What changed in this filing

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Item 1. Financial Statements

2021-08-05 compared with 2021-05-05 · 129 added, 74 removed, 501 unchanged (29% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2021 2020 2021 2020

7 unchanged sentences

Interest expense 13 15 26 32

Loss on divestitures and transaction costs 2 4

(Gain) loss on divestitures and transaction costs ( 1 ) 2 1 6

Litigation costs 1 14 2 20

Loss on extinguishment of debt 2 — 2 —

Other (income) expenses, net — ( 1 ) — 1

Total Operating Costs and Expenses 1,007 1,080 2,044 2,182

Loss Before Income Taxes ( 9 ) ( 51 )

Income (Loss) Before Income Taxes 19 ( 64 ) 10 ( 115 )

Income tax expense (benefit) 7 ( 13 ) 9 ( 15 )

Net Loss $ ( 11 ) $ ( 49 )

Net Loss per Share:

Net Income (Loss) $ 12 $ ( 51 ) $ 1 $ ( 100 )

Net Earnings (Loss) per Share:

Basic $ 0.05 $ ( 0.25 ) $ ( 0.02 ) $ ( 0.50 )

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2021 2020 2021 2020

Net Loss $ ( 11 ) $ ( 49 )

Net Income (Loss) $ 12 $ ( 51 ) $ 1 $ ( 100 )

Other Comprehensive Income (Loss), Net (1)

3 unchanged sentences

Other Comprehensive Income (Loss), Net 3 4 ( 9 ) ( 26 )

Comprehensive Loss, Net $ ( 23 ) $ ( 79 )

Comprehensive Income (Loss), Net $ 15 $ ( 47 ) $ ( 8 ) $ ( 126 )

(1) All amounts are net of tax.

4 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) March 31, 2021 December 31, 2020

(in millions, except share data in thousands) June 30, 2021 December 31, 2020

Cash and cash equivalents $ 397 $ 450

35 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2021 2020

7 unchanged sentences

Amortization of debt financing costs 4 3

Loss on extinguishment of debt 2 —

Loss on divestitures and sales of fixed assets, net 1 —

16 unchanged sentences

Payments on debt ( 79 ) ( 28 )

Premium on debt redemption ( 2 ) —

Taxes paid for settlement of stock-based compensation ( 1 ) ( 3 )

5 unchanged sentences

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

(1) Includes $ 10 million and $ 18 million of restricted cash as of March 31, 2021 and 2020, respectively, that were included in Other current assets on their respective Condensed Consolidated Balance Sheets.

(1) Includes $ 6 million and $ 9 million of restricted cash as of June 30, 2021 and 2020, 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 March 31, 2021

Three Months Ended June 30, 2021

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

Shareholders'

Balance at December 31, 2020 $ 2 $ 3,899 $ ( 2,313 ) $ ( 398 ) $ 1,190

Balance at March 31, 2021 $ 2 $ 3,902 $ ( 2,326 ) $ ( 410 ) $ 1,168

Dividends - preferred stock, $ 20 /share

2 unchanged sentences

Comprehensive Income (Loss):

Net Loss — — ( 11 ) — ( 11 )

Net Income (Loss) — — 12 — 12

Other comprehensive income (loss), net — — — 3 3

Total Comprehensive Income (Loss), Net — — 12 3 15

Balance at June 30, 2021 $ 2 $ 3,907 $ ( 2,317 ) $ ( 407 ) $ 1,185

Three Months Ended June 30, 2020

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

Shareholders'

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

Three Months Ended March 31, 2020

Dividends - preferred stock, $ 20 /share

— — ( 3 ) — ( 3 )

Stock incentive plans, net — 5 — — 5

Comprehensive Income (Loss):

— — ( 51 ) — ( 51 )

Other comprehensive income (loss), net — — — 4 4

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

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

Six Months Ended June 30, 2021

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

5 unchanged sentences

Comprehensive Income (Loss):

Net Loss — — ( 49 ) — ( 49 )

Net Income (Loss) — — 1 — 1

Other comprehensive income (loss), net — — — ( 9 ) ( 9 )

Total Comprehensive Income (Loss), Net — — 1 ( 9 ) ( 8 )

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

Balance at June 30, 2021 $ 2 $ 3,907 $ ( 2,317 ) $ ( 407 ) $ 1,185

Six 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

Dividends - preferred stock, $ 40 /share

— — ( 5 ) — ( 5 )

Stock incentive plans, net — 6 — — 6

Comprehensive Income (Loss):

Net Income (Loss) — — ( 100 ) — ( 100 )

Other comprehensive income (loss), net — — — ( 26 ) ( 26 )

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

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

(1) AOCL - Accumulated other comprehensive loss.

13 unchanged sentences

The unaudited interim Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S.

GAAP) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC.

GAAP) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (SEC).

Accordingly, they do not include all of the information and notes required by U.S.

13 unchanged sentences

The Company bases its 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, 2021, the impact of the COVID-19 pandemic and the mitigating impact of the rollout of a vaccine for it continue to unfold.

As a result, many of the Company's estimates and assumptions required increased judgment and carry a higher degree of variability and volatility.

As of June 30, 2021, the impact of the COVID-19 pandemic, the mitigating impact of the rollout of a vaccine for it and emerging cases of new variants of the virus continue to unfold.

As a result, many of the Company's estimates and assumptions continue to require increased judgment and carry a higher degree of variability and volatility.

As events continue to evolve and additional information becomes available, the Company's estimates may change materially in the future.

2 unchanged sentences

The Company's significant accounting policies are described in Note 1–Basis of Presentation and Summary of Significant Accounting Policies in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Summarized below are the accounting pronouncements adopted subsequent to December 31, 2020 that were applicable and material to the Company.

Summarized below are the applicable accounting pronouncements adopted or to be adopted subsequent to December 31, 2020.

New Accounting Standards Adopted

18 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2021 2020 2021 2020

29 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, 2021 December 31, 2020

(in millions) June 30, 2021 December 31, 2020

Contract Assets (Unearned Income)

8 unchanged sentences

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

Revenues of $ 58 million and $ 42 million were recognized during the three months ended March 31, 2021 and 2020, respectively, related to the Company's unearned income at December 31, 2020 and 2019, respectively.

The Company had no material asset impairment charges related to contract assets for the three months ended March 31, 2021 or 2020.

Revenues of $ 30 million and $ 88 million were recognized during the three and six months ended June 30, 2021, respectively, related to the Company's unearned income at December 31, 2020.

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.

The Company had no material asset impairment charges related to contract assets for the three and six months ended June 30, 2021 or 2020.

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, 2021 was approximately $ 1.2 billion.

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2021 was approximately $ 1.3 billion.

The Company expects to recognize approximately 76 % of this revenue over the next two years and the remainder thereafter.

28 unchanged sentences

Adjusted EBITDA $ 52 $ 96 $ 29 $ ( 1 ) $ ( 66 ) $ 110

Six Months Ended

(in millions) Commercial Industries Government Services Transportation Other Unallocated Costs Total

Revenue $ 1,029 $ 656 $ 369 $ — $ — $ 2,054

Segment profit (loss) $ 64 $ 197 $ 38 $ — $ ( 165 ) $ 134

Segment depreciation and amortization $ 52 $ 13 $ 17 $ — $ 27 $ 109

Adjusted EBITDA $ 116 $ 210 $ 55 $ — $ ( 138 ) $ 243

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

Segment profit (loss) $ 67 $ 160 $ 30 $ 3 $ ( 160 ) $ 100

Segment depreciation and amortization $ 55 $ 13 $ 18 $ — $ 27 $ 113

Adjusted EBITDA $ 122 $ 173 $ 48 $ ( 4 ) $ ( 133 ) $ 206

CNDT Q2 2021 Form 10-Q

(in millions) Three Months Ended

June 30, Six Months Ended

Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2021 2020 2021 2020

Loss Before Income Taxes $ ( 9 ) $ ( 51 )

Income (Loss) Before Income Taxes $ 19 $ ( 64 ) $ 10 $ ( 115 )

Reconciling items:

2 unchanged sentences

Interest expense 13 15 26 32

Loss on divestitures and transaction costs 2 4

(Gain) loss on divestitures and transaction costs ( 1 ) 2 1 6

Litigation costs 1 14 2 20

Loss on extinguishment of debt 2 — 2 —

Other (income) expenses, net — ( 1 ) — 1

4 unchanged sentences

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

CNDT Q1 2021 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 operational efficiency improvement initiatives have reduced the Company's real estate footprint across all geographies and segments resulting in lease right-of-use asset impairments and other related costs.

Also included in Restructuring and related costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 7 million and $ 2 million for the three months ended March 31, 2021 and 2020, respectively.

The implementation of the Company's operational efficiency improvement initiatives has reduced the Company's real estate footprint across all geographies and segments resulting in lease right-of-use asset impairments and other related costs.

Also included in Restructuring and related costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $ 8 million and $ 6 million for the three months ended June 30, 2021 and 2020, respectively, and $ 15 million and $ 8 million for the six months ended June 30, 2021 and 2020, respectively.

Management continues to evaluate the Company's businesses, 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.

2 unchanged sentences

Asset impairment costs related to the reduction of our real estate footprint include impairment of operating lease right-of-use (ROU) assets and associated leasehold improvements.

A summary of the Company's restructuring program activity during the three months ended March 31, 2021 and 2020 is as follows:

A summary of the Company's restructuring program activity during the six months ended June 30, 2021 and 2020 is as follows:

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

4 unchanged sentences

Charges against reserve and currency ( 2 ) ( 15 ) ( 4 ) ( 21 )

Accrued Balance at March 31, 2021 $ 1 $ 2 $ — $ 3

Accrued Balance at June 30, 2021 $ 3 $ 1 $ — $ 4

CNDT Q2 2021 Form 10-Q

(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

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

In addition, the Company recorded professional support costs associated with the implementation of certain strategic transformation programs of $ 1 million and $ 2 million for the three months ended March 31, 2021 and 2020, respectively.

CNDT Q1 2021 Form 10-Q

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

Three Months Ended

June 30, Six Months Ended

(in millions) 2021 2020 2021 2020

7 unchanged sentences

Long-term debt was as follows:

(in millions) March 31, 2021 December 31, 2020

Term loan A due 2022 $ 624 $ 654

Term loan B due 2023 814 816

(in millions) June 30, 2021 December 31, 2020

Term loan A due December 2022 $ 610 $ 654

Term loan B due December 2023 812 816

Senior notes due 2024 — 34

5 unchanged sentences

Total Long-term Debt $ 1,340 $ 1,420

As of March 31, 2021, the Company had no outstanding borrowings under its $ 750 million Senior Revolving Credit Facility (Revolver).

As of June 30, 2021, the Company had no outstanding borrowings under its $ 750 million Senior Revolving Credit Facility (Revolver).

However, the Company has utilized $ 7 million of the Revolver to issue letters of credit.

The net Revolver available to be drawn upon as of March 31, 2021 was $ 743 million.

At March 31, 2021 and December 31, 2020, 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, 2021 was $ 743 million.

On May 1, 2021, the Company redeemed all the previously outstanding $ 34 million 10.50% Senior Notes due 2024 and incurred $ 2 million of loss on extinguishment of debt.

At June 30, 2021 and December 31, 2020, the Company was in compliance with all debt covenants related to the borrowings in the table above.

CNDT Q2 2021 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, 2021 and December 31, 2020, the Company had outstanding forward exchange contracts with gross notional values of $ 234 million and $ 180 million, respectively.

At March 31, 2021, approximately 82 % of these contracts mature within three months, 7 % in three to six months, 8 % in six to twelve months and 3 % in greater than twelve months.

At June 30, 2021 and December 31, 2020, the Company had outstanding forward exchange contracts with gross notional values of $ 143 million and $ 180 million, respectively.

At June 30, 2021, approximately 71 % of these contracts mature within three months, 11 % in three to six months, 14 % 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 2021 Form 10-Q

Note 8 – Fair Value of Financial Assets and Liabilities

5 unchanged sentences

Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities.

Unless noted herein, the Company's valuation methodologies for assets and liabilities measured at fair value are described in Note 14 – Fair Value of Financial Assets and Liabilities to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

Summary of Financial Assets and Liabilities Accounted for at Fair Value on a Recurring Basis

1 unchanged sentence

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

(in millions) March 31, 2021 December 31, 2020

(in millions) June 30, 2021 December 31, 2020

Foreign exchange contract - forward $ 1 $ 2

4 unchanged sentences

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(in millions) Carrying

2 unchanged sentences

The fair value amounts for Cash and cash equivalents, Restricted cash, Accounts receivable, net and Short-term debt approximate carrying amounts due to the short-term maturities of these instruments.

The fair value of Long-term debt was estimated based on the current rates offered to the Company for debt of similar maturities (Level 2).

CNDT Q2 2021 Form 10-Q

The fair value of Long-term debt was estimated based on the current rates offered to the Company for debt of similar maturities (Level 2).

Note 9 – Employee Benefit Plans

8 unchanged sentences

employees in November of 2020.

The Company recognized an expense related to its defined contribution plans of $ 5 million and $ 1 million for the three months ended March 31, 2021 and 2020, respectively.

The Company recognized an expense related to its defined contribution plans of $ 5 million and $ 0 million for the three months ended June 30, 2021 and 2020, respectively.

The Company recognized an expense related to its defined contribution plans of $ 10 million and $ 1 million for the six months ended June 30, 2021 and 2020, respectively.

The balance sheet and income statement impacts of any remaining defined benefit plans are immaterial for all periods presented in these Consolidated Condensed Financial Statements.

Note 10 – Accumulated Other Comprehensive Loss (AOCL)

3 unchanged sentences

Other comprehensive income (loss) ( 7 ) ( 1 ) ( 1 ) ( 9 )

Balance at March 31, 2021 $ ( 411 ) $ 2 $ ( 1 ) $ ( 410 )

Balance at June 30, 2021 $ ( 407 ) $ 2 $ ( 2 ) $ ( 407 )

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

1 unchanged sentence

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 )

(1) All amounts are net of tax.

Tax effects were immaterial.

CNDT Q2 2021 Form 10-Q

Note 11 – Contingencies and Litigation

10 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, 2021.

The Company believes it has recorded adequate provisions for any such matters as of June 30, 2021.

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 2021 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 Company's condensed consolidated financial position or liquidity.

As of March 31, 2021, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

As of June 30, 2021, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

Litigation Against the Company

1 unchanged sentence

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.

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 former 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.

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, in excess of currently recorded reserves.

CNDT Q2 2021 Form 10-Q

Skyview Capital LLC and Continuum Global Solutions, LLC v.

8 unchanged sentences

On August 20, 2020, Conduent filed a counterclaim against Skyview seeking the outstanding balance on the notes, the amounts owed for the Jamaica deferred closing, and other transition services agreement and late rent payment obligations.

Conduent denies all of the plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims and will vigorously defend itself against these claims.

Conduent also moved to dismiss Skyview’s claims in 2020.

In May 2021, the court denied the motion and allowed the claims to proceed.

Conduent denies all of the plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims and it intends to defend the litigation vigorously.

CNDT Q1 2021 Form 10-Q

Dennis Nasrawi v.

19 unchanged sentences

CNDT Q2 2021 Form 10-Q

Conduent Business Services, LLC v.

10 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 2021 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, 2021, the Company had $ 610 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $ 95 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, 2021, the Company had $ 620 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $ 95 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 2021 Form 10-Q

Note 12 – Preferred Stock

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data in whole dollars and shares in thousands) 2021 2020 2021 2020

Net loss $ ( 11 ) $ ( 49 )

Net Income (Loss) $ 12 $ ( 51 ) $ 1 $ ( 100 )

Dividend - Preferred Stock ( 3 ) ( 3 ) ( 5 ) ( 5 )

Adjusted Net Loss Available to Common Shareholders $ ( 13 ) $ ( 51 )

Weighted Average Common Shares Outstanding 212,250 211,093

Net Loss per Share:

Adjusted Net Income (Loss) Available to Common Shareholders $ 9 $ ( 54 ) $ ( 4 ) $ ( 105 )

Weighted Average Common Shares Outstanding - Basic 212,450 209,129 212,344 210,261

Common Shares Issuable With Respect To:

Restricted Stock And Performance Units / Shares 7,715 — — —

Weighted Average Common Shares Outstanding - Diluted 220,165 209,129 212,344 210,261

Net Earnings (Loss) per Share:

Basic $ 0.05 $ ( 0.25 ) $ ( 0.02 ) $ ( 0.50 )

Diluted $ 0.04 $ ( 0.25 ) $ ( 0.02 ) $ ( 0.50 )

There were no securities excluded from the computation of diluted earnings per share for being either contingently issuable shares or shares that if included would have been anti-dilutive for the three months ended March 31, 2021 or 2020.

The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands):

Restricted stock and performance shares/units 2,762 16,444 13,783 16,444

Convertible preferred stock 5,393 5,393 5,393 5,393

Total Anti-Dilutive and Contingently Issuable Securities 8,155 21,837 19,176 21,837

CNDT Q2 2021 Form 10-Q

Note 14 – Supplementary Financial Information

The components of Other assets and liabilities were as follows:

(in millions) March 31, 2021 December 31, 2020

The components of Other assets and Other liabilities were as follows:

(in millions) June 30, 2021 December 31, 2020

Other Current Assets

4 unchanged sentences

Current portion of capitalized cloud computing implementation costs, net 8 8

Net receivable from buyers of divested businesses 53 53

Total Other Current Assets $ 267 $ 306

19 unchanged sentences

Total Other Long-term Liabilities $ 113 $ 108

(1) The CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 and the remainder due on December 31, 2022.

(1) The CARES Act allowed for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 and the remainder due on December 31, 2022.

The current portion of this liability is included in Accrued compensation and benefits costs.

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2021 2020 2021 2020

1 unchanged sentence

Purchases from related parties $ 9 $ 6 $ 16 $ 16

The Company's receivable and payable balances with related party entities were not material as of March 31, 2021 and December 31, 2020 .

The Company's receivable and payable balances with related party entities were not material as of June 30, 2021 and December 31, 2020 .

Note 16 – Goodwill

3 unchanged sentences

Foreign currency translation ( 4 ) ( 3 ) ( 2 ) ( 9 )

Balance at March 31, 2021 $ 830 $ 620 $ 63 $ 1,513

Balance at June 30, 2021 $ 833 $ 620 $ 66 $ 1,519

Gross goodwill $ 2,386 $ 1,374 $ 646 $ 4,406

Accumulated impairment ( 1,553 ) ( 754 ) ( 580 ) ( 2,887 )

Balance at March 31, 2021 $ 830 $ 620 $ 63 $ 1,513

In the first quarter of 2021, 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.

Consequently, we determined that it was not necessary to perform an interim impairment test for any of our reporting units.

Balance at June 30, 2021 $ 833 $ 620 $ 66 $ 1,519

In the first and second quarters of 2021, 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, the Company concluded that it is not more likely than not that the fair values of any of its reporting units were less than their carrying values.

Consequently, the Company determined that it was not necessary to perform an interim impairment test for any of its reporting units.

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.

Note 17 – Subsequent Event

On May 1, 2021, the Company redeemed all the outstanding $ 34 million 10.50 % Senior Notes due 2024.

CNDT Q2 2021 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