CONDUENT Inc 10-Q

ITEM 1 — FINANCIAL STATEMENTS (UNAUDITED) CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share data) 2024 2023 2024 2023 Revenue $ 807 $ 932 $ 2,556 $ 2,769 Operating Costs and Expenses Cost of services (excluding depreciation and amortization) 656 724 2,068 2,148 Selling, general and administrative (excluding depreciation and amortization) 115 115 346 344 Research and development (excluding depreciation and amortization) 1 2 4 5 Depreciation and amortization 44 81 157 199 Restructuring and related costs 4 7 21 49 Interest expense 16 28 62 82 Goodwill impairment — 287 — 287 (Gain) loss on divestitures and transaction costs, net ( 188 ) 3 ( 696 ) 8 Litigation settlements (recoveries), net 1 — 6 ( 22 ) Loss on extinguishment of debt 1 — 6 — Other (income) expenses, net ( 2 ) ( 2 ) ( 4 ) ( 3 ) Total Operating Costs and Expenses 648 1,245 1,970 3,097 Income (Loss) Before Income Taxes 159 ( 313 ) 586 ( 328 ) Income tax expense (benefit) 36 ( 24 ) 148 ( 26 ) Net Income (Loss) $ 123 $ ( 289 ) $ 438 $ ( 302 ) Net Income (Loss) per Share: Basic $ 0.75 $ ( 1.34 ) $ 2.28 $ ( 1.42 ) Diluted $ 0.72 $ ( 1.34 ) $ 2.22 $ ( 1.42 ) The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q3 2024 Form 10-Q 3 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Net Income (Loss) $ 123 $ ( 289 ) $ 438 $ ( 302 ) Other Comprehensive Income (Loss), Net (1) Currency translation adjustments, net 13 ( 18 ) ( 14 ) 3 Unrecognized gains (losses), net 1 ( 1 ) — — Other Comprehensive Income (Loss), Net 14 ( 19 ) ( 14 ) 3 Comprehensive Income (Loss), Net $ 137 $ ( 308 ) $ 424 $ ( 299 ) __________ (1) All amounts are net of tax. Tax effects were immaterial. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q3 2024 Form 10-Q 4 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except share data in thousands) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 393 $ 498 Accounts receivable, net 528 559 Assets held for sale — 180 Contract assets 152 178 Other current assets 372 240 Total current assets 1,445 1,655 Land, buildings and equipment, net 174 197 Operating lease right-of-use assets 174 191 Intangible assets, net 15 32 Goodwill 642 651 Other long-term assets 391 436 Total Assets $ 2,841 $ 3,162 Liabilities and Equity Current portion of long-term debt $ 26 $ 34 Accounts payable 133 174 Accrued compensation and benefits costs 193 183 Unearned income 115 91 Liabilities held for sale — 58 Other current liabilities 360 328 Total current liabilities 827 868 Long-term debt 718 1,248 Deferred taxes 54 30 Operating lease liabilities 141 157 Other long-term liabilities 78 84 Total Liabilities 1,818 2,387 Contingencies (See Note 12) Series A convertible preferred stock 142 142 Common stock 2 2 Treasury stock, at cost ( 210 ) ( 27 ) Additional paid-in capital 3,952 3,938 Retained earnings (deficit) ( 2,418 ) ( 2,849 ) Accumulated other comprehensive loss ( 449 ) ( 435 ) Total Conduent Inc. Equity 877 629 Noncontrolling Interest 4 4 Total Equity 881 633 Total Liabilities and Equity $ 2,841 $ 3,162 Shares of common stock issued and outstanding 159,890 211,509 Shares of series A convertible preferred stock issued and outstanding 120 120 Shares of common stock held in treasury 60,868 8,841 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q3 2024 Form 10-Q 5 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Nine Months Ended September 30, (in millions) 2024 2023 Cash Flows from Operating Activities: Net income (loss) $ 438 $ ( 302 ) Adjustments required to reconcile net income (loss) to cash flows from operating activities: Depreciation and amortization 157 199 Contract inducement amortization 2 3 Deferred income taxes 23 ( 23 ) Goodwill impairment — 287 Amortization of debt financing costs 3 3 Loss on extinguishment of debt 6 — (Gain) loss on divestitures and sales of fixed assets, net ( 727 ) — Stock-based compensation 14 13 Changes in operating assets and liabilities: Accounts receivable 6 19 Other current and long-term assets ( 86 ) ( 115 ) Accounts payable and accrued compensation and benefits costs ( 17 ) ( 55 ) Other current and long-term liabilities ( 12 ) ( 36 ) Net change in income tax assets and liabilities 102 ( 26 ) Net cash provided by (used in) operating activities ( 91 ) ( 33 ) Cash Flows from Investing Activities: Cost of additions to land, buildings and equipment ( 39 ) ( 33 ) Cost of additions to internal use software ( 23 ) ( 31 ) Proceeds from divestitures 823 — Net cash provided by (used in) investing activities 761 ( 64 ) Cash Flows from Financing Activities: Proceeds from revolving credit facility 80 — Payments on revolving credit facility ( 80 ) — Payments on debt ( 587 ) ( 30 ) Treasury stock purchases ( 182 ) ( 7 ) Taxes paid for settlement of stock-based compensation ( 5 ) ( 7 ) Dividends paid on preferred stock ( 7 ) ( 7 ) Contribution from noncontrolling interest — 3 Net cash provided by (used in) financing activities ( 781 ) ( 48 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 4 ) 2 Increase (decrease) in cash, cash equivalents and restricted cash ( 115 ) ( 143 ) Cash, Cash Equivalents and Restricted Cash at Beginning of Period 519 598 Cash, Cash Equivalents and Restricted Cash at End of period (1) $ 404 $ 455 ___________ (1) Includes $ 11 million and $ 4 million of restricted cash as of September 30, 2024 and 2023, respectively, that were included in Other current assets on the respective Condensed Consolidated Balance Sheets. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q3 2024 Form 10-Q 6 Table of Contents CONDUENT INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) Three Months Ended September 30, 2024 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at June 30, 2024 $ 2 $ ( 196 ) $ 3,947 $ ( 2,539 ) $ ( 463 ) $ 4 $ 755 Dividends - preferred stock, $ 20 /share — — — ( 2 ) — — ( 2 ) Stock incentive plans, net — — 5 — — — 5 Treasury stock purchases — ( 14 ) — — — ( 14 ) Contribution from noncontrolling interest — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — 123 — — 123 Other comprehensive income (loss), net — — — — 14 — 14 Total Comprehensive Income (Loss), Net — — — 123 14 — 137 Balance at September 30, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,418 ) $ ( 449 ) $ 4 $ 881 Three Months Ended September 30, 2023 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at June 30, 2023 $ 2 $ ( 1 ) $ 3,931 $ ( 2,561 ) $ ( 444 ) $ — $ 927 Dividends - preferred stock, $ 20 /share — — — ( 2 ) — — ( 2 ) Stock incentive plans, net — — 6 — — — 6 Treasury stock purchases — ( 6 ) — — — — ( 6 ) Contribution from noncontrolling interest — — — — — 3 3 Comprehensive Income (Loss): Net Income (Loss) — — — ( 289 ) — — ( 289 ) Other comprehensive income (loss), net — — — — ( 19 ) — ( 19 ) Total Comprehensive Income (Loss), Net — — — ( 289 ) ( 19 ) — ( 308 ) Balance at September 30, 2023 $ 2 $ ( 7 ) $ 3,937 $ ( 2,852 ) $ ( 463 ) $ 3 $ 620 Nine Months Ended September 30, 2024 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at December 31, 2023 $ 2 $ ( 27 ) $ 3,938 $ ( 2,849 ) $ ( 435 ) $ 4 $ 633 Dividends - preferred stock, $ 60 /share — — — ( 7 ) — — ( 7 ) Stock incentive plans, net — — 14 — — — 14 Treasury stock purchases — ( 183 ) — — — — ( 183 ) Contribution from noncontrolling interest — — — — — — — Comprehensive Income (Loss): Net Income (Loss) — — — 438 — — 438 Other comprehensive income (loss), net — — — — ( 14 ) — ( 14 ) Total Comprehensive Income (Loss), Net — — — 438 ( 14 ) — 424 Balance at September 30, 2024 $ 2 $ ( 210 ) $ 3,952 $ ( 2,418 ) $ ( 449 ) $ 4 $ 881 Nine Months Ended September 30, 2023 (in millions) Common Stock Treasury Stock Additional Paid-in Capital Retained Earnings (Deficit) AOCL (1) Non-controlling Interest Shareholders' Equity Balance at December 31, 2022 $ 2 $ — $ 3,924 $ ( 2,543 ) $ ( 466 ) $ — $ 917 Dividends - preferred stock, $ 60 /share — — — ( 7 ) — — ( 7 ) Stock incentive plans, net — — 13 — — — 13 Treasury stock purchases — ( 7 ) — — — — ( 7 ) Contribution from noncontrolling interest — — — — — 3 3 Comprehensive Income (Loss): Net Income (Loss) — — — ( 302 ) — — ( 302 ) Other comprehensive income (loss), net — — — — 3 — 3 Total Comprehensive Income (Loss), Net — — — ( 302 ) 3 — ( 299 ) Balance at September 30, 2023 $ 2 $ ( 7 ) $ 3,937 $ ( 2,852 ) $ ( 463 ) $ 3 $ 620 ___________ (1) AOCL - Accumulated other comprehensive loss. Refer to Note 11 – Accumulated Other Comprehensive Loss for the components of AOCL. The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. CNDT Q3 2024 Form 10-Q 7 Table of Contents Note 1 – Basis of Presentation References herein to “we,” “us,” “our,” the “Company” and “Conduent” refer to Conduent Incorporated and its consolidated subsidiaries unless the context suggests otherwise. Description of Business Conduent Incorporated is a New York corporation, organized in 2016. Conduent delivers digital business solutions and services spanning the commercial, government and transportation spectrum – creating valuable outcomes for its clients and the millions of people who count on them. The Company leverages cloud computing, artificial intelligence, machine learning, automation and advanced analytics to deliver mission-critical solutions. Through a dedicated global team of approximately 55,000 associates, process expertise and advanced technologies, Conduent’s solutions and services digitally transform its clients’ operations to enhance customer experiences, improve performance, increase efficiencies and reduce costs. Basis of Presentation 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 Securities and Exchange Commission (the "SEC"). Accordingly, they do not include all the information and notes required by U.S. GAAP for complete financial statements. The year-end Condensed Consolidated Balance Sheet was derived from the audited Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023. Intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for a fair statement of the financial position, results of operations and cash flows have been made. These adjustments consist of normal recurring items. The interim results of operations are not necessarily indicative of the results of the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. In the first quarter of 2023, the Company identified an error and recorded an out-of-period adjustment to correct the recognition of revenue on a Government segment contract that originated in 2020 and impacted all quarterly periods through December 31, 2022. This adjustment resulted in a reduction to revenue and income (loss) before income taxes of $ 7 million and a corresponding decrease to accounts receivable of $ 1 million and an increase to other current liabilities of $ 6 million in the first quarter of 2023. 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 was not material to the year ending December 31, 2023. The Company has evaluated subsequent events through November 6, 2024, and no material subsequent events were identified. Use of Estimates Preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, the Company evaluates its estimates, including those related to fair values of financial instruments, goodwill and intangible assets, income taxes and contingent liabilities, among others. 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. Summary of Significant Accounting Policies 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, 2023. During 2024, there have been no changes to the Company's significant accounting policies as described therein. CNDT Q3 2024 Form 10-Q 8 Table of Contents Note 2 – Recent Accounting Pronouncements New Accounting Standards Adopted The Company has not adopted any new accounting standards in 2024 that had a material impact on its Consolidated Financial Statements. New Accounting Standards To Be Adopted Segment Reporting: In November 2023, the Financial Accounting Standards Board ("FASB") issued final guidance that expands reportable segment disclosures, particularly incremental segment expense disclosures. This guidance is effective for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is not early adopting this guidance. The Company has gathered the data required to be disclosed upon adoption. As the guidance is disclosure-related, adoption will not have any impact on the Company's Condensed Consolidated Financial Statements. Income Taxes: In December 2023, the FASB issued final guidance designed to improve income tax disclosures, particularly disclosures around business entities' income tax rate reconciliation and income taxes paid. The guidance requires consistent categories and greater disaggregation of information in the reconciliation of an entity's statutory tax rate to its effective tax rate and information about income taxes paid disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 15, 2024. The Company is not early adopting this guidance. The Company is currently in the process of gathering the data required to be disclosed upon adoption. As the guidance is disclosure-related, adoption will not have any impact on the Company's Condensed Consolidated Financial Statements. Disaggregation of Income Statement Expenses: In November 2024, the FASB issued final guidance designed to enhance financial reporting by requiring public business entities to disclose additional details regarding specific expense categories in the notes to the financial statements for both interim and annual periods. The new guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is not early adopting this guidance. The Company is currently evaluating the impact this guidance will have on its disclosures. Note 3 – Revenue Disaggregation of Revenue During the second quarter of 2024, revenue from the BenefitWallet Portfolio and the Curbside Management and Public Safety businesses were reclassified to the Divestitures segment from the Commercial and Transportation segments, respectively. In addition, during the third quarter of 2024, revenue from the Casualty Claims Solutions business was reclassified to the Divestitures segment from the Commercial segment. 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. Refer to Note 4 – Segment Reporting for additional information on the Company's reportable segments and Note 5 – Divestitures and Assets/Liabilities Held for Sale for additional information on the Company's divestitures. CNDT Q3 2024 Form 10-Q 9 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Commercial: Customer experience management $ 126 $ 144 $ 405 $ 463 Business operations solutions 131 126 400 388 Healthcare claims and administration solutions 53 49 162 155 Human capital solutions 75 78 225 239 Total Commercial 385 397 1,192 1,245 Government: Government healthcare solutions 137 159 427 453 Government services solutions 118 131 331 371 Total Government 255 290 758 824 Transportation: Road usage charging & management solutions 58 81 185 237 Transit solutions 83 61 240 157 Commercial vehicles — 2 1 6 Total Transportation 141 144 426 400 Divestitures 26 101 180 300 Total Consolidated Revenue $ 807 $ 932 $ 2,556 $ 2,769 Timing of Revenue Recognition: Point in time $ 24 $ 25 $ 80 $ 76 Over time 783 907 2,476 2,693 Total Revenue $ 807 $ 932 $ 2,556 $ 2,769 Contract Balances The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are the Company’s rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Contract assets are transferred to Accounts receivable, net when the rights to consideration become unconditional. Unearned income includes payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract. The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) September 30, 2024 December 31, 2023 Contract Assets (Liabilities) Current contract assets $ 152 $ 178 Long-term contract assets (1) 4 12 Current unearned income ( 115 ) ( 91 ) Long-term unearned income (2) ( 53 ) ( 55 ) Net Contract Assets (Liabilities) $ ( 12 ) $ 44 Accounts receivable, net $ 528 $ 559 __________ (1) Presented in Other long-term assets in the Condensed Consolidated Balance Sheets. (2) Presented in Other long-term liabilities in the Condensed Consolidated Balance Sheets. Revenues of $ 12 million and $ 81 million were recognized during the three and nine months ended September 30, 2024, respectively, related to the Company's unearned income at December 31, 2023. Revenues of $ 8 million and $ 50 million were recognized during the three and nine months ended September 30, 2023, respectively, related to the Company's unearned income at December 31, 2022. CNDT Q3 2024 Form 10-Q 10 Table of Contents The Company had no material asset impairment charges related to contract assets for the three and nine months ended September 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 September 30, 2024 was approximately $ 1.5 billion. The Company expects to recognize approximately 70 % of this revenue over the next two years and the remainder thereafter. Note 4 – Segment Reporting The Company's reportable segments correspond to how it organizes and manages the business, as defined by the Company's Chief Executive Officer, who is also the Company's Chief Operating Decision Maker (the "CODM"). 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 to third parties in 2024 including (i) the BenefitWallet Portfolio, (ii) the Curbside Management and Public Safety Solutions businesses, and (iii) the Casualty Claims Solutions business. Accordingly, the results of these divested businesses, previously reported within the Commercial and Transportation segments, 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. Additionally, the Company's CODM does not evaluate operating segments using discrete asset information as a significant portion of the assets is managed at the total Company level. Commercial: The Commercial segment provides business process services and customized solutions and services to clients in a variety of industries. Across the Commercial segment, the Company operates on its clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enhance performance for the Company's clients and deliver better experiences for their consumers and employees. Government: The Government segment provides government-centric business process services to U.S. federal, state and local government agencies and foreign governments for public assistance, healthcare programs and administration, transaction processing and payment services. The solutions in this segment help governments provide constituents access to and delivery of benefits, respond to changing rules for eligibility and keep pace with increasing citizen expectations. Transportation: The Transportation segment provides systems, support, and revenue-generating solutions to government transportation agencies. 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, the transfer of which was completed in the second quarter of 2024, its Curbside Management and Public Safety Solutions businesses which it sold in the second quarter of 2024, and its Casualty Claims business, which it sold in the third 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 Q3 2024 Form 10-Q 11 Table of Contents Selected financial information for the Company's segments was as follows: Three Months Ended September 30, (in millions) Commercial Government Transportation Divestitures Unallocated Costs Total 2024 Revenue $ 385 $ 255 $ 141 $ 26 $ — $ 807 Segment profit (loss) $ 15 $ 50 $ ( 6 ) $ 3 $ ( 70 ) $ ( 8 ) 2023 Revenue $ 397 $ 290 $ 144 $ 101 $ — $ 932 Segment profit (loss) $ ( 19 ) $ 84 $ ( 5 ) $ 26 $ ( 75 ) $ 11 Nine Months Ended September 30, (in millions) Commercial Government Transportation Divestitures Unallocated Costs Total 2024 Revenue $ 1,192 $ 758 $ 426 $ 180 $ — $ 2,556 Segment profit (loss) $ 48 $ 130 $ ( 15 ) $ 35 $ ( 213 ) $ ( 15 ) 2023 Revenue $ 1,245 $ 824 $ 400 $ 300 $ — $ 2,769 Segment profit (loss) $ 13 $ 224 $ ( 11 ) $ 76 $ ( 224 ) $ 78 (in millions) Three Months Ended September 30, Nine Months Ended September 30, Segment Profit (Loss) Reconciliation to Income (Loss) Before Income Taxes 2024 2023 2024 2023 Income (Loss) Before Income Taxes $ 159 $ ( 313 ) $ 586 $ ( 328 ) Reconciling items: Amortization of acquired intangible assets 1 1 4 5 Restructuring and related costs 4 7 21 49 Interest expense 16 28 62 82 Goodwill impairment — 287 — 287 (Gain) loss on divestitures and transaction costs, net ( 188 ) 3 ( 696 ) 8 Litigation settlements (recoveries), net 1 — 6 ( 22 ) Loss on extinguishment of debt 1 — 6 — Other (income) expenses, net ( 2 ) ( 2 ) ( 4 ) ( 3 ) Segment Profit (Loss) $ ( 8 ) $ 11 $ ( 15 ) $ 78 Refer to Note 3 – Revenue for additional information on disaggregated revenues of the reportable segments. 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 "BenefitWallet Portfolio") to HealthEquity, Inc. ("HealthEquity") for an aggregate purchase price of $ 425 million (the "Purchase Price"), subject to customary purchase price adjustments. 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 Q3 2024 Form 10-Q 12 Table of Contents 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. On April 11, 2024, the second tranche closed and the Company received $ 85 million as the pro-rata share of the Purchase Price. 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 as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Revenue $ — $ 30 $ 30 $ 89 Pre-tax profit — 22 20 67 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 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 due 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 as follows: Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Revenue $ — $ 34 $ 50 $ 101 Pre-tax profit — 2 6 3 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 (collectively referred to as the "Casualty Disposal Group") to MedRisk. On September 1, 2024, the sale was completed and MedRisk paid Conduent $ 224 million of cash consideration, subject to certain post-closing adjustments. These adjustments are expected to be finalized in the first quarter of 2025 and are not expected to be material. In the third quarter of 2024, the Company recorded a gain on the sale of $ 195 million less costs to sell of $ 7 million, which is recorded in Gain (loss) on divestitures and transaction costs. Additionally, the Company recorded $ 35 million of income tax expense related to the divestiture. The Casualty Disposal Group generated revenue and pre-tax profit as follows: CNDT Q3 2024 Form 10-Q 13 Table of Contents Three Months Ended September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Revenue $ 26 $ 38 $ 100 $ 111 Pre-tax profit 3 2 6 5 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 Curbside Disposal Group 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. In the second quarter of 2024, the assets and liabilities of the Casualty Disposal Group were disclosed as held for sale as of June 30, 2024. Since the sale of the Casualty Disposal Group was completed during the third quarter of 2024, no associated assets or liabilities are reported as held for sale as of September 30, 2024. The following is a summary of the major categories of assets and liabilities that have been reclassified as held for sale for the Curbside Disposal Group: (in millions) December 31, 2023 Accounts Receivable, net $ 49 Other current assets 3 Land, building and equipment, net 52 Operating lease right-of-use assets 6 Intangible assets, net — Goodwill 35 Other long-term assets 35 Total Assets held for sale $ 180 Current portion of long-term debt $ 5 Accounts payable 11 Accrued compensation and benefits costs 2 Unearned income 4 Other current liabilities 9 Long-term debt 19 Operating lease liabilities 4 Other long-term liabilities 4 Total Liabilities held for sale $ 58 Note 6 – Restructuring Programs and Related Costs 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 ("ROU") 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 and bringing certain technology functions in-house, which totaled $ 1 million and $ 3 million for the three months ended September 30, 2024 and 2023, respectively, and $ 4 million and $ 7 million for the nine months ended September 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. CNDT Q3 2024 Form 10-Q 14 Table of Contents Costs associated with restructuring, including employee severance and lease termination costs, are generally recognized when it has been determined that a liability has been incurred, which is generally upon communication to the affected employees or exit from the leased facility. In those geographies where the Company has either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, it recognizes employee severance costs when they are both probable and reasonably estimable. 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 nine months ended September 30, 2024 and 2023 is as follows: (in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total Accrued Balance at December 31, 2023 $ 9 $ 1 $ — $ 10 Provision 9 10 2 21 Changes in estimates — — — — Total Net Current Period Charges (1) 9 10 2 21 Charges against reserve and currency ( 15 ) ( 11 ) ( 2 ) ( 28 ) Accrued Balance at September 30, 2024 $ 3 $ — $ — $ 3 (in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total Accrued Balance at December 31, 2022 $ 10 $ — $ — $ 10 Provision 25 18 7 50 Changes in estimates ( 1 ) — — ( 1 ) Total Net Current Period Charges (1) 24 18 7 49 Charges against reserve and currency ( 24 ) ( 17 ) ( 7 ) ( 48 ) Accrued Balance at September 30, 2023 $ 10 $ 1 $ — $ 11 __________ (1) Represents amounts recognized within the Consolidated Statements of Income (Loss) for the years shown. 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 September 30, Nine Months Ended September 30, (in millions) 2024 2023 2024 2023 Commercial $ 1 $ 2 $ 4 $ 25 Government — — — — Transportation — — 1 — Divestitures — — — — Unallocated Costs (1) 3 5 16 24 Total Net Restructuring Charges $ 4 $ 7 $ 21 $ 49 __________ (1) Represents costs related to the consolidation of the Company's data centers, operating lease ROU assets impairment, termination and other costs not allocated to the segments. CNDT Q3 2024 Form 10-Q 15 Table of Contents Note 7 – Debt Long-term debt was as follows: (in millions) September 30, 2024 December 31, 2023 Term loan A due 2026 $ 191 $ 238 Term loan B due 2028 — 505 Senior notes due 2029 520 520 Finance lease obligations 29 22 Other 13 15 Principal debt balance 753 1,300 Debt issuance costs and unamortized discounts ( 9 ) ( 18 ) Less: current maturities ( 26 ) ( 34 ) Total Long-term Debt $ 718 $ 1,248 As of September 30, 2024, the Company had no outstanding borrowings under its $ 550 million revolving credit facility (the "Revolver"). Additionally, the Company utilized $ 11 million of the Revolver to issue letters of credit as of September 30, 2024. The net Revolver available to be drawn upon as of September 30, 2024 was $ 539 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"). In April and May 2024, the Company voluntarily prepaid $ 300 million of principal of the Term Loan B. In September 2024, the Company voluntarily prepaid (i) the entire remaining outstanding balance of the Term Loan B in an amount equal to $ 38 million and (ii) $ 37 million of the Senior Secured Term Loan A due 2026 ("Term Loan A"). In connection with these voluntary prepayments, the Company wrote-off related debt issuance costs of $ 1 million and $ 6 million for the three and nine months ended September 30, 2024, respectively, which is included in Loss on extinguishment of debt in the Condensed Consolidated Statements of Income (Loss). At September 30, 2024, the Company was in compliance with all debt covenants related to the borrowings in the table above. Note 8 – Financial Instruments The Company is a global company that is exposed to foreign currency exchange rate fluctuations in the normal course of its business. 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 September 30, 2024 and December 31, 2023, the Company had outstanding forward exchange contracts with gross notional values of $ 181 million and $ 148 million, respectively. At September 30, 2024, approximately 76 % of these contracts mature within three months, 9 % in three to six months, 11 % 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 9 – Fair Value of Financial Assets and Liabilities for additional information regarding the fair value of the Company's foreign exchange forward contracts. Note 9 – Fair Value of Financial Assets and Liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows: CNDT Q3 2024 Form 10-Q 16 Table of Contents Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities. Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3: Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities. Summary of Financial Assets and Liabilities Accounted for at Fair Value on a Recurring Basis The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases was Level 2. (in millions) September 30, 2024 December 31, 2023 Assets: Foreign exchange contracts - forward $ 1 $ 1 Total Assets $ 1 $ 1 Liabilities: Foreign exchange contracts - forward $ — $ — Total Liabilities $ — $ — Summary of Other Financial Assets and Liabilities The estimated fair values of other financial assets and liabilities were as follows: September 30, 2024 December 31, 2023 (in millions) Carrying Amount Fair Value Carrying Amount Fair Value Liabilities: Long-term debt $ 718 $ 697 $ 1,248 $ 1,191 Liabilities held for sale $ — $ — $ 58 $ 58 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 using quoted market prices for identical or similar instruments (Level 2 inputs). Note 10 – Employee Benefit Plans The Company has post-retirement pension, savings and investment plans in several countries, including the U.S., India and the Philippines. In many instances, employees participating in defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans, employees are permitted to contribute a portion of their salaries and bonuses to the plans. The Company, at its discretion, matches a portion of employee contributions. The Company recognized an expense related to its defined contribution plans of $ 2 million and $ 2 million for the three months ended September 30, 2024 and 2023, respectively, and $ 8 million and $ 8 million for the nine months ended September 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 Q3 2024 Form 10-Q 17 Table of Contents Note 11 – Accumulated Other Comprehensive Loss ("AOCL") Below are the balances and changes in AOCL (1) : (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2023 $ ( 441 ) $ 2 $ 4 $ ( 435 ) Other comprehensive income (loss) ( 14 ) — — ( 14 ) Balance at September 30, 2024 $ ( 455 ) $ 2 $ 4 $ ( 449 ) (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2022 $ ( 472 ) $ 1 $ 5 $ ( 466 ) Other comprehensive income (loss) 3 — — 3 Balance at September 30, 2023 $ ( 469 ) $ 1 $ 5 $ ( 463 ) __________ (1) All amounts are net of tax. Tax effects were immaterial. Note 12 – Contingencies and Litigation As more fully discussed below, the Company is involved in a variety of claims, lawsuits, investigations and proceedings concerning a variety of matters, including: governmental entity contracting, servicing and procurement law; intellectual property law; employment law; commercial and contracts law; the Employee Retirement Income Security Act ("ERISA"); and other laws and regulations. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing its litigation and regulatory matters using available information. The Company develops its view on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. 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 September 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 matter 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. 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. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property (such as patents), environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the outcome of these claims. 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 September 30, 2024, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees. CNDT Q3 2024 Form 10-Q 18 Table of Contents Litigation Against the Company Skyview Capital LLC and Continuum Global Solutions, LLC v. Conduent Business Services, LLC: On February 3, 2020, plaintiffs Skyview Capital LLC and Continuum Global Solutions LLC (collectively "Skyview") filed a lawsuit in the Supreme Court of the State of New York, County of New York against Conduent Business Services, LLC, a wholly-owned subsidiary of the Company ("CBS"). The lawsuit relates to the sale of a portion of CBS's select standalone customer care call center business to plaintiffs, which sale closed in February 2019. Under the terms of the sale agreement, CBS received approximately $ 23 million in principal amount of promissory notes from plaintiffs (the "Notes"). The lawsuit alleges various causes of action in connection with the acquisition, including: indemnification for breach of representation and warranty; indemnification for breach of covenant; and fraud. Plaintiffs alleged that their obligation to mitigate damages and their contractual right of set-off permits them to withhold and deduct from any amounts that are owed to CBS under the Notes, and plaintiffs sought a judgment that they have no obligation to pay the Notes. On August 20, 2020, CBS filed counterclaims against Skyview seeking the outstanding balance on the Notes, the amounts owed for operating certain Jamaica-based call centers on plaintiffs' behalf pending closing (the "Jamaica Deferred Closing"), other transition services agreement ("TSA") and TSA amendments, and late rent payment obligations. CBS also moved to dismiss Skyview’s claims in 2020. In May 2021, the court denied the motion and allowed the claims to proceed. Fact and expert discovery have concluded and the parties filed summary judgment motions on July 24, 2023. On December 5, 2023, the court heard oral argument on the parties’ cross-motions for summary judgment, and rendered its decision on December 8, 2023, finding there are certain material issues of fact that require trial, and also entering partial summary judgment for each side. On January 5, 2024, CBS filed its notice of appeal of the portion of the ruling that did not grant its motion for summary judgment in its entirety and that granted certain limited relief in favor of plaintiffs. On January 23, 2024, Skyview filed its own notice of appeal, challenging the decision granting a portion of CBS’s counterclaims. Under the present schedule, the parties' appeals will be fully briefed as of November 8, 2024. Oral argument has not yet been scheduled. In July 2024, Skyview informed CBS of its intention to sell a portion of its call center business. The parties reached an agreement on August 8, 2024, under which, contemporaneously with the closing of such a transaction, Skyview will pay the outstanding principal plus interest due on the outstanding Notes, fully discharging Skyview's obligations under the Notes, and will pay certain of CBS's litigation costs. On September 24, 2024, Skyview and the buyer, Everise, announced a signed and binding asset purchase agreement. Following regulatory review, the transaction is expected to close in the fourth quarter of 2024, at which point Skyview will pay CBS the outstanding principal and interest due on the Notes. Skyview will then withdraw its arguments in the litigation regarding its purported right to set-off amounts due under the Notes, though Skyview's claims for alleged fraud, breach of covenant, and breach of representation and warranty otherwise will be unaffected. In addition, CBS will dismiss its two counterclaims related to the Notes. CBS's remaining counterclaims related to the Jamaica Deferred Closing, the TSAs and rent payment obligations will be unaffected. CBS continues to deny all of plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims, and will continue to defend the litigation vigorously. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimates of the possible outcome or loss, if any, in excess of currently recorded reserves. Other Contingencies 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 September 30, 2024, the Company had $ 614 million of outstanding surety bonds issued to secure its performance of contractual obligations with its clients, and $ 177 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. CNDT Q3 2024 Form 10-Q 19 Table of Contents 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, which has since been repaid. Series A Preferred Stock In December 2016, the Company issued 120,000 shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $ 120 million and an initial fair value of $ 142 million. The convertible preferred stock earns quarterly cash dividends at a rate of 8 % per year ($ 9.6 million per year). 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. Note 14 – Earnings (Loss) per Share The Company did not declare any common stock dividends in the periods presented. The following table sets forth the computation of basic and diluted earnings (loss) per share of common stock: Three Months Ended September 30, Nine Months Ended September 30, (in millions, except per share data in whole dollars and shares in thousands) 2024 2023 2024 2023 Basic Net Earnings (Loss) per Share: Net Income (Loss) $ 123 $ ( 289 ) $ 438 $ ( 302 ) Dividend - Preferred Stock ( 2 ) ( 2 ) ( 7 ) ( 7 ) Adjusted Net Income (Loss) Available to Common Shareholders - Basic $ 121 $ ( 291 ) $ 431 $ ( 309 ) Diluted Net Earnings (Loss) per Share: Net Income (Loss) $ 123 $ ( 289 ) $ 438 $ ( 302 ) Dividend - Preferred Stock — ( 2 ) — ( 7 ) Adjusted Net Income (Loss) Available to Common Shareholders - Diluted $ 123 $ ( 291 ) $ 438 $ ( 309 ) Weighted Average Common Shares Outstanding - Basic 161,684 217,348 189,107 217,992 Common Shares Issuable With Respect To: Restricted Stock And Performance Units / Shares 4,077 — 2,473 — 8% Convertible Preferred Stock 5,393 — 5,393 — Weighted Average Common Shares Outstanding - Diluted 171,154 217,348 196,973 217,992 Net Earnings (Loss) per Share: Basic $ 0.75 $ ( 1.34 ) $ 2.28 $ ( 1.42 ) Diluted $ 0.72 $ ( 1.34 ) $ 2.22 $ ( 1.42 ) 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 10,288 12,297 10,329 12,297 Convertible preferred stock — 5,393 — 5,393 Total Anti-Dilutive and Contingently Issuable Securities 10,288 17,690 10,329 17,690 CNDT Q3 2024 Form 10-Q 20 Table of Contents Note 15 – Supplementary Financial Information The components of Other assets and Other liabilities were as follows: (in millions) September 30, 2024 December 31, 2023 Other Current Assets Prepaid expenses $ 106 $ 70 Income taxes receivable 8 38 Value-added tax (VAT) receivable 7 8 Restricted cash 11 21 Net receivables from buyers of divested businesses 128 — Other 112 103 Total Other Current Assets $ 372 $ 240 Other Current Liabilities Accrued liabilities to vendors $ 146 $ 188 Litigation related accruals 12 6 Current operating lease liabilities 52 54 Restructuring liabilities 3 10 Income tax payable 75 1 Other taxes payable 16 19 Accrued interest 13 6 Other 43 44 Total Other Current Liabilities $ 360 $ 328 Other Long-term Assets Internal use software, net $ 110 $ 143 Deferred contract costs, net 120 91 Product software, net 76 92 Deferred tax assets 22 21 Other 63 89 Total Other Long-term Assets $ 391 $ 436 Other Long-term Liabilities Income tax liabilities 1 6 Unearned income 53 55 Other 24 23 Total Other Long-term Liabilities $ 78 $ 84 CNDT Q3 2024 Form 10-Q 21 Table of Contents