESTRUCTURING
Charges	171	$ 125	297
Corporate, Non-Segment
RESTRUCTURING
Charges	3	10	13
United States. \| Operating Segments
RESTRUCTURING
Charges	29	14	43
Japan. \| Operating Segments
RESTRUCTURING
Charges	2	2	4
Principal Markets \| Operating Segments
RESTRUCTURING
Charges	76	63	139
Strategic Markets \| Operating Segments
RESTRUCTURING
Charges	$ 65	$ 47	$ 112

SIGNIFICANT ACCOUNTING POLICIES - RD&E, Advertising, and Promotional Expense (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
SIGNIFICANT ACCOUNTING POLICIES
Research, development and engineering expenses	$ 23	$ 58	$ 79	$ 63
Advertising and promotional expense	$ 54	$ 115	$ 136	$ 56

BORROWINGS - Contractual obligations of long-term debt outstanding (Details) $ in Millions	Mar. 31, 2024 USD ($)
Pre-swap annual contractual obligations of long-term debt outstanding
2025	$ 29
2026	29
2027	710
2029	500
Thereafter	1,700
Total	$ 2,968

SEGMENTS - Geographic Information (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

Segment Information

Revenue

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Property and equipment, net

2,674

2,779

Operating right-of-use assets, net

864

964

United States.

Segment Information

Revenue

1,169

4,295

4,726

4,805

Property and equipment, net

951

922

Operating right-of-use assets, net

113

124

Japan.

Segment Information

Revenue

706

2,344

2,502

2,923

Operating right-of-use assets, net

110

Other countries, excluding United States and Japan

Segment Information

Revenue

$ 2,556

9,413

9,797

$ 10,930

Belgium

Segment Information

Operating right-of-use assets, net

135

149

Italy

Segment Information

Operating right-of-use assets, net

Other countries excluding United States

Segment Information

Property and equipment, net

1,724

1,857

Other countries excluding United States, Japan, Belgium, and Italy

Segment Information

Operating right-of-use assets, net

$ 448

$ 517

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021

TRANSITION PERIOD - Cash Flows (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Cash flows from operating activities:
Net income (loss)	$ (229)	$ (494)	$ (340)	$ (1,374)	$ (2,304)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation of property, equipment and capitalized software	246	339	834	900	1,300
Depreciation of right-of-use assets	103	99	319	428	327
Amortization of transition costs and prepaid software	319	323	1,256	1,199	1,278
Amortization of capitalized contract costs	136	160	531	472	563
Amortization of acquisition-related intangible assets	7	7	30	46	37
Stock-based compensation	31	16	95	113	71
Deferred taxes	(10)	17	(13)	285	(401)
Net (gain) loss on asset sales and other	12	(1)	43	6	11
Change in operating assets and liabilities:
Deferred costs (excluding amortization)	(672)	(548)	(1,569)	(1,592)	(1,618)
Right-of-use assets and liabilities (excluding depreciation)	(117)	(118)	(335)	(361)	(374)
Workforce rebalancing liabilities	(73)	(138)	(38)	41	(341)
Receivables	(31)	(138)	11	664	(1,076)
Accounts payable	384	(99)	(305)	282	125
Taxes (including items settled with former Parent in 2021 period)	(66)	74	(2)	90	994
Other assets and other liabilities	151	172	(63)	(415)	822
Net cash provided by (used in) operating activities	189	(328)	454	781	(119)
Cash flows from investing activities:
Payments for property and equipment	(180)	(180)	(651)	(865)	(752)
Proceeds from disposition of property and equipment	9	93	138	23	194
Other investing activities, net	(53)	(13)	(40)	7	(14)
Net cash used in investing activities	(225)	(100)	(553)	(835)	(572)
Cash flows from financing activities:
Debt repayments	(28)	(17)	(644)	(118)	(91)
Net transfers from Parent		460			(30)
Common stock repurchases for tax withholdings	(3)		(22)	(19)	(1)
Other financing activities, net	(12)		2	(4)
Net cash provided by (used in) financing activities	(43)	443	(170)	(141)	2,915
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(7)	(3)	(37)	(100)	(22)
Net change in cash, cash equivalents and restricted cash	(86)	13	(306)	(294)	2,203
Cash, cash equivalents and restricted cash at beginning of period	2,240	38	1,860	2,154	38
Cash, cash equivalents and restricted cash at end of period	2,154	$ 50	1,554	1,860	2,240
Supplemental data
Income taxes paid, net of refunds received	47		191	167	12
Interest paid on debt	$ 3		$ 118	$ 98	$ 2

TAXES - Reconciliation of Statutory U.S. Federal Tax Rate (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
TAXES.
Statutory rate	21.00%	21.00%	21.00%	21.00%
Tax differential on foreign income	(1.10%)	(17.40%)	(3.90%)	(8.60%)
State and local taxes	5.60%	17.80%	5.70%	3.00%
Valuation allowances	(30.80%)	(67.70%)	(72.00%)	(16.10%)
Reserves for uncertain tax positions	(5.40%)	(7.80%)	(6.50%)	(8.30%)
Global Intangible Low-Taxed Income (GILTI)	(4.40%)		(2.00%)
Undistributed foreign earnings	(3.40%)	2.20%	1.50%	(0.60%)
Impact of foreign operations	2.50%	(43.60%)	(8.60%)	(4.70%)
Separation-related transactions				(2.60%)
Goodwill impairment				(4.00%)
Basis adjustment		(6.20%)
Tax credits		28.70%	4.70%
Return to provision	(4.40%)	(19.30%)	0.30%
Nondeductible items	(0.60%)	(8.60%)	(2.00%)
Other		(1.40%)		(0.20%)
Effective tax rate	(21.00%)	(102.20%)	(61.60%)	(21.10%)
Intercompany prepayment				0.50%

TAXES

12 Months Ended

Mar. 31, 2024

TAXES.

TAXES

NOTE 5. TAXES

For the period prior to the Separation, income taxes have been calculated as if we filed income tax returns for the Company on a standalone basis, although the Company’s operations historically have been included in the income tax returns of its former Parent.

Income (loss) before income taxes by geography was as follows:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Income (loss) before income taxes:
U.S. operations	$	(678)	$	(1,543)	$	(255)	$	(1,765)
Non-U.S. operations		510		692		66		(138)
Total income (loss) before income taxes	$	(168)	$	(851)	$	(189)	$	(1,903)

The components of the provision for income taxes by taxing jurisdiction were as follows:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
U.S. federal:
Current	$	39	$	—	$	—	$	17
Deferred		(10)		(19)		(43)		(73)
	$	29	$	(19)	$	(43)	$	(56)
U.S. state and local:
Current	$	2	$	2	$	—	$	—
Deferred		1		(4)		(10)		(5)
	$	3	$	(2)	$	(10)	$	(5)
Non-U.S.:
Current	$	142	$	236	$	51	$	790
Deferred		(2)		308		42		(327)
	$	140	$	545	$	93	$	463
Total provision for income taxes	$	172	$	524	$	40	$	402

A reconciliation of the statutory U.S. federal tax rate to the Company’s effective tax rate from continuing operations was as follows:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
	2024		2023		2022		2021
Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
Tax differential on foreign income	(17.4)	%	(3.9)	%	(1.1)	%	(8.6)	%
State and local taxes	17.8	%	5.7	%	5.6	%	3.0	%
Valuation allowances	(67.7)	%	(72.0)	%	(30.8)	%	(16.1)	%
Reserves for uncertain tax positions	(7.8)	%	(6.5)	%	(5.4)	%	(8.3)	%
Global Intangible Low-Taxed Income (GILTI)	—	%	(2.0)	%	(4.4)	%	—	%
Undistributed foreign earnings	2.2	%	1.5	%	(3.4)	%	(0.6)	%
Impact of foreign operations	(43.6)	%	(8.6)	%	2.5	%	(4.7)	%
Separation-related transactions	—	%	—	%	—	%	(2.6)	%
Goodwill impairment	—	%	—	%	—	%	(4.0)	%
Basis adjustment	(6.2)	%	—	%	—	%	—	%
Tax credits	28.7	%	4.7	%	—	%	—	%
Return to provision	(19.3)	%	0.3	%	(4.4)	%	—	%
Nondeductible items	(8.6)	%	(2.0)	%	(0.6)	%	—	%
Other*	(1.4)	%	—	%	—	%	(0.2)	%
Effective tax rate	(102.2)	%	(61.6)	%	(21.0)	%	(21.1)	%

* Includes intercompany prepayment of 0.5% in 2021.

The provision for income taxes for the year ended March 31, 2024 was $172 million as compared to $524 million for the year ended March 31, 2023. The decrease in income tax expense was primarily driven by valuation allowances established in fiscal year 2023, changes in uncertain tax positions during fiscal year 2024 as a result of audit settlements and statute of limitations lapsing, offset by increases in taxes on foreign operations. The provision for income taxes for the year ended March 31, 2023 was $524 million compared to $402 million for the year ended December 31, 2021. The increase in income tax expense was primarily driven by the changes in valuation allowances, offset by tax charges in 2021 related to the transfer of Kyndryl’s operations that were considered a one-time item from Separation.

The Company’s effective tax rate for the year ended March 31, 2024 was lower (more negative) than the Company’s statutory tax rate primarily due to the Company’s pretax loss being significantly lower in fiscal year 2024 and current year losses not benefitted due to the existing valuation allowances. The Company’s effective tax rate for the year ended March 31, 2023 was lower than the Company’s statutory tax rate primarily due to changes in valuation allowances, taxes on foreign operations and uncertain tax positions. The Company’s effective tax rate for the three months ended March 31, 2022 was lower than the Company’s statutory tax rate primarily due to tax effects of cross-border tax laws, undistributed foreign earnings, taxes on foreign operations, uncertain tax positions and the establishment of valuation allowances in certain jurisdictions against deferred tax assets that are not more likely than not to be realized. The Company’s effective tax rate for 2021 was lower than the statutory tax rate primarily due to changes in valuation allowances, losses in certain jurisdictions that cannot be benefited from and tax charges related to the transfer of Kyndryl’s operations from IBM that were deemed to be immediately settled with IBM through the Net Parent Investment account.

The Organization for Economic Cooperation and Development (“OECD”) is coordinating negotiations among more than 140 countries with the goal of achieving consensus around substantial changes to international tax policies, including the implementation of a minimum global effective tax rate of 15%. While many jurisdictions in which the Company operates have adopted the relevant legislation effective for tax years beginning on or after January 1, 2024, the legislation did not result in a material change to the Company’s income tax provision for the year ended March 31, 2024.

The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:


	March 31,
(Dollars in millions)	2024		2023
Deferred tax assets
Retirement benefits	$	121	$	115
Leases		308		280
Stock-based and other compensation		90		36
U.S. tax loss/credit carryforwards		441		412
Deferred income		65		47
Foreign tax loss/credit carryforwards		66		118
Allowance for credit losses		12		28
Fixed assets and depreciation		—		—
Goodwill and intangible assets		59		34
Workforce rebalancing charges		15		25
Limitation on deductibility of interest		79		35
Accruals		94		61
Other		57		124
Gross deferred tax assets	$	1,406	$	1,314
Less: valuation allowance		(748)		(620)
Net deferred tax assets	$	657	$	694

Deferred tax liabilities
Fixed assets and depreciation	$	34	$	7
Goodwill and intangible assets		—		—
Leases and right-of-use assets		294		267
Undistributed foreign earnings		16		19
Deferred transition costs		131		135
Prepaids		4		30
Other		16		87
Gross deferred tax liabilities	$	494	$	544

As of March 31, 2024, the Company had tax-affected U.S. and foreign net operating loss deferred tax assets of $441 million and $66 million, respectively. As of March 31, 2023, the Company had tax-affected U.S. and foreign net

operating loss deferred tax assets of $412 million and $118 million, respectively. If not utilized, the U.S. state net operating loss carryforwards will begin to expire in 2026, and foreign net operating loss carryforwards will begin to expire in 2026. The U.S. federal net operating loss can be carried forward indefinitely.

The valuation allowances as of March 31, 2024 and 2023 were $748 million and $620 million, respectively. The increase in valuation allowances from March 31, 2023 to March 31, 2024 was $128 million. The increase in valuation allowance is primarily a result of current year net operating losses generated in the U.S. that are not supported by the reversal of taxable temporary differences and changes in judgment associated with the realizability of deferred tax assets in certain foreign jurisdictions. For purposes of the historical periods presented on a “carve-out” basis, the Company’s income tax provisions were calculated using the separate return basis, as if the Company filed separate tax returns. Prior to Separation, the Company’s operations were included in the consolidated U.S. federal and certain state, local and foreign income tax returns filed by its former Parent. Post-Separation, certain net operating losses and tax credit carryforwards that were included for purposes of the historical periods presented on a “carve-out” basis available to be utilized by its former Parent are not available for future utilization by the Company and were settled through Net Parent investment immediately prior to the Separation. As of March 31, 2024, based on all available evidence, management concluded that no other valuation allowance was necessary to reduce the deferred tax assets remaining post-Separation since estimated future taxable income is expected to be sufficient to utilize these assets prior to their expiration. Estimates of future taxable income could change, perhaps materially, which may require us to revise our assessment of the recoverability of the deferred tax asset at that time.

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Balance at beginning of period	$	104	$	55	$	44	$	18
Additions based on tax positions related to the current year		36		46		12		479
Additions for tax positions of prior years		—		3		—		—
Reductions for tax positions of prior years (including impacts due to a lapse of statute)		(32)		—		(1)		—
Settlements (closed out to Net Parent investment)		—		—		—		(453)
Balance at end of period	$	108	$	104	$	55	$	44

Post-Separation, liabilities related to unrecognized tax benefits for which the Company is liable are reported within the Consolidated Balance Sheet based upon tax authorities’ ability to assert the Company may be the primary obligor for historical taxes, among other factors.

With limited exceptions, the Company is generally subject to income tax audits for tax years subsequent to September 1, 2021, or post-Separation, including in the U.S., Germany, Japan and Spain. Pursuant to the terms of the Separation, any tax liabilities attributable to the tax period (or portion thereof) ending on or before November 3, 2021, are generally not the Company’s liability. As of March 31, 2024, the Company is not aware of any material open income tax audits that would result in a liability owed by the Company. The Company does not expect a significant increase or decrease in unrecognized tax benefits within the next twelve months. The net amount of $108 million unrecognized tax benefits, if recognized, would favorably affect the Company’s effective tax rate. Interest and penalties related to income tax liabilities are included in income tax expense. During the year ended March 31, 2024, the Company recognized $4 million in interest expense and penalties. The Company had $6 million for interest and penalties accrued at March 31, 2023.

Pursuant to the terms of the Separation, the Company identified certain tax refunds related to estimated tax payments and refundable value-added taxes for which we are required to reimburse our former Parent as the refunds are received, as well as certain tax benefits related to net operating losses that were transferred to the Company for which we are required to pay to our former Parent as the tax benefits are realized. As of March 31, 2024, the Company estimated the amount of our obligations to our former Parent related to these tax refunds and tax benefits to be approximately $13

million, where $4 million is recorded in other accrued expenses and liabilities expected to be paid within one year, and $9 million is recorded in other liabilities expected to be paid beyond the one-year period. The Company also estimated the amount of our former Parent’s indemnification obligations to the Company related to income tax liabilities attributable to tax periods (or portions thereof) ending on or before November 3, 2021, to be approximately $27 million, which is recorded in prepaid expenses and other current assets on the Company’s Consolidated Balance Sheet.

At March 31, 2024, the Company’s undistributed earnings from non-U.S. subsidiaries were not indefinitely reinvested. Accordingly, the Company recorded a deferred tax liability of $15 million for the estimated taxes associated with the repatriation of these earnings. The Company intends to repatriate certain foreign earnings that have been taxed in the U.S. and undistributed earnings to the extent the foreign earnings are not restricted by local laws and can be accessed in a cost-effective manner.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

LEASES - Lease cost (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
LEASES - Lease cost (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
LEASES
Finance lease costs	$ 21	$ 112	$ 85	$ 69
Operating lease costs	111	388	434	354
Short-term lease costs	4	4	7	7
Variable lease costs	16	135	108	73
Sublease income	(1)	(11)	(9)	(5)
Total lease costs	150	629	625	498
Sale and leaseback transactions	$ 0	$ 0	$ 0	$ 0

INTANGIBLE ASSETS INCLUDING GOODWILL - Goodwill by Segment (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021	Jan. 01, 2024
Changes in Goodwill Balances
Beginning Balance	$ 812	$ 823
Impairment	0		$ (469)
Additions and Other Adjustments	(7)	(11)
Goodwill accumulated impairment losses	469
Ending Balance	805	812
EMEA
Changes in Goodwill Balances
Goodwill accumulated impairment losses	293
Japan
Changes in Goodwill Balances
Beginning Balance	495	506
Additions and Other Adjustments	(7)	(11)
Ending Balance	488	495
United States
Changes in Goodwill Balances
Goodwill accumulated impairment losses	176
Principal Markets
Changes in Goodwill Balances
Beginning Balance	142	142
Additions and Other Adjustments	(1)
Ending Balance	141	142
Strategic Markets
Changes in Goodwill Balances
Beginning Balance	176	176
Ending Balance	$ 176	$ 176
Percentage of net book value exceeded				100.00%

RETIREMENT-RELATED BENEFITS (Tables)

12 Months Ended

Mar. 31, 2024

RETIREMENT-RELATED BENEFITS

Components of net periodic pension cost for the defined benefit pension plans


					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Service cost	$	38	$	44	$	14	$	81
Interest cost*		55		32		6		11
Expected return on plan assets*		(60)		(43)		(10)		(30)
Amortization of prior service costs (credits)*		1		1		—		—
Recognized actuarial losses*		4		40		16		51
Curtailments and settlements*		13		10		4		2
Total net periodic pension cost	$	51	$	84	$	30	$	115

*These components of net periodic pension cost are included in other expense in the Consolidated Income Statement.

Changes in benefit obligations


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Change in benefit obligation
Benefit obligation at beginning of period	$	1,659	$	2,024
Service cost		38		44
Interest cost		55		32
Plan participants’ contributions		3		4
Actuarial losses (gains)*		83		(299)
Benefits paid from trust		(24)		(15)
Direct benefit payments		(38)		(37)
Business combination/divestiture		(23)		—
Foreign exchange impact		(23)		(66)
Amendments, curtailments, settlements and other		(61)		(29)
Benefit obligation at end of period	$	1,670	$	1,659
Accumulated benefit obligation	$	1,583	$	1,574
Change in plan assets
Fair value of plan assets at beginning of period	$	1,226	$	1,383
Actual return on plan assets		87		(88)
Employer contributions		14		27
Fair value of plan assets assumed from former Parent**		27		—
Plan participants’ contributions		3		4
Benefits paid from trust		(24)		(15)
Business combination/divestiture		(18)		—
Foreign exchange impact		(18)		(40)
Settlements		(49)		(44)
Fair value of plan assets at end of period	$	1,248	$	1,226
Funded status at end of period	$	(422)	$	(433)

*	The year-over-year change was primarily driven by lower inflation rates and demographic factors.

**	Due to the separation of a pension plan that used to be co-sponsored by Kyndryl and the former Parent.

Changes in plan assets

The following table presents the changes in net benefit obligation and plan assets for the defined benefit pension plans.


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Change in benefit obligation
Benefit obligation at beginning of period	$	1,659	$	2,024
Service cost		38		44
Interest cost		55		32
Plan participants’ contributions		3		4
Actuarial losses (gains)*		83		(299)
Benefits paid from trust		(24)		(15)
Direct benefit payments		(38)		(37)
Business combination/divestiture		(23)		—
Foreign exchange impact		(23)		(66)
Amendments, curtailments, settlements and other		(61)		(29)
Benefit obligation at end of period	$	1,670	$	1,659
Accumulated benefit obligation	$	1,583	$	1,574
Change in plan assets
Fair value of plan assets at beginning of period	$	1,226	$	1,383
Actual return on plan assets		87		(88)
Employer contributions		14		27
Fair value of plan assets assumed from former Parent**		27		—
Plan participants’ contributions		3		4
Benefits paid from trust		(24)		(15)
Business combination/divestiture		(18)		—
Foreign exchange impact		(18)		(40)
Settlements		(49)		(44)
Fair value of plan assets at end of period	$	1,248	$	1,226
Funded status at end of period	$	(422)	$	(433)

*	The year-over-year change was primarily driven by lower inflation rates and demographic factors.

**	Due to the separation of a pension plan that used to be co-sponsored by Kyndryl and the former Parent.

Net funded status


	At March 31,		At March 31,
(Dollars in millions)	2024		2023
Noncurrent assets – pension assets	$	105	$	94
Current liabilities – accrued compensation and benefits		(40)		(38)
Noncurrent liabilities – retirement and nonpension postretirement benefit obligations		(487)		(489)
Funded status, net	$	(422)	$	(433)

Defined benefit pension plans with accumulated benefit obligations (ABO) or projected benefit obligations (PBO) in excess of plan assets


	At March 31, 2024				At March 31, 2023
	Benefit		Plan		Benefit		Plan
(Dollars in millions)	Obligation		Assets		Obligation		Assets
Plans with PBO in excess of plan assets	$	714	$	187	$	953	$	426
Plans with ABO in excess of plan assets		712		186		630		171
Plans with plan assets in excess of PBO		957		1,061		706		800

Pretax net loss and prior service costs (credits) recognized in OCI and the changes in pretax net loss and prior service costs (credits) as well as Separation-related transfers from Parent recognized in AOCI


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Net loss (gain) at beginning of period	$	253	$	474
Current period loss (gain)		57		(172)
Curtailments and settlements		(10)		(10)
Amortization of net loss included in net periodic benefit cost		(4)		(39)
Net loss (gain) at end of period	$	296	$	253
Prior service costs (credits) at beginning of period		8		9
Current period prior service costs (credits)		(2)		—
Amortization for prior service costs (credits) included in net periodic benefit cost		(1)		(1)
Prior service costs (credits) at end of period	$	4	$	8
Total amounts recognized in accumulated other comprehensive loss (income) *	$	301	$	261

See Note 14 – Equity for the total change in AOCI and the Consolidated Statement of Comprehensive Income for the components of net periodic benefit cost, which includes components related to nonpension postretirement benefit plans as well as the related tax effects, recognized in OCI for the retirement-related benefit plans.

Assumptions used to measure the net periodic pension cost and the year-end benefit obligations


					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
Weighted-average assumptions used to measure:	2024		2023		2022		2021
Net periodic pension cost
Discount rate	3.57	%	1.88	%	1.19	%	0.62	%
Expected long-term returns on plan assets	4.69	%	3.33	%	3.00	%	3.00	%
Rate of compensation increase	2.85	%	2.54	%	2.30	%	2.22	%
Benefit obligations
Discount rate	3.30	%	3.57	%	1.88	%	1.19	%
Rate of compensation increase	2.84	%	2.85	%	2.54	%	2.30	%
Interest crediting rate – cash balance plans	1.65	%	1.52	%	1.52	%	1.43	%

Defined benefit pension plans' asset classes and their associated fair value


	At March 31, 2024								At March 31, 2023
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity
Equity securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Fixed income
Government and related ⁽¹⁾		—		112		—		112		—		107		—		107
Corporate bonds		—		21		—		21		—		20		—		20
Insurance contracts		—		189		—		189		—		191		—		191
Cash and short-term investments ⁽²⁾		3		1		—		3		3		—		—		3
Derivative assets ⁽³⁾		—		5		—		5		—		5		—		5
Subtotal	$	3	$	327	$	—	$	329	$	3	$	322	$	—	$	326
Investments measured at net asset value using NAV as a practical expedient ⁽⁴⁾		—		—		—		919		—		—		—		901
Fair value of plan assets	$	3	$	327	$	—	$	1,248	$	3	$	322	$	—	$	1,226

(1)	Includes debt issued by national, state and local governments and agencies.

(2)	Includes cash, cash equivalents and short-term marketable securities.

(3)	Includes forward contracts, interest rate swaps, exchange traded and other over-the-counter derivatives.

(4)	Investments measured at fair value using the net asset value (NAV) per share (or its equivalent), as a practical expedient. These investments include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships.

Total expected benefit payments


	Expected
(Dollars in millions)	Benefit Payments
Fiscal year ending March 31,
2025	$	121
2026		119
2027		116
2028		118
2029		118
2030-2034		596

FINANCIAL ASSETS AND LIABILITIES - Foreign Exchange Risk (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Not designated as hedging instruments - economic hedges \| Currency swaps \| Maximum
Derivatives, Fair Value [Line Items]
Term of contract		1 year
Derivative instruments in cash flow hedges
Derivatives, Fair Value [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 0.0	$ 0.0	$ 0.0	$ 0.0
Derivative instruments in cash flow hedges \| Designated as hedging instruments \| Foreign exchange contracts
Derivatives, Fair Value [Line Items]
Net gains from derivatives		2.0	$ 1.0
Deferred net gains on derivatives reclassified to net income		$ 2.0
Derivative instruments in cash flow hedges \| Designated as hedging instruments \| Foreign exchange forward contracts
Derivatives, Fair Value [Line Items]
Maximum length of time hedged		1 year
Weighted average remaining maturity		6 months	6 months
Net investment hedges \| Designated as hedging instruments \| Cross-currency swap contracts
Derivatives, Fair Value [Line Items]
Net loss from derivatives		$ 11.0
Term of contract		10 years
Investment hedges			$ 0.0

REVENUE RECOGNITION - Reconciliation of Contract Balances (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Reconciliation of Contract Balances
Accounts receivable (net of allowances for credit losses of $22 at March 31, 2024 and $32 at March 31, 2023) *	$ 1,599	$ 1,523
Contract assets	30	30
Deferred income (current)	825	820
Deferred income (noncurrent)	314	362
Accounts receivable, allowances	22	32
Unbilled receivable	377	$ 384
Revenue recognized that was included in deferred income at the beginning of the period	$ 794

REVENUE RECOGNITION - Deferred Costs (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Deferred Contract Costs
Deferred costs			$ 2,000	$ 2,236
Deferred costs, current			1,081	1,070
Deferred costs, noncurrent			920	1,166
Total deferred costs amortized	$ 455		1,800	1,700	$ 1,800
Amortization of deferred costs	136	$ 160	531	472	563
Deferred transition costs
Deferred Contract Costs
Deferred costs			753	856
Total deferred costs amortized	112		335	342	403
Prepaid software costs
Deferred Contract Costs
Deferred costs			770	782
Total deferred costs amortized	$ 207		921	857	$ 874
Capitalized costs to fulfill contracts
Deferred Contract Costs
Deferred costs			212	285
Capitalized costs to obtain contracts
Deferred Contract Costs
Deferred costs			$ 265	$ 313
Minimum
Deferred Contract Costs
Term of contract with customer			3 years
Maximum
Deferred Contract Costs
Term of contract with customer			6 years

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES - Rollforward (Details) - USD ($) $ in Millions	12 Months Ended		24 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024
RESTRUCTURING
Balance at beginning of period	$ 58
Charges	174	$ 135	$ 310
Cash payments	(168)	(1)
Non-cash adjustments	(36)	(76)
Balance at end of period	28	58	28
Workforce Rebalancing Charges
RESTRUCTURING
Balance at beginning of period	55
Charges	135	55
Cash payments	(161)
Non-cash adjustments	(1)
Balance at end of period	28	55	28
Liabilities Related to Ceasing to Use Leased Assets
RESTRUCTURING
Charges	14	69
Non-cash adjustments	(14)	(69)
Liabilities Related to Lease Terminations
RESTRUCTURING
Balance at beginning of period	3
Charges	(1)	4
Cash payments	(2)	(1)
Balance at end of period		3
Liabilities Related to Ceasing to Use Fixed Assets
RESTRUCTURING
Charges	26	7
Cash payments	(5)
Non-cash adjustments	(21)	(7)
Abandonment of Certain Company Owned Fixed Assets
RESTRUCTURING
Charges	21	7
Charges Related to One-Off Terminations
RESTRUCTURING
Charges		16
Workforce Rebalancing Liabilities Inherited from Former Parent
RESTRUCTURING
Balance at beginning of period	42	57	57
Charges	4
Cash payments	(15)	(32)
Balance at end of period	$ 29	$ 42	$ 29

RETIREMENT-RELATED BENEFITS - Investment Strategy (Details)	12 Months Ended
	Mar. 31, 2024
Maximum
Investment Policies And Strategies
Percentage of board members, elected by employees and retirees for managing investments (as a percent)	50.00%
Equity securities
Investment Policies And Strategies
Target allocation (as a percent)	27.00%
Fixed-income securities
Investment Policies And Strategies
Target allocation (as a percent)	46.00%
Real Estate.
Investment Policies And Strategies
Target allocation (as a percent)	6.00%
Insurance contracts
Investment Policies And Strategies
Target allocation (as a percent)	15.00%
Other investments
Investment Policies And Strategies
Target allocation (as a percent)	6.00%

REVENUE RECOGNITION - Major Clients (Details) - client	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
Revenue.
Concentration Risk [Line Items]
Concentration risk, major clients	0	0	0	0
Accounts Receivable.
Concentration Risk [Line Items]
Concentration risk, major clients	0	0

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	May 31, 2022	Mar. 31, 2024
Loss Contingencies
Purchase commitment, short-term		$ 600
Purchase commitment, mid-term		400
Purchase commitment, long-term		$ 400
Minimum
Loss Contingencies
Duration of contractual commitments		2 years
Maximum
Loss Contingencies
Duration of contractual commitments		3 years
BMC v. IBM \| IBM
Loss Contingencies
Direct damages sought, value	$ 717
Punitive damages sought, value	$ 717

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES (Tables)

12 Months Ended

Mar. 31, 2024

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

Schedule of segment breakout of charges


	Year Ended		Year Ended		Costs Incurred
(Dollars in millions)	March 31, 2024		March 31, 2023		to Date
United States	$	29	$	14	$	43
Japan		2		2		4
Principal Markets		76		63		139
Strategic Markets		65		47		112
Total charges by segment	$	171	$	125	$	297
Corporate charges not allocated to the segments		3		10		13
Total charges	$	174	$	135	$	310

Summary of classification of workforce rebalancing and site-rationalization activities


	Year Ended			Year Ended		Costs Incurred
(Dollars in millions)	March 31, 2024			March 31, 2023		to Date
Cost of services	$	23		$	71	$	94
Selling, general and administrative expenses		16			9		25
Workforce rebalancing charges		135	*		55		190
Total charges	$	174		$	135	$	310

*	Excludes $4 million liability adjustment related to workforce rebalancing actions taken by the former Parent prior to Separation.

Schedule of components of and changes in workforce rebalancing and site-rationalization charges


			Liabilities		Liabilities		Liabilities
	Workforce		Related to		Related to		Related to
	Rebalancing		Ceasing to Use		Lease		Ceasing to Use
(Dollars in millions)	Liabilities*		Leased Assets		Terminations		Fixed Assets		Total
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—
Charges		55		69		4		7		135
Cash payments		—		—		(1)		—		(1)
Non-cash adjustments		—		(69)		—		(7)		(76)
Balance at March 31, 2023	$	55	$	—	$	3	$	—	$	58
Charges (benefits)		135		14		(1)		26		174
Cash payments		(161)		—		(2)		(5)		(168)
Non-cash adjustments		(1)		(14)		—		(21)		(36)
Balance at March 31, 2024	$	28	$	—	$	—	$	—	$	28

Prior-year movement excludes workforce rebalancing liabilities inherited from the former Parent of $57 million as of March 31, 2022, charges of $16 million related to one-off terminations, cash payments of $32 million, and ending balance of $42 million as of March 31, 2023. Current-year movement excludes additional charges of $4 million, cash payments of $15 million and ending balance of $29 million related to actions initiated by the former Parent. Workforce rebalancing liabilities are recorded within Other Liabilities; refer to Note 12 – Other Liabilities for further details.

SEGMENTS (Tables)

12 Months Ended

Mar. 31, 2024

SEGMENTS

Summary of results of segments


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Revenue
United States	$	4,295	$	4,726	$	1,169	$	4,805
Japan		2,344		2,502		706		2,923
Principal Markets		5,823		5,957		1,579		7,085
Strategic Markets		3,590		3,840		978		3,844
Total revenue	$	16,052	$	17,026	$	4,431	$	18,657
Segment adjusted EBITDA
United States	$	781	$	839	$	248	$	842
Japan		361		407		154		501
Principal Markets		740		371		98		341
Strategic Markets		579		436		92		540
Total segment adjusted EBITDA	$	2,461	$	2,052	$	592	$	2,223

Summary of reconciliation of adjusted EBITDA to consolidated pretax income (loss)


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Segment adjusted EBITDA	$	2,461	$	2,052	$	592	$	2,223
Workforce rebalancing charges		(138)		(71)		—		(39)
Charges related to ceasing to use leased/fixed assets and lease terminations		(39)		(80)		—		—
Transaction-related (costs) benefits		46		(264)		(58)		(627)
Stock-based compensation expense		(95)		(113)		(31)		(71)
Impairment expense		—		—		—		(469)
Interest expense		(122)		(94)		(21)		(64)
Depreciation of property, equipment and capitalized software		(834)		(900)		(246)		(1,300)
Amortization expense		(1,287)		(1,245)		(326)		(1,314)
Corporate expense not allocated to the segments		(95)		(77)		(56)		(154)
Other adjustments*		(68)		(59)		(43)		(88)
Pretax income (loss)	$	(168)	$	(851)	$	(189)	$	(1,903)

* Other adjustments represent pension expenses other than pension servicing costs and multi-employer plan costs, significant litigation costs, currency impacts of highly inflationary countries, and an adjustment to reduce amortization expense for the amount already included in transaction-related (costs) benefits above.

Summary of geographic information


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Revenue*
United States	$	4,295	$	4,726	$	1,169	$	4,805
Japan		2,344		2,502		706		2,923
Other countries		9,413		9,797		2,556		10,930
Total revenue	$	16,052	$	17,026	$	4,431	$	18,657

*	Revenues are attributed to countries based on the location of the client and exclude certain allocations.


	At March 31,
(Dollars in millions)	2024		2023
Property and equipment, net
United States *	$	951	$	922
Other countries		1,724		1,857
Total property and equipment, net	$	2,674	$	2,779

Operating right-of-use assets, net
United States *	$	113	$	124
Japan		73		110
Belgium		135		149
Italy		95		64
Other countries		448		517
Total operating right-of-use assets, net	$	864	$	964

* Includes corporate and other.

LEASES - Supplemental information relating to the cash flows (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
LEASES
Operating cash outflows for finance leases	$ 1	$ 14	$ 5	$ 3
Financing cash outflows for finance leases	20	116	83	70
Operating cash outflows for operating leases	118	387	417	327
Right-of-use assets obtained in exchange for new finance lease liabilities	19	212	111	86
Right-of-use assets obtained in exchange for new operating lease liabilities	$ 67	$ 291	$ 175	$ 562

NET LOSS PER SHARE

12 Months Ended

Mar. 31, 2024

NET LOSS PER SHARE

NET LOSS PER SHARE

NOTE 6. NET LOSS PER SHARE

We did not declare any stock dividends in the periods presented. The following table provides the computation of basic and diluted earnings per share of common stock for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period), and the year ended December 31, 2021.


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(In millions, except per share amounts)	2024		2023		2022		2021
Net income (loss) on which basic and diluted earnings per share is calculated	$	(340)	$	(1,374)	$	(229)	$	(2,304)
Number of shares on which basic and diluted earnings per share is calculated		229.2		226.7		224.4		224.1

Basic earnings (loss) per share		(1.48)		(6.06)		(1.02)		(10.28)
Diluted earnings (loss) per share		(1.48)		(6.06)		(1.02)		(10.28)

For the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period), and the year ended December 31, 2021, the Company’s basic and diluted weighted-average shares outstanding were the same. The following securities were not included in the computation of diluted net loss per share because they would have been anti-dilutive:


			Three Months
			Ended	Year Ended
	Year Ended March 31,		March 31,	December 31,
(In millions)	2024	2023	2022	2021
Nonvested restricted stock units	8.8	9.4	9.8	10.2
Nonvested performance-conditioned stock units	3.0	2.3	—	—
Nonvested market-conditioned stock units	2.7	2.3	1.8	1.8
Stock options issued and outstanding	3.6	3.7	3.8	3.8
Total	18.1	17.7	15.5	15.8

CONSOLIDATED BALANCE SHEET (Parenthetical) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2024	Mar. 31, 2023
CONSOLIDATED BALANCE SHEET
Notes and accounts receivable - trade, allowances	$ 22	$ 32
Common Stock, Par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, Shares authorized (in shares)	1,000.0	1,000.0
Common Stock, Shares issued (in shares)	233.7	229.6
Treasury Stock (in shares)	3.3	1.9

STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Stock-based compensation cost, allocation of recognized costs
Pretax stock-based compensation expense	$ 31	$ 95	$ 113	$ 71
Income tax benefits	(5)	(5)	(5)	(13)
Stock-based compensation cost, net of tax	26	90	108	58
Unrecognized compensation cost related to non-vested awards		$ 137
Unrecognized compensation cost related to non-vested awards, weighted average period of recognition		2 years 1 month 6 days
Cost of service
Stock-based compensation cost, allocation of recognized costs
Pretax stock-based compensation expense	7	$ 16	21	28
Selling, general and administrative expense.
Stock-based compensation cost, allocation of recognized costs
Pretax stock-based compensation expense	$ 24	$ 78	$ 92	$ 44

BORROWINGS - Senior Unsecured Notes (Details) - USD ($) $ in Millions	1 Months Ended
	Feb. 29, 2024	Oct. 31, 2021
Fixed Rate, Senior Unsecured Notes
BORROWINGS
Aggregate amount of debt issued		$ 2,400
Senior Notes due 2026
BORROWINGS
Aggregate amount of debt issued		$ 700
Coupon rate (as a percent)		2.05%
Senior Notes due 2028
BORROWINGS
Aggregate amount of debt issued		$ 500
Coupon rate (as a percent)		2.70%
Senior Notes due 2031
BORROWINGS
Aggregate amount of debt issued		$ 650
Coupon rate (as a percent)		3.15%
Senior Notes due 2034
BORROWINGS
Aggregate amount of debt issued	$ 500
Coupon rate (as a percent)	6.35%
Net proceeds	$ 494
Senior Notes due 2041
BORROWINGS
Aggregate amount of debt issued		$ 550
Coupon rate (as a percent)		4.10%

REVENUE RECOGNITION - Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Roll forward of accounts receivable - allowance for credit losses
Beginning balance	$ 44	$ 32	$ 44	$ 91
Additions (releases)	6	4	6	(23)
Write-offs	(4)	(4)	(13)	(5)
Other	(2)	(9)	(5)	(19)
Ending balance	$ 44	$ 22	$ 32	$ 44

FINANCIAL ASSETS AND LIABILITIES

12 Months Ended

Mar. 31, 2024

FINANCIAL ASSETS AND LIABILITIES

FINANCIAL ASSETS AND LIABILITIES

NOTE 7. FINANCIAL ASSETS AND LIABILITIES

Financial Assets and Liabilities Measured at Fair Value

The following table presents the Company’s financial assets and financial liabilities that are measured at fair value on a recurring basis at March 31, 2024 and 2023.


	Fair Value
	Hierarchy	At March 31, 2024						At March 31, 2023
(Dollars in millions)	Level	Assets		Liabilities		Fair Value		Assets		Liabilities		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts	2	$	2	$	1	$	1	$	4	$	3	$	1
Cross-currency swap contracts	2		1		11		(9)		—		—		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	2		2		6		(4)		11		5		6
Total		$	5	$	18	$	(13)	$	15	$	9	$	6

The gross balances of derivative assets, including accrued interest, are contained within prepaid expenses and other current assets, and the gross balances of derivative liabilities are contained within other accrued expenses and liabilities, or other noncurrent liabilities in the Consolidated Balance Sheet. The Company may enter into master netting agreements with certain counterparties that allow for netting of exposures. There was no netting of derivative assets against liabilities in the Consolidated Balance Sheet at March 31, 2024 and 2023. The Company manages counterparty risk by seeking counterparties of high credit quality and by monitoring credit ratings, credit spreads and other relevant public information about its counterparties. The Company does not anticipate nonperformance by any of the counterparties.

Financial Assets and Liabilities Not Measured at Fair Value

Accounts receivable are financial assets with carrying values that approximate fair value. Accounts payable, other accrued expenses and short-term debt are financial liabilities with carrying values that approximate fair value. If measured at fair value in the consolidated financial statements, these financial instruments would be classified as Level 3 in the fair value hierarchy, except for short-term debt, which would be classified as Level 2.

The Company also has time deposits that have maturities of 90 days or less, and their carrying values approximate fair value. They are measured for impairment on a recurring basis by comparing their fair value with their amortized cost basis. There were no impairments of financial assets recognized for any of the periods presented. The balance of these time deposits with maturities of 90 days or less contained within cash and cash equivalents in the Consolidated Balance Sheet at March 31, 2024 and 2023 was $828 million and $814 million, respectively. If measured at fair value in the consolidated financial statements, time deposits with maturities of 90 days or less would be categorized as Level 2 in the fair value hierarchy.

The fair value of our outstanding debt (excluding finance lease obligations) is based on various methodologies, including quoted prices in active markets for identical debt instruments, which is a Level 1 measurement, or calculated fair value using an expected present value technique that uses rates currently available to the Company for debt in active markets with similar terms and remaining maturities, which is a Level 2 measurement. See Note 11 – Borrowings for additional information. Our outstanding debt (excluding finance lease obligations) had a carrying value of $2.9 billion and $3.0 billion as of March 31, 2024 and 2023, respectively. The debt had an estimated fair value of $2.6 billion and $2.5 billion as of March 31, 2024 and 2023, respectively.

Derivative Financial Instruments

The following table summarizes the notional amounts of the Company’s outstanding derivatives:


	At March 31, 2024				At March 31, 2023
(Dollars in millions)	Foreign Exchange Contracts		Cross-currency Swap Contracts		Foreign Exchange Contracts		Cross-currency Swap Contracts
Derivatives designated as hedging instruments
Cash flow hedges	$	281	$	—	$	283	$	—
Net investment hedges		—		500		—		—
Derivatives not designated as hedging instruments	$	1,624	$	—	$	1,506	$	—

The notional amounts of derivative instruments do not necessarily represent the amounts exchanged by the Company with third parties and are not necessarily a direct measure of the financial exposure.

Derivatives Designated as Hedging Instruments

Cash Flow Hedges

The Company has foreign exchange derivative financial instruments designated as cash flow hedges to manage the volatility of cash flows that relate to operating expenses denominated in certain currencies. Through the pre-Separation period, derivatives designated as cash flow hedges were deemed to be associated with the Company’s operations and were allocated to the Company’s Consolidated Income Statement based on its pro-rata share of the underlying items hedged, where applicable, with the remainder allocated on a pro-rata basis of revenue. For additional information, see Note 1 – Significant Accounting Policies.

The maximum remaining length of time over which the Company has hedged its exposures is approximately one year. At March 31, 2024 and 2023, the weighted-average remaining maturity of these instruments was approximately 0.5 years. At March 31, 2024 and 2023, in connection with cash flow hedges of foreign currency cost transactions, the Company had unrealized gains of $2 million and $1 million (each before taxes), respectively, in AOCI. The Company estimates that $2 million (before taxes) of deferred net gains on derivatives in AOCI at March 31, 2024 will be reclassified to net income within the next twelve months, providing an offsetting economic impact against the underlying anticipated transactions.

Net Investment Hedges

The Company has entered into and designated cross-currency interest rate swap contracts as net investment hedges to mitigate foreign exchange exposure related net investments. Under the terms of the cross-currency swaps, the Company makes fixed-rate payments in foreign currencies and receives fixed-rate amounts in U.S. dollars, with the exchange of the underlying notional amounts at maturity whereby the Company will receive U.S. dollars and pay foreign currencies at exchange rates which are determined at contract inception. At March 31, 2024, the remaining maturity of these instruments was approximately 10 years. At March 31, 2024, the Company had unrealized losses of $11 million (before taxes) in AOCI related to net investment hedges. There were no net investment hedges in fiscal year 2023.

Derivatives Not Designated as Hedging Instruments

The Company enters into currency forward and swap contracts to hedge exposures related to assets and liabilities across its subsidiaries. The terms of these contracts are generally less than one year.

The Effect of Derivative Instruments in the Consolidated Income Statement

The effects of derivatives designated as hedging instruments on the Consolidated Income Statement and Other Comprehensive Income are as follows:


	Gain (Loss) Recognized in Consolidated Income Statement
	and Other Comprehensive Income
					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021

Derivative instruments in cash flow hedges:	Recognized in OCI *
Foreign exchange contracts	$	22	$	(4)	$	1	$	4
Derivative instruments in net investment hedges:
Cross-currency swaps **	$	(11)	$	—	$	—	$	—
Total	$	11	$	(4)	$	1	$	4

Consolidated Income Statement line item	Reclassified from AOCI *
Cost of services	$	21	$	(2)	$	1	$	1
Interest expenses **		1		—		—		—
Total	$	23	$	(2)	$	1	$	1

*	Pre-Separation, the effects of hedging activity were allocated from the former Parent directly to the Company’s Consolidated Income Statement, resulting in no gain (loss) either recognized in other comprehensive income or reclassified from accumulated other comprehensive income.

For the year ended March 31, 2024, the Company recognized a gain of $1 million in interest expense on components excluded from the assessment of the hedge effectiveness for net investment hedges. There were no net investment hedges in the year ended March 31, 2023, the three months ended March 31, 2022 and the year ended December 31, 2021.

For the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 and the year ended December 31, 2021, there were no gains or losses excluded from the assessment of hedge effectiveness for cash flow hedges, or associated with an underlying exposure that did not or was not expected to occur; nor are there any anticipated in the normal course of business.

The effects of derivatives not designated as hedging instruments on the Consolidated Income Statement are as follows:


	Gain (Loss) Recognized in Consolidated Income Statement
						Three
	Consolidated	Year Ended		Year Ended		Months Ended		Year Ended
	Income Statement	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	Line Item	2024		2023		2022		2021

Derivative instruments not designated as hedging instruments:
Foreign exchange contracts	Other expense	$	(48)	$	20	$	(1)	$	4
Total		$	(48)	$	20	$	(1)	$	4

PROPERTY AND EQUIPMENT - Balances (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 9,300	$ 10,016
Less: Accumulated depreciation	(6,626)	(7,237)
Property, plant and equipment - net	2,674	2,779
Information technology equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	6,374	6,912
Buildings and leasehold improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	2,502	2,665
Office and other equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	354	370
Land and land improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 70	$ 70

PROPERTY AND EQUIPMENT - Depreciation (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended			24 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021	Mar. 31, 2024
PROPERTY AND EQUIPMENT
Depreciation of property and equipment	$ 246	$ 801	$ 900	$ 1,300
Unpaid property and equipment		29	62
Charges		174	135		$ 310
Abandonment of Certain Company Owned Fixed Assets
PROPERTY AND EQUIPMENT
Charges		$ 21	$ 7

RETIREMENT-RELATED BENEFITS - Net Funded Status (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Net funded status recognized in the Consolidated Balance Sheet
Noncurrent assets - pension assets	$ 105	$ 94
Current liabilities - accrued compensation and benefits	(609)	(533)
Noncurrent liabilities - retirement and nonpension postretirement benefit obligations	(500)	(504)
Defined Benefit Pension Plans
Net funded status recognized in the Consolidated Balance Sheet
Noncurrent assets - pension assets	105	94
Current liabilities - accrued compensation and benefits	(40)	(38)
Noncurrent liabilities - retirement and nonpension postretirement benefit obligations	(487)	(489)
Funded status, net	$ (422)	$ (433)

- Definition

Amount of asset, recognized in statement of financial position, for overfunded defined benefit pension and other postretirement plans.

+ References + Details

SEGMENTS - Reconciliation of segment adjusted EBITDA to consolidated pretax income (loss) (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
SEGMENTS
Segment adjusted EBITDA	$ 592		$ 2,461	$ 2,052	$ 2,223
Workforce rebalancing charges		$ (52)	(138)	(71)	(39)
Charges related to ceasing to use leased / fixed assets and lease terminations			(39)	(80)
Transaction-related (costs) benefits	(58)	(55)	46	(264)	(627)
Stock-based compensation expense	(31)	(16)	(95)	(113)	(71)
Impairment expense			0		(469)
Interest expense	(21)	(14)	(122)	(94)	(64)
Depreciation of property, equipment and capitalized software	(246)	(339)	(834)	(900)	(1,300)
Amortization expense	(326)		(1,287)	(1,245)	(1,314)
Corporate expense not allocated to the segments	(56)		(95)	(77)	(154)
Other adjustments	(43)		(68)	(59)	(88)
Income (loss) before income taxes	$ (189)	$ (403)	$ (168)	$ (851)	$ (1,903)

FINANCIAL ASSETS AND LIABILITIES (Tables)

12 Months Ended

Mar. 31, 2024

FINANCIAL ASSETS AND LIABILITIES

Financial assets and financial liabilities measured at fair value on a recurring basis


	Fair Value
	Hierarchy	At March 31, 2024						At March 31, 2023
(Dollars in millions)	Level	Assets		Liabilities		Fair Value		Assets		Liabilities		Fair Value
Derivatives designated as hedging instruments:
Foreign exchange contracts	2	$	2	$	1	$	1	$	4	$	3	$	1
Cross-currency swap contracts	2		1		11		(9)		—		—		—
Derivatives not designated as hedging instruments:
Foreign exchange contracts	2		2		6		(4)		11		5		6
Total		$	5	$	18	$	(13)	$	15	$	9	$	6

Summary of notional amounts of outstanding derivatives


	At March 31, 2024				At March 31, 2023
(Dollars in millions)	Foreign Exchange Contracts		Cross-currency Swap Contracts		Foreign Exchange Contracts		Cross-currency Swap Contracts
Derivatives designated as hedging instruments
Cash flow hedges	$	281	$	—	$	283	$	—
Net investment hedges		—		500		—		—
Derivatives not designated as hedging instruments	$	1,624	$	—	$	1,506	$	—

Effect of derivative instruments in the Consolidated Income Statement - designated


	Gain (Loss) Recognized in Consolidated Income Statement
	and Other Comprehensive Income
					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021

Derivative instruments in cash flow hedges:	Recognized in OCI *
Foreign exchange contracts	$	22	$	(4)	$	1	$	4
Derivative instruments in net investment hedges:
Cross-currency swaps **	$	(11)	$	—	$	—	$	—
Total	$	11	$	(4)	$	1	$	4

Consolidated Income Statement line item	Reclassified from AOCI *
Cost of services	$	21	$	(2)	$	1	$	1
Interest expenses **		1		—		—		—
Total	$	23	$	(2)	$	1	$	1

*	Pre-Separation, the effects of hedging activity were allocated from the former Parent directly to the Company’s Consolidated Income Statement, resulting in no gain (loss) either recognized in other comprehensive income or reclassified from accumulated other comprehensive income.

Effect of derivative instruments in the Consolidated Income Statement- Not designated


	Gain (Loss) Recognized in Consolidated Income Statement
						Three
	Consolidated	Year Ended		Year Ended		Months Ended		Year Ended
	Income Statement	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	Line Item	2024		2023		2022		2021

Derivative instruments not designated as hedging instruments:
Foreign exchange contracts	Other expense	$	(48)	$	20	$	(1)	$	4
Total		$	(48)	$	20	$	(1)	$	4

LEASES - Finance leases recognized in the Consolidated Balance Sheet (Details) - USD ($) $ in Millions	12 Months Ended		24 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024	Mar. 31, 2022	Dec. 31, 2021
RESTRUCTURING
Right-of-use assets - Property and equipment	$ 309	$ 245	$ 309
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net	Property, Plant and Equipment, Net
Lease Liabilities:
Current	$ 95	$ 82	$ 95
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Short-term Debt	Short-term Debt	Short-term Debt	Short-term Debt	Short-term Debt
Noncurrent	$ 193	$ 160	$ 193
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Long-term Debt and Lease Obligation	Long-term Debt and Lease Obligation	Long-term Debt and Lease Obligation	Long-term Debt and Lease Obligation	Long-term Debt and Lease Obligation
Charges	$ 174	$ 135	$ 310
Liabilities Related to Ceasing to Use Leased Assets
Lease Liabilities:
Charges	$ 14	$ 69

ACCOUNTING PRONOUNCEMENTS

12 Months Ended

Mar. 31, 2024

ACCOUNTING PRONOUNCEMENTS

ACCOUNTING PRONOUNCEMENTS

NOTE 2. ACCOUNTING PRONOUNCEMENTS

Standards Implemented

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04, Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (“LIBOR”) would cease being published. The FASB issued temporary, optional expedients related to the accounting for contract modifications and hedging transactions as a result of markets transitioning from the use of LIBOR and other interbank offered rates to alternative reference rates. In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848, deferring the sunset date of Topic 848 to December 31, 2024. In June 2023, the Company modified its contracts that use LIBOR, transitioning from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The use of SOFR became effective in modified contracts beginning on July 1, 2023. The change of reference rate did not result in any material impact to the Company’s consolidated financial statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, which amended its guidance related to supplier finance programs. The amended guidance requires additional disclosures surrounding the use of supplier finance programs to purchase goods or services, including disclosing the key terms of the programs, the amount of obligations outstanding at the end of the reporting period, and a roll-forward of those obligations. The new guidance, except the roll-forward information, is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The requirement to present roll-forward information is effective for fiscal years beginning after December 15, 2023. The Company adopted the guidance at the beginning of fiscal year 2024. The guidance did not have a material impact to the Company’s consolidated financial statements or disclosures, as the Company did not have material supplier finance programs. For additional information, see Note 1 – Significant Accounting Policies.

Recent Pronouncements

In March 2023, the FASB issued ASU 2023-01, Leases (Topic 842) – Common-Control Arrangements. This guidance amends the accounting for leasehold improvements in common-control arrangements by requiring a lessee in a common-control arrangement to amortize leasehold improvements that it owns over the improvements’ useful life to the common-control group, regardless of the lease term, if the lessee continues to control the use of the underlying asset through a lease. This guidance is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted. The Company has evaluated the impact of the amended guidance and concluded that the guidance does not have a material impact on the Company’s consolidated financial statements.

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement, which requires a joint venture to measure all contributions received upon its formation at fair value. This guidance should be applied prospectively, effective for all newly-formed joint venture entities with a formation date on or after January 1, 2025. Early adoption is permitted. The Company has evaluated the impact of the guidance and does not expect it to have a material impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. The guidance should be applied retrospectively, effective for

fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, which is intended to enhance the transparency and usefulness of income tax disclosures through improved reporting related to the rate reconciliation and income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of this guidance on the disclosures in its consolidated financial statements.

- Definition

The entire disclosure for change in accounting principle. Includes, but is not limited to, nature, reason, and method of adopting amendment to accounting standards or other change in accounting principle.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 2
-Subparagraph (g)(2)(i)
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-URI https://asc.fasb.org//1943274/2147480016/944-40-65-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

RETIREMENT-RELATED BENEFITS - Assumptions (Details) - Defined Benefit Pension Plans	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Weighted-average assumptions used to measure net periodic benefit cost
Discount rate	1.19%	3.57%	1.88%	0.62%
Expected long-term returns on plan assets	3.00%	4.69%	3.33%	3.00%
Rate of compensation increase	2.30%	2.85%	2.54%	2.22%
Weighted-average assumptions used to measure benefit obligations
Discount rate	1.88%	3.30%	3.57%	1.19%
Rate of compensation increase	2.54%	2.84%	2.85%	2.30%
Interest crediting rate - cash balance plans	1.52%	1.65%	1.52%	1.43%

RETIREMENT-RELATED BENEFITS - Nonpension Postretirement Benefits Plans and Mult-Employer Plans (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
Retirement-Related Benefit Plans Disclosures [Line Items]
Retirement and nonpension postretirement benefit obligations	$ 500	$ 504
Non Pension Postretirement Benefit Plans
Retirement-Related Benefit Plans Disclosures [Line Items]
Retirement and nonpension postretirement benefit obligations		$ 10
Discount rate	2.89%	3.02%	1.23%	1.04%
Fair Value of plan assets	$ 0	$ 0	$ 0	$ 0

- Definition

Amount of asset segregated and restricted to provide benefit under defined benefit plan. Asset includes, but is not limited to, stock, bond, other investment, earning from investment, and contribution by employer and employee.

+ References + Details

OTHER LIABILITIES (Tables)

12 Months Ended

Mar. 31, 2024

OTHER LIABILITIES.

Schedule of components of other liabilities


	At March 31,
(Dollars in millions)	2024		2023
Workforce rebalancing (current)	$	45	$	75
Other current accruals		476		549
Other accrued expenses and liabilities	$	521	$	624
Workforce rebalancing (noncurrent)	$	12	$	21
Deferred taxes		55		98
Income tax reserve		90		85
Other		174		246
Other noncurrent liabilities	$	332	$	450

RETIREMENT-RELATED BENEFITS - Plan Assets (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022
Retirement-Related Benefits
Percentage of Co-sponsored plan assets	55.00%
Defined Benefit Pension Plans
Retirement-Related Benefits
Fair value of plan assets, gross	$ 329	$ 326
Investments measured at net asset value using NAV as a practical expedient	919	901
Fair value of plan assets	1,248	1,226	$ 1,383
Defined Benefit Pension Plans \| Government and related
Retirement-Related Benefits
Fair value of plan assets, gross	112	107
Defined Benefit Pension Plans \| Corporate bonds
Retirement-Related Benefits
Fair value of plan assets, gross	21	20
Defined Benefit Pension Plans \| Insurance contracts
Retirement-Related Benefits
Fair value of plan assets, gross	189	191
Defined Benefit Pension Plans \| Cash and short-term investments
Retirement-Related Benefits
Fair value of plan assets, gross	3	3
Defined Benefit Pension Plans \| Derivatives
Retirement-Related Benefits
Fair value of plan assets, gross	5	5
Defined Benefit Pension Plans \| Level 1
Retirement-Related Benefits
Fair value of plan assets, gross	3	3
Fair value of plan assets	3	3
Defined Benefit Pension Plans \| Level 1 \| Cash and short-term investments
Retirement-Related Benefits
Fair value of plan assets, gross	3	3
Defined Benefit Pension Plans \| Level 2
Retirement-Related Benefits
Fair value of plan assets, gross	327	322
Fair value of plan assets	327	322
Defined Benefit Pension Plans \| Level 2 \| Government and related
Retirement-Related Benefits
Fair value of plan assets, gross	112	107
Defined Benefit Pension Plans \| Level 2 \| Corporate bonds
Retirement-Related Benefits
Fair value of plan assets, gross	21	20
Defined Benefit Pension Plans \| Level 2 \| Insurance contracts
Retirement-Related Benefits
Fair value of plan assets, gross	189	191
Defined Benefit Pension Plans \| Level 2 \| Cash and short-term investments
Retirement-Related Benefits
Fair value of plan assets, gross	1
Defined Benefit Pension Plans \| Level 2 \| Derivatives
Retirement-Related Benefits
Fair value of plan assets, gross	$ 5	$ 5

SIGNIFICANT ACCOUNTING POLICIES - Kyndryl's Spin-off and Description of Business (Details)	Nov. 03, 2021	Mar. 31, 2024 employee country	Nov. 04, 2021
Percentage of common stock transferred on spin off	80.10%
Number of employees \| employee		80,000
IBM
Ownership percentage retained			19.90%
Minimum
Number of countries \| country		100

TRANSACTIONS WITH FORMER PARENT

12 Months Ended

Mar. 31, 2024

TRANSACTIONS WITH FORMER PARENT

TRANSACTIONS WITH FORMER PARENT

NOTE 17. TRANSACTIONS WITH FORMER PARENT

Change in Beneficial Ownership

IBM transferred all of its 19.9% initially retained interest in Kyndryl common stock to a third-party financial institution through exchange agreements in May and August 2022. IBM ceased to be a related party of Kyndryl in August 2022. Transactions related to former Parent after August 11, 2022 are no longer reported as related-party activities. As a result, there was no related-party revenue or cost of services recognized subsequent to August 11, 2022.

Revenue and Purchases Related to Former Parent

While IBM was a related party, Kyndryl provided various services to IBM, including those related to hosting data centers and servicing IBM’s information technology infrastructure, which are reported as revenue in the Company’s Consolidated Income Statement. Related-party revenue generated from these services was $287 million, $236 million and $704 million for the year ended March 31, 2023, the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. No related-party revenue was recognized after August 2022. During the year ended March 31, 2024, the Company reached an agreement to collect previously reserved receivables from our former Parent, which resulted in a gain recorded within transaction-related costs (benefits).

While IBM was a related party, Kyndryl utilized various IBM products and services, recognized as costs of services, in the fulfillment of services contracts. Total cost of services recognized from these related-party transactions in the Company’s Consolidated Income Statement was $1.4 billion, $924 million and $4.0 billion for the year ended March 31, 2023, the three months ended March 31, 2022, and the year ended December 31, 2021, respectively. No related-party cost of services was recognized after August 2022.

Capital Expenditures with Former Parent

Related-party capital expenditures for purchases of IBM hardware were reflected as payments for property and equipment within the investing section of the Company’s Consolidated Statement of Cash Flows in the amounts of $89 million, $25 million, and $299 million for the year ended March 31, 2023, the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. Additionally, as part of the Separation, IBM committed to provide Kyndryl, at no cost, up to approximately $265 million of upgraded hardware over an expected two-year period. The amounts committed by IBM are reflected within other assets (noncurrent) within the Consolidated Balance Sheet at March 31, 2023. For the year ended March 31, 2024, $265 million of the upgraded hardware committed by IBM was delivered to Kyndryl. Accordingly, such balance was transferred from other assets (noncurrent) to property and equipment on the Balance Sheet and recognized as non-cash investing activity. The Company intends to recognize depreciation expense related to such equipment over its useful life in accordance with the Company’s depreciation policy, as described in Note 1 – Significant Accounting Policies.

Allocation of Corporate Expenses

Following the Separation, general corporate expenses from IBM are no longer allocated to Kyndryl; therefore, no related amounts were reflected on the Company’s financial statements for the years ended March 31, 2024 and 2023 or the three months ended March 31, 2022.

Prior to the Separation, IBM allocated certain general corporate expenses that would have been incurred by Kyndryl had it been a separate, standalone company. These allocated general corporate expenses from IBM were recorded in the historical Consolidated Income Statement, Consolidated Statement of Comprehensive Income (Loss) and Consolidated Statement of Cash Flows. Allocations for management costs and corporate support services provided to Kyndryl for the year ended December 31, 2021 were $989 million, which consisted of $10 million of allocated other expense, $46 million of allocated interest expense and $932 million of allocated selling, general and administrative expense. Allocated selling, general and administrative expense primarily represents expenses for corporate functions including, but not limited to, senior management, legal, human resources, finance and accounting, treasury, information technology and other shared services. All such amounts were deemed to have been incurred and settled by Kyndryl in the period in which the costs were recorded and are included in the net Parent investment. These costs were allocated based on direct usage as applicable, with the remainder allocated on a pro-rata basis of gross profit, headcount, assets or other measures.

Net Parent Investment

As a result of the Separation, net Parent investment in the Consolidated Balance Sheet and Consolidated Statement of Equity was fully settled on November 3, 2021. As such, there was no balance in net Parent investment at December 31, 2021, March 31, 2022, March 31, 2023 and March 31, 2024, and there was no activity within the account during the three months ended March 31, 2022 and the years ended March 31, 2023 and 2024. The total net effect of these settlement transactions was reflected as Net transfers (to) from Parent in the financing activities section in the Consolidated Statement of Cash Flows for the year ended December 31, 2021.

Prior to the Separation, net Parent investment in the historical Balance Sheet and Statement of Equity represented IBM’s historical investment in Kyndryl, the net effect of transactions with and allocations from IBM, and Kyndryl’s accumulated earnings.

Lease Guarantees

Kyndryl has lease agreements with third parties with an estimated aggregate lease liability of $79 million that were guaranteed by IBM as of March 31, 2023. Lease agreements guaranteed by IBM were immaterial as of March 31, 2024.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section 50
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-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

EQUITY

12 Months Ended

Mar. 31, 2024

EQUITY

EQUITY

NOTE 14. EQUITY

The following tables present reclassifications and taxes related to items of other comprehensive income (loss) for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period) and the year ended December 31, 2021:


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended March 31, 2024	Amount		Benefit		Amount
Foreign currency translation adjustments:
Foreign currency translation adjustments	$	(36)	$	—	$	(36)
Unrealized losses on net investment hedges		(11)		—		(11)
Total foreign currency translation adjustments	$	(47)	$	—	$	(47)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	22	$	(1)	$	21
Reclassification of (gains) losses to net income		(21)		—		(21)
Total unrealized gains (losses) on cash flow hedges	$	1	$	(1)	$	—
Retirement-related benefit plans*:
Prior service (credits) costs	$	(3)	$	1	$	(2)
Net gains (losses) arising during the period		(56)		10		(45)
Curtailments and settlements		10		(2)		8
Amortization of prior service (credits) costs		1		(0)		1
Amortization of net (gains) losses		5		(2)		3
Total retirement-related benefit plans	$	(42)	$	7	$	(36)
Other comprehensive income (loss)	$	(88)	$	6	$	(82)

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended March 31, 2023	Amount		Benefit		Amount
Foreign currency translation adjustments	$	(186)	$	—	$	(186)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	$	(4)	$	—	$	(4)
Reclassification of (gains) losses to net income		2		—		2
Total unrealized gains (losses) on cash flow hedges	$	(3)	$	—	$	(2)
Retirement-related benefit plans*:
Prior service (credits) costs	$	4	$	—	$	3
Net gains (losses) arising during the period		175		—		175
Curtailments and settlements		10		(2)		8
Amortization of prior service (credits) costs		1		—		1
Amortization of net (gains) losses		40		(11)		29
Total retirement-related benefit plans	$	229	$	(14)	$	215
Other comprehensive income (loss)	$	40	$	(14)	$	27

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the three months ended March 31, 2022:	Amount		Benefit		Amount
Foreign currency translation adjustments	$	(51)	$	—	$	(51)
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period		1		—		1
Reclassification of (gains) losses to net income		(1)		—		(1)
Total unrealized gains (losses) on cash flow hedges	$	—	$	—	$	—
Retirement-related benefit plans*:
Net gains (losses) arising during the period	$	136	$	(45)	$	91
Curtailments and settlements		4		(1)		3
Amortization of net (gains) losses		16		(4)		12
Total retirement-related benefit plans	$	156	$	(50)	$	105
Other comprehensive income (loss)	$	105	$	(50)	$	54

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.


(Dollars in millions)	Pretax		Tax (Expense)		Net-of-Tax
For the year ended December 31, 2021:	Amount		Benefit		Amount
Foreign currency translation adjustments	$	194	$	—	$	194
Unrealized gains (losses) on cash flow hedges
Unrealized gains (losses) arising during the period		4		—		4
Reclassification of (gains) losses to net income		(1)		—		(1)
Total unrealized gains (losses) on cash flow hedges	$	3	$	—	$	3
Retirement-related benefit plans*:
Prior service (credits) costs	$	1	$	(2)	$	(1)
Net gains (losses) arising during the period		72		(17)		54
Curtailments and settlements		3		(1)		2
Amortization of net (gains) losses		51		(13)		38
Total retirement-related benefit plans	$	127	$	(33)	$	94
Other comprehensive income (loss)	$	324	$	(33)	$	292

*	These AOCI components are included in the computation of net periodic benefit cost. Refer to Note 16 – Retirement-Related Benefits for additional information.

The following table presents the components of accumulated other comprehensive income (loss), net of taxes:


	Net Unrealized		Foreign Currency		Net Change in		Accumulated Other
	Gains (Losses)		Translation		Retirement-Related		Comprehensive
(Dollars in millions)	on Cash Flow Hedges		Adjustments*		Benefit Plans		Income (Loss)
December 31, 2020	$	—	$	(878)	$	(218)	$	(1,096)
Net transfers from Parent		—		—		(339)		(339)
Other comprehensive income (loss)		3		194		94		292
December 31, 2021	$	3	$	(684)	$	(463)	$	(1,143)
Other comprehensive income (loss)		—		(51)		105		54
March 31, 2022	$	3	$	(735)	$	(357)	$	(1,089)
Other comprehensive income (loss)		(2)		(186)		215		27
March 31, 2023	$	—	$	(921)	$	(142)	$	(1,062)
Other comprehensive income (loss)		—		(47)		(36)		(82)
March 31, 2024	$	—	$	(967)	$	(178)	$	(1,145)

*	Foreign currency translation adjustments are presented gross.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

EQUITY - Reclassifications and Taxes (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss)	$ 54	$ (82)	$ 27	$ 292
Accumulated Other Comprehensive Income (Loss)
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	105	(88)	40	324
Other comprehensive income (loss), tax (expense) benefit	(50)	6	(14)	(33)
Other comprehensive income (loss)	54	(82)	27	292
Foreign Currency Translation Adjustments
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	(51)	(47)	(186)	194
Other comprehensive income (loss)	(51)	(47)	(186)	194
Foreign Currency Translation Adjustments Excluding Net Investment Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount		(36)
Unrealized gains (losses) arising during the period, net of tax amount		(36)
Unrealized Losses on Net Investment Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount		(11)
Unrealized gains (losses) arising during the period, net of tax amount		(11)
Unrealized Gains (Losses) on Cash Flow Hedges
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	1	22	(4)	4
Unrealized gains (losses) arising during the period, tax (expense) benefit		(1)
Unrealized gains (losses) arising during the period, net of tax amount	1	21	(4)	4
Reclassification/amortization, before tax amount	(1)	(21)	2	(1)
Reclassification/amortization, net of tax amount	(1)	(21)	2	(1)
Other comprehensive income (loss), before tax amount		1	(3)	3
Other comprehensive income (loss), tax (expense) benefit		(1)
Other comprehensive income (loss)			(2)	3
Net Change Retirement-Related Benefit Plans
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Other comprehensive income (loss), before tax amount	156	(42)	229	127
Other comprehensive income (loss), tax (expense) benefit	(50)	7	(14)	(33)
Other comprehensive income (loss)	105	(36)	215	94
Retirement-Related Benefit Plans, Curtailments and Settlements
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	4	10	10	3
Unrealized gains (losses) arising during the period, tax (expense) benefit	(1)	(2)	(2)	(1)
Unrealized gains (losses) arising during the period, net of tax amount	3	8	8	2
Retirement-Related Benefit Plans, Prior Service Costs (Credits)
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount		(3)	4	1
Unrealized gains (losses) arising during the period, tax (expense) benefit		1		(2)
Unrealized gains (losses) arising during the period, net of tax amount		(2)	3	(1)
Reclassification/amortization, before tax amount		1	1
Reclassification/amortization, tax (expense) benefit		0
Reclassification/amortization, net of tax amount		1	1
Retirement-Related Benefit Plans, Net Gains (Losses)
Reclassifications and Taxes Related to Items of Other Comprehensive Income (Loss)
Unrealized gains (losses) arising during the period, before tax amount	136	(56)	175	72
Unrealized gains (losses) arising during the period, tax (expense) benefit	(45)	10		(17)
Unrealized gains (losses) arising during the period, net of tax amount	91	(45)	175	54
Reclassification/amortization, before tax amount	16	5	40	51
Reclassification/amortization, tax (expense) benefit	(4)	(2)	(11)	(13)
Reclassification/amortization, net of tax amount	$ 12	$ 3	$ 29	$ 38

OTHER LIABILITIES (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
OTHER LIABILITIES.
Workforce rebalancing (current)	$ 45	$ 75
Other current accruals	476	549
Other accrued expenses and liabilities	521	624
Workforce rebalancing (noncurrent)	12	21
Deferred taxes	55	98
Income tax reserve	90	85
Other	174	246
Other non-current liabilities	$ 332	$ 450

NET LOSS PER SHARE (Tables)

12 Months Ended

Mar. 31, 2024

NET LOSS PER SHARE

Schedule of computation of basic and diluted earnings per share of common stock


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(In millions, except per share amounts)	2024		2023		2022		2021
Net income (loss) on which basic and diluted earnings per share is calculated	$	(340)	$	(1,374)	$	(229)	$	(2,304)
Number of shares on which basic and diluted earnings per share is calculated		229.2		226.7		224.4		224.1

Basic earnings (loss) per share		(1.48)		(6.06)		(1.02)		(10.28)
Diluted earnings (loss) per share		(1.48)		(6.06)		(1.02)		(10.28)

Schedule of anti dilutive securities were not included in the computation of diluted net loss per share


			Three Months
			Ended	Year Ended
	Year Ended March 31,		March 31,	December 31,
(In millions)	2024	2023	2022	2021
Nonvested restricted stock units	8.8	9.4	9.8	10.2
Nonvested performance-conditioned stock units	3.0	2.3	—	—
Nonvested market-conditioned stock units	2.7	2.3	1.8	1.8
Stock options issued and outstanding	3.6	3.7	3.8	3.8
Total	18.1	17.7	15.5	15.8

SEGMENTS

12 Months Ended

Mar. 31, 2024

SEGMENTS

SEGMENTS

NOTE 4. SEGMENTS

Our reportable segments correspond to how the chief operating decision maker (“CODM”) reviews performance and allocates resources. Our four reportable segments consist of the following:

United States: This reportable segment is comprised of Kyndryl’s operations in the United States.

Japan: This reportable segment is comprised of Kyndryl’s operations in Japan.

Principal Markets: This reportable segment represents the aggregation of our operations in Australia / New Zealand, Canada, France, Germany, India, Italy, Spain / Portugal, and the United Kingdom / Ireland.

Strategic Markets: This reportable segment is comprised of our operations in all other countries in which we operate.

The measure of segment operating performance used by Kyndryl’s CODM is adjusted EBITDA. Adjusted EBITDA is defined as net income (loss) excluding income taxes, interest expense, depreciation and amortization (excluding depreciation of right-of-use assets and amortization of capitalized contract costs), charges related to ceasing to use leased and owned fixed assets, charges related to lease terminations, transaction-related costs and benefits, pension expenses other than pension servicing costs and multi-employer plan costs, stock-based compensation expense, workforce rebalancing charges incurred prior to March 31, 2024, impairment expense, significant litigation costs, and currency impacts of highly inflationary countries. The use of revenue and adjusted EBITDA aligns with how the CODM assesses performance and allocates resources for the Company’s segments.

Our geographic markets frequently work together to sell and implement certain contracts. The resulting revenues and costs from these contracts may be apportioned among the participating geographic markets. The economic environment and its effects on the industries served by our geographic markets affect revenues and operating expenses within our geographic markets to differing degrees. Currency fluctuations also tend to affect our geographic markets differently, depending on the geographic concentrations and locations of their businesses.

The following table reflects the results of the Company’s segments:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Revenue
United States	$	4,295	$	4,726	$	1,169	$	4,805
Japan		2,344		2,502		706		2,923
Principal Markets		5,823		5,957		1,579		7,085
Strategic Markets		3,590		3,840		978		3,844
Total revenue	$	16,052	$	17,026	$	4,431	$	18,657
Segment adjusted EBITDA
United States	$	781	$	839	$	248	$	842
Japan		361		407		154		501
Principal Markets		740		371		98		341
Strategic Markets		579		436		92		540
Total segment adjusted EBITDA	$	2,461	$	2,052	$	592	$	2,223

The following table reconciles segment adjusted EBITDA to consolidated pretax income (loss):


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Segment adjusted EBITDA	$	2,461	$	2,052	$	592	$	2,223
Workforce rebalancing charges		(138)		(71)		—		(39)
Charges related to ceasing to use leased/fixed assets and lease terminations		(39)		(80)		—		—
Transaction-related (costs) benefits		46		(264)		(58)		(627)
Stock-based compensation expense		(95)		(113)		(31)		(71)
Impairment expense		—		—		—		(469)
Interest expense		(122)		(94)		(21)		(64)
Depreciation of property, equipment and capitalized software		(834)		(900)		(246)		(1,300)
Amortization expense		(1,287)		(1,245)		(326)		(1,314)
Corporate expense not allocated to the segments		(95)		(77)		(56)		(154)
Other adjustments*		(68)		(59)		(43)		(88)
Pretax income (loss)	$	(168)	$	(851)	$	(189)	$	(1,903)

Segment Assets and Other Items

The Company does not allocate assets to the above reportable segments for our CODM’s review.

Geographic Information

The following tables provide information for those countries that represent 10 percent or more of the specific category. Refer to Note 8 – Property and Equipment and Note 9 – Leases for more information on allocation methodologies.


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Revenue*
United States	$	4,295	$	4,726	$	1,169	$	4,805
Japan		2,344		2,502		706		2,923
Other countries		9,413		9,797		2,556		10,930
Total revenue	$	16,052	$	17,026	$	4,431	$	18,657

*	Revenues are attributed to countries based on the location of the client and exclude certain allocations.


	At March 31,
(Dollars in millions)	2024		2023
Property and equipment, net
United States *	$	951	$	922
Other countries		1,724		1,857
Total property and equipment, net	$	2,674	$	2,779

Operating right-of-use assets, net
United States *	$	113	$	124
Japan		73		110
Belgium		135		149
Italy		95		64
Other countries		448		517
Total operating right-of-use assets, net	$	864	$	964

* Includes corporate and other.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-15

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 42
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-42

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 40
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-40

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//280/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 26
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-26

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 34
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-34

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 41
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-41

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-21

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

+ Details

NET LOSS PER SHARE - Anti dilutive securities (Details) - shares shares in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	15.5	18.1	17.7	15.8
Restricted stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	9.8	8.8	9.4	10.2
Performance-conditioned stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities		3.0	2.3
Market-conditioned stock units
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	1.8	2.7	2.3	1.8
Employee Stock Option
Securities not included in the computation of diluted earnings (loss) per share
Anti dilutive securities	3.8	3.6	3.7	3.8

TRANSITION PERIOD (Table)

12 Months Ended

Mar. 31, 2024

TRANSITION PERIOD

Condensed Income Statement


	Three Months Ended March 31,
(In millions, except per share amounts)	2022		2021 (unaudited)
Revenues *	$	4,431	$	4,771

Cost of services **	$	3,824	$	4,318
Selling, general and administrative expenses		690		714
Workforce rebalancing charges		—		52
Transaction-related costs		58		55
Interest expense		21		14
Other expenses		27		22
Total costs and expenses	$	4,620	$	5,175

Income (loss) before income taxes	$	(189)	$	(403)
Provision for income taxes	$	40	$	91
Net income (loss)	$	(229)	$	(494)

Basic earnings (loss) per share	$	(1.02)	$	(2.20)
Diluted earnings (loss) per share	$	(1.02)	$	(2.20)

Weighted-average basic shares outstanding		224.4		224.1
Weighted-average diluted shares outstanding		224.4		224.1

* Including related-party revenue of $236 million and $154 million for the three months ended March 31, 2022 and 2021, respectively

** Including related-party cost of services of $924 million and $1,006 million for the three months ended March 31, 2022 and 2021, respectively

Condensed Cash Flow Statement


	Three Months Ended March 31,
(Dollars in millions)	2022		2021 (unaudited)
Cash flows from operating activities:
Net income (loss)	$	(229)	$	(494)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization
Depreciation of property and equipment		246		339
Depreciation of right-of-use assets		103		99
Amortization of transition costs and prepaid software		319		323
Amortization of capitalized contract costs		136		160
Amortization of intangible assets		7		7
Stock-based compensation		31		16
Deferred taxes		(10)		17
Net (gain) loss on asset sales and other		12		(1)
Change in operating assets and liabilities:
Deferred costs (excluding amortization)		(672)		(548)
Right-of-use assets and liabilities (excluding depreciation)		(117)		(118)
Workforce rebalancing liabilities		(73)		(138)
Receivables		(31)		(138)
Accounts payable		384		(99)
Taxes (including items settled with former Parent in prior-year period)		(66)		74
Other assets and other liabilities		151		172
Net cash provided by (used in) operating activities	$	189	$	(328)

Cash flows from investing activities:
Payments for property and equipment	$	(180)	$	(180)
Proceeds from disposition of property and equipment		9		93
Other investing activities, net		(53)		(13)
Net cash used in investing activities	$	(225)	$	(100)

Cash flows from financing activities:
Debt repayments	$	(28)	$	(17)
Net transfers from Parent		—		460
Common stock repurchases for tax withholdings		(3)		—
Other financing activities, net		(12)		—
Net cash provided by (used in) financing activities	$	(43)	$	443

Effect of exchange rate changes on cash, cash equivalents and restricted cash	$	(7)	$	(3)
Net change in cash, cash equivalents and restricted cash	$	(86)	$	13

Cash, cash equivalents and restricted cash at January 1	$	2,240	$	38
Cash, cash equivalents and restricted cash at March 31	$	2,154	$	50

Supplemental data
Income taxes paid, net of refunds received	$	47	$	—
Interest paid on debt	$	3	$	—

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ (229)	$ (340)	$ (1,374)	$ (2,304)
Foreign currency translation adjustments:
Foreign currency translation adjustments	(51)	(36)	(186)	194
Unrealized losses on net investment hedges		(11)
Total foreign currency translation adjustments	(51)	(47)	(186)	194
Unrealized gains (losses) on cash flow hedges:
Unrealized gains (losses) arising during the period	1	22	(4)	4
Reclassification of (gains) losses to net income	(1)	(21)	2	(1)
Total unrealized gains (losses) on cash flow hedges		1	(3)	3
Retirement-related benefit plans:
Prior service costs (credits)		(3)	4	1
Net gains (losses) arising during the period	136	(56)	175	72
Curtailments and settlements	4	10	10	3
Amortization of prior service (credits) costs		1	1
Amortization of net (gains) losses	16	5	40	51
Total retirement-related benefit plans	156	(42)	229	127
Other comprehensive income (loss), before tax	105	(88)	40	324
Income tax (expense) benefit related to items of other comprehensive income (loss)	(50)	6	(14)	(33)
Other comprehensive income (loss), net of tax	54	(82)	27	292
Total comprehensive income (loss)	$ (175)	$ (423)	$ (1,347)	$ (2,013)

RETIREMENT-RELATED BENEFITS - Net Periodic Pension Cost for Defined Benefit Pension Plans (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Cost/(Income) of Pension Plans
Cost of defined contribution expense	$ 35	$ 140	$ 142	$ 165
Defined Benefit Pension Plans
Cost/(Income) of Pension Plans
Service cost	14	38	44	81
Interest cost	$ 6	$ 55	$ 32	$ 11
Interest cost - income statement location	Other expense	Other expense	Other expense	Other expense
Expected return on plan assets	$ (10)	$ (60)	$ (43)	$ (30)
Expected return on plan assets - income statement location	Other expense	Other expense	Other expense	Other expense
Amortization of prior service costs (credits)		$ 1	$ 1
Amortization of prior service costs/(credits) - income statement location	Other expense	Other expense	Other expense	Other expense
Recognized actuarial losses (gains)	$ 16	$ 4	$ 40	$ 51
Recognized actuarial losses (gains) - income statement location	Other expense	Other expense	Other expense	Other expense
Curtailments and settlements	$ 4	$ 13	$ 10	$ 2
Curtailments and settlements - income statement location	Other expense	Other expense	Other expense	Other expense
Total net periodic pension cost	$ 30	$ 51	$ 84	$ 115

TRANSACTIONS WITH FORMER PARENT - Lease Guarantees (Details) $ in Millions	Mar. 31, 2023 USD ($)
IBM \| Related Party
Related Party Transaction [Line Items]
Lease liability guaranteed by IBM	$ 79

RETIREMENT-RELATED BENEFITS - OCI and AOCI (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Changes in AOCI for retirement-related benefits
Current period loss (gain)	$ (136)	$ 56	$ (175)	$ (72)
Curtailments and settlements	(4)	(10)	(10)	(3)
Amortization of net loss included in net periodic benefit cost	(16)	(5)	(40)	(51)
Current period prior service costs (credits)		3	(4)	$ (1)
Amortization for prior service costs (credits) included in net periodic benefit cost		(1)	(1)
Defined Benefit Pension Plans
Changes in AOCI for retirement-related benefits
Net loss (gain) at beginning of period		253	474
Current period loss (gain)		57	(172)
Curtailments and settlements		(10)	(10)
Amortization of net loss included in net periodic benefit cost		(4)	(39)
Net loss (gain) at end of period	474	296	253
Prior service costs (credits) at beginning of period		8	9
Current period prior service costs (credits)		(2)
Amortization for prior service costs (credits) included in net periodic benefit cost		(1)	(1)
Prior service costs (credits) at end of period	$ 9	4	8
Total amounts recognized in accumulated other comprehensive loss (income)		$ 301	$ 261

TAXES - Narrative (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
TAXES - Narrative (Details) - USD ($) $ in Millions	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021	Nov. 03, 2021
Income Taxes [Line Items]
Effective tax rate (as a percent)	(21.00%)	(102.20%)	(61.60%)	(21.10%)
Domestic net operating loss deferred tax assets		$ 441	$ 412
Foreign net operating loss deferred tax assets		66	118
Valuation allowance		748	620
Increase (decrease) to valuation allowance		128
Net unrecognized tax benefit amount, would favorably affect the company's effective tax rate		108
Interest expense and penalties recognized		4
Interest and penalties accrued			$ 6
Indemnification obligations to former parent		13
Deferred tax liability		15
Income taxes receivable					$ 27
Other accrued expenses and liabilities
Income Taxes [Line Items]
Indemnification obligations to former parent		4
Other liabilities
Income Taxes [Line Items]
Indemnification obligations to former parent		$ 9

SEGMENTS (Details)	12 Months Ended
SEGMENTS (Details)	Mar. 31, 2024 segment
SEGMENTS
Number of reportable segments	4

STOCK-BASED COMPENSATION - Fair Value (Details) - $ / shares	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021	Mar. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average grant-date fair value	$ 28.78
IBM
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average grant-date fair value			$ 126.01
Market-Conditioned Performance Awards
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average grant-date fair value	14.32	$ 14.40	15.14	$ 15.14
Share Price	$ 13.55	$ 10.89	$ 18.31
Volatility rate	39.00%	39.00%	35.00%
Risk-free interest rate		2.85%
Dividend yield	0.00%	0.00%	0.00%
Market-Conditioned Performance Awards \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award
Risk-free interest rate	4.57%		0.26%
Market-Conditioned Performance Awards \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Risk-free interest rate	5.38%		0.92%
Performance-based stock units
Share-based Compensation Arrangement by Share-based Payment Award
Weighted-average grant-date fair value	$ 12.28	$ 10.62
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award
Share Price			$ 17.78
Expected term (in years)			6 years 3 months
Volatility rate			34.50%
Risk-free interest rate			1.40%
Dividend yield			0.00%

RETIREMENT-RELATED BENEFITS

12 Months Ended

Mar. 31, 2024

RETIREMENT-RELATED BENEFITS

RETIREMENT-RELATED BENEFITS

NOTE 16. RETIREMENT-RELATED BENEFITS

Defined Benefit Pension Plans

The Company sponsors and co-sponsors defined benefit pension plans that cover certain non-U.S. employees and retirees. The defined benefit pension plan benefits are based principally on employees’ years of service and/or compensation levels at or near retirement. These plans are accounted for as defined benefit pension plans for purposes of the consolidated financial statements. Accordingly, the net benefit plan obligations and the related benefit plan expenses of those plans have been recorded in the Company’s consolidated financial statements.

The following tables present the components of net periodic pension cost for the defined benefit pension plans recognized in the Consolidated Income Statement.


					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Service cost	$	38	$	44	$	14	$	81
Interest cost*		55		32		6		11
Expected return on plan assets*		(60)		(43)		(10)		(30)
Amortization of prior service costs (credits)*		1		1		—		—
Recognized actuarial losses*		4		40		16		51
Curtailments and settlements*		13		10		4		2
Total net periodic pension cost	$	51	$	84	$	30	$	115

*These components of net periodic pension cost are included in other expense in the Consolidated Income Statement.

The following table presents the changes in net benefit obligation and plan assets for the defined benefit pension plans.


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Change in benefit obligation
Benefit obligation at beginning of period	$	1,659	$	2,024
Service cost		38		44
Interest cost		55		32
Plan participants’ contributions		3		4
Actuarial losses (gains)*		83		(299)
Benefits paid from trust		(24)		(15)
Direct benefit payments		(38)		(37)
Business combination/divestiture		(23)		—
Foreign exchange impact		(23)		(66)
Amendments, curtailments, settlements and other		(61)		(29)
Benefit obligation at end of period	$	1,670	$	1,659
Accumulated benefit obligation	$	1,583	$	1,574
Change in plan assets
Fair value of plan assets at beginning of period	$	1,226	$	1,383
Actual return on plan assets		87		(88)
Employer contributions		14		27
Fair value of plan assets assumed from former Parent**		27		—
Plan participants’ contributions		3		4
Benefits paid from trust		(24)		(15)
Business combination/divestiture		(18)		—
Foreign exchange impact		(18)		(40)
Settlements		(49)		(44)
Fair value of plan assets at end of period	$	1,248	$	1,226
Funded status at end of period	$	(422)	$	(433)

*	The year-over-year change was primarily driven by lower inflation rates and demographic factors.

**	Due to the separation of a pension plan that used to be co-sponsored by Kyndryl and the former Parent.

The following table presents the amounts recorded in the Consolidated Balance Sheet for the defined benefit pension plans.


	At March 31,		At March 31,
(Dollars in millions)	2024		2023
Noncurrent assets – pension assets	$	105	$	94
Current liabilities – accrued compensation and benefits		(40)		(38)
Noncurrent liabilities – retirement and nonpension postretirement benefit obligations		(487)		(489)
Funded status, net	$	(422)	$	(433)

The following table presents information for defined benefit pension plans with accumulated benefit obligations (ABO) or projected benefit obligations (PBO) in excess of plan assets.


	At March 31, 2024				At March 31, 2023
	Benefit		Plan		Benefit		Plan
(Dollars in millions)	Obligation		Assets		Obligation		Assets
Plans with PBO in excess of plan assets	$	714	$	187	$	953	$	426
Plans with ABO in excess of plan assets		712		186		630		171
Plans with plan assets in excess of PBO		957		1,061		706		800

The following table presents the pretax net loss and prior service costs (credits) recognized in OCI and the changes in pretax net loss and prior service costs (credits) as well as Separation-related transfers from Parent recognized in AOCI for the defined benefit pension plans.


	Year		Year
	Ended		Ended
	March 31,		March 31,
(Dollars in millions)	2024		2023
Net loss (gain) at beginning of period	$	253	$	474
Current period loss (gain)		57		(172)
Curtailments and settlements		(10)		(10)
Amortization of net loss included in net periodic benefit cost		(4)		(39)
Net loss (gain) at end of period	$	296	$	253
Prior service costs (credits) at beginning of period		8		9
Current period prior service costs (credits)		(2)		—
Amortization for prior service costs (credits) included in net periodic benefit cost		(1)		(1)
Prior service costs (credits) at end of period	$	4	$	8
Total amounts recognized in accumulated other comprehensive loss (income) *	$	301	$	261

The following table presents the weighted-average assumptions used to measure the net periodic pension cost and the year-end benefit obligations for the defined benefit pension plans.


					Three
	Year Ended		Year Ended		Months Ended		Year Ended
	March 31,		March 31,		March 31,		December 31,
Weighted-average assumptions used to measure:	2024		2023		2022		2021
Net periodic pension cost
Discount rate	3.57	%	1.88	%	1.19	%	0.62	%
Expected long-term returns on plan assets	4.69	%	3.33	%	3.00	%	3.00	%
Rate of compensation increase	2.85	%	2.54	%	2.30	%	2.22	%
Benefit obligations
Discount rate	3.30	%	3.57	%	1.88	%	1.19	%
Rate of compensation increase	2.84	%	2.85	%	2.54	%	2.30	%
Interest crediting rate – cash balance plans	1.65	%	1.52	%	1.52	%	1.43	%

In certain countries, a hypothetical portfolio of high-quality corporate bonds is used to construct a yield curve. Projected cash flows from the Company’s expected benefit obligation payments are matched to the yield curve to derive discounts. In other countries where the markets for high-quality long-term bonds are not as well developed, a portfolio of long-term government bonds is used as a base and a credit spread is added to simulate corporate bond yields at these maturities in the jurisdiction of each plan. This is the benchmark for developing the respective discount rates.

In developing the expected long-term rate of return on assets, the Company considers the long-term expectations for future returns. The use of expected returns may result in pension income that is greater or less than the actual return of those plan assets in a given year. Over time, however, the expected rate of return is expected to approximate the actual long-term results, leading to a pattern of income or loss recognition that more closely matches the pattern of services provided by the employees.

The investment objective of the defined benefit plans is to generate returns that will enable the plan to meet its future obligations. The weighted-average target allocation for the defined benefit plans is 27% equity securities, 46% fixed-income securities, 6% real estate, 15% insurance contracts and 6% other investments. Typically the responsibility

for determining the target allocation and managing the investments lies with a plan governing board that may include up to 50 percent of members elected by employees and retirees. Generally, these defined benefit plans do not invest in illiquid assets, and their use of derivatives is mainly for currency hedging, interest rate risk management, credit exposure and alternative investment strategies.

The following table presents the Company’s defined benefit pension plans’ asset classes and their associated fair value at March 31, 2024 and 2023.


	At March 31, 2024								At March 31, 2023
(Dollars in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Equity
Equity securities	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Fixed income
Government and related ⁽¹⁾		—		112		—		112		—		107		—		107
Corporate bonds		—		21		—		21		—		20		—		20
Insurance contracts		—		189		—		189		—		191		—		191
Cash and short-term investments ⁽²⁾		3		1		—		3		3		—		—		3
Derivative assets ⁽³⁾		—		5		—		5		—		5		—		5
Subtotal	$	3	$	327	$	—	$	329	$	3	$	322	$	—	$	326
Investments measured at net asset value using NAV as a practical expedient ⁽⁴⁾		—		—		—		919		—		—		—		901
Fair value of plan assets	$	3	$	327	$	—	$	1,248	$	3	$	322	$	—	$	1,226

(1)	Includes debt issued by national, state and local governments and agencies.

(2)	Includes cash, cash equivalents and short-term marketable securities.

(3)	Includes forward contracts, interest rate swaps, exchange traded and other over-the-counter derivatives.

(4)	Investments measured at fair value using the net asset value (NAV) per share (or its equivalent), as a practical expedient. These investments include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships.

Approximately 55 percent of plan assets are held in plans which are co-sponsored by the Company and the former Parent. The allocation of the fair value of co-sponsored plan assets is based on the initial pension assets assumed in connection with establishment of certain Kyndryl legal entities, Company contributions, distributions and market returns.

Defined benefit pension plan assets are recognized and measured at fair value. Because of the inherent uncertainty of valuations, these fair value measurements may not necessarily reflect the amounts the Company could realize in current market transactions. The following is a description of the valuation techniques used to measure plan assets at fair value. There were no changes in valuation techniques during the periods presented.

Equity securities and mutual funds: Equity securities are valued at the closing price reported on the stock exchange on which the individual securities are traded. Mutual funds are typically valued based on quoted market prices. These assets are generally classified as Level 1.

Fixed income: Fixed-income securities, other than insurance contracts, are typically valued using the closing price reported on the major market on which the individual securities are traded, if available. Assets fair-valued using this methodology are generally classified as Level 2. If market prices are unavailable, the fair value is estimated using pricing models or quoted prices of securities with similar characteristics.

Insurance contracts: Fair value is based on the expected value of the insurance benefits of the insurance contracts. The insurance benefits are assessed using the same interest rate and mortality table used to determine the liability. These assets are generally classified as Level 2.

Cash and short-term investments: Cash includes money market accounts that are valued at their cost plus interest on a daily basis, which approximates fair value. Short-term investments represent securities with original maturities of one year or less. These assets are generally classified as Level 1.

Derivatives assets: Exchange-traded derivatives are valued at the closing price reported on the exchange on which the individual securities are traded. Forward contracts are valued using a mid-close price. Over-the-counter derivatives are valued using pricing models. These models require a variety of inputs, yield curves, credit curves, measures of volatility and foreign exchange rates. Derivative assets are classified as Level 1 or Level 2 depending on availability of quoted market prices.

Investments measured at net asset value: Certain investments are measured at fair value using the net asset value (“NAV”) per share (or its equivalent) as a practical expedient. These investments, which may include commingled funds, hedge funds, common collective trusts, private equity partnerships and real estate partnerships, are typically valued using the NAV provided by the administrator of the fund. The NAV is based on the value of the underlying assets owned by the fund, minus liabilities multiplied by the plan’s ownership of the investment.

It is the Company’s general practice to fund amounts for pensions sufficient to meet the minimum requirements set forth in applicable employee benefits laws and local tax laws. From time to time, the Company contributes additional amounts as it deems appropriate. The Company contributed $14 million, $27 million, $2 million, and $25 million to the defined benefit pension plans during the years ended March 31, 2024 and 2023, the three months ended March 31, 2022, and the year ended December 31, 2021, respectively. Additionally, the Company made direct payments of $46 million, $37 million, $11 million, and $33 million to participants of the defined benefit pension plans during the years ended March 31, 2024 and 2023, the three months ended March 31, 2022, and the year ended December 31, 2021, respectively.

The Company estimates contributions to its defined benefit pension plans in fiscal year 2025 to be approximately $16 million. This amount generally represents legally mandated minimum contributions. Financial market performance in fiscal year 2025 could increase or decrease the legally mandated minimum contribution in certain countries that require monthly or daily remeasurement of the funded status. The Company could also elect to contribute more than the legally mandated amount based on market conditions or other factors.

The following table presents the total expected benefit payments to participants of the defined benefit pension plans.


	Expected
(Dollars in millions)	Benefit Payments
Fiscal year ending March 31,
2025	$	121
2026		119
2027		116
2028		118
2029		118
2030-2034		596

The fiscal year 2025 expected benefit payments not covered by the respective plan assets represent a component of compensation and benefits, within current liabilities, in the Consolidated Balance Sheet.

Defined Contribution Retirement Plans

The Company sponsors defined contribution retirement plans for certain eligible employees. The Company’s contribution expense associated with employer matching benefits was $140 million, $142 million, $35 million, and $165 million for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 and the year ended December 31, 2021, respectively.

Nonpension Postretirement Benefit Plans and Multi-Employer Plans

Certain Company employees participate in multi-employer defined benefit pension plans and post-retirement health plans which are sponsored by third parties and include other participants as well as other nonpension postretirement benefit plans that are sponsored by the Company. Accordingly, the Company does not record an asset or liability to recognize the funded status of the multi-employer plans. However, the Company records service cost attributable to its employees who participate in the multi-employer plans, as well as expense allocated for certain corporate and shared functional employees. These amounts are included in the Consolidated Income Statement, and were not material for any of the periods presented. The nonpension postretirement benefit plans provide a fixed monthly dollar credit for retiree health care expense. The related expenses for these plans are included in the consolidated financial statements, and were not material for any period presented.

Contributions to the nonpension postretirement benefit plans and the multi-employer plans and components of net periodic benefit cost related to these plans and were not material for any period presented. Additionally, the components resulting in a change in benefit obligation and the activity recognized in AOCI related to the nonpension postretirement benefit plans were not material for the periods presented. The nonpension postretirement benefit plans had a noncurrent liability recorded in the retirement and nonpension postretirement benefit obligation Consolidated Balance Sheet of $10 million at March 31, 2024 and 2023. The weighted-average discount rate used to measure the nonpension postretirement benefit plan obligation was 2.89%, 3.02%, 1.23%, and 1.04% for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 and the year ended December 31, 2021, respectively. There were no plan assets in the nonpension postretirement benefit plans for any period presented. As a result, the noncurrent liability related to these plans represented the accumulated postretirement benefit obligation in excess of plan assets for each period presented. Future expected benefit payments to participants of the nonpension postretirement benefit plans are not expected to be material, and the Company expects contributions to the multi-employer and nonpension postretirement benefits plans to be immaterial in fiscal year 2025.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Mar. 31, 2024

COMMITMENTS AND CONTINGENCIES.

COMMITMENTS AND CONTINGENCIES

NOTE 13. COMMITMENTS AND CONTINGENCIES

The Company guarantees certain loans and financial commitments. The maximum potential future payment under these financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at March 31, 2024 and 2023 were not material. Additionally, the Company has contractual commitments that are noncancellable with certain software, hardware and cloud partners used in the delivery of services to customers. Certain of these commitments were allocated to the Company as part of the Separation from its former Parent. The Company has determined that these commitments may exceed the Company’s needs over the next two to three years. If the Company is unable to satisfy, reduce or amend its contractual commitments, it will record the future charges for any payments related to excess commitments as cost of services. At March 31, 2024, we had short-term (April 2024 through March 2025), mid-term (April 2025 through March 2027) and long-term (April 2027 onward) purchase commitments in the amount of $0.6 billion, $0.4 billion and $0.4 billion, respectively.

As a Fortune 500 company with customers and employees around the world, Kyndryl is subject to, or could become subject to, either as plaintiff or defendant, a variety of contingencies, including claims, demands and suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of its business. Given the rapidly evolving external landscape of cybersecurity, privacy and data protection laws, regulations and threat actors, the Company or its clients could become subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of Kyndryl’s scope and scale, the Company is subject to, or could become subject to, actions and proceedings in various jurisdictions involving a wide range of labor and employment issues (including matters related to contested employment decisions, country-specific labor and employment laws, and the Company’s benefit plans), as well as actions with respect to contracts, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number of different parties, including competitors, clients, employees, government and regulatory agencies, stockholders and representatives of the locations in which the Company does business. Some of the actions to which the Company is, or may become, party may involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions in which these matters arise. Additionally, the Company is, or may be, a party to agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters.

The Company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In accordance with the relevant accounting guidance, the Company provides disclosures of matters for which the likelihood of material loss is at least reasonably possible. In addition, the Company may also disclose matters based on its consideration of other matters and qualitative factors.

The Company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or in the aggregate) to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews by counsel and other information pertinent to a particular matter.

Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a material effect on the Company’s business, financial condition, results of operations or cash flows will depend on a number of variables, including the timing and amount of such losses or damages; the structure and type of any such remedies; the significance of the impact any such losses, damages or remedies may have in the consolidated financial statements; and the unique facts and circumstances of the particular matter that may give rise to additional factors. While the Company will continue to defend itself vigorously, it is possible that the Company’s business, financial condition, results of operations or cash flows could be affected in any particular period by the resolution of one or more of these matters.

In July 2017, BMC Software, Inc. (“BMC”) filed suit against IBM in the U.S. Court for the Southern District of Texas in a dispute involving various aspects of IBM’s business, including its managed infrastructure business. BMC alleged IBM’s removal of BMC software from one of its client’s sites at the client’s request constituted breach of contract, fraudulent inducement and trade secret misappropriation. In May 2022, the trial court entered a judgment against IBM and awarded BMC $717 million in direct damages and $717 million in punitive damages, plus interest, for which IBM might have tried to seek an indemnity from the Company. However, IBM appealed the judgment, and in April 2024, the court of appeals overturned the judgment against IBM. Accordingly, we do not expect to have any liability related to this judgment.

Separately, certain contractual disputes have arisen between Kyndryl and IBM following the Separation. IBM and Kyndryl have commenced arbitration proceedings related to certain of these matters. The Company anticipates that certain of these matters will be concluded in fiscal year 2025, while others are in preliminary stages. Kyndryl intends to vigorously pursue its interests and defenses in these matters, including asserting its own claims in arbitration if necessary.

SUBSEQUENT EVENTS (Details) - Subsequent event - USD ($) $ in Millions	Apr. 26, 2024	May 31, 2024
Discontinued Operations, Held-for-Sale \| Securities Industry Services
Subsequent Events
Definitive agreement		$ 200
Skytap, Inc.
Subsequent Events
Total purchase price allocation	$ 51

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Mar. 31, 2024

STOCK-BASED COMPENSATION

Stock-based compensation cost associated with employees


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Cost of services	$	16	$	21	$	7	$	28
Selling, general and administrative expense		78		92		24		44
Pretax stock-based compensation expense	$	95	$	113	$	31	$	71
Income tax benefits		(5)		(5)		(5)		(13)
Stock-based compensation cost, net of tax	$	90	$	108	$	26	$	58

Summary of restricted stock units, market-conditioned stock units, and performance-conditioned stock units activity


					Market-Conditioned				Performance-Conditioned
	RSUs				Stock Units				Stock Units*
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
	Number		Grant-Date		Number		Grant-Date		Number		Grant-Date
	of Units		Fair Value		of Units		Fair Value		of Units		Fair Value
	(in millions)		(per share)		(in millions)		(per share)		(in millions)		(per share)
Nonvested balance at December 31, 2021		10.2	$	26.82		1.8	$	15.14		—	$	—
Awards granted		0.4		17.61		—		—		—		—
Awards vested		(0.5)		28.04		—		—		—		—
Awards canceled/forfeited		(0.2)		28.44		—		—		—		—
Nonvested balance at March 31, 2022		9.8	$	26.36		1.8	$	15.14		—	$	—
Awards granted		5.0	$	10.80		0.7	$	12.51		2.5	$	10.62
Awards vested		(4.9)		26.09		—		—		—		—
Awards canceled/forfeited		(0.5)		23.09		(0.2)		14.46		(0.1)		10.62
Nonvested balance at March 31, 2023		9.4	$	18.43		2.3	$	14.40		2.3	$	10.62
Awards granted		3.1	$	13.52		0.6	$	14.10		2.0	$	13.37
Awards vested		(4.0)		21.92		—		—		—		—
Awards canceled/forfeited		(0.4)		17.43		(0.1)		14.43		(0.1)		11.85
Nonvested balance at March 31, 2024		8.0	$	15.33		2.9	$	14.32		4.3	$	12.28

*	The grant-date fair value of performance-conditioned stock units issued was determined using the stock price at the grant date.

Summary of assumptions used in estimation of fair value of market-conditioned stock units


	Year Ended
	March 31,	March 31,	December 31,
Market-conditioned Stock Units:	2024	2023	2021
Share price	$13.55	$10.89	$18.31
Expected volatility*	39%	39%	35%
Risk-free interest rate	4.57% - 5.38%	2.85%	0.26% - 0.92%
Dividend yield	0%	0%	0%

*	Based on the average unadjusted three-year historic volatility across a group of peer companies.

Summary of stock option activity


	Stock Options
									Weighted-
					Weighted-				Average
			Weighted-		Average		Aggregate		Remaining
	Number		Average		Grant Date		Intrinsic		Contractual
	of Units		Exercise Price		Fair Value		Value		Term
	(in millions)		(per share)		(per share)		(in millions)		(in years)
Outstanding balance at December 31, 2021		3.8	$	17.76	$	6.54		—	10.0
Awards exercised		—		—		—
Awards canceled/forfeited		—		—		—
Outstanding balance at March 31, 2022		3.8	$	17.76	$	6.54	$	—	9.7
Awards exercised		—		—		—
Awards canceled/forfeited		(0.2)		17.78		6.54
Outstanding balance at March 31, 2023		3.7	$	17.76	$	6.54	$	—	8.7
Awards exercised		(0.0)		17.30		6.61
Awards canceled/forfeited		(0.1)		17.78		6.54
Outstanding balance at March 31, 2024		3.5	$	17.77	$	6.54	$	14.2	7.3
Options vested and exercisable at March 31, 2024		1.9		17.76		6.54		7.8	6.9

Summary of assumptions used in estimation of fair value of stock options


		Year Ended
		December 31,
Employee Stock Options:		2021
Fair value of common stock per share		$17.78
Expected term (in years)*		6.25
Expected volatility**		34.5%
Risk-free interest rate		1.4%
Dividend yield		0.0%

*	The Company utilized the simplified method to estimate the weighted-average option term due to a lack of relevant historical data.

** Based on the average unadjusted historic volatility of common shares across a group of peer companies.

LEASES (Tables)

12 Months Ended

Mar. 31, 2024

LEASES

Schedule of components of lease expense


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Finance lease costs	$	112	$	85	$	21	$	69
Operating lease costs		388		434		111		354
Short-term lease costs		4		7		4		7
Variable lease costs		135		108		16		73
Sublease income		(11)		(9)		(1)		(5)
Total lease costs	$	629	$	625	$	150	$	498

Schedule of supplemental information relating to the cash flows arising from lease transactions


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for finance leases	$	14	$	5	$	1	$	3
Financing cash outflows for finance leases		116		83		20		70
Operating cash outflows for operating leases		387		417		118		327
Right-of-use assets obtained in exchange for new finance lease liabilities		212		111		19		86
Right-of-use assets obtained in exchange for new operating lease liabilities		291		175		67		562

Schedule of weighted-average lease terms and discount rates


	At March 31,
	2024		2023
Finance leases
Weighted-average remaining lease term	3.8	years	3.5	years
Weighted-average discount rate	5.58	%	3.36	%
Operating leases
Weighted-average remaining lease term	4.8	years	4.7	years
Weighted-average discount rate	5.15	%	4.38	%

Schedule of maturities of the finance leases liabilities


	Year Ending March 31,												Imputed
(Dollars in millions)	2025		2026		2027		2028		2029		Thereafter		Interest*		Total
Finance leases	$	121	$	102	$	63	$	38	$	31	$	—	$	(67)	$	289
Operating leases	$	337	$	281	$	169	$	97	$	70	$	143	$	(191)	$	907

* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.

Schedule of maturities of the operating leases liabilities


	Year Ending March 31,												Imputed
(Dollars in millions)	2025		2026		2027		2028		2029		Thereafter		Interest*		Total
Finance leases	$	121	$	102	$	63	$	38	$	31	$	—	$	(67)	$	289
Operating leases	$	337	$	281	$	169	$	97	$	70	$	143	$	(191)	$	907

* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.

Schedule of finance leases recognized in the Consolidated Balance Sheet


	At March 31,
(Dollars in millions)	2024		2023
Right-of-use assets – Property and equipment	$	309	$	245
Lease liabilities:
Current		95		82
Noncurrent		193		160

REVENUE RECOGNITION

12 Months Ended

Mar. 31, 2024

REVENUE RECOGNITION

REVENUE RECOGNITION

NOTE 3. REVENUE RECOGNITION

Disaggregation of Revenue

The Company views its segment results to be the best view of disaggregated revenue. Refer to Note 4 – Segments.

Remaining Performance Obligations

The remaining performance obligation (“RPO”) represents the aggregate amount of contractual deliverables yet to be recognized as revenue at the end of the reporting period. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed. The customer is not considered committed when it is able to terminate for convenience without payment of a substantive penalty. The RPO also includes estimates of variable consideration. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustments for revenue that has not materialized and adjustments for currency.

At March 31, 2024, the aggregate amount of RPO related to customer contracts that are unsatisfied or partially unsatisfied was $33.1 billion. Approximately 59 percent of the amount is expected to be recognized as revenue in the next two years, approximately 34 percent in the subsequent three years, and the balance thereafter.

Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods

For the year ended March 31, 2024, revenue increased by $31 million for performance obligations satisfied (or partially satisfied) in previous periods, mainly due to changes in estimates on contracts with cost-to-cost measures of progress.

Contract Balances

The following table provides information about accounts receivable, contract assets and deferred income balances:


	At March 31,
(Dollars in millions)	2024		2023
Accounts receivable (net of allowances for credit losses of $22 at March 31, 2024 and $32 at March 31, 2023) *	$	1,599	$	1,523
Contract assets **		30		30
Deferred income (current)		825		820
Deferred income (noncurrent)		314		362

*	Including unbilled receivable balances of $377 million at March 31, 2024 and $384 million at March 31, 2023.

The amount of revenue recognized during the year ended March 31, 2024 that was included within the deferred income balance at March 31, 2023 was $794 million.

The following table provides roll-forwards of the accounts receivable allowance for expected credit losses for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (transition period), and the year ended December 31, 2021:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Beginning balance	$	32	$	44	$	44	$	91
Additions (releases)		4		6		6		(23)
Write-offs		(4)		(13)		(4)		(5)
Other *		(9)		(5)		(2)		(19)
Ending balance	$	22	$	32	$	44	$	44

* Primarily represents translation adjustments.

The contract assets allowance for expected credit losses was not material in any of the periods presented.

Major Clients

No single client represented more than 10 percent of the Company’s total revenue during the years ended March 31, 2024 and 2023 and the three months ended March 31, 2022 (transition period). Other than transactions with the former Parent, no single client represented 10 percent or more of the Company’s total revenue in the year ended December 31, 2021. Other than receivables with the former Parent, no single client represented more than 10 percent of the Company’s total accounts receivable balance as of March 31, 2024 and 2023, respectively.

Deferred Costs

Costs to acquire and fulfill customer contracts are deferred and amortized over the contract period or expected customer relationship life. The expected customer relationship period is determined based on the average customer relationship period, including expected renewals, for each offering type and ranges from three to six years. For contracts with an estimated amortization period of less than one year, we elected the practical expedient to expense incremental costs immediately.

The following table provides amounts of capitalized costs to acquire and fulfill customer contracts at March 31, 2024 and 2023:


	At March 31,
(Dollars in millions)	2024		2023
Deferred transition costs	$	753	$	856
Prepaid software costs		770		782
Capitalized costs to fulfill contracts		212		285
Capitalized costs to obtain contracts		265		313
Total deferred costs *	$	2,000	$	2,236

* Of the total deferred costs, $1,081 million was current and $920 million was noncurrent at March 31, 2024, and $1,070 million was current and $1,166 million was noncurrent at March 31, 2023.

The amount of total deferred costs amortized during the year ended March 31, 2024 was $1.8 billion, composed of $335 million of amortization of deferred transition costs, $921 million of amortization of prepaid software and $531 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended March 31, 2023 was $1.7 billion, composed of $342 million of amortization of deferred transition costs, $857 million of amortization of prepaid software and $472 million of amortization of capitalized contract costs. The amount of total

deferred costs amortized during the three months ended March 31, 2022 (transition period) was $455 million, composed of $112 million of amortization of deferred transition costs, $207 million of amortization of prepaid software and $136 million of amortization of capitalized contract costs. The amount of total deferred costs amortized during the year ended December 31, 2021 was $1.8 billion, composed of $403 million of amortization of deferred transition costs, $874 million of amortization of prepaid software and $563 million of amortization of capitalized contract costs. There were no material impairment losses incurred in any period. Refer to Note 1 – Significant Accounting Policies for additional information on deferred costs to fulfill a contract and capitalized costs of obtaining a contract.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Mar. 31, 2024

SIGNIFICANT ACCOUNTING POLICIES

Summary of estimated useful lives of the assets


Classification		Estimated Useful Life
Buildings		30 to 50 years
Land improvements		20 years
Leasehold improvements*		Estimated useful life or term of lease
Office and other equipment		2 to 20 years
Information technology equipment (acquired as used)		1.5 to 3 years
Information technology equipment (acquired as new)**		5 years

* Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease term, rarely exceeding 10 years.

** Extended to six years effective April 1, 2024.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES - Classification of restructuring activity (Details) - USD ($) $ in Millions	12 Months Ended		24 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024
RESTRUCTURING
Charges	$ 174	$ 135	$ 310
Workforce Rebalancing Liabilities Inherited from Former Parent
RESTRUCTURING
Charges	4
Cost of services
RESTRUCTURING
Charges	23	71	94
Selling, general and administrative expense.
RESTRUCTURING
Charges	16	9	25
Workforce rebalancing charges
RESTRUCTURING
Charges	$ 135	$ 55	$ 190

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

INTANGIBLE ASSETS INCLUDING GOODWILL - Business Combinations (Details) - Exa Transaction	Feb. 01, 2022 USD ($)
Intangible asset balances by major asset class
Number of business combinations	2
Majority interest	51.00%
Consideration, net of cash acquired	$ 48,000,000
Equity interest (as a percentage)	49.00%
Cash acquired	$ 59,000,000

RETIREMENT-RELATED BENEFITS - Changes in Benefit Obligation and Plan Assets (Details) - Defined Benefit Pension Plans - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Changes in benefit obligation
Benefit obligation, at beginning of period	$ 1,659	$ 2,024
Service cost	38	44
Interest cost	55	32
Plan participants' contributions	3	4
Actuarial losses (gains)	83	(299)
Benefits paid from trust	(24)	(15)
Direct benefit payments	(38)	(37)
Business combination/divestiture	(23)
Foreign exchange impact	(23)	(66)
Amendments, curtailments, settlements and other	(61)	(29)
Benefit obligation, at end of period	1,670	1,659
Change in plan assets
Fair value of plan assets, at beginning of period	1,226	1,383
Actual return on plan assets	87	(88)
Employer contributions	14	27
Fair value of plan assets assumed from former Parent	27
Plan participant's contributions	3	4
Benefits paid from trust	(24)	(15)
Business combination/divestiture	(18)
Foreign exchange impact	(18)	(40)
Settlements	(49)	(44)
Fair value of plan assets, at end of period	1,248	1,226
Funded status at end of period	(422)	(433)
Accumulated benefit obligation	$ 1,583	$ 1,574

BORROWINGS

12 Months Ended

Mar. 31, 2024

BORROWINGS

BORROWINGS

NOTE 11. BORROWINGS

Debt

The following table presents the components of our debt:



			At March 31,
(Dollars in millions)	Interest Rate	Maturity	2024		2023
Unsecured floating-rate term loan	—	—	$	—	$	500
Commercial loan agreement	3.00%	July 2026		68		96
Unsecured senior notes due 2026	2.05%	October 2026		700		700
Unsecured senior notes due 2028	2.70%	October 2028		500		500
Unsecured senior notes due 2031	3.15%	October 2031		650		650
Unsecured senior notes due 2034	6.35% *	February 2034		500		—
Unsecured senior notes due 2041	4.10%	October 2041		550		550
Finance lease and other obligations	5.57% **	2024-2029		291		242
			$	3,259	$	3,238
Less: Unamortized discount				5		5
Less: Unamortized debt issuance costs				16		13
Less: Current portion of long-term debt				126		110
Total long-term debt			$	3,112	$	3,111

** Weighted-average discount rate

Contractual obligations of long-term debt outstanding at March 31, 2024, exclusive of finance lease obligations, were as follows:


(Dollars in millions)*	Principal
Year ending March 31:
2025	$	29
2026		29
2027		710
2028		—
2029		500
Thereafter		1,700
Total	$	2,968

* Contractual obligations approximate scheduled repayments.

Senior Unsecured Notes

In October 2021, in preparation for our Spin-off, we completed the offering of $2.4 billion in aggregate principal amount of senior unsecured fixed-rate notes as follows: $700 million aggregate principal amount of 2.05% Senior Notes due 2026, $500 million aggregate principal amount of 2.70% Senior Notes due 2028, $650 million aggregate principal amount of 3.15% Senior Notes due 2031 and $550 million aggregate principal amount of 4.10% Senior Notes due 2041 (the “Initial Notes”). The Initial Notes were offered and sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to non-U.S. persons in reliance on Regulation S of the Securities Act. In connection with the issuance of the Initial Notes, we entered into a registration rights agreement with the purchasers of the Initial Notes, pursuant to which we completed a registered offering to exchange each series of Initial Notes for new notes with substantially identical terms during the quarter ended September 30, 2022.

In February 2024, we completed a registered offering of $500 million in aggregate principal amount of 6.35% senior unsecured notes due 2034 (the “2034 Notes”). We received proceeds of $494 million, net of debt issuance costs and discounts, which were capitalized as a reduction to the carrying value of debt and are being amortized as interest expense over the term of the notes. The 2034 Notes are the Company’s senior unsecured obligations and rank equally in right of payment with all of the Company’s other existing and future senior unsecured indebtedness. If measured at fair value in the consolidated financial statements, all of the Company’s senior unsecured notes would be classified as Level 1 in the fair value hierarchy.

The Initial Notes and the 2034 Notes are subject to customary affirmative covenants, negative covenants and events of default for financings of this type and are redeemable at our option in a customary manner.

Term Loan and Revolving Credit Facility

In October 2021, we entered into a $500 million three-year variable rate term loan credit agreement (the “Term Loan Credit Agreement”), which was scheduled to mature in November 2024. In November 2021, we drew down the full $500 million available under the Term Loan Credit Agreement. The interest rate on this term loan was equal to one-month U.S. Dollar London Interbank Offered Rate (“LIBOR”) plus a margin of 1.125%. In June 2023, we amended the Term Loan Credit Agreement by replacing LIBOR with the Secured Overnight Financing Rate (“SOFR”). The first repricing date using SOFR was in July 2023. In February 2024, the Company used the net proceeds from the offering of the 2034 Notes, together with cash on hand, to prepay the full amount outstanding under the Term Loan Credit Agreement, at no penalty.

In October 2021, we entered into a $3.15 billion multi-currency revolving credit agreement (the “Revolving Credit Agreement”), which expires, unless extended, in October 2026. The Revolving Credit Agreement was amended in June 2023, replacing LIBOR with SOFR. Interest rates on borrowings under the Revolving Credit Agreement will be based on prevailing market interest rates, plus a margin, as further described in the Revolving Credit Agreement.

The total facility fees recorded by the Company for the Revolving Credit Agreement were $5 million for the years ended March 31, 2024 and 2023. Facility fees were immaterial for the three months ended March 31, 2022 and the year ended December 31, 2021. As of March 31, 2024, there has been no drawdown on the Revolving Credit Agreement.

The Revolving Credit Agreement includes certain customary mandatory prepayment provisions. In addition, it includes customary events of default and affirmative and negative covenants as well as a maintenance covenant that will require that the ratio of our indebtedness for borrowed money to consolidated EBITDA (as defined in the Revolving Credit Agreement) for any period of four consecutive fiscal quarters be no greater than 3.50 to 1.00. The Company is in compliance with its debt covenants.

Loan Agreement

In the second quarter of 2021, our former Parent entered into a $140 million loan agreement with a bank to finance a purchase of software licenses on behalf of Kyndryl. The loan was transferred to Kyndryl in conjunction with the Separation and is included in the Company’s consolidated financial statements. The carrying amount of the loan approximates fair value. If measured at fair value in the consolidated financial statements, the loan would be classified as Level 2 in the fair value hierarchy.

The amortizing loan contains covenants, primarily for compliance with the scheduled payments in the loan agreement. Failure to comply with the loan covenants could constitute an event of default and result in the immediate repayment of the principal and interest on the loan. The Company is in compliance with all of the loan covenants and is expected to maintain a credit rating at or above the level outlined in the loan agreement.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

STOCK-BASED COMPENSATION - Stock Option Activity (Details) - Employee Stock Option [Member] - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
Number of Shares under Option
Beginning balance (in shares)	3.8	3.7	3.8
Awards granted (in shares)	0.0	0.0	0.0
Awards exercised (in shares)		(0.0)
Awards canceled/ forfeited (in shares)		(0.1)	(0.2)
Ending balance (in shares)	3.8	3.5	3.7	3.8	3.8
Options vested and exercisable (in shares)		1.9
Weighted-Average Exercise Price
Beginning balance (in dollars per share)	$ 17.76	$ 17.76	$ 17.76
Awards exercised (in dollars per share)		17.30
Awards canceled/forfeited (in dollars per share)		17.78	17.78
Ending balance (in dollars per share)	17.76	17.77	17.76	$ 17.76	$ 17.76
Options vested and exercisable (in dollars per share)		17.76
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share)	6.54	6.54	6.54
Awards exercised (in dollars per share)		6.61
Awards canceled/forfeited (in dollars per share)		6.54	6.54
Ending balance (in dollars per share)	$ 6.54	6.54	$ 6.54	$ 6.54	$ 6.54
Options vested and exercisable (in dollars per share)		$ 6.54
Awards outstanding, total intrinsic value		$ 14.2
Options vested and exercisable, intrinsic value		$ 7.8
Awards outstanding, weighted average remaining contractual life		7 years 3 months 18 days	8 years 8 months 12 days	9 years 8 months 12 days	10 years
Options vested and exercisable, weighted average remaining contractual life		6 years 10 months 24 days

CONSOLIDATED INCOME STATEMENT - USD ($)
shares in Millions, $ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

CONSOLIDATED INCOME STATEMENT

Revenues

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Cost of services

3,824

^[2]

4,318

13,189

^[2]

14,498

^[2]

16,550

^[2]

Selling, general and administrative expenses

690

714

2,773

2,914

2,776

Workforce rebalancing charges

138

Transaction-related costs (benefits)

(46)

264

627

Impairment expense

469

Interest expense

122

Other expense

Total costs and expenses

4,620

5,175

16,221

17,876

20,560

Income (loss) before income taxes

(189)

(403)

(168)

(851)

(1,903)

Provision for income taxes

172

524

402

Net income (loss)

$ (229)

$ (494)

$ (340)

$ (1,374)

$ (2,304)

NET LOSS PER SHARE

Basic earnings (loss) per share (in dollars per share)

$ (1.02)

$ (2.20)

$ (1.48)

$ (6.06)

$ (10.28)

Diluted earnings (loss) per share (in dollars per share)

$ (1.02)

$ (2.20)

$ (1.48)

$ (6.06)

$ (10.28)

Weighted-average basic shares outstanding (in shares)

224.4

224.1

229.2

226.7

224.1

Weighted-average diluted shares outstanding (in shares)

224.4

224.1

229.2

226.7

224.1

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021
[2]	Including related-party cost of service of $1,382 for the year ended March 31, 2023, $924 for the three months ended March 31, 2022, and $3,979 for the year ended December 31, 2021

BORROWINGS - Interest on Debt (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Interest on Debt
Interest expense	$ 21	$ 14	$ 122	$ 94	$ 64

- Definition

Amount of the cost of borrowed funds accounted for as interest expense.

+ References + Details

OTHER LIABILITIES

12 Months Ended

Mar. 31, 2024

OTHER LIABILITIES.

OTHER LIABILITIES

NOTE 12. OTHER LIABILITIES

The following table provides the components of other liabilities at March 31, 2024 and 2023.


	At March 31,
(Dollars in millions)	2024		2023
Workforce rebalancing (current)	$	45	$	75
Other current accruals		476		549
Other accrued expenses and liabilities	$	521	$	624
Workforce rebalancing (noncurrent)	$	12	$	21
Deferred taxes		55		98
Income tax reserve		90		85
Other		174		246
Other noncurrent liabilities	$	332	$	450

In response to changing business needs, the Company has taken workforce rebalancing actions to increase productivity, enhance cost-competitiveness and rebalance skills. The workforce rebalancing liabilities at March 31, 2024 include liabilities inherited from our former Parent plus new actions taken by Kyndryl during the fiscal year. Refer to Note 19 – Workforce Rebalancing and Site-Rationalization Charges for details.

Pursuant to the terms of the Separation, the Company may be required to reimburse our former Parent for certain tax refunds we receive and to indemnify our former Parent for certain tax payments. For more information, see Note 5 – Taxes.

TAXES - Tax Effects of Temporary Differences of Deferred Taxes (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Deferred tax assets
Retirement benefits	$ 121	$ 115
Leases	308	280
Stock-based and other compensation	90	36
U.S. tax loss/credit carryforwards	441	412
Deferred income	65	47
Foreign tax loss/credit carryforwards	66	118
Allowance for credit losses	12	28
Goodwill and intangible assets	59	34
Workforce rebalancing charges	15	25
Limitation on deductibility of interest	79	35
Accruals	94	61
Other	57	124
Gross deferred tax assets	1,406	1,314
Less: valuation allowance	(748)	(620)
Net deferred tax assets	657	694
Deferred tax liabilities
Fixed assets and depreciation	34	7
Leases and right-of-use assets	294	267
Undistributed foreign earnings	16	19
Deferred transition costs	131	135
Prepaids	4	30
Other	16	87
Gross deferred tax liabilities	$ 494	$ 544

CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Current assets:
Cash and cash equivalents	$ 1,553	$ 1,847
Restricted cash	1	12
Accounts receivable (net of allowances for credit losses of $22 at March 31, 2024 and $32 at March 31, 2023)	1,599	1,523
Deferred costs (current portion)	1,081	1,070
Prepaid expenses and other current assets	514	510
Total current assets	4,747	4,963
Property and equipment, net	2,674	2,779
Operating right-of-use assets, net	864	964
Deferred costs (noncurrent portion)	920	1,166
Deferred taxes	220	248
Goodwill	805	812
Intangible assets, net	188	171
Pension assets	105	94
Other noncurrent assets	67	267
Total assets	10,590	11,464
Current liabilities:
Accounts payable	1,408	1,774
Value-added tax and income tax liabilities	327	347
Current portion of long-term debt	126	110
Accrued compensation and benefits	609	533
Deferred income (current portion)	825	820
Operating lease liabilities (current portion)	285	316
Accrued contract costs	487	346
Other accrued expenses and liabilities	521	624
Total current liabilities	4,589	4,868
Long-term debt	3,112	3,111
Retirement and nonpension postretirement benefit obligations	500	504
Deferred income (noncurrent portion)	314	362
Operating lease liabilities (noncurrent portion)	622	707
Other noncurrent liabilities	332	450
Total liabilities	9,468	10,002
Commitments and contingencies
Stockholders' equity
Common stock, par value $0.01 per share, and additional paid-in capital (shares authorized: 1,000.0; shares issued: March 31, 2024 - 233.7, March 31, 2023 - 229.6)	4,524	4,428
Accumulated deficit	(2,319)	(1,978)
Treasury stock, at cost (shares: March 31, 2024 - 3.3, March 31, 2023 - 1.9)	(45)	(23)
Accumulated other comprehensive income (loss)	(1,145)	(1,062)
Total stockholders' equity before non-controlling interests	1,015	1,365
Non-controlling interests	107	97
Total equity	1,122	1,462
Total liabilities and equity	$ 10,590	$ 11,464

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Mar. 31, 2024	May 23, 2024	Sep. 29, 2023
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Entity File Number	001-40853
Entity Registrant Name	Kyndryl Holdings, Inc
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	86-1185492
Entity Address, Address Line One	One Vanderbilt Avenue, 15th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10017
City Area Code	212
Local Phone Number	896-2098
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	KD
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		230,513,437
Entity Public Float			$ 3.4
Entity Central Index Key	0001867072
Current Fiscal Year End Date	--03-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Amendment Flag	false
Document Financial Statement Error Correction [Flag]	false
Auditor Name	PricewaterhouseCoopers LLP
Auditor Firm ID	238
Auditor Location	New York, New York

TRANSITION PERIOD - Income Statement - Related Party (Details) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

Revenue

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Cost of services

3,824

^[2]

4,318

$ 13,189

^[2]

14,498

^[2]

16,550

^[2]

Related Party

Revenue

236

154

287

704

Cost of services

$ 924

$ 1,006

$ 1,382

$ 3,979

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021
[2]	Including related-party cost of service of $1,382 for the year ended March 31, 2023, $924 for the three months ended March 31, 2022, and $3,979 for the year ended December 31, 2021

- Definition

The aggregate cost of goods produced and sold and services rendered during the reporting period.

REVENUE RECOGNITION - Performance Obligations Satisfied or Partially Satisfied in Prior Periods (Details) $ in Millions	12 Months Ended
	Mar. 31, 2024 USD ($)
REVENUE RECOGNITION
Impact to revenue from performance obligations satisfied (or partially satisfied) in previous periods	$ 31

SIGNIFICANT ACCOUNTING POLICIES - Incremental Costs of Obtaining a Contract (Details)	Mar. 31, 2024
Minimum
SIGNIFICANT ACCOUNTING POLICIES
Capitalized costs to obtain contract, expected customer relationship period as amortization period	3 years
Maximum
SIGNIFICANT ACCOUNTING POLICIES
Capitalized costs to obtain contract, expected customer relationship period as amortization period	6 years

LEASES - Maturity analysis (Details) $ in Millions	Mar. 31, 2024 USD ($)
Finance leases
2025	$ 121
2026	102
2027	63
2028	38
2029	31
Imputed Interest	(67)
Total	289
Operating leases
2025	337
2026	281
2027	169
2028	97
2029	70
Thereafter	143
Imputed Interest	(191)
Total	$ 907

SUBSEQUENT EVENTS

12 Months Ended

Mar. 31, 2024

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 20. SUBSEQUENT EVENTS

On April 26, 2024, the Company completed its acquisition of Skytap, Inc. for $51 million of cash consideration, reflecting customary closing adjustments. The acquisition will be accounted for using the acquisition method and the

results of the acquired business will be included in the Company’s results of operations from the acquisition date. The purchase price allocation is subject to adjustments as we obtain additional information during the measurement period. We are currently in the process of completing the accounting for this transaction and expect to have our preliminary allocation of the purchase consideration to the assets acquired and liabilities assumed in the first half of fiscal year 2025.

In May 2024, the Company entered into a definitive agreement to divest its Securities Industry Services (SIS) business for approximately $200 million. The Company has determined the assets associated with the business to be held-for-sale as of the first quarter of our 2025 fiscal year. Closing of the transaction is subject to customary closing conditions, including regulatory approval. The Company is currently evaluating the accounting impact resulting from the disposal, which it expects to include in its financial results in the first quarter of 2025.

SIGNIFICANT ACCOUNTING POLICIES - Leases (Details)	12 Months Ended
SIGNIFICANT ACCOUNTING POLICIES - Leases (Details)	Mar. 31, 2024
Leases
Option to extend	true
Option to terminate	true
Practical expedient	true
Real estate \| Weighted-Average
Leases
Lease terms (in years)	5 years
Equipment leases \| Minimum
Leases
Lease terms (in years)	2 years
Equipment leases \| Maximum
Leases
Lease terms (in years)	5 years

SIGNIFICANT ACCOUNTING POLICIES - Revenue (Details) - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
Payment due period from receipt of invoice, per standard billing terms	30 days
Contract assets	$ 30	$ 30
Unbilled accounts receivable	$ 377	$ 384
Practical expedient, financing components	true
Minimum \| Services
SIGNIFICANT ACCOUNTING POLICIES
Contract term, low end of range	1 year
Maximum \| Services
SIGNIFICANT ACCOUNTING POLICIES
Contract term, high end of range	10 years

INTANGIBLE ASSETS INCLUDING GOODWILL

12 Months Ended

Mar. 31, 2024

INTANGIBLE ASSETS INCLUDING GOODWILL

INTANGIBLE ASSETS INCLUDING GOODWILL

NOTE 10. INTANGIBLE ASSETS INCLUDING GOODWILL

Business Combinations

In February 2022, the Company completed two transactions that were considered business combinations. Our financial statements for the three months ended March 31, 2022 reflect the assets, liabilities, operating results and cash flows of both business combinations commencing from the acquisition date. These transactions consisted of an immaterial acquisition in our Strategic Markets segment and a transfer of a majority interest (51%) of a managed infrastructure services joint venture in Japan (the “Exa transaction”) from our former Parent. The Company completed the Exa transaction for consideration of $48 million, net of cash acquired of $59 million. The non-controlling interest associated with the Exa transaction represents the fair value of the joint venture pro-rated by the non-controlling shareholder’s percentage of ownership (49%).

Intangible Assets

The following tables present the Company’s intangible asset balances by major asset class:


	At March 31, 2024						At March 31, 2023
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Capitalized software	$	172	$	(48)	$	125	$	83	$	(15)	$	68
Customer relationships*		152		(96)		56		232		(141)		91
Completed technology		—		—		—		20		(20)		—
Patents and trademarks*		14		(6)		8		18		(6)		13
Total	$	339	$	(150)	$	188	$	353	$	(182)	$	171

* Amounts include effects from foreign currency translation.

There was no impairment of identifiable intangible assets recorded in the periods reported. The net carrying amount of intangible assets increased by $17 million during the year ended March 31, 2024, primarily due to additions of capitalized software, partially offset by amortization and retirements. The aggregate intangible asset amortization expense was $63 million, $46 million, $7 million and $37 million for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 and year ended December 31, 2021, respectively. The aggregate amortization expense in fiscal year 2024 included amortization of capitalized software of $33 million, which was reported in “Depreciation of property, equipment and capitalized software” on the Consolidated Statement of Cash Flows.

The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet was estimated to be the following at March 31, 2024:


	Capitalized		Customer		Patents and
(Dollars in millions)	Software		Relationships		Trademarks		Total
Year ending March 31:
2025	$	46	$	21	$	3	$	71
2026		45		18		3		65
2027		34		15		2		51
2028		—		1		—		1
2029		—		1		—		1
Thereafter		—		—		—		—

Goodwill

The following table presents a roll-forward of goodwill balances by segment for the years ended March 31, 2024 and 2023:



			Additions				Additions
(Dollars in	Balance at		and		Balance at		and		Balance at
millions)	March 31,		Other		March 31,		Other		March 31,
Segment	2022		Adjustments*		2023		Adjustments*		2024
Japan	$	506	$	(11)	$	495	$	(7)	$	488
United States		—		—		—		—		—
Principal Markets		142		—		142		(1)		141
Strategic Markets		176		—		176		—		176
Total	$	823	$	(11)	$	812	$	(7)	$	805

*	Primarily driven by foreign currency translation.

Management reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable by first assessing qualitative factors to determine if it is more likely than not that fair value is less than carrying value.

We use an income-based approach where fair value is determined using a discounted cash flow model that requires significant judgment with respect to revenue growth rates, based upon annual budgets and long-term strategic plans. Fair value estimates employed in our annual impairment review of goodwill involve using various assumptions. Assumptions critical to our fair value estimates were discount rates, expected revenue growth and projected EBITDA margins used in determining the fair value of the reporting units. These and other assumptions are impacted by economic conditions and expectations of management and may change based on different facts and circumstances. We believe the assumptions used to estimate future cash flows are reasonable, but there can be no assurance that the expected cash flows will be realized. The use of different assumptions would increase or decrease discounted cash flows or earnings projections and therefore could change impairment determinations.

There were no goodwill impairment losses recorded for the year ended March 31, 2024. We prepared our impairment test as of January 1, 2024. For the reporting units subject to quantitative tests, we concluded that their fair values exceeded carrying values by over 100%. Future developments related to macroeconomic factors, including increases to the discount rate used, or changes to other inputs and assumptions, including revenue growth, could reduce the fair value of this and/or other reporting units and lead to impairment. Cumulatively, the Company has recorded $469 million in goodwill impairment charges within its former EMEA ($293 million) and current United States ($176 million) reporting units.

STOCK-BASED COMPENSATION

12 Months Ended

Mar. 31, 2024

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 15. STOCK-BASED COMPENSATION

Stock-based incentive awards are granted to employees under the terms of Kyndryl’s employment and the Kyndryl Plan (see Note 1 – Significant Accounting Policies). Awards under the Kyndryl Plan principally include Restricted Stock Units (RSUs), market-conditioned and performance-conditioned stock units and stock options. RSUs and stock options generally vest based on continued passage of time. Market-conditioned and performance-conditioned stock units are cliff-vested at the end of the performance period if the market or performance conditions have been satisfied.

The following table summarizes stock-based compensation cost, which is included in net income (loss).


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Cost of services	$	16	$	21	$	7	$	28
Selling, general and administrative expense		78		92		24		44
Pretax stock-based compensation expense	$	95	$	113	$	31	$	71
Income tax benefits		(5)		(5)		(5)		(13)
Stock-based compensation cost, net of tax	$	90	$	108	$	26	$	58

The Company’s total unrecognized compensation cost related to non-vested awards at March 31, 2024 was $137 million and is expected to be recognized over a weighted-average period of approximately 2.1 years. Capitalized stock-based compensation cost was not material during any period presented.

Stock Units

The following table summarizes the activity related to Kyndryl’s RSUs, market-conditioned stock units and performance-conditioned stock units:


					Market-Conditioned				Performance-Conditioned
	RSUs				Stock Units				Stock Units*
			Weighted-				Weighted-				Weighted-
			Average				Average				Average
	Number		Grant-Date		Number		Grant-Date		Number		Grant-Date
	of Units		Fair Value		of Units		Fair Value		of Units		Fair Value
	(in millions)		(per share)		(in millions)		(per share)		(in millions)		(per share)
Nonvested balance at December 31, 2021		10.2	$	26.82		1.8	$	15.14		—	$	—
Awards granted		0.4		17.61		—		—		—		—
Awards vested		(0.5)		28.04		—		—		—		—
Awards canceled/forfeited		(0.2)		28.44		—		—		—		—
Nonvested balance at March 31, 2022		9.8	$	26.36		1.8	$	15.14		—	$	—
Awards granted		5.0	$	10.80		0.7	$	12.51		2.5	$	10.62
Awards vested		(4.9)		26.09		—		—		—		—
Awards canceled/forfeited		(0.5)		23.09		(0.2)		14.46		(0.1)		10.62
Nonvested balance at March 31, 2023		9.4	$	18.43		2.3	$	14.40		2.3	$	10.62
Awards granted		3.1	$	13.52		0.6	$	14.10		2.0	$	13.37
Awards vested		(4.0)		21.92		—		—		—		—
Awards canceled/forfeited		(0.4)		17.43		(0.1)		14.43		(0.1)		11.85
Nonvested balance at March 31, 2024		8.0	$	15.33		2.9	$	14.32		4.3	$	12.28

*	The grant-date fair value of performance-conditioned stock units issued was determined using the stock price at the grant date.

The Company used the following assumptions in the Monte-Carlo simulation pricing model to estimate the grant-date fair values of the market-conditioned stock units granted within each of the following fiscal years. No market-conditioned stock units were granted for the transition quarter ended March 31, 2022.


	Year Ended
	March 31,	March 31,	December 31,
Market-conditioned Stock Units:	2024	2023	2021
Share price	$13.55	$10.89	$18.31
Expected volatility*	39%	39%	35%
Risk-free interest rate	4.57% - 5.38%	2.85%	0.26% - 0.92%
Dividend yield	0%	0%	0%

*	Based on the average unadjusted three-year historic volatility across a group of peer companies.

Prior to the Separation, the weighted-average grant-date fair value of RSUs and PSUs granted by our former Parent was $126.01 for the pre-Separation period in the year ended December 31, 2021, which was derived from our former Parent’s stock price at their grant dates. On the Separation date, such awards were converted to Kyndryl awards, resulting in a weighted-average grant-date fair value of $28.78 per share.

Stock Options

The following table summarizes the activity related to Kyndryl’s stock options:


	Stock Options
									Weighted-
					Weighted-				Average
			Weighted-		Average		Aggregate		Remaining
	Number		Average		Grant Date		Intrinsic		Contractual
	of Units		Exercise Price		Fair Value		Value		Term
	(in millions)		(per share)		(per share)		(in millions)		(in years)
Outstanding balance at December 31, 2021		3.8	$	17.76	$	6.54		—	10.0
Awards exercised		—		—		—
Awards canceled/forfeited		—		—		—
Outstanding balance at March 31, 2022		3.8	$	17.76	$	6.54	$	—	9.7
Awards exercised		—		—		—
Awards canceled/forfeited		(0.2)		17.78		6.54
Outstanding balance at March 31, 2023		3.7	$	17.76	$	6.54	$	—	8.7
Awards exercised		(0.0)		17.30		6.61
Awards canceled/forfeited		(0.1)		17.78		6.54
Outstanding balance at March 31, 2024		3.5	$	17.77	$	6.54	$	14.2	7.3
Options vested and exercisable at March 31, 2024		1.9		17.76		6.54		7.8	6.9

The Company used the following assumptions in the Black-Scholes option pricing model to estimate the fair value of the employee stock options granted in the year ended December 31, 2021. No stock options were granted in any other periods presented.


		Year Ended
		December 31,
Employee Stock Options:		2021
Fair value of common stock per share		$17.78
Expected term (in years)*		6.25
Expected volatility**		34.5%
Risk-free interest rate		1.4%
Dividend yield		0.0%

*	The Company utilized the simplified method to estimate the weighted-average option term due to a lack of relevant historical data.

** Based on the average unadjusted historic volatility of common shares across a group of peer companies.

TAXES (Tables)

12 Months Ended

Mar. 31, 2024

TAXES.

Income (loss) before income taxes by geography


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Income (loss) before income taxes:
U.S. operations	$	(678)	$	(1,543)	$	(255)	$	(1,765)
Non-U.S. operations		510		692		66		(138)
Total income (loss) before income taxes	$	(168)	$	(851)	$	(189)	$	(1,903)

Components of the provision for income taxes by taxing jurisdiction


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
U.S. federal:
Current	$	39	$	—	$	—	$	17
Deferred		(10)		(19)		(43)		(73)
	$	29	$	(19)	$	(43)	$	(56)
U.S. state and local:
Current	$	2	$	2	$	—	$	—
Deferred		1		(4)		(10)		(5)
	$	3	$	(2)	$	(10)	$	(5)
Non-U.S.:
Current	$	142	$	236	$	51	$	790
Deferred		(2)		308		42		(327)
	$	140	$	545	$	93	$	463
Total provision for income taxes	$	172	$	524	$	40	$	402

Effective income tax rate reconciliation


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
	2024		2023		2022		2021
Statutory rate	21.0	%	21.0	%	21.0	%	21.0	%
Tax differential on foreign income	(17.4)	%	(3.9)	%	(1.1)	%	(8.6)	%
State and local taxes	17.8	%	5.7	%	5.6	%	3.0	%
Valuation allowances	(67.7)	%	(72.0)	%	(30.8)	%	(16.1)	%
Reserves for uncertain tax positions	(7.8)	%	(6.5)	%	(5.4)	%	(8.3)	%
Global Intangible Low-Taxed Income (GILTI)	—	%	(2.0)	%	(4.4)	%	—	%
Undistributed foreign earnings	2.2	%	1.5	%	(3.4)	%	(0.6)	%
Impact of foreign operations	(43.6)	%	(8.6)	%	2.5	%	(4.7)	%
Separation-related transactions	—	%	—	%	—	%	(2.6)	%
Goodwill impairment	—	%	—	%	—	%	(4.0)	%
Basis adjustment	(6.2)	%	—	%	—	%	—	%
Tax credits	28.7	%	4.7	%	—	%	—	%
Return to provision	(19.3)	%	0.3	%	(4.4)	%	—	%
Nondeductible items	(8.6)	%	(2.0)	%	(0.6)	%	—	%
Other*	(1.4)	%	—	%	—	%	(0.2)	%
Effective tax rate	(102.2)	%	(61.6)	%	(21.0)	%	(21.1)	%

* Includes intercompany prepayment of 0.5% in 2021.

Components of deferred tax assets and liabilities


	March 31,
(Dollars in millions)	2024		2023
Deferred tax assets
Retirement benefits	$	121	$	115
Leases		308		280
Stock-based and other compensation		90		36
U.S. tax loss/credit carryforwards		441		412
Deferred income		65		47
Foreign tax loss/credit carryforwards		66		118
Allowance for credit losses		12		28
Fixed assets and depreciation		—		—
Goodwill and intangible assets		59		34
Workforce rebalancing charges		15		25
Limitation on deductibility of interest		79		35
Accruals		94		61
Other		57		124
Gross deferred tax assets	$	1,406	$	1,314
Less: valuation allowance		(748)		(620)
Net deferred tax assets	$	657	$	694

Deferred tax liabilities
Fixed assets and depreciation	$	34	$	7
Goodwill and intangible assets		—		—
Leases and right-of-use assets		294		267
Undistributed foreign earnings		16		19
Deferred transition costs		131		135
Prepaids		4		30
Other		16		87
Gross deferred tax liabilities	$	494	$	544

Reconciliation of the beginning and ending amount of unrecognized tax benefits


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Balance at beginning of period	$	104	$	55	$	44	$	18
Additions based on tax positions related to the current year		36		46		12		479
Additions for tax positions of prior years		—		3		—		—
Reductions for tax positions of prior years (including impacts due to a lapse of statute)		(32)		—		(1)		—
Settlements (closed out to Net Parent investment)		—		—		—		(453)
Balance at end of period	$	108	$	104	$	55	$	44

FINANCIAL ASSETS AND LIABILITIES - Fair Value (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Prepaid Expense and Other Assets, Current	Prepaid Expense and Other Assets, Current
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current	Other Liabilities, Noncurrent, Accrued Liabilities and Other Liabilities, Current
Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	$ 5	$ 15
Derivative liabilities	18	9
Fair value, net	(13)	6
Designated as hedging instruments \| Foreign exchange contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	2	4
Derivative liabilities	1	3
Fair value, net	1	1
Designated as hedging instruments \| Cross-currency swap contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	1
Derivative liabilities	11
Fair value, net	(9)
Not designated as hedging instruments - economic hedges \| Foreign exchange contracts \| Level 2
Derivative Instruments, Gain (Loss) [Line Items]
Derivative assets	2	11
Derivative liabilities	6	5
Fair value, net	$ (4)	$ 6

NET LOSS PER SHARE - Computation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
NET LOSS PER SHARE
Stock dividends declared	$ 0		$ 0	$ 0	$ 0
Net income (loss) on which basic and diluted earnings per share is calculated	$ (229)	$ (494)	$ (340)	$ (1,374)	$ (2,304)
Number of shares on which basic earnings per share is calculated	224.4	224.1	229.2	226.7	224.1
Number of shares on which diluted earnings per share is calculated	224.4	224.1	229.2	226.7	224.1
Basic earnings (loss) per share	$ (1.02)	$ (2.20)	$ (1.48)	$ (6.06)	$ (10.28)
Diluted earnings (loss) per share	$ (1.02)	$ (2.20)	$ (1.48)	$ (6.06)	$ (10.28)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 260
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482635/260-10-55-15

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The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

REVENUE RECOGNITION - Remaining Performance Obligations (Details) $ in Billions	Mar. 31, 2024 USD ($)
REVENUE RECOGNITION
Remaining performance obligations related to customer contracts that are unsatisfied or partially unsatisfied	$ 33.1

BORROWINGS - Debt (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
BORROWINGS
Financing lease and other obligations	$ 291	$ 242
Total	3,259	3,238
Less: Unamortized discount	5	5
Less: Unamortized debt issuance costs	16	13
Less: Current portion of debt	126	110
Total	$ 3,112	3,111
Finance lease obligations, interest rate (as a percent)	5.57%
Unsecured senior notes due 2034, including cross-currency swaps
BORROWINGS
Debt instrument, weighted-average interest rate (as a percent)	3.84%
Unsecured floating-rate term loan
BORROWINGS
Long-term debt		500
Commercial loan agreement
BORROWINGS
Long-term debt	$ 68	96
Debt instrument, weighted-average interest rate (as a percent)	3.00%
Unsecured senior notes due 2026
BORROWINGS
Long-term debt	$ 700	700
Debt instrument, weighted-average interest rate (as a percent)	2.05%
Unsecured senior notes due 2028
BORROWINGS
Long-term debt	$ 500	500
Debt instrument, weighted-average interest rate (as a percent)	2.70%
Unsecured senior notes due 2031
BORROWINGS
Long-term debt	$ 650	650
Debt instrument, weighted-average interest rate (as a percent)	3.15%
Unsecured senior notes due 2034
BORROWINGS
Long-term debt	$ 500
Debt instrument, weighted-average interest rate (as a percent)	6.35%
Unsecured senior notes due 2041
BORROWINGS
Long-term debt	$ 550	$ 550
Debt instrument, weighted-average interest rate (as a percent)	4.10%

RETIREMENT-RELATED BENEFITS - Contributions and Direct Benefit Payments (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Defined benefit plans
Defined Benefit Plan Disclosure [Line Items]
Total	$ 2	$ 14	$ 27	$ 25
Direct payments
Defined Benefit Plan Disclosure [Line Items]
Total	$ 11	46	$ 37	$ 33
Defined Benefit Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Estimated cash contributions to the defined benefit plans in next fiscal year		$ 16

TRANSACTIONS WITH FORMER PARENT - Allocation of Corporate Expenses (Details) - IBM - Related Party - Management Costs And Corporate Support Services - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Related Party Transaction [Line Items]
Allocation of corporate expenses	$ 0	$ 0	$ 0	$ 989
Other expense
Related Party Transaction [Line Items]
Allocation of corporate expenses				10
Interest expense.
Related Party Transaction [Line Items]
Allocation of corporate expenses				46
Selling, general and administrative expense.
Related Party Transaction [Line Items]
Allocation of corporate expenses				$ 932

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

12 Months Ended

Mar. 31, 2024

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES.

WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

NOTE 19. WORKFORCE REBALANCING AND SITE-RATIONALIZATION CHARGES

During the year ended March 31, 2023, the Company initiated actions to reduce our overall cost structure and increase our operating efficiency, which continued through the fiscal year ended March 31, 2024. These actions resulted in workforce rebalancing charges, charges related to ceasing to use leased and owned fixed assets, and lease termination charges (collectively, the “charges”). Total charges for this program through March 31, 2024 were $310 million, consisting of approximately 60% for workforce rebalancing charges and approximately 40% for charges related to ceasing to use leased and owned fixed assets and lease termination charges. The Company expects that these actions will reduce future payroll costs, rent expenses and depreciation of property and equipment. We will continue to seek

opportunities to increase our operational efficiency and reduce costs, which may result in additional charges in future periods.

The following table presents the segment breakout of charges incurred during the years ended March 31, 2024 and 2023.


	Year Ended		Year Ended		Costs Incurred
(Dollars in millions)	March 31, 2024		March 31, 2023		to Date
United States	$	29	$	14	$	43
Japan		2		2		4
Principal Markets		76		63		139
Strategic Markets		65		47		112
Total charges by segment	$	171	$	125	$	297
Corporate charges not allocated to the segments		3		10		13
Total charges	$	174	$	135	$	310

The following table presents the classification of workforce rebalancing and site-rationalization activity in the Consolidated Income Statement during the years ended March 31, 2024 and 2023.


	Year Ended			Year Ended		Costs Incurred
(Dollars in millions)	March 31, 2024			March 31, 2023		to Date
Cost of services	$	23		$	71	$	94
Selling, general and administrative expenses		16			9		25
Workforce rebalancing charges		135	*		55		190
Total charges	$	174		$	135	$	310

*	Excludes $4 million liability adjustment related to workforce rebalancing actions taken by the former Parent prior to Separation.

The following table presents the components of and changes in our workforce rebalancing and site-rationalization charges accrual during the years ended March 31, 2024 and 2023.


			Liabilities		Liabilities		Liabilities
	Workforce		Related to		Related to		Related to
	Rebalancing		Ceasing to Use		Lease		Ceasing to Use
(Dollars in millions)	Liabilities*		Leased Assets		Terminations		Fixed Assets		Total
Balance at March 31, 2022	$	—	$	—	$	—	$	—	$	—
Charges		55		69		4		7		135
Cash payments		—		—		(1)		—		(1)
Non-cash adjustments		—		(69)		—		(7)		(76)
Balance at March 31, 2023	$	55	$	—	$	3	$	—	$	58
Charges (benefits)		135		14		(1)		26		174
Cash payments		(161)		—		(2)		(5)		(168)
Non-cash adjustments		(1)		(14)		—		(21)		(36)
Balance at March 31, 2024	$	28	$	—	$	—	$	—	$	28

REVENUE RECOGNITION - Remaining Performance Obligations, Expected Timing of Satisfaction (Details)	Mar. 31, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	59.00%
Duration of expected recognition period for remaining performance obligation	2 years
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-04-01
Remaining Performance Obligations
Percentage of remaining performance obligation expected to be recognized	34.00%
Duration of expected recognition period for remaining performance obligation	3 years

INTANGIBLE ASSETS INCLUDING GOODWILL - Intangible Assets Activity (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2021
Intangible assets
Impairment of intangible assets			$ 0	$ 0	$ 0
Net carrying amount of intangible assets increased			17
Intangible asset amortization including capitalized software			63
Amortization of acquisition-related intangible assets	$ 7	$ 7	30	$ 46		$ 37
Capitalized software
Intangible assets
Intangible asset amortization expense			$ 33

TAXES - Provision by taxing jurisdiction (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
U.S. federal
Current			$ 39		$ 17
Deferred	$ (43)		(10)	$ (19)	(73)
U.S. federal total	(43)		29	(19)	(56)
U.S. state and local
Current			2	2
Deferred	(10)		1	(4)	(5)
U.S. state and local total	(10)		3	(2)	(5)
Non-U.S.
Current	51		142	236	790
Deferred	42		(2)	308	(327)
Total Non-U.S.	93		140	545	463
Total provision for income taxes	$ 40	$ 91	$ 172	$ 524	$ 402

INTANGIBLE ASSETS INCLUDING GOODWILL - Future Amortization Expense (Details) $ in Millions	Mar. 31, 2024 USD ($)
Future amortization expense, by year
2025	$ 71
2026	65
2027	51
2028	1
2029	1
Capitalized software
Future amortization expense, by year
2025	46
2026	45
2027	34
Customer relationships
Future amortization expense, by year
2025	21
2026	18
2027	15
2028	1
2029	1
Patents and trademarks
Future amortization expense, by year
2025	3
2026	3
2027	$ 2

TAXES - Income (loss) before income taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
TAXES.
U.S. operations	$ (255)		$ (678)	$ (1,543)	$ (1,765)
Non-U.S. operations	66		510	692	(138)
Income (loss) before income taxes	$ (189)	$ (403)	$ (168)	$ (851)	$ (1,903)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(11))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 22
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 30
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 31
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-31

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 32
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 942
-SubTopic 235
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479557/942-235-S99-1

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section 25
-Paragraph 1
-SubTopic 20
-Topic 940
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481913/940-20-25-1

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

LEASES

12 Months Ended

Mar. 31, 2024

LEASES

LEASES

NOTE 9. LEASES

The following table presents the various components of lease costs:


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Finance lease costs	$	112	$	85	$	21	$	69
Operating lease costs		388		434		111		354
Short-term lease costs		4		7		4		7
Variable lease costs		135		108		16		73
Sublease income		(11)		(9)		(1)		(5)
Total lease costs	$	629	$	625	$	150	$	498

For pre-Separation periods, the Company’s components of lease costs reflected in the Consolidated Income Statement are based on an allocation of its former Parent’s lease costs, depending on the type of lease. Finance lease costs relating to assets specifically utilized by the Company were fully allocated to the Company. The real estate lease costs were allocated based on the percentage of space utilized by the Company. The remaining lease costs were allocated to the Company based on headcount.

During the fiscal years of 2024 and 2023, we identified and ceased use of certain operating right-of-use assets that were inherited from the former Parent at Separation. We determined that we will no longer receive economic benefits from these leased properties and do not have the intent or practical ability to sublease or sell them. Accordingly, we recorded accelerated depreciation in the amount of $14 million and $69 million (representing the remaining carrying value of the identified right-of-use assets, not included in the operating lease costs in the table above) for the years ended March 31, 2024 and 2023, respectively. Refer to Note 19 – Workforce Rebalancing and Site-Rationalization Charges for details of this program.

The Company had no sale and leaseback transactions for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 and the year ended December 31, 2021.

The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities and, as such, are excluded from the amounts below.


					Three Months
					Ended		Year Ended
	Year Ended March 31,				March 31,		December 31,
(Dollars in millions)	2024		2023		2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for finance leases	$	14	$	5	$	1	$	3
Financing cash outflows for finance leases		116		83		20		70
Operating cash outflows for operating leases		387		417		118		327
Right-of-use assets obtained in exchange for new finance lease liabilities		212		111		19		86
Right-of-use assets obtained in exchange for new operating lease liabilities		291		175		67		562

The following table presents the weighted-average lease term and discount rate for finance and operating leases:


	At March 31,
	2024		2023
Finance leases
Weighted-average remaining lease term	3.8	years	3.5	years
Weighted-average discount rate	5.58	%	3.36	%
Operating leases
Weighted-average remaining lease term	4.8	years	4.7	years
Weighted-average discount rate	5.15	%	4.38	%

The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual basis for the next five years and thereafter.


	Year Ending March 31,												Imputed
(Dollars in millions)	2025		2026		2027		2028		2029		Thereafter		Interest*		Total
Finance leases	$	121	$	102	$	63	$	38	$	31	$	—	$	(67)	$	289
Operating leases	$	337	$	281	$	169	$	97	$	70	$	143	$	(191)	$	907

* Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.

The following table presents the total amount of finance leases recognized in the Consolidated Balance Sheet:


	At March 31,
(Dollars in millions)	2024		2023
Right-of-use assets – Property and equipment	$	309	$	245
Lease liabilities:
Current		95		82
Noncurrent		193		160

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Mar. 31, 2024

PROPERTY AND EQUIPMENT

Summary of balances of property and equipment by type



	At March 31,
(Dollars in millions)	2024		2023
Information technology equipment	$	6,374	$	6,912
Buildings and leasehold improvements		2,502		2,665
Office and other equipment		354		370
Land and land improvements		70		70
Property and equipment, gross	$	9,300	$	10,016
Accumulated depreciation		(6,626)		(7,237)
Property and equipment, net	$	2,674	$	2,779

CONSOLIDATED INCOME STATEMENT (Parenthetical) - USD ($)
$ in Millions

3 Months Ended

12 Months Ended

Mar. 31, 2022

Mar. 31, 2021

Mar. 31, 2024

Mar. 31, 2023

Dec. 31, 2021

Revenue

$ 4,431

^[1]

$ 4,771

$ 16,052

^[1]

$ 17,026

^[1]

$ 18,657

^[1]

Cost of services

3,824

^[2]

4,318

$ 13,189

^[2]

14,498

^[2]

16,550

^[2]

Related Party

Revenue

236

154

287

704

Cost of services

$ 924

$ 1,006

$ 1,382

$ 3,979

[1]	Including related-party revenue of $287 for the year ended March 31, 2023, $236 for the three months ended March 31, 2022, and $704 for the year ended December 31, 2021
[2]	Including related-party cost of service of $1,382 for the year ended March 31, 2023, $924 for the three months ended March 31, 2022, and $3,979 for the year ended December 31, 2021

- Definition

The aggregate cost of goods produced and sold and services rendered during the reporting period.

CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2021
Cash flows from operating activities:
Net income (loss)	$ (340)	$ (2,304)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation of property, equipment and capitalized software	834	1,300
Depreciation of right-of-use assets	319	327
Amortization of transition costs and prepaid software	1,256	1,278
Amortization of capitalized contract costs	531	563
Amortization of acquisition-related intangible assets	30	37
Goodwill impairment	0	469
Stock-based compensation	95	71
Deferred taxes	(13)	(401)
Net (gain) loss on asset sales and other	43	11
Change in operating assets and liabilities:
Deferred costs (excluding amortization)	(1,569)	(1,618)
Right-of-use assets and liabilities (excluding depreciation)	(335)	(374)
Workforce rebalancing liabilities	(38)	(341)
Receivables	11	(1,076)
Accounts payable	(305)	125
Taxes (including items settled with former Parent in 2021 period)	(2)	994
Other assets and other liabilities	(63)	822
Net cash provided by (used in) operating activities	454	(119)
Cash flows from investing activities:
Capital expenditures	(651)	(752)
Proceeds from disposition of property and equipment	138	194
Other investing activities, net	(40)	(14)
Net cash used in investing activities	(553)	(572)
Cash flows from financing activities:
Debt repayments	(644)	(91)
Proceeds from issuance of debt, net of debt issuance costs	494	3,038
Net transfers (to) from Parent		(30)
Common stock repurchases for tax withholdings	(22)	(1)
Other financing activities, net	2
Net cash provided by (used in) financing activities	(170)	2,915
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(37)	(22)
Net change in cash, cash equivalents and restricted cash	(306)	2,203
Cash, cash equivalents and restricted cash at beginning of period	1,860	38
Cash, cash equivalents and restricted cash at end of period	1,554	2,240
Supplemental data
Income taxes paid, net of refunds received	191	12
Interest paid on debt	$ 118	$ 2

PROPERTY AND EQUIPMENT

12 Months Ended

Mar. 31, 2024

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 8. PROPERTY AND EQUIPMENT

The following table presents the balances of property and equipment by type:



	At March 31,
(Dollars in millions)	2024		2023
Information technology equipment	$	6,374	$	6,912
Buildings and leasehold improvements		2,502		2,665
Office and other equipment		354		370
Land and land improvements		70		70
Property and equipment, gross	$	9,300	$	10,016
Accumulated depreciation		(6,626)		(7,237)
Property and equipment, net	$	2,674	$	2,779

The unpaid property and equipment balance included in accounts payable and accrued expenses was $29 million and $62 million at March 31, 2024 and 2023, respectively. Depreciation of property and equipment was $801 million, $900 million, $246 million, and $1.3 billion for the years ended March 31, 2024 and 2023, the three months ended March 31, 2022 (the transition period) and the year ended December 31, 2021, respectively. Additionally, as part of the site-rationalization program, the Company recognized $21 million and $7 million of accelerated depreciation related to ceasing to use certain owned fixed assets for the years ended March 31, 2024 and 2023, respectively. Refer to Note 19 – Workforce Rebalancing and Site-Rationalization Charges for additional details.

FINANCIAL ASSETS AND LIABILITIES - Gains and Losses (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Amounts Excluded from Effectiveness Testing	$ 0	$ 0	$ 0	$ 0
Designated as hedging instruments
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	1	11	(4)	4
Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	1	23	(2)	1
Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (loss) from derivatives	(1)	(48)	20	4
Foreign exchange contracts \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI	1	22	(4)	4
Foreign exchange contracts \| Not designated as hedging instruments - economic hedges
Derivative Instruments, Gain (Loss) [Line Items]
Net gains (loss) from derivatives	$ (1)	$ (48)	$ 20	$ 4
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration]	Other Income and Expense	Other Income and Expense	Other Income and Expense	Other Income and Expense
Cross-currency swap contracts \| Designated as hedging instruments \| Net investment hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Recognized in OCI		$ (11)
Cost of services. \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	$ 1	21	$ (2)	$ 1
Interest expense. \| Designated as hedging instruments \| Derivative instruments in cash flow hedges
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Recognized in Earnings and Other Comprehensive Income - Reclassified from AOCI	$ 0	$ 1	$ 0	$ 0

RETIREMENT-RELATED BENEFITS - ABO and APBO in Excess of Plan Assets (Details) - USD ($) $ in Millions	Mar. 31, 2024	Mar. 31, 2023
Defined Benefit Plan, Pension and Non-Pension Plans with Accumulated Benefit Obligations in Excess of Plan Assets
Plans with PBO in excess of plan assets, Benefit Obligation	$ 714	$ 953
Plans with PBO in excess of plan assets, Plan Assets	187	426
Plans with ABO in excess of plan assets, Benefit Obligation	712	630
Plans with ABO in excess of plan assets, Plan Assets	186	171
Plans with assets in excess of PBO, Benefit Obligation	957	706
Plans with assets in excess of PBO, Plan Assets	$ 1,061	$ 800

TAXES - Reconciliation of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2021
Reconciliation of Unrecognized Tax Benefits
Beginning balance	$ 44	$ 104	$ 55	$ 18
Additions based on tax positions related to the current year	12	36	46	479
Additions for tax positions of prior years			3
Reductions for tax positions of prior years (including impacts due to a lapse of statute)	(1)	(32)
Settlements (closed out to Net Parent investment)				(453)
Ending balance	$ 55	$ 108	$ 104	$ 44

LEASES - Weighted-average lease term and discount rate (Details)	Mar. 31, 2024	Mar. 31, 2023
LEASES
Finance leases, Weighted-average remaining lease term	3 years 9 months 18 days	3 years 6 months
Finance leases, Weighted-average discount rate	5.58%	3.36%
Operating leases, Weighted-average remaining lease term	4 years 9 months 18 days	4 years 8 months 12 days
Operating leases, Weighted-average discount rate	5.15%	4.38%

INTANGIBLE ASSETS INCLUDING GOODWILL (Tables)

12 Months Ended

Mar. 31, 2024

INTANGIBLE ASSETS INCLUDING GOODWILL

Intangible asset balances by major asset class


	At March 31, 2024						At March 31, 2023
	Gross Carrying		Accumulated		Net Carrying		Gross Carrying		Accumulated		Net Carrying
(Dollars in millions)	Amount		Amortization		Amount		Amount		Amortization		Amount
Capitalized software	$	172	$	(48)	$	125	$	83	$	(15)	$	68
Customer relationships*		152		(96)		56		232		(141)		91
Completed technology		—		—		—		20		(20)		—
Patents and trademarks*		14		(6)		8		18		(6)		13
Total	$	339	$	(150)	$	188	$	353	$	(182)	$	171

* Amounts include effects from foreign currency translation.

Intangible assets, future amortization expense


	Capitalized		Customer		Patents and
(Dollars in millions)	Software		Relationships		Trademarks		Total
Year ending March 31:
2025	$	46	$	21	$	3	$	71
2026		45		18		3		65
2027		34		15		2		51
2028		—		1		—		1
2029		—		1		—		1
Thereafter		—		—		—		—

Changes in goodwill balances by reportable segment

Goodwill

The following table presents a roll-forward of goodwill balances by segment for the years ended March 31, 2024 and 2023:



			Additions				Additions
(Dollars in	Balance at		and		Balance at		and		Balance at
millions)	March 31,		Other		March 31,		Other		March 31,
Segment	2022		Adjustments*		2023		Adjustments*		2024
Japan	$	506	$	(11)	$	495	$	(7)	$	488
United States		—		—		—		—		—
Principal Markets		142		—		142		(1)		141
Strategic Markets		176		—		176		—		176
Total	$	823	$	(11)	$	812	$	(7)	$	805

*	Primarily driven by foreign currency translation.

- Definition

Tabular disclosure of goodwill by reportable segment and in total which includes a rollforward schedule.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 24
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482548/350-20-55-24

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482573/350-20-50-1

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 350
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
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+ Details