What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-02 · 151 added, 69 removed, 481 unchanged (31% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data) 2024 2023 2024 2023

23 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

11 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share data in thousands) March 31, 2024 December 31, 2023

(in millions, except share data in thousands) June 30, 2024 December 31, 2023

Cash and cash equivalents $ 300 $ 498

42 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

(in millions) 2024 2023

22 unchanged sentences

Cash Flows from Financing Activities:

Proceeds from revolving credit facility 30 —

Payments on revolving credit facility ( 30 ) —

Payments on debt ( 503 ) ( 20 )

7 unchanged sentences

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

(1) Includes $ 9 million and $ 21 million of restricted cash as of March 31, 2024 and 2023, respectively, that were included in Other current assets on their respective Condensed Consolidated Balance Sheets.

(1) Includes $ 7 million and $ 5 million of restricted cash as of June 30, 2024 and 2023, 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, 2024

Three Months Ended June 30, 2024

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

Non-controlling Interest Shareholders'

Balance at December 31, 2023 $ 2 $ ( 27 ) $ 3,938 $ ( 2,849 ) $ ( 435 ) $ 4 $ 633

Balance at March 31, 2024 $ 2 $ ( 44 ) $ 3,941 $ ( 2,752 ) $ ( 446 ) $ 4 $ 705

Dividends - preferred stock, $ 20 /share

6 unchanged sentences

Total Comprehensive Income (Loss), Net — — — 216 ( 17 ) — 199

Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755

Three Months Ended June 30, 2023

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

Non-controlling Interest Shareholders'

Balance at March 31, 2023 $ 2 $ — $ 3,926 $ ( 2,551 ) $ ( 448 ) $ — $ 929

Three Months Ended March 31, 2023

Dividends - preferred stock, $ 20 /share

— — — ( 3 ) — — ( 3 )

Stock incentive plans, net — — 5 — — — 5

Treasury stock purchases — ( 1 ) — — — — ( 1 )

Comprehensive Income (Loss):

Net Income (Loss) — — — ( 7 ) — — ( 7 )

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

Total Comprehensive Income (Loss), Net — — — ( 7 ) 4 — ( 3 )

Balance at June 30, 2023 $ 2 $ ( 1 ) $ 3,931 $ ( 2,561 ) $ ( 444 ) $ — $ 927

Six Months Ended June 30, 2024

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

9 unchanged sentences

Total Comprehensive Income (Loss), Net — — — 315 ( 28 ) — 287

Balance at March 31, 2023 $ 2 $ — $ 3,926 $ ( 2,551 ) $ ( 448 ) $ — $ 929

Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755

Six Months Ended June 30, 2023

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

Non-controlling Interest Shareholders'

Balance at December 31, 2022 $ 2 $ — $ 3,924 $ ( 2,543 ) $ ( 466 ) $ — $ 917

Dividends - preferred stock, $ 40 /share

— — — ( 5 ) — — ( 5 )

Stock incentive plans, net — — 7 — — — 7

Treasury stock purchases — ( 1 ) — — — — ( 1 )

Comprehensive Income (Loss):

Net Income (Loss) — — — ( 13 ) — — ( 13 )

Other comprehensive income (loss), net — — — — 22 — 22

Total Comprehensive Income (Loss), Net — — — ( 13 ) 22 — 9

Balance at June 30, 2023 $ 2 $ ( 1 ) $ 3,931 $ ( 2,561 ) $ ( 444 ) $ — $ 927

(1) AOCL - Accumulated other comprehensive loss.

24 unchanged sentences

The Company evaluated the impact of the out-of-period adjustment and concluded it was not material to any previously issued interim or annual consolidated financial statements and the adjustment is not material to the year ending December 31, 2023.

The Company has evaluated subsequent events through May 2, 2024, and apart from the matters disclosed in Note 5 – Assets/Liabilities Held for Sale and Divestitures, Note 7 – Debt and Note 16 - Subsequent Event, no material subsequent events were identified.

The Company has evaluated subsequent events through August 7, 2024, and no material subsequent events were identified.

Use of Estimates

27 unchanged sentences

Disaggregation of Revenue

During the second quarter of 2024, revenue for the BenefitWallet Portfolio (as defined in Note 5 – Divestitures and Assets/Liabilities Held for Sale) and the Curbside Management and Public Safety businesses were reclassified to the Divestitures segment from the Commercial and Transportation segments, respectively.

All prior periods presented have been recast to reflect these changes.

The following table provides information about disaggregated revenue by major service offering, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segment.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

10 unchanged sentences

Transit solutions 81 56 157 96

Curbside management solutions 19 19

Public safety solutions 17 14

Commercial vehicles — 2 1 4

Total Transportation 141 139 285 256

Divestitures 17 64 80 126

Total Consolidated Revenue $ 828 $ 915 $ 1,749 $ 1,837

10 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, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Contract Assets (Unearned Income)

8 unchanged sentences

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

Revenues of $ 44 million were recognized during the three months ended March 31, 2024 related to the Company's unearned income at December 31, 2023.

Revenues of $ 29 million were recognized during the three months ended March 31, 2023 related to the Company's unearned income at December 31, 2022.

Revenues of $ 25 million and $ 69 million were recognized during the three and six months ended June 30, 2024, respectively, related to the Company's unearned income at December 31, 2023.

Revenues of $ 13 million and $ 42 million were recognized during the three and six months ended June 30, 2023, respectively, related to the Company's unearned income at December 31, 2022.

CNDT Q2 2024 Form 10-Q

The Company had no material asset impairment charges related to contract assets for the three months ended March 31, 2024 or 2023.

The Company had no material asset impairment charges related to contract assets for the three and six months ended June 30, 2024 or 2023.

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, 2024 was approximately $ 1.5 billion.

Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at June 30, 2024 was approximately $ 1.5 billion.

The Company expects to recognize approximately 65 % of this revenue over the next two years and the remainder thereafter.

2 unchanged sentences

The Company's segments involve the delivery of business process solutions on behalf of its clients to improve cost, performance, and end-user experiences.

As described in Note 5 – Divestitures and Assets/Liabilities Held for Sale, the Company transferred or sold certain businesses including (i) its BenefitWallet Portfolio and (ii) its Curbside Management and Public Safety Solutions businesses to third parties in the first half of 2024.

Accordingly, the results of these disposed businesses, which had previously been reported in the Commercial segment and the Transportation segment, respectively, have been reclassified to the Divestitures segment.

All prior periods presented have been recast to reflect these changes.

The Company's financial performance is based on Segment Profit (Loss) for its three reportable segments (Commercial, Government and Transportation), Divestitures and Unallocated Costs.

7 unchanged sentences

The Transportation segment provides systems, support, and revenue-generating solutions, to government transportation agencies.

The Company delivers mission-critical public safety, mobility and digital payment solutions that streamline operations, increase revenue and reduce congestion while creating safe, seamless travel experiences for consumers while reducing impact on the environment.

The Company delivers mission-critical mobility and digital payment solutions for public transit and road usage charging that streamline operations, increase revenue and reduce congestion while creating safe, seamless travel experiences for consumers while reducing impact on the environment.

Divestitures includes the Company's BenefitWallet Portfolio for which the Company completed the transfer to a third party in the second quarter of 2024 and its Curbside Management and Public Safety Solutions businesses which it sold to a third party in the second quarter of 2024.

Refer to Note 5 – Divestitures and Assets/Liabilities Held for Sale for additional information.

Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to the reportable segments.

CNDT Q2 2024 Form 10-Q

Selected financial information for the Company's reportable segments was as follows:

Three Months Ended

(in millions) Commercial Government Transportation Unallocated Costs Total

(in millions) Commercial Government Transportation Divestitures Unallocated Costs Total

Revenue $ 425 $ 245 $ 141 $ 17 $ — $ 828

2 unchanged sentences

Segment profit (loss) $ 22 $ 67 $ 3 $ 24 $ ( 79 ) $ 37

CNDT Q1 2024 Form 10-Q

Six Months Ended

(in millions) Commercial Government Transportation Divestitures Unallocated Costs Total

Revenue $ 881 $ 503 $ 285 $ 80 $ — $ 1,749

Segment profit (loss) $ 39 $ 80 $ ( 9 ) $ 26 $ ( 143 ) $ ( 7 )

Revenue $ 921 $ 534 $ 256 $ 126 $ — $ 1,837

Segment profit (loss) $ 37 $ 140 $ ( 6 ) $ 45 $ ( 149 ) $ 67

(in millions) Three Months Ended

June 30, Six Months Ended

Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2024 2023 2024 2023

10 unchanged sentences

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

Note 5 – Assets/Liabilities Held for Sale and Divestitures

Note 5 – Divestitures and Assets/Liabilities Held for Sale

The Company entered into various agreements to transfer or sell certain portfolios and businesses in 2023 and 2024.

Each of these transactions is described below.

As applicable, the assets and liabilities held for sale for each transaction are also presented below.

Transfer of BenefitWallet Portfolio

In September 2023, the Company entered into a Custodial Transfer and Asset Purchase Agreement to transfer its BenefitWallet health savings account and medical savings account portfolio (collectively, the "Portfolio") to HealthEquity, Inc.

("HealthEquity") for an aggregate purchase price of $ 425 million (the "Purchase Price"), subject to customary purchase price adjustments.

As of March 31, 2024, there were no asset or liability balances related to the Portfolio that would require disclosure as assets and liabilities held for sale on the Company's Condensed Consolidated Balance Sheet.

The transfer is closing in multiple tranches.

As of December 31, 2023, there were no asset or liability balances related to the BenefitWallet Portfolio that would require disclosure as assets and liabilities held for sale on the Company's Condensed Consolidated Balance Sheet.

CNDT Q2 2024 Form 10-Q

The BenefitWallet transfer closed in multiple tranches.

The first tranche closed on March 7, 2024 with the Company receiving $ 164 million as the pro-rata share of the Purchase Price.

As there were no assets or liabilities associated with the Portfolio, the Company recorded $ 164 million of pre-tax gain on this first tranche.

During the three months ended March 31, 2024 and 2023, the Portfolio related to this first tranche generated revenue of $ 8 million and $ 10 million, respectively.

The pre-tax profit, related to this first tranche, excluding unallocated costs, was $ 6 million and $ 9 million for the same periods, respectively.

On April 11, 2024, the second tranche closed and the Company received $ 85 million as the pro-rata share of the Purchase Price.

The Company anticipates the third and final tranche will be completed in the second quarter of 2024.

During the three months ended March 31, 2024 and 2023, the Portfolio related to the second and third tranches generated revenue of $ 18 million and $ 19 million for the same periods, respectively.

The pre-tax profit, related to these two tranches, excluding unallocated costs, was $ 14 million and $ 16 million for the three months ended March 31, 2024 and 2023, respectively.

The third and final tranche closed on May 14, 2024 and the Company received $ 176 million comprising the balance of the aggregate purchase price of $ 425 million.

The Company recorded a gain on the transfer of $ 425 million less costs to sell of $ 13 million, which is recorded in Gain (loss) on divestitures and transaction costs, net.

The Company recorded $ 101 million of income tax expense in connection with the BenefitWallet transfer.

The BenefitWallet Portfolio generated revenue and pre-tax profit, excluding unallocated costs as follows:

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

Revenue $ 3 $ 30 $ 30 $ 59

Pre-tax profit, excluding unallocated costs 2 23 20 44

Divestiture of Curbside Management and Public Safety Solutions Businesses

In December 2023, the Company signed a definitive agreement to sell its Curbside Management and Public Safety Solutions businesses for $ 230 million (plus the assumption of certain indebtedness), subject to customary purchase price adjustments.

The assets and liabilities of these businesses (collectively referred to as the "Disposal Group") have been reclassified as held for sale and measured at the lower of carrying value or fair value less costs to sell.

The Disposal Group is currently reported in the Transportation segment.

The Disposal Group generated revenue of $ 36 million and $ 33 million for the three months ended March 31, 2024 and 2023, respectively.

The pre-tax profit of the Disposal Group, excluding unallocated costs, was $ 8 million and $ 5 million for the three months ended March 31, 2024 and 2023, respectively.

On April 30, 2024, Conduent completed the sale.

See Note 16 - Subsequent Event for additional information regarding the sale.

The following is a summary of the major categories of assets and liabilities that have been reclassified as held for sale:

In December 2023, the Company signed a definitive agreement to sell its Curbside Management and Public Safety Solutions businesses to Modaxo, a division of Constellation Software Inc., for $ 230 million (plus the assumption of certain indebtedness), subject to customary purchase price adjustments.

The assets and liabilities of these businesses (collectively referred to as the "Curbside Disposal Group") were reclassified as held for sale and measured at the lower of carrying value or fair value less costs to sell.

On April 30, 2024, Conduent completed the sale of this business.

The Company received $ 174 million of cash consideration, a $ 50 million non-interest bearing note payable to the Company on April 30, 2025, and other amounts receivable of $ 56 million related to:

(i) the reimbursement for payments made by the Company related to finance lease liabilities and related costs;

(ii) the reimbursement for the purchase of certain equipment made by the Company on the buyer's behalf;

and (iii) customary closing date purchase price holdbacks related to net asset targets, all of which are payable in the fourth quarter of 2024.

The sale is subject to customary purchase price adjustments expected to be settled in the fourth quarter of 2024.

In the second quarter of 2024, the Company recorded a gain on the sale of $ 108 million less costs to sell of $ 4 million, which is recorded in Gain (loss) on divestitures and transaction costs.

The Company recorded $ 30 million of income tax expense in connection with the divestiture.

The Curbside Disposal Group generated revenue and pre-tax profit, excluding unallocated costs as follows:

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

Revenue $ 14 $ 34 $ 50 $ 67

Pre-tax profit, excluding unallocated costs 3 1 6 1

Divestiture of Casualty Claims Solutions Business

On May 3, 2024, the Company entered into a definitive agreement to sell the Company’s Casualty Claims Solutions business to MedRisk.

The sale is for $ 240 million in cash and is subject to certain purchase price adjustments.

The consummation of the transaction is subject to regulatory approval and the satisfaction or waiver of customary closing conditions and is expected to close during the third quarter of 2024.

The assets and liabilities of these businesses (collectively referred to as the "Casualty Disposal Group") have been reclassified as held for sale and measured at the lower of carrying value or fair value less costs to sell.

The Casualty Disposal Group generated revenue and pre-tax profit, excluding unallocated costs as follows:

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

Revenue $ 37 $ 36 $ 74 $ 74

Pre-tax profit, excluding unallocated costs 7 7 14 13

CNDT Q2 2024 Form 10-Q

(in millions) March 31, 2024 December 31, 2023

Assets/Liabilities Held for Sale

As noted above, the BenefitWallet Portfolio did not have any associated assets and liabilities to disclose as held for sale in the Company's Condensed Consolidated Balance Sheet at December 31, 2023.

The divestiture of the Company's Curbside Management and Public Safety Solutions businesses was announced in December 2023 and completed in the second quarter of 2024.

Accordingly, the assets and liabilities of these businesses were disclosed as held for sale as of December 31, 2023 and removed as of June 30, 2024.

The assets and liabilities of the Casualty Disposal Group are disclosed as held for sale as of June 30, 2024.

The following is a summary of the major categories of assets and liabilities that have been reclassified as held for sale for each of these transactions:

Casualty Disposal Group Curbside Disposal Group

(in millions) June 30, 2024 December 31, 2023

Accounts Receivable, net $ 27 $ 49

2 unchanged sentences

Operating lease right-of-use assets — 6

Intangible assets, net 14 —

Goodwill — 35

12 unchanged sentences

The Company engages in a series of restructuring programs related to exiting certain activities, downsizing its employee base, 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 has reduced the Company's real estate footprint across all geographies and segments resulting in lease right-of-use asset ("ROU") 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, and bringing certain technology functions in-house, which totaled $ 2 million and $ 6 million for the three months ended March 31, 2024 and 2023, respectively.

Also included in Restructuring and related costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, and bringing certain technology functions in-house, which totaled $ 2 million and $ 2 million for the three months ended June 30, 2024 and 2023, respectively, and $ 3 million and $ 4 million for the six months ended June 30, 2024 and 2023, 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 the Company's real estate footprint include impairment of operating lease ROU assets and associated leasehold improvements.

A summary of the Company's restructuring program activity during the three months ended March 31, 2024 and 2023 is as follows:

CNDT Q2 2024 Form 10-Q

A summary of the Company's restructuring program activity during the six months ended June 30, 2024 and 2023 is as follows:

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

4 unchanged sentences

Charges against reserve and currency ( 11 ) ( 7 ) ( 2 ) ( 20 )

Accrued Balance at March 31, 2024 $ 6 $ 2 $ — $ 8

CNDT Q1 2024 Form 10-Q

Accrued Balance at June 30, 2024 $ 5 $ 2 $ — $ 7

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

4 unchanged sentences

Charges against reserve and currency ( 14 ) ( 13 ) ( 6 ) ( 33 )

Accrued Balance at March 31, 2023 $ 22 $ 4 $ — $ 26

Accrued Balance at June 30, 2023 $ 19 $ — $ — $ 19

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

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

(in millions) 2024 2023 2024 2023

2 unchanged sentences

Transportation — — 1 —

Divestitures — — — —

Unallocated Costs (1)

3 unchanged sentences

Long-term debt was as follows:

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Term loan A due 2026 $ 232 $ 238

7 unchanged sentences

Total Long-term Debt $ 789 $ 1,248

As of March 31, 2024, the Company had no outstanding borrowings under its revolving credit facility (the "Revolver").

However, the Company utilized $ 2 million of the Revolver to issue letters of credit as of March 31, 2024.

The net Revolver available to be drawn upon as of March 31, 2024 was $ 548 million.

In March 2024, the Company utilized the proceeds from the closing of the first tranche of the BenefitWallet Transfer to voluntarily prepay $ 164 million of principal of the Senior Secured Term Loan B due 2028 ("Term Loan B") and wrote-off related debt issuance costs of $ 2 million which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss) for the three months ended March 31, 2024.

In April 2024, the Company voluntarily prepaid $ 95 million of principal of the Term Loan B and wrote-off related debt issuance costs of $ 1 million.

At March 31, 2024, the Company was in compliance with all debt covenants related to the borrowings in the table above.

As of June 30, 2024, the Company had no outstanding borrowings under its revolving credit facility (the "Revolver").

Additionally, the Company utilized $ 3 million of the Revolver to issue letters of credit as of June 30, 2024.

The net Revolver available to be drawn upon as of June 30, 2024 was $ 547 million.

CNDT Q2 2024 Form 10-Q

In April and May 2024, the Company voluntarily prepaid $ 300 million of principal of the Term Loan B and wrote-off related debt issuance costs of $ 3 million for the three months ended June 30, 2024, which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss).

At June 30, 2024, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Note 8 – 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, 2024 and December 31, 2023, the Company had outstanding forward exchange contracts with gross notional values of $ 135 million and $ 148 million, respectively.

At March 31, 2024, approximately 68 % of these contracts mature within three months, 12 % in three to six months, 15 % in six to twelve months and 5 % in greater than twelve months.

At June 30, 2024 and December 31, 2023, the Company had outstanding forward exchange contracts with gross notional values of $ 189 million and $ 148 million, respectively.

At June 30, 2024, approximately 77 % of these contracts mature within three months, 9 % in three to six months, 11 % in six to twelve months and 3 % 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.

7 unchanged sentences

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

CNDT Q2 2024 Form 10-Q

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, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Foreign exchange contracts - forward $ — $ 1

4 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

(in millions) Carrying

3 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.

CNDT Q1 2024 Form 10-Q

The fair value of Long-term debt was estimated using quoted market prices for identical or similar instruments (Level 2 inputs).

4 unchanged sentences

The Company, at its discretion, matches a portion of employee contributions.

The Company recognized an expense related to its defined contribution plans of $ 4 million and $ 3 million for the three months ended March 31, 2024 and 2023, respectively.

The Company recognized an expense related to its defined contribution plans of $ 2 million and $ 3 million for the three months ended June 30, 2024 and 2023, respectively, and $ 6 million and $ 6 million for the six months ended June 30, 2024 and 2023, respectively.

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

CNDT Q2 2024 Form 10-Q

Note 11 – Accumulated Other Comprehensive Loss ("AOCL")

3 unchanged sentences

Other comprehensive income (loss) ( 27 ) ( 1 ) — ( 28 )

Balance at March 31, 2024 $ ( 452 ) $ 2 $ 4 $ ( 446 )

Balance at June 30, 2024 $ ( 468 ) $ 1 $ 4 $ ( 463 )

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

1 unchanged sentence

Other comprehensive income (loss) 21 1 — 22

Balance at March 31, 2023 $ ( 455 ) $ 2 $ 5 $ ( 448 )

Balance at June 30, 2023 $ ( 451 ) $ 2 $ 5 $ ( 444 )

(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, 2024.

The Company believes it has recorded adequate provisions for any such matters as of June 30, 2024.

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 more than 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 2024 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 consolidated financial position or liquidity.

As of March 31, 2024, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

As of June 30, 2024, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees.

CNDT Q2 2024 Form 10-Q

Litigation Against the Company

19 unchanged sentences

Certain contracts, primarily in the Company's Government 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, 2024, the Company had $ 636 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients and $ 180 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, 2024, the Company had $ 620 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients, and $ 166 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 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 to allow it to respond to future requests for proposals that require such credit support.

Note 13 – Preferred Stock

Note 13 – Common Stock and Preferred Stock

Icahn Share Repurchase

On June 8, 2024, the Company entered into a purchase agreement (the "Purchase Agreement") with Carl C.

Icahn and certain of his affiliates ("Icahn Parties") pursuant to which the Company agreed to purchase an aggregate of approximately 38 million shares of the Company’s common stock, at a price of $ 3.47 per share, the closing price on June 7, 2024, the last full trading day prior to the execution of the Purchase Agreement, for an aggregate purchase price of approximately $ 132 million.

The purchase was completed and settled on June 10, 2024 and was funded through a combination of cash on hand and a drawdown under the Company’s Revolver.

Series A Preferred Stock

7 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in millions, except per share data in whole dollars and shares in thousands) 2024 2023 2024 2023

22 unchanged sentences

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

(in millions) March 31, 2024 December 31, 2023

(in millions) June 30, 2024 December 31, 2023

Other Current Assets

3 unchanged sentences

Restricted cash 7 21

Net receivable from buyer of Curbside Management and Public Safety Solutions business 104 —

Other 104 103

19 unchanged sentences

Total Other Long-term Liabilities $ 83 $ 84

Note 16 – Subsequent Event

Certain subsequent event matters have been disclosed in Note 5 – Assets/Liabilities Held for Sale and Divestitures and Note 7 – Debt.

On April 30, 2024, Conduent completed the sale of its Curbside Management and Public Safety Solutions Businesses.

The Company received $ 174 million of cash consideration, a $ 50 million note receivable payable in one year, and other amounts receivable of $ 50 million (primarily related to the reimbursement for finance lease liability payoffs and the purchase of certain equipment on the buyer's behalf), which are payable in the fourth quarter of 2024.

The sale is subject to customary purchase price adjustments expected to be settled in the fourth quarter of 2024.

CNDT Q2 2024 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