Future commitment to fund

  
The following table summarizes the capitalized costs related to data center agreements as of June 30, 2022:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | Amended IT Services Agreement |  | Amended EU IT Services Agreement |  | Total |
|   |  | (in millions) |
| Capitalized costs, beginning balance |  | $ | 62.8  |  |  | $ | 9.0  |  |  | $ | 71.8  |  |
| Capitalized costs incurred |  | 0.3  |  |  | —  |  |  | 0.3  |  |
| Impact of foreign currency exchange |  | —  |  |  | (1.4) |  |  | (1.4) |  |
| Total capitalized costs, ending balance |  | 63.0  |  |  | 7.6  |  |  | 70.7  |  |
| Total accumulated amortization |  | (46.6) |  |  | (5.4) |  |  | (52.0) |  |
| Net Deferred Kyndryl Costs |  | $ | 16.4  |  |  | $ | 2.3  |  |  | $ | 18.7  |  |

Cloud Services Resale AgreementOn December 31, 2021, the Company and Presidio Networked Solutions LLC (“Presidio”), a reseller of services of Amazon Web Services, Inc. and its affiliates (collectively, “AWS”), entered into an Order Form and AWS Private Pricing Addendum, dated December 31, 2021 (the “Order Form”), to the Cloud Services Resale Agreement, dated December 15, 2017, as amended (together with the Order Form, the “AWS Cloud Agreement”), whereby Presidio will resell to the Company certain public cloud infrastructure and related services provided by AWS for the operation, management and support of the Company’s cloud global distributed platforms and products. The AWS Cloud Agreement expires on December 31, 2026. Fixed minimums remaining under the AWS Cloud Agreement at June 30, 2022 are $226.8 million in the aggregate through December 31, 2026.InvestmentsThe Company has an equity method investment that is a variable interest in a variable interest entity. The Company is not the primary beneficiary and therefore does not consolidate the investee. The Company’s potential maximum loss exposure related to its unconsolidated investment in this variable interest entity totaled $42.7 million as of June 30, 2022, which represents the carrying value of the Company's investment. In addition, as of June 30, 2022, the Company also has a future commitment to fund $0.9 million to one of the Company’s other investees. Contractual ObligationsThe Company has obligations under the Amended IT Services Agreement, the Amended EU IT Services Agreement, the Private Cloud Agreement, the AWS Cloud Agreement, software license agreements including hosted software arrangements, and software and hardware maintenance and support agreements. The following table summarizes the total expenses related to these agreements:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|   |  | Years ended June 30, |
|   |  | 2022 |  | 2021 |  | 2020 |
|   |  | (in millions) |
| Data center expenses |  | $ | 248.0  |  |  | $ | 204.3  |  |  | $ | 128.9  |  |
| Software license agreements |  | 81.9  |  |  | 63.6  |  |  | 46.9  |  |
| Software/hardware maintenance agreements |  | 77.3  |  |  | 77.5  |  |  | 72.1  |  |
|      Total expenses  |  | $ | 407.1  |  |  | $ | 345.4  |  |  | $ | 247.9  |  |

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