What changed in this filing

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Item 1. Financial Statements

2020-08-07 compared with 2020-05-08 · 120 added, 58 removed, 535 unchanged (25% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2020 2019 2020 2019

23 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2020 2019 2020 2019

14 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) March 31, 2020 December 31, 2019

(in millions, except share data in thousands) June 30, 2020 December 31, 2019

Cash and cash equivalents $ 428 $ 496

35 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2020 2019

17 unchanged sentences

Net change in income tax assets and liabilities 17 ( 9 )

Other operating, net — ( 1 )

Net cash provided by (used in) operating activities ( 118 ) ( 234 )

16 unchanged sentences

Cash, Cash Equivalents and Restricted Cash at End of period (1)

(1) Includes $ 18 million and $ 8 million of restricted cash as of March 31, 2020 and 2019, respectively, that were included in Other current assets on their respective Condensed Consolidated Balance Sheets.

(1) Includes $ 9 million of restricted cash as of both June 30, 2020 and 2019, respectively, that were included in Other current assets on their respective Condensed Consolidated Balance Sheets.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

Three Months Ended June 30, 2020

(in millions) Common Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

Shareholders'

Balance at December 31, 2019 $ 2 $ 3,890 $ ( 2,185 ) $ ( 407 ) $ 1,300

Cash dividends paid - preferred stock, $20/per share — — ( 2 ) — ( 2 )

Balance at March 31, 2020 $ 2 $ 3,891 $ ( 2,236 ) $ ( 437 ) $ 1,220

Cash dividends paid - preferred stock, $ 20 /share

— — ( 3 ) — ( 3 )

Stock option and incentive plans, net — 5 — — 5

3 unchanged sentences

Total Comprehensive Income (Loss), Net — — ( 51 ) 4 ( 47 )

Balance at June 30, 2020 $ 2 $ 3,896 $ ( 2,290 ) $ ( 433 ) $ 1,175

Three Months Ended June 30, 2019

(in millions) Common Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

Shareholders'

Balance at March 31, 2019 $ 2 $ 3,879 $ ( 551 ) $ ( 403 ) $ 2,927

Cash dividends paid - preferred stock, $ 20 /share

— — ( 3 ) — ( 3 )

Stock option and incentive plans, net — 7 — — 7

Comprehensive Income (Loss):

Net Income (Loss) — — ( 1,029 ) — ( 1,029 )

Other comprehensive income (loss), net — — — ( 1 ) ( 1 )

Total Comprehensive Income (Loss), Net — — ( 1,029 ) ( 1 ) ( 1,030 )

Balance at June 30, 2019 $ 2 $ 3,886 $ ( 1,583 ) $ ( 404 ) $ 1,901

Six Months Ended June 30, 2020

(in millions) Common Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

1 unchanged sentence

Balance at December 31, 2019 $ 2 $ 3,890 $ ( 2,185 ) $ ( 407 ) $ 1,300

Cash dividends paid - preferred stock, $20/per share — — ( 2 ) — ( 2 )

Cumulative impact of adopting the new lease standard — — ( 8 ) — ( 8 )

Cash dividends paid - preferred stock, $ 40 /share

— — ( 5 ) — ( 5 )

Stock option and incentive plans, net — 6 — — 6

3 unchanged sentences

Total Comprehensive Income (Loss), Net — — ( 100 ) ( 26 ) ( 126 )

Balance at March 31, 2019 $ 2 $ 3,879 $ ( 551 ) $ ( 403 ) $ 2,927

Balance at June 30, 2020 $ 2 $ 3,896 $ ( 2,290 ) $ ( 433 ) $ 1,175

Six Months Ended June 30, 2019

(in millions) Common Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1)

Shareholders'

Balance at December 31, 2018 $ 2 $ 3,878 $ ( 233 ) $ ( 425 ) $ 3,222

Cash dividends paid - preferred stock, $ 40 /share

— — ( 5 ) — ( 5 )

Cumulative effect of accounting change — — ( 8 ) — ( 8 )

Stock option and incentive plans, net — 8 — — 8

Comprehensive Income (Loss):

Net Income (Loss) — — ( 1,337 ) — ( 1,337 )

Other comprehensive income (loss), net — — — 21 21

Total Comprehensive Income (Loss), Net — — ( 1,337 ) 21 ( 1,316 )

Balance at June 30, 2019 $ 2 $ 3,886 $ ( 1,583 ) $ ( 404 ) $ 1,901

(1) AOCL - Accumulated other comprehensive loss.

25 unchanged sentences

We base our estimates on assumptions, both historical and forward looking, that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

As of March 31, 2020, the impact of the outbreak of COVID-19 pandemic continues to unfold.

As of June 30, 2020, the impact of the outbreak of COVID-19 pandemic continues to unfold.

As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

15 unchanged sentences

Income Taxes:

In December 2019, the FASB issued an updated accounting guidance to simplify the accounting for income taxes.

In December 2019, the FASB issued updated accounting guidance to simplify the accounting for income taxes.

The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

4 unchanged sentences

Reference Rate Reform:

In March 2020, the FASB issued an updated guidance relating to the accounting for the discontinuation of the London Inter-bank Offered Rate (LIBOR), referred to as the reference rate reform.

In March 2020, the FASB issued updated guidance relating to the accounting for the discontinuation of the London Inter-bank Offered Rate (LIBOR), referred to as the reference rate reform.

This guidance provides practical expedients and exceptions for applying U.S.

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2020 2019 2020 2019

32 unchanged sentences

The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers:

(in millions) March 31, 2020 December 31, 2019

(in millions) June 30, 2020 December 31, 2019

Contract Assets (Unearned Income)

8 unchanged sentences

(2) Presented in Other long-term liabilities in the Condensed Consolidated Balance Sheets

Revenues of $ 42 million and $ 53 million were recognized during the three months ended March 31, 2020 and 2019, respectively, related to the Company's unearned income at December 31, 2019 and 2018, respectively.

Revenues of $ 22 million and $ 64 million were recognized during the three and six months ended June 30, 2020, respectively, related to the Company's unearned income at December 31, 2019.

Revenues of $ 28 million and $ 81 million were recognized during the three and six months ended June 30, 2019, respectively, related to the Company's unearned income at December 31, 2018.

Transaction Price Allocated to the Remaining Performance Obligations

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at March 31, 2020 was approximately $ 1.8 billion.

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2020 was approximately $ 1.6 billion.

The Company expects to recognize approximately 67 % of this revenue over the next two years and the remainder thereafter.

Note 4 – Segment Reporting

Our reportable segments correspond to how we organize and manage the business, as defined by our CEO, who is also our Chief Operating Decision Maker, and are aligned to the industries in which our clients operate.

Our reportable segments correspond to how we organize and manage the business, as defined by our CEO, who is also our Chief Operating Decision Maker (CODM), and are aligned to the industries in which our clients operate.

Our segments involve the delivery of business process services and include service arrangements where we manage a customer's business activity or process.

1 unchanged sentence

All prior periods presented have been revised to reflect this change in costs structure.

Our financial performance is based on Segment Profit / (Loss) and Segment Adjusted EBITDA for our three reportable segments (Commercial Industries, Government Services and Transportation), Other operations and Shared IT / Infrastructure & Corporate Costs.

Our CODM does not evaluate operating segments using discrete asset information.

Commercial Industries:

5 unchanged sentences

Our solutions in this segment help governments respond to changing rules for eligibility and increasing citizen expectations.

CNDT Q2 2020 Form 10-Q

Transportation:

1 unchanged sentence

On behalf of government agencies and authorities in the transportation industry, we deliver mission-critical mobility and payment solutions that improve automation, interoperability and decision-making to streamline operations, increase revenue and reduce congestion while creating safer communities and seamless travel experiences for consumers.

CNDT Q1 2020 Form 10-Q

Other includes our divestitures and our Student Loan business, which the Company exited in the third quarter of 2018.

Shared IT / Infrastructure & Corporate Costs includes both normal ongoing IT infrastructure and enterprise application costs and costs related to modernization of a significant portion of our infrastructure with new systems and processes and consolidation of our data centers as part of our transformation initiatives.

It also includes costs related to corporate overhead functions and shared real estate costs.

12 unchanged sentences

Adjusted EBITDA $ 132 $ 102 $ 41 $ — $ — $ ( 161 ) $ 114

Six Months Ended

(in millions) Commercial Industries Government Services Transportation Other Shared IT / Infrastructure & Corporate Costs Total

2020 Divestitures Other

Revenue $ 1,092 $ 621 $ 354 $ — $ — $ — $ 2,067

Segment profit (loss) $ 162 $ 208 $ 54 $ — $ 3 $ ( 327 ) $ 100

Segment depreciation and amortization $ 49 $ 11 $ 17 $ — $ — $ 36 $ 113

Adjusted EBITDA $ 211 $ 219 $ 71 $ — $ ( 4 ) $ ( 291 ) $ 206

Revenue $ 1,204 $ 651 $ 378 $ 36 $ 1 $ — $ 2,270

Segment profit (loss) $ 228 $ 175 $ 48 $ 1 $ — $ ( 324 ) $ 128

Segment depreciation and amortization $ 43 $ 16 $ 17 $ — $ — $ 29 $ 105

Adjusted EBITDA $ 271 $ 191 $ 69 $ 1 $ — $ ( 295 ) $ 237

CNDT Q2 2020 Form 10-Q

(in millions) Three Months Ended

June 30, Six Months Ended

Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2020 2019 2020 2019

11 unchanged sentences

CA MMIS charge (credit) — — ( 7 ) —

Other adjustments — 4 — 4

Adjusted EBITDA $ 110 $ 114 $ 206 $ 237

Refer to Note 3 – Revenue for additional information on disaggregated revenues of the reportable segments.

CNDT Q1 2020 Form 10-Q

Note 5 – Restructuring Programs and Related Costs

The Company engages in a series of restructuring programs related to downsizing its employee base, exiting certain activities, outsourcing certain internal functions and engaging in other actions designed to reduce its cost structure and improve productivity.

The implementation of the Company's strategic transformation program and various productivity initiatives have reduced the Company's real estate footprint across all geographies and segments resulting in increased lease cancellation and other related costs.

Also included in Restructuring and related costs in the table below are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 2 million and $ 9 million for the three months ended March 31, 2020 and 2019, respectively.

The implementation of the Company's strategic transformation program and various productivity initiatives have reduced the Company's real estate footprint across all geographies and segments resulting in lease terminations, asset impairments and other related costs.

Also included in Restructuring and related costs in the table below are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 6 million and $ 9 million for the three months ended June 30, 2020 and 2019, respectively, and $ 8 million and $ 18 million for the six months ended June 30, 2020 and 2019, respectively.

Management continues to evaluate the Company's business, and in the future, there may be additional provisions for new plan initiatives and/or changes in previously recorded estimates as payments are made, or actions are completed.

1 unchanged sentence

In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, we recognize employee severance costs when they are both probable and reasonably estimable.

A summary of the Company's restructuring program activity during the three months ended March 31, 2020 and 2019 was as follows:

A summary of the Company's restructuring program activity during the six months ended June 30, 2020 and 2019 was as follows:

(in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total

4 unchanged sentences

Charges against reserve and currency ( 13 ) ( 13 ) ( 11 ) ( 37 )

Accrued Balance at March 31, 2020 $ 7 $ 5 $ — $ 12

Accrued Balance at June 30, 2020 $ 12 $ 4 $ — $ 16

CNDT Q2 2020 Form 10-Q

(in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total

6 unchanged sentences

— ( 22 ) — ( 22 )

Accrued Balance at March 31, 2019 $ 11 $ 18 $ — $ 29

Accrued Balance at June 30, 2019 $ 19 $ 9 $ — $ 28

(1) Represents amounts recognized within the Consolidated Statements of Income (Loss) for the years shown.

(2) Relates to the adoption of the new lease guidance.

In addition, the Company recorded professional support costs associated with the strategic transformation program in Restructuring and related costs of $ 2 million and $ 0 million for the three months ended March 31, 2020 and 2019, respectively.

CNDT Q1 2020 Form 10-Q

In addition, the Company recorded professional support costs associated with the strategic transformation program in Restructuring and related costs of $ 2 million and $ 2 million for the three months ended June 30, 2020 and 2019, respectively, and $ 4 million and $ 2 million for the six months ended June 30, 2020 and 2019, respectively.

The following table summarizes the total amount of costs incurred in connection with these restructuring programs by segment:

Three Months Ended

June 30, Six Months Ended

(in millions) 2020 2019 2020 2019

Commercial Industries $ 5 $ 9 $ 7 $ 11

Government Services 1 1 1 1

Transportation 3 — 3 1

Other — — — 1

Shared IT / Infrastructure & Corporate Costs 18 14 21 26

2 unchanged sentences

Long-term debt was as follows:

(in millions) March 31, 2020 December 31, 2019

(in millions) June 30, 2020 December 31, 2019

Term loan A due 2022 $ 648 $ 664

7 unchanged sentences

Total Long-term Debt $ 1,581 $ 1,464

As of March 31, 2020, the Company has borrowed $ 150 million of its $ 750 million Senior Revolving Credit Facility (Revolver).

As of June 30, 2020, the Company has borrowed $ 150 million of its $ 750 million Senior Revolving Credit Facility (Revolver).

In addition, the Company has utilized $ 8 million of the Revolver to issue letters of credit.

The net Revolver available to be drawn upon as of March 31, 2020 was $ 518 million.

At March 31, 2020 and December 31, 2019, the Company was in compliance with all debt covenants related to the borrowings in the table above.

The net Revolver available to be drawn upon as of June 30, 2020 was $ 592 million.

At June 30, 2020 and December 31, 2019, the Company was in compliance with all debt covenants related to the borrowings in the table above.

CNDT Q2 2020 Form 10-Q

Note 7 – Financial Instruments

1 unchanged sentence

As a part of the Company's foreign exchange risk management strategy, the Company uses derivative instruments, primarily forward contracts, to hedge the funding of foreign entities which have a non-dollar functional currency, thereby reducing volatility of earnings or protecting fair values of assets and liabilities.

At March 31, 2020 and December 31, 2019, the Company had outstanding forward exchange contracts with gross notional values of $ 176 million and $ 207 million, respectively.

At March 31, 2020, approximately 72 % of these contracts mature within three months, 11 % in three to six months, 13 % in six to twelve months and 4 % in greater than twelve months.

At June 30, 2020 and December 31, 2019, the Company had outstanding forward exchange contracts with gross notional values of $ 162 million and $ 207 million, respectively.

At June 30, 2020, approximately 74 % of these contracts mature within three months, 10 % in three to six months, 12 % in six to twelve months and 4 % in greater than twelve months.

Most of these foreign currency derivative contracts are designated as cash flow hedges and did not have a material impact on the Company's balance sheet, income statement or cash flows for the periods presented.

Refer to Note 8 – Fair Value of Financial Assets and Liabilities for additional information regarding the fair value of the Company's foreign exchange forward contracts.

CNDT Q1 2020 Form 10-Q

Note 8 – Fair Value of Financial Assets and Liabilities

9 unchanged sentences

The basis for the measurement at fair value in all cases was Level 2.

(in millions) March 31, 2020 December 31, 2019

(in millions) June 30, 2020 December 31, 2019

Foreign exchange contract - forward $ 1 $ 2

Total Assets $ 1 $ 2

Foreign exchange contracts - forwards $ 3 $ —

Foreign exchange contracts - forward $ 1 $ —

Total Liabilities $ 1 $ —

CNDT Q2 2020 Form 10-Q

Summary of Other Financial Assets and Liabilities

The estimated fair values of our other financial assets and liabilities were as follows:

March 31, 2020 December 31, 2019

June 30, 2020 December 31, 2019

(in millions) Carrying

7 unchanged sentences

The changes in the fair value are recorded in Other income (expense), net on the Condensed Consolidated Statements of Income (Loss).

CNDT Q1 2020 Form 10-Q

Note 9 – Employee Benefit Plans

3 unchanged sentences

Historically, the Company matched a portion of employee contributions.

However, beginning in 2019, the Company has suspended its match to the 401(k) plan for all U.S.

However, beginning in 2019, the Company suspended its match to the 401(k) plan for all U.S.

salaried employees.

The Company recognized an expense related to its defined contribution plans of $ 1 million and $ 3 million for the three months ended March 31, 2020 and 2019, respectively.

Additionally, during the second quarter of 2020, the Company extended the suspension of its match to the 401(k) plan to also include all U.S.

hourly employees.

The Company recognized an expense related to its defined contribution plans of $ 0 million and $ 2 million for the three months ended June 30, 2020 and 2019, respectively, and $ 1 million and $ 5 million for the six months ended June 30, 2020 and 2019, respectively.

Note 10 – Accumulated Other Comprehensive Loss (AOCL)

5 unchanged sentences

Net current period other comprehensive income (loss) ( 26 ) ( 1 ) 1 ( 26 )

Balance at March 31, 2020 $ ( 436 ) $ — $ ( 1 ) $ ( 437 )

Balance at June 30, 2020 $ ( 434 ) $ 2 $ ( 1 ) $ ( 433 )

CNDT Q2 2020 Form 10-Q

(in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total

3 unchanged sentences

Net current period other comprehensive income (loss) 21 1 ( 1 ) 21

Balance at March 31, 2019 $ ( 404 ) $ 3 $ ( 2 ) $ ( 403 )

Balance at June 30, 2019 $ ( 405 ) $ 3 $ ( 2 ) $ ( 404 )

(1) All amounts are net of tax.

12 unchanged sentences

Should developments in any of these matters cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts in excess of any accrual for such matter or matters, this could have a material adverse effect on the Company's results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs.

The Company believes it has recorded adequate provisions for any such matters as of March 31, 2020.

The Company believes it has recorded adequate provisions for any such matters as of June 30, 2020.

Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matters could be in excess of any amounts accrued and could be material to the Company's results of operations, cash flows or financial position in any reporting period.

CNDT Q1 2020 Form 10-Q

Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and non-consolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur.

3 unchanged sentences

However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the condensed consolidated financial position or liquidity.

As of March 31, 2020, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

As of June 30, 2020, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

Litigation Against the Company

6 unchanged sentences

The case has been dismissed with prejudice with a full release and discharge of the Defendants.

CNDT Q2 2020 Form 10-Q

Employees’ Retirement System of the Puerto Rico Electric Power Authority et al v.

Conduent Inc.

On March 8, 2019, a putative class action lawsuit alleging violations of certain federal securities laws in connection with our statements and alleged omissions regarding our financial guidance and business and operations was filed against us, our former Chief Executive Officer, and our Chief Financial Officer in the United States District Court for the District of New Jersey.

The complaint seeks certification of a class of all persons who purchased or otherwise acquired our securities from February 21, 2018 through November 6, 2018, and also seeks unspecified monetary damages, costs, and attorneys’ fees.

We moved to dismiss the class action complaint in its entirety.

In June 2020, the court denied the motion to dismiss and allowed the claims to proceed.

We intend to defend the litigation vigorously.

The Company maintains insurance that may cover any costs arising out of this litigation up to the insurance limits, and subject to meeting certain deductibles and to other terms and conditions thereof.

The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves.

Skyview Capital LLC and Continuum Global Solutions, LLC v.

1 unchanged sentence

On February 3, 2020, plaintiffs filed a lawsuit in the Superior Court of New York County, New York.

The lawsuit relates to the sale of a portion of Conduent Business Service LLC’s (“CBS”) select standalone customer care call center business (the “Business”) to plaintiffs, which sale closed in February 2019.

The lawsuit relates to the sale of a portion of CBS's select standalone customer care call center business (the “Business”) to plaintiffs, which sale closed in February 2019.

Under the terms of the sale agreement, CBS received approximately $ 23 million of notes from plaintiffs (the “Notes”).

4 unchanged sentences

The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any.

CNDT Q1 2020 Form 10-Q

Dennis Nasrawi v.

19 unchanged sentences

CNDT Q2 2020 Form 10-Q

Conduent Business Services, LLC v.

Cognizant Business Services, LLC:

On April 12, 2017, Conduent Business Services LLC (“CBS”) filed a lawsuit against Cognizant Business Services Corporation (“Cognizant”) in the Supreme Court of New York County, New York.

On April 12, 2017, CBS filed a lawsuit against Cognizant Business Services Corporation (“Cognizant”) in the Supreme Court of New York County, New York.

The lawsuit relates to the Amended and Restated Master Outsourcing Services Agreement effective as of October 24, 2012, and the service delivery contracts and work orders thereunder, between CBS and Cognizant, as amended and supplemented (the “Contract”).

8 unchanged sentences

CBS will continue to vigorously defend itself against the counterclaims but the Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves.

CNDT Q1 2020 Form 10-Q

Other Matters

9 unchanged sentences

Certain contracts, primarily in the Company's Government Services and Transportation segments, require the Company to provide a surety bond or a letter of credit as a guarantee of performance.

As of March 31, 2020, the Company had $ 591 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $ 210 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations.

As of June 30, 2020, the Company had $ 578 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $ 90 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations.

In general, the Company would only be liable for the amount of these guarantees in the event of default in the Company's performance of its obligations under each contract.

The Company believes it has sufficient capacity in the surety markets and liquidity from its cash flow and its various credit arrangements (including its Revolver) to allow it to respond to future requests for proposals that require such credit support.

CNDT Q2 2020 Form 10-Q

Note 12 – Preferred Stock

3 unchanged sentences

Each share of convertible preferred stock is convertible at any time, at the option of the holder, into 44.9438 shares of common stock for a total of 5,393,000 shares (reflecting an initial conversion price of approximately $ 22.25 per share of common stock), subject to customary anti-dilution adjustments.

CNDT Q1 2020 Form 10-Q

Note 13 – Earnings per Share

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data in whole dollars and shares in thousands) 2020 2019 2020 2019

13 unchanged sentences

The components of Other assets and liabilities were as follows:

(in millions) March 31, 2020 December 31, 2019

(in millions) June 30, 2020 December 31, 2019

Other Current Assets

17 unchanged sentences

Product software, net 55 40

Other 111 113

Capitalized cloud computing implementation costs, net 41 40

Total Other Long-term Assets $ 397 $ 387

11 unchanged sentences

The purchases from these entities included office equipment and related services and supplies.

In addition, we have a receivable related to certain income tax matters and a payable for certain litigation related reimbursement matters with our former parent company, Xerox Corporation.

In addition, we have a receivable related to certain income tax matters with our former parent company, Xerox Corporation.

Revenue and purchases from these entities were included in Revenue and Costs of services / Selling, General and administrative, respectively, on the Company's Condensed Consolidated Statements of Income (Loss).

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in millions) 2020 2019 2020 2019

1 unchanged sentence

Purchases from related parties $ 2 $ 6 $ 8 $ 18

The Company's receivable and payable balances with related party entities were not material as of March 31, 2020 and December 31, 2019 .

The Company's receivable and payable balances with related party entities were not material as of June 30, 2020 and December 31, 2019 .

Note 16 – Goodwill

3 unchanged sentences

Foreign currency translation ( 7 ) ( 5 ) 1 ( 11 )

Balance at March 31, 2020 $ 812 $ 615 $ 59 $ 1,486

In the first quarter of 2020, the Company performed its ongoing assessment to consider whether events or circumstances had occurred that could more likely than not reduce the fair value of a reporting unit below its carrying value.

Balance at June 30, 2020 $ 814 $ 616 $ 61 $ 1,491

In the first and second quarters of 2020, the Company performed its ongoing assessment to consider whether events or circumstances had occurred that could more likely than not reduce the fair value of a reporting unit below its carrying value.

After evaluating and weighing all relevant events and circumstances, we concluded that it is not more likely than not that the fair values of any of our reporting units were less than their carrying values.

1 unchanged sentence

To the extent the COVID-19 pandemic continues to disrupt the economic environment, such as a decline in the performance of the reporting units or loss of a significant contract or multiple significant contracts, the fair value of one or more of the reporting units could fall below their carrying value, resulting in a goodwill impairment charge.

In addition, the Company has assessed whether any impairment of its amortizable assets existed and has determined that no charges were deemed necessary under applicable accounting standards as of March 31, 2020.

CNDT Q2 2020 Form 10-Q

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements