What changed in this filing

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Item 1. Financial Statements

2022-11-23 compared with 2022-08-03 · 132 added, 100 removed, 602 unchanged (28% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

469.2 462.9 1,420.7 1,405.6

Operating income 33.7 40.8 10.2 84.4

Operating (loss) income ( 8.0 ) 25.1 2.2 109.5

Interest expense 7.9 8.5 24.6 27.0

Other (expense), net ( 23.3 ) ( 24.2 ) ( 66.2 ) ( 434.6 )

Earnings (loss) before income taxes 3.5 ( 195.4 ) ( 49.4 ) ( 344.5 )

Loss before income taxes ( 39.2 ) ( 7.6 ) ( 88.6 ) ( 352.1 )

Provision for (benefit from) income taxes 0.7 10.9 25.1 ( 33.8 )

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

11 unchanged sentences

CONSOLIDATED BALANCE SHEETS (Unaudited)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets:

42 unchanged sentences

Total liabilities and deficit $ 2,058.1 * $ 2,419.5

* These consolidated financial statements reflect a change of $ 15.2 million to increase both assets and liabilities, as compared to the previously filed consolidated financial statements on November 7, 2022.

See notes to consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

Consolidated net loss $ ( 113.7 ) $ ( 318.3 )

Adjustments to reconcile consolidated net loss to net cash used for operating activities:

Adjustments to reconcile consolidated net loss to net cash (used for) provided by operating activities:

Foreign currency losses 6.3 3.2

16 unchanged sentences

Other liabilities 6.2 36.3

Net cash used for operating activities ( 66.7 ) ( 1.0 )

Net cash (used for) provided by operating activities ( 22.2 ) 64.5

Cash flows from investing activities

33 unchanged sentences

Balance at June 30, 2022 $ ( 98.5 ) $ ( 147.2 ) $ 0.7 $ ( 1,483.4 ) $ ( 155.9 ) $ 4,721.9 $ ( 3,230.5 ) $ 48.7

Consolidated net (loss) income ( 39.9 ) ( 40.1 ) ( 40.1 ) 0.2

Stock-based activity 4.9 4.9 4.9

Translation adjustments ( 90.9 ) ( 87.4 ) ( 87.4 ) ( 3.5 )

Postretirement plans 89.1 85.7 85.7 3.4

Balance at September 30, 2022 $ ( 135.3 ) $ ( 184.1 ) $ 0.7 $ ( 1,523.5 ) $ ( 155.9 ) $ 4,726.8 $ ( 3,232.2 ) $ 48.8

Unisys Corporation

12 unchanged sentences

Balance at June 30, 2021 $ ( 263.8 ) $ ( 308.8 ) $ 0.7 $ ( 1,259.1 ) $ ( 152.1 ) $ 4,697.8 $ ( 3,596.1 ) $ 45.0

Consolidated net (loss) income ( 18.5 ) ( 18.7 ) ( 18.7 ) 0.2

Stock-based activity 5.3 5.3 — 5.3

Translation adjustments ( 36.5 ) ( 33.9 ) ( 33.9 ) ( 2.6 )

Postretirement plans 63.4 61.8 61.8 1.6

Balance at September 30, 2021 $ ( 250.1 ) $ ( 294.3 ) $ 0.7 $ ( 1,277.8 ) $ ( 152.1 ) $ 4,703.1 $ ( 3,568.2 ) $ 44.2

See notes to consolidated financial statements

38 unchanged sentences

Goodwill 38.0

During the three months ended June 30, 2022, the company finalized its valuation of assets acquired and liabilities assumed resulting in measurement period adjustments that decreased goodwill by $ 27.5 million primarily related to an increase of $ 27.6 million in the fair value of the acquired intangible assets.

In the second quarter of 2022, the company finalized its valuation of assets acquired and liabilities assumed resulting in measurement period adjustments that decreased goodwill by $ 27.5 million primarily related to an increase of $ 27.6 million in the fair value of the acquired intangible assets.

Goodwill is the excess of the purchase price consideration over the fair value of the underlying intangible assets and net liabilities assumed.

The goodwill represents expected synergies, intellectual capital and the acquired assembled workforce, none of which qualify for recognition as a separate intangible asset.

Goodwill determined by the allocation of the purchase price was recorded in the company’s Cloud, Applications and Infrastructure Solutions segment and is deductible for tax purposes.

Goodwill determined by the allocation of the purchase price was recorded in the company’s Cloud, Applications & Infrastructure Solutions segment and is deductible for tax purposes.

The following table summarizes the fair value of the intangible assets acquired and the related weighted average amortization period:

4 unchanged sentences

Revenue and earnings for CompuGain have not been presented as the impact is not material to the company’s consolidated financial statements.

For the six months ended June 30, 2022, the company incurred and expensed acquisition-related costs of $ 0.4 million, Acquisition-related costs are included within selling, general and administrative expenses on the consolidated statements of income (loss).

For the nine months ended September 30, 2022, the company incurred and expensed acquisition-related costs of $ 0.4 million, Acquisition-related costs are included within selling, general and administrative expenses on the consolidated statements of income (loss).

Note 4 - Cost-Reduction Actions

During the three months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $ 3.1 million.

The credit related to work-force reductions was $ 0.3 million for changes in estimates.

In addition, the company recorded charges of $ 3.4 million comprised of a charge of $ 1.8 million for net foreign currency losses related to exiting foreign countries, a charge of $ 0.9 million for asset impairments and a charge of $ 0.7 million for other expenses related to cost-reduction efforts.

During the three months ended June 30, 2021, the company recognized net cost-reduction charges and other costs of $ 5.1 million.

During the three months ended September 30, 2022, the company recognized cost-reduction charges and other costs of $ 8.1 million.

The charges related to work-force reductions were $ 0.5 million for changes in estimates.

In addition, the company recorded charges of $ 7.6 million comprised of $ 1.9 million for net foreign currency losses related to exiting foreign countries, $ 4.7 million for asset impairments and $ 1.0 million for other expenses related to cost-reduction efforts.

During the three months ended September 30, 2021, the company recognized net cost-reduction charges and other costs of $ 0.8 million.

The net credits related to work-force reductions were $ 0.6 million, principally related to severance costs, and were comprised of:

(a) a charge of $ 0.7 million and (b) a credit of $ 1.3 million for changes in estimates.

In addition, the company recorded net charges of $ 5.4 million comprised of a credit of $ 0.7 million for net foreign currency gains related to exiting foreign countries, a charge of $ 4.4 million for asset impairments and a charge of $ 1.7 million for other expenses related to cost-reduction efforts.

During the six months ended June 30, 2022, the company recognized net cost-reduction charges and other costs of $ 6.1 million.

In addition, the company recorded net charges of $ 1.4 million comprised of a charge of $ 1.3 million for net foreign currency losses related to exiting foreign countries, a charge of $ 0.5 million for asset impairments and a credit of $ 0.4 million related to other cost-reduction efforts.

During the nine months ended September 30, 2022, the company recognized net cost-reduction charges and other costs of $ 14.2 million.

The credit related to work-force reductions was $ 0.4 million for changes in estimates.

In addition, the company recorded net charges of $ 7.0 million comprised of a charge of $ 2.9 million for net foreign currency losses related to exiting foreign countries, a charge of $ 4.7 million for asset impairments and a credit of $ 0.6 million for changes in estimates related to cost-reduction efforts.

During the six months ended June 30, 2021, the company recognized net cost-reduction charges and other costs of $ 13.6 million.

In addition, the company recorded charges of $ 14.6 million comprised of $ 4.8 million for net foreign currency losses related to exiting foreign countries, $ 9.4 million for asset impairments and a net charge of $ 0.4 million for other expenses related to cost-reduction efforts.

During the nine months ended September 30, 2021, the company recognized net cost-reduction charges and other costs of $ 14.4 million.

The net credits related to work-force reductions were $ 2.5 million, principally related to severance costs, and were comprised of:

2 unchanged sentences

The charges (credits) were recorded in the following statement of income (loss) classifications:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

10 unchanged sentences

Translation adjustments ( 1.0 ) — ( 1.0 )

Balance at June 30, 2022 $ 8.3 $ 2.0 $ 6.3

Expected future utilization on balance at June 30, 2022:

Balance at September 30, 2022 $ 6.3 $ 1.3 $ 5.0

Expected future utilization on balance at September 30, 2022:

Short-term $ 6.3 $ 1.3 $ 5.0

2 unchanged sentences

Three Months Ended

June 30, 2022 Three Months Ended

June 30, 2021

September 30, 2022 Three Months Ended

September 30, 2021

Plans International

7 unchanged sentences

Recognized net actuarial loss 40.5 31.4 9.1 45.8 34.0 11.8

Settlement losses (ii)

— — — 210.7 — 210.7

Net periodic pension expense (income) $ 11.8 $ 12.1 $ ( 0.3 ) $ 13.6 $ 12.7 $ 0.9

Six Months Ended

June 30, 2022 Six Months Ended

June 30, 2021

Nine Months Ended

September 30, 2022 Nine Months Ended

September 30, 2021

Plans International

11 unchanged sentences

(i) Service cost is reported in selling, general and administrative expense.

All other components of net periodic pension expense are reported in other (expense), net in the consolidated statements of income (loss).

All other components of net periodic pension expense (income) are reported in other (expense), net in the consolidated statements of income (loss).

(ii) In the second quarter of 2021, the company’s primary pension plan related to its Dutch subsidiary was transferred to a multi-client circle within a multi-employer fund.

This action resulted in a pre-tax settlement loss of $ 182.6 million for both the three and six months ended June 30, 2021.

This action resulted in a pre-tax settlement loss of $ 182.6 million for the nine months ended September 30, 2021.

Additionally, the company’s Swiss subsidiary transferred its defined benefit pension plans to a multiple-employer collective foundation.

This action resulted in a pre-tax settlement loss of $ 28.1 million for both the three and six months ended June 30, 2021.

This action resulted in a pre-tax settlement loss of $ 28.1 million for the nine months ended September 30, 2021.

(iii) In January 2021, the company purchased a group annuity contract to transferred projected benefit obligations related to its U.S.

defined benefit pension plans.

This action resulted in a pre-tax settlement loss of $ 158.0 million.

This action resulted in a pre-tax settlement loss of $ 158.0 million for the nine months ended September 30, 2021.

In 2022, the company expects to make cash contributions of approximately $ 38.5 million primarily for the company’s international defined benefit pension plans.

In 2021, the company made cash contributions of $ 52.4 million to its worldwide defined benefit pension plans.

During the six months ended June 30, 2022 and 2021, the company made cash contributions of $ 23.3 million and $ 30.3 million, respectively.

During the nine months ended September 30, 2022 and 2021, the company made cash contributions of $ 30.9 million and $ 40.3 million, respectively.

At the end of each year, the company estimates its future cash contributions to its U.S.

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

(i) Service cost is reported in selling, general and administrative expense.

All other components of net periodic postretirement benefit expense are reported in other (expense), net in the consolidated statements of income (loss).

All other components of net periodic postretirement benefit expense (income) are reported in other (expense), net in the consolidated statements of income (loss).

The company expects to make cash contributions of approximately $ 6 million to its postretirement benefit plan in 2022.

In 2021, the company made cash contributions of $ 4.0 million to its postretirement benefit plan.

For the six months ended June 30, 2022 and 2021, the company made cash contributions of $ 1.8 million each period.

For the nine months ended September 30, 2022 and 2021, the company made cash contributions of $ 3.0 million and $ 3.3 million, respectively.

Note 6 - Stock Compensation

Under stockholder approved stock-based plans, stock options, stock appreciation rights, restricted stock and restricted stock units may be granted to officers, directors and other key employees.

As of June 30, 2022, the company has granted non-qualified stock options, restricted stock and restricted stock units under these plans.

As of September 30, 2022, the company has granted non-qualified stock options, restricted stock and restricted stock units under these plans.

The company recognizes compensation cost, net of a forfeiture rate, in selling, general and administrative expense, and recognizes compensation cost only for those awards expected to vest.

The company estimates the forfeiture rate based on its historical experience and its expectations about future forfeitures.

During the six months ended June 30, 2022 and 2021, the company recorded $ 10.3 million and $ 7.0 million of share-based restricted stock and restricted stock unit compensation expense, respectively.

During the nine months ended September 30, 2022 and 2021, the company recorded $ 15.2 million and $ 11.5 million of share-based restricted stock and restricted stock unit compensation expense, respectively.

Restricted stock and restricted stock unit awards may contain time-based units, performance-based units, total shareholder return market-based units, or a combination of these units.

3 unchanged sentences

Restricted stock unit grants for the company’s directors vest upon award and compensation expense for such awards is recognized upon grant.

A summary of restricted stock and restricted stock unit (RSU) activity for the six months ended June 30, 2022 follows (shares in thousands):

A summary of restricted stock and restricted stock unit (RSU) activity for the nine months ended September 30, 2022 follows (shares in thousands):

and RSU Weighted-

3 unchanged sentences

Forfeited and expired ( 163 ) 25.23

Outstanding at June 30, 2022 2,372 23.78

The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units granted during the six months ended June 30, 2022 and 2021 was $ 26.7 million and $ 32.2 million, respectively.

Outstanding at September 30, 2022 2,348 23.71

The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units granted during the nine months ended September 30, 2022 and 2021 was $ 27.0 million and $ 32.4 million, respectively.

The fair value of restricted stock and restricted stock units with time and performance conditions was determined based on the trading price of the company’s common shares on the date of grant.

The fair value of awards with market conditions was estimated using a Monte Carlo simulation with the following weighted-average assumptions:

Six Months Ended

Nine Months Ended

September 30,

Weighted-average fair value of grant $ 34.14 $ 40.02

9 unchanged sentences

(iii) Represents the remaining life of the longest performance period.

As of June 30, 2022, there was $ 39.5 million of total unrecognized compensation cost related to outstanding restricted stock and restricted stock units granted under the company’s plans.

As of September 30, 2022, there was $ 34.0 million of total unrecognized compensation cost related to outstanding restricted stock and restricted stock units granted under the company’s plans.

That cost is expected to be recognized over a weighted-average period of 2.1 years.

The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units vested during the six months ended June 30, 2022 and 2021 was $ 16.6 million and $ 14.7 million, respectively.

The aggregate weighted-average grant-date fair value of restricted stock and restricted stock units vested during the nine months ended September 30, 2022 and 2021 was $ 16.6 million and $ 14.8 million, respectively.

Common stock issued upon the lapse of restrictions on restricted stock and restricted stock units are newly issued shares.

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Postretirement expense* $ ( 10.9 ) $ ( 12.2 ) $ ( 32.5 ) $ ( 405.0 )

Foreign exchange (losses) gains** ( 2.6 ) 2.0 ( 0.4 ) ( 0.9 )

Foreign exchange losses** ( 5.9 ) ( 2.1 ) ( 6.3 ) ( 3.0 )

Environmental costs and other, net ( 6.5 ) ( 9.9 ) ( 27.4 ) ( 26.6 )

Total other (expense), net $ ( 23.3 ) $ ( 24.2 ) $ ( 66.2 ) $ ( 434.6 )

*Includes $ 210.7 million and $ 368.7 million in the three and six months ended June 30, 2021 of settlement losses related to defined benefit pension plans.

**Includes net foreign losses of $ 1.8 million and net foreign currency gains of $ 0.7 million, respectively, in the three months ended June 30, 2022 and 2021, related to substantial completion of liquidation of foreign subsidiaries.

Includes net foreign currency losses of $ 2.9 million and $ 1.6 million, respectively, in the six months ended June 30, 2022 and 2021, related to substantial completion of liquidation of foreign subsidiaries.

*Includes $ 368.7 million in the nine months ended September 30, 2021 of settlement losses related to defined benefit pension plans.

**Includes net foreign losses of $ 1.9 million and $ 1.3 million, respectively, in the three months ended September 30, 2022 and 2021, related to substantial completion of liquidation of foreign subsidiaries.

Includes net foreign currency losses of $ 4.8 million and $ 2.9 million, respectively, in the nine months ended September 30, 2022 and 2021, related to substantial completion of liquidation of foreign subsidiaries.

Note 8 - Income Taxes

2 unchanged sentences

The company evaluates the realizability of its deferred tax assets by assessing its valuation allowance and by adjusting the amount of such allowance, if necessary.

The realization of the company’s net deferred tax assets as of June 30, 2022 is primarily dependent on the ability to generate sustained taxable income in various jurisdictions.

The realization of the company’s net deferred tax assets as of September 30, 2022 is primarily dependent on the ability to generate sustained taxable income in various jurisdictions.

Judgment is required to estimate forecasted future taxable income, which may be impacted by future business developments, actual results, strategic

operational and tax initiatives, legislative, and other economic factors and developments.

It is at least reasonably possible that the company’s judgment about the need for, and level of, existing valuation allowances could change in the near term based on changes in objective evidence such as further sustained income or loss in certain jurisdictions, as well as the other factors discussed above, primarily in certain jurisdictions outside of the United States.

As such, the company will continue to monitor income levels and mix among jurisdictions, potential changes to the company’s operating and tax model, and other legislative or global developments in its determination.

It is reasonably possible that such changes could result in a material impact to the company’s valuation allowance within the next 12 months.

Any increase or decrease in the valuation allowance would result in additional or lower income tax expense in that period and could have a significant impact on that period’s earnings.

As a result of its projections of future taxable income, the company has determined that a portion of its non-U.S.

net deferred tax assets no longer requires a valuation allowance as of September 30, 2022.

The release of the valuation allowance for the three and nine months ended September 30, 2022 was approximately $ 10.4 million and $ 12.1 million, respectively, primarily in the United Kingdom and other European jurisdictions.

A full valuation allowance is currently maintained for all U.S.

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

16 unchanged sentences

Net contract assets (liabilities) are as follows:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Contract assets - current $ 26.3 $ 42.0

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

The current and noncurrent portions of deferred commissions are included in prepaid expenses and other current assets and in other long-term assets, respectively, in the company’s consolidated balance sheets.

At June 30, 2022 and December 31, 2021, the company had $ 5.0 million and $ 6.7 million, respectively, of deferred commissions.

At September 30, 2022 and December 31, 2021, the company had $ 4.1 million and $ 6.7 million, respectively, of deferred commissions.

Amortization expense related to deferred commissions was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

These costs are included in outsourcing assets, net in the company’s consolidated balance sheets.

The amount of such costs at June 30, 2022 and December 31, 2021 was $ 43.4 million and $ 56.2 million, respectively.

The amount of such costs at September 30, 2022 and December 31, 2021 was $ 38.8 million and $ 56.2 million, respectively.

These costs are amortized over the initial contract life and reported in cost of revenue.

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

7 unchanged sentences

The company enters into foreign exchange forward contracts, generally having maturities of three months or less, which have not been designated as hedging instruments.

At June 30, 2022 and December 31, 2021, the notional amount of these contracts was $ 506.2 million and $ 552.2 million, respectively.

At September 30, 2022 and December 31, 2021, the notional amount of these contracts was $ 484.9 million and $ 552.2 million, respectively.

The fair value of these forward contracts is based on quoted prices for similar but not identical financial instruments;

1 unchanged sentence

The following table summarizes the fair value of the company’s foreign exchange forward contracts.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Balance Sheet Location

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

The carrying amounts of these financial assets and liabilities approximate fair value due to their short maturities.

Such financial instruments are not included in the following table that provides information about the estimated fair values of other financial instruments that are not measured at fair value in the consolidated balance sheets as of June 30, 2022 and December 31, 2021.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Carrying Amount Fair Value Carrying Amount Fair Value

9 unchanged sentences

Translation adjustments ( 1.3 ) ( 1.3 ) — — —

Balance at June 30, 2022 $ 286.8 $ 140.2 $ 38.0 $ 98.3 $ 10.3

At June 30, 2022, the amount of goodwill allocated to reporting units with negative net assets within Other was $ 10.3 million.

Balance at September 30, 2022 $ 286.2 $ 139.6 $ 38.0 $ 98.3 $ 10.3

At September 30, 2022, the amount of goodwill allocated to reporting units with negative net assets within Other was $ 10.3 million.

Intangible Assets, Net

Intangible assets, net at June 30, 2022 consists of the following:

Intangible assets, net at September 30, 2022 consists of the following:

Gross Carrying Amount Accumulated Amortization Net Carrying Amount

8 unchanged sentences

See Note 3 for measurement period adjustment.

For the three months ended June 30, 2022 and 2021 amortization expense was $ 2.9 million and $ 0.5 million, respectively.

For the six months ended June 30, 2022 and 2021 amortization expense was $ 5.3 million and $ 0.5 million, respectively.

The future amortization relating to acquired intangible assets at June 30, 2022 was estimated as follows:

For the three months ended September 30, 2022 and 2021 amortization expense was $ 2.4 million and $ 1.2 million, respectively.

For the nine months ended September 30, 2022 and 2021 amortization expense was $ 7.7 million and $ 1.7 million, respectively.

The future amortization relating to acquired intangible assets at September 30, 2022 was estimated as follows:

Future Amortization Expense

3 unchanged sentences

Long-term debt is comprised of the following:

June 30, 2022 December 31, 2021

6.875 % senior secured notes due November 1, 2027 (Face value of $ 485.0 million less unamortized issuance costs of $ 6.3 and $ 6.9 million at June 30, 2022 and at December 31, 2021)

September 30, 2022 December 31, 2021

6.875 % senior secured notes due November 1, 2027 (Face value of $ 485.0 million less unamortized issuance costs of $ 6.0 and $ 6.9 million at September 30, 2022 and at December 31, 2021)

$ 479.0 $ 478.1

35 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

9 unchanged sentences

Interest expense related to the 2021 Notes was as follows:

Six Months Ended

Nine Months Ended September 30, 2021

Contractual interest coupon $ 0.8

3 unchanged sentences

Interest accrues at an annual rate of 7.0 % and the company is required to make monthly principal and interest payments on each agreement in arrears.

At June 30, 2022, $ 5.3 million was reported in current maturities of long-term debt.

At September 30, 2022, $ 5.4 million was reported in current maturities of long-term debt.

The company has a vendor agreement in the amount of $ 19.3 million to finance the acquisition of certain software licenses used to provide services to our clients and for its own internal use.

Interest accrues at an annual rate of 5.47 % and the company is required to make annual principal and interest payments in advance with the last payment due on March 1, 2024.

At June 30, 2022, $ 4.0 million was reported in current maturities of long-term debt.

At September 30, 2022, $ 4.0 million was reported in current maturities of long-term debt.

Asset Based Lending (ABL) Credit Facility

1 unchanged sentence

Availability under the credit facility is subject to a borrowing base calculated by reference to the company’s receivables.

At June 30, 2022, the company had no borrowings and $ 6.3 million of letters of credit outstanding, and availability under the facility was $ 74.7 million net of letters of credit issued.

The Amended and Restated ABL Credit Facility is subject to a springing maturity, under which the Amended and Restated ABL Credit Facility will immediately mature 91 days prior to any date on which contributions to pension funds in the United States in an amount in excess of $ 100.0 million are required to be paid unless the company is able to meet certain conditions,

including that the company has the liquidity (as defined in the Amended and Restarted ABL Credit Facility) to cash settle the amount of such pension payments, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $ 130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis.

At September 30, 2022, the company had no borrowings and $ 6.3 million of letters of credit outstanding, and availability under the facility was $ 66.3 million net of letters of credit issued.

amount of such pension payments, no default or event of default has occurred under the Amended and Restated ABL Credit Facility, the company’s liquidity is above $ 130.0 million and the company is in compliance with the then applicable fixed charge coverage ratio on a pro forma basis.

The Amended and Restated ABL Credit Facility is guaranteed by the subsidiary guarantors and any future material domestic subsidiaries.

5 unchanged sentences

Events of default include non-payment, failure to comply with covenants, materially incorrect representations and warranties, change of control and default under other debt aggregating at least $ 50.0 million, subject to relevant cure periods, as applicable.

At June 30, 2022, the company has met all covenants and conditions under its various lending and funding agreements.

For at least the next twelve months, the company expects to continue to meet these covenants and conditions.

At September 30, 2022, the company has met all covenants and conditions under its various lending and funding agreements.

For at least the next 12 months, the company expects to continue to meet these covenants and conditions .

Note 15 - Litigation and Contingencies

9 unchanged sentences

The company believes that appropriate accruals have been established for such matters based on information currently available.

At June 30, 2022, excluding those matters that have been assessed by management as being remote as to the likelihood of ultimately resulting in a loss, the amount related to unreserved tax-related matters, inclusive of any related interest, is estimated to be up to approximately $ 84 million.

At September 30, 2022, excluding those matters that have been assessed by management as being remote as to the likelihood of ultimately resulting in a loss, the amount related to unreserved tax-related matters, inclusive of any related interest, is estimated to be up to approximately $ 103.3 million.

On November 11, 2022, a purported stockholder of the company filed a putative securities class action complaint in the United States District Court for the Eastern District of Pennsylvania against the company and certain of its current officers, alleging violations of the Securities Exchange Act of 1934, as amended, based on allegedly false or misleading statements related to projections and certain other statements positively characterizing the company’s momentum, business, prospects and operations, and the effectiveness of the company’s internal control over financial reporting and the company’s disclosure controls and procedures.

The plaintiff seeks an award of compensatory damages, among other relief, and costs and attorneys’ and experts’ fees.

With respect to the specific legal proceedings and claims described above, except as otherwise noted, either (i) the amount or range of possible losses in excess of amounts accrued, if any, is not reasonably estimable or (ii) the company believes that the amount or range of possible losses in excess of amounts accrued that are estimable would not be material.

1 unchanged sentence

Accordingly, it is possible that an adverse outcome from such matters could exceed the amounts accrued in an amount that could be material to the company’s financial condition, results of operations and cash flows in any particular reporting period.

Notwithstanding that the ultimate results of the lawsuits, claims, investigations and proceedings that have been brought or asserted against the company are not currently determinable, the company believes that at June 30, 2022, it has adequate provisions for any such matters.

Notwithstanding that the ultimate results of the lawsuits, claims, investigations and proceedings that have been brought or asserted against the company are not currently determinable, the company believes that at September 30, 2022, it has adequate provisions for any such matters.

Note 16 - Accumulated Other Comprehensive Loss

6 unchanged sentences

Current period other comprehensive income (loss) 31.9 ( 194.6 ) 226.5

Balance at June 30, 2022 $ ( 3,230.5 ) $ ( 973.4 ) $ ( 2,257.1 )

Balance at September 30, 2022 $ ( 3,232.2 ) $ ( 1,060.8 ) $ ( 2,171.4 )

Amounts reclassified out of accumulated other comprehensive loss are as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

12 unchanged sentences

Note 17 - Supplemental Cash Flow Information

Six Months Ended

Nine Months Ended

September 30,

Cash paid during the period for:

2 unchanged sentences

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the consolidated statements of cash flows.

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Cash and cash equivalents $ 351.4 $ 552.9

5 unchanged sentences

As a result, certain prior period segment revenue as well as the related cost of sales amounts have been reclassified to be comparable to the current period’s presentation.

In addition, during the second quarter of 2022, the company renamed its Cloud and Infrastructure Solutions segment as Cloud, Applications and Infrastructure Solutions to better represent the nature of the segment’s operations.

In addition, during the second quarter of 2022, the company renamed its Cloud and Infrastructure Solutions segment as Cloud, Applications & Infrastructure Solutions to better represent the nature of the segment’s operations.

There was no change to the composition of the segment or its historical results.

1 unchanged sentence

• Digital Workplace Solutions (DWS), which provides modern and traditional workplace solutions;

• Cloud, Applications and Infrastructure Solutions (CA&I), which provides digital platform, applications, and infrastructure solutions;

• Cloud, Applications & Infrastructure Solutions (CA&I), which provides digital platform, applications, and infrastructure solutions;

• Enterprise Computing Solutions (ECS), which provides solutions that harness secure, continuous high-intensity computing and enable digital services through software-defined operating environments.

5 unchanged sentences

Also included in the ECS segment’s sales and gross profit are sales of hardware and software sold to other segments for internal use in their engagements.

The amount of such profit included in gross profit of the ECS segment for the three and six months ended June 30, 2021 was $ 0.4 million and $ 1.1 million, respectively.

The amount of such profit included in gross profit of the ECS segment for the three and nine months ended September 30, 2021 was $ 0.3 million and $ 1.4 million, respectively.

The sales and profit on these transactions are eliminated in consolidation.

2 unchanged sentences

Total Segments DWS CA&I ECS

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Customer revenue $ 390.1 $ 130.1 $ 122.3 $ 137.7

2 unchanged sentences

Gross profit $ 107.3 $ 19.7 $ 6.8 $ 80.8

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Customer revenue $ 410.4 $ 143.2 $ 115.9 $ 151.3

3 unchanged sentences

Total Segments DWS CA&I ECS

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Customer revenue $ 1,207.7 $ 382.1 $ 381.5 $ 444.1

2 unchanged sentences

Gross profit $ 339.7 $ 52.2 $ 20.9 $ 266.6

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Customer revenue $ 1,284.9 $ 434.5 $ 358.3 $ 492.1

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

5 unchanged sentences

Remaining performance obligations represent the transaction price of firm orders for which work has not been performed and excludes (1) contracts with an original expected length of one year or less and (2) contracts for which the company recognizes revenue at the amount to which it has the right to invoice for services performed.

At June 30, 2022, the company had approximately $ 0.6 billion of remaining performance obligations of which approximately 19 % is estimated to be recognized as revenue by the end of 2022 and an additional 35 % by the end of 2023.

At September 30, 2022, the company had approximately $ 0.5 billion of remaining performance obligations of which approximately 9 % is estimated to be recognized as revenue by the end of 2022, 34 % by the end of 2023, 24 % by the end of 2024, 13 % by the end of 2025 and 20 % thereafter.

Note 20 - Subsequent Event

Subsequent to quarter-end and through the date of this filing, the company has experienced a significant decline in its market capitalization, from $ 0.5 billion to $ 0.3 billion.

Management is evaluating whether this decline represents a triggering event for assessing the goodwill and intangible asset balances for impairment in the fourth quarter of 2022.

As of September 30, 2022, the balances of the company’s goodwill and intangible asset were $ 286.2 million and $ 54.8 million, respectively.

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