(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of RegulationS-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☐☒ No ☒☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting ~~company”~~company,” and “emerging growth company” in Rule12b-2 ~~of the Exchange Act in Rule12b-2~~ of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section ~~7(a)(2)(B)~~13(a) of the ~~Securities~~Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule12b-2 of the Exchange Act). Yes ☐ No☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as the latest practicable date: ~~136,703,308~~147,803,003 shares of Common Stock, $0.01 par value per share, as of ~~May 23, 2018.~~October 30, 2020.

This Quarterly Report on Form10-Q (“Form10-Q”) contains, or incorporates by reference, not only historical information, but also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and that are subject to the safe harbor created by those sections. Forward-looking statements, including, without limitation, statements concerning the conditions of the human capital management ~~(“HCM”)~~ solutions industry and our operations, performance, and financial condition, including, in particular, statements relating to our business, growth strategies, product development efforts, and future expenses. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “assumes,” “projects,” “could,” “may,” “will,” “should,” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance, such as those contained in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national, or global political, economic, business, competitive, market, and regulatory conditions and the following:

Please refer to Part II, Item IA, “Risk Factors” of this Form 10-Q and Part I, Item IA, “Risk Factors” of our ~~Cloud solutions and our other applications may not succeed;~~

~~we fail to provide enhancements and new features and modifications to our solutions;~~

~~failure to comply with~~most recently filed Annual Report on Form 10-K, for the ~~Federal Trade Commission’s~~year ended December 31, 2019 (“~~FTC”~~2019 Form 10-K”) ~~ongoing consent order regarding data protection;~~

~~system interruptions or failures, including cyber-security breaches, identity theft, or other disruptions that could compromise our information;~~

~~our failure to comply with applicable privacy, security and data laws, regulations and standards;~~

~~changes in regulations governing privacy concerns and laws or other domestic or foreign data protection regulations;~~

~~we are unable to successfully expand our current offerings into new markets or further penetrate existing markets;~~

~~we are unable to meet the more complex configuration and integration demands of our large customers;~~

~~our customers declining to renew their agreements with us or renewing at lower performance fee levels;~~

~~we fail to manage our technical operations infrastructure;~~

~~we are unable to maintain necessary third party licenses or errors;~~

~~our inability to protect our intellectual property rights, proprietary technology, information, processes, andknow-how;~~

~~we fail to keep pace with rapid technological changes and evolving industry standards; or~~

~~changes in laws and regulations related to the Internet or changes in the Internet infrastructure itself.~~

~~See Part II. Item IA. “Risk Factors”~~, for a further description of these and other factors. Although we have attempted to identify important risk factors, there may be other risk factors not presently known to us or that we presently believe are not material that could cause actual results and developments to differ materially from those made in or suggested by the forward-looking statements contained in this Form10-Q. If any of these risks materialize, or if any of the above assumptions underlying forward-looking statements prove incorrect, actual results and developments may differ materially from those made in or suggested by the forward-looking statements contained in this Form10-Q. For the reasons described above, we caution you against relying on any forward-looking ~~statements, which should also be read in conjunction with the other cautionary statements that are included elsewhere in this Form10-Q.~~statements. Any forward-looking statement made by us in this Form 10-Q speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or to revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should be viewed as historical data.

~~(Unaudited, dollars in millions, except share and per share data)~~ (Unaudited)

Ceridian HCM Holding Inc. and its subsidiaries (also referred to in this report as “Ceridian,” “we,” “our,” ~~and “us”~~“us,” or the “Company”) offer a broad range of services and software designed to help employers to more effectively manage employment processes, such as payroll, payroll-related tax filing, human resource information systems, employee self-service, time and labor management, employee assistance programs, and recruitment and applicant screening. Our technology-based services are typically provided through long-term customer relationships that result in a high level of recurring revenue. Our operations are primarily located in the United States (“U.S.”) and Canada.

AsOn August 28, 2020, we completed a secondary offering in which certain of March 31, 2018, Ceridian owned a controlling financial interest in a joint venture, WorkAngel Organisation Limited (“LifeWorks”) (the “Joint Venture Company”), which offers an employee engagement platform that delivers employee assistance programs, social recognition, exclusive perks and discounts, a private social network, employee and corporate wellness, and employee engagement analytics in the United States, Canada, and the United Kingdom. Prior to the formation of the joint venture, employee assistance programs were provided by Ceridian. On January 20, 2017, WorkAngel Organisation Limited changed its name to LifeWorks Corporation Ltd. On April 30, 2018, we distributed our ownership interest in the Joint Venture Company to our stockholders (the “Selling Stockholders”) sold 7,717,347 shares of ~~record (the “LifeWorks Disposition”) prior to~~ our ~~initial~~common stock in an underwritten public offering ~~(“IPO”). Please refer to Note 19, “Subsequent Events,” for further discussion of the LifeWorks Disposition.~~

As of March 31, 2018, Ceridian HCM Holding Inc. was primarily owned by Ceridian LLC (the “Parent”) and Ceridian Holding II LLC (“Ceridian Holding II”). The Parent was 100% owned by Foundation Holding LLC, which in turn was 100% owned by Ceridian Holding LLC (“Ceridian Holding”).

~~The owners of Ceridian Holding and Ceridian Holding II included (i) affiliates andco-investors~~ of Thomas H. Lee Partners, L.P. (“THL Partners”) and Cannae Holdings, LLC (“Cannae”) (THL Partners and Cannae are together referred to as the “Sponsors”), who collectively owned approximately 96% of the outstanding interests of both Ceridian Holding and Ceridian Holding II, and (ii) other individuals, who collectively owned approximately 4% of the outstanding interests of each holding company. The Sponsors initially acquired their indirect ownership interest in Ceridian Holding on November 9, 2007, when the Sponsors completed the acquisition of all of the outstanding equity of the Ceridian entities (the “2007 Merger”). The Sponsors acquired their ownership interest in Ceridian Holding II on March 30, 2016, when the Sponsors and other individuals purchased equity in Ceridian Holding II, which in turn purchased equity in Ceridian HCM Holding Inc. This equity financing transaction with Ceridian Holding II raised $150.2, of which $75.0 was contributed by Ceridian Holding II to Ceridian HCM Holding Inc. on March 30, 2016. The remaining $75.2 was committed to be funded to Ceridian HCM Holding Inc. within the following three years, and during the second quarter of 2017, the Board of Directors of Ceridian Holding II approved the funding of the remaining $75.2, which was transferred to Ceridian HCM Holding Inc. on June 28, 2017.

~~On April 30, 2018, we completed our IPO, in which we issued and sold 21,000,000 shares of common stock~~ at a public offering price of ~~$22.00~~$72.18 per share. ~~We granted~~All proceeds from the ~~underwriters a30-day~~ ~~option to purchase an additional 3,150,000 shares~~sale of this common stock at the offering price, which was exercised in full. A total of 24,150,000 shares of common stock were issued on April 30, 2018. Concurrently, we issued 4,545,455 shares of our common stock in a private placement at $22.00 per share. We received gross proceeds of $631.3 from the IPO and concurrent private placement before deducting underwriting discounts, commissions, and other offering related expenses. Subsequentwent to the ~~IPO~~selling stockholders. During the three months ended September 30, 2020, we incurred $0.4 million of expenses related to the August 28, 2020, secondary offering. Expenses associated with our secondary offering are recorded within selling, general and ~~concurrent private placement, we completed an internal corporate reorganization, pursuant to which the limited liability companies that hold shares~~administrative expense in us were merged with and into Ceridian HCM Holding Inc. At the time of these transactions, these limited liability companies had no assets other than equity interests in us or the other limited liability companies. As a result of these transactions, our previous stockholders now hold shares of our common stock directly, rather than through a series of limited liability companies. These transactions had no impact on our assets, liabilities, or operations. Please refer to Note 19, “Subsequent Events,” for further discussion of the IPO and concurrent private placement. The condensed consolidated ~~financial~~ statements as of March 31, 2018, including share and per share amounts, do not give effect to the IPO, the concurrent private placement, or the internal reorganization, as the IPO and such transactions were completed subsequent to March 31, 2018.operations.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“~~U.S.~~ GAAP”) for interim financial information. Accordingly, ~~they~~the unaudited condensed consolidated financial statements do not include all of the information and notes required by ~~U.S.~~ GAAP for complete financial statements. The accounting policies we follow are set forth in Note 2, “Summary of Significant Accounting Policies,” to ~~Ceridian’s audited consolidated financial statements, included in~~ our audited consolidated financial statements ~~and notes thereto for the year ended December 31, 2017 (our “2017 Annual Report”), included within~~in our ~~prospectus dated April 25, 2018, as filed with the Securities and Exchange Commission (the “SEC”) on April 26, 2018, pursuant to Rule 424(b) under the Securities Act of 1933, as amended (FileNo. 333-223905)~~ ~~(the “Prospectus”).~~2019 Form 10-K. The following notes should be read in conjunction with ~~such~~these policies and other disclosures in our ~~2017 Annual Report and Prospectus.~~2019 Form 10-K.

In the opinion of management, the unaudited condensed consolidated financial statements contained herein reflect all adjustments (consisting only of normal recurring adjustments, except as set forth in these notes to condensed consolidated financial statements) necessary to present fairly in all material aspects the financial position, results of operations, comprehensive ~~loss,~~income (loss), and cash flows from all periods presented. Interim results are not necessarily indicative of results for a full year.

~~On April 10, 2018, we effected a1-for-2~~ reverse stock split of our common stock. All of the common share and per share information referenced throughout this interim report have been retroactively adjusted to reflect this reverse stock split. Please refer to Note 19, “Subsequent Events,” for further discussion of other transactions occurring after period end which are not reflected in the condensed consolidated financial statements.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Estimates that could significantly affect our results of operations or financial condition involve the assignment of fair values to goodwill and other intangible assets, the testing of impairment of long-lived assets, the determination of our liability for pensions and postretirement benefits, the determination of fair value of stock options granted, and the resolution of tax matters and legal contingencies. Please refer to our 2017 Annual Report for a further discussion of these estimates.

In accordance with Accounting Standards Codification (“ASC”) Topic 350, we capitalize costs associated with software developed or obtained for internal use when both the preliminary project stage is completed and our management has authorized further funding for the project, which it deems probable of completion. Capitalized software costs include only: (1) external direct costs of materials and services consumed in developing or obtaining the software; (2) payroll and payroll-related costs for employees who are directly associated with and who devote time to the project; and (3) interest costs incurred while developing the software. Capitalization of these costs ceases no later than the point at which the project is substantially complete and ready for its intended purpose. We do not include general and administrative costs and overhead costs in capitalizable costs. ~~We charge research~~Research and development costs, product management, and other software maintenance costs related to software development ~~to earnings~~are expensed as incurred.

~~We have international operations whereby the local currencies serve as functional currencies. We translate foreign currency denominated~~Deferred costs, which primarily consist of deferred sales commissions, included within Other assets ~~and liabilities at theend-of-period~~ exchange rates and foreign currency denominated statements of operations at the weighted-average exchange rates for each period. We report the effect of changes in the U.S. dollar carrying values of assets and liabilities ofon our international operations that are due to changes in exchange rates between the U.S. dollar and their functional currency as foreign currency translation within accumulated other comprehensive income (loss) in the accompanying condensed consolidated ~~statements~~balance sheets were $118.8 million and $106.4 million as of ~~comprehensive income (loss). Gains~~September 30, 2020, and ~~losses from transactions~~December 31, 2019, respectively. Amortization expense for the deferred costs was $9.8 million and ~~translation of assets~~$8.1 million for the three months ended September 30, 2020, and ~~liabilities denominated in currencies other than~~2019, respectively, and $27.9 million and $23.5 million for the ~~functional currency of the international operation are recorded in the condensed consolidated statements of operations within other expense, net.~~nine months ended September 30, 2020, and 2019 respectively.

In ~~May 2014~~August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. ~~2014-09,~~ ~~“Revenue from Contracts with Customers,~~2018-14, “Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans,” which ~~replaced all existing revenue guidance created by ASC Topic 606, including prescriptive industry-specific guidance.~~modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This ~~standard’s core principle is~~update removes disclosures that ~~an entity will recognize revenue when it transfers promised goods or services~~are no longer considered cost beneficial, adds disclosures identified as relevant, and clarifies certain specific requirements of

disclosures to ~~customers in an amount that reflects~~improve the consideration to which the entity expects to be entitled in exchange for those goods or services. Entities will need to apply more judgment and make more estimates than under the previous guidance. In July 2015 the FASB deferred the effective date for all entities by one year, making the guidance for~~non-public~~ ~~companies effective for annual reporting periods beginning after December 15, 2018. Early adoption was permitted to the original effective date~~effectiveness of December 15, 2016 (including interim reporting periods within that reporting period). The standard permits the use of either the retrospective or cumulative effect transition method. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. An emerging growth company can, therefore, delay adoption of certain accounting standards until those standards would otherwise apply to private companies. Management has chosen to take advantage of this extended transition period to adopt ASU~~2014-09~~ ~~beginning in the first quarter of 2019. Management anticipates using the retrospective method for adoption.~~

~~In preparation for this planned adoption, we have been evaluating the impact of the new standard to our financial statements and accompanying~~ disclosures in the notes to ~~our consolidated~~ financial statements. ~~Our assessment~~The amendments in this update are effective for public business entities for fiscal years ending after December 15, 2020. The amendments in this update should be applied on a retrospective basis to all periods presented. The adoption of this guidance will not have a significant impact on our annual defined benefit plan and other postretirement plan disclosures.

In March 2020, the ~~impact includes~~FASB issued ASU No. 2020-04, “Reference Rate Reform,” which provides guidance for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this guidance apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this guidance provide for an ~~evaluation~~optional method in which modifications of the five-step process set forth in the new standard along with the enhancement of disclosures that will be required. To date, we have developed our initial plan for implementing the standard, which includes identifying customer contracts within the scope of ASC Topic 310, Receivables, and ASC Topic 470, Debt, should be accounted for by prospectively adjusting the ~~new standard, identifying performance obligations within those customer contracts,~~effective interest rate, in addition to several other optional methods and evaluating the impact of incremental variable consideration paid to obtain those customer contracts. We have also undertaken a comprehensive review of all contracts that fall under the scope of the new standard; and, as of the date ofexceptions. The amendments in this ~~report, we have substantially completed our review ofin-scope~~ ~~contracts.~~

Based on analysis performed to date, we expect that adoption of the new standard will result in changes to the classification and timing of our revenue recognition. Specifically, we expect an increase in revenue classified as professional services and other revenue and a reduction in revenue classified as recurring services revenue under the new standard, as compared to current U.S. GAAP. Further, we expect that the new standard will result in changes to the timing of our revenue recognition compared to current U.S. GAAP. In compliance with the new standard, a contractual asset will be reflected on the consolidated balance sheets and will be amortized over the customers’ period of benefit, which is generally three years. We also expect changes to the timing of certain incremental selling, general, and administrative expenses, as the new standard will also require capitalizing and amortizing certain selling expenses, such as commissions and bonuses paid to the sales force. These sales expenses will be amortized over the customer’s period of benefit.

~~In periods of revenue growth, the changes above~~update are ~~expected to result in higher overall earnings before income taxes and net income when compared to current U.S. GAAP. We have not yet determined the impact of the disclosure requirements.~~

~~The following table presents the anticipated impacts that the adoption of ASC 606 would have for the periods presented:~~

~~In February 2016, the FASB issued ASUNo. 2016-02,~~ “Leases,” which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This standard requires balance sheet recognition for both finance leases and operating leases. This guidance is effective for~~non-public~~ ~~companies for fiscal years~~ all entities beginning ~~after December 15, 2019,~~March 12, 2020 and ~~interim periods within fiscal years beginning after December 15, 2020. The guidance is required~~are available to be adopted using a modified retrospective approach. An entity will, in effect, continue to account for leases that commence before the effective date in accordance with previous U.S. GAAP unless the lease is modified, except that lessees are required to recognize a~~right-of-use~~ asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous U.S. GAAP.used through December 31, 2022. We ~~are currently evaluating the impact of~~do not expect the adoption of this ~~standard.~~

~~In February 2018 the FASB issued ASU2018-02,~~ ~~“Income Statement—Reporting Comprehensive Income,” which is in response~~guidance to a narrow-scope financial reporting issue that arose because of the Tax Cuts and Jobs Act. The amendment in this update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This amendment is intended to improve the usefulness of information reported to financial statement users by requiring certain disclosures about stranded tax effects. The amendment in this update is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. Please refer to Note 14, “Income Taxes,” for further discussion of this new guidance.

In the third quarter of 2013, we entered into an agreement for the sale of certain of our customer contracts for consumer-directed benefit services, including flexible spending accounts, health reimbursement accounts, health savings accounts, commuter (parking or transit) premium-only plans, and tuition reimbursement plans (collectively, the “Consumer-Directed Benefit Services”). During the third quarter of 2015, we completed two separate transactions that resulted in the sale of our benefits administration and post-employment health insurance portability compliance businesses (the “Divested Benefits Continuation Businesses”).

~~These three transactions represented a strategic shift in our overall business and~~ have ~~had~~ a significant impact on our financial statements.

On May 29, 2020, we completed the purchase of 100% of the outstanding shares of Excelity Global Solutions Pte. Ltd. (“Excelity”) for $77.2 million. Excelity is a human capital management service provider in the Asia-Pacific region.

The financial ~~statement results. Accordingly, the Divested Benefits Continuation Businesses, as well as the Consumer-Directed Benefit Services,~~results of Excelity have been ~~presented as discontinued operations~~included within ~~the HCM segment in the~~our condensed consolidated financial statements from the acquisition date forward and ~~accompanying notes for all periods presented.~~are classified as a Bureau solution. The ~~amounts in the table below reflect the operating results and gain on sale~~acquisition of ~~the Divested Benefits Continuation Businesses reported as discontinued operations, as well as supplemental disclosures of the discontinued operations:~~

~~For both sales of the Divested Benefits Continuation Businesses, consideration received was contingent upon the number and dollar value of successful customer transitions and~~Excelity was recorded ~~when earned. Proceeds~~using the acquisition method of ~~$0.9 were received~~accounting, in which the assets and ~~earned based on the customers transitioned during the three months ended March 31, 2017. These proceeds were for~~liabilities assumed are recognized at their fair value. As of September 30, 2020, we have conducted a ~~final purchase pricetrue-up~~ ~~related to one~~preliminary assessment of ~~the transactions.~~

~~The remaining~~certain assets and liabilities related to ~~discontinued operations for~~ the ~~Divested Benefits Continuation Businesses as~~acquisition of ~~March 31, 2018,~~Excelity. We are continuing our review of these items during the measurement period, and ~~December 31, 2017, are immaterial amounts included in Other accrued expenses in our condensed consolidated balance sheets.~~

On March 1, 2016, we entered into a strategic joint venture with WorkAngel Technology Limited (“WorkAngel”) in which we contributed our existing LifeWorks business to a newly formed English limited company (WorkAngel Organisation Limited orif new information is obtained about facts and circumstances that existed at the “Joint Venture Company”). On January 20, 2017, WorkAngel Organisation Limited changed its name to LifeWorks Corporation Ltd. We have a controlling interest in the Joint Venture Company, including certain preferential distribution rights; therefore, the Joint Venture Company is consolidated within our financial statements, and the other joint venture ownership interest component is presented as a noncontrolling interest.

~~Shareholder distributions will occur upon a liquidation event, as defined by the joint venture agreement. We hold all~~effective date of the ~~Class A shares, and former WorkAngel shareholders hold all~~acquisition, the acquisition accounting will be revised to reflect the resulting adjustments to the current estimate of these items. After consideration of the ~~Class B shares. Holders~~Excelity acquisition, management has concluded that we continue to have 1 operating and reportable segment. This conclusion aligns with how management monitors operating performance, allocates resources, and deploys capital.

The major classes of Class A shares will have rights to 75 percent of the distributions up to $250 million, 25 percent of the distributions between $250 and $500 million, and 50 percent thereafter. Holders of Class B shares have rights to the remaining distributions. Income attributable to noncontrolling interest has been calculated by applying the Class B distribution percentages to the joint venture earnings as reported on a stand-alone basis. During the three months ended March 31, 2018, and 2017, there was loss attributable to the noncontrolling interest of $0.5 and $0.0, respectively.

On April 30, 2018, we distributed our ownership interest in the Joint Venture Company to our stockholders of record prior to our IPO. Please refer to Note 19, “Subsequent Events,” for further discussion of the LifeWorks Disposition.

Fair value is defined as 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 (an exit price). U.S. GAAP outlines a valuation framework and creates a fair value hierarchy intended to increase the consistency and comparability of fair value measurements and the related disclosures. Certain assets and liabilities ~~must be measured at fair value, and disclosures are required for items measured at fair value.~~

~~We measure our financial instruments using inputs from~~to which we allocated the ~~following three levels of the fair value hierarchy. The three levels are~~purchase price were as follows:

Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (that is, interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).

Level 3 inputs include unobservable inputs that reflect our assumptions about the assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including internal data.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

~~As of March 31, 2018, our~~Our financial assets and liabilities measured at fair value on a recurring basis were categorized as follows:

During the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2020, and the year ended December 31, ~~2017,~~2019, we ~~did notre-measure~~ ~~any financial~~completed business combinations which required the assets oracquired and liabilities assumed to be measured at fair value on a nonrecurring basis.

In connection with our U.S. and Canadian payroll and tax filing services, we collect funds for payment of payroll and taxes; temporarily hold such funds in trust until payment is due; remit the funds to the clients’ employees and appropriate taxing authority; file federal, state and local tax returns; and handle related regulatory correspondence and amendments. The assets held in trust are intended for the specific purpose of satisfying client fund obligations and therefore are not freely available for our general business use.

Our customer trust funds are held and invested with the primary objectives being to ensure adequate liquidity to meet cash flow requirements and to protect the principal balance. In accordance with these objectives, we maintain on average approximately 45% of customer trust funds in liquidity portfolios with maturities ranging from one to 120 days, consisting of high-quality bank deposits, money market mutual funds, commercial paper, or collateralized short-term investments; and we maintain on average approximately 55% of customer trust funds in fixed income portfolios with maturities ranging from 120 days to 10 years, consisting of U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate and bank securities. To maintain sufficient liquidity in the trust to meet payment obligations, we also have financing arrangements and may pledge fixed income securities for short-term financing.

Investment income from invested customer trust funds, ~~constitutes~~also referred to as float revenue or float, is a component of our compensation for providing services under agreements with our customers. Investment income from invested customer trust funds included in recurring services revenue was ~~$17.6~~$10.6 million and ~~$11.4~~$18.3 million for the three months ended ~~March 31, 2018,~~September 30, 2020, and ~~2017,~~2019, respectively, and $41.7 million and $62.9 million for the nine months ended September 30, 2020, and 2019, respectively.Investment income includes interest income, realized gains and losses from sales of customer trust funds’ investments, and unrealized credit losses determined to be ~~other-than-temporary.~~unrecoverable.

The amortized cost of customer trust funds as of ~~as of March 31, 2018~~September 30, 2020, and December 31, ~~2017,~~2019, is ~~comprised of~~ the original cost of assets acquired. The amortized cost and fair values of investments of customer trust funds available for sale ~~at as of March 31, 2018 and December 31, 2017, are~~were as follows:

The following represents the gross unrealized losses and the related fair value of the investments of customer trust funds available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss ~~position at March 31, 2018.~~ position.

Management does not believe that any individual unrealized loss was unrecoverable as of ~~March 31, 2018, represents an other-than-temporary impairment.~~September 30, 2020. The unrealized losses are primarily attributable to changes in interest rates and not to credit deterioration. We currently do not intend to sell or expect to be required to sell the securities before the time required to recover the amortized cost.

The amortized cost and fair value of investment securities available for sale at ~~March 31, 2018,~~September 30, 2020, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or to prepay obligations with or without call or prepayment penalties.

   March 31, 2018
   Cost    Fair Value
Due in one year or less
   $ 2,864.5    $ 2,864.6
Due in one to three years
   525.6    522.0
Due in three to five years
   544.8    538.0
Due after five years
   368.3    359.3




Invested customer trust funds
   $ 4,303.2    $ 4,283.9




13

~~Depreciation expense of property, plant, and equipment totaled $9.4 and $8.7 for the three months ended March 31, 2018, and 2017, respectively.~~

Goodwill and changes therein were as ~~follows for the three months ended March 31, 2018 and the year ended December 31, 2017:~~follows:

Please refer to Note 3, “Business Combinations,” for further discussion of the Excelity acquisition.

We perform an impairment assessment of our trade name intangible assets as of ~~March 31, 2018:~~October 1 of each year. We continue to evaluate the use of our trade names and branding in our sales and marketing efforts. If there is a fundamental shift in the method of our branding in the future, we will assess the impact on the carrying amount of our trade name intangible assets and determine whether an impairment exists. If it is determined that an impairment has occurred, it would be recognized during the period in which the decision was made to make the fundamental shift.

Amortization expense related to definite-lived intangible assets was ~~$5.5~~$0.8 million and ~~$5.4~~$4.7 million for the three months ended ~~March 31, 2018,~~September 30, 2020, and ~~2017,~~2019, respectively, and $1.6 million and $13.9 million for the nine months ended September 30, 2020, and 2019, respectively.

On April 30, 2018, Ceridian ~~entered~~completed the refinancing of its debt by entering into a new credit ~~agreement dated as of November 14, 2014, pursuant~~agreement. Pursuant to the terms of ~~which~~the new credit agreement, Ceridian became borrower of (i) a ~~$702.0~~$680.0 million term loan debt facility (the ~~“Term~~“2018 Term Debt”) and (ii) a ~~$130.0~~$300.0 million revolving credit facility (the ~~“Revolving~~“2018 Revolving Credit Facility”) (the 2018 Term Debt and the 2018 Revolving Credit Facility are together referred to as the ~~“Senior~~“2018 Senior Secured Credit Facility”). The 2018 Senior Secured Credit Facility is secured by substantially all assets of ~~Ceridian and is senior to Ceridian’s other debt.~~Ceridian. The 2018 Term Debt has a maturity date of ~~September 2020,~~April 30, 2025, and the 2018 Revolving Credit Facility has a maturity date of April 30, 2023. The 2018 Term Debt was initially subject to an interest rate of LIBOR plus 3.25%. As a result of a ratings upgrade on March 26, 2019, of our senior secured credit facilities by Moody’s Investors Service, from B3 to B2, the Company’s floating rate term debt interest rate has been reduced from LIBOR plus 3.25% to LIBOR plus 3.00%, so long as the rating is maintained.On February 19, 2020, Ceridian completed the first amendment to the 2018 Senior Secured Credit Facility in which the 2018 Term Debt interest rate was reduced from LIBOR plus 3.00% to LIBOR plus 2.50%. Further, the interest rate trigger under the applicable rating by Moody’s Investor Service was removed by the first amendment.Accrued interest related to the 2018 Senior Secured Credit Facility was $0.4million and $0.1 million as of September ~~2019. During the three months ended March~~30, 2020, and December 31, ~~2018, Ceridian made a final mandatorypre-payment~~ ~~of $0.3 towards the principal~~2019, respectively, and is included within Other accrued expenses in our condensed consolidated balance sheets.

On April 2, 2020, in light of the ~~Term Debt~~uncertainty and volatility in the global financial markets resulting from the ~~proceeds received from~~COVID-19 pandemic, Ceridian elected to borrow $295.0 million under the ~~2016 sale of~~2018 Revolving Credit Facility as a precautionary measure to increase our ~~United Kingdom~~cash position and ~~Ireland business.~~to preserve financial flexibility.

Ceridian issued its senior notes due 2021 (“Senior Notes”) on October 1, 2013, in the principal amount of $475.0 guaranteed by Parent and its payment systems business unit (“Comdata”). In connection with the Parent’s divestiture of Comdata on November 14, 2014, Ceridian met the credit conditions to allow the Senior Notes to transition to stand-alone obligations of Ceridian. The Senior Notes are unsecured.

The future principal payments and maturities of our indebtedness, excluding financing lease obligations, are as follows:

Our debt does not trade in active markets. Based on the borrowing rates currently available to us for bank loans with similar terms and average maturities and the limited trades of our debt, the fair value of our ~~indebtedness~~debt was estimated to be ~~$1,150.2~~$927.8 million and ~~$1,154.1~~$675.1 million as of ~~March 31, 2018~~September 30, 2020, and December 31, ~~2017,~~2019, respectively.

Using the net proceeds received from the IPO and concurrent private placement, we satisfied and discharged the indenture governing our Senior Notes on April 30, 2018, and the Senior Notes will be redeemed as of May 30, 2018. Concurrently, we completed the refinancing of our Senior Secured Credit Facility. Please refer to Note 19, “Subsequent Events,” for further discussion of these transactions.

The components of net periodic cost for our defined benefit pension plan and for our postretirement benefit plan are included in the following tables:

In October 2020, we contributed $105.0 million to the U.S. pension plan, which represented $17.0 million of required minimum contributions and $88.0 million of voluntary contributions.

~~HCM Share-Based Compensation Plans~~Our share-based compensation consists of performance-based stock options, term-based stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). We also offer an employee stock purchase plan.

Prior to November 1, 2013, Ceridian employees participated in a share-based compensation plan of the former ultimate parent of ~~Ceridian. The~~Ceridian, the 2007 Stock Incentive Plan (“2007 SIP”) authorized the issuance of up to 10,540,540 shares of common stock of Parent to eligible participants through stock options and stock awards. Eligible participants in the 2007 SIP included the Parent’s directors, employees and consultants.

. Effective November 1, 2013, although most participants who held stock options under the 2007 SIP converted their options to a newly created option plan, the 2013 Ceridian HCM Holding Inc. Stock Incentive Plan, as amended (“2013 ~~HCM~~ SIP”)~~. A~~, a small number of participants maintained their stock options in the 2007 SIP. Concurrent with the initial public offering (“IPO”) and legal reorganization, all outstanding stock options under the 2007 SIP were converted into options to purchase common stock of Ceridian. As of ~~March 31, 2018,~~September 30, 2020, there were ~~10,000~~2,500 stock options outstanding under the 2007 SIP.

As part of the 2013 HCM SIP, the Board of Directors approved a stock appreciation rights program that authorized the issuance of up to 600,000 stock appreciation rights. As of March 31, 2018, there were 260,850 outstanding stock appreciation rights.

~~As of March 31, 2018, there were 1,823,963 shares available for future grants of stock options and stock awards under the 2013 HCM SIP.~~

Stock options awarded under the 2013 ~~HCM~~ SIP vest either annually on a pro rata basis over a four- or five-year period or on a specific date if certain performance criteria are satisfied and certain equity values are attained. In addition, upon termination of ~~employment,~~service, all vested options ~~become eligible to~~must be exercised generally within 90 days after ~~termination.~~termination, or these awards will be forfeited. The stock option awards have a10-year contractual term and have an exercise price that is not less than the fair market value of the underlying stock on the date of grant.

~~Share-based compensation expense for~~ As of September 30, 2020, there were 2,882,412 stock options and RSUs outstanding under the ~~HCM plans was $2.7 and $4.2 for three months ended March 31, 2018, and 2017, respectively.~~2013 SIP. We do not intend to grant any additional awards under the 2007 SIP or the 2013 SIP.

On April 24, 2018, in connection with the IPO, the Board of Directors approved the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (“2018 EIP”), which authorizes the issuance of up to 13,500,000 shares of common stock to eligible participants through equity ~~awards. Concurrent with~~awards (the “Share Reserve”). The Share Reserve may be increased on March 31 of each of the ~~IPO, 4,673,605~~first ten calendar years during the term of the 2018 EIP, by the lesser of (i) 3 percent of the number of shares of our common stock ~~options were granted~~outstanding on each January 31 immediately prior to ~~current employees~~the date of increase or (ii) such number of shares of our common stock determined by the Board of Directors. Effective on March 31, 2020, the Share Reserve was increased by 4,199,089 shares, pursuant to the terms of the 2018 EIP.

Equity awards under the 2018 ~~EIP.~~EIP vest either annually or quarterly on a pro rata basis, generally over a one-, three-, or four-year period. In addition, upon termination of service, all vested awards must be exercised within 90 days after termination, or these awards will be forfeited. The equity awards have a 10-year contractual term and have an exercise price that is not less than the fair market value of ~~such~~the underlying stock on the date of the grant. As of September 30, 2020, there were 12,354,165 stock options, ~~is $22.00,~~RSUs, and PSUs outstanding and 9,541,117 shares available for future grants of equity awards under the ~~IPO price,~~2018 EIP.

Total share-based compensation expense was $18.5 million and $10.4 million for the ~~options will vest over four years.~~three months ended September 30, 2020, and 2019, respectively, and $46.3 million and $26.0 million for the nine months ended September 30, 2020, and 2019, respectively.

Performance-based stock option activity ~~for~~under the ~~period~~2007 SIP, the ~~period is~~2013 SIP, and the 2018 EIP was as follows:

The performance criteria for all outstanding performance-based stock options under the 2007 SIP and the 2013 SIP was met on June 7, 2018, resulting in the vesting of all outstanding performance-based stock options under the 2007 SIP and the 2013 SIP on this date.

During the nine months ended September 30, 2020, 1,500,000 performance-based stock options (“Performance Option Award”) were granted under the 2018 EIP with an exercise price of $65.26. The vesting conditions for the Performance Option Award are based on the Company’s performance on the New York Stock Exchange (“NYSE”) with 750,000 shares available to vest when the Company’s per share closing price on the NYSE meets or exceeds $110.94, or 1.7 times the exercise price, for ten consecutive trading days, and the remaining 750,000 shares are available to vest when the Company’s per share closing price on the NYSE meets or exceeds $130.52, or 2.0 times the exercise price, for ten consecutive trading days. The Performance Option Award has a minimum time-based vesting period of 3 years. The vesting conditions must be achieved prior to May 8, 2025, or any unvested portion of the Performance Option Award will terminate. A Monte Carlo simulation model was used to determine the fair value of these performance-based stock options. The Monte Carlo model utilizes multiple input variables that determine the probability of satisfying the market conditions stipulated in the award. We have estimated an expected term of 5.3 years, based on the vesting period and contractual term.

The remaining performance-based stock options granted during the nine months ended September 30, 2020, under the 2018 EIP primarily include vesting conditions based on migrations of customers to Dayforce. There are 2 tranches of stock options, in which the vesting conditions must be met either prior to September 13, 2021, or September 13, 2022.

As of ~~March 31, 2018,~~September 30, 2020, there was ~~$5.3~~$26.2 million of share-based compensation expense related to unvested performance-based stock ~~options~~option awards not yet ~~recognized.~~

Term-based stock option activity under the 2007 SIP, the 2013 SIP, and the 2018 EIP, for the period iswas as follows:

As of ~~March 31, 2018,~~September 30, 2020, there was ~~$20.8~~$95.9 million of share-based compensation expense related to unvested ~~term based awards~~term-based stock options not yet recognized, which is expected to be recognized over a weighted average period of ~~1.2~~1.9 years. ~~As of March 31, 2018, there were 7,214,169 vested term-based stock options.~~

~~Restricted stock units (“RSUs”)~~RSU activity under the 2013 SIP and the 2018 EIP, for the period iswas as ~~follows.~~follows:

During the ~~three~~nine months ended ~~March 31, 2018, 201,190 restricted stock units~~September 30, 2020, 215,441 RSUs vested. ~~Of the vested restricted stock units, 76,190 shares of common stock were issued, and 125,000 restricted stock units remained vested and releasable.~~ As of ~~March 31, 2018,~~September 30, 2020, there were ~~404,800~~946,484 unvested ~~restricted stock units~~RSUs outstanding and 422,635 vested RSUs outstanding. ~~Restricted stock units~~RSUs generally vest annually over a one-, three-, or four-year period. As of ~~March 31, 2018,~~September 30, 2020, there was ~~$6.3~~$45.4 million of share-based compensation expense related to unvested ~~restricted stock units not yet recognized, which expected to be recognized over a weighted average period of 3.0 years.~~

In connection with the formation of the Joint Venture Company, a share-based compensation scheme under English law (the “JV SIP”) was created. The JV SIP has authorized the issuance of 3,551,911 options to purchase Class C or Class D shares of the Joint Venture Company. Class C shares are ordinary shares in the Joint Venture Company with rights and liquidation preferences comparable to Class B shares. Class D shares are ordinary shares in the Joint Venture Company with rights and liquidation preferences comparable to Class A shares. Eligible participants in the JV SIP include the Joint Venture Company directors and employees.

~~Share-based compensation expense for the JV SIP was $0.2 and $0.3 for the years ended March 31, 2018 and 2017, respectively.~~

~~As of March 31, 2018, there was $2.4 of share-based compensation related to unvested awards~~RSUs not yet recognized, which is expected to be recognized over a weighted average period of 1.8 years.

During the nine months ended September 30, 2020, 145,017 PSUs were granted under the 2018 EIP and 3,464 PSUs were forfeited and cancelled.The vesting conditions for the PSUs are based on the Company’s performance against Cloud revenue and adjusted EBITDA margin goals under the Company’s 2020 Management Incentive Plan (the “2020 MIP”) for the incentive period of January 1, 2020 through December 31, 2020. The maximum incentive vesting of PSUs may not exceed 125% under the 2020 MIP. Both the Cloud revenue and adjusted EBITDA margin goals are calculated based on the Company’s operating results, adjusted for foreign currency and interest rate impacts plus other unique impacts as approved by the Compensation Committee or the Board of Directors. Upon vesting of a PSU, a participant will receive shares of common stock of the Company. The probability of vesting of PSUs will continue to be evaluated throughout the period, and share-based compensation expense will be recognized in accordance with that probability. As of ~~March 31,~~September 30, 2020, there was $10.0 million of share-based compensation expense related to unvested PSUs not yet recognized.

On November 9, 2018, ~~there were 624,820 vested Class C options~~the Board of Directors approved the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (“GESPP”), and ~~404,014 vested Class D options.~~the Company’s stockholders approved the GESPP on May 1, 2019. The GESPP authorizes the issuance of up to 2,500,000 shares of common stock to eligible participants through purchases via payroll deductions. A total of 2,102,709 shares of common stock are available for future issuances under the plan at September 30, 2020. The purchase price is the lower of (i) 85% of the fair market value of a share of common stock on the offering date (the first trading day of the offering period commencing on January 1 and concluding on December 31) or (ii) 85% of the fair market value of a share of common stock on the purchase date. The GESPP shall continue for ten years, unless terminated sooner as provided under the GESPP. During 2020 and subsequent years, quarterly purchase periods commence on January 1, April 1, July 1, and October 1. Shares are purchased on the last trading day of the respective purchase periods.

Recurring services revenue includes float revenue of ~~$2.8~~$10.6 million and $18.3 million for the three months ended ~~March 31, 2018,~~September 30, 2020, and ~~foreign currency translation expense of $0.9~~2019, respectively, and $41.7 million and $62.9 million for the ~~three~~nine months ended ~~March~~September 30, 2020, and 2019, respectively.

The Company records a contract asset when revenue recognized for professional service performance obligations exceed the contractual amount of billings for implementation related professional services. Contract assets were $53.4 million and $43.2 million as of September 30, 2020, and December 31, ~~2017. For~~2019, respectively. Contract assets expected to be recognized in revenue within twelve months are included within Prepaid expenses and other current assets, with the remaining contract assets included within Other assets on our condensed consolidated balance sheets.

Deferred revenue primarily consists of payments received in advance of revenue recognition. The changes in deferred revenue were as follows:

In accordance with ASC Topic 606, the following represents the aggregate amount of transaction price allocated to the remaining performance obligations that are unsatisfied as of the end of the reporting period. As of September 30, 2020, approximately $926.1 million of revenue is expected to be recognized over the next three ~~months ended March 31, 2018,~~years from remaining performance obligations, which represents contracted revenue for recurring services and ~~2017,~~fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. In accordance with the ~~foreign currency translation is~~practical expedient provided in ASC Topic 606, performance obligations that are billed and recognized as they are delivered, primarily ~~related to foreign currency remeasurement gains~~professional services contracts that are on a time and ~~losses resulting~~materials basis, are excluded from ~~intercompany receivables or payables denominated in foreign currencies.~~

The components of accumulated other comprehensive ~~income (loss)~~loss were as follows:

During the three months ended March 31, 2018, other comprehensive loss attributable to noncontrolling interest was $0.2, entirely related to foreign currency translation. During the three months ended March 31, 2017, other comprehensive income attributable to noncontrolling interest was $0.1, entirely related to foreign currency translation.

Our income tax provision ~~(benefit)~~ represents federal, state, and international taxes on our income recognized for financial statement purposes ~~which~~and includes the ~~effect~~effects of temporary differences between financial statement income and income recognized for tax return purposes. ~~Our income~~Deferred tax ~~provision is negatively affected by~~assets and liabilities are recorded for temporary differences between the ~~need~~financial reporting basis and the tax basis of assets and liabilities as adjusted for ~~a valuation allowance against our deferred tax assets.~~the expected benefits of utilizing net operating loss carryforwards. We record a valuation allowance to reduce our deferred tax ~~asset when it is more likely than not that all or a portion of~~assets to reflect the net deferred tax ~~asset~~assets that we believe will ~~not~~ be realized. In ~~determining~~assessing the ~~requirement~~likelihood that we will be able to recover our deferred tax assets and the need for a valuation allowance, we ~~assess the~~consider all available evidence, both positive and negative, ~~evidence to estimate if sufficient~~including historical levels of pre-tax book income, expiration of net operating losses, expectations and risks associated with estimates of future taxable income, ~~will be generated to utilize our deferred~~and ongoing prudent and feasible tax ~~assets not already identified~~planning strategies, as ~~requiring a valuation allowance.~~ well as current tax laws.As of ~~March 31, 2018, and December 31, 2017, excluding the Joint Venture Company,~~September 30, 2020, we continued to record a full valuation allowance against our domestic deferred tax assets that are not offset by the reversal of deferred tax liabilities. In the future, if it is determined that we no longer have a requirementcontinue to record a valuation allowance ~~against all or a portion~~ of ~~our~~$12.0 million against deferred tax assets ~~the release of the valuation allowance would have a positive impact on our income tax provision.~~

~~On December 22, 2017, the Tax Cut and Jobs Act legislation (the “Act”) was signed into law. The Act made broad and complex changes~~attributable to the U.S. tax code including: (a) lower U.S. federal corporate income tax rate from 35% to 21% effective January 1, 2018, (b) accelerated expensing of qualified capital investments for a specific period, and (c) a transition from a worldwide tax system to a territorial tax system.

ASC 740, Income Taxes, requires a company to record the effects of a tax law change in the period of enactment; however, shortly after enactment of the Tax Act, the SEC staff issued Staff Accounting Bulletin (“SAB”) 118, which allows a company to record a provisional amount when it does not have the necessary information available to complete its accounting for the change in the tax law. The FASB subsequently issued ASU~~2018-05~~ ~~to codify SAB 118 by amending ASC 740. ASU2018-05~~ continues to allow a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. The measurement period ends when the company has obtained, prepared, and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year.state net operating loss carryovers.

We recorded an income tax ~~expense~~benefit of $5.7 million during the nine months ended September 30, 2020, primarily attributable to tax benefits of $6.8 during the three months ended March 31, 2018. Included in this amount are the estimated impacts of requiring a current inclusion in U.S. federal income of certain earnings of controlled foreign corporations, allowing a domestic corporation an immediate deduction in the U.S. taxable incomemillion for a ~~portion of its foreign-derived intangible income, and~~reduction in the base erosion anti-abuse ~~tax.~~

~~In January~~(“BEAT”) in the U.S., $2.8 million associated with share-based compensation, and ~~April~~a $2.3 million reduction associated with unremitted foreign earnings, partially offset by tax expense of ~~2018, the Internal Revenue Service (the “IRS”) issued guidance that provides additional clarification on certain aspects of the transition tax calculation. We did not record any change~~$6.2 million, primarily attributable to our transition tax liability during the three months ended March 31, 2018. We are considering the additional IRS guidance as we continue to gather additional information related to the transition tax estimates and deferred tax estimates to more precisely compute the transition tax and remeasurement of deferred$4.8 million in U.S. state taxes. ~~We anticipate additional IRS guidance relative to the impacts of the Act will be forthcoming throughout 2018.~~

The total amount of unrecognized tax benefits as of ~~March 31, 2018,~~September 30, 2020, and December 31, ~~2017,~~2019, were ~~$10.5,~~$1.8 million, including ~~$2.1~~$0.3 million of accrued interest, and ~~$10.5,~~$1.5 million, including ~~$2.2~~$0.2 million of accrued interest, respectively. Of the total amount of unrecognized tax benefits as of ~~March 31, 2018, $9.9~~September 30, 2020, $1.8 million represents the amount that, if recognized, would favorably impact our effective income tax rate. It is reasonable to expect that the amount of unrecognized tax benefits will change in the next twelve months; however, we do not expect the change to have a significant impact on our results of operations or financial condition.

We file income tax returns in the U.S. federal jurisdiction, various states, and foreign jurisdictions. With a few exceptions, we are no longer subject to U.S. federal, state and local, ornon-U.S. income tax examinations by tax authorities for years before ~~2014.~~2015.

We are subject to claims and a number of judicial and administrative proceedings considered normal in the course of our current and past operations, including employment-related disputes, contract disputes, disputes with our competitors, intellectual property disputes, government audits and proceedings, customer disputes, and tort claims. In some proceedings, the claimant seeks damages as well as other relief, which, if granted, would require substantial expenditures on our part.

Our general terms and conditions in customer contracts frequently include a provision indicating that we will indemnify and hold our customers harmless from and against any and all claims alleging that the services and materials furnished by us violate any third party’s patent, trade secret, copyright or other intellectual property right. We are not aware of any material pending litigation concerning these indemnifications.

Some of these matters raise difficult and complex factual and legal issues and are subject to many uncertainties, including the facts and circumstances of each particular action, and the jurisdiction, forum, and law under which each action is proceeding. Because of these complexities, final disposition of some of these proceedings may not occur for several years. As such, we are not always able to estimate the amount of our possible future liabilities, if any.

There can be no certainty that we may not ultimately incur charges in excess of presently established or future financial accruals or insurance coverage. Although occasional adverse decisions or settlements may occur, it is management’s opinion that the final disposition of these proceedings will not, considering the merits of the claims and available resources or reserves and insurance, and based upon the facts and circumstances currently known, have a material adverse effect on our financial position or results of operations.

~~Ceridian is party to management agreements with affiliates~~We identified an isolated service incident on September 26, 2019, that resulted in duplicate payments for certain of our Sponsors, Fidelity National Financial, Inc. (“FNF”) and THLM. FNF assigned its management agreement to Cannae in November 2017. Pursuant to these management agreements, Cannae and THLM each, respectively, agree to provideU.S. payroll customers totaling $18.8 million. During the ~~Company with financial advisory, strategic, and general oversight services. These management agreements provide that~~year ended December 31, 2019, we will pay annual management fees to each of Cannae and THLM in an amount equal to the greater of (a) $0.9, or (b) 0.5 percent of Adjusted EBITDA. Adjusted EBITDA, for purposes of the management agreements, is EBITDA as defined in the Ceridian Senior Secured Credit Facility, further adjusted to exclude the payments made pursuant to the management agreements and certain stock options or other equity compensation.

We recorded a ~~management fee expense in~~loss of $11.2 million for the amount unrecovered, within selling, general, and administrative expense in our consolidated statement of ~~$0.5,~~operations. Our recovery efforts continued through the second quarter of 2020, resulting in collections of $0.4 million during the nine months ended September 30, 2020, which was recognized as a reduction to selling, general, and ~~$0.5~~administrative expense. We are no longer pursuing collection efforts of the remaining amount unrecovered.

We provide services to FleetCor Technologies Inc. (“FleetCor Technologies”) a related party due to a shared board member, through certain commercial arrangements entered into in the ordinary course of business, which include provision of Dayforce services and other administrative services. For these services, we have recorded revenue of $0.2 million for the three months ended ~~March 31, 2018,~~September 30, 2020, and ~~2017,~~2019, respectively, ~~related to these management agreements.~~

~~In April 2018,~~and $0.7 million and $0.6 million for the management agreements terminated upon consummation of our IPO. Upon termination, the management agreements provided that we pay a termination fee equal to the net present value of the management fee for a seven year period, which was $11.3 million.

~~Prior to itssplit-off~~ from FNF, Cannae was an affiliate of FNF. FNF and its subsidiaries owned $24.0 and $24.0 of the Senior Notes as of March 31, 2018, and December 31, 2017, respectively. Based on this ownership, $0.8 and $0.8 in interest payments were made to FNF and its subsidiaries during the threenine months ended ~~March 31, 2018,~~September 30, 2020, and ~~2017,~~2019 respectively. ~~FNF and its subsidiaries conducted the debt transactions through third parties in the ordinary course of their business and not directly with us. Following Cannae’ssplit-off~~ ~~from FNF, FNF retained ownership of the Senior Notes.~~

~~Ceridian is a~~We are party to a service agreement with ~~CompuCom Systems, Inc.~~The Dun and Bradstreet Corporation (“~~CompuCom”~~Dun and Bradstreet”), ~~an investment portfolio company of THL Partners.~~a related party due to certain shared board members. Pursuant to the service agreement, ~~CompuCom agrees to provide us with service desk and desk side support services. Pursuant to this arrangement,~~ we made payments to ~~CompuCom~~Dun and Bradstreet totaling ~~$0.2, and $0.5 during~~$0.4 million for the ~~three~~nine months ended ~~March 31, 2018, and 2017, respectively.~~

We provide Dayforce and related services to The Stronach Group, for which we recorded revenueof $0.1 million and $0.2 million for the ~~three~~nine months ended ~~March 31, 2018. Alon Ossip, the~~September 30, 2020, and 2019, respectively. The brother of ~~David Ossip,~~our chief executive officer is the chief executive officer, and is currently a minority shareholder, of The Stronach Group.

We provide payroll-related tax filings services to Fidelity National Financial, Inc., a related party until August 2019 due to certain shared board members, for which we recorded revenue of$0.1 million and $0.3 million for the three and nine months ended September 30, 2019, respectively.

We provide Dayforce and related services to ~~FNF for~~certain investment portfolio companies of THL Managers VI, LLC and Cannae Holdings, Inc., which ~~we recorded revenue of $0.1 and $0.3 for the three months ended March 31, 2018, and 2017, respectively.~~

As of March 31, 2018, Ceridian had two operating and reportable segments, HCM and LifeWorks, based on the separate management teams, solutions, and objectives of the businesses. Our operating and reportable segments align with how management monitored operating performance, allocates resources, and deploys capital. There were two chief operating decision makers (“CODM”), the Chief Executive Officer (“CEO”) of HCM and the CEO of LifeWorks. Both reported directlyare considered related parties due to ~~their separate Boards of Directors.~~

Segment performance is based on revenues and operating income or income (loss) before interest expense and income taxes. Interest expense and income taxes are not indicative of operating performance, and, as a result are not included in the measures that are reviewed by the CODMs. The amounts in the following tables are obtained from reports used by our senior management team. There are no significant~~non-cash~~ items reported in segment profit or loss other than depreciation and amortization and share-based compensation. Total assets by segment were $6,723.8 for HCM and $155.7 for LifeWorks as of March 31, 2018, and $6,573.7 for HCM and $156.2 for LifeWorks as of December 31, 2017. Please refer to Note 8, “Goodwill and Intangible Assets,” for goodwill balances by segment.

~~We categorize our solutions into three categories: Cloud HCM (“Cloud”), Bureau HCM (“Bureau”), and LifeWorks offerings.~~

Cloud revenue is generated from HCM solutions that are delivered via two cloud offerings: Dayforce and Powerpay. The Dayforce offering is differentiated from our market competition as being a single application that offers a comprehensive range of functionality, including global HR, payroll, benefits, workforce management, and talent management on web and native iOS and Android platforms. Dayforce revenue is primarily generated from monthly recurring fees charged on a PEPM basis, generally~~one-month~~ in advance of service. Also included within Dayforce revenue is implementation, staging, and other professional services revenue; revenues from the sale, rental, and maintenance of time clocks; and billable travel expenses. The Powerpay offering is our solution designed primarily for small market Canadian customers. The typical Powerpay customer has fewer than 20 employees, and the majority of the revenue is generated from recurring fees charged on a~~per-employee,per-process~~ ~~basis. Typical processes include the customer’s payroll runs,year-end~~ tax packages, and delivery of customers’ remittance advices or checks. In addition to the direct revenue earned from the Dayforce and Powerpay offerings, Cloud revenue also includes investment income generated from holding Cloud customer funds in trust before funds are remitted to taxing authorities, Cloud customer employees, or other third parties; and revenue from the sale of third party services.

Bureau revenue is generated primarily from HCM solutions delivered via a service-bureau model. These solutions are delivered via three primary service lines: payroll, payroll-related tax filing services, and outsourced human resource solutions.certain shared board members. Revenue from ~~payroll services is generated from recurring fees charged on aper-process~~ ~~basis. Typical processes include the customer’s payroll runs,year-end~~ tax packages, and delivery of customers’ remittance advices or checks. In addition to customers who use our payroll services, certain customers use our tax filing services on a stand-alone basis. Our outsourced human resource solutions are tailored to meet the needs of individual customers, and entail our contracting to perform many of the duties of a customer’s human resources department, including payroll processing, time and labor management, performance management, and recruiting. We also perform~~HCM-related~~ individual services for customers, such as check printing, wage attachment and disbursement, and ACA management. Additional items included in Bureau revenue are custom professional services revenue; investment income generated from holding Bureau customer funds in trust before funds are remitted to taxing authorities, Bureau customer employees, or other third parties; consulting servicesthese related ~~to Bureau offerings; and revenue from the sale of third party services.~~

LifeWorks joint venture revenue is primarily generated from employee assistance, wellness, recognition, and incentive programs offered directly by LifeWorks in the United States, Canada, the United Kingdom and various other countries through LifeWorks’ network of contractors. LifeWorks offers employee engagement services, such as employee assistance programs, social recognition, discounts from participating vendors, a private social network, employee and corporate wellness, and employee engagement analytics.

We compute net ~~loss~~income (loss) per share of common stock using the treasury stock method.

Basic net loss per share is computed by dividing net loss attributable to Ceridian available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

For the calculation of diluted net loss per share, net loss per share is adjusted by the effect of dilutive securities, including awards under our share-based compensation plans. Diluted net loss per share is computed by dividing the resulting net loss attributable to Ceridian available to common stockholders by the weighted-average number of fully diluted common shares outstanding. During the three months ended March 31, 2018, and 2017, our potential dilutive shares, such as stock options, RSUs, and shares of senior and junior convertible preferred stock were not included in the computation of diluted net loss per share as the effect of including these shares in the calculation would have been anti-dilutive.

The ~~numerators and denominators of the~~ basic and diluted net ~~loss~~income (loss) per share computations ~~are~~were calculated as follows:

The following potentially dilutive weighted-average shares were excluded from the calculation of diluted net ~~loss~~income (loss) per share because their effect would have been anti-dilutive:

Pro forma basic and diluted net loss per share for the three months ended March 31, 2018, has been computed to reflect the number of shares that will be outstanding after the internal corporate reorganization subsequent to our IPO and concurrent private placement, in which our senior convertible preferred stock and junior convertible preferred stock was converted into common stock. Pro forma basic and diluted net loss per share does not give effect to our IPO or concurrent private placement and the use of proceeds therefrom.

~~The numerators and denominators of pro forma basic and diluted net loss per share computations are calculated as follows:~~

On April 30, 2018, we completed our initial public offering (“IPO”), in which we issued and sold 21,000,000 shares of common stock at a public offering price of $22.00 per share. We granted the underwriters a~~30-day~~ option to purchase an additional 3,150,000 shares of common stock at the offering price, which was exercised in full. A total of 24,150,000 shares of common stock were issued on April 30, 2018, with gross proceeds of $531.3 from the IPO before deducting underwriting discounts, commissions, and other offering expenses. Immediately subsequent to the closing of our IPO on April 30, 2018, THL / Cannae Investors LLC, one of our existing stockholders controlled by our Sponsors, purchased from us in a private placement $100.0 of our common stock at a price per share equal to the offering price. Based on the offering price of $22.00 per share, 4,545,455 shares were issued in this private placement. The condensed consolidated financial statements as of March 31, 2018, including share and per share amounts, do not give effect to the IPO, concurrent private placement, or the internal corporate reorganization discussed in Note 1, “Organization,” as the IPO and related transactions were completed subsequent to March 31, 2018.

Concurrently with closing of the IPO and the concurrent private placement, we applied the net proceeds from the IPO to satisfy and to discharge the indenture governing our outstanding $475.0 principal amount Senior Notes, and they will be redeemed on May 30, 2018. We also refinanced our remaining indebtedness under our (i) $702.0 (original principal amount) Senior Term Debt and (ii) $130.0 Revolving Credit Facility, including accrued interest and related costs and expenses, with new senior credit facilities consisting of a $680.0 term loan debt facility and a $300.0 revolving credit facility.

Contemporaneously with the IPO and concurrent private placement, we distributed our interest in LifeWorks to our existing stockholders of record prior to the IPO on a pro rata basis in accordance with their pro rata interests in us. As a result of the LifeWorks Disposition, we no longer have any material obligations under the LifeWorks joint venture agreement. In addition, upon completion of the LifeWorks Disposition, LifeWorks is no longer a separate reportable segment, and we will no longer have a~~non-controlling~~ ~~interest on our consolidated financial statements.~~

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our financial condition and results of operations as of, and for, the periods presented. You should read the following discussion and analysis of our financial condition and results of operations ~~should be read in conjunction~~together with ~~the~~our unaudited condensed consolidated financial statements and notes thereto included elsewhere in ~~this Quarterly Report on Form10-Q~~ ~~(this “Form10-Q”)~~report and in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, ~~2017 (our “2017~~2019, in our Annual ~~Report”) included within our prospectus dated April 25, 2018, as~~Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission ~~(the “SEC”~~(“SEC”) on ~~April 26, 2018, pursuant~~February 28, 2020 (our “2019 Form 10-K”). This discussion and analysis contains forward-looking statements, including statement regarding industry outlook, our expectations for the future of our business, and our liquidity and capital resources as well as other non-historical statements. These statements are based on current expectations and are subject to ~~Rule 424(b) under~~numerous risks and uncertainties, including but not limited to the ~~Securities Act of 1933, as amended (FileNo. 333-223905)~~ ~~(the “Prospectus”).~~risks and uncertainties described in Part II, Item 1A, “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” Our actual results may differ materially from those contained in or implied by these forward-looking statements. Any reference to a “Note” in this discussion relates to the accompanying notes to the unaudited condensed consolidated financial statements included elsewhere in this ~~Form10-Q~~report unless otherwise indicated.

Ceridian is a global human capital management (“HCM”) software company. We categorize our solutions into two categories: Cloud and Bureau solutions. Cloud revenue is generated from HCM solutions that are delivered via two cloud offerings: Dayforce, our flagship cloud HCM platform, and Powerpay, a cloud HR and payroll solution for the Canadian small business market. We also continue to support customers using our Bureau solutions, which we generally stopped actively selling to new customers following the acquisition of Dayforce in 2012. Revenue from our Cloud and Bureau solutions include an allocation of investment income generated from holding customer funds in trust before funds are remitted to taxing authorities, also referred to as float revenue or float. We invest in maintenance and necessary updates to support our Bureau customers and continue to migrate them to Dayforce.

Dayforce provides ~~human resources (“HR”),~~HR, payroll, benefits, workforce management, and talent management functionality. Our platform is used by organizations, regardless of industry or size, to optimize management of the entire employee lifecycle, including attracting, engaging, paying, deploying, and developing their people. Dayforce was built as a single application from the ground up that combines a modern, consumer-grade user experience with proprietary application architecture, including a single employee record and a rules engine spanning all areas of HCM. Dayforce provides continuous real-time calculations across all modules to enable, for example, payroll administrators access to data through the entire pay period, and managers access to real-time data to optimize work schedules. Our platform is designed to make work life better for our customers and their employees by improving HCM decision-making processes, streamlining workflows, ~~exposing~~revealing strategic organizational insights, and simplifying legislative compliance. The platform is designed to ease administrative work for both employees and managers, creating opportunities for companies to increase employee engagement. We are afounder-led organization, and our culture combines the agility and innovation of astart-up with a history of deep domain and operational expertise.

In 2020, we launched the Dayforce Wallet, which gives our customers’ employees greater control over their financial well-being by providing them with instant access to their earnings. This on-demand pay feature allows employees more choice over when they get paid by making any day payday. Dayforce Wallet enables workers to access their already-earned wages anytime during the pay period, net of taxes, withholdings and other payroll deductions. Leveraging Dayforce’s continuous pay calculations, Dayforce Wallet processes a same-day payroll each time a worker requests their pay. The solution is compliant with federal, state, and local remittances and requires no changes to payroll processing including the funding, timing, and close-out of pay.

We sell Dayforce through our direct sales force on a subscriptionper-employee,per-month (“PEPM”) basis. Our subscriptions are typically structured with an initial fixed term of between three and five years, with evergreen renewal thereafter. Dayforce can serve customers of all sizes, ranging from 100 to over 100,000 employees. We have rapidly grown the Dayforce platform to ~~more than 3,150~~4,704 live Dayforce customers as of ~~March 31, 2018.~~September 30, 2020. For the three and nine months ended ~~March 31, 2018,~~September 30, 2020, we added ~~over 150~~101 and 341 net new live Dayforce ~~customers.~~

In addition to Dayforce, we sell Powerpay, a cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels. We also continue to support customers, using our Bureau solutions, which we generally stopped actively selling to new customers following the acquisition of Dayforce. We invest in maintenance and necessary updates to support our Bureau customers and continue to migrate them to Dayforce. We also own a controlling financial interest in a joint venture, LifeWorks, which offers an employee engagement platform that delivers employee assistance programs, social recognition, exclusive perks and discounts, a private social network, employee and corporate wellness programs, and employee engagement analytics in the United States, Canada, and the United Kingdom.

We generate recurring revenues primarily from recurring fees charged for the use of our Cloud HCM solutions, Dayforce and Powerpay, as well as from our Bureau solutions and LifeWorks joint venture. We also generate professional services and other revenue associated primarily with the work performed to assist customers with the planning, design, implementation, and staging of their cloud-based solution. Our HCM solutions are typically provided through long-term customer relationships that result in a high level of recurring revenue. For Dayforce, we primarily charge monthly recurring fees on a PEPM basis, generally~~one-month~~ in advance of service, based on the number and type of solutions provided to the customer and the number of employees and other users at the customer. Our standard Dayforce contracts are generally for a three to five-year period. The average time it takes to implement Dayforce typically ranges from three months for smaller customers to nine months for larger customers. Once Dayforce is implemented, the customer goes live, and we begin to generate recurring revenue. For Powerpay, we charge customers recurring fees on a~~per-employee,per-process~~ basis. Powerpay can typically be implemented on a remote basis within one to three days, at which point we start receiving recurring fees. For our Bureau solutions, we primarily charge recurring fees on a~~per-process~~ basis. We also generate recurring revenue from investment income from funds held in trust on behalf of our customers. The LifeWorks joint venture also generates recurring revenue, primarily from employee assistance, wellness, recognition, and incentive programs.

~~We categorize our solutions into three categories: Cloud HCM, Bureau HCM, and LifeWorks solutions.~~

Bureau revenue is generated primarily from HCM solutions delivered via a service-bureau model. These solutions are delivered via three primary service lines: payroll, payroll-related tax filing services, and outsourced human resource solutions. Revenue from payroll services is generated from recurring fees charged on a~~per-process~~ ~~basis. Typical processes include the customer’s payroll runs,year-end~~ tax packages, and delivery of customers’ remittance advices or checks. In addition to customers who use our payroll services, certain customers use our tax filing services on a stand-alone basis. Our outsourced human resource solutions are tailored to meet the needs of individual customers, and entail our contracting to perform many of the duties of a customer’s human resources department, including payroll processing, time and labor management, performance management, and recruiting. We also perform~~HCM-related~~ individual services for customers, such as check printing, wage attachment and disbursement, and ACA management. Additional items included in Bureau revenue are custom professional services revenue; investment income generated from holding Bureau customer funds in trust before funds are remitted to taxing authorities, Bureau customer employees, or other third parties; consulting services related to Bureau offerings; and revenue from the sale of third party services.

~~Ceridian was acquired in 2007 by affiliates andco-investors~~ of Thomas H. Lee Partners, L.P. (“THL Partners”) and Cannae Holdings, Inc., formerly known as Fidelity National Financial Ventures, LLC (“Cannae”) (THL Partners and Cannae are together referred to as the “Sponsors”). In April 2012, Ceridian acquired Dayforce Corporation, which had built Dayforce, a Cloud HCM solution. In the months following the acquisition, Dayforce founder David D. Ossip was named Chief Executive Officer of Ceridian HCM, and shortly thereafter, we generally stopped actively selling our Bureau solutions to new customers in the United States to focus our resources on expanding the Dayforce platform and growing Cloud HCM solutions. For each quarter since September 30, 2016, our Cloud HCM revenue has surpassed our Bureau HCM revenue.

As part of our strategy to focus on the growth of our Cloud HCM solutions business, we (i) sold our consumer-directed benefit services business in 2013, (ii) merged Comdata, our payment systems business unit, with FleetCor Technologies Inc. in 2014, (iii) sold our benefits administration and post-employment compliance business in 2015, and (iv) sold our United Kingdom and Ireland businesses and a portion of our operations that supported such businesses in the Republic of Mauritius in 2016. Our benefits administration and post-employee compliance business, our United Kingdom and Ireland businesses, and our divested Mauritius operations are presented as discontinued operations in our financial statements. Our consumer-directed

benefits services business and our benefits administration and post-employment compliance business are collectively referred to as our “Divested Benefits Businesses.” As a result of these transactions, we only actively sell Dayforce and Powerpay in our HCM segment, which we believe simplifies our business model and positions us well for continued growth. In 2016, we contributed our LifeWorks employee assistance program business to a joint venture, LifeWorks, that provides employee assistance, wellness, recognition, and incentives programs in the United States, Canada, and the United Kingdom. Prior to the formation of the LifeWorks joint venture, employee assistance programs were provided by Ceridian.

On April 30, 2018, we completed our initial public offering (“IPO”), in which we issued and sold 21,000,000 shares of common stock at a public offering price of $22.00 per share. We granted the underwriters a~~30-day~~ option to purchase an additional 3,150,000 shares of common stock at the offering price, which was exercised in full. A total of 24,150,000 shares of common stock were issued on April 30, 2018, with gross proceeds of $531.3 million from the IPO before deducting underwriting discounts, commissions, and other offering expenses. Immediately subsequent to the closing of our IPO on April 30, 2018, THL / Cannae Investors LLC, one of our existing stockholders controlled by our Sponsors, purchased from us in a private placement $100.0 million of our common stock at a price per share equal to the offering price. Based on the offering price of $22.00 per share, 4,545,455 shares were issued in this private placement.

We applied the net proceeds from the IPO to satisfy and to discharge the indenture governing our outstanding $475.0 million principal amount Senior Notes, and they will be redeemed on May 30, 2018. Concurrently, we also refinanced our remaining indebtedness under our (i) $702.0 million (original principal amount) Senior Term Debt and (ii) $130.0 million Revolving Credit Facility, including accrued interest and related costs and expenses, with new senior credit facilities consisting of a $680.0 million term loan debt facility and a $300.0 million revolving credit facility.

~~Please refer to Note 19, “Subsequent Events,” for further discussion of these transactions.~~respectively.

Our business model focuses on supporting the rapid growth of Dayforce and maximizing the lifetime value of our Dayforce customer relationships. Due to our subscription model, where we recognize subscription revenues ratably over the term of the subscription period, and high customer retention rates, we have historically had a high level of visibility into our future revenues. The profitability of a customer ~~to our business~~ depends, in large part, on how long they have been a customer. Because in our current business model, PEPM subscription fees are not charged until the customer goes live, and because we incur costs in advance of receiving PEPM revenue that are not offset by our implementation fees, we estimate that it takes ~~an average of 2.5~~approximately two years before we are able to recover our implementation, customer acquisition, and other direct costs on a new Dayforce customer contract. ~~As the proportion~~

Over the lifetime of the customer relationship, we have the opportunity to realize additional PEPM revenue, both as the customer grows or rolls out the Dayforce solution to additional employees, and also by selling additional functionality to existing customers that do not currently utilize our full platform. We also incur costs to manage the account, to ~~support~~retain customers, and to sell additional functionality. These costs, however, are significantly less than the costs initially incurred to acquire and to implement the customer.

In March 2020, the World Health Organization declared the outbreak of ~~Operations~~

~~Set forth below is~~coronavirus (COVID-19) to be a ~~discussion of some~~pandemic. The global spread of the ~~key factors~~COVID-19 pandemic has created significant global volatility, uncertainty, and ~~trends affecting our results of operations.~~

~~A key part of our strategy is to~~economic disruption. We have experienced and may continue to ~~grow our Dayforce~~experience curtailed customer base. We have developed sales and marketing efforts that are designed for effective customer acquisition. As of March 31, 2018, we had more than 3,150 live Dayforce customers, an increase of approximately 670 customers as compared to the total at March 31, 2017. Our continued focus on sales execution is important to drive further penetration of the Dayforce platform and to expand our market share. We also believe that there is a significant opportunity for our solution outside of our core North American markets. Dayforce was designeddemand, primarily as a ~~global platform;~~result of declining employment levels at our customers in certain sectors, such as retail and ~~we intend to expand globally through both the expansion of our own proprietary payroll functionality,~~hospitality, as well as ~~through new~~lower customer utilization of professional services and ~~existing partnerships with local vendors, including our existing membership~~customer delays in implementation services, due to the ~~Payroll Services Alliance.~~

~~We are committed~~effects of the COVID-19 pandemic. Additionally, the federal funds rate cuts by the U.S. Federal Reserve and the overnight rate target by the Bank of Canada have had and will continue to delivering market-leading HCM solutions preferred by employers and employees alike. We believe that maintaining our product leadership is critical to driving further revenue growth. Our leading market position in technology is basedhave negative effects on our ability to innovate and to bring new solutions to market. Dayforce is designed around our proprietary single application architecture, which features continuous calculation and includes a single cross-domain rules engine and a complete employee record, which facilitates new innovation. Since 2012, we have developed a full suite of HCM functionality. We intend to continue to extend the functionality and breadth of our platform in the future. We have a roadmap for continued development, which includes adding native payroll capabilities for additional countries. We intend to continue to invest in our product development and innovation to maintain our strong, differentiated technology position.

float revenue. The economic benefits of our business model include persistent, long-lived customer relationships, as well as the opportunity to realize additional revenue from existing customers. Our annual Cloud revenue retention rate was over 95% in 2017, reflecting high retention rates with Dayforce customers, driving strong customer lifetime value. Because our subscription revenue is based on a PEPM charge, as customers grow and add more employees, we realize a corresponding increase in PEPM revenue. Moreover, with the continued launch of new functionality for our Dayforce platform, we have the opportunity to realize incremental revenue by selling additional functionality to existing customers that do not currently utilize our full platform. We believe that this opportunity is particularly strong in the enterprise segment, where customers often start with a subset of our Dayforce platform in conjunction with point solutions from other vendors that we target to replace over time.

We generally stopped actively selling our Bureau solutions to new customers in the United States in 2012 and have been marketing our Dayforce platform to new and existing customers since that time. For the three months ended March 31, 2018, Bureau revenue declined by $14.7 million, or 19.2%, as compared to the three months ended March 31, 2017. Of the $14.7 million decline in Bureau revenue for the three months ended March 31, 2018, $6.1 million was associated with customers migrating to Dayforce, which represented 18%broader implications of the ~~increase in Cloud revenue during this period. As the number of Bureau customers continues to decline,~~pandemic on our results of operations ~~will depend, in part,~~and overall financial performance remain uncertain. Please refer to the Results of Operations section below for further discussion of the financial impacts of the COVID-19 pandemic during the three and nine months ended September 30, 2020. Please refer to Part II, Item 1A Risk Factors for further discussion of the potential impact of the pandemic on ~~replacing the revenue from Bureau customer attrition and on maintaining the profitability of services to~~ our ~~remaining Bureau customers. We believe that our cloud Dayforce platform is attractive to many customers that currently use an outsourced service bureau for their payroll andHCM-related~~ needs; and, as a result, that sales to new customers and sales of additional functionality to our growing Dayforce customer base will continue to more than offset the decline in revenue from Bureau customers. We also believe that we will continue to be able to provide services to our remaining Bureau customers at attractive margins. As we migrate our Bureau customers to Dayforce, we typically experience a revenue increase from such customers driven by increased product density on the Dayforce platform.

We carefully designed and built Dayforce to meet the needs of a homogeneous market with a common set of requirements and compliance challenges across organization sizes and industries. To support our rapid growth, we have rigorously managed our implementation and customer support operations to maintain consistent, repeatable methods and processes and to take advantage of automation. We believe that our business model enables us to realize significant operating leverage and economies of scale and that we can continue to acquire, to implement, and to support more customers and to generate more revenue without a corresponding increase in expenses. Our profitability depends in part upon our ability to achieve a balance in the timing and magnitude of required investments in sales and marketing, implementation, and customer support.business.

In assessing our performance, we consider a variety of performance indicators in addition to revenue and net income. Set forth below is a description of our key performance measures.

~~The following table sets forth our key performance indicators for the periods presented.~~

~~In our business model, PEPM subscription fees are not charged until the customer goes live on the platform, and we~~We use the number of customers live on Dayforce as an indicator of future revenue and the overall performance of the business and to assess the performance of our implementation services. We ~~have 3,154~~had 4,704 customers live on Dayforce as of ~~March 31, 2018.~~September 30, 2020, compared to 4,169 customers live on Dayforce as of September 30, 2019.

We present revenue on a constant currency basis to assess how our underlying business performed, excluding the effect of foreign currency rate fluctuations. We believe this non-GAAP financial measure is useful to management and investors. We have calculated revenue on a constant currency basis by applying the average foreign exchange rate in effect during the comparable prior period.

We believe that ~~HCM~~ Adjusted EBITDA and ~~HCM~~ Adjusted EBITDA margin,non-GAAP financial measures, are useful to management and investors as supplemental measures to evaluate our overall operating performance. ~~HCM~~ Adjusted EBITDA and ~~HCM~~ Adjusted EBITDA margin are components of our management incentive plan and are used by management to assess performance and to compare our operating performance to our competitors. We define ~~HCM~~ Adjusted EBITDA as net income or loss before interest, taxes, depreciation, and amortization, as adjusted to exclude ~~net income or loss from discontinued operations, LifeWorks EBITDA, sponsor management fees,non-cash~~ ~~charges for asset impairments, gains or losses~~gain (loss) on assets and liabilities held in a foreign currency other than the functional currency of a company subsidiary,~~non-cash~~ share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, and ~~environmental reserve~~certain other non-recurring charges. ~~HCM~~ Adjusted EBITDA margin is determined by calculating the percentage ~~HCM~~that Adjusted EBITDA is of ~~Total HCM Revenue.~~total revenue. Management believes that ~~HCM~~ Adjusted EBITDA and ~~HCM~~ Adjusted EBITDA margin are helpful in highlighting management performance trends because ~~HCM~~ Adjusted EBITDA and ~~HCM~~ Adjusted EBITDA margin exclude the results of decisions that are outside the ~~control~~normal course of ~~operating management.~~

~~Our presentation~~our business operations. Please refer to the “Results of ~~HCM~~Operations” section below for a discussion of Adjusted EBITDA and ~~HCM~~ Adjusted EBITDA ~~margin are intended as supplemental measures~~margin.

Results of operating cash flows or liquidity. Our presentation of HCM Adjusted EBITDA and HCM Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by these items. HCM Adjusted EBITDA and HCM Adjusted EBITDA margin are included in this discussion because they are key metrics used by management to assess our operating performance.

HCM Adjusted EBITDA and HCM Adjusted EBITDA margin are not defined under U.S. GAAP, are not measures of net income, operating income, or any other performance measures derived in accordance with U.S. GAAP, and are subject to important limitations. Our use of the terms HCM Adjusted EBITDA and HCM Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with U.S. GAAP.

HCM Adjusted EBITDA and HCM Adjusted EBITDA margin have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of these limitations are:Three Months Ended September 30, 2020 Compared With Three Months Ended September 30, 2019

~~HCM Adjusted EBITDA and HCM Adjusted EBITDA margin do not reflect any charges for the assets being depreciated and amortized that may need to be replaced in the future;~~

~~HCM Adjusted EBITDA and HCM Adjusted EBITDA margin do not reflect the impact~~

Table of ~~share-based compensation upon our results of operations;~~

~~HCM Adjusted EBITDA and HCM Adjusted EBITDA margin do not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt; and~~

~~HCM Adjusted EBITDA and HCM Adjusted EBITDA margin do not reflect our income tax expense or the cash requirements to pay our income taxes.~~

We have two operating and reportable segments, HCM and LifeWorks. HCM includes both of our Cloud solutions, Dayforce and Powerpay, as well as our Bureau HCM solutions. Our LifeWorks segment reflects the results of the LifeWorks joint venture.

We have two categories of revenues: (i) recurring services and (ii) professional services and other. Recurring services revenues consist of the recurring fees that we charge for our Cloud HCM and Bureau HCM solutions, as well as LifeWorks solutions. For our Dayforce solutions, we primarily charge monthly recurring fees on a PEPM basis, generally~~one-month~~ ~~in advance of service, based on the number and type of solutions provided to the customer and the number of employees at the customer. We charge Powerpay customers recurring fees on aper-employee,per-process~~ ~~basis. For our Bureau HCM solutions, we typically charge recurring fees on aper-process~~ basis. We also generate recurring services revenue from investment income on our Cloud and Bureau customer funds held in trust before such funds are remitted to taxing authorities, customer employees, or other third parties. We refer to this investment income as float revenue. Professional services and other revenues consist primarily of charges relating to the work performed to assist customers with the implementation of their solutions. Also included in professional services and other revenues are any related training services, post-implementation professional services, and purchased time clocks. We also generate professional services and other revenues from other professional services and consulting services that we provide and for certain third party services that we arrange for our Bureau customers.

~~The following table presents our Cloud HCM revenue for both recurring and professional services and other, for both our Dayforce and Powerpay solutions for the periods presented.~~

Cloud revenue was $125.2 million for the three months ended March 31, 2018, an increase of 38.0% when compared to three months ended March 31, 2017. Dayforce revenue increased 44.2%, and Powerpay revenue increased 15.7% for the three months ended March 31, 2018 as compared to the three months ended March 31, 2017. On a constant currency basis, Dayforce revenue increased 42.8%, and Powerpay revenue increased 10.0% for the three months ended March 31, 2018 as compared to the three months ended March 31, 2017. Our new business sales to Dayforce customers comprised 82% of our increase in Cloud revenue for the three months ended March 31, 2018, including sales to new Dayforce customers and sales of additional functionality to existing Dayforce customers; and the remaining 18% consisted primarily of customer migration to Dayforce from our Bureau solutions.

As we focused on our Cloud HCM solutions, we generally ceased marketing our Bureau solutions to new customers in the United States in 2012 and in Canada in 2015, and have been actively marketing our Dayforce platform to these customers since that time. During the three months ended March 31, 2018, Bureau revenue declined by $14.7 million, or 19.2%, as compared to the three months ended March 31, 2017.

Our customer trust funds are invested with safety of principal and liquidity as the primary objectives. As a secondary objective, we also seek to maximize float revenue, which is affected by the balances held in our customer trust funds and the interest rates earned on invested funds. The average float balance for our customer trust funds for the three months ended March 31, 2018, was $4,072.0 million, compared to $3,764.9 million for the three months ended March 31, 2017. The average

yield was 1.75% during the three months ended March 31, 2018, an increase of 52 basis points compared to the three months ended March 31, 2017. Investment income from invested customer trust funds included in revenue was $17.6 and $11.4 for the three months ended March 31, 2018, and 2017, respectively.

Cost of revenue consists of costs to deliver our solutions. Most of these costs are recognized as incurred. Some costs of revenue are recognized in the period that a service is sold and delivered. Other costs of revenue are recognized over the period of use or in proportion to the related revenue.

~~We grant share-based compensation awards to certain employees, officers, andnon-employee~~ directors as long-term incentive compensation. We recognize the related expense for time-based awards ratably over the applicable vesting period. We recognize the related expense for performance-based awards upon the achievement of the performance criteria. Such expense is recognized as either cost of revenue or selling, general, and administrative expense. The following table shows the allocation of share-based compensation expense among our expense line items for the periods presented:

Included within selling, general, and administrative expense was $0.4 million and $0.4 million of share-based compensation expense related to sales and marketing for the three months ended March 31, 2018, and 2017, respectively.

~~Three Months ended March 31, 2018, Compared with Three Months ended March 31, 2017~~

~~The following table sets forth our results of operations for the periods presented.~~

Revenue.The following table sets forth certain information regarding our ~~consolidated~~ revenues for the three months ended ~~March 31, 2018,~~September 30, 2020, compared with the three months ended ~~March 31, 2017.~~September 30, 2019.

Total revenue increased ~~$21.9~~$2.1 million, or ~~11.7%~~1.0%, to ~~$208.9~~$204.4 million for the three months ended ~~March 31, 2018,~~September 30, 2020, compared to ~~$187.0~~$202.3 million for the three months ended ~~March 31, 2017.~~September 30, 2019. This increase was primarily attributable to an increase in Cloud revenue of ~~$34.5~~$11.2 million, or ~~38.0%~~6.8%, from ~~$90.7~~$165.5 million for the three months ended ~~March 31, 2017,~~September 30, 2019, to ~~$125.2~~$176.7 million for the three months ended ~~March 31, 2018.~~September 30, 2020. The increase in Cloud revenue was partially offset by a decline in Bureau revenue of $9.1 million, or 24.7%. The Cloud revenue increase was driven by an increase of ~~$29.6~~$10.3 million, or ~~38.7%~~7.9%, in Cloud recurring services revenue, and ~~$4.9~~$0.9 million, or ~~34.3%~~2.6%, in Cloud professional services and other revenue. The increase in Cloud recurring services revenue of ~~$29.6~~$10.3 million was due to ~~$17.7~~$10.5 million from new customers,add-ons, and revenue uplift from migrations of Bureau customers, net of customer ~~losses; $6.1~~losses and $5.1 million from the migration of Bureau ~~customers; and $5.8~~customers, partially offset by a $5.3 million ~~from increased~~decline in float revenue related to Cloud recurring services revenue.

The COVID-19 pandemic has had an adverse impact on our revenue streams during the three months ended September 30, 2020, primarily in the form of lower employment levels at our customers, lower float revenue resulting from reductions in the U.S. Federal Reserve federal funds rate and the Bank of Canada overnight rate target, lower average float balances for our customer trust funds, lower demand for professional services, and customer delays in implementation services, among other effects. We estimate the impact of lower employment levels at our customers was an approximately $10 million decline to our revenue for the three months ended September 30, 2020, of which approximately $8 million was related to Dayforce and approximately $2 million was related to Powerpay. In addition, we estimate the impact to float revenue was approximately $6 million for the three months ended September 30, 2020. Of the approximately $6 million impact on float revenue, approximately $4 million was due to rate reductions during the first quarter of 2020, and approximately $2 million was due to lower average float balances for our customer trust funds.

Cloud revenue was $176.7 million for the three months ended September 30, 2020, an increase of $11.2 million, or 6.8%, compared to the three months ended September 30, 2019. Dayforce revenue increased 9.8%, and Powerpay revenue declined 13.3% for the three months ended September 30, 2020, as compared to the three months ended September 30, 2019. Powerpay is designed primarily for small market Canadian customers, which typically have fewer than 20 employees, and these customers have been more adversely affected by the COVID-19 pandemic than larger Dayforce customers.Our new business sales to Dayforce and Powerpay customers comprised approximately 54% of our increase in Cloud revenue for the three months ended September 30, 2020, and approximately 46% consisted of ~~$34.5 million~~customer migrations to Dayforce from our Bureau solutions. The percentage of new business sales compared to customer migrations was adversely affected by the impact of the COVID-19 pandemic on our revenues, as our new business sales to Dayforce and ~~the~~Powerpay customers comprised approximately 85% of our increase in ~~LifeWorks~~Cloud revenue for the three months ended September 30, 2019, and approximately 15% consisted of ~~$2.1 million were partially offset~~customer migrations to Dayforce from our Bureau solutions.

The decrease of new business sales from the comparable period, which comprised approximately 85% of our increase in Cloud revenue, was due to the adverse effect of the COVID-19 pandemic on our revenues. As we migrate our Bureau customers to Dayforce, we typically experience a revenue increase from such customers, driven by ~~a decline in~~ increased product density on the Dayforce platform.

Bureau revenue ~~of $14.7~~declined $9.1 million, or ~~19.2%.~~24.7%, for the three months ended September 30, 2020, which included approximately $7 million of Excelity revenue. Of the $9.1 million decline, approximately 56% was attributable to customer migrations to Dayforce. Excluding the impact of migrations to Dayforce, Bureau revenue declined by ~~$8.6~~$4.0 million, or ~~11.2%.~~10.9%, primarily attributable to a reduction of employment levels and float revenue due to the COVID-19 pandemic.

OnExcluding float revenue and on a constant currency basis, total revenue grew ~~9.9%. This adjusted revenue growth was driven by~~5.4%, reflecting an 11.0% increase ~~of 35.6%~~ in Cloud ~~revenue and 7.5% in LifeWorks~~ revenue, partially offset by a 20.1% decline ~~of 20.0%~~ in Bureau revenue. OnExcluding float revenue and on a constant currency basis, Cloud revenue growth reflected a 13.5% increase in Cloud recurring services revenue and a 2.6% increase in Cloud professional services and other revenue. Excluding float revenue and on a constant currency basis, Dayforce revenue increased 13.9%, reflecting a 17.9% increase in Dayforce recurring service revenue and a 2.3% increase in Dayforce professional services and other revenue. Excluding float revenue and on a constant currency basis, Powerpay revenue declined 9.0%.

Float revenue included in recurring services revenue was $10.6 million and $18.3 million for the three months ended ~~March 31, 2018,~~September 30, 2020, and 2019, respectively. Float revenue allocated to Cloud revenue was $9.5 million and $14.8 million, respectively, for the three months ended September 30, 2020, and 2019, respectively. The average float balance for our customer trust funds for the three months ended September 30, 2020, was $2,745.1 million, compared to $3,117.5 million for the three months ended September 30, 2019. On a constant currency basis, the average float balance for our customer trust funds for the three months ended September 30, 2020, declined 11.6% compared to the three months ended ~~March 31, 2017,~~September 30, 2019. This decline was driven by Cloud recurring services revenue, which increased by 36.7%, and professional services and other revenue, which increased by 29.9%, as we continued to sign and to activate new customers. Of the decline in Bureau revenue, approximately 60% wasprimarily attributable to ~~customer attrition~~lower payroll balances and ~~approximately 40%~~associated tax payments as a result of the COVID-19 pandemic impact to employment levels at our customers. The average yield was 1.52% during the three months ended September 30, 2020, a decline of 81 basis points compared to the average yield during the three months ended September 30, 2019, primarily due to reductions in the U.S. Federal Reserve federal funds rate and the Bank of Canada overnight rate target. For the three months ended September 30, 2020 and 2019, approximately 39% of our average float balance consisted of Canadian customer ~~migrations to Dayforce.~~trust funds. Based on current market conditions, portfolio composition and investment practices, a 100 basis point change in market investment rates would result in approximately $17 million of change in float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with changes in float revenue.

Cost of ~~revenue~~.revenue. Total cost of revenue for the three months ended ~~March 31, 2018,~~September 30, 2020, was ~~$119.7~~$127.7 million, an increase of ~~$6.5~~$14.2 million, or ~~5.7%~~12.5%, compared to the three months ended ~~March 31, 2017.~~

September 30, 2019. Recurring services cost of revenue for the three months ended September 30, 2020, increased ~~by $3.9~~$4.9 million, or 9.9%, compared with the three months ended September 30, 2019, primarily due to additional costs related to global expansion, including Excelity which is classified as a Bureau solution, and costs to support the growing Dayforce customer base. Professional services and other cost of revenue increased $2.6 million, or 6.9%, for the three months ended September 30, 2020, compared to the three months ended September 30, 2019, primarily due to additional costs incurred to take new customers live.

Product development and management expense increased $5.4 million for the three months ended ~~March 31, 2018,~~September 30, 2020, compared to the three months ended ~~March 31, 2017, due to additional costs incurred to support~~September 30, 2019. Excluding the ~~growing Dayforce customer base, partially offset by reductions in Bureau costs.~~

~~The reduction in cost~~impact of ~~revenue for professional services~~share-based compensation and other of $1.1 million for the three months ended March 31, 2018, compared to the three months ended March 31, 2017, was primarily due to productivity improvements in implementing new customers, reflecting the increased experience of our implementation consultantsrelated employer taxes, and ~~the continued use of automation in our implementation processes.~~

Product development and management expense includes costs related to software development activities that do not qualify for capitalization, such as development, quality assurance, testing of new technologies, enhancements to our existing solutions that do not result in additional functionality, and costs related to the management of our solutions. The increase inseverance expense; product development and management expense ~~of $2.6 million for the three months ended March 31, 2018, compared to the~~

~~three months ended March 31, 2017, reflected increases in~~would have increased by $2.7 million. This adjusted increase reflects additional personnel costs and Dayforce product development ~~efforts.~~efforts that are not eligible for capitalization. For the three months ended ~~March 31, 2018,~~September 30, 2020, and ~~2017,~~2019, our investment in software development was ~~$14.2~~$19.7 million and ~~$12.6~~$17.4 million, respectively, ~~comprised~~consisting of ~~$8.1~~$9.4 million and ~~$7.2~~$8.7 million, of research and development expense, which is included within product development and management expense, and ~~$6.1~~$10.3 million and ~~$5.4~~$8.7 million in capitalized software development costs, respectively.

Depreciation and amortization expense associated with cost of revenue increased by ~~$1.1~~$1.3 million for the three months ended ~~March 31, 2018,~~September 30, 2020, compared to the three months ended ~~March 31, 2017,~~September 30, 2019, as we continue to capitalize Dayforce related and other development costs and subsequently to amortize ~~those~~these costs.

The overall 11.7% increase in revenue outpaced the 5.7% increase in cost of revenue, and gross profit increased by $15.4 million, or 20.9%, as we continued to leverage our investment in people and processes to realize economies of scale.

~~Selling, general, and administrative expense.~~ Selling, general, and administrative expense increased $4.9 million for the three months ended March 31, 2018, compared to the three months ended March 31, 2017, reflecting increases in sales and marketing expenses and LifeWorks expenses, partially offset by a reduction in share-based compensation expense. Sales and marketing expense was $31.7 million for the three months ended March 31, 2018, compared to $27.2 million for the three months ended March 31, 2017.

~~Other expense.~~ For the three months ended March 31, 2018, we incurred $2.8 million of other income, net, compared to $0.9 million of other expense, net, for the three months ended March 31, 2017. The other income and expense, net, for the three months ended March 31, 2018, and 2017, respectively, was primarily related to foreign currency remeasurement gains and losses on intercompany receivables or payables denominated in foreign currencies. Please refer to Note 12, “Supplementary Data to Statement of Operations,” for further discussion.

~~Interest expense.~~ ~~Interest expense for the three months ended March 31, 2018, was $22.2 million, compared to $21.4 million for the three months ended March 31, 2017.~~

~~Income tax expense.~~ ~~For the three months ended March 31, 2018, we incurred income tax expense of $6.8 million, compared to $2.5 million for the three months ended March 31, 2017.~~

~~Discontinued operations.~~~~For the three months ended March 31, 2017, income from discontinued operations was $0.5 million. This income primarily relates to a final purchase pricetrue-up~~ ~~related to one of the divested benefits businesses.~~

~~Net loss attributable to Ceridian.~~ Net loss attributable to Ceridian improved by $9.1 million to $2.1 million of net loss for the three months ended March 31, 2018, compared to $11.2 million of net loss for the three months ended March 31, 2017.

Gross profit.The following table presents ~~certain financial information concerning the HCM segment’s results of operations for the periods presented.~~

~~(a)~~

~~We define HCM EBITDA from continuing operations as HCM net loss before interest, taxes, depreciations and amortization, and discontinued operations.~~

~~(b)~~

~~Other adjustments include sponsor management fees,non-cash~~ ~~charges for asset impairments, gains or losses on assets and liabilities held in a foreign currency other than the functional currency of a company subsidiary,non-cash~~ ~~share-based compensation expense, severance charges, restructuring charges, and environmental reserve charges.~~

~~(c)~~

~~For a reconciliation of HCM Adjusted EBITDA to HCM operating profit, please refer to the “Overview” section above.~~

HCM revenue increased $19.8 million, or 11.8%, to $187.2 million for the three months ended March 31, 2018, compared to $167.4 million for the three months ended March 31, 2017. On a constant currency basis, revenue increased 10.2%. This adjusted revenue growth was driven by an increase of 35.6%, in Cloud revenue, which was partially offset by a decline of 20.0%, in Bureau revenue. The increase in Cloud revenue was driven by Cloud recurring services revenue, which increased by 36.7%, and Cloud professional services and other revenue, which increased by 29.9%. The decline in Bureau revenue was primarily attributable to customer attrition and customer migrations to Dayforce.

~~The table below presents~~ total ~~HCM segment~~ gross margin and ~~HCM~~ solution gross margins for the periods presented:

Total gross margin is defined as total ~~HCM~~ gross profit as a percentage of total ~~HCM~~ revenue, inclusive of ~~HCM~~ product development and management costs, as well as ~~HCM~~ depreciation and amortization associated with cost of revenue. Gross margin for each ~~HCM~~ solution in the table above is defined as total revenue less cost of revenue for the applicable solution as a percentage of total revenue for that related ~~HCM~~ solution, exclusive of any product development and management or depreciation and amortization cost allocations.

Total gross margin for the three months ended September 30, 2020, declined 6.4% compared to total gross margin for the three months ended September 30, 2019, and gross profit declined by $12.1 million, or 13.6%. The $12.1 million decline in gross profit was primarily attributable to the $7.7 million decline in float revenue for the three months ended September 30, 2020, compared to the three months ended September 30, 2019.

Cloud recurring services gross margin was ~~68.8%~~70.4% for the three months ended ~~March 31, 2018,~~September 30, 2020, compared to ~~62.2%~~70.2% for the three months ended ~~March 31, 2017.~~September 30, 2019. Excluding float revenue, Cloud recurring services gross margin was 68.3% for the three months ended September 30, 2020, compared to 66.4% for the three months ended September 30, 2019. The increase in Cloud recurring services gross margin, excluding float revenue, reflects an increase in the proportion of Dayforce customers live for more than two years, which increased from 68% as of September 30, 2019, to 74% as of September 30, 2020, and was also attributable to consistent configuration that has enabled us to continue to realize economies of scale in hosting and customer support. Bureau recurring services gross margin ~~was 71.1%~~declined from 71.4% for the three months ended ~~March 31, 2018, compared~~September 30, 2019, to ~~72.9%~~53.4% for the three months ended ~~March 31, 2017.~~September 30, 2020, primarily due to lower Bureau recurring revenue, including lower high margin float revenue, as well as the acquisition of Excelity, which is classified as Bureau currently. Professional services and other gross margin was ~~(62.4)~~(10.7)% for the three months ended ~~March 31, 2018, improving from (117.3)~~September 30, 2020, compared to (7.7)% for the three months ended ~~March 31, 2017,~~September 30, 2019, reflecting ~~an increase in profitable postgo-live~~ ~~professional services~~additional costs incurred to take new customers live and ~~productivity improvements in implementing new customers.~~lower utilization during the COVID-19 pandemic.

~~HCM operating profit~~Selling, general, and ~~HCM Adjusted EBITDA increased $16.4~~administrative expense. Selling, general, and administrative expense was reduced by $5.0 million ~~and $12.4 million, respectively,~~ for the three months ended ~~March 31, 2018,~~September 30, 2020, compared to the three months ended ~~March 31, 2017,~~September 30, 2019. Excluding the impact of share-based compensation and related employer taxes, restructuring consulting fees, severance expense, and certain other non-recurring charges; selling, general, and administrative expenses would have increased by $4.1 million. This adjusted increase reflects an increase of $3.4 million in sales and marketing expense, primarily ~~due~~employee-related costs, and $0.7 million in general and administrative expense, primarily customer list amortization expense. Please refer to ~~a $19.8~~the “Non-GAAP Measures” section for additional information on the excluded items.

Interest expense, net. Interest expense, net was $5.9 million ~~increase in revenue, which flowed through to improve gross margin.~~

~~The following table presents certain financial information concerning the LifeWorks segment’s financial results:~~

~~On a constant currency basis, LifeWorks revenue increased 7.5%~~and $7.8 million for the three months ended ~~March~~September 30, 2020, and 2019, respectively, which was primarily due to a reduction in our term debt interest rate and a reduction in LIBOR rates generally, partially offset by increased debt outstanding under our revolving credit facility. A 100 basis point change in LIBOR rates would result in an approximately $10 million change in our interest expense, net over the ensuing twelve-month period.

Other (income) expense, net. For the three months ended September 30, 2020, and 2019, we realized other income, net of $0.2 million and incurred other expense, net of $1.6 million, respectively. Other income, net was comprised of foreign currency translation gain, partially offset by net periodic pension expense for the three months ended September 30, 2020. For the three months ended September 30, 2019, other expense, net was primarily comprised of net periodic pension expense.

Income tax benefit. For the three months ended September 30, 2020, and 2019, we recorded income tax benefit of $5.5 million and $65.6 million, respectively. The $60.1 million reduction in income tax benefit was primarily due to the $65.8 million tax benefit from the release of valuation allowance recognized during the three months ended September 30, 2019, that was not repeated during the three months ended September 31, ~~2018,~~2020, and other increases of $0.6 million, partially offset by a $6.3 million reduction attributable to lower base erosion anti-abuse tax (“BEAT”) in the U.S.

Net (loss) income. We realized net loss of $0.8 million for the three months ended September 30, 2020, compared to net income of $62.7 million for the three months ended September 30, 2019, which included a one-time $65.8 million tax benefit.

Adjusted EBITDA. Adjusted EBITDA declined by $13.2 million to $33.2 million, for the three months ended September 30, 2020, compared to the three months ended ~~March 31, 2017.~~

~~LifeWorks operating (loss) profit~~September 30, 2019, and ~~LifeWorks~~ Adjusted EBITDA ~~declined $2.2 million and $2.3 million, respectively,~~margin was 16.2% for the three months ended ~~March 31, 2018,~~September 30, 2020, compared towith Adjusted EBITDA margin of 22.9% for the three months ended ~~March~~ September 30, 2019. Please refer to the “Non-GAAP Measures” section for additional information on the excluded items.

Nine Months Ended September 30, 2020 Compared With Nine Months Ended September 30, 2019

Revenue.The following table sets forth certain information regarding our revenues for the nine months ended September 30, 2020, compared with the nine months ended September 30, 2019.

Total revenue increased $17.4 million, or 2.9%, to $619.7 million for the nine months ended September 30, 2020, compared to $602.3 million for the nine months ended September 30, 2019. This increase was primarily attributable to an increase in Cloud revenue of $59.7 million, or 12.5%, from $475.8 million for the nine months ended September 30, 2019, to $535.5 million for the nine months ended September 30, 2020. The Cloud revenue increase was driven by an increase of ~~$1.9~~$47.2 million, or 12.5%, in ~~selling, general,~~Cloud recurring services revenue, and ~~administrative expense.~~$12.5 million, or 12.9%, in Cloud professional services and other revenue. The increase in Cloud recurring services revenue of $47.2 million was due to $43.2 million from new customers, add-ons, and revenue uplift from migrations of Bureau customers, net of customer losses and $16.7 million from the migration of Bureau customers, partially offset by a decline of $12.7 million from float revenue related to Cloud recurring services revenue.

The COVID-19 pandemic has had an adverse impact on our ~~financial results~~revenue streams during the nine months ended September 30, 2020, primarily in ~~accordance with~~the form of lower employment levels at our customers, lower float revenue resulting from reductions in the U.S. ~~GAAP. To supplement this information, we also use LifeWorks Adjusted EBITDA, anon-GAAP~~ ~~financial measure, in this Form10-Q.~~ ~~We define LifeWorks Adjusted EBITDA as net income or loss before interest, taxes, depreciation,~~Federal Reserve federal funds rate and ~~amortization, as adjusted to excludenon-cash~~ ~~share-based compensation expense~~the Bank of Canada overnight rate target, lower average float balances for our ~~LifeWorks segment. Management believes that LifeWorks Adjusted EBITDA~~customer trust funds, lower demand for professional services, and customer delays in implementation services, among other effects. We estimate the impact of lower employment levels at our customers was an approximately $18 million decline to our revenue for the nine months ended September 30, 2020, of which approximately $13 million was related to Dayforce and approximately $5 million was related to Powerpay. In addition, we estimate the impact to float revenue was approximately $14 million for the nine months ended September 30, 2020. Of the approximately $14 million impact on float revenue, approximately $9 million was due to rate reductions during the first quarter of 2020, and approximately $5 million was due to lower average float balances for our customer trust funds.

Cloud revenue was $535.5 million for the nine months ended September 30, 2020, an increase of $59.7 million, or 12.5%, compared to the nine months ended September 30, 2019. Dayforce revenue increased 16.3%, and Powerpay revenue declined 11.4% for the nine months ended September 30, 2020, as compared to the nine months ended September 30, 2019. On a constant currency basis, Dayforce revenue increased 16.7%, and Powerpay revenue declined 10.5% for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. Powerpay is ~~helpful in highlighting management performance trends because LifeWorks Adjusted EBITDA excludes~~designed primarily for small market Canadian customers, which typically have fewer than 20 employees, and these customers have been more adversely affected by the ~~results of decisions that are outside the control of operating management. By providing thisnon-GAAP~~ ~~financial measure, management believes we are enhancing investors’ understanding~~COVID-19 pandemic than larger Dayforce customers. Our new business sales to Dayforce and Powerpay customers comprised approximately 72% of our ~~business~~increase in Cloud revenue for the nine months ended September 30, 2020, and approximately 28% consisted primarily of customer migrations to Dayforce from our ~~results~~Bureau solutions. As we migrate our Bureau customers to Dayforce, we typically experience a revenue increase from such customers driven by increased product density on the Dayforce platform.

Bureau revenue declined $42.3 million, or 33.4% for the nine months ended September 30, 2020. Of the $42.3 million decline, approximately 40% was attributable to customer migrations to Dayforce. Excluding the impact of ~~operations, as well as assisting investors~~migrations to Dayforce, Bureau revenue declined by $25.6 million, or 20.2%.

Excluding float revenue and on a constant currency basis, total revenue grew 7.6%, reflecting a 17.4% increase in ~~evaluating how well we are executing~~Cloud revenue, partially offset by a 29.7% decline in Bureau revenue. Excluding float revenue and on a constant currency basis, Cloud revenue growth reflected a 18.6% increase in Cloud recurring services revenue and a 13.3% increase in Cloud professional services and other revenue. Excluding float revenue and on a constant currency basis, Dayforce revenue increased 21.2%, reflecting a 23.9% increase in Dayforce recurring service revenue and a 13.4% increase in Dayforce professional services and other revenue. Excluding float revenue and on a constant currency basis, Powerpay revenue declined 7.7%.

Float revenue included in recurring services revenue was $41.7 million and $62.9 million for the nine months ended September 30, 2020, and 2019, respectively. Float revenue allocated to Cloud revenue was $36.5 million and $49.2 million for the nine months ended September 30, 2020, and 2019, respectively. The average float balance for our ~~strategic initiatives.~~customer trust funds for the nine months ended September 30, 2020, was $3,269.7 million, compared to $3,524.9 million for the nine months ended September 30, 2019. On a constant currency basis, the average float balance for our customer trust funds declined 6.8% for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. The average yield was 1.70% during the nine months ended September 30, 2020, a decline of 69 basis points compared to the average yield in the nine months ended September 30, 2019. For the nine months ended September 30, 2020, approximately 34% of our average float balance consisted of Canadian customer trust funds, compared to approximately 36% for the nine months ended September 30, 2019. Based on current market conditions, portfolio composition and investment practices, a 100 basis point change in market investment rates would result in approximately $17 million of change in float revenue over the ensuing twelve month period.

~~Our presentation~~Cost of ~~LifeWorks Adjusted EBITDA~~revenue. Total cost of revenue for the nine months ended September 30, 2020, was $363.9 million, an increase of $32.0 million, or 9.6%, compared to the nine months ended September 30, 2019. Recurring services cost of revenue increased $6.8 million, or 4.6% for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, primarily due to additional costs related to global expansion, including Excelity, which is ~~intended~~classified as a ~~supplemental measure~~Bureau solution, and costs to support the growing Dayforce customer base. The increase in cost of ~~our performance that is not required by,~~revenue for professional services and other of $13.6 million, or presented in accordance with, U.S. GAAP. LifeWorks Adjusted EBITDA should not be considered as an alternative to operating income (loss), net income (loss), earnings per share, or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or operating cash flows or as measures of liquidity. Our presentation of LifeWorks Adjusted EBITDA should not be construed to imply that our future results will be unaffected by these items. LifeWorks Adjusted EBITDA is included in this Form~~10-Q~~ ~~because it is a key metric used by management to assess our operating performance.~~

LifeWorks Adjusted EBITDA is not defined under U.S. GAAP, is not a measure of net income, operating income or any other performance measure derived in accordance with U.S. GAAP, and is subject to important limitations. Our use of the term LifeWorks Adjusted EBITDA may not be comparable to similarly titled measures of other companies in our industry and is not a measure of performance calculated in accordance with U.S. GAAP.

LifeWorks Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

~~LifeWorks Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;~~

~~LifeWorks Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;~~

~~LifeWorks Adjusted EBITDA does not reflect any charges~~12.7% for the ~~assets being depreciated~~nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, was primarily due to additional costs incurred to implement new customers.

Product development and ~~amortized that may have~~management expense increased $8.4 million for the nine months ended September 30, 2020, compared to ~~be replaced in~~ the ~~future;~~

~~LifeWorks Adjusted EBITDA does not reflect~~nine months ended September 30, 2019. Excluding the impact of share-based compensation ~~upon~~and related employer taxes, and severance expense; product development and management expense would have increased by $4.3 million. This adjusted increase reflects additional personnel costs and Dayforce product development efforts, including costs to build out the Dayforce Wallet and our ~~results~~international offerings that are not eligible for capitalization. For the nine months ended September 30, 2020, and 2019, our investment in software development was $53.9 million and $48.1 million, respectively, consisting of ~~operations;~~$25.1 million and $24.6 million, of research and development expense, which is included within product development and management expense, and $28.8 million and $23.5 million in capitalized software development, respectively.

Table of Contents

Depreciation and amortization expense associated with cost of revenue increased by $3.2 million for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, as we continue to capitalize Dayforce related and other development costs and subsequently amortize those costs.

Gross profit. The table below presents total gross margin and solution gross margins for the periods presented:

	Nine Months Ended September 30,
	2020			2019

Total gross margin		41.3	%		44.9	%
Gross margin by solution:
Cloud recurring services		71.3	%		69.9	%
Bureau recurring services		59.4	%		72.0	%
Professional services and other		(8.7	)%		(8.6	)%

~~LifeWorks Adjusted EBITDA does not reflect~~

Total gross margin for the nine months ended September 30, 2020, declined 3.6% compared to total gross margin for the nine months ended September 30, 2019, and gross profit declined $14.6 million.

Cloud recurring services gross margin was 71.3% for the nine months ended September 30, 2020, compared to 69.9% for the nine months ended September 30, 2019. Excluding float revenue, Cloud recurring service gross margin was 68.6% for the nine months ended September 30, 2020, compared to 65.4% for the nine months ended September 30, 2019. The increase in Cloud recurring services gross margin reflects an increase in the proportion of Dayforce customers live for more than two years, which increased from 68% as of September 30, 2019, to 74% as of September 30, 2020, and was also attributable to consistent configuration that has enabled us to realize economies of scale in customer support and hosting costs. Bureau recurring services gross margin declined from 72.0% for the nine months ended September 30, 2019, to 59.4% for the nine months ended September 30, 2020, primarily due to lower Bureau recurring revenue, including high margin float revenue. Professional services and other gross margin was (8.7)% for the nine months ended September 30, 2020, compared to (8.6)% for the nine months ended September 30, 2019.

Selling, general, and administrative expense. Selling, general, and administrative expense increased by $8.3 million for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019. Excluding the impact of share-based compensation and related employer taxes, restructuring consulting fees, severance expense, and certain other non-recurring charges; selling, general, and administrative expenses would have increased by $2.8 million. This adjusted increase of $2.8 million reflects an increase of $8.7 million in sales and marketing, primarily personnel costs, partially offset by a $5.9 million reduction in general and administrative expense, primarily customer list amortization expense. Please refer to the “Non-GAAP Measures” section for additional information on the excluded items.

Interest expense. Interest expense was $19.4 million for the nine months ended September 30, 2020, compared to $25.2 million for the nine months ended September 30, 2019, which was primarily due to a reduction in our term debt interest rate and a reduction in LIBOR rates generally, partially offset by increased debt outstanding under our revolving credit facility. A 100 basis point change in LIBOR rates would result in an approximately $10 million change in our interest expense over the ensuing twelve-month period.

Other expense, net. For the nine months ended September 30, 2020 and 2019, other expense, net of $2.7 million and $4.7 million, respectively, was comprised of net periodic pension expense and foreign currency translation loss.

Income tax benefit. For the nine months ended September 30, 2020, and 2019, we recorded income tax ~~expense or the cash requirements to pay our income taxes.~~

~~In evaluating LifeWorks Adjusted EBITDA, you should be aware that~~benefit of $5.7 million and $57.5 million, respectively. The $51.8 million reduction in ~~the future we may incur expenses similar to those eliminated in this presentation.~~

~~Unaudited Pro Forma Consolidated Financial Data~~

The following unaudited pro forma condensed consolidated financial data consists of our unaudited pro forma condensed consolidated statement of operations and unaudited pro forma condensed consolidated statement of cash flows for the three months ended March 31, 2018, and our unaudited pro forma condensed consolidated balance sheet as of March 31, 2018. You should read the information set forth below together with the “Results of Operations” section above, the historical condensed consolidated financial statements and the corresponding notes included elsewhere in this Form~~10-Q.~~ The unaudited pro forma condensed consolidated statement of operations and unaudited pro forma condensed consolidated statement of cash flows for the three months ended March 31, 2018 and the unaudited pro forma condensed consolidated balance sheet as of March 31, 2018, have been adjusted to give effecttax benefit was primarily due to the ~~distribution of shares of LifeWorks. The stockholders will receive these interests in a taxable distribution; and based on current estimates of~~$65.8 million tax benefit from the value of our interest in LifeWorks at the time of the disposition, we currently anticipate that we will incur approximately $3.2 million of foreign taxes and use approximately $96.0 million of our U.S. federal net operating losses to offset the U.S. tax gain. The net operating losses are currently subject to a full valuation allowance, therefore, the tax gain recognition and resulting use of the net operating loss and release of the valuation allowance ~~result in no anticipated U.S.~~recognized during the nine months ended September 30, 2019, that was not repeated during the nine months ended September 30, 2020, partially offset by a $12.3 million reduction attributable to lower base erosion anti-abuse tax ~~expense.~~

The following unaudited pro forma condensed consolidated balance sheet, statement of operations, and statement of cash flows have been derived from our historical condensed consolidated financial statements included elsewhere in this Form~~10-Q.~~ The statements are for informational purposes only and do not purport to represent what our financial position and results of operations actually would have been had the LifeWorks disposition occurred on the dates indicated, or to project our financial performance for any future period.

The unaudited pro forma condensed consolidated balance sheet adjustments assume that our distribution of LifeWorks occurred as of March 31, 2018. The unaudited pro forma consolidated statements of operations and unaudited pro forma condensed consolidated statement of cash flows assume that the separation occurred as of January 1, 2018.

The adjustment amounts primarily represent the LifeWorks segment amounts as presented in our financial statements with the addition of $3.2 million of foreign tax expense expected to be incurred by Ceridian as a result of expected gains recognized on the taxable distribution of LifeWorks to our stockholders. The adjustment to the income tax expense is comprised of two components: (i) the elimination of the LifeWorks tax expense of $1.0 million, and (ii) the addition of the $3.2 million expected tax expense to be incurred on the distribution. No pro forma adjustments are necessary for the expected use of net operating losses to offset taxable gains expected(“BEAT”) in the U.S., ~~as they are subject~~and a $1.8 million reduction attributable to unremitted foreign earnings.

Net income. Net income was $13.3 million for the nine months ended September 30, 2020, compared to $80.2 million for the nine months ended September 30, 2019, which included a ~~full valuation allowance~~one-time $65.8 million tax benefit.

Adjusted EBITDA. Adjusted EBITDA declined by $14.3 million to $125.9 million, for the nine months ended September 30, 2020, compared to the nine months ended September 30, 2019, and ~~would not have an impact~~Adjusted EBITDA margin was 20.3% for the nine months ended September 30, 2020, compared with 23.3% for the nine months ended September 30, 2019. Please refer to the “Non-GAAP Measures” section for additional information on ~~our financial statements. No other adjustments were necessary.~~

the excluded items.

Ceridian HCM Holding Inc.
Unaudited Pro Forma Condensed
Consolidated Balance Sheet

   March 31, 2018
   Ceridian
Historical    Adjustments    Ceridian
Pro Forma
   (Dollars in millions)
ASSETS

Current assets:

Cash and equivalents
   $ 62.2    $ 7.6    $ 54.6
Trade and other receivables, net
   81.1    15.1    66.0
Prepaid expenses
   49.2    1.7    47.5
Other current assets
   1.8    —      1.8






Total current assets before customer trust funds
   194.3    24.4    169.9
Customer trust funds
   4,293.9    —      4,293.9






Total current assets
   4,488.2    24.4    4,463.8
Property, plant, and equipment, net
   103.4    1.6    101.8
Goodwill
   2,075.8    125.8    1,950.0
Other intangible assets, net
   206.6    5.1    201.5
Other assets
   5.5    2.0    3.5






Total assets
   $ 6,879.5    $ 158.9    $ 6,720.6






LIABILITIES AND EQUITY

Current liabilities:

Current portion of long-term debt
   $ —      $ —      $ —
Accounts payable
   47.6    6.0    41.6
Accrued interest
   2.7    —      2.7
Deferred revenue
   18.5    2.5    16.0
Employee compensation and benefits
   55.7    1.5    54.2
Other accrued expenses
   16.7    0.4    16.3






Total current liabilities before customer trust funds obligations
   141.2    10.4    130.8
Customer trust funds obligations
   4,313.2    —      4,313.2






Total current liabilities
   4,454.4    10.4    4,444.0
Long-term debt, less current portion
   1,120.5    —      1,120.5
Employee benefit plans
   147.3    —      147.3
Other liabilities
   53.8    10.6    43.2






Total liabilities
   5,776.0    21.0    5,755.0
Total equity
   1,103.5    137.9    965.6






Total liabilities and equity
   $ 6,879.5    $ 158.9    $ 6,720.6






35

Table of Contents

Ceridian HCM Holding Inc.
Unaudited Pro Forma Condensed
Consolidated Statement of Operations

   Three Months Ended March 31, 2018
   Ceridian
Historical Adjustments Ceridian
Pro Forma
   (Dollars in millions)
Revenue:

Recurring services
   $ 188.7 $ 21.7 $ 167.0
Professional services and other
   20.2 —   20.2


Total revenue
   208.9 21.7 187.2
Cost of revenue:

Recurring services
   62.7 12.0 50.7
Professional services and other
   32.8 —   32.8
Product development and management
   15.4 1.7 13.7
Depreciation and amortization
   8.8 0.1 8.7


Total cost of revenue
   119.7 13.8 105.9


Gross profit
   89.2 7.9 81.3
Costs and expenses:

Selling, general, and administrative
   65.6 8.8 56.8
Other (income) expense, net
   (2.8 ) —   (2.8 )
Interest expense, net
   22.2 —   22.2


Total costs and expenses
   85.0 8.8 76.2


Income (loss) from continuing operations before income taxes
   4.2 (0.9 ) 5.1
Income tax expense
   6.8 (2.2 ) 9.0


Loss from continuing operations
   (2.6 ) 1.3 (3.9 )
Income from discontinued operations
   —   —   —


Net loss
   (2.6 ) 1.3 (3.9 )


Net loss attributable to noncontrolling interest
   (0.5 ) (0.5 ) —


Net loss attributable to Ceridian
   $ (2.1 ) $ 1.8 $ (3.9 )

Ceridian HCM Holding Inc.
Unaudited Pro Forma Condensed
Consolidated Statement of Cash Flows

   Three Months Ended March 31, 2018
   Ceridian
Historical Adjustments Ceridian
Pro Forma
   (Dollars in millions)
Net loss
   $ (2.6 ) $ 1.3 $ (3.9 )
Adjustments to reconcile net loss to net cash used in operating activities:
   —
Deferred income tax benefit
   (0.1 ) —   (0.1 )
Depreciation and amortization
   14.9 1.0 13.9
Amortization of debt issuance costs and debt discount
   1.0 —   1.0
Net periodic pension and postretirement cost
   0.6 —   0.6
Share-based compensation
   2.9 0.2 2.7
Other
   (0.1 ) —   (0.1 )
Changes in operating assets and liabilities excluding effects of acquisitions and divestitures:
   (39.9 ) (0.2 ) (39.7 )


Net cash used in operating activities—continuing operations
   (23.3 ) 2.3 (25.6 )
Net cash used in operating activities—discontinued operations
   (0.1 ) —   (0.1 )


Net cash used in operating activities
   (23.4 ) 2.3 (25.7 )
Cash Flows from Investing Activities
   —
Purchase of customer trust funds marketable securities
   (520.6 ) —   (520.6 )
Proceeds from sale and maturity of customer trust funds marketable securities
   175.4 —   175.4
Net change in restricted cash and other restricted assets held to satisfy customer trust funds obligations
   114.8 —   114.8
Expenditures for property, plant, and equipment
   (2.9 ) —   (2.9 )
Expenditures for software and technology
   (7.4 ) —   (7.4 )


Net cash used in investing activities
   (240.7 ) —   (240.7 )
Cash Flows from Financing Activities
   —
Increase in customer trust funds obligations, net
   230.4 —   230.4
Repayment of long-term debt obligations
   (0.3 ) —   (0.3 )


Net cash provided by financing activities
   230.1 —   230.1
Effect of Exchange Rate Changes on Cash
   (3.4 ) —   (3.4 )


Net decrease in cash and equivalents
   (37.4 ) 2.3 (39.7 )
Cash and equivalents at beginning of period
   99.6 5.3 94.3


Cash and equivalents at end of period
   $ 62.2 $ 7.6 $ 54.6

Liquidity and Capital Resources

Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities, borrowings under our credit facilities, and proceeds from equity offerings. As of ~~March 31, 2018,~~September 30, 2020, we had cash and equivalents of ~~$62.2~~$554.6 million. On April 2, 2020, in light of the current uncertainty in the global capital markets resulting from the COVID-19 pandemic, Ceridian elected to borrow $295.0 million under the 2018 Revolving Credit Facility as a precautionary measure to increase our cash position and ~~availability under our revolving credit facility of $45.0 million. No cash amounts were drawn on the revolving credit facility as of March 31, 2018.~~to preserve financial flexibility. Our total ~~indebtedness~~debt balance was ~~$1,132.0~~ $970.8million as of ~~March 31, 2018.~~September 30, 2020.

On February 19, 2020, Ceridian completed the first amendment to the 2018 Senior Secured Credit Facility, in which the 2018 Term Debt interest rate was reduced from LIBOR plus 3.00% to LIBOR plus 2.50%. Further, the interest rate trigger under the applicable rating by Moody’s Investor Service was removed by the first amendment.The 50 basis point rate reduction will result in savings of approximately $3.4 million over the ensuing twelve-month period. Please refer to Note 9,7, “Debt,” to our condensed consolidated financial statements for further information on our ~~indebtedness.~~debt.

Our primary liquidity needs are related to funding of general business requirements, including the payment of interest and principal on our ~~indebtedness, working capital,~~debt, capital expenditures, pension contributions, and product development.

Concurrently with closing of the IPO and the concurrent private placement on April 30, 2018, we applied the net proceeds to satisfy and discharge the indenture governing our outstanding $475.0 million principal amount Senior Notes, and they will be redeemed on May 30, 2018. We also refinanced our remaining indebtedness under our (i) $702.0 million (original principal amount) Senior Term Debt and (ii) $130.0 million Revolving Credit Facility, accrued interest and related costs and expenses, with new senior credit facilities consisting of a $680.0 million term loan debt facility and a $300.0 million revolving credit facility. Please refer to Note 19, “Subsequent Events,” for further discussion of these transactions.

Our customer trust funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow ~~requirements and to protect the principal balance.~~requirements. In accordance with these objectives, we maintain ~~on average~~ approximately ~~45%~~47% of customer trust funds in liquidity portfolios with maturities ranging from one to 120 days, consisting of high-quality bank deposits, money market mutual funds, commercial paper, or collateralized short-term investments; and we maintain ~~on average~~ approximately ~~55%~~53% of customer trust funds in fixed income portfolios with maturities ranging from 120 days to 10 years, consisting of U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, ~~mortgage- backed,~~mortgage-backed, municipal, corporate, and bank securities. To maintain sufficient liquidity in the trust to meet payment obligations, we also have financing arrangements and may pledge fixed income securities for short-term financing. The assets held in trust are intended for the specific purpose of satisfying client fund obligations and therefore are not freely available for our general business use.

We believe that our cash flow from operations, available cash and equivalents, and remaining availability under our revolving credit facility ~~and available cash and equivalents~~ will be sufficient to meet our liquidity needs for the foreseeable future. We anticipate that to the extent that we require additional liquidity, it will be funded through the issuance of equity, the incurrence of additional indebtedness, or a combination thereof. We cannot assure you that we will be able to obtain this additional liquidity on reasonable terms, or at all. Additionally, our liquidity and our ability to meet our obligations and to fund our capital requirements are also dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control. Accordingly, we cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses or dilution.

Table of Contents

Statements of Cash Flows

~~The following table provides a summary of cash flows from operating, investing, and financing activities from the periods presented.~~

   Three Months ended March 31,
   2018    2017
Net cash flows

Net cash used in operating activities—continuing operations
   $ (23.3 )    $ (44.0 )
Net cash used in investing activities
   (240.7 )    (919.9 )
Net cash provided by financing activities
   230.1    910.2
Net cash flows used in discontinued operations
   (0.1 )    (0.7 )
Effect of exchange rate on cash
   (3.4 )    0.7




Net cash flows used
   (37.4 )    (53.7 )
Cash and equivalents at end of period
   $ 62.2    $ 77.7
Net cash flows of customer trust funds

Net cash used in investing activities—continuing operations
   $ (230.4 )    $ (912.0 )
Net cash provided by financing activities—continuing operations
   230.4    912.0




Net cash flows provided by customer trust funds—continuing operations
   $ —      $ —

Changes in cash flows due to purchases of customer trust fund marketable securities and proceeds from the sale or maturity of customer trust fund marketable securities, ~~and~~as well as the ~~net increase (decrease)~~carrying value of ~~restricted cash held to satisfy~~ customer trust fund ~~obligations are primarily~~accounts as of period end dates can vary significantly due to several factors, including the specific day of the week the period ends, which impacts the timing of funds collected from customers and payments made to satisfy customer ~~obligations. Customer trust fund cash flows are significantly affected by the period end day of the week relative~~obligations to ~~customer payment cycles.~~employees, taxing authorities, and others. The customer trust funds are fully segregated from our operating cash accounts and are evaluated and tracked separately by management. Therefore, we have provided the table below excluding the cash flows and restricted cash and equivalents held within our customer trust funds to provide ~~meaningful~~supplemental information ~~to the readers, the following discussion is~~ regarding the ~~net~~ cash flows related to our core business.

	Nine Months Ended September 30,
	2020			2019
	(Dollars in millions)
Net cash provided by operating activities, excluding customer trust funds	$	36.1		$	43.4
Net cash used in investing activities, excluding customer trust funds		(114.8	)		(67.8	)
Net cash provided by financing activities, excluding customer trust funds		357.3			71.6
Effect of exchange rate changes on cash and equivalents		(5.3	)		5.9
Net increase in cash and equivalents		273.3			53.1
Cash and equivalents at beginning of period		281.3			217.8
Cash and equivalents at end of period		554.6			270.9

Net customer trust funds restricted cash provided by (used in) operating activities		11.2			(18.8	)
Net customer trust funds restricted cash provided by (used in) investing activities		291.1			(57.0	)
Net customer trust funds restricted cash used in financing activities		(601.4	)		(54.5	)
Effect of exchange rate changes on restricted cash and equivalents		(2.6	)		1.3
Net decrease in restricted cash and equivalents		(301.7	)		(129.0	)
Restricted cash and equivalents included in customer trust funds at beginning of period		1,377.3			888.5
Restricted cash and equivalents included in customer trust funds at end of period		1,075.6			759.5

Net decrease in cash, restricted cash, and equivalents		(28.4	)		(75.9	)
Cash, restricted cash, and equivalents at beginning of period		1,658.6			1,106.3
Cash, restricted cash, and equivalents at end of period	$	1,630.2		$	1,030.4

Operating Activities

Net cash provided by operating activities, excluding customer trust ~~funds.~~

~~Operating Activities~~

~~Net cash used in operating activities from continuing operations of $23.3~~fund activity, was $36.1 million during the ~~three~~nine months ended ~~March 31, 2018, was~~September 30, 2020, primarily attributable to net ~~changes in working capital~~income of ~~$39.9~~$13.3 million and the net ~~loss~~impact of ~~$2.6~~adjustments for certain non-cash items of $87.2 million, including $46.3 million of non-cash share-based compensation expense and $36.9 million of depreciation and amortization. These items were partially offset by net working capital reductions of $64.4 million, which included a $20.1 million net change in other assets and liabilities primarily due to deferred commissions and contract assets, a $12.0 million reduction in accounts payable and other current assets due to timing of payments, an $8.7 million reduction of accrued taxes, primarily due to cash tax payments partially offset by additional provision accruals, and an $8.0 million increase in prepaid expenses and other current assets, primarily due to payments for annual maintenance contracts. Included within net cash flows provided by operating activities for the nine months ended September 30, 2020, was $20.5 million in cash interest payments on our long-term debt and $1.9 million in cash tax payments, net of refunds.

Net cash provided by operating activities, excluding customer trust fund activity was $43.4 million during the nine months ended September 30, 2019, primarily attributable to net income of $80.2 million and the net impact of adjustments for certainnon-cash items ~~primarily $14.9~~of $6.0, including $75.9 million of deferred income tax benefit, offset by $43.9 million of depreciation and amortization and ~~$2.9~~$26.0 million of non-cash share-based compensation ~~expense. Net changes in~~expense, partially offset by net working capital reductions of $37.3 million, which included reductions of $18.5 million in liabilities for employee compensation and benefits, primarily due to payments of accrued incentive ~~compensation; reductions in liabilities~~compensation and pension contributions; $10.4 million for accrued ~~interest~~taxes, primarily ~~as a result of $34.8 million in~~due to cash ~~interest~~tax payments ~~on our long-term debt;~~partially offset by additional provision accruals; and increases in assets of $10.1 million for prepaid expenses and other current assets, primarily due to payments for annual maintenance contracts. Included within net cash flows ~~used in~~provided by operating activities for the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2019, was ~~$5.5~~$28.9 million in cash ~~taxes and $1.9~~tax payments, $28.9 million in ~~pension payments.~~

~~Net~~ cash used in operating activities from continuing operations of $44.0 million during the three months ended March 31, 2017, was primarily attributable to net changes in working capital of $51.3 million and net loss of $11.2 million, partially offset by certain~~non-cash~~ items, primarily $14.1 million of depreciation and amortization and $4.5 million of share-based compensation expense. Net changes in working capital included reductions in liabilities for employee compensation and benefits, primarily due to payments of accrued incentive compensation; reductions in liabilities for accrued interest ~~primarily due to semi-annual~~ payments on our long-term ~~debt; increases~~debt, and $18.0 million in ~~prepaid expenses and other current assets, primarily due to annual maintenance contracts, and reductions in liabilities for accrued taxes.~~pension contributions.

Table of Contents

Investing Activities

During the ~~three~~nine months ended ~~March 31, 2018,~~September 30, 2020, net cash used in investing activities, ~~from continuing operations~~ excluding customer trust fund activity, was ~~$10.3~~$114.8 million, related to acquisition costs, net of cash acquired of $70.6 million and capital ~~expenditures.~~expenditures of $44.2 million. Our capital expenditures included ~~$7.4~~$30.6 million for software and technology and ~~$2.9~~$13.6 million for property and equipment. ~~For~~

During the ~~three~~nine months ended ~~March 31, 2018, capital expenditures for software development were $6.1 million which is included in capitalized expenditures for software and technology.~~

~~During the three months ended March 31, 2017,~~September 30, 2019, net cash used in investing activities, ~~from continuing operations~~ excluding customer trust fund activity, was ~~$7.9~~$67.8 million, ~~primarily~~ related to capital expenditures ~~partially offset by~~of $38.4 million and acquisition costs, net ~~proceeds from divestitures~~ of ~~$0.9~~cash acquired of $29.4 million. Our capital expenditures included ~~$6.2~~$27.6 million for software and technology and ~~$2.6~~$10.8 million for property and equipment. ~~For the three months ended March 31, 2017, capital expenditures for software development were $5.4 million which is included in capitalized expenditures for software and technology.~~

Financing Activities

Net cash ~~used in~~provided by financing activities, ~~from continuing operations~~ excluding the change in customer trust fund ~~obligation~~obligations, was ~~$0.3~~$357.3 million during the ~~three~~nine months ended ~~March 31,~~September 30, 2020. This cash inflow is primarily attributable to proceeds from a draw on the 2018 ~~related to repayment~~Revolving Credit Facility of $295.0 million and proceeds from the issuance of common stock upon exercise of stock options of $70.2 million, partially offset by payments on our long-term debt obligations of $7.9 million. The payments on our long-term debt obligations included $5.1 million in principal payments towards our 2018 Term Loan and $2.8 million in payments towards our financing lease obligations.

Net cash ~~used in~~provided by financing activities, ~~from continuing operations~~ excluding the change in customer trust fund ~~obligation~~obligations, was ~~$1.8~~$71.6 million during the ~~three~~nine months ended ~~March 31, 2017, related~~September 30, 2019. This cash inflow is primarily attributable to proceeds from the ~~repurchase~~issuance of common stock upon exercise of stock options of $76.7 million, partially offset by principal payments on our long-term debt obligations of $5.1 million.

Backlog

Backlog is equivalent to our remaining performance obligations, which represents contracted revenue for recurring services and fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. Please refer to Note 10, “Revenue,” to our condensed consolidated financial statements for further discussion of our ~~stock.~~remaining performance obligations.

~~Cash Flows from Discontinued Operations~~Off-Balance Sheet Arrangements

~~During the three months ended March 31, 2018, net cash used~~As of September 30, 2020, we did not have any “off-balance sheet arrangements” (as such term is defined in discontinued operations was $0.1 million. During the three months ended March 31, 2017, net cash used in discontinued operations was $0.7 million. The cash flows from discontinued operations for all periods primarily relate to changes in working capital.Item 303 of Regulation S-K).

Critical Accounting Policies and Estimates

~~There have been~~During the nine months ended September 30, 2020, there were no ~~material~~significant changes to our critical accounting policies and estimates ~~from the information provided~~as described in the ~~“Management’s Discussion and Analysis of Financial Conditions and Results of Operations—Critical Accounting Policies and Estimates”~~consolidated financial statements contained in our ~~2017 Annual Report. For discussion~~2019 Form 10-K.

Non-GAAP Measures

Adjusted EBITDA and Adjusted EBITDA Margin

We believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP financial measures, are useful to management and investors as supplemental measures to evaluate our overall operating performance. Adjusted EBITDA and Adjusted EBITDA margin are components of ~~recently issued~~our management incentive plan and ~~adopted accounting pronouncements, please refer~~are used by management to ~~Note 2, “Summary of Significant Accounting Policies,”~~assess performance and to compare our operating performance to our ~~condensed consolidated financial statements included herein.~~

~~Off-Balance~~ ~~Sheet Arrangements~~

competitors. We ~~do not~~define Adjusted EBITDA as net income before interest, taxes, depreciation, and amortization, as adjusted to exclude gain (loss) on assets and liabilities held in a foreign currency other than the functional currency of ~~March 31, 2018, we did not, have anyoff-balance~~ ~~sheet arrangements (as~~a company subsidiary, share-based compensation expense and related employer taxes, severance charges, restructuring consulting fees, and certain other non-recurring charges. Adjusted EBITDA margin is determined by calculating the percentage Adjusted EBITDA is of total revenue. Management believes that ~~term is defined~~Adjusted EBITDA and Adjusted EBITDA margin are helpful in ~~applicable SEC rules)~~highlighting management performance trends because Adjusted EBITDA and Adjusted EBITDA margin exclude the results of decisions that are ~~reasonably likely to have a current or future material effect on our financial condition, results~~outside the control of ~~operations, liquidity, capital expenditures or capital resources.~~operating management.

~~Forward-Looking Statements~~38

Table of Contents

~~The foregoing Management’s Discussion~~

Our presentation of Adjusted EBITDA and Analysis of Financial Condition and Results of Operations and the following Quantitative and Qualitative Disclosures about Market Risk contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements represent our expectations or beliefs, including, but not limited to, our expectations concerning our operations and financial performance and condition. Words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “assumes,” “projects,” “could,” “may,” “will,” “should,” and similar expressionsAdjusted EBITDA margin are intended ~~to identify such forward-looking statements. These forward-looking statements~~as supplemental measures of our performance that are not ~~guarantees~~required by, or presented in accordance with, GAAP. Adjusted EBITDA and Adjusted EBITDA margin should not be considered as alternatives to net income, earnings per share, or any other performance measures derived in accordance with GAAP, or as measures of operating cash flows or liquidity. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by these items. Adjusted EBITDA and Adjusted EBITDA margin are included in this discussion because they are key metrics used by management to assess our operating performance.

Adjusted EBITDA and Adjusted EBITDA margin are not defined under GAAP, are not measures of net income or any other performance measures derived in accordance with GAAP, and are subject to ~~certain risks~~important limitations. Our use of the terms Adjusted EBITDA and ~~uncertainties~~Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP.

Adjusted EBITDA and Adjusted EBITDA margin have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Some of these limitations are that ~~are difficult to predict. Our actual results could differ materially from those contained~~Adjusted EBITDA and Adjusted EBITDA margin do not reflect the following:

•

our cash expenditures or future requirements for capital expenditures or contractual commitments;

•

changes in, or cash requirements for, our working capital needs;

•

any charges for the assets being depreciated and amortized that may need to be replaced in the future;

•

the impact of share-based compensation and related employer taxes upon our results of operations;

•

the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;

•

our income tax expense or the cash requirements to pay our income taxes; and

•

certain other non-recurring charges.

In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the ~~forward-looking statements due~~future we may incur expenses similar to ~~risks and uncertainties associated with fluctuations~~those eliminated in ~~our quarterly operating results, concentration~~this presentation.

The following table reconciles net income to Adjusted EBITDA for the periods presented:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
	(Dollars in millions)
Net (loss) income	$	(0.8	)	$	62.7		$	13.3		$	80.2
Interest expense, net		5.9			7.8			19.4			25.2
Income tax benefit		(5.5	)		(65.6	)		(5.7	)		(57.5	)
Depreciation and amortization		13.0			14.9			36.9			43.9
EBITDA (a)		12.6			19.8			63.9			91.8
Intercompany foreign exchange (gain) loss		(1.2	)		0.3			0.1			0.8
Share-based compensation (b)		19.3			11.4			48.5			27.0
Severance charges (c)		2.2			0.8			6.9			4.4
Restructuring consulting fees (d)		0.3			1.5			6.9			3.6
Other non-recurring charges (e)		—			12.6			(0.4	)		12.6
Adjusted EBITDA	$	33.2		$	46.4		$	125.9		$	140.2
Adjusted EBITDA margin		16.2	%		22.9	%		20.3	%		23.3	%

(a)	We define EBITDA as net income or loss before interest, taxes, and depreciation and amortization.

(b)	Represents share-based compensation expense and related employer taxes.

(c)	Represents costs for severance compensation paid to employees whose positions have been eliminated or who have been terminated not for cause.

(d)	Represents consulting fees and expenses incurred during the periods presented in connection with any acquisition, investment, disposition, recapitalization, equity offering, issuance or repayment of debt, issuance of equity interests, or refinancing.

(e)	Represents (recovery) loss on unrecovered duplicate payments associated with an isolated service incident. Please refer to Note 14, “Commitments and Contingencies,” for further discussion.

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The following tables present a reconciliation of our ~~product offerings, development risks involved with new products and technologies, competition,~~reported results to our ~~contractual relationships with third parties, contract renewals with business partners, compliance by our customers with the terms~~non-GAAP Adjusted EBITDA basis for all periods presented:

	Three Months Ended September 30, 2020
	As reported			Share-based compensation		Severance charges		Other operating expenses (a)			Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	54.3		$	1.8	$	0.8	$	—		$	51.7
Professional services and other		40.2			1.0		—		—			39.2
Product development and management		22.9			2.9		0.8		—			19.2
Depreciation and amortization		10.3			—		—		—			10.3
Total cost of revenue		127.7			5.7		1.6		—			120.4
Sales and marketing		39.5			2.0		0.4		—			37.1
General and administrative		37.8			11.6		0.2		0.3			25.7
Operating (loss) profit		(0.6	)		19.3		2.2		0.3			21.2
Other expense, net		(0.2	)		—		—		(1.2	)		1.0
Depreciation and amortization		13.0			—		—		—			13.0
EBITDA	$	12.6		$	19.3	$	2.2	$	(0.9	)	$	33.2

(a)	Other operating expenses includes intercompany foreign exchange gain and restructuring consulting fees.

	Three Months Ended September 30, 2019
	As reported		Share-based compensation		Severance charges		Other operating expenses (a)		Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	49.4	$	0.9	$	0.3	$	—	$	48.2
Professional services and other		37.6		0.5		—		—		37.1
Product development and management		17.5		1.0		—		—		16.5
Depreciation and amortization		9.0		—		—		—		9.0
Total cost of revenue		113.5		2.4		0.3		—		110.8
Sales and marketing		35.5		1.3		0.5		—		33.7
General and administrative		46.8		7.7		—		14.1		25.0
Operating profit		6.5		11.4		0.8		14.1		32.8
Other expense, net		1.6		—		—		0.3		1.3
Depreciation and amortization		14.9		—		—		—		14.9
EBITDA	$	19.8	$	11.4	$	0.8	$	14.4	$	46.4

(a)	Other operating expenses includes intercompany foreign exchange loss, restructuring consulting fees, and other non-recurring charges.

Table of ~~their contracts with us, and other factors disclosed in our filings with the SEC. Other factors that may cause such differences include, but are not limited to, those discussed in this Form10-Q~~ ~~and the Prospectus, including the risk factors set forth in “Risk Factors”~~Contents

	Nine Months Ended September 30, 2020
	As reported		Share-based compensation		Severance charges		Other operating expenses (a)		Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	155.8	$	4.5	$	1.6	$	—	$	149.7
Professional services and other		120.7		2.5		0.9		—		117.3
Product development and management		57.5		5.2		1.2		—		51.1
Depreciation and amortization		29.9		—		—		—		29.9
Total cost of revenue		363.9		12.2		3.7		—		348.0
Sales and marketing		116.2		6.0		1.4		—		108.8
General and administrative		109.9		30.3		1.8		6.5		71.3
Operating profit		29.7		48.5		6.9		6.5		91.6
Other expense, net		2.7		—		—		0.1		2.6
Depreciation and amortization		36.9		—		—		—		36.9
EBITDA	$	63.9	$	48.5	$	6.9	$	6.6	$	125.9

(a)	Other operating expenses includes intercompany foreign exchange loss, restructuring consulting fees, and other non-recurring charges.

	Nine Months Ended September 30, 2019
	As reported		Share-based compensation		Severance charges		Other operating expenses (a)		Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	149.0	$	2.1	$	1.1	$	—	$	145.8
Professional services and other		107.1		1.2		0.4		—		105.5
Product development and management		49.1		2.2		0.1		—		46.8
Depreciation and amortization		26.7		—		—		—		26.7
Total cost of revenue		331.9		5.5		1.6		—		324.8
Sales and marketing		105.6		3.6		1.9		—		100.1
General and administrative		112.2		17.9		0.9		16.2		77.2
Operating profit		52.6		27.0		4.4		16.2		100.2
Other expense, net		4.7		—		—		0.8		3.9
Depreciation and amortization		43.9		—		—		—		43.9
EBITDA	$	91.8	$	27.0	$	4.4	$	17.0	$	140.2

(a)	Other operating expenses includes intercompany foreign exchange loss, restructuring consulting fees, and other non-recurring charges.

Table of the Prospectus. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or the terms of our indebtedness. These risks and uncertainties should be considered in evaluating any forward-looking statements contained herein.Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks related to foreign currency exchange rates, interest rates, and pension obligations. We seek to minimize or to manage these market risks through normal operating and financing activities. These market risks may be amplified by events and factors surrounding the COVID-19 pandemic. We do not trade or use instruments with the objective of earning financial gains on the market fluctuations, nor do we use instruments where there are not underlying exposures.

Foreign Currency Risk. Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Canadian Dollar. Due to the relative size of our international operations to date, we have not instituted an active hedging program. We expect our international operations to continue to grow in the near term, and we are monitoring the foreign currency exposure to determine if we should begin a hedging program.

Interest Rate Risk. In connection with our U.S. and Canadian payroll and tax filing services, we collect funds for payment of payroll and taxes; temporarily hold such funds in trust until payment is due; remit the funds to the customers’ employees and appropriate taxing authority; file federal, state and local tax returns; and handle related regulatory correspondence and amendments. We invest the U.S. customer trust funds ~~primarily~~ in high- quality bank deposits, money market mutual funds, or collateralized short-term investments. We may also invest these funds in U.S. Treasury and agency securities, as well as highly rated asset-backed, mortgage-backed, municipal, and corporate securities. Our Canadian customer trust funds are invested in securities issued by the government and provinces of Canada, highly rated Canadian banks and corporations, asset-backed trusts, and mortgages.

We do not enter into investments for trading or speculative purposes. Our cash equivalents and our portfolio of marketable securities are subject to market risk due to changes in interest rates. Fixed rate securities may have their market value adversely affected due to a rise in interest rates, while floating rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectation due to changes in interest rates or we may suffer losses in principal if we are forced to sell securities that decline in market value due to changes in interest rates. However, because we classify our securities as “available for sale,” no gains or losses are recognized due to changes in interest rates unless such securities are sold prior to maturity or declines in fair value are determined to be ~~other-than-temporary.~~unrecoverable.

We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition. Fluctuations in the value of our investment securities caused by a change in interest rates (gains or losses on the carrying value) are recorded in other comprehensive income, and are realized only if we sell the underlying securities.

Pension Obligation Risk. We provide a pension plan for certain current and former U.S. employees that closed to new participants on January 2, 1995. In 2007, the U.S. pension plan was amended (1) to exclude from further participation any participant or former participant who was not employed by the company or another participating employer on January 1, 2008, (2) to discontinue participant contributions, and (3) to freeze the accrual of additional benefits as of December 31, 2007. In applying relevant accounting policies, we have made critical estimates related to actuarial assumptions, including assumptions of expected returns on plan assets, discount rates, and health care cost trends. The cost of pension benefits in future periods will depend on actual returns on plan assets, assumptions for future periods, contributions, and benefit experience. In ~~2017,~~October 2020, we contributed ~~$25.3~~$105.0 million to the U.S. pension plan, which represented $17.0 million of required minimum contributions and $88.0 million of voluntary contributions. In 2019, we contributed $18.0 million to our U.S. pension plan. The effective discount rate used in accounting for pension and other benefit obligations in ~~2017~~2019 ranged from ~~3.01%~~2.52% to ~~3.25%~~2.81%. The expected rate of return on plan assets for qualified pension benefits in ~~2018~~2020 is ~~6.30%~~5.70%.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

~~Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure~~Disclosure controls and procedures, as defined in Rule13(a)-15(e) ~~of the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form10-Q~~ ~~pursuant to Rule13a-15(b)~~ of the Exchange ~~Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure~~Act, are controls and procedures ~~as of the end of the period covered by this Quarterly Report on Form10-Q~~that are ~~effective at a reasonable assurance level in ensuring~~designed to ensure that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Our management ~~including~~has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, ~~does not expect~~the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Form 10-Q pursuant to Rule 13a-15(b) of the Exchange Act. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures ~~will prevent or detect all errors and all fraud. We have not engaged an independent registered accounting firm to perform an audit of our internal control over financial reporting~~ as of ~~any balance sheet date or for any period reported in our financial statements. Presently, we are not an accelerated filer, as such term is defined by Rule12b-2~~the end of the Exchange Act, therefore; our management is not presently required to perform an annual assessment of the effectiveness of our internal control over financial reporting. This requirement could apply as early as our Annual Report onperiod covered by this Form~~10-K~~ ~~for the year ending December 31, 2019 if certain triggers requiring accelerated filing deadlines~~ 10-Q are met prior to that. Our independent public registered accounting firm will first be required to attest to the effectiveness of our internal control over financial reporting for our Annual Report on Form~~10-K~~ ~~for the first year we are no longer an “emerging growth company”.~~effective. While our disclosure controls and procedures are designed to provide reasonable assurance of their effectiveness, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected.

Changes in Internal Control over Financial Reporting

There were no changes to our internal ~~control~~controls over financial reporting during the three months ended ~~March 31, 2018,~~September 30, 2020, that have materially affected, or that are reasonably likely to materially affect, our internal ~~control~~controls over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or taken together have a material adverse effect on our business, financial condition or liquidity. Discussion of Legal Matters is incorporated by reference from Part I, Item 1, Note 14, “Commitments and Contingencies,” of this Form 10-Q and should be considered an integral part of Part II, Item 1, “Legal Proceedings”.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the reader should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. There have been no material changes in the Company's risk factors from those disclosed in Part I, Item 1A, of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 with the exception of the items listed below.

Our business has been adversely affected and will likely continue to be adversely affected by the COVID-19 pandemic.

The global spread of the COVID-19 pandemic has created significant global volatility, uncertainty, and economic disruption. The COVID-19 pandemic began to adversely affect our operations in March 2020. The extent to which the COVID-19 pandemic will continue to adversely affect our business, operations, and financial results will depend on numerous evolving factors that we may not be able to accurately predict, including but not limited to:

•

the duration and scope of the pandemic;

•

governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

•

the impact of the pandemic on economic activity and actions taken in response;

•

the declining employment levels of our customers;

•

the effect on our customers’ demand for or the delays in implementing our services;

•

our ability to sell and to provide our services to our current and future customers, including as a result of travel restrictions and people working from home;

•

the ability of our customers to pay for our services or to make us whole for advances of earned net wages and associated tax amounts made on their behalf by us; and

•

our ability to safely and efficiently navigate our employees’ return to the workplace and adapt to the evolving business environment resulting from the COVID-19 pandemic.

Existing or potential customers have and may continue to reduce employee headcount, to slow down decision-making, to delay planned work, or to seek to modify existing agreements, especially those customers significantly adversely affected by the pandemic’s economic impact in areas where we have significant concentrations, including the retail and hospitality sectors.

Further, the effects of the pandemic have and may continue to reduce our float revenue as our customers employ fewer employees and as governments take actions to stimulate the global economy, such as the U.S. Federal Reserve and Bank of Canada lowering interest rates. A sustained downturn in the financial markets and asset values may have the effect of reducing our float revenue, or limiting our ability to liquidate securities held in our customer trust funds. The effects of the pandemic, including remote working arrangements for employees, may also impact our financial reporting systems and internal control over financial reporting, including our ability to ensure information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our ~~principal~~management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Any of these consequences of the pandemic could cause or contribute to the risks ~~that~~and uncertainties enumerated in the Form 10-K. As we ~~believe are material~~cannot predict the duration or scope of the COVID-19 pandemic, the anticipated negative financial impact to our business, financial condition, results of operations and/or stock price cannot be reasonably estimated, but could be material and could last for an extended period of time.

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Our quarterly results of operations may fluctuate significantly and may not fully reflect the underlying performance of our business.

Our quarterly results of operations, including the levels of our revenues, gross margin, profitability, cash flow, and deferred revenue, may vary significantly in the future, and period-to-period comparisons of our results of operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, and as a result, may not fully reflect the underlying performance of our business. Fluctuation in quarterly results may negatively impact the value of our common stock. Factors that may cause fluctuations in our quarterly financial results include, without limitation:

•

our ability to attract new Cloud customers;

•

our ability to replace declining Bureau revenue with Cloud revenue;

•

the addition or loss of large Cloud customers, including through acquisitions or consolidations;

•

the addition or loss of employees by our Cloud customers;

•

the timing and number of paydays in a period;

•

the adoption of the Dayforce Wallet by customers and their employees;

•

the losses, if any, caused by customer failure to repay advances we make on their behalf for our Dayforce Wallet or other services;

•

the timing of recognition of revenues;

•

the tenure of our Cloud customers during that period;

•

the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure;

•

network outages or security breaches;

•

general economic, industry, and market conditions;

•

customer renewal rates;

•

increases or decreases in the number of elements of our services or pricing changes upon any renewals of customer agreements;

•

changes in our pricing policies or those of our competitors;

•

the mix of applications sold during a period;

•

seasonal variations in sales of our applications, which has historically been highest in the fourth quarter of a calendar year;

•

fluctuation in market interest rates, which impacts debt interest expense as well as float revenue;

•

the timing and success of new application and service introductions by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, customers, or strategic partners; and

•

the impact of new accounting rules.

Our Dayforce Wallet program presents the potential for our employer customers or employee customers to become the victim of fraud or other similar illegal behavior.

As part of the Dayforce Wallet program, our third-party financial institution partner will issue payroll cards and execute transactions for each Dayforce Wallet account. These transactions give rise to the potential for fraud against our employer customers or employee customers when they are used for bill payments, purchases and peer-to-peer transfers. Our third-party financial institution partner has responsibility for managing potential payment fraud to which the Dayforce Wallet users are subject. If any of our employer customers or employee customers become victims of fraud or similar illegal behavior, we might face legal liabilities and other losses that could have a material adverse effect on our business, financial condition, and results of operations.

Our solutions and our business are subject to a variety of U.S. and international laws and regulations, including those regarding privacy, data protection, and information security. Any failure by us or our third party service providers, as well as the failure of our platform or services, to comply with applicable laws and regulations could have a material adverse effect on our business, financial condition, and results of operations.

We are subject to a variety of U.S. and international laws and regulations, including regulation by various federal government agencies, including the FTC, and state and local agencies.

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Privacy and Data Protection Laws

The United States and various state and foreign governments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security, and storage of personal identifiable information (“PII”) of individuals; and the FTC and many state attorneys general are applying federal and state consumer protection laws to impose standards on the online collection, use and dissemination of data. Self-regulatory obligations, other industry standards, policies, and other legal obligations may apply to our collection, distribution, use, security, or storage of PII or other data relating to individuals. In addition, most states and some foreign governments have enacted laws requiring companies to notify individuals of data security breaches involving certain types of PII. These obligations may be interpreted and applied in an inconsistent manner from one jurisdiction to another and may conflict with one another, other regulatory requirements, or our internal practices. Any failure or perceived failure by us to comply with U.S., E.U., or other foreign privacy or security laws, regulations, policies, industry standards, or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, release, or transfer of, PII may result in governmental enforcement actions, litigation, fines and penalties, or adverse publicity and could cause our customers to lose trust in us, which could harm our reputation and have a material adverse effect on our business, financial condition, and results of operations.

We expect that there will continue to be new proposed laws, regulations, and industry standards concerning privacy, data protection and information security in the United States, Canada, the European Union, and other jurisdictions, and we cannot yet determine the impact such future laws, regulations, and standards may have on our business. For example, in May 2018, the General Data Protection Regulation came into force, bringing with it a complete overhaul of E.U. data protection laws: the new rules supersede E.U. data protection legislation, impose more stringent E.U. data protection requirements, and provide for greater penalties for non-compliance. Changing definitions of what constitutes PII may also limit or inhibit our ability to operate or to expand our business, including limiting strategic partnerships that may involve the sharing of data. Also, some jurisdictions require that certain types of data be retained on servers within these jurisdictions. Our failure to comply with applicable laws, directives, and regulations may result in enforcement action against us, including fines and imprisonment, and damage to our reputation, any of which may have an adverse effect on our business and operating results. Further, the E.U. requires that certain data transfer mechanisms be put in place before PII can be transferred from the E.U. to another jurisdiction. These validity of these mechanisms- namely the Privacy Shield, which permits US-based participating companies such as Ceridian to move PII from the E.U. to the US; and the EU Standard Contractual Clauses, which Ceridian uses extensively- continue to be challenged by civil society before E.U. regulators and courts of law. Should these mechanisms be invalidated, Ceridian may not be able to transfer customers’ PII and its own from Europe to the U.S. and other jurisdictions to run its business and deliver services to customers.

If our service is perceived to cause, or is otherwise unfavorably associated with, violations of privacy or data security requirements, it may subject us or our customers to public criticism and potential legal liability. Public concerns regarding PII processing, privacy and security may cause some of our customers’ end users to be less likely to visit their websites or otherwise interact with them. If enough end users choose not to visit our customers’ websites or otherwise interact with them, our customers could stop using our platform. This, in turn, may reduce the value of our services and slow or eliminate the growth of our business. Existing and potential privacy laws and regulations concerning privacy and data security and increasing sensitivity of consumers to unauthorized processing of PII may create negative public reactions to technologies, products, and services such as ours.

Evolving and changing definitions of what constitutes PII and / or “Personal Data” within the United States, Canada, the European Union, and elsewhere, especially relating to the classification of internet protocol, or IP addresses, machine or device identification numbers, location data and other information, may limit or inhibit our ability to operate or to expand our business. Future laws, regulations, standards and other obligations could impair our ability to collect or to use information that we utilize to provide email delivery and marketing services to our customers, thereby impairing our ability to maintain and to grow our customer base and to increase revenue. Future restrictions on the collection, use, sharing, or disclosure of our customers’ data or additional requirements for express or implied consent of customers for the use and disclosure of such information may limit our ability to develop new services and features.

Financial Services Laws

The United States and various state and foreign governments have adopted regulations which may be applicable to our Dayforce Wallet or other services with which we and/or or our third-party providers must comply. The obligations include undertakings imposed, for example, by state money transmission laws, commercial lending laws, the Office of Foreign Asset Control, the Bank Secrecy Act, Gramm-Leach-Bliley Act and the National Automated Clearing House Association. Any failure or perceived failure by us or one of our third party providers to comply with financial services laws, regulations, policies, industry standards, or legal obligations, may result in governmental enforcement actions, litigation, fines and penalties, or adverse publicity, and could cause our customers to lose trust in us, which could harm our reputation and have a material adverse effect on our business, financial condition, and results of operations.

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We rely on third party service providers for many aspects of our business, including, but not limited to, the operation of data centers; the execution of Automated Clearing House, or ACH, and wire transfers to support our customer payroll and tax services; the monitoring of applicable laws; the printing and delivery of checks; serving as an independent trustee of our U.S. client funds trust; and providing program management and other financial related services for our Dayforce Wallet program. If any third-party service providers on which we rely experience a disruption, go out of business, experience a decline in quality, or terminate their relationship with us, we could experience a material adverse effect on our business, financial condition, and results of operation.

We rely on third party service providers for many integral aspects of our business. A failure on the part of any of our third-party service providers to fulfill their contracts with us could result in a material adverse effect on our business, financial condition, and results of operation. We depend on our third parties for many services, including, but not limited to:

Upkeep of data centers

We host Dayforce and Powerpay applications and serve all of our customers from data centers operated by third party providers, primarily NaviSite, in Boston, Massachusetts; Redhill, England; Santa Clara, California; Toronto, Canada; Vancouver, Canada; Woking, England; Sydney, Australia; London, England; and Oregon. We also host Dayforce Australia in Microsoft Azure in Melbourne, Australia and Sydney, Australia. While we control and have access to our servers and all of the components of our network that are located in our external data centers, we do not control the operation of these facilities. The owners of our data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. These parties may also seek to cap their maximum contractual liability resulting in us being financially responsible for losses caused by their actions or omissions. Additionally, we host our internal systems through data centers that we operate and lease or own in Atlanta, Georgia; Fountain Valley, California; Louisville, Kentucky; and St. Petersburg, Florida. If we are unable to renew our agreements with our third party providers or to renew our leases on commercially reasonable terms, or if one of our data center operators is acquired, we may be required to transfer our servers and other infrastructure to new data center facilities, and we may incur significant costs and possible service interruption in connection with any such transfer. Both our third party data centers and data centers that we lease and operate are subject to break-ins, sabotage, intentional acts of vandalism, and other misconduct. Any such acts could result in a breach of the security of our or our customers’ data.

Problems faced by our third party data center locations, with the telecommunications network providers with whom we or they contract, or with the systems by which our telecommunications providers allocate capacity among their customers, including us, could adversely affect the experience of our customers. Our third party data centers operators could decide to close their facilities without adequate notice. In addition, any financial difficulties, such as bankruptcy, faced by our third party data centers operators or any of the service providers with whom we or they contract may have negative effects on our business, the nature and extent of which are difficult to predict. Additionally, if our data centers are unable to keep up with our growing needs for capacity, this could adversely affect the growth of our business. Any changes in third party service levels at our data centers or any security breaches, errors, defects, disruptions, or other performance problems with our applications could adversely affect our reputation, damage our customers’ stored files, result in lengthy interruptions in our services, or otherwise result in damage or losses to our customers for which they may seek compensation from us. Interruptions in our services might reduce our revenues, cause us to issue refunds to customers for prepaid and unused subscription services, subject us to potential liability, or adversely affect our renewal rates.

Processing of electronic funds transfers

We currently have agreements with four banks in the United States, two banks in Canada, and one financial payments company in the United Kingdom to execute electronic funds transfers to support our customer payroll and tax services in the United States, Canada, and the United Kingdom. If one or more of these parties fails to process electronic funds transfers on a timely basis, or at all, then our relationship with our customers could be harmed and we could be subject to claims by a customer with respect to the failed transfers, with little or no recourse to the banks. In addition, these parties have no obligation to renew their agreements with us on commercially reasonable terms, or at all, and transferring to alternative providers could prove time-consuming and costly. If these parties terminate their relationships with us, restrict or fail to increase the dollar amounts of funds that they will process on behalf of our customers, their doing so may impede our ability to process funds and could have a material adverse effect on our business, financial condition, and results of operations.

Check printing and delivery

In Canada, we rely on a third party vendor to print payroll checks, and in Canada and the United States we rely on third party couriers, such as Federal Express and Purolator, to ship printed reports, year-end slips, and pay checks to our customers. Relying on third party check printers and couriers puts us at risk from disruptions in their operations, such as employee strikes, inclement weather, and their ability to perform tasks on our behalf. If these vendors fail to perform their tasks, we could incur liability or suffer damages to our reputation, or both. If we are forced to use other third party couriers, transferring to these competitor couriers could prove time-consuming, our costs could increase and we may not be able to meet shipment deadlines. Moreover, we may not be able to obtain terms as favorable as those we currently use, which could further increase our costs.

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Monitoring of changes to applicable laws

We and our third party providers must monitor for any changes or updates in laws that are applicable to the solutions that we or our third party providers provide to our customers. In addition, we are reliant on our third party providers to modify the solutions that they provide to our customers to enable our clients to comply with changes to such laws and regulations. If our third party providers fail to reflect changes or updates in applicable laws in the solutions that they provide to our customers, we could be subject to negative customer experiences, harm to our reputation, loss of customers, claims for any fines, penalties or other damages suffered by our customers, and other financial harm.

Trustee of U.S. client funds trust

In the United States, we rely on a state-chartered trust company to serve as the independent trustee of our clients’ funds trust. Our client funds are held in accounts in the name of the clients’ fund trust and our independent trustee, in order to maintain bankruptcy remoteness of those funds from us. We rely on our independent trustee to maintain regulatory compliance with all applicable laws. It may be difficult to find a replacement trustee for our clients’ funds trust in the event the trustee terminates its relationship with us or fails to perform under our agreement with the trustee. If that were to occur, we may be unable to provide the Dayforce Wallet or our standard payroll services to our customers and their employees, which could harm our relationship with our customers and their employees, could subject us to claims by a customer, their employees, and regulatory sanctions with respect to the failure, and could result in a material adverse effect on our business, financial condition, and results of operations.

Program manager of our U.S. Dayforce Wallet program

We rely on a third party financial institution to serve as the issuing bank, the program manager and perform other financial related services with respect to our Dayforce Wallet product. In that regard, the third party financial institution, among other things, maintains our omnibus wallet funds account and performs the necessary regulatory and payments processing activity required by the Dayforce Wallet platform. We do not have the necessary regulatory approvals to hold wallet funds in or move funds from an account, nor do we have access to the payment systems needed to move the funds from the omnibus wallet funds account and the omnibus card holder account. As a result, if our third party financial institution partner fails to perform under our agreement with it, or terminates its agreement with us, we may be unable to provide the Dayforce Wallet service to our customers until we enter into a new relationship with a new third party financial institution, which could harm our relationship with our customers and their employees, could subject us to claims by a customer, their employees, and regulatory sanctions with respect to the failure, and could result in a material adverse effect on our business, financial condition, and results of operations.

A failure on the part of any of our third party service providers could result in a material adverse effect on our business, financial condition, and results of operations.

For our Dayforce Wallet service, we advance earned net wages and associated tax amounts on behalf of customers in connection with the “on demand pay” payroll feature of the service in order to provide their employees access to earned wages in advance of their standard payroll cycles. A customer may fail to satisfy its obligation to repay us for those advanced monies which could have a material adverse effect on our business, financial condition, and results of operations.

In contrast to our standard payroll processing business where a customer’s account is generally debited prior to any disbursement on its behalf, in the case of our “on demand pay” service, credit is provided to our customers and funds are advanced on the customers’ behalf in order to fund the customers’ employees’ interim earned net wage payroll demands (including associated source and other deductions) with the requirement that the customers will repay the advance on the date of their ordinary payroll run. These advances may or may not have priority over other creditors of our customers, and our security interest and/or other credit protection measures may be inadequate to make us whole. There is, therefore, a risk that our customers do not pay back the amounts we have already paid on their behalf, and in that event, we may possess limited legal recourse to recoup those funds from our customers. In the event of a customer’s failure to repay us, we may be required to seek additional sources of short-term liquidity, which may not be available on reasonable terms, or suffer credit losses, which could have a material adverse effect on our business, financial condition, and results of operations.

Regulatory requirements placed on our software and services could impose increased costs on us, delay or prevent our introduction of new products and services, and impair the function or value of our existing products and services.

Our existing products and services may become subject to increasing regulatory requirements, or our new products and services may subject us to increased regulatory requirements, and as these requirements proliferate, we may be required to change or adapt our products and services to comply. Changing regulatory requirements might render our products and services obsolete or might block us from developing new products and services. New products or services, such as the Dayforce Wallet, in turn subject us to incrementally new regulatory requirements, such as the need to obtain, maintain and comply with commercial lending licenses or other requirements

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in certain jurisdictions. These increased regulatory demands might in turn impose additional costs upon us to comply or to further develop our products and services. It might also make introduction of new products and services more costly or more time-consuming than we currently anticipate and could even prevent introduction by us of new products or services or cause the continuation of our existing products or services to become more costly. Accordingly, such regulatory requirements could have a material adverse effect on our business, financial condition, and results of operations.

Catastrophic events may disrupt our business.

Our data centers are located in Atlanta, Georgia; Fountain Valley, California; Louisville, Kentucky; St. Petersburg, Florida. Additionally, our data centers hosted by third parties and our corporate offices are located in Boston, Massachusetts; Melbourne, Australia; Minneapolis, Minnesota; Redhill, England; Santa Clara, California; Sydney, Australia; Toronto, Canada; Vancouver, Canada; Woking, England; London, England; and Oregon. Any location in any part of the world is susceptible to natural disasters or other risks beyond our control and its third party contractors that could impact operations. For example, the west coast of the United States contains active earthquake zones, the Midwest is subject to periodic tornadoes, and the east coast is subject to seasonal hurricanes and snowstorms. Additionally, we employ a substantial number of employees located in the Republic of Mauritius, which is subject to seasonal hurricanes, and the geographic remoteness of the location may create additional delays in recovery from any catastrophic event. Additionally, we rely on our network and third party infrastructure and enterprise applications, internal technology systems, and our website for our development, marketing, operational support, hosted services and sales activities. In the event of a major earthquake, tornado, hurricane, pandemic or other public health emergency or catastrophic event, such as fire, power loss, telecommunications failure, cyber-attack, war, or terrorist attack in any of our domestic or international locations, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our application development, lengthy interruptions in our services, breaches of data security and loss of critical data, all of which could have a material adverse effect on our business, financial condition, and results of operations.

Customer funds and wage funds of their employees that our trustees and third-party financial institution partners hold in trust are subject to market, interest rate, credit, and liquidity risks. The loss of these funds could have a material adverse effect on our business, financial condition, and results of operations.

Both our trustees (in the case of customer funds held in our U.S. clients’ funds trust and our Canada payroll trust) and our third party financial institution partner (in the case of employee wage funds held on their behalf as part of the U.S. Dayforce Wallet program) may invest funds in one of more of the following high-quality bank deposits, money market mutual funds, commercial paper, collateralized short-term investments, U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate, and bank securities. Nevertheless, these assets are subject to general market, interest rate, credit, and liquidity risks. These risks may be exacerbated, individually or in unison, during periods of unusual financial market volatility. We are required to fund the payroll and wage funds of our customers and their employees regardless of any loss realized on those investments affecting the principal funds held. In the event of a global financial crisis, such as that experienced in 2008, we could be faced with a severe constriction of the availability of liquidity, which could impact our ability to fund payrolls. Any loss of principal, or inability to access customer funds could have an adverse impact on our cash position and results of operations and could require us to obtain additional sources of liquidity, and could have a material adverse effect on our business, financial condition, from the risk factors previously disclosed in the prospectus, dated April 25, 2018, filed pursuant to Rule 424(b)(4) with the SEC on April 26, 2018, relating to our initial public offering which is accessible on the SEC’s website at www.sec.gov.and results of operations.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Initial Public Offering~~None.

On April 30, 2018, we completed an initial public offering (“IPO”) of our common stock. In connection with the IPO, we issued and sold 24,150,000 shares of common stock at a price to the public of $22.00 per share. Prior to completion of the IPO, those shares were unregistered. However, as a result of their registration and sale pursuant to the IPO, we received approximately $531.3 million in gross proceeds before deducting underwriting discounts, commissions and other offering related expenses. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of our equity securities or to their associates or to our affiliates. Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC acted as representatives of the underwriters for the offering.

~~We registered the shares under the Securities Act on a Registration Statement on FormS-1~~ ~~(RegistrationNo. 333-223905),~~ ~~which was filed with the SEC on March 26, 2018 and declared effective on April 25, 2018.~~

~~The IPO closed on April 30, 2018. The offering terminated after all of the shares of common stock were sold.~~

~~There was no material change in the planned use of proceeds from our IPO as described in our Prospectus.~~

~~Concurrent Private Placement~~

Immediately subsequent to our IPO on April 30, 2018, THL / Cannae Investors LLC, one of our existing stockholders controlled by our Sponsors, purchased from us in a private placement $100.0 million of our common stock at a price per share equal to the initial public offering price. Based on the IPO price of $22.00 per share, 4,545,455 shares were issued in this private placement.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

(a) Exhibits

The following exhibits are filed or furnished as a part of this report:


Exhibit No.		Description

~~3.1~~ 10.1*		~~Third Amended~~Separation, Release and ~~Restated Certificate of Incorporation of Ceridian HCM Holding Inc.~~

~~3.2~~		~~Amended and Restated Bylaws of Ceridian HCM Holding Inc.~~

~~4.1~~		~~Certificate of Common Stock.~~

~~4.2~~		~~Indenture,~~Consulting Agreement, dated ~~October 1, 2013, among Ceridian HCM Holding Inc., the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.2 to the FormS-1~~ ~~Registration Statement filed by Ceridian HCM Holding Inc. on March 26, 2018 (No.333-223905)).~~

~~4.3~~		~~First Supplemental Indenture, dated August 8, 2014, between Ceridian HCM Holding Inc. and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.3 to the FormS-1~~ ~~Registration Statement filed by Ceridian HCM Holding Inc. on March 26, 2018 (No.333-223905)).~~

~~4.4~~		~~Registration Rights Agreement~~July 2, 2020, by and among Ceridian HCM Holding, Inc., Ceridian Dayforce Inc. and Ozzie Goldschmied (incorporated by reference to Exhibit 10.1 to the ~~other parties thereto.~~Current Report on Form 8-K filed by the Company on July 2, 2020).

~~31.1~~ 10.2**		Employment Agreement, dated September 15, 2020, by and between Noémie C. Heuland and Ceridian HCM, Inc.

31.1**		Certification of Principal Executive Officer Pursuant to Rules13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~31.2~~ 31.2**		Certification of Principal Financial Officer Pursuant to Rules13a-14(a) and15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

~~32.1~~ 32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~32.2~~ 32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

~~101.INS~~ 101.INS**		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

~~101.SCH~~ 101.SCH**		Inline XBRL Taxonomy Extension Schema Document

~~101.CAL~~ 101.CAL**		Inline XBRL Taxonomy Extension Calculation Linkbase Document

~~101.DEF~~ 101.DEF**		Inline XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB~~ 101.LAB**		Inline XBRL Taxonomy Extension Label Linkbase Document

~~101.PRE~~ 101.PRE**		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104**		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*	Management compensatory plan or arrangement.

**	Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of ~~1933,~~1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


		CERIDIAN HCM HOLDING INC.

Date: ~~May 24, 2018~~November 5, 2020		By:	/s/ David D. Ossip
	Name:		~~Name:~~ David D. Ossip
	Title:		~~Title:~~ Chief Executive Officer
			~~(Principal~~ (Principal Executive Officer)



Date: ~~May 24, 2018~~November 5, 2020		By:	/s/ ~~Arthur Gitajn~~Noémie Heuland
	Name:		~~Name: Arthur Gitajn~~ Noémie Heuland
	Title:		~~Title:~~ Executive Vice President and Chief Financial Officer
			(Principal Financial ~~Officer~~Officer)
			~~(Principal Financial Officer and~~	~~Principal Accounting Officer)~~

5651

	September 30,			December 31,
	2020			2019
(Dollars in millions, except share data)	(Unaudited)
ASSETS
Current assets:
Cash and equivalents	$	554.6		$	281.3
Trade and other receivables, net		91.4			80.4
Prepaid expenses and other current assets		78.7			57.9
Total current assets before customer trust funds		724.7			419.6
Customer trust funds		2,646.6			3,204.1
Total current assets		3,371.3			3,623.7
Right of use lease asset		37.5			32.0
Property, plant, and equipment, net		132.2			128.3
Goodwill		2,011.3			1,973.5
Other intangible assets, net		197.3			177.9
Other assets		168.4			150.3
Total assets	$	5,918.0		$	6,085.7
LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	7.7		$	10.8
Current portion of long-term lease liabilities		10.3			8.8
Accounts payable		26.6			43.2
Deferred revenue		26.1			25.5
Employee compensation and benefits		75.8			75.9
Other accrued expenses		13.7			13.9
Total current liabilities before customer trust funds obligations		160.2			178.1
Customer trust funds obligations		2,581.2			3,193.6
Total current liabilities		2,741.4			3,371.7
Long-term debt, less current portion		957.2			666.3
Employee benefit plans		108.2			117.2
Long-term lease liabilities, less current portion		34.1			30.1
Other liabilities		40.8			18.1
Total liabilities		3,881.7			4,203.4
Commitments and contingencies (Note 14)
Stockholders’ equity:
Common stock, $0.01 par, 500,000,000 shares authorized, 147,647,117 and 144,386,618 shares issued and outstanding, respectively		1.5			1.4
Additional paid in capital		2,565.5			2,449.1
Accumulated deficit		(216.5	)		(229.8	)
Accumulated other comprehensive loss		(314.2	)		(338.4	)
Total stockholders’ equity		2,036.3			1,882.3
Total liabilities and equity	$	5,918.0		$	6,085.7


	Three Months ended March 31,
	2018			2017
Net loss	$	(2.6	)	$	(11.2	)
Items of other comprehensive income (loss) before income taxes:
Change in foreign currency translation adjustment		(16.1	)		4.9
Change in unrealized (loss) gain from invested customer trust funds		(13.4	)		1.8
Change in pension liability adjustment⁽¹⁾		2.9			2.6

Other comprehensive (loss) income before income taxes		(26.6	)		9.3
Income tax expense, net		0.8			1.6

Other comprehensive (loss) income after income taxes		(27.4	)		7.7

Comprehensive loss		(30.0	)		(3.5	)
Comprehensive (loss) income attributable to noncontrolling interest		(0.7	)		0.1

Comprehensive loss attributable to Ceridian	$	(29.3	)	$	(3.6	)

	September 30, 2020
	Amortized		Gross Unrealized					Fair
	Cost		Gain		Loss			Value
	(Dollars in millions)
Money market securities, investments carried at cost and other cash equivalents	$	1,050.6	$	—	$	—		$	1,050.6
Available for sale investments:
U.S. government and agency securities		441.9		23.6		—			465.5
Canadian and provincial government securities		379.8		16.1		—			395.9
Corporate debt securities		466.1		19.8		(0.1	)		485.8
Asset-backed securities		201.2		5.4		—			206.6
Mortgage-backed securities		12.5		0.2		—			12.7
Other securities		4.5		—		—			4.5
Total available for sale investments		1,506.0		65.1		(0.1	)		1,571.0
Invested customer trust funds		2,556.6	$	65.1	$	(0.1	)		2,621.6
Trust receivables		24.6							25.0
Total customer trust funds	$	2,581.2						$	2,646.6


	Amortized Cost		Gross Unrealized					Fair Value
	Amortized Cost		Gain		Loss			Fair Value
Money market securities, investments carried at cost and other cash equivalents	$	2,191.8						$	2,191.8
Available for sale investments:
U.S. government and agency securities		623.1		—		(14.4	)		608.7
Canadian and provincial government securities		411.9		4.8		(1.9	)		414.8
Corporate debt securities		781.9		0.5		(4.8	)		777.6
Asset-backed securities		264.6		0.1		(3.1	)		261.6
Mortgage-backed securities		12.9		—		(0.3	)		12.6
Other securities		17.0		—		(0.2	)		16.8

Total available for sale investments		2,111.4		5.4		(24.7	)		2,092.1

Invested customer trust funds		4,303.2	$	5.4	$	(24.7	)		4,283.9

Trust receivables		10.0							10.0

Total customer trust funds	$	4,313.2						$	4,293.9

	December 31, 2019
	Amortized		Gross Unrealized					Fair
	Cost		Gain		Loss			Value
	(Dollars in millions)
Money market securities, investments carried at cost and other cash equivalents	$	1,348.1	$	—	$	—		$	1,348.1
Available for sale investments:
U.S. government and agency securities		542.4		7.1		(0.3	)		549.2
Canadian and provincial government securities		406.7		5.4		(0.7	)		411.4
Corporate debt securities		562.2		9.0		(0.3	)		570.9
Asset-backed securities		270.0		1.7		(0.3	)		271.4
Mortgage-backed securities		19.8		0.2		(0.1	)		19.9
Other securities		4.0		—		—			4.0
Total available for sale investments		1,805.1		23.4		(1.7	)		1,826.8
Invested customer trust funds		3,153.2	$	23.4	$	(1.7	)		3,174.9
Trust receivables (a)		40.4							29.2
Total customer trust funds	$	3,193.6						$	3,204.1


				Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		3
			4
PART I. FINANCIAL INFORMATION		5

Item 1.		Condensed Consolidated Financial Statements (unaudited)	5
		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
		32
Item 3.		Quantitative and Qualitative Disclosures about Market Risk	42
		52
Item 4.		Controls and Procedures	43
			53
PART II. OTHER INFORMATION		44

Item 1.		Legal Proceedings	44
		54
Item 1A.		Risk Factors	44
		54
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	49
		54
Item 3.		Defaults Upon Senior Securities	49
		54
Item 4.		Mine Safety Disclosures	49
		54
Item 5.		Other Information	49
		54
Item 6.	Exhibits	~~Exhibits~~			55	50


	March 31, 2018			December 31, 2017
	(unaudited)
ASSETS
Current assets:
Cash and equivalents	$	62.2		$	99.6
Trade and other receivables, net		81.1			79.9
Prepaid expenses		49.2			37.9
Other current assets		1.8			5.3

Total current assets before customer trust funds		194.3			222.7
Customer trust funds		4,293.9			4,099.7

Total current assets		4,488.2			4,322.4
Property, plant, and equipment, net		103.4			103.8
Goodwill		2,075.8			2,087.3
Other intangible assets, net		206.6			212.4
Other assets		5.5			4.0

Total assets	$	6,879.5		$	6,729.9

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—		$	—
Accounts payable		47.6			48.8
Accrued interest		2.7			15.9
Deferred revenue		18.5			16.8
Employee compensation and benefits		55.7			70.0
Other accrued expenses		16.7			15.5

Total current liabilities before customer trust funds obligations		141.2			167.0
Customer trust funds obligations		4,313.2			4,105.5

Total current liabilities		4,454.4			4,272.5
Long-term debt, less current portion		1,120.5			1,119.8
Employee benefit plans		147.3			152.4
Other liabilities		53.8			56.2

Total liabilities		5,776.0			5,600.9
Commitments and contingencies (Note 15)
Stockholders’ equity:
Senior preferred stock, $0.01 par, 70,000,000 shares authorized, 16,802,144 shares issued and outstanding as of March 31, 2018 and December 31, 2017		190.1			184.8
Junior preferred stock, $0.01 par, 70,000,000 shares authorized, 58,244,308 shares issued and outstanding as of March 31, 2018 and December 31, 2017		0.6			0.6
Common stock, $0.01 par, 150,000,000 shares authorized, 65,374,309 shares issued and outstanding as of March 31, 2018 and 65,285,962 shares issued and outstanding as of December 31, 2017		0.7			0.7
Additional paid in capital		1,568.3			1,565.4
Accumulated deficit		(355.6	)		(348.2	)
Accumulated other comprehensive loss		(337.7	)		(312.1	)

Total stockholders’ equity		1,066.4			1,091.2
Noncontrolling interest		37.1			37.8

Total equity		1,103.5			1,129.0

Total liabilities and equity	$	6,879.5		$	6,729.9

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		$		Capital		Deficit			Loss			Equity
	(Dollars in millions, except share data, Unaudited)
Balance as of December 31, 2019		144,386,618	$	1.4	$	2,449.1	$	(229.8	)	$	(338.4	)	$	1,882.3
Net income		—		—		—		8.6			—			8.6
Issuance of common stock under share-based compensation plans		551,328		—		11.4		—			—			11.4
Share-based compensation		—		—		12.5		—			—			12.5
Foreign currency translation		—		—		—		—			(49.1	)		(49.1	)
Change in unrealized gain, net of tax of $6.0		—		—		—		—			17.4			17.4
Change in pension liability adjustment, net of tax of $0.8		—		—		—		—			2.5			2.5
Balance as of March 31, 2020		144,937,946	$	1.4	$	2,473.0	$	(221.2	)	$	(367.6	)	$	1,885.6
Net income		—		—		—		5.5			—			5.5
Issuance of common stock under share-based compensation plans		1,865,986		0.1		40.1		—			—			40.2
Share-based compensation		—		—		15.3		—			—			15.3
Foreign currency translation		—		—		—		—			21.6			21.6
Change in unrealized gain, net of tax of $5.1		—		—		—		—			15.0			15.0
Change in pension liability adjustment, net of tax of $0.8		—		—		—		—			2.5			2.5
Balance as of June 30, 2020		146,803,932	$	1.5	$	2,528.4	$	(215.7	)	$	(328.5	)	$	1,985.7
Net loss		—		—		—		(0.8	)		—			(0.8	)
Issuance of common stock under share-based compensation plans		843,185		—		18.6		—			—			18.6
Share-based compensation		—		—		18.5		—			—			18.5
Foreign currency translation		—		—		—		—			12.8			12.8
Change in unrealized loss, net of tax of $0.5		—		—		—		—			(0.7	)		(0.7	)
Change in pension liability adjustment, net of tax of $1.1		—		—		—		—			2.2			2.2
Balance as of September 30, 2020		147,647,117	$	1.5	$	2,565.5	$	(216.5	)	$	(314.2	)	$	2,036.3


	Three Months ended March 31, 2018
	As Reported		Under ASC 606		Impact
Revenue:
Recurring services	$	188.7	$	182.3	$	(6.4	)
Professional services and other		20.2		28.9		8.7

Total revenue	$	208.9	$	211.2	$	2.3
Operating profit	$	26.4	$	30.6	$	4.2


	Three Months ended March 31, 2017
	As Reported		Under ASC 606		Impact
Revenue:
Recurring services	$	171.4	$	165.5	$	(5.9	)
Professional services and other		15.6		22.5		6.9

Total revenue	$	187.0	$	188.0	$	1.0
Operating profit	$	12.2	$	14.6	$	2.4


	Three Months ended March 31,
	2017
Net revenues	$	—
Loss from operations before income taxes		(0.1	)
Gain on sale of businesses		0.9
Income tax expense		(0.3	)
Income from discontinued operations, net of income taxes	$	0.5

	(Dollars in millions)
Cash and equivalents	$	6.6
Trade receivables, prepaid expenses, and other current assets		10.8
Customer trust funds		12.3
Property, plant, and equipment and other assets		4.2
Goodwill		47.6
Other intangible assets, net		20.7
Accounts payable and other current liabilities		(2.2	)
Customer trust funds obligations		(13.1	)
Other non-current liabilities		(9.7	)
Total purchase price	$	77.2

										September 30, 2020
										Level 1		Level 2			Level 3		Total
	Total		Level 1		Level 2			Level 3		(Dollars in millions)
Assets
Available for sale customer trust funds assets	$	2,092.1	$	—	$	2,092.1	(a)	$	—	$	—	$	1,571.0	(a)	$	—	$	1,571.0

Total assets measured at fair value	$	2,092.1	$	—	$	2,092.1		$	—	$	—	$	1,571.0		$	—	$	1,571.0


	Less than 12 months					12 months or more					Total
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
U.S. government and agency securities	$	(9.5	)	$	493.6	$	(4.9	)	$	112.0	$	(14.4	)	$	605.6
Canadian and provincial government securities		(1.9	)		138.1		—			—		(1.9	)		138.1
Corporate debt securities		(4.0	)		300.8		(0.8	)		39.0		(4.8	)		339.8
Asset-backed securities		(2.9	)		211.9		(0.2	)		17.8		(3.1	)		229.7
Mortgage-backed securities		(0.1	)		3.3		(0.2	)		9.1		(0.3	)		12.4
Other securities			(a)		5.0		(0.2	)		12.5		(0.2	)		17.5

Total available for sale investments	$	(18.4	)	$	1,152.7	$	(6.3	)	$	190.4	$	(24.7	)	$	1,343.1

	September 30, 2020
	Cost		Fair Value
	(Dollars in millions)
Due in one year or less	$	1,398.7	$	1,402.0
Due in one to three years		689.9		719.2
Due in three to five years		343.5		362.2
Due after five years		124.5		138.2
Invested customer trust funds	$	2,556.6	$	2,621.6


	March 31, 2018
	Cost		Fair Value
Due in one year or less	$	2,864.5	$	2,864.6
Due in one to three years		525.6		522.0
Due in three to five years		544.8		538.0
Due after five years		368.3		359.3

Invested customer trust funds	$	4,303.2	$	4,283.9


	March 31,			December 31,
	2018			2017
Land	$	7.5		$	7.5
Software		212.1			207.2
Machinery and equipment		123.0			122.1
Buildings and improvements		36.8			36.6

Total property, plant, and equipment		379.4			373.4
Accumulated depreciation		(276.0	)		(269.6	)

Property, plant, and equipment, net	$	103.4		$	103.8


	HCM			LifeWorks			Total
Balance at December 31, 2016	$	1,933.1		$	124.9		$	2,058.0
Translation		27.9			1.4			29.3

Balance at December 31, 2017		1,961.0			126.3			2,087.3
Translation		(11.0	)		(0.5	)		(11.5	)

Balance at March 31, 2018	$	1,950.0		$	125.8		$	2,075.8

	(Dollars in millions)
Balance at December 31, 2018	$	1,927.4
Acquisitions		25.7
Translation		20.4
Balance at December 31, 2019		1,973.5
Acquisition		47.6
Translation		(9.8	)
Balance at September 30, 2020	$	2,011.3

	September 30, 2020
	Gross Carrying Amount		Accumulated Amortization			Net		Estimated Life Range (Years)
	(Dollars in millions)
Customer lists and relationships	$	225.9	$	(207.5	)	$	18.4	5-15
Trade name		177.4		(2.0	)		175.4	3 and Indefinite
Technology		157.3		(153.8	)		3.5	3-4
Total other intangible assets	$	560.6	$	(363.3	)	$	197.3

Years Ending December 31,			Amount
			(Dollars in millions)
Years Ending December 31,	Amount
2018	$	—
2019		—
2020		657.0	$	1.7
2021		475.0		6.8
2022		—		6.8
2023				301.8
2024				6.8
Thereafter		—		637.5
			$	961.4
	$	1,132.0

											Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
	Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Options outstanding at December 31, 2017		1,035,647		$	13.46			3.5	$	—
Performance-based options outstanding at December 31, 2019												68,281		$	13.58			2.6	$	3.7
Granted		—			—			—		—		1,818,728			65.27			—		—
Exercised		—			—			—		—		(31,678	)		(13.46	)		—		—
Forfeited or expired		(5,572	)		(13.46	)		—		—		0			0			—		—

Options outstanding at March 31, 2018		1,030,075		$	13.46			3.2	$	—
Performance-based options outstanding at September 30, 2020												1,855,331		$	64.25			9.5	$	34.1
Performance-based options exercisable at September 30, 2020												36,603		$	13.68			2.1	$	2.5

		Shares
		~~Shares~~
RSUs outstanding at December 31, ~~2017~~2019			~~605,990~~ 819,818
Granted			— 629,554
Shares issued upon vesting of RSUs			(~~76,190~~63,144	)
Forfeited or canceled			— (17,109	)
	RSUs outstanding at September 30, 2020
~~RSUs outstanding at March 31, 2018~~1,369,119			~~529,800~~
RSUs releasable at ~~March 31, 2018~~September 30, 2020			~~125,000~~ 422,635

Period Ended	Shares Issued		Purchase Price (per share)
March 31, 2020		49,802	$	42.56
June 30, 2020		42,706		59.52
September 30, 2020		42,719		59.52


	Foreign Currency Translation Adjustment			Unrealized Gain (Loss) from Invested Customer Trust Funds			Pension Liability Adjustment			Total
Balance as of December 31, 2017	$	(160.6	)	$	(9.0	)	$	(142.5	)	$	(312.1	)
Other comprehensive income (loss) before income taxes and reclassifications		(15.9	)		(13.4	)		(0.1	)		(29.4	)
Income tax benefit		—			0.8			—			0.8
Reclassifications to earnings		—			—			3.0			3.0

Other comprehensive income (loss) attributable to Ceridian		(15.9	)		(12.6	)		2.9			(25.6	)

Balance as of March 31, 2018	$	(176.5	)	$	(21.6	)	$	(139.6	)	$	(337.7	)

Lease Type	Balance Sheet Classification	September 30, 2020		December 31, 2019
		(Dollars in millions)
ASSETS
Operating lease assets	Trade and other receivables, net	$	5.4	$	5.5
Operating lease assets	Prepaid expenses and other current assets		2.2		1.2
Operating lease assets	Right of use lease asset		37.5		32.0
Financing lease assets	Property, plant, and equipment, net		8.2		8.8
Total lease assets		$	53.3	$	47.5
LIABILITIES
Current
Financing lease liabilities	Current portion of long-term debt	$	0.9	$	4.0
Operating lease liabilities	Current portion of long-term lease liabilities		10.3		8.8
Noncurrent
Financing lease liabilities	Long-term debt, less current portion		8.5		8.4
Operating lease liabilities	Long-term lease liabilities, less current portion		34.1		30.1
Total lease liabilities		$	53.8	$	51.3

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Lease Cost	(Dollars in millions)
Operating lease cost	$	2.4		$	4.2		$	7.0		$	12.6
Financing lease cost:
Depreciation of lease assets		0.2			—			0.6			—
Interest on lease liabilities		0.1			—			0.3			—
Sublease income		(1.1	)		(1.0	)		(3.2	)		(3.3	)
Total lease cost, net	$	1.6		$	3.2		$	4.7		$	9.3


	Three Months ended March 31,
	2018
Numerator:
Net loss attributable to Ceridian	$	(2.1	)
Less: Income from discontinued operations		—

Net loss from continuing operations attributable to Ceridian	$	(2.1	)

Denominator:
Weighted-average shares outstanding—basic and diluted		65,314,462
Pro forma adjustment to reflect assumed conversion of senior convertible preferred stock		13,124,574
Pro forma adjustment to reflect assumed conversion of junior convertible preferred stock		29,122,075

Pro forma weighted-average shares outstanding used to computed pro forma net loss per share—basic and diluted		107,561,111
Pro forma net loss per share from continuing operations attributable to Ceridian—basic and diluted	$	(0.02	)
Pro forma net income per share from discontinued operations—basic and diluted	$	—

Pro forma net loss per share attributable to Ceridian—basic and diluted	$	(0.02	)

	Three Months Ended
	September 30,						Increase/ (Decrease)						% of Revenue
	2020			2019			Amount			%			2020			2019
	(Dollars in millions)
Revenue:
Recurring services
Cloud	$	141.3		$	131.0		$	10.3			7.9	%		69.1	%		64.8	%
Bureau		26.8			36.4			(9.6	)		(26.4	)%		13.1	%		18.0	%
Total recurring services		168.1			167.4			0.7			0.4	%		82.2	%		82.7	%
Professional services and other		36.3			34.9			1.4			4.0	%		17.8	%		17.3	%
Total revenue		204.4			202.3			2.1			1.0	%		100.0	%		100.0	%
Cost of revenue:
Recurring services
Cloud		41.8			39.0			2.8			7.2	%		20.5	%		19.3	%
Bureau		12.5			10.4			2.1			20.2	%		6.1	%		5.1	%
Total recurring services		54.3			49.4			4.9			9.9	%		26.6	%		24.4	%
Professional services and other		40.2			37.6			2.6			6.9	%		19.7	%		18.6	%
Product development and management		22.9			17.5			5.4			30.9	%		11.2	%		8.7	%
Depreciation and amortization		10.3			9.0			1.3			14.4	%		5.0	%		4.4	%
Total cost of revenue		127.7			113.5			14.2			12.5	%		62.5	%		56.1	%
Gross profit		76.7			88.8			(12.1	)		(13.6	)%		37.5	%		43.9	%
Selling, general, and administrative		77.3			82.3			(5.0	)		(6.1	)%		37.8	%		40.7	%
Operating (loss) profit		(0.6	)		6.5			(7.1	)		(109.2	)%		(0.3	)%		3.2	%
Interest expense, net		5.9			7.8			(1.9	)		(24.4	)%		2.9	%		3.9	%
Other (income) expense, net		(0.2	)		1.6			(1.8	)		(112.5	)%		(0.1	)%		0.8	%
Loss before income taxes		(6.3	)		(2.9	)		(3.4	)		(117.2	)%		(3.1	)%		(1.4	)%
Income tax benefit		(5.5	)		(65.6	)		60.1			91.6	%		(2.7	)%		(32.4	)%
Net (loss) income	$	(0.8	)	$	62.7		$	(63.5	)		(101.3	)%		(0.4	)%		31.0	%
Adjusted EBITDA (a)	$	33.2		$	46.4		$	(13.2	)		(28.4	)%		16.2	%		22.9	%
Adjusted EBITDA margin (a)		16.2	%		22.9	%		(6.7	)%		(29.3	)%


	Three Months ended March 31,				Growth rate year-over-year			Growth rate on a constant currency basis (a)
	2018		2017		2018 vs. 2017			2018 vs. 2017
	(Dollar in millions)
Dayforce	$	102.4	$	71.0		44.2	%		42.8	%
PowerPay		22.8		19.7		15.7	%		10.0	%

Total Cloud revenue	$	125.2	$	90.7		38.0	%		35.6	%


	Three Months Ended						Increase /
	March 31,						(Decrease)						% of Revenue
	2018			2017			Amount			%			2018			2017
	(Dollars in millions)
Revenue:
Recurring services
Cloud	$	106.0		$	76.4		$	29.6			38.7	%		50.7	%		40.9	%
Bureau		61.0			75.4			(14.4	)		(19.1	)%		29.2	%		40.3	%
LifeWorks		21.7			19.6			2.1			10.7	%		10.4	%		10.5	%

Total recurring services		188.7			171.4			17.3			10.1	%		90.3	%		91.7	%
Professional services and other		20.2			15.6			4.6			29.5	%		9.7	%		8.3	%

Total revenue		208.9			187.0			21.9			11.7	%		100.0	%		100.0	%
Cost of revenue:
Recurring services
Cloud		33.1			28.9			4.2			14.5	%		15.8	%		15.5	%
Bureau		17.6			20.4			(2.8	)		(13.7	)%		8.4	%		10.9	%
LifeWorks		12.0			9.5			2.5			26.3	%		5.7	%		5.1	%

Total recurring services		62.7			58.8			3.9			6.6	%		30.0	%		31.4	%
Professional services and other		32.8			33.9			(1.1	)		(3.2	)%		15.7	%		18.1	%
Product development and management		15.4			12.8			2.6			20.3	%		7.4	%		6.8	%
Depreciation and amortization		8.8			7.7			1.1			14.3	%		4.2	%		4.1	%

Total cost of revenue		119.7			113.2			6.5			5.7	%		57.3	%		60.5	%

Gross profit		89.2			73.8			15.4			20.9	%		42.7	%		39.5	%
Costs and expenses:
Selling, general, and administrative		65.6			60.7			4.9			8.1	%		31.4	%		32.5	%
Other (income) expense, net		(2.8	)		0.9			(3.7	)		(411.1	)%		(1.3	)%		0.5	%
Interest expense, net		22.2			21.4			0.8			3.7	%		10.6	%		11.4	%

Total costs and expenses		85.0			83.0			2.0			2.4	%		40.7	%		44.4	%

Income (loss) from continuing operations before income taxes		4.2			(9.2	)		13.4			145.7	%		2.0	%		(4.9	)%
Income tax expense		6.8			2.5			4.3			172.0	%		3.3	%		1.3	%

Loss from continuing operations		(2.6	)		(11.7	)		9.1			77.8	%		(1.2	)%		(6.3	)%
Income from discontinued operations		—			0.5			(0.5	)		(100.0	)%		—	%		0.3	%

Net loss		(2.6	)		(11.2	)		8.6			76.8	%		(1.2	)%		(6.0	)%
Net loss attributable to noncontrolling interest		(0.5	)		—			(0.5	)		n.m.			(0.2	)%		—	%

Net loss attributable to Ceridian	$	(2.1	)	$	(11.2	)	$	9.1			81.3	%		(1.0	)%		(6.0	)%


	Percentage change in revenue as reported			Impact of changes in foreign currency (a)			Percentage change in revenue on constant currency basis (a)
Revenue:
Cloud
Recurring services		38.7	%		2.0	%		36.7	%
Professional services and other		34.3	%		4.4	%		29.9	%

Total Cloud revenue		38.0	%		2.4	%		35.6	%
Bureau (b)		(19.2	)%		0.8	%		(20.0	)%
LifeWorks		10.7	%		3.2	%		7.5	%

Total revenue		11.7	%		1.8	%		9.9	%

	Three Months Ended September 30,				Percentage change in revenue as reported			Impact of changes in foreign currency (a)			Percentage change in revenue on constant currency basis (a)
	2020		2019		2020 vs. 2019						2020 vs. 2019
	(Dollars in millions)
Revenue:
Dayforce recurring services, excluding float	$	115.1	$	97.6		17.9	%		(—	)%		17.9	%
Dayforce float		7.6		11.8		(35.6	)%		(—	)%		(35.6	)%
Total Dayforce recurring services		122.7		109.4		12.2	%		(—	)%		12.2	%
Powerpay recurring services, excluding float		16.7		18.6		(10.2	)%		(0.5	)%		(9.7	)%
Powerpay float		1.9		3.0		(36.7	)%		(—	)%		(36.7	)%
Total Powerpay recurring services		18.6		21.6		(13.9	)%		(0.5	)%		(13.4	)%
Total Cloud recurring services		141.3		131.0		7.9	%		(—	)%		7.9	%
Dayforce professional services and other		35.1		34.3		2.3	%		(—	)%		2.3	%
Powerpay professional services and other		0.3		0.2		50.0	%		(—	)%		50.0	%
Total Cloud professional services and other		35.4		34.5		2.6	%		(—	)%		2.6	%
Total Cloud revenue		176.7		165.5		6.8	%		(—	)%		6.8	%
Bureau recurring services, excluding float		25.7		32.9		(21.9	)%		(—	)%		(21.9	)%
Bureau float		1.1		3.5		(68.6	)%		(—	)%		(68.6	)%
Total Bureau recurring services		26.8		36.4		(26.4	)%		(—	)%		(26.4	)%
Bureau professional services and other		0.9		0.4		125.0	%		(—	)%		125.0	%
Total Bureau revenue		27.7		36.8		(24.7	)%		(—	)%		(24.7	)%
Total revenue	$	204.4	$	202.3		1.0	%		(0.1	)%		1.1	%

Dayforce	$	157.8	$	143.7		9.8	%		(—	)%		9.8	%
Powerpay		18.9		21.8		(13.3	)%		(0.5	)%		(12.8	)%
Total Cloud revenue	$	176.7	$	165.5		6.8	%		(—	)%		6.8	%

Dayforce, excluding float	$	150.2	$	131.9		13.9	%		(—	)%		13.9	%
Powerpay, excluding float		17.0		18.8		(9.6	)%		(0.6	)%		(9.0	)%
Cloud revenue, excluding float		167.2		150.7		10.9	%		(0.1	)%		11.0	%
Cloud float		9.5		14.8		(35.8	)%		(—	)%		(35.8	)%
Total Cloud revenue	$	176.7	$	165.5		6.8	%		(—	)%		6.8	%


	Ceridian HCM Holding Inc. Unaudited Pro Forma Condensed Consolidated Balance Sheet
	March 31, 2018
	Ceridian Historical		Adjustments		Ceridian Pro Forma
	(Dollars in millions)
ASSETS
Current assets:
Cash and equivalents	$	62.2	$	7.6	$	54.6
Trade and other receivables, net		81.1		15.1		66.0
Prepaid expenses		49.2		1.7		47.5
Other current assets		1.8		—		1.8

Total current assets before customer trust funds		194.3		24.4		169.9
Customer trust funds		4,293.9		—		4,293.9

Total current assets		4,488.2		24.4		4,463.8
Property, plant, and equipment, net		103.4		1.6		101.8
Goodwill		2,075.8		125.8		1,950.0
Other intangible assets, net		206.6		5.1		201.5
Other assets		5.5		2.0		3.5

Total assets	$	6,879.5	$	158.9	$	6,720.6

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	—	$	—	$	—
Accounts payable		47.6		6.0		41.6
Accrued interest		2.7		—		2.7
Deferred revenue		18.5		2.5		16.0
Employee compensation and benefits		55.7		1.5		54.2
Other accrued expenses		16.7		0.4		16.3

Total current liabilities before customer trust funds obligations		141.2		10.4		130.8
Customer trust funds obligations		4,313.2		—		4,313.2

Total current liabilities		4,454.4		10.4		4,444.0
Long-term debt, less current portion		1,120.5		—		1,120.5
Employee benefit plans		147.3		—		147.3
Other liabilities		53.8		10.6		43.2

Total liabilities		5,776.0		21.0		5,755.0
Total equity		1,103.5		137.9		965.6

Total liabilities and equity	$	6,879.5	$	158.9	$	6,720.6

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