Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Jan. 31, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37817 | ||
Entity Registrant Name | CONDUENT INC | ||
Entity Incorporation, State or Country Code | NY | ||
Entity Tax Identification Number | 81-2983623 | ||
Entity Address, Address Line One | 100 Campus Drive, | ||
Entity Address, Address Line Two | Suite 200, | ||
Entity Address, City or Town | Florham Park, | ||
Entity Address, State or Province | NJ | ||
Entity Address, Postal Zip Code | 07932 | ||
City Area Code | 844 | ||
Local Phone Number | 663-2638 | ||
Title of 12(b) Security | Common Stock, $0.01 par value | ||
Trading Symbol | CNDT | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,585,638,435 | ||
Entity Common Stock, Shares Outstanding (in shares) | 215,420,530 | ||
Documents Incorporated by Reference [Text Block] | Part III of this Form 10-K incorporates by reference certain portions of the Registrant's Notice of 2022 Annual Meeting of Shareholders and Proxy Statement (to be filed with the Securities and Exchange Commission pursuant to Regulation 14A no later than 120 days after the close of the fiscal year covered by this report on Form 10-K). | ||
Entity Central Index Key | 0001677703 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Auditor Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Location | Florham Park, New Jersey |
Auditor Firm ID | 238 |
Consolidated Statements of Inco
Consolidated Statements of Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | |||
Revenues | $ 4,140 | $ 4,163 | $ 4,467 |
Operating Costs and Expenses | |||
Cost of services (excluding depreciation and amortization) | 3,138 | 3,209 | 3,494 |
Selling, general and administrative (excluding depreciation and amortization) | 544 | 468 | 479 |
Research and development (excluding depreciation and amortization) | 4 | 1 | 8 |
Depreciation and amortization | 352 | 459 | 459 |
Restructuring and related costs | 45 | 67 | 71 |
Interest expense | 55 | 60 | 78 |
Loss on extinguishment of debt | 15 | 0 | 0 |
Goodwill impairment | 0 | 0 | 1,952 |
Loss on divestitures and transaction costs | 3 | 17 | 25 |
Litigation costs, net | 3 | 20 | 17 |
Other (income) expenses, net | 6 | 1 | (10) |
Total Operating Costs and Expenses | 4,165 | 4,302 | 6,573 |
Loss Before Income Taxes | (25) | (139) | (2,106) |
Income tax expense (benefit) | 3 | (21) | (172) |
Net Loss | $ (28) | $ (118) | $ (1,934) |
Basic Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Diluted Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (28) | $ (118) | $ (1,934) | |
Other Comprehensive Income (Loss), Net | ||||
Currency translation adjustments, net | [1] | (31) | 8 | 3 |
Reclassification of currency translation adjustments on divestitures | [1] | 0 | 0 | 15 |
Reclassification of divested benefit plans and other | [1] | 0 | 0 | (1) |
Unrecognized gains (losses), net | [1] | (1) | 0 | 1 |
Net actuarial/prior service (losses) gains, net of tax | [1] | 1 | 1 | 0 |
Other Comprehensive Income (Loss), Net | [1] | (31) | 9 | 18 |
Comprehensive Income (Loss), Net | $ (59) | $ (109) | $ (1,916) | |
[1] | All amounts are net of tax. Tax effects were immaterial. Refer to Note 19 – Other Comprehensive Income (Loss) for information about pre-tax amounts. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) shares in Thousands, $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and cash equivalents | $ 415 | $ 450 |
Accounts receivable, net | 699 | 670 |
Assets held for sale | 184 | 0 |
Contract assets | 154 | 151 |
Other current assets | 228 | 306 |
Total current assets | 1,680 | 1,577 |
Land, buildings and equipment, net | 281 | 305 |
Operating lease right-of-use assets | 231 | 246 |
Intangible assets, net | 52 | 187 |
Goodwill | 1,339 | 1,528 |
Other long-term assets | 453 | 413 |
Total Assets | 4,036 | 4,256 |
Liabilities and Equity | ||
Current portion of long-term debt | 30 | 90 |
Accounts payable | 198 | 182 |
Accrued compensation and benefits costs | 243 | 237 |
Unearned income | 82 | 133 |
Liabilities held for sale | 29 | 0 |
Other current liabilities | 443 | 450 |
Total current liabilities | 1,025 | 1,092 |
Long-term debt | 1,383 | 1,420 |
Deferred taxes | 75 | 97 |
Operating lease liabilities | 184 | 207 |
Other long-term liabilities | 95 | 108 |
Total Liabilities | 2,762 | 2,924 |
Contingencies (See Note 16) | ||
Series A convertible preferred stock | 142 | 142 |
Common stock | 2 | 2 |
Additional paid-in capital | 3,910 | 3,899 |
Retained earnings (deficit) | (2,351) | (2,313) |
Accumulated other comprehensive loss | (429) | (398) |
Total Equity | 1,132 | 1,190 |
Total Liabilities and Equity | $ 4,036 | $ 4,256 |
Shares of common stock issued and outstanding (in shares) | 215,381 | 212,074 |
Shares of Series A convertible preferred stock and outstanding (in shares) | 120 | 120 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Cash Flows from Operating Activities: | ||||||
Net Loss | $ (28) | $ (118) | $ (1,934) | |||
Adjustments required to reconcile net loss to cash flows from operating activities: | ||||||
Depreciation and amortization | 352 | 459 | 459 | |||
Contract inducement amortization | 1 | 2 | 3 | |||
Goodwill impairment | 0 | 0 | 1,952 | |||
Write-off of implementation costs | 28 | 0 | 0 | |||
Deferred income taxes | (21) | (21) | (220) | |||
(Gain) loss from investments | 5 | (3) | (4) | |||
Amortization of debt financing costs | 6 | 7 | 7 | |||
Loss on extinguishment of debt | 15 | 0 | 0 | |||
Loss on divestitures and sales of fixed assets, net | 1 | 6 | 8 | |||
Stock-based compensation | 21 | 20 | 24 | |||
Allowance for credit losses | 1 | 2 | 3 | |||
Accounts receivable | (45) | (14) | 107 | |||
Other current and long-term assets | (44) | (36) | (14) | |||
Accounts payable and accrued compensation and benefits costs | 23 | 39 | (15) | |||
Other current and long-term liabilities | (68) | (174) | (247) | |||
Net change in income tax assets and liabilities | (4) | (8) | 3 | |||
Net Cash Provided by (Used in) Operating Activities, Total | 243 | 161 | 132 | |||
Cash Flows from Investing Activities: | ||||||
Cost of additions to land, buildings and equipment | (80) | (76) | (148) | |||
Proceeds from sale of land, buildings and equipment | 0 | 0 | 2 | |||
Cost of additions to internal use software | (67) | (63) | (67) | |||
Payments to Acquire Businesses, Net of Cash Acquired | 0 | 0 | (90) | |||
Proceeds from divestitures | 5 | 5 | (7) | |||
Net Cash Provided By (Used In) Investing Activities | (142) | (134) | (310) | |||
Cash Flows from Financing Activities: | ||||||
Proceeds from revolving credit facility | 100 | 150 | 0 | |||
Payments on revolving credit facility | 0 | (150) | 0 | |||
Proceeds from the issuance of debt, net | 1,299 | 5 | 0 | |||
Payments on debt | (1,500) | (55) | (54) | |||
Debt issuance costs | (9) | 0 | 0 | |||
Premium on debt redemption | (2) | 0 | 0 | |||
Payment of contingent consideration related to acquisition | 0 | (4) | 0 | |||
Taxes paid for settlement of stock-based compensation | (10) | (10) | (21) | |||
Dividends paid on preferred stock | (10) | (10) | (10) | |||
Net cash provided by (used in) financing activities | (132) | (74) | (85) | |||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (7) | 0 | 3 | |||
Increase (decrease) in cash, cash equivalents and restricted cash | (38) | (47) | (260) | |||
Cash, Cash Equivalents and Restricted Cash at Beginning of Period | 458 | [1] | 505 | [1] | 765 | |
Cash, Cash Equivalents and Restricted Cash at End of period | $ 420 | $ 458 | [1] | $ 505 | [1] | |
[1] | Includes $5 million, $8 million and $9 million of restricted cash as of the years ended December 31, 2021, 2020 and 2019, respectively, that was included in Other current assets on their respective Consolidated Balance Sheets. |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Restricted Cash [Abstract] | |||
Restricted Cash, Current | $ 5 | $ 8 | $ 9 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Total | Conduent Shareholders' Equity [Member] | Conduent Shareholders' Equity [Member]Cumulative Effect, Period of Adoption, Adjustment | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member]Cumulative Effect, Period of Adoption, Adjustment | AOCL [Member] | ||
Beginning Balance at Dec. 31, 2018 | $ 3,222 | $ (8) | $ 2 | $ 3,878 | $ (233) | $ (8) | $ (425) | [1] | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividend - preferred stock, $80/per share | (10) | (10) | ||||||||
Stock option and incentive plans, net | (12) | 12 | ||||||||
Net Loss | $ (1,934) | (1,934) | (1,934) | |||||||
Other comprehensive income (loss), net | 18 | [2] | 18 | 18 | [1] | |||||
Comprehensive Income (Loss), Net | (1,916) | (1,916) | 0 | 0 | (1,934) | 18 | [1] | |||
Ending Balance at Dec. 31, 2019 | 1,300 | 2 | 3,890 | (2,185) | (407) | [1] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividend - preferred stock, $80/per share | (10) | (10) | ||||||||
Stock option and incentive plans, net | 9 | 9 | ||||||||
Net Loss | (118) | (118) | (118) | |||||||
Other comprehensive income (loss), net | 9 | [2] | 9 | 9 | [1] | |||||
Comprehensive Income (Loss), Net | (109) | (109) | 0 | 0 | (118) | 9 | [1] | |||
Ending Balance at Dec. 31, 2020 | 1,190 | 2 | 3,899 | (2,313) | (398) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Dividend - preferred stock, $80/per share | (10) | (10) | ||||||||
Stock option and incentive plans, net | 11 | 11 | ||||||||
Net Loss | (28) | (28) | (28) | |||||||
Other comprehensive income (loss), net | (31) | [2] | (31) | (31) | [1] | |||||
Comprehensive Income (Loss), Net | $ (59) | (59) | 0 | 0 | (28) | (31) | [1] | |||
Ending Balance at Dec. 31, 2021 | $ 1,132 | $ 2 | $ 3,910 | $ (2,351) | $ (429) | |||||
[1] | AOCL - Accumulated other comprehensive loss. | |||||||||
[2] | All amounts are net of tax. Tax effects were immaterial. Refer to Note 19 – Other Comprehensive Income (Loss) for information about pre-tax amounts. |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | |||
Preferred stock, cash dividend (in dollars per share) | $ 80 | $ 80 | $ 80 |
Organization, Consolidation and
Organization, Consolidation and Presentation of Financial Statements | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies References herein to “we,” “us,” “our,” the “Company” and “Conduent” refer to Conduent Incorporated and its consolidated subsidiaries unless the context suggests otherwise. Description of Business As one of the largest business process services companies in the world, Conduent delivers mission-critical services and solutions on behalf of businesses and governments – creating exceptional outcomes for its clients and the millions of people who count on them. Through people, process, expertise in transaction-intensive processing and technology such as analytics and automation, Conduent's services and solutions create value by improving efficiencies, reducing costs and enabling revenue growth. A majority of Fortune 100 companies and over 500 government entities depend on Conduent every day to manage their business processes and essential interactions with their end-users. The Company's portfolio includes industry-focused solutions in attractive growth markets such as healthcare and transportation, as well as solutions that serve multiple industries such as transaction processing, customer care, human resource solutions and payment services. Basis of Presentation The Company's Consolidated Financial Statements included the historical basis of assets, liabilities, revenues and expenses of the individual businesses of the Company, including joint ventures and partnerships over which the Company has a controlling financial interest. The Company has prepared the Consolidated Financial Statements pursuant to the rules and regulations of the SEC. Certain reclassifications have been made to prior years' amounts to conform to the current year presentation. All intercompany transactions and balances have been eliminated. The Company has evaluated subsequent events through February 23, 2022. Conduent Incorporated is a New York corporation, organized in 2016. Its common stock began trading on January 3, 2017, on the New York Stock Exchange, under the ticker "CNDT". In December 2019, Conduent changed the listing of its publicly traded common stock from the New York Stock Exchange to the NASDAQ Global Select Market (NASDAQ), where it remains listed under the ticker "CNDT". Use of Estimates The Company prepared the Consolidated Financial Statements using financial information available at the time of preparation, which requires it to make estimates and assumptions that affect the amounts reported. The Company's most significant estimates pertain to intangible assets, valuation of goodwill, contingencies and litigation and income taxes. These estimates are based on management's best knowledge of current events, historical experience, and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. As of December 31, 2021, the impact of the COVID-19 pandemic, the mitigating impact of the rollout of a vaccine for it and fluctuating cases of new variants of the virus continue to unfold. As a result, many of the Company's estimates and assumptions continue to require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company's estimates may change materially in the future. New Accounting Standards The Company has considered all recent accounting standards issued, but not yet effective, and does not expect any to have a material impact on the Company's Consolidated Financial Statements. Recently Adopted Accounting Standards Reference Rate Reform: In March 2020, the Financial Accounting Standards Board (FASB) issued updated guidance relating to the accounting for the discontinuation of the London Inter-bank Offered Rate (LIBOR), referred to as reference rate reform. This guidance provides optional practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. This guidance is applicable to contract modifications that replace a reference LIBOR rate affected by reference rate reform. The amendments may be applied through December 31, 2022. The Company adopted the reference rate reform guidance on a retrospective basis as of January 1, 2021. The adoption did not have a material impact on the Company’s Consolidated Financial Statements. Income Taxes: In December 2019, the FASB issued final guidance that simplified the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (ASC) 740, Income Taxes. This final guidance was effective for fiscal years beginning January 1, 2021. The Company adopted the final income taxes guidance as of January 1, 2021. The adoption did not have a material impact on the Company's Consolidated Financial Statements. The American Rescue Plan Act, which became law in March 2021, added a new subsection to Section 162(m) of the Internal Revenue Code to expand the application of Section 162(m) to an additional five most highly compensated individuals. The expansion of Section 162(m) coverage is effective for tax years beginning after December 31, 2026. This expansion does not have an impact in the current year. The Company will monitor any potential impacts going forward. Summary of Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, including money market funds and investments with original maturities of three months or less. Receivable Sales In 2021, 2020 and 2019, the Company sold certain accounts receivable and derecognized the corresponding receivable balance. Refer to Note 5 – Accounts Receivable, Net for more details on the Company's receivable sales. Assets/Liabilities Held for Sale The Company classifies assets as held for sale in the period when the following conditions are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset (disposal group); (ii) the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal group); (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; (iv) the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset (disposal group) beyond one year; (v) the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset (disposal group) that is classified as held for sale is initially measured at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset (disposal group) until the date of sale. The fair value of a long-lived asset (disposal group) less any costs to sell is assessed each reporting period it remains classified as held for sale and any subsequent changes are reported as an adjustment to the carrying value of the asset (disposal group), as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. On December 29, 2021, the Company signed a definitive agreement to sell its Midas Suite of Solutions to Symplr Software, Inc. This action was taken because of the Company's strategy to streamline its portfolio and its consideration of divestitures of select businesses to enhance shareholder and client value. As of December 31, 2021, the Company determined that this business met the conditions discussed above to be classified as held for sale. Refer to Note 4 – Assets/Liabilities Held for Sale and Divestiture for further discussion. Land, Buildings and Equipment Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life. Significant improvements are capitalized and maintenance and repairs are expensed when incurred. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further discussion. Internal Use and Product Software Internal Use Software: The Company capitalizes direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortizes these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented. Costs for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts incurred for Internal Use Software are included in Cash Flows from Investing Activities. Produc t Software : The Company also capitalizes certain costs related to the development of software solutions to be sold to its customers upon reaching technological feasibility. These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts incurred for Product Software are included in Cash Flows from Operating activities. The Company performs annual reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value). Costs to support or service licensed software are charged to Costs of services as incurred. Internal use and Product software are included in Other long-term assets on the Company's Consolidated Balance Sheets. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further information. Cloud Computing Arrangements The Company incurs costs to implement cloud computing arrangements that are hosted by third party vendors. Implementation costs associated with cloud computing arrangements are capitalized when incurred during the application development phase. Amortization is calculated on a straight-line basis over the contractual term of the cloud computing arrangement, which includes renewal options that are reasonably certain to be exercised. Capitalized amounts related to such arrangements are recorded within Other current assets and Other long-term assets in the Consolidated Balance Sheets. The amortization expense and the associated hosting fees are included in Cost of services and Selling, general and administrative expenses, depending on the nature of the underlying use of the cloud computing arrangement, in the Company’s Consolidated Statements of Income (Loss). In the fourth quarter of 2021, the Company wrote-off approximately $28 million of previously capitalized implementation costs. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further information. Leases The Company adopted the new lease guidance as of January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company determines if an arrangement is a lease at the inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The Company has operating and finance leases for real estate and equipment. Operating leases are included in Operating lease ROU assets, Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Current portion of long-term debt, and Long-term debt in the Company's Consolidated Balance Sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the net present value of lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option based on economic factors. The Company recognizes operating fixed lease expense and finance lease depreciation on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company accounts for lease and non-lease components separately for its equipment leases, based on the estimated standalone price of each component, and combines lease and non-lease components for its real estate leases. Refer to Note 7 – Leases for further information. Goodwill For acquired businesses, the Company records the acquired assets and assumed liabilities based on their relative fair values at the date of acquisitions (commonly referred to as the purchase price allocation). Goodwill represents the excess of the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. For the Company’s business acquisitions, the purchase price is allocated to identifiable intangible assets separate from goodwill if they are from contractual or other legal rights, or if they could be separated from the acquired business and sold, transferred, licensed, rented or exchanged. The Company tests goodwill for impairment annually or more frequently if an event or change in circumstances indicate the asset may be impaired. Impairment testing for goodwill is done at the reporting unit level. The Company determined the fair value of its reporting units utilizing a combination of both an Income Approach and a Market Approach. The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of its reporting units. The Market Approach utilizes the guideline public company method. If the fair value of a reporting unit is less than its carrying amount, an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to Note 8 – Goodwill and Intangible Assets, Net for further information. Other Intangible Assets Other intangible assets primarily consist of assets acquired through business combinations, primarily installed customer base. Other intangible assets are amortized on a straight-line basis over their estimated economic lives unless impairment is identified. Refer to Note 8 – Goodwill and Intangible Assets, Net for further information. Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, including buildings, equipment, internal use software, product software, right-of-use assets and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The Company's primary measure of fair value is based on forecasted cash flows. Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are based on differences between U.S. GAAP reporting and tax bases of assets or liabilities and based on current tax laws, regulations and rates. The recognition of deferred tax assets requires an assessment to determine the realization of such assets. Management establishes valuation allowances on deferred tax assets when it is determined “more-likely-than-not” that some portion or all of the deferred tax assets may not be realized. Management considers positive and negative evidence in evaluating the ability of the Company to realize its deferred tax assets, including its historical results and forecasts of future ability to realize its deferred tax assets, including projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company is subject to ongoing tax examinations and assessments in various jurisdictions. The Company has unrecognized tax benefits for uncertain tax positions. The Company follows U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company's ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can materially increase or decrease its effective tax rate, as well as impact its operating results. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (Tax Reform). The Tax Reform includes a tax on global intangible low-taxed income (“GILTI”), which imposes a U.S. tax on certain income earned by the Company’s foreign subsidiaries. The Company elected to treat the tax on GILTI as a period cost when incurred and therefore, no deferred taxes for GILTI were recognized for the year ended December 31, 2021. Refer to Note 15 – Income Taxes for further discussion. Foreign Currency Translation and Re-measurement The functional currency for most foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss. The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars. A combination of current and historical exchange rates is used in re-measuring the local currency transactions of these subsidiaries and the resulting exchange adjustments are recorded in Currency (gains) and losses within Other (income) expenses, net together with other foreign currency re-measurements. Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, may require judgment. Typically, the Company’s contracts include performance obligation(s) to stand-ready on a daily or monthly basis to provide services to the customers. Under a stand-ready obligation, the evaluation of the nature of our performance obligation is focused on each time increment rather than the underlying activities. Accordingly, the promise to stand-ready is accounted for as a single-series performance obligation. Once the Company determines the performance obligations, the Company determines the transaction price, which is based on fixed and variable consideration. Typical forms of variable consideration include variable pricing based on the number of transactions processed or usage-based pricing arrangements. Variable consideration is also present in the form of volume discounts, tiered and declining pricing, penalties for service level agreements, performance bonuses and credits. In circumstances where the Company meets certain requirements to allocate variable consideration to a distinct service within a series of related services, it allocates variable consideration to each distinct period of service within the series. In limited circumstances, if the Company does not meet those requirements, it includes an estimate of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines standalone selling prices based on the prices charged to customers or by using expected cost plus a reasonable margin. The Company typically satisfies its performance obligations over time as the services are provided. A time-elapsed output method is used to measure progress because the nature of the Company’s promise is a stand-ready service and efforts are expended evenly throughout the period. In limited circumstances, such as contracts for implementation or development projects, the Company also uses a cost-to-cost based input method. The Company has determined that the above methods provide a faithful depiction of the transfer of services to the customer. Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase additional services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for when the customer exercises its option to purchase additional goods or services. The Company recognizes revenue for non-refundable upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract term. When more than one party is involved in providing services to a customer, the Company evaluates whether it is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers the following: if it obtains control of the specified services before they are transferred to the customer; is primarily responsible for fulfillment and inventory risk; and has discretion in establishing price. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). The Company's payment terms vary by type of services offered. The time between invoicing and when payment is due is not significant. For certain services and customer types, the Company requires payment before services are rendered. From time to time, the Company's contracts are modified to account for additions or changes to existing performance obligations. The Company's contract modifications related to stand-ready performance obligations are generally accounted for prospectively. Refer to Note 2 – Revenue for further discussion. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table provides information about disaggregated revenue by major service offering, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segments. Refer to Note 3 – Segment Reporting for additional information on the Company's reportable segments. Year Ended December 31, (in millions) 2021 2020 2019 Commercial Industries: Customer experience management $ 629 $ 648 $ 669 Business operations solutions 567 566 632 Commercial healthcare solutions 435 431 482 Human resource and learning services 445 518 602 Total Commercial Industries 2,076 2,163 2,385 Government Services: Government healthcare solutions 576 603 675 Government services solutions 742 678 588 Total Government Services 1,318 1,281 1,263 Transportation: Roadway charging & management services 327 318 327 Transit solutions 262 248 254 Curbside management solutions 82 72 107 Public safety solutions 67 73 83 Commercial vehicles 8 8 10 Total Transportation 746 719 781 Other: Divestitures — — 36 Education — — 2 Total Other — — 38 Total Consolidated Revenue $ 4,140 $ 4,163 $ 4,467 Timing of Revenue Recognition: Point in time $ 111 $ 110 $ 144 Over time 4,029 4,053 4,323 Total Revenue $ 4,140 $ 4,163 $ 4,467 The Company's contracts with customers are broadly similar in nature throughout the Company's major service offerings. The following is a description of the major service offerings: Customer Experience Management : The Company offers a range of services that help its clients support their end-users. This includes in-bound and out-bound call support for both simple and complex transactions, technical support and patient assistance. The Company also provides multi-channel communication support (both print and digital) across a range of industries . Business Operations Solutions : The Company helps its clients improve communications with their customers and constituents, whether it is on paper, online or through other communication channels. The Company also offers a broad array of flexible transaction processing services that include data entry, scanning, image processing, enrollment processing, claims processing, high volume offsite print and mail services and file indexing. The Company serves clients by managing their critical finance, accounting and procurement processes. These services include general accounting and reporting, billing and accounts receivable and purchasing, accounts payable and expense management services. The Company also offers wholesale and retail lockbox services and process auto and mortgage loans in the United States. Commercial Healthcare Solutions : The Company delivers administration, clinical support and medical management solutions across the health ecosystem to reduce costs, increase compliance and enhance utilization, while improving health outcomes and experience for members and patients. The Company's solutions span: trials, sales, access, and adherence to pharmaceutical clients; case management, performance management and patient safety for hospital clients; medical bill review, claim processing, care integration, subrogation and payment integrity solutions to managed care companies; and workers compensation medical bill review, mailroom/data capture and medical management services to claims payers and third-party administrators . Human Resource and Learning Services : The Company helps its clients support their employees at all stages of employment from initial on-boarding through retirement. The Company delivers mission-critical, technology-enabled HR services and solutions that improve business processes across the employee journey to maximize business performance, while increasing employee satisfaction, engagement and overall well-being. These solutions span health, benefits, payroll, onboarding and learning administration, annual enrollment, wealth & retirement, HR, talent, and workforce management. Government Healthcare Solutions : The Company provides medical management and fiscal agent care management services, eligibility and enrollment services and support to Medicaid programs and federally funded U.S. government healthcare programs. The Company's services include a range of innovative solutions such as Medicaid management, provider services, Medicaid business intelligence, pharmacy benefits management, eligibility and enrollment support, contract center services, application processing, premium billing, disease surveillance and outbreak management and case management solutions. Government Services Solutions : The Company is a leader in government payment disbursements for federally sponsored programs like SNAP, commonly known as food stamps and WIC as well as government-initiated cash disbursements such as child support and unemployment benefits. Roadway Charging & Management Services : The Company's electronic tolling, urban congestion management and mileage-based user solutions help clients keep up with an ever-changing environment and get more travelers where they need to go while generating revenue for much-needed infrastructure improvements. The Company's solutions include vehicle passenger detection systems, electronic toll collection, automated license plate recognition and congestion management solutions. Transit Solutions : The Company aims to make journeys more personalized and convenient while increasing capacity and profitability for authorities and agencies. The Company combines the latest in fare collection and intelligent mobility so that clients can get the added efficiency of having a single point of contact for all their transit solutions. Curbside Management Solutions : The Company delivers intelligent curbside management systems that simplify parking programs and deliver convenient and hassle-free experience for drivers. The Company's curbside solutions include citation and permit administration, parking enforcement and curbside demand management. Public Safety Solutions : The Company provides data analytics, automated photo enforcement and other public safety solutions to make streets and communities safer. Photo enforcement systems include red light, fixed and mobile speed, school bus, work zone, school zone, bus lane only, high occupancy and other forms of photo enforcement systems. Commercial Vehicles : The Company provides computer-aided dispatch/automatic vehicle location technology to help customers manage their fleet operations. Contract Balances The Company receives payments from customers based upon contractual billing schedules. Accounts receivable are recorded when the right to consideration becomes unconditional. Contract assets are the Company’s rights to consideration for services provided when the right is conditioned on something other than passage of time (for example, meeting a milestone for the right to bill under the cost-to-cost measure of progress). Contract assets are transferred to Accounts receivable, net when the rights to consideration become unconditional. Unearned income includes payments received in advance of performance under the contract, which are realized when the associated revenue is recognized under the contract. The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) December 31, 2021 December 31, 2020 Contract Assets (Unearned Income) Current contract assets $ 154 $ 151 Long-term contract assets (1) 8 13 Current unearned income (82) (133) Long-term unearned income (2) (48) (29) Net Contract Assets $ 32 $ 2 Accounts receivable, net $ 699 $ 670 __________ (1) Presented in Other long-term assets in the Consolidated Balance Sheets (2) Presented in Other long-term liabilities in the Consolidated Balance Sheets Revenues of $107 million and $101 million were recognized during the years ended December 31, 2021 and 2020, respectively, related to the Company's unearned income at December 31, 2020 and December 31, 2019. The Company had no material asset impairment charges related to contract assets for the year ended December 31, 2021. Transaction Price Allocated to the Remaining Performance Obligations Estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially satisfied at December 31, 2021, was approximately $1.2 billion. The Company expects to recognize approximately 76% of this revenue over the next 2 years and the remainder thereafter. Costs to Obtain and Fulfill a Contract The Company capitalizes commission expenses paid to internal sales personnel that are incremental to obtaining customer contracts. The net book value of these costs, which was $25 million and $23 million as of December 31, 2021 and 2020, respectively, are included in Other long-term assets. The judgments made in determining the amount of costs incurred include whether the commissions are incremental and directly related to a successful acquisition of a customer contract. These costs are amortized in Depreciation and amortization over the term of the contract or the estimated life of the customer relationship, if renewals are expected and the renewal commission is not commensurate with the initial commission. The Company expenses sales commissions when incurred if the amortization period of the sales commission is one year or less. In addition, the Company may provide inducement payments to secure customer contracts. These inducement payments are capitalized and amortized as a reduction of revenue over the term of the customer contract. The net book value of these costs totaled $19 million and $21 million as of December 31, 2021 and 2020, respectively, and are included in Other long-term assets. Also, the Company capitalizes costs incurred to fulfill its contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy the Company’s performance obligation under the contract and (iii) are expected to be recovered through revenue generated under the contract. The net book value of these costs, which comprise set-up/transition activities, was $29 million and $32 million as of December 31, 2021 and 2020, respectively, and are classified in Other long-term assets on the Consolidated Balance Sheets. Contract fulfillment costs are expensed to Depreciation and amortization as the Company satisfies its performance obligations by transferring the service to the customer. These costs are amortized on a systematic basis over the expected period of benefit. These costs are periodically reviewed for impairment. The amortization of costs incurred to obtain and fulfill a contract, excluding contract inducements, for the years ended December 31, 2021, 2020 and 2019, were $39 million, $41 million and $42 million, respectively. The expected amortization expense for the next five years and thereafter for these costs is as follows: 2022 2023 2024 2025 2026 Thereafter $ 25 $ 15 $ 8 $ 5 $ 3 $ 17 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company's reportable segments correspond to how it organizes and manages the business, as defined by the Company's Chief Executive Officer, who is also its Chief Operating Decision Maker (CODM), and are aligned to the industries in which the Company's clients operate. The Company's segments involve the delivery of business process services and include service arrangements where it manages a customer's business activity or process. In 2020, the Company realigned its sales organization and certain shared IT and other allocated functions and reallocated certain costs that were previously included in the Shared IT/Infrastructure and Corporate Costs (now referred to as Unallocated Costs) to each of the reportable segments. The year ended December 31, 2019 amounts have been recast to reflect these changes. The Company's financial performance is based on Segment Profit/(Loss) for its three reportable segments (Commercial Industries, Government Services and Transportation), Other and Unallocated Costs. The Company's CODM does not evaluate operating segments using discrete asset information. • Commercial Industries: The Commercial Industries segment provides business process services and customized solutions to clients in a variety of industries. Across the Commercial Industries segment, the Company operates on its clients’ behalf to deliver mission-critical solutions and services to reduce costs, improve efficiencies and enable revenue growth for the Company's clients and their consumers and employees. • Government Services: The Government Services segment provides government-centric business process services to U.S. federal, state and local and foreign governments for public assistance program administration, transaction processing and payment services. The solutions in this segment help governments respond to changing rules for eligibility and increasing citizen expectations. • Transportation: The Transportation segment provides systems and support, as well as revenue-generating services, to government clients. On behalf of government agencies and authorities in the transportation industry, the Company delivers mission-critical mobility and payment solutions that improve automation, interoperability and decision-making to streamline operations, increase revenue and reduce congestion while creating safer communities and seamless travel experiences for consumers. Other includes the Company's divestitures and the Student Loan business, which the Company exited in the third quarter of 2018. Unallocated Costs includes IT infrastructure costs that are shared by multiple reportable segments, enterprise application costs and certain corporate overhead expenses not directly attributable or allocated to the reportable segments. Selected financial information for our reportable segments was as follows: Year Ended December 31, (in millions) Commercial Industries Government Services Transportation Other Unallocated Costs Total 2021 Divestitures Other Revenue $ 2,076 $ 1,318 $ 746 $ — $ — $ — $ 4,140 Segment profit (loss) $ 137 $ 412 $ 75 $ — $ 1 $ (388) $ 237 2020 Revenue $ 2,163 $ 1,281 $ 719 $ — $ — $ — $ 4,163 Segment profit (loss) $ 150 $ 372 $ 82 $ — $ 9 $ (348) $ 265 2019 Revenue $ 2,385 $ 1,263 $ 781 $ 36 $ 2 $ — $ 4,467 Segment profit (loss) $ 270 $ 279 $ 69 $ 1 $ (1) $ (345) $ 273 The following is a reconciliation of segment profit (loss) to income (loss) before income taxes: (in millions) Year Ended December 31, Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2021 2020 2019 Loss Before Income Taxes $ (25) $ (139) $ (2,106) Reconciling items: Amortization of acquired intangible assets 135 239 246 Restructuring and related costs 45 67 71 Interest expense 55 60 78 Loss on extinguishment of debt 15 — — Goodwill impairment — — 1,952 Loss on divestitures and transaction costs 3 17 25 Litigation costs, net 3 20 17 Other (income) expenses, net 6 1 (10) Segment Profit (Loss) $ 237 $ 265 $ 273 Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows for each of the years ended December 31: Revenues Long-Lived Assets (1) (in millions) 2021 2020 2019 2021 2020 United States $ 3,712 $ 3,748 $ 4,000 $ 651 $ 628 Europe 368 357 386 39 44 Other areas 60 58 81 96 114 Total Revenues and Long-Lived Assets $ 4,140 $ 4,163 $ 4,467 $ 786 $ 786 __________ |
Divestiture
Divestiture | 12 Months Ended |
Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestiture | Assets/Liabilities Held for Sale and Divestiture Assets/Liabilities Held for Sale On December 29, 2021, the Company signed a definitive agreement to sell its Midas Suite of patient safety, quality and advanced analytics solutions to Symplr Software, Inc. (the Buyer), a third party. The transaction closed on February 8, 2022 for cash consideration of $321 million subject to customary working capital adjustments. This action was taken because of the Company's strategy to streamline its portfolio and its consideration of divestitures of select businesses to enhance shareholder and client value. The assets and liabilities of this portfolio, collectively referred to as the Disposal Group, have been reclassified as held for sale and measured at the lower of carrying value or fair value less costs to sell. The Disposal Group is currently reported in the Commercial Industries segment. The pretax profit of the Disposal Group, excluding unallocated costs, was $30 million, $31 million and $33 million for the years ended December 31, 2021, 2020 and 2019, respectively. As the consideration for the Disposal Group is greater than the carrying value, the Company will record a gain on the sale of the Midas business in the first quarter of 2022. The following is a summary of the major categories of assets and liabilities that have been reclassified as held for sale: (in millions) December 31, 2021 Accounts Receivable, net $ 9 Other current assets 1 Product Software, net 10 Goodwill 162 Other long-term assets 2 Total Assets held for sale $ 184 Accounts payable $ 1 Accrued compensation and benefits costs 3 Unearned income 24 Other current liabilities 1 Total Liabilities held for sale $ 29 Divestiture In February 2019, the Company completed the sale of a portfolio of select standalone customer care contracts to Skyview Capital LLC. During 2019, the Company recorded additional losses and transaction costs of $17 million on the sale of this portfolio, reflecting certain changes in estimates that were made when recording the initial charge in 2018. The revenue generated from this business was $36 million for the three months ended March 31, 2019. |
Accounts Receivables, Net
Accounts Receivables, Net | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts Receivables, Net | Accounts Receivable, Net The Accounts receivable, net balance of $699 million and $670 million at December 31, 2021 and 2020, respectively, included allowance for doubtful accounts of $0 million and $2 million at December 31, 2021 and 2020, respectively. The Company enters into factoring agreements in the normal course of business as part of our cash and liquidity management, to sell certain accounts receivable without recourse to third-party financial institutions. These transactions are treated as a sale and are accounted for as a reduction in accounts receivable because the agreements transfer effective control over, and risk related to, the receivables to the buyers. Cash proceeds from these arrangements are included in cash flow from operating activities in the Consolidated Statements of Cash Flows. Accounts receivable sales for the years ended December 31, 2021 and 2020 were $422 million and $529 million, respectively. |
Land, Buildings, Equipment and
Land, Buildings, Equipment and Software, Net | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Land, Buildings, Equipment and Software, Net | Land, Buildings, Equipment and Software, Net Land, buildings and equipment, net was as follows: Estimated Useful Lives December 31, (in millions except as noted) (Years) 2021 2020 Land $ 1 $ 1 Building and building equipment 25 to 50 7 7 Leasehold improvements Varies 250 268 IT, other equipment and office furniture 3 to 15 883 869 Other 4 to 20 3 2 Construction in progress 49 35 Subtotal 1,193 1,182 Accumulated depreciation (912) (877) Land, Buildings and Equipment, Net $ 281 $ 305 Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $116 million, $125 million and $123 million, respectively. Internal Use and Product Software Internal use and Product software are included in Other long-term assets on the Company's Consolidated Balance Sheets. Additions to Internal use and Product software as well as year-end balances for these assets were as follows: (in millions) Year Ended December 31, Additions to: 2021 2020 2019 Internal use software $ 65 $ 63 $ 70 Product software 45 36 9 December 31, (in millions) 2021 2020 Internal use software, at cost $ 563 $ 524 Accumulated amortization (382) (361) Internal use software, net $ 181 $ 163 Product software, at cost $ 171 $ 144 Accumulated amortization (78) (72) Product software, net $ 93 $ 72 Useful lives of our Internal use and Product software generally vary from one Cloud Computing Arrangements Cloud computing implementation costs are included in Other current assets and Other long-term assets on the Company's Consolidated Balance Sheets. Additions to Cloud computing implementation costs as well as year-end balances for these assets were as follows: (in millions) Year Ended December 31, Additions to: 2021 2020 2019 Cloud computing implementation costs $ 6 $ 3 $ 39 (in millions) December 31, Capitalized Costs, Net 2021 2020 Cloud computing implementation costs, at cost $ 53 $ 47 Impairment charges (28) — Accumulated amortization (11) (6) Cloud computing implementation costs, net (1) $ 14 $ 41 __________ (1) Refer to Note 10 – Supplementary Financial Information for additional information on the current and long-term portions of this asset. three |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases The Company adopted the new lease guidance as of January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are, or contain, leases, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. The Company did not elect to apply the hindsight practical expedient. Additionally, the Company has elected not to include short-term leases, with a term of 12 months or less, on its Consolidated Balance Sheets. The components of lease costs were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Finance Lease Costs: Amortization of right of use assets $ 10 $ 8 $ 10 Interest on lease liabilities 1 1 1 Total Finance Lease Costs $ 11 $ 9 $ 11 Operating lease costs: Base rent $ 85 $ 95 $ 112 Short-term lease costs 4 5 12 Variable lease costs (1) 23 26 30 Sublease income (1) (3) (7) Total Operating Lease Costs $ 111 $ 123 $ 147 __________ (1) Primarily related to taxes, insurance and common area and other maintenance costs for real estate leases. Supplemental cash flow information related to leases was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Cash paid for the amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 117 $ 137 Operating cash flows from finance leases 1 1 1 Total Cash Flow from Operating Activities $ 100 $ 118 $ 138 Financing cash flow from finance leases $ 9 $ 11 $ 11 Supplemental non-cash information on right of use assets obtained in exchange for new lease obligations: Operating leases $ 68 $ 73 $ 32 Finance leases $ 5 $ 14 $ 2 Supplemental balance sheet information related to leases was as follows: December 31, (in millions) 2021 2020 Operating lease assets: Operating lease right-of-use assets $ 231 $ 246 Operating lease liabilities: Other current liabilities $ 71 $ 81 Operating lease liabilities 184 207 Total Operating Lease Liabilities $ 255 $ 288 Finance lease assets: Land, buildings and equipment, net $ 17 $ 19 Finance lease liabilities: Current portion of long-term debt $ 8 $ 8 Long-term debt 8 12 Total Finance Lease Liabilities $ 16 $ 20 The Company's leases generally do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate as the discount rate when measuring lease liabilities. The incremental borrowing rate represents an estimate of the interest rate that the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The weighted average discount rates and weighted average remaining lease terms for operating and finance leases as of December 31, 2021 and 2020 were as follows: December 31, 2021 December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average discount rates 5.8 % 5.0 % 6.1 % 5.3 % Weighted average remaining lease term (in years) 5 3 5 3 Maturities of operating and finance lease liabilities as of December 31, 2021 were as follows: December 31, 2021 (in millions) Operating Lease Payments Finance Lease 2022 $ 84 $ 8 2023 60 5 2024 47 2 2025 37 2 2026 28 — Thereafter 36 — Total undiscounted lease payments 292 17 Less imputed interest 37 1 Present value of lease liabilities $ 255 $ 16 As of December 31, 2021, the Company had entered into an additional operating lease agreement for real estate of $6 million, which has not commenced and has not been recognized on the Company's Consolidated Balance Sheet. This operating lease is expected to commence in 2022 with a lease term of 5 years. |
Leases | Leases The Company adopted the new lease guidance as of January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are, or contain, leases, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. The Company did not elect to apply the hindsight practical expedient. Additionally, the Company has elected not to include short-term leases, with a term of 12 months or less, on its Consolidated Balance Sheets. The components of lease costs were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Finance Lease Costs: Amortization of right of use assets $ 10 $ 8 $ 10 Interest on lease liabilities 1 1 1 Total Finance Lease Costs $ 11 $ 9 $ 11 Operating lease costs: Base rent $ 85 $ 95 $ 112 Short-term lease costs 4 5 12 Variable lease costs (1) 23 26 30 Sublease income (1) (3) (7) Total Operating Lease Costs $ 111 $ 123 $ 147 __________ (1) Primarily related to taxes, insurance and common area and other maintenance costs for real estate leases. Supplemental cash flow information related to leases was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Cash paid for the amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 117 $ 137 Operating cash flows from finance leases 1 1 1 Total Cash Flow from Operating Activities $ 100 $ 118 $ 138 Financing cash flow from finance leases $ 9 $ 11 $ 11 Supplemental non-cash information on right of use assets obtained in exchange for new lease obligations: Operating leases $ 68 $ 73 $ 32 Finance leases $ 5 $ 14 $ 2 Supplemental balance sheet information related to leases was as follows: December 31, (in millions) 2021 2020 Operating lease assets: Operating lease right-of-use assets $ 231 $ 246 Operating lease liabilities: Other current liabilities $ 71 $ 81 Operating lease liabilities 184 207 Total Operating Lease Liabilities $ 255 $ 288 Finance lease assets: Land, buildings and equipment, net $ 17 $ 19 Finance lease liabilities: Current portion of long-term debt $ 8 $ 8 Long-term debt 8 12 Total Finance Lease Liabilities $ 16 $ 20 The Company's leases generally do not provide an implicit rate; therefore, the Company uses its incremental borrowing rate as the discount rate when measuring lease liabilities. The incremental borrowing rate represents an estimate of the interest rate that the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of a lease within a particular currency environment. The weighted average discount rates and weighted average remaining lease terms for operating and finance leases as of December 31, 2021 and 2020 were as follows: December 31, 2021 December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average discount rates 5.8 % 5.0 % 6.1 % 5.3 % Weighted average remaining lease term (in years) 5 3 5 3 Maturities of operating and finance lease liabilities as of December 31, 2021 were as follows: December 31, 2021 (in millions) Operating Lease Payments Finance Lease 2022 $ 84 $ 8 2023 60 5 2024 47 2 2025 37 2 2026 28 — Thereafter 36 — Total undiscounted lease payments 292 17 Less imputed interest 37 1 Present value of lease liabilities $ 255 $ 16 As of December 31, 2021, the Company had entered into an additional operating lease agreement for real estate of $6 million, which has not commenced and has not been recognized on the Company's Consolidated Balance Sheet. This operating lease is expected to commence in 2022 with a lease term of 5 years. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Goodwill The following table presents the changes in the carrying amount of goodwill, by reportable segment: (in millions) Commercial Industries Government Services Transportation Total Balance at December 31, 2019 $ 821 $ 621 $ 60 $ 1,502 Foreign currency translation 16 2 8 26 Balance at December 31, 2020 $ 837 $ 623 $ 68 $ 1,528 Foreign currency translation (14) (6) (7) (27) Assets Held For Sale (162) — — (162) Balance at December 31, 2021 $ 661 $ 617 $ 61 $ 1,339 Gross goodwill $ 2,214 $ 1,371 $ 641 $ 4,226 Accumulated impairment (1,553) (754) (580) (2,887) Balance at December 31, 2021 $ 661 $ 617 $ 61 $ 1,339 The Company performed its annual goodwill impairment test for the year ended December 31, 2021 as of October 1, 2021. This testing did not identify any goodwill impairment and, accordingly, no impairment charge was recorded. To the extent the COVID-19 pandemic continues to disrupt the economic environment, such as a decline in the performance of the reporting units or loss of a significant contract or multiple significant contracts, the fair value of one or more of the reporting units could fall below their carrying value, resulting in a goodwill impairment charge. 2019 Goodwill Impairment Charge In the first quarter of 2019, the Transportation reporting unit experienced unanticipated losses of certain customer contracts, lower than expected new customer contracts and higher costs of delivery, and as a result, the growth of this reporting unit decreased resulting in its fair value being below its carrying value by an estimated $284 million. Accordingly, the Company recorded a pre-tax impairment charge of $284 million for the three months ended March 31, 2019. In the second quarter of 2019, there were further unanticipated losses of certain customer contracts, lower potential future volumes and lower than expected new customer contracts. This led to actual results being below budget and a further downward revision of the long-term forecast across all the Company's reporting units. Because of the business performance and the strategy pivot due to changes in management that occurred in the second quarter of 2019, the Company performed an interim goodwill impairment assessment for all its reporting units which resulted in a pre-tax impairment charge of $1.1 billion for the three months ended June 30, 2019. As of December 31, 2019, the Company performed an interim impairment assessment due to a triggering event caused by further unanticipated contract losses within the Government Services reporting unit, and as result, management performed a goodwill impairment assessment for this reporting unit as of December 31, 2019, which resulted in a pre-tax impairment charge of $512 million. In addition, in the fourth quarter of 2019, the Company recorded an immaterial correction to the impairment charges recorded in the first and second quarters to properly reflect the impact of tax-deductible goodwill on the previous impairments as well as the related income tax benefit. The cumulative impairment charge for the year ended December 31, 2019 was approximately $2.0 billion. Intangible Assets, Net Net intangible assets were $52 million at December 31, 2021 of which $50 million, $2 million and $0 million relate to our Commercial Industries, Government Services and Transportation segments, respectively. Intangible assets were comprised exclusively of Customer relationships as follows: December 31, 2021 December 31, 2020 (in millions except years) Weighted Average Gross Accumulated Net Gross Accumulated Net Total Intangible Assets 12 years $ 1,658 $ 1,606 $ 52 $ 2,890 $ 2,703 $ 187 Amortization expense related to intangible assets was $135 million, $239 million and $246 million for the years ended December 31, 2021, 2020 and 2019, respectively. Amortization expense is expected to approximate $12 million in 2022, $7 million in 2023, $6 million in 2024, $4 million in 2025 and $4 million in 2026. |
Restructuring and Asset Impairm
Restructuring and Asset Impairment Charges | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Asset Impairment Charges | Restructuring Programs and Related Costs The Company engages in a series of restructuring programs related to downsizing its employee base, exiting certain activities, outsourcing certain internal functions and engaging in other actions designed to reduce its cost structure and improve productivity. The implementation of the Company's operational efficiency improvement initiatives has reduced the Company's real estate footprint across all geographies and segments resulting in lease right-of-use asset impairments and other related costs. Also included in Restructuring and Related Costs are incremental, non-recurring costs related to the consolidation of the Company's data centers, which totaled $23 million, $23 million and $21 million for the years ended December 31, 2021, 2020 and 2019, respectively. Management continues to evaluate the Company's business and, in the future, there may be additional provisions for new plan initiatives and/or changes in previously recorded estimates as payments are made, or actions are completed. Costs associated with restructuring, including employee severance and lease termination costs, are generally recognized when it has been determined that a liability has been incurred, which is generally upon communication to the affected employees or exit from the leased facility. In those geographies where we have either a formal severance plan or a history of consistently providing severance benefits representing a substantive plan, we recognize employee severance costs when they are both probable and reasonably estimable. Asset impairment costs related to the reduction of our real estate footprint include impairment of operating lease right-of-use (ROU) assets and associated leasehold improvements. A summary of the Company's restructuring program activity during the two years ended December 31, 2021 is as follows: (in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total Balance at December 31, 2019 $ 15 $ 6 $ — $ 21 Provision 13 27 15 55 Changes in estimates 1 3 — 4 Total Net Current Period Charges (1) 14 30 15 59 Charges against reserve and currency (26) (33) (15) (74) Balance at December 31, 2020 $ 3 $ 3 $ — $ 6 Provision 8 27 9 44 Changes in estimates — (3) — (3) Total Net Current Period Charges (1) 8 24 9 41 Charges against reserve and currency (6) (26) (9) (41) Balance at December 30, 2021 $ 5 $ 1 $ — $ 6 __________ (1) Represents amounts recognized within the Consolidated Statements of Income (Loss) for the years shown. We also recorded costs related to professional support services associated with the implementation of certain strategic transformation programs of $4 million, $8 million and $4 million during the years ended December 31, 2021, 2020 and 2019, respectively. The following table summarizes the total amount of costs incurred in connection with these restructuring programs by reportable and non-reportable segments: Year Ended December 31, (in millions) 2021 2020 2019 Commercial Industries $ 4 $ 11 $ 24 Government Services 1 1 1 Transportation 1 2 2 Unallocated Costs 35 45 40 Total Net Restructuring Charges $ 41 $ 59 $ 67 |
Supplementary Financial Informa
Supplementary Financial Information Supplementary Financial Information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Financial Information [Abstract] | |
Supplementary Financial Information | Supplementary Financial Information The components of Other assets and liabilities were as follows: December 31, (in millions) 2021 2020 Other Current Assets Prepaid expenses $ 84 $ 73 Income taxes receivable 46 48 Value-added tax (VAT) receivable 12 21 Restricted cash 5 8 Cloud computing implementation costs, net 6 8 Other 75 148 Total Other Current Assets $ 228 $ 306 Other Current Liabilities Accrued liabilities $ 246 $ 229 Litigation related accruals 64 73 Operating lease liabilities 71 81 Restructuring liabilities 6 1 Income tax payable 10 16 Other taxes payable 14 16 Accrued interest 10 3 Other 22 31 Total Other Current Liabilities $ 443 $ 450 Other Long-term Assets Internal use software, net $ 181 $ 163 Deferred contract costs, net (2) 73 76 Product software, net 93 72 Cloud computing implementation costs, net 8 33 Other 98 69 Total Other Long-term Assets $ 453 $ 413 Other Long-term Liabilities Deferred payroll tax related to the CARES Act (1) $ — $ 24 Income tax liabilities 15 15 Unearned income 48 29 Restructuring liabilities — 5 Other 32 35 Total Other Long-term Liabilities $ 95 $ 108 __________ (1) The CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 (and which the Company paid in December 2021) and the remainder due on December 31, 2022. As of December 31, 2021, the remaining portion of this liability is classified as current and is included in Accrued compensation and benefits costs. (2) Represents capitalized costs associated with obtaining or fulfilling a contract with a customer. The balances at December 31, 2021 and 2020 are expected to be amortized over a weighted average remaining life of approximately 12 and 11 years, respectively. See Note 2 – Revenue for more information. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company classifies its debt based on the contractual maturity dates of the underlying debt instruments. The Company defers costs associated with debt issuance over the applicable term. These costs are amortized as interest expense in the Consolidated Statements of Income (Loss). Long-term debt was as follows: December 31, (in millions) Weighted Average Interest Rates at December 31, 2021 (1) 2021 2020 2021 Term loan A due 2026 3.10 % $ 265 $ — 2021 Term loan B due 2028 5.00 % 515 — 2021 Senior notes due 2029 6.04 % 520 — 2021 Revolving credit facility maturing 2026 2.58 % 100 — 2016 Term loan A due 2022 — 654 2016 Term loan B due 2023 — 816 2016 Senior notes due 2024 — 34 Finance lease obligations 5.01 % 16 20 Other 3.98 % 24 4 Principal Debt Balance $ 1,440 $ 1,528 Debt issuance costs and unamortized discounts (27) (18) Less: current maturities (30) (90) Total Long-term Debt $ 1,383 $ 1,420 ____________ (1) Represents weighted average effective interest rate which includes the effect of discounts and debt issuance costs on issued debt. Scheduled principal payments due on long-term debt for the next five years are as follows: 2022 2023 2024 2025 2026 Thereafter Total $ 30 $ 27 $ 24 $ 23 $ 327 $ 1,009 $ 1,440 2016 Credit Facilities On December 7, 2016, the Company entered into a senior secured credit agreement among the Company, its subsidiaries: Conduent Business Services, LLC (CBS), Affiliated Computer Services International B.V. and Conduent Finance, Inc. (CFI), the lenders party thereto and JP Morgan Chase Bank, N.A., as the administrative agent (2016 Credit Agreement). The 2016 Credit Agreement contains senior secured credit facilities (2016 Senior Credit Facilities) consisting of: (i) Senior Secured Term Loan A (2016 Term Loan A) with an aggregate principal amount of $700 million; (ii) Senior Secured Term Loan B (2016 Term Loan B) with an aggregate principal amount of $850 million; and (iii) Senior Revolving Credit Facility (2016 Revolving Credit Facility) with an aggregate available amount of $750 million including a sub-limit for up to $300 million available for the issuance of letters of credit. During the first quarter of 2020, the Company borrowed $150 million of its $750 million 2016 Revolving Credit Facility, which was subsequently fully repaid in December 2020. 2016 Senior Notes On December 7, 2016, the Company issued 10.5% senior secured note (2016 Senior Notes). The 2016 Senior Notes were jointly and severally guaranteed on a senior unsecured basis by the Company and each of the existing and future domestic subsidiaries of CFI or CBS that guaranteed the obligations under the 2016 Senior Credit Facilities. Interest was payable semi-annually. The entire remaining $34 million outstanding principal amount of 2016 Senior Notes was redeemed on May 1, 2021. Additionally, the Company wrote-off debt issuance costs and discounts related to the 2016 Senior Notes of $2 million which is included in Loss on extinguishment of debt in the Consolidated Statements of Income (Loss) for the year ended December 31, 2021. 2021 Credit Facilities On October 15, 2021, the Company refinanced its 2016 Senior Credit Facilities by entering into a new senior secured credit agreement among the Company, its subsidiaries CBS, Conduent State & Local Solutions, Inc. (CSLS) and Affiliated Computer Services International B.V., the lenders party thereto and Bank of America, N.A., as the administrative agent (2021 Credit Agreement). The 2021 Credit Agreement contains senior secured credit facilities (2021 Senior Credit Facilities) consisting of: (i) Senior Secured Term Loan A (2021 Term Loan A) with an aggregate principal amount of $265 million; (ii) Senior Secured Term Loan B (2021 Term Loan B) with an aggregate principal amount of $515 million; and (iii) Senior Revolving Credit Facility maturing 2026 (2021 Revolving Credit Facility) with an aggregate available amount of $550 million including a sub-limit for up to $300 million available for the issuance of letters of credit. As of December 31, 2021, the Company has borrowed $100 million of its $550 million 2021 Revolving Credit Facility and utilized $20 million of its revolving credit facility capacity to issue letters of credit. The net amount available to be drawn upon under the 2021 Revolving Credit Facility as of December 31, 2021, was $430 million. The 2021 Credit Agreement permits the Company to request incremental term loan borrowings and /or increase commitments, subject to certain limitations and satisfaction of certain conditions. Borrowings under the 2021 Term Loan A, the 2021 Term Loan B and the 2021 Revolving Credit Facility bear interest, at the Issuers’ option, at a rate per annum equal to an applicable margin over a base rate or a Eurocurrency rate, depending on the type of loan. The applicable margin for the 2021 Term Loan A and the 2021 Revolving Credit Facility for Eurocurrency loans range from 1.75% to 2.75% per annum, depending on certain leverage ratios and for base rate loans range from 0.75% to 1.75% per annum. The margin at December 31, 2021 was 2.25%. The applicable margin for the 2021 Term Loan B for Eurocurrency loans is 4.25% per annum and for base rate loans is 3.25% per annum. The margin at December 31, 2021 was 4.25%. In addition to paying interest on outstanding principal under the 2021 Revolving Credit Facility, the Company is required to pay a commitment fee of 0.4% per annum to the lenders in respect of unutilized commitments thereunder. Under the terms of the 2021 Credit Agreement, in the event there is a benchmark transition, the Eurocurrency rate will reference the benchmark replacement rate as defined in the 2021 Credit Agreement. The Company does not anticipate this transition will have any material impact on its consolidated financial statements. All obligations under the 2021 Credit Agreement are unconditionally guaranteed by the Company, CBS and CSLS, and the existing and future direct and indirect wholly owned domestic restricted subsidiaries of CBS (subject to certain exceptions). All obligations under the 2021 Credit Agreement are secured, subject to certain exceptions, by a first-priority pledge of substantially all assets of CBS and the subsidiary guarantors, and all of the capital stock of CBS and each of CBS' wholly owned material restricted subsidiaries directly held by CBS and CSLS or a subsidiary guarantor (which pledges, in the case of any foreign subsidiary, are limited to 65% of the capital stock of any first-tier foreign subsidiary). The 2021 Credit Agreement contains certain customary affirmative and negative covenants, restrictions, prepayment terms and events of default. It requires the consolidated first lien net leverage ratio not to exceed 3.50 to 1.00. This covenant applies to the 2021 Term Loan A and 2021 Revolving Credit Facility. The covenant is tested on the last day of any fiscal quarter commencing with the first full fiscal quarter after the closing date. Therefore the first time the test will be performed is as of March 31, 2022. 2021 Senior Notes Concurrent with the 2021 Credit Agreement, on October 15, 2021, CBS and CSLS (collectively, the Issuers) issued 6.00% fixed rate senior notes due 2029 (2021 Senior Notes). The 2021 Senior Notes are guaranteed on a senior secured basis by the Company and existing and future material direct and indirect wholly owned domestic subsidiaries of CBS that guaranteed the obligations under the 2021 Senior Credit Facilities. Interest is payable semi-annually. Prior to November 1, 2024, the Issuers can redeem the 2021 Senior Notes, in whole or in part, at a price equal to the principal amount of the 2021 Senior Notes, plus a make-whole premium plus accrued and unpaid interest. The Issuers can redeem the 2021 Senior Notes, in whole or in part, at any time on or after November 1, 2024, at the redemption prices specified in the Indenture, plus accrued and unpaid interest, if any, up to but excluding the redemption date. In addition, the Company may be required to make an offer to purchase the notes upon the sale of certain assets and upon a change of control. No 2021 Senior Notes were redeemed between October 15, 2021 and December 31, 2021. Debt Issuance Costs and Discount In connection with the refinancing, the Company recorded deferred discounts and debt issuance costs of $30 million. Additionally, the Company wrote-off debt issuance costs and discounts related to the 2016 Senior Credit Facilities of $13 million which is included in Loss on extinguishment of debt in the Consolidated Statements of Income (Loss) for the year ended December 31, 2021. Use of Proceeds The net proceeds of the 2021 Senior Credit Facilities and the 2021 Senior Notes were used to refinance entirely the balance of borrowings outstanding under the 2016 Senior Credit Facilities on the Closing Date and to pay related fees and expenses. Interest Interest paid on short-term and long-term debt amounted to $40 million, $51 million, $69 million for the years ended December 31, 2021, 2020 and 2019, respectively. Interest expense and interest income were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Interest expense $ 55 $ 60 $ 78 Interest income (1) 1 2 6 ____________ (1) Included in Other (income) expenses, net on the Consolidated Statements of Income (Loss). |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Financial Instruments The Company is exposed to market risk from changes in foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. The Company manages its exposure to these market risks through regular operating and financing activities and, when appropriate, using derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce earnings and cash flow volatility resulting from shifts in market rates. The Company enters limited types of derivative contracts to manage foreign currency exposures that it hedges. The primary foreign currency market exposures include the Philippine Peso and Indian Rupee. The fair market values of all the Company's derivative contracts change with fluctuations in interest rates or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures. Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes. The related cash flow impacts of all derivative activities are reflected as cash flows from operating activities. The Company does not believe there is significant risk of loss in the event of non-performance by the counterparty associated with its derivative instruments because these transactions are executed with a major financial institution. Further, the Company's policy is to deal only with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties. Summary of Foreign Exchange Hedging Positions At December 31, 2021 and 2020, the Company had outstanding forward exchange with gross notional values of $150 million and $180 million, respectively. At December 31, 2021, approximately 73% of these contracts mature within three months, 10% in three to six months, 13% in six to twelve months and 4% in greater than 12 months. The following is a summary of the primary hedging positions and corresponding fair values: December 31, 2021 December 31, 2020 (in millions) Gross Fair Value Asset (Liability) (1) Gross Fair Value Asset (Liability) (1) Currencies Hedged (Buy/Sell) Philippine Peso/U.S. Dollar $ 55 $ (2) $ 53 $ 1 Indian Rupee/U.S. Dollar 47 1 52 1 Euro/U.S. Dollar 18 — 17 — Mexican Peso/U.S. Dollar — — 2 — All Other 30 — 56 — Total Foreign Exchange Hedging $ 150 $ (1) $ 180 $ 2 ____________ (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP established a hierarchy framework to classify the fair value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows: Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities. Level 2: Fair value is estimated using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly. Level 3: Fair value is estimated using unobservable inputs that are significant to the fair value of the assets or liabilities. Summary of Financial Assets and Liabilities Accounted for at Fair Value on a Recurring Basis The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases was Level 2. (in millions) December 31, 2021 December 31, 2020 Assets: Foreign exchange contract - forward $ 1 $ 2 Total Assets $ 1 $ 2 Liabilities: Foreign exchange contracts - forward $ 2 $ — Total Liabilities $ 2 $ — Summary of Other Financial Assets and Liabilities The estimated fair values of other financial assets and liabilities were as follows: December 31, 2021 December 31, 2020 (in millions) Carrying Fair Carrying Fair Liabilities: Long-term debt $ 1,383 $ 1,374 $ 1,420 $ 1,378 The fair value amounts for Cash and cash equivalents, Restricted cash, Accounts receivable, net and Short-term debt approximate carrying amounts due to the short-term maturities of these instruments. In January 2019, the Company completed the acquisition of Health Solutions Plus (HSP), a software provider of healthcare payer administration solutions, for a total base consideration of $90 million and a maximum contingent consideration payment of $8 million based on a cumulative achievement over 2 years. The fair value of the contingent consideration payable related to the HSP acquisition was measured using a Monte Carlo simulation model and calibrated to management’s financial projections of the acquired business. The value of the contingent consideration payable was then estimated to be the arithmetic average of all simulation paths, discounted to the valuation date (Level 3). During the third quarter of 2020, the contingent consideration payable was settled. The fair value of Long-term debt was estimated based on the current rates offered to the Company for debt of similar maturities (Level 2). |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Benefit Plans The Company's remaining benefit obligations and plan assets at December 31, 2021 were $16 million and $1 million, respectively. The Company's benefit obligations and plan assets at December 31, 2020 were $13 million and $2 million, respectively. Defined Contribution Plans The Company has post-retirement savings and investment plans in several countries, including the U.S., U.K. and Canada. In many instances, employees from those defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans employees are allowed to contribute a portion of their salaries and bonuses to the plans, and the Company matches a portion of the employee contributions. Beginning in 2019, the Company suspended its match to the 401(k) plan for all U.S. salaried employees and extended the suspension to all U.S. hourly employees in the second quarter of 2020. However, the match was reinstated for all U.S. employees in November of 2020. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Loss before income taxes (pre-tax income (loss)) was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Domestic loss $ (68) $ (186) $ (2,177) Foreign income 43 47 71 Loss Before Income Taxes $ (25) $ (139) $ (2,106) Provision (benefit) for income taxes were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Federal Income Taxes Current $ 6 $ (22) $ (3) Deferred (23) (17) (170) Foreign Income Taxes Current 15 18 47 Deferred 2 (4) (8) State Income Taxes Current 3 5 5 Deferred — (1) (43) Total Provision (Benefit) $ 3 $ (21) $ (172) A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows: Year Ended December 31, 2021 2020 2019 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Nondeductible expenses (15.5) % (2.1) % (0.2) % Change in valuation allowance for deferred tax assets (20.4) % 0.6 % (1.2) % State taxes, net of federal benefit (8.6) % (2.1) % 1.8 % Tax-exempt income, credits and incentives 38.4 % 5.1 % 0.3 % Foreign rate differential adjusted for U.S. taxation of foreign profits (1) (11.1) % (0.9) % (0.2) % Divestitures 2.1 % — % 0.2 % Impairments (2) (3.1) % — % (14.1) % Unrecognized tax benefits 0.8 % (1.2) % (0.3) % Audit and other tax adjustments (22.9) % (5.3) % 0.1 % Excess tax benefits 7.5 % — % — % Other (3) 2.1 % — % 0.8 % Effective Income Tax Rate (9.7) % 15.1 % 8.2 % _______________ (1) The “Foreign rate differential adjusted for U.S. taxation of foreign profits” includes the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries. (2) Impairment represents adjustments for impairment of an equity investment and the non-deductible component of goodwill. (3) In 2021, the "Other" line includes two reconciling items above 5% of the federal statutory rate. The impact to the effective rate is driven by the low pretax book income in 2021, and these items are otherwise immaterial. As such, the Company believes it is appropriate for these items to remain in “Other”. On a consolidated basis, the Company paid $25 million, received a refund of $1 million and paid $46 million in combined income taxes to federal, foreign and state jurisdictions during the three years ended December 31, 2021, 2020 and 2019, respectively. Unrecognized Tax Benefits and Audit Resolutions The Company recognizes tax liabilities when, despite its belief that its tax return positions are supportable, the Company believes that certain positions may not be fully sustained upon review by tax authorities. Each period the Company assesses uncertain tax positions for recognition, measurement and effective settlement. Benefits from uncertain tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. Where the Company has determined that its tax return filing position does not satisfy the more-likely-than-not recognition threshold, the Company has recorded no tax benefits. The Company is also subject to ongoing tax examinations in numerous jurisdictions due to the extensive geographical scope of its operations. Ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can increase or decrease the Company's effective tax rate, as well as impact its operating results. The specific timing of when the resolution of each tax position will be reached is uncertain. As of December 31, 2021, the Company had $23 million of unrecognized tax benefits, of which $22 million, if recognized, would impact the Company's effective tax rate. Due to expected settlements, the Company estimates that $11 million of the total unrecognized tax benefits will reverse within the next twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: (in millions) 2021 2020 2019 Balance at January 1 $ 23 $ 24 $ 20 Additions related to current year — — 1 Additions related to prior years positions 3 3 7 Reductions related to prior years positions (3) — (3) Settlements with taxing authorities — (4) (1) Balance at December 31 $ 23 $ 23 $ 24 The Company maintains offsetting benefits from other jurisdictions of $12 million, $15 million and $16 million, at December 31, 2021, 2020 and 2019, respectively. The Company recognized interest and penalties accrued on unrecognized tax benefits within income tax expense. The Company had $12 million, $13 million and $14 million accrued for the payment of interest and penalties associated with unrecognized tax benefits at December 31, 2021, 2020 and 2019, respectively. In the U.S., the Company is no longer subject to U.S. federal income tax examinations for years before 2017. With respect to major foreign jurisdictions, the years generally remain open back to 2005. Deferred Income Taxes The Company is indefinitely reinvested in the undistributed earnings of its foreign subsidiaries with respect to the U.S. These foreign subsidiaries have aggregate cumulative undistributed earnings of $307 million as of December 31, 2021. For years after 2017, the Tax Reform does allow for certain earnings to be repatriated free from U.S. Federal taxes. However, the repatriation of earnings could give rise to additional tax liabilities. The Company has also not provided for deferred taxes on outside basis differences in its investments in its foreign subsidiaries. A determination of the unrecognized deferred taxes related to these other components of our outside basis differences is not practicable. The Company has provided for deferred taxes with respect to certain unremitted earnings of foreign subsidiaries that are not indefinitely reinvested between foreign subsidiaries outside of the U.S. The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: December 31, (in millions) 2021 2020 Deferred Tax Assets Net operating losses and capital loss carryforward $ 84 $ 96 Operating reserves, accruals and deferrals 49 57 Deferred compensation 5 7 Settlement reserves 18 17 Operating lease liabilities 63 68 Tax credits 42 42 Other 4 7 Subtotal 265 294 Valuation allowance (82) (83) Total $ 183 $ 211 Deferred Tax Liabilities Unearned income $ — $ 27 Intangibles and goodwill 79 100 Depreciation 85 75 Operating lease right-of-use assets 56 57 Other 18 26 Total $ 238 $ 285 Total Deferred Tax Assets (Liabilities), Net $ (55) $ (74) The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance was recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. The net change in the total valuation allowance for the years ended December 31, 2021 and 2020 was a decrease of $1 million and an increase of $11 million, respectively. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations. Although realization is not assured, we have concluded that it is more-likely-than-not that the deferred tax assets, for which a valuation allowance was determined to be unnecessary, will be realized in the ordinary course of operations based on the available positive and negative evidence, including scheduling of deferred tax liabilities and projected income from operating activities. The amount of the net deferred tax assets considered realizable, however, could be reduced in the near term if actual future income or income tax rates are lower than estimated, or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary differences. At December 31, 2021, we had tax credit carryforwards of $42 million available to offset future income taxes, which will expire between 2027 and 2041, if not utilized. We also had net operating loss carryforwards for income tax purposes of $603 million that will expire between 2022 and 2041, if not utilized, and $143 million available to offset future taxable income indefinitely. We had $7 million of capital loss carryforwards for income tax purposes that will expire in 2024, if not utilized, and $12 million available to offset future capital gains income indefinitely. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies and Litigation | Contingencies and Litigation As more fully discussed below, the Company is involved in a variety of claims, lawsuits, investigations and proceedings concerning a variety of matters, including: governmental entity contracting, servicing and procurement law; intellectual property law; employment law; commercial and contracts law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing its litigation and regulatory matters using available information. The Company develops its view on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts in excess of any accrual for such matter or matters, this could have a material adverse effect on the Company's results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. The Company believes it has recorded adequate provisions for any such matters as of December 31, 2021. Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matters could be more than any amounts accrued and could be material to the Company's results of operations, cash flows or financial position in any reporting period. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and non-consolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company's Consolidated Financial position or liquidity. As of December 31, 2021, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees. Litigation Against the Company Employees’ Retirement System of the Puerto Rico Electric Power Authority et al v. Conduent Inc. et al.: On March 8, 2019, a putative class action lawsuit alleging violations of certain federal securities laws in connection with our statements and alleged omissions regarding our financial guidance and business and operations was filed against us, our former Chief Executive Officer, and our former Chief Financial Officer in the United States District Court for the District of New Jersey. The complaint seeks certification of a class of all persons who purchased or otherwise acquired our securities from February 21, 2018 through November 6, 2018, and also seeks unspecified monetary damages, costs, and attorneys’ fees. We moved to dismiss the class action complaint in its entirety. In June 2020, the court denied the motion to dismiss and allowed the claims to proceed. We intend to defend the litigation vigorously. The Company maintains insurance that may cover any costs arising out of this litigation up to the insurance limits, and subject to meeting certain deductibles and to other terms and conditions thereof. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Skyview Capital LLC and Continuum Global Solutions, LLC v. Conduent Business Services, LLC: On February 3, 2020, plaintiffs filed a lawsuit in the Superior Court of New York County, New York. The lawsuit relates to the sale of a portion of Conduent Business Service, LLC’s (CBS) select standalone customer care call center business to plaintiffs, which sale closed in February 2019. Under the terms of the sale agreement, CBS received approximately $23 million of notes from plaintiffs (Notes). The lawsuit alleges various causes of action in connection with the acquisition, including: indemnification for breach of representation and warranty; indemnification for breach of contract and fraud. Plaintiffs allege that their obligation to mitigate damages and their contractual right of set-off permits them to withhold and deduct from any amounts that are owed to CBS under the Notes, and plaintiffs seek a judgement that they have no obligation to pay the Notes. On August 20, 2020, Conduent filed a counterclaim against Skyview LLC (Skyview) seeking the outstanding balance on the Notes, the amounts owed for the Jamaica deferred closing, and other transition services agreement and late rent payment obligations. Conduent also moved to dismiss Skyview’s claims in 2020. In May 2021, the court denied the motion and allowed the claims to proceed. Conduent denies all of the plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims and it intends to defend the litigation vigorously. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Dennis Nasrawi v. Buck Consultants et al.: On October 8, 2009, plaintiffs filed a lawsuit in the Superior Court of California, Stanislaus County, and on November 24, 2009, the case was removed to the U.S. Court for the Eastern District of California, Fresno Division. Plaintiffs allege actuarial negligence against Buck Consultants, LLC (Buck), which was a wholly-owned subsidiary of Conduent, for the use of faulty actuarial assumptions in connection with the 2007 actuarial valuation for the Stanislaus County Employees Retirement Association (StanCERA). Plaintiffs allege that the employer contribution rate adopted by StanCERA based on Buck’s valuation was insufficient to fund the benefits promised by the County. On July 13, 2012, the Court entered its ruling that the plaintiffs lacked standing to sue in a representative capacity on behalf of all plan participants. The Court also ruled that plaintiffs had adequately pleaded their claim that Buck allegedly aided and abetted StanCERA in breaching its fiduciary duty. Plaintiffs then filed their Fifth Amended Complaint and added StanCERA to the litigation. Buck and StanCERA filed demurrers to the amended complaint. On September 13, 2012, the Court sustained both demurrers with prejudice, completely dismissing the matter and barring plaintiffs from refiling their claims. Plaintiffs appealed, and ultimately the California Court of Appeals (Sixth District) reversed the trial court’s ruling and remanded the case back to the trial court as to Buck only, and only with respect to plaintiff’s claim of aiding and abetting StanCERA in breaching its fiduciary duty. This case has been stayed pending the outcome of parallel litigation the plaintiffs are pursuing against StanCERA. The parallel litigation was tried before the bench in June 2018, and on January 24, 2019, the court found in favor of StanCERA, holding that it had not breached its fiduciary duty to plaintiffs. On April 26, 2019, plaintiffs in the parallel litigation filed an appeal. On December 8, 2021, the appellate court affirmed the trial court’s decision, and the judgment became final on January 7, 2022. Plaintiffs in the parallel litigation filed a petition for review to the California Supreme Court. Nasrawi remains stayed until the parallel litigation is finally concluded. Absent the court finding that StanCERA breached its fiduciary duty, plaintiffs’ claim against Buck for aiding and abetting said breach would not appear viable. Buck will continue to aggressively defend these lawsuits. In August 2018, Conduent sold Buck; however, the Company retained this liability after the sale. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Conduent Business Services, LLC v. Cognizant Business Services Corporation: On April 12, 2017, CBS filed a lawsuit against Cognizant Business Services Corporation (Cognizant) in the Supreme Court of New York County, New York. The lawsuit relates to the Amended and Restated Master Outsourcing Services Agreement effective as of October 24, 2012, and the service delivery contracts and work orders thereunder, between CBS and Cognizant, as amended and supplemented (Contract). The Contract contains certain minimum purchase obligations by CBS through the date of expiration. The lawsuit alleges that Cognizant committed multiple breaches of the Contract, including Cognizant’s failure to properly perform its obligations as subcontractor to CBS under CBS's contract with the New York Department of Health to provide Medicaid Management Information Systems. In the lawsuit, CBS seeks damages in excess of $150 million. During the first quarter of 2018, CBS provided notice to Cognizant that it was terminating the Contract for cause and recorded in the same period certain charges associated with the termination. CBS also alleges that it terminated the Contract for cause, because, among other things, Cognizant violated the Foreign Corrupt Practices Act. In its answer, Cognizant asserted two counterclaims for breach of contract seeking recovery of damages in excess of $47 million, which includes amounts alleged not paid to Cognizant under the Contract and an alleged $25 million termination fee. Cognizant's second amended counterclaim increased Cognizant's damages to $89 million. CBS will continue to vigorously defend itself against the counterclaims, but the Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Other Matters: Since 2014, Xerox Education Services, Inc. (XES) has cooperated with several federal and state agencies regarding a variety of matters, including XES' self-disclosure to the U.S. Department of Education (Department) and the Consumer Financial Protection Bureau (CFPB) that some third-party student loans under outsourcing arrangements for various financial institutions required adjustments. With the exception of one remaining state attorney general inquiry, the Company has resolved all investigations by the CFPB, several state agencies, the Department and the U.S. Department of Justice. The Company cannot provide assurance that the CFPB, another regulator, a financial institution on behalf of which XES serviced third-party student loans, or another party will not ultimately commence a legal action against XES in which fines, penalties or other liabilities are sought from XES. Nor is the Company able to predict the likely outcome of these matters, should any such matter be commenced, or reasonably provide an estimate or range of estimates of any loss in excess of currently recorded reserves. The Company could, in future periods, incur judgments or enter into settlements to resolve these potential matters for amounts in excess of current reserves and there could be a material adverse effect on the Company's results of operations, cash flows and financial position in the period in which such change in judgment or settlement occurs. Guarantees and Indemnifications Indemnifications Provided as Part of Contracts and Agreements Acquisitions/Divestitures: The Company has indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of its divestiture agreements. In addition, the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants, including such matters as adequate title to assets sold, intellectual property rights and certain income taxes arising prior to the date of acquisition. Where appropriate, an obligation for such indemnifications is recorded as a liability at the time of the acquisition or divestiture. Since the obligated amounts of these types of indemnifications are often not explicitly stated or are contingent on the occurrence of future events, the overall maximum amount, or range of amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, the Company has not historically made significant payments for these indemnifications. Additionally, under certain of the Company's acquisition agreements, it has provided for additional consideration to be paid to the sellers if established financial targets are achieved within specific timeframes post-closing. The Company has recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from divestitures and contingent consideration provided for by acquisitions are not expected to be material to the Company's financial position, results of operations or cash flows. Other Agreements: The Company is also party to the following types of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters: • Guarantees on behalf of the Company's subsidiaries with respect to real estate leases. These lease guarantees may remain in effect after the sale of the subsidiary. • Agreements to indemnify various service providers, trustees and bank agents from any third-party claims related to their performance on the Company's behalf, except for claims that result from the third-party's own willful misconduct or gross negligence. • Guarantees of the Company's performance in certain services contracts to its customers and indirectly the performance of third parties with whom the Company has subcontracted for their services. This includes indemnifications to customers for losses that may be sustained because of the Company's performance of services at a customer's location. In each of these circumstances, payment is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract and such procedures also typically allow the Company to challenge the other party's claims. In the case of lease guarantees, the Company may contest the liabilities asserted under the lease. Further, obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments it made. Intellectual Property Indemnifications The Company does not own all of the software that it uses to run its business. Instead, the Company licenses this software from a small number of primary vendors. The Company indemnifies certain software providers against claims that may arise as a result of the Company's use or its subsidiaries', customers' or resellers' use of their software in the Company's services and solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the procedures required in the services contract. Indemnification of Officers and Directors The Company's corporate by-laws require that, except to the extent expressly prohibited by law, the Company must indemnify its officers and directors against judgments, fines, penalties and amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with civil or criminal action or proceedings or any appeal, as it relates to their services to the Company and its subsidiaries. Although the by-laws provide no limit on the amount of indemnification, the Company may have recourse against its insurance carriers for certain payments made by the Company. However, certain indemnification payments may not be covered under the Company's directors' and officers' insurance coverage. The Company also indemnifies certain fiduciaries of its employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of the Company. Finally, in connection with the Company's acquisition of businesses, it may become contractually obligated to indemnify certain former and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws or indemnification agreements or applicable state law. Other Contingencies Certain contracts, primarily in the Company's Government Services and Transportation segments, require the Company to provide a surety bond or a letter of credit as a guarantee of performance. As of December 31, 2021, the Company had $560 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $109 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations. In general, the Company would only be liable for these guarantees in the event of default in the Company's performance of its obligations under each contract. The Company believes it has sufficient capacity in the surety markets and liquidity from its cash flow and its various credit arrangements to allow it to respond to future requests for proposals that require such credit support. |
Preferred Stock
Preferred Stock | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Preferred Stock | Preferred Stock Series A Preferred Stock In connection with the December 31, 2016 separation from the Company's former parent company (Separation), the Company issued 120,000 shares of Series A convertible perpetual preferred stock with an aggregate liquidation preference of $120 million and an initial fair value of $142 million. The Series A convertible preferred stock pays quarterly cash dividends at a rate of 8% per year ($9.6 million per year). Each share of the Series A convertible preferred stock is convertible at any time, at the option of the holder, into 44.9438 shares of common stock for a total of 5,393,000 shares (reflecting an initial conversion price of approximately $22.25 per share of common stock), subject to customary anti-dilution adjustments. If the closing price of the Company's common stock exceeds 137% of the initial conversion price for 20 out of 30 trading days, the Company has the right to cause any or all of the Series A convertible preferred stock to be converted into shares of common stock at the then applicable conversion rate. The Series A convertible preferred stock is also convertible, at the option of the holder, upon a change in control, at the applicable conversion rate plus an additional number of shares determined by reference to the price paid for the Company's common stock upon such change in control. In addition, upon the occurrence of certain fundamental change events, including a change in control or the delisting of Conduent's common stock, the holder of Series A convertible preferred stock has the right to require the Company to redeem any or all of the Series A convertible preferred stock in cash at a redemption price per share equal to the liquidation preference and any accrued and unpaid dividends to, but not including, the redemption date. As a result of the contingent redemption feature, the Series A convertible preferred stock is classified as temporary equity and reflected separately from permanent equity in the Consolidated Balance Sheets. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Preferred Stock As of December 31, 2021, the Company had one class of preferred stock outstanding. Refer to Note 17 – Preferred Stock for further information. The Company is authorized to issue approximately 100 million shares of convertible preferred stock at $0.01 par value per share. Common Stock The Company has 1 billion authorized shares of common stock at $0.01 par value per share. At December 31, 2021, 28.9 million shares were reserved for issuance under the Company's incentive compensation plans and 5.4 million shares were reserved for conversion of the Series A convertible preferred stock. Stock Compensation Plans Certain of the Company's employees participate in a long-term incentive plan. The Company's long-term incentive plan authorizes the issuance of restricted stock units / shares (RSU), performance stock units / share (PSU) and non-qualified stock options to employees. Stock-based compensation expense includes expense based on the awards and terms previously granted to the employees. Stock-based compensation expense was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Stock-based compensation expense, pre-tax $ 21 $ 20 $ 24 Income tax benefit recognized in earnings 3 3 — Restricted Stock Units / Shares Compensation expense is based upon the grant date market price. The compensation expense is recorded over the vesting period based on management's estimate of the number of shares expected to vest. The Company’s RSU awards typically vest in three separate and equal tranches over a three-year period. Each tranche vests annually, at December 31, following the date of grant. In 2021, the Company issued 329 thousand Deferred Stock Units (DSU) to non-employee members of the Board of Directors. DSU awards typically vest in accordance with certain service conditions. Performance Stock Units / Shares: The Company has granted PSUs under various scenarios including: • PSUs that vest contingent upon its achievement of certain specified financial performance criteria over a three-year period. If the three-year actual results exceed the stated targets, then the plan participants have the potential to earn additional shares of common stock, which cannot exceed 50% of the original grant. The fair value of these PSUs is based upon the market price of Conduent's common stock on the date of the grant. Compensation expense is recognized over the vesting period, which is two years and nine months from the date of grant, based on management's estimate of the number of shares expected to vest. If the stated targets are not met, any recognized compensation cost would be reversed. • PSUs that vest contingent upon the increase of Conduent’s stock price to certain levels over a two year and nine-month period from the date of grant. These PSUs also have a service requirement that must be met for them to vest. The fair value of these PSUs is based upon a Monte Carlo simulation. Compensation expense is recognized over the vesting period based on management's estimate of the number of shares expected to vest. Summary of Stock-based Compensation Activity 2021 2020 2019 (shares in thousands) Shares Weighted Shares Weighted Shares Weighted Restricted Stock Units / Shares Outstanding at January 1 5,620 $ 3.49 1,741 $ 13.07 2,399 $ 16.90 Granted 2,677 6.65 7,778 2.25 2,503 12.57 Vested (3,117) 4.69 (2,816) 4.99 (2,135) 15.54 Canceled (1,388) 3.96 (1,083) 6.11 (1,026) 15.68 Outstanding at December 31 3,792 4.57 5,620 3.49 1,741 13.07 Performance Stock Units / Shares Outstanding at January 1 5,453 $ 3.83 3,597 $ 16.17 4,557 $ 16.76 Granted 1,545 6.54 7,010 1.37 1,229 13.35 Vested (1,945) 3.37 (3,163) 7.33 (1,069) 15.64 Canceled (1,444) 5.13 (1,991) 11.91 (1,120) 16.00 Outstanding at December 31 3,609 4.71 5,453 3.83 3,597 16.17 The total unrecognized compensation cost related to non-vested stock-based awards at December 31, 2021 was as follows (in millions): Awards Unrecognized Compensation Remaining Weighted-Average Expense Period (Years) Restricted Stock Units / Shares $ 11 1.7 Performance Stock Units / Shares 4 1.4 Total $ 15 The aggregate intrinsic value of outstanding RSUs and PSUs awards were as follows (in millions): Awards December 31, 2021 Restricted Stock Units / Shares $ 20 Performance Stock Units / Shares 19 The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards were as follows: (in millions) December 31, 2021 December 31, 2020 December 31, 2019 Awards Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Restricted Stock Units / Shares $ 17 $ — $ 3 $ 13 $ — $ 3 $ 17 $ — $ 4 Performance Stock Units / Shares 11 — 2 14 — 2 11 — 2 |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Comprehensive Income (Loss) Note | Other Comprehensive Income (Loss) Other Comprehensive Income (Loss) is comprised of the following: Year Ended December 31, 2021 2020 2019 (in millions) Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Currency Translation Currency translation adjustments, net $ (31) $ (31) $ 8 $ 8 $ 3 $ 3 Reclassification of currency translation adjustments on divestitures — — — — 15 15 Translation adjustments gains (losses) $ (31) $ (31) $ 8 $ 8 $ 18 $ 18 Unrealized Gains (Losses) Changes in fair value of cash flow hedges gains (losses) $ (1) $ (1) $ — $ — $ 1 $ 1 Changes in cash flow hedges reclassed to earnings (1) — — — — (1) — Net Unrealized Gains (Losses) $ (1) $ (1) $ — $ — $ — $ 1 Defined Benefit Plans Gains (Losses) Reclassification of divested benefit plans and other $ — $ — $ — $ — $ 1 $ (1) Net actuarial/prior service gains (losses) 1 1 1 1 — — Changes in Defined Benefit Plans Gains (Losses) $ 1 $ 1 $ 1 $ 1 $ 1 $ (1) Other Comprehensive Income (Loss) $ (31) $ (31) $ 9 $ 9 $ 19 $ 18 ____________________________ (1) Reclassified to Cost of services - refer to Note 12 – Financial Instruments for additional information regarding our cash flow hedges. Accumulated Other Comprehensive Loss (AOCL) Below are the balances and changes in AOCL (1) : (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2018 $ (426) $ 2 $ (1) $ (425) Other comprehensive income (loss) before reclassifications 3 1 — 4 Amounts reclassified from accumulated other comprehensive loss 15 — (1) 14 Net current period other comprehensive income (loss) 18 1 (1) 18 Balance at December 31, 2019 $ (408) $ 3 $ (2) $ (407) Other comprehensive income (loss) before reclassifications 8 — 1 9 Amounts reclassified from accumulated other comprehensive loss — — — — Net current period other comprehensive income (loss) 8 — 1 9 Balance at December 31, 2020 $ (400) $ 3 $ (1) $ (398) Other comprehensive income (loss) before reclassifications (31) (1) 1 (31) Amounts reclassified from accumulated other comprehensive loss — — — — Net current period other comprehensive income (loss) (31) (1) 1 (31) Balance at December 31, 2021 $ (431) $ 2 $ — $ (429) __________ (1) All amounts are net of tax. Tax effects were immaterial. |
Earnings per Share
Earnings per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings (Loss) per Share We did not declare any common stock dividends in the periods presented. The following table sets forth the computation of basic and diluted loss per share of common stock: Year Ended December 31, (in millions, except per share data. Shares in thousands) 2021 2020 2019 Net Earnings (Loss) per Share: Net Income (Loss) $ (28) $ (118) $ (1,934) Dividend - Preferred Stock (10) (10) (10) Adjusted Net Income (Loss) Available to Common Shareholders $ (38) $ (128) $ (1,944) Weighted Average Common Shares Outstanding - Basic 212,719 210,018 209,318 Common Shares Issuable with Respect to: Restricted Stock And Performance Units / Shares 0 0 0 Weighted Average Common Shares Outstanding - Diluted 212,719 210,018 209,318 Net Earnings (Loss) per Share: Basic $ (0.18) $ (0.61) $ (9.29) Diluted $ (0.18) $ (0.61) $ (9.29) The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Restricted stock and performance shares/units 8,210 12,286 8,943 Convertible preferred stock 5,393 5,393 5,393 Total Anti-Dilutive and Contingently Issuable Securities 13,603 17,679 14,336 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related Party Transactions During the third quarter of 2019, Carl C. Icahn and his affiliates (shareholders) increased their ownership interest in the Company. In the normal course of business, the Company provides services to, and purchases from, certain related parties with the same shareholders. The services provided to these entities included those related to human resources, end-user support and other services and solutions. The purchases from these entities included office equipment and related services and supplies. Revenue and purchases from these entities were included in Revenue and Costs of services or Selling, general and administrative, respectively, on the Company's Consolidated Statements of Income (Loss). Transactions with related parties were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Revenue from related parties $ 16 $ 24 $ 33 Purchases from related parties $ 28 $ 36 $ 46 The Company's receivable and payable balances with related party entities were not material as of December 31, 2021 and 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On February 8, 2022, the Company completed the sale of the Midas Suite of patient safety, quality and advanced analytics solutions. At closing, the Buyer paid the Company $321 million in cash, which is subject to settlement of customary post-closing adjustments. The revenue from this business was $70 million and $72 million for the years ended December 31, 2021 and 2020, respectively. On February 11, 2022, the Company repaid $100 million of outstanding borrowings, plus accrued interest thereon, under the 2021 Revolving Credit Facility. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2021 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | Valuation and Qualifying Accounts For the three years ended December 31, 2021 (in millions) Balance Additions charged to expense (1)(4) Amounts (credited) charged to other income statement accounts (2) Deductions and other, net of recoveries (3)(4) Balance Allowance for Credit Losses: 2021 Accounts Receivable $ 2 $ 1 $ — $ (3) $ — 2020 Accounts Receivable 2 1 — (1) 2 2019 Accounts Receivable 1 3 — (2) 2 Tax Valuation Allowance: 2021 Tax Valuation 83 10 — (11) 82 2020 Tax Valuation 72 17 — (6) 83 2019 Tax Valuation 44 38 — (10) 72 __________ (1) Account Receivables/Contract Assets: additions charged to expense represent bad debt provisions relate to estimated losses due to credit and similar collectability issues. (2) Account Receivables: Other charges (credits) relate to adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations. (3) Account Receivables/Contract Assets: Deductions and other, net of recoveries primarily relates to receivable and contract asset write-offs, but also includes reclassification to other balance sheet accounts, the impact of foreign currency translation adjustments and recoveries of previously written off receivables and contract assets. (4) Tax Valuation: tax valuation allowance are primarily related to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which we have concluded it is more-likely-than-not that these items will not be realized in the ordinary course of operations. |
Organization, Consolidation a_2
Organization, Consolidation and Presentation of Financial Statements (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Consolidation | Description of Business As one of the largest business process services companies in the world, Conduent delivers mission-critical services and solutions on behalf of businesses and governments – creating exceptional outcomes for its clients and the millions of people who count on them. Through people, process, expertise in transaction-intensive processing and technology such as analytics and automation, Conduent's services and solutions create value by improving efficiencies, reducing costs and enabling revenue growth. A majority of Fortune 100 companies and over 500 government entities depend on Conduent every day to manage their business processes and essential interactions with their end-users. The Company's portfolio includes industry-focused solutions in attractive growth markets such as healthcare and transportation, as well as solutions that serve multiple industries such as transaction processing, customer care, human resource solutions and payment services. Basis of Presentation The Company's Consolidated Financial Statements included the historical basis of assets, liabilities, revenues and expenses of the individual businesses of the Company, including joint ventures and partnerships over which the Company has a controlling financial interest. The Company has prepared the Consolidated Financial Statements pursuant to the rules and regulations of the SEC. Certain reclassifications have been made to prior years' amounts to conform to the current year presentation. All intercompany transactions and balances have been eliminated. The Company has evaluated subsequent events through February 23, 2022. |
Use of Estimates | Use of Estimates The Company prepared the Consolidated Financial Statements using financial information available at the time of preparation, which requires it to make estimates and assumptions that affect the amounts reported. The Company's most significant estimates pertain to intangible assets, valuation of goodwill, contingencies and litigation and income taxes. These estimates are based on management's best knowledge of current events, historical experience, and on various other assumptions that are believed to be reasonable under the circumstances. As a result, actual results may be different from these estimates. As of December 31, 2021, the impact of the COVID-19 pandemic, the mitigating impact of the rollout of a vaccine for it and fluctuating cases of new variants of the virus continue to unfold. As a result, many of the Company's estimates and assumptions continue to require increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, the Company's estimates may change materially in the future. |
New Accounting Pronouncements | New Accounting Standards The Company has considered all recent accounting standards issued, but not yet effective, and does not expect any to have a material impact on the Company's Consolidated Financial Statements. Recently Adopted Accounting Standards Reference Rate Reform: In March 2020, the Financial Accounting Standards Board (FASB) issued updated guidance relating to the accounting for the discontinuation of the London Inter-bank Offered Rate (LIBOR), referred to as reference rate reform. This guidance provides optional practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by the reference rate reform if certain criteria are met. This guidance is applicable to contract modifications that replace a reference LIBOR rate affected by reference rate reform. The amendments may be applied through December 31, 2022. The Company adopted the reference rate reform guidance on a retrospective basis as of January 1, 2021. The adoption did not have a material impact on the Company’s Consolidated Financial Statements. Income Taxes: In December 2019, the FASB issued final guidance that simplified the accounting for income taxes by eliminating some exceptions to the general approach in Accounting Standards Codification (ASC) 740, Income Taxes. This final guidance was effective for fiscal years beginning January 1, 2021. The Company adopted the final income taxes guidance as of January 1, 2021. The adoption did not have a material impact on the Company's Consolidated Financial Statements. The American Rescue Plan Act, which became law in March 2021, added a new subsection to Section 162(m) of the Internal Revenue Code to expand the application of Section 162(m) to an additional five most highly compensated individuals. The expansion of Section 162(m) coverage is effective for tax years beginning after December 31, 2026. This expansion does not have an impact in the current year. The Company will monitor any potential impacts going forward. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, including money market funds and investments with original maturities of three months or less. |
Receivable Sales | Receivable Sales In 2021, 2020 and 2019, the Company sold certain accounts receivable and derecognized the corresponding receivable balance. Refer to Note 5 – Accounts Receivable, Net for more details on the Company's receivable sales. |
Land, Buildings and Equipment and Equipment on Operating Leases | Land, Buildings and Equipment Land, buildings and equipment are recorded at cost. Buildings and equipment are depreciated over their estimated useful lives. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life. Significant improvements are capitalized and maintenance and repairs are expensed when incurred. |
Software - Internal Use and Product | Internal Use Software: The Company capitalizes direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortizes these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented. Costs for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts incurred for Internal Use Software are included in Cash Flows from Investing Activities. Produc t Software : The Company also capitalizes certain costs related to the development of software solutions to be sold to its customers upon reaching technological feasibility. These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts incurred for Product Software are included in Cash Flows from Operating activities. The Company performs annual reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value). Costs to support or service licensed software are charged to Costs of services as incurred. Internal use and Product software are included in Other long-term assets on the Company's Consolidated Balance Sheets. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further information. |
Capitalization of Internal Costs | Internal Use and Product Software Internal Use Software: The Company capitalizes direct costs associated with developing, purchasing or otherwise acquiring software for internal use and amortizes these costs on a straight-line basis over the expected useful life of the software, beginning when the software is implemented. Costs for upgrades and enhancements that will not result in additional functionality are expensed as incurred. Amounts incurred for Internal Use Software are included in Cash Flows from Investing Activities. Produc t Software : The Company also capitalizes certain costs related to the development of software solutions to be sold to its customers upon reaching technological feasibility. These costs are amortized on a straight-line basis over the estimated economic life of the software. Amounts incurred for Product Software are included in Cash Flows from Operating activities. The Company performs annual reviews to ensure that unamortized Product Software costs remain recoverable from estimated future operating profits (net realizable value). Costs to support or service licensed software are charged to Costs of services as incurred. Internal use and Product software are included in Other long-term assets on the Company's Consolidated Balance Sheets. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further information. |
cloud computing policy | Cloud Computing Arrangements The Company incurs costs to implement cloud computing arrangements that are hosted by third party vendors. Implementation costs associated with cloud computing arrangements are capitalized when incurred during the application development phase. Amortization is calculated on a straight-line basis over the contractual term of the cloud computing arrangement, which includes renewal options that are reasonably certain to be exercised. Capitalized amounts related to such arrangements are recorded within Other current assets and Other long-term assets in the Consolidated Balance Sheets. The amortization expense and the associated hosting fees are included in Cost of services and Selling, general and administrative expenses, depending on the nature of the underlying use of the cloud computing arrangement, in the Company’s Consolidated Statements of Income (Loss). In the fourth quarter of 2021, the Company wrote-off approximately $28 million of previously capitalized implementation costs. Refer to Note 6 – Land, Buildings, Equipment and Software, Net for further information. |
Lessee, Leases | Leases The Company adopted the new lease guidance as of January 1, 2019, using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company determines if an arrangement is a lease at the inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. The Company has operating and finance leases for real estate and equipment. Operating leases are included in Operating lease ROU assets, Other current liabilities, and Operating lease liabilities in our Consolidated Balance Sheets. Finance leases are included in Land, buildings and equipment, net, Current portion of long-term debt, and Long-term debt in the Company's Consolidated Balance Sheets. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the net present value of lease payments over the lease term using the Company’s incremental borrowing rates or implicit rates. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option based on economic factors. The Company recognizes operating fixed lease expense and finance lease depreciation on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. The Company accounts for lease and non-lease components separately for its equipment leases, based on the estimated standalone price of each component, and combines lease and non-lease components for its real estate leases. Refer to Note 7 – Leases for further information. |
Goodwill and Other Intangible Assets | Goodwill For acquired businesses, the Company records the acquired assets and assumed liabilities based on their relative fair values at the date of acquisitions (commonly referred to as the purchase price allocation). Goodwill represents the excess of the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. For the Company’s business acquisitions, the purchase price is allocated to identifiable intangible assets separate from goodwill if they are from contractual or other legal rights, or if they could be separated from the acquired business and sold, transferred, licensed, rented or exchanged. The Company tests goodwill for impairment annually or more frequently if an event or change in circumstances indicate the asset may be impaired. Impairment testing for goodwill is done at the reporting unit level. The Company determined the fair value of its reporting units utilizing a combination of both an Income Approach and a Market Approach. The Income Approach utilizes a discounted cash flow analysis based upon the forecasted future business results of its reporting units. The Market Approach utilizes the guideline public company method. If the fair value of a reporting unit is less than its carrying amount, an impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Refer to Note 8 – Goodwill and Intangible Assets, Net for further information. Other Intangible Assets Other intangible assets primarily consist of assets acquired through business combinations, primarily installed customer base. Other intangible assets are amortized on a straight-line basis over their estimated economic lives unless impairment is identified. |
Impairment or Disposal of Long-Lived Assets, Policy | Impairment of Long-Lived Assets The Company reviews the recoverability of its long-lived assets, including buildings, equipment, internal use software, product software, right-of-use assets and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company's ability to recover the carrying value of the asset from the expected future cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The Company's primary measure of fair value is based on forecasted cash flows. |
Income Tax | Income Taxes The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are based on differences between U.S. GAAP reporting and tax bases of assets or liabilities and based on current tax laws, regulations and rates. The recognition of deferred tax assets requires an assessment to determine the realization of such assets. Management establishes valuation allowances on deferred tax assets when it is determined “more-likely-than-not” that some portion or all of the deferred tax assets may not be realized. Management considers positive and negative evidence in evaluating the ability of the Company to realize its deferred tax assets, including its historical results and forecasts of future ability to realize its deferred tax assets, including projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. The Company is subject to ongoing tax examinations and assessments in various jurisdictions. The Company has unrecognized tax benefits for uncertain tax positions. The Company follows U.S. GAAP which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company's ongoing assessments of the more-likely-than-not outcomes of the examinations and related tax positions require judgment and can materially increase or decrease its effective tax rate, as well as impact its operating results. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (Tax Reform). The Tax Reform includes a tax on global intangible low-taxed income (“GILTI”), which imposes a U.S. tax on certain income earned by the Company’s foreign subsidiaries. The Company elected to treat the tax on GILTI as a period cost when incurred and therefore, no deferred taxes for GILTI were recognized for the year ended December 31, 2021. Refer to Note 15 – Income Taxes for further discussion. |
Foreign Currency Transactions and Re-measurement | Foreign Currency Translation and Re-measurement The functional currency for most foreign operations is the local currency. Net assets are translated at current rates of exchange and income, expense and cash flow items are translated at average exchange rates for the applicable period. The translation adjustments are recorded in Accumulated other comprehensive loss. The U.S. Dollar is used as the functional currency for certain foreign subsidiaries that conduct their business in U.S. Dollars. A combination of current and historical exchange rates is used in re-measuring the local currency transactions of these subsidiaries and the resulting exchange adjustments are recorded in Currency (gains) and losses within Other (income) expenses, net together with other foreign currency re-measurements. |
Revenue from Contract with Customer | Revenue Recognition The Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately, versus together, may require judgment. Typically, the Company’s contracts include performance obligation(s) to stand-ready on a daily or monthly basis to provide services to the customers. Under a stand-ready obligation, the evaluation of the nature of our performance obligation is focused on each time increment rather than the underlying activities. Accordingly, the promise to stand-ready is accounted for as a single-series performance obligation. Once the Company determines the performance obligations, the Company determines the transaction price, which is based on fixed and variable consideration. Typical forms of variable consideration include variable pricing based on the number of transactions processed or usage-based pricing arrangements. Variable consideration is also present in the form of volume discounts, tiered and declining pricing, penalties for service level agreements, performance bonuses and credits. In circumstances where the Company meets certain requirements to allocate variable consideration to a distinct service within a series of related services, it allocates variable consideration to each distinct period of service within the series. In limited circumstances, if the Company does not meet those requirements, it includes an estimate of variable consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. For contracts with multiple performance obligations, the transaction price is allocated to the separate performance obligations on a relative standalone selling price basis. The Company generally determines standalone selling prices based on the prices charged to customers or by using expected cost plus a reasonable margin. The Company typically satisfies its performance obligations over time as the services are provided. A time-elapsed output method is used to measure progress because the nature of the Company’s promise is a stand-ready service and efforts are expended evenly throughout the period. In limited circumstances, such as contracts for implementation or development projects, the Company also uses a cost-to-cost based input method. The Company has determined that the above methods provide a faithful depiction of the transfer of services to the customer. Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase additional services that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for when the customer exercises its option to purchase additional goods or services. The Company recognizes revenue for non-refundable upfront implementation fees on a straight-line basis over the period between the initiation of the services through the end of the contract term. When more than one party is involved in providing services to a customer, the Company evaluates whether it is the principal, and reports revenue on a gross basis, or an agent, and reports revenue on a net basis. In this assessment, the Company considers the following: if it obtains control of the specified services before they are transferred to the customer; is primarily responsible for fulfillment and inventory risk; and has discretion in establishing price. The Company reports revenue net of any revenue-based taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions. The primary revenue-based taxes are sales tax and value-added tax (VAT). The Company's payment terms vary by type of services offered. The time between invoicing and when payment is due is not significant. For certain services and customer types, the Company requires payment before services are rendered. From time to time, the Company's contracts are modified to account for additions or changes to existing performance obligations. The Company's contract modifications related to stand-ready performance obligations are generally accounted for prospectively. |
Transfers and Servicing of Financial Assets, Transfers of Financial Assets, Sales | Receivable Sales In 2021, 2020 and 2019, the Company sold certain accounts receivable and derecognized the corresponding receivable balance. Refer to Note 5 – Accounts Receivable, Net for more details on the Company's receivable sales. |
Assets Held-for-Sale | Assets/Liabilities Held for Sale The Company classifies assets as held for sale in the period when the following conditions are met: (i) management, having the authority to approve the action, commits to a plan to sell the asset (disposal group); (ii) the asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal group); (iii) an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated; (iv) the sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset (disposal group) beyond one year; (v) the asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. A long-lived asset (disposal group) that is classified as held for sale is initially measured at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in the period in which the held for sale criteria are met. Conversely, gains are not recognized on the sale of a long-lived asset (disposal group) until the date of sale. The fair value of a long-lived asset (disposal group) less any costs to sell is assessed each reporting period it remains classified as held for sale and any subsequent changes are reported as an adjustment to the carrying value of the asset (disposal group), as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. On December 29, 2021, the Company signed a definitive agreement to sell its Midas Suite of Solutions to Symplr Software, Inc. This action was taken because of the Company's strategy to streamline its portfolio and its consideration of divestitures of select businesses to enhance shareholder and client value. As of December 31, 2021, the Company determined that this business met the conditions discussed above to be classified as held for sale. |
Revenue from Contract with Cust
Revenue from Contract with Customer (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Major Service Line | The following table provides information about disaggregated revenue by major service offering, the timing of revenue recognition and a reconciliation of the disaggregated revenue by reportable segments. Refer to Note 3 – Segment Reporting for additional information on the Company's reportable segments. Year Ended December 31, (in millions) 2021 2020 2019 Commercial Industries: Customer experience management $ 629 $ 648 $ 669 Business operations solutions 567 566 632 Commercial healthcare solutions 435 431 482 Human resource and learning services 445 518 602 Total Commercial Industries 2,076 2,163 2,385 Government Services: Government healthcare solutions 576 603 675 Government services solutions 742 678 588 Total Government Services 1,318 1,281 1,263 Transportation: Roadway charging & management services 327 318 327 Transit solutions 262 248 254 Curbside management solutions 82 72 107 Public safety solutions 67 73 83 Commercial vehicles 8 8 10 Total Transportation 746 719 781 Other: Divestitures — — 36 Education — — 2 Total Other — — 38 Total Consolidated Revenue $ 4,140 $ 4,163 $ 4,467 Timing of Revenue Recognition: Point in time $ 111 $ 110 $ 144 Over time 4,029 4,053 4,323 Total Revenue $ 4,140 $ 4,163 $ 4,467 |
Contract Assets, Unearned Income and Accounts Receivable | The following table provides information about the balances of the Company's contract assets, unearned income and receivables from contracts with customers: (in millions) December 31, 2021 December 31, 2020 Contract Assets (Unearned Income) Current contract assets $ 154 $ 151 Long-term contract assets (1) 8 13 Current unearned income (82) (133) Long-term unearned income (2) (48) (29) Net Contract Assets $ 32 $ 2 Accounts receivable, net $ 699 $ 670 __________ (1) Presented in Other long-term assets in the Consolidated Balance Sheets (2) Presented in Other long-term liabilities in the Consolidated Balance Sheets |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Operating segment revenues and profitability | Selected financial information for our reportable segments was as follows: Year Ended December 31, (in millions) Commercial Industries Government Services Transportation Other Unallocated Costs Total 2021 Divestitures Other Revenue $ 2,076 $ 1,318 $ 746 $ — $ — $ — $ 4,140 Segment profit (loss) $ 137 $ 412 $ 75 $ — $ 1 $ (388) $ 237 2020 Revenue $ 2,163 $ 1,281 $ 719 $ — $ — $ — $ 4,163 Segment profit (loss) $ 150 $ 372 $ 82 $ — $ 9 $ (348) $ 265 2019 Revenue $ 2,385 $ 1,263 $ 781 $ 36 $ 2 $ — $ 4,467 Segment profit (loss) $ 270 $ 279 $ 69 $ 1 $ (1) $ (345) $ 273 |
Reconciliation to pre-tax income (loss) | The following is a reconciliation of segment profit (loss) to income (loss) before income taxes: (in millions) Year Ended December 31, Segment Profit (Loss) Reconciliation to Pre-tax Income (Loss) 2021 2020 2019 Loss Before Income Taxes $ (25) $ (139) $ (2,106) Reconciling items: Amortization of acquired intangible assets 135 239 246 Restructuring and related costs 45 67 71 Interest expense 55 60 78 Loss on extinguishment of debt 15 — — Goodwill impairment — — 1,952 Loss on divestitures and transaction costs 3 17 25 Litigation costs, net 3 20 17 Other (income) expenses, net 6 1 (10) Segment Profit (Loss) $ 237 $ 265 $ 273 |
Revenue and long-lived assets by geography | Geographic area data is based upon the location of the subsidiary reporting the revenue or long-lived assets and is as follows for each of the years ended December 31: Revenues Long-Lived Assets (1) (in millions) 2021 2020 2019 2021 2020 United States $ 3,712 $ 3,748 $ 4,000 $ 651 $ 628 Europe 368 357 386 39 44 Other areas 60 58 81 96 114 Total Revenues and Long-Lived Assets $ 4,140 $ 4,163 $ 4,467 $ 786 $ 786 __________ |
Land, Buildings, Equipment an_2
Land, Buildings, Equipment and Software, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Land, buildings and equipment, net | Land, buildings and equipment, net was as follows: Estimated Useful Lives December 31, (in millions except as noted) (Years) 2021 2020 Land $ 1 $ 1 Building and building equipment 25 to 50 7 7 Leasehold improvements Varies 250 268 IT, other equipment and office furniture 3 to 15 883 869 Other 4 to 20 3 2 Construction in progress 49 35 Subtotal 1,193 1,182 Accumulated depreciation (912) (877) Land, Buildings and Equipment, Net $ 281 $ 305 |
Land, Buildings and Equipment Depreciation Expense | Depreciation expense for the years ended December 31, 2021, 2020 and 2019 was $116 million, $125 million and $123 million, respectively. |
Additions to Internal Use and Product Software | Additions to Internal use and Product software as well as year-end balances for these assets were as follows: (in millions) Year Ended December 31, Additions to: 2021 2020 2019 Internal use software $ 65 $ 63 $ 70 Product software 45 36 9 |
Capitalized Costs, Internal Use and Product Software | December 31, (in millions) 2021 2020 Internal use software, at cost $ 563 $ 524 Accumulated amortization (382) (361) Internal use software, net $ 181 $ 163 Product software, at cost $ 171 $ 144 Accumulated amortization (78) (72) Product software, net $ 93 $ 72 |
capitalized cloud computing costs | Additions to Cloud computing implementation costs as well as year-end balances for these assets were as follows: (in millions) Year Ended December 31, Additions to: 2021 2020 2019 Cloud computing implementation costs $ 6 $ 3 $ 39 (in millions) December 31, Capitalized Costs, Net 2021 2020 Cloud computing implementation costs, at cost $ 53 $ 47 Impairment charges (28) — Accumulated amortization (11) (6) Cloud computing implementation costs, net (1) $ 14 $ 41 __________ (1) Refer to Note 10 – Supplementary Financial Information for additional information on the current and long-term portions of this asset. |
Leases, Codification Topic 842
Leases, Codification Topic 842 (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Lease, Cost | The components of lease costs were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Finance Lease Costs: Amortization of right of use assets $ 10 $ 8 $ 10 Interest on lease liabilities 1 1 1 Total Finance Lease Costs $ 11 $ 9 $ 11 Operating lease costs: Base rent $ 85 $ 95 $ 112 Short-term lease costs 4 5 12 Variable lease costs (1) 23 26 30 Sublease income (1) (3) (7) Total Operating Lease Costs $ 111 $ 123 $ 147 __________ (1) Primarily related to taxes, insurance and common area and other maintenance costs for real estate leases. |
Lessee, Operating Lease, Disclosure | Supplemental cash flow information related to leases was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Cash paid for the amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 117 $ 137 Operating cash flows from finance leases 1 1 1 Total Cash Flow from Operating Activities $ 100 $ 118 $ 138 Financing cash flow from finance leases $ 9 $ 11 $ 11 Supplemental non-cash information on right of use assets obtained in exchange for new lease obligations: Operating leases $ 68 $ 73 $ 32 Finance leases $ 5 $ 14 $ 2 Supplemental balance sheet information related to leases was as follows: December 31, (in millions) 2021 2020 Operating lease assets: Operating lease right-of-use assets $ 231 $ 246 Operating lease liabilities: Other current liabilities $ 71 $ 81 Operating lease liabilities 184 207 Total Operating Lease Liabilities $ 255 $ 288 Finance lease assets: Land, buildings and equipment, net $ 17 $ 19 Finance lease liabilities: Current portion of long-term debt $ 8 $ 8 Long-term debt 8 12 Total Finance Lease Liabilities $ 16 $ 20 The weighted average discount rates and weighted average remaining lease terms for operating and finance leases as of December 31, 2021 and 2020 were as follows: December 31, 2021 December 31, 2020 Operating Leases Finance Leases Operating Leases Finance Leases Weighted average discount rates 5.8 % 5.0 % 6.1 % 5.3 % Weighted average remaining lease term (in years) 5 3 5 3 |
Lessee, Operating Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of December 31, 2021 were as follows: December 31, 2021 (in millions) Operating Lease Payments Finance Lease 2022 $ 84 $ 8 2023 60 5 2024 47 2 2025 37 2 2026 28 — Thereafter 36 — Total undiscounted lease payments 292 17 Less imputed interest 37 1 Present value of lease liabilities $ 255 $ 16 As of December 31, 2021, the Company had entered into an additional operating lease agreement for real estate of $6 million, which has not commenced and has not been recognized on the Company's Consolidated Balance Sheet. This operating lease is expected to commence in 2022 with a lease term of 5 years. |
Finance Lease, Liability, Maturity | Maturities of operating and finance lease liabilities as of December 31, 2021 were as follows: December 31, 2021 (in millions) Operating Lease Payments Finance Lease 2022 $ 84 $ 8 2023 60 5 2024 47 2 2025 37 2 2026 28 — Thereafter 36 — Total undiscounted lease payments 292 17 Less imputed interest 37 1 Present value of lease liabilities $ 255 $ 16 As of December 31, 2021, the Company had entered into an additional operating lease agreement for real estate of $6 million, which has not commenced and has not been recognized on the Company's Consolidated Balance Sheet. This operating lease is expected to commence in 2022 with a lease term of 5 years. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table presents the changes in the carrying amount of goodwill, by reportable segment: (in millions) Commercial Industries Government Services Transportation Total Balance at December 31, 2019 $ 821 $ 621 $ 60 $ 1,502 Foreign currency translation 16 2 8 26 Balance at December 31, 2020 $ 837 $ 623 $ 68 $ 1,528 Foreign currency translation (14) (6) (7) (27) Assets Held For Sale (162) — — (162) Balance at December 31, 2021 $ 661 $ 617 $ 61 $ 1,339 Gross goodwill $ 2,214 $ 1,371 $ 641 $ 4,226 Accumulated impairment (1,553) (754) (580) (2,887) Balance at December 31, 2021 $ 661 $ 617 $ 61 $ 1,339 |
Schedule of Finite-Lived Intangible Assets by Major Class | Intangible assets were comprised exclusively of Customer relationships as follows: December 31, 2021 December 31, 2020 (in millions except years) Weighted Average Gross Accumulated Net Gross Accumulated Net Total Intangible Assets 12 years $ 1,658 $ 1,606 $ 52 $ 2,890 $ 2,703 $ 187 |
Restructuring and Asset Impai_2
Restructuring and Asset Impairment Charges (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program Activity | A summary of the Company's restructuring program activity during the two years ended December 31, 2021 is as follows: (in millions) Severance and Related Costs Termination and Other Costs Asset Impairments Total Balance at December 31, 2019 $ 15 $ 6 $ — $ 21 Provision 13 27 15 55 Changes in estimates 1 3 — 4 Total Net Current Period Charges (1) 14 30 15 59 Charges against reserve and currency (26) (33) (15) (74) Balance at December 31, 2020 $ 3 $ 3 $ — $ 6 Provision 8 27 9 44 Changes in estimates — (3) — (3) Total Net Current Period Charges (1) 8 24 9 41 Charges against reserve and currency (6) (26) (9) (41) Balance at December 30, 2021 $ 5 $ 1 $ — $ 6 |
Total Costs Incurred with Restructuring Programs, by Segment | The following table summarizes the total amount of costs incurred in connection with these restructuring programs by reportable and non-reportable segments: Year Ended December 31, (in millions) 2021 2020 2019 Commercial Industries $ 4 $ 11 $ 24 Government Services 1 1 1 Transportation 1 2 2 Unallocated Costs 35 45 40 Total Net Restructuring Charges $ 41 $ 59 $ 67 |
Supplementary Financial Infor_2
Supplementary Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Financial Information [Abstract] | |
Supplemental Financial Information Table | The components of Other assets and liabilities were as follows: December 31, (in millions) 2021 2020 Other Current Assets Prepaid expenses $ 84 $ 73 Income taxes receivable 46 48 Value-added tax (VAT) receivable 12 21 Restricted cash 5 8 Cloud computing implementation costs, net 6 8 Other 75 148 Total Other Current Assets $ 228 $ 306 Other Current Liabilities Accrued liabilities $ 246 $ 229 Litigation related accruals 64 73 Operating lease liabilities 71 81 Restructuring liabilities 6 1 Income tax payable 10 16 Other taxes payable 14 16 Accrued interest 10 3 Other 22 31 Total Other Current Liabilities $ 443 $ 450 Other Long-term Assets Internal use software, net $ 181 $ 163 Deferred contract costs, net (2) 73 76 Product software, net 93 72 Cloud computing implementation costs, net 8 33 Other 98 69 Total Other Long-term Assets $ 453 $ 413 Other Long-term Liabilities Deferred payroll tax related to the CARES Act (1) $ — $ 24 Income tax liabilities 15 15 Unearned income 48 29 Restructuring liabilities — 5 Other 32 35 Total Other Long-term Liabilities $ 95 $ 108 __________ (1) The CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 (and which the Company paid in December 2021) and the remainder due on December 31, 2022. As of December 31, 2021, the remaining portion of this liability is classified as current and is included in Accrued compensation and benefits costs. (2) Represents capitalized costs associated with obtaining or fulfilling a contract with a customer. The balances at December 31, 2021 and 2020 are expected to be amortized over a weighted average remaining life of approximately 12 and 11 years, respectively. See Note 2 – Revenue for more information. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Long-term debt was as follows: December 31, (in millions) Weighted Average Interest Rates at December 31, 2021 (1) 2021 2020 2021 Term loan A due 2026 3.10 % $ 265 $ — 2021 Term loan B due 2028 5.00 % 515 — 2021 Senior notes due 2029 6.04 % 520 — 2021 Revolving credit facility maturing 2026 2.58 % 100 — 2016 Term loan A due 2022 — 654 2016 Term loan B due 2023 — 816 2016 Senior notes due 2024 — 34 Finance lease obligations 5.01 % 16 20 Other 3.98 % 24 4 Principal Debt Balance $ 1,440 $ 1,528 Debt issuance costs and unamortized discounts (27) (18) Less: current maturities (30) (90) Total Long-term Debt $ 1,383 $ 1,420 ____________ (1) Represents weighted average effective interest rate which includes the effect of discounts and debt issuance costs on issued debt. |
Schedule of Maturities of Long-term Debt | Scheduled principal payments due on long-term debt for the next five years are as follows: 2022 2023 2024 2025 2026 Thereafter Total $ 30 $ 27 $ 24 $ 23 $ 327 $ 1,009 $ 1,440 |
Schedule Of Interest Expense And Interest Income | Interest expense and interest income were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Interest expense $ 55 $ 60 $ 78 Interest income (1) 1 2 6 ____________ (1) Included in Other (income) expenses, net on the Consolidated Statements of Income (Loss). |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of a Summary of Foreign Exchange Contracts Gross Notional Values | The following is a summary of the primary hedging positions and corresponding fair values: December 31, 2021 December 31, 2020 (in millions) Gross Fair Value Asset (Liability) (1) Gross Fair Value Asset (Liability) (1) Currencies Hedged (Buy/Sell) Philippine Peso/U.S. Dollar $ 55 $ (2) $ 53 $ 1 Indian Rupee/U.S. Dollar 47 1 52 1 Euro/U.S. Dollar 18 — 17 — Mexican Peso/U.S. Dollar — — 2 — All Other 30 — 56 — Total Foreign Exchange Hedging $ 150 $ (1) $ 180 $ 2 ____________ (1) Represents the net receivable (payable) amount included in the Consolidated Balance Sheet. |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Assets and Liabilities | The following table represents assets and liabilities measured at fair value on a recurring basis. The basis for the measurement at fair value in all cases was Level 2. (in millions) December 31, 2021 December 31, 2020 Assets: Foreign exchange contract - forward $ 1 $ 2 Total Assets $ 1 $ 2 Liabilities: Foreign exchange contracts - forward $ 2 $ — Total Liabilities $ 2 $ — |
Schedule of Estimated Fair Values of Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis | The estimated fair values of other financial assets and liabilities were as follows: December 31, 2021 December 31, 2020 (in millions) Carrying Fair Carrying Fair Liabilities: Long-term debt $ 1,383 $ 1,374 $ 1,420 $ 1,378 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income before Income Tax, Domestic and Foreign | Loss before income taxes (pre-tax income (loss)) was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Domestic loss $ (68) $ (186) $ (2,177) Foreign income 43 47 71 Loss Before Income Taxes $ (25) $ (139) $ (2,106) |
Schedule of Effective Income Tax Rate Reconciliation | A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows: Year Ended December 31, 2021 2020 2019 U.S. federal statutory income tax rate 21.0 % 21.0 % 21.0 % Nondeductible expenses (15.5) % (2.1) % (0.2) % Change in valuation allowance for deferred tax assets (20.4) % 0.6 % (1.2) % State taxes, net of federal benefit (8.6) % (2.1) % 1.8 % Tax-exempt income, credits and incentives 38.4 % 5.1 % 0.3 % Foreign rate differential adjusted for U.S. taxation of foreign profits (1) (11.1) % (0.9) % (0.2) % Divestitures 2.1 % — % 0.2 % Impairments (2) (3.1) % — % (14.1) % Unrecognized tax benefits 0.8 % (1.2) % (0.3) % Audit and other tax adjustments (22.9) % (5.3) % 0.1 % Excess tax benefits 7.5 % — % — % Other (3) 2.1 % — % 0.8 % Effective Income Tax Rate (9.7) % 15.1 % 8.2 % _______________ (1) The “Foreign rate differential adjusted for U.S. taxation of foreign profits” includes the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries. (2) Impairment represents adjustments for impairment of an equity investment and the non-deductible component of goodwill. (3) In 2021, the "Other" line includes two reconciling items above 5% of the federal statutory rate. The impact to the effective rate is driven by the low pretax book income in 2021, and these items are otherwise immaterial. As such, the Company believes it is appropriate for these items to remain in “Other”. |
Summary of Income Tax Contingencies | A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows: (in millions) 2021 2020 2019 Balance at January 1 $ 23 $ 24 $ 20 Additions related to current year — — 1 Additions related to prior years positions 3 3 7 Reductions related to prior years positions (3) — (3) Settlements with taxing authorities — (4) (1) Balance at December 31 $ 23 $ 23 $ 24 |
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: December 31, (in millions) 2021 2020 Deferred Tax Assets Net operating losses and capital loss carryforward $ 84 $ 96 Operating reserves, accruals and deferrals 49 57 Deferred compensation 5 7 Settlement reserves 18 17 Operating lease liabilities 63 68 Tax credits 42 42 Other 4 7 Subtotal 265 294 Valuation allowance (82) (83) Total $ 183 $ 211 Deferred Tax Liabilities Unearned income $ — $ 27 Intangibles and goodwill 79 100 Depreciation 85 75 Operating lease right-of-use assets 56 57 Other 18 26 Total $ 238 $ 285 Total Deferred Tax Assets (Liabilities), Net $ (55) $ (74) |
Schedule of Components of Income Tax Expense (Benefit) | Provision (benefit) for income taxes were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Federal Income Taxes Current $ 6 $ (22) $ (3) Deferred (23) (17) (170) Foreign Income Taxes Current 15 18 47 Deferred 2 (4) (8) State Income Taxes Current 3 5 5 Deferred — (1) (43) Total Provision (Benefit) $ 3 $ (21) $ (172) |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock-based Compensation Expense, Tax Effect | Stock-based compensation expense was as follows: Year Ended December 31, (in millions) 2021 2020 2019 Stock-based compensation expense, pre-tax $ 21 $ 20 $ 24 Income tax benefit recognized in earnings 3 3 — |
Schedule of Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | Summary of Stock-based Compensation Activity 2021 2020 2019 (shares in thousands) Shares Weighted Shares Weighted Shares Weighted Restricted Stock Units / Shares Outstanding at January 1 5,620 $ 3.49 1,741 $ 13.07 2,399 $ 16.90 Granted 2,677 6.65 7,778 2.25 2,503 12.57 Vested (3,117) 4.69 (2,816) 4.99 (2,135) 15.54 Canceled (1,388) 3.96 (1,083) 6.11 (1,026) 15.68 Outstanding at December 31 3,792 4.57 5,620 3.49 1,741 13.07 Performance Stock Units / Shares Outstanding at January 1 5,453 $ 3.83 3,597 $ 16.17 4,557 $ 16.76 Granted 1,545 6.54 7,010 1.37 1,229 13.35 Vested (1,945) 3.37 (3,163) 7.33 (1,069) 15.64 Canceled (1,444) 5.13 (1,991) 11.91 (1,120) 16.00 Outstanding at December 31 3,609 4.71 5,453 3.83 3,597 16.17 |
Schedule of Unrecognized Compensation Cost, Nonvested Awards | The total unrecognized compensation cost related to non-vested stock-based awards at December 31, 2021 was as follows (in millions): Awards Unrecognized Compensation Remaining Weighted-Average Expense Period (Years) Restricted Stock Units / Shares $ 11 1.7 Performance Stock Units / Shares 4 1.4 Total $ 15 |
Schedule of Aggregate intrinsic value restricted stock and performance shares compensation awards | The aggregate intrinsic value of outstanding RSUs and PSUs awards were as follows (in millions): Awards December 31, 2021 Restricted Stock Units / Shares $ 20 Performance Stock Units / Shares 19 |
Schedule of Vested and exercised stock based awards total intrinsic value and tax benefit realized | The total intrinsic value and actual tax benefit realized for vested and exercised stock-based awards were as follows: (in millions) December 31, 2021 December 31, 2020 December 31, 2019 Awards Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Total Intrinsic Value Cash Received Tax Benefit Restricted Stock Units / Shares $ 17 $ — $ 3 $ 13 $ — $ 3 $ 17 $ — $ 4 Performance Stock Units / Shares 11 — 2 14 — 2 11 — 2 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Schedule of Amounts Recognized in Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) is comprised of the following: Year Ended December 31, 2021 2020 2019 (in millions) Pre-tax Net of Tax Pre-tax Net of Tax Pre-tax Net of Tax Currency Translation Currency translation adjustments, net $ (31) $ (31) $ 8 $ 8 $ 3 $ 3 Reclassification of currency translation adjustments on divestitures — — — — 15 15 Translation adjustments gains (losses) $ (31) $ (31) $ 8 $ 8 $ 18 $ 18 Unrealized Gains (Losses) Changes in fair value of cash flow hedges gains (losses) $ (1) $ (1) $ — $ — $ 1 $ 1 Changes in cash flow hedges reclassed to earnings (1) — — — — (1) — Net Unrealized Gains (Losses) $ (1) $ (1) $ — $ — $ — $ 1 Defined Benefit Plans Gains (Losses) Reclassification of divested benefit plans and other $ — $ — $ — $ — $ 1 $ (1) Net actuarial/prior service gains (losses) 1 1 1 1 — — Changes in Defined Benefit Plans Gains (Losses) $ 1 $ 1 $ 1 $ 1 $ 1 $ (1) Other Comprehensive Income (Loss) $ (31) $ (31) $ 9 $ 9 $ 19 $ 18 ____________________________ (1) Reclassified to Cost of services - refer to Note 12 – Financial Instruments for additional information regarding our cash flow hedges. |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Below are the balances and changes in AOCL (1) : (in millions) Currency Translation Adjustments Gains (Losses) on Cash Flow Hedges Defined Benefit Pension Items Total Balance at December 31, 2018 $ (426) $ 2 $ (1) $ (425) Other comprehensive income (loss) before reclassifications 3 1 — 4 Amounts reclassified from accumulated other comprehensive loss 15 — (1) 14 Net current period other comprehensive income (loss) 18 1 (1) 18 Balance at December 31, 2019 $ (408) $ 3 $ (2) $ (407) Other comprehensive income (loss) before reclassifications 8 — 1 9 Amounts reclassified from accumulated other comprehensive loss — — — — Net current period other comprehensive income (loss) 8 — 1 9 Balance at December 31, 2020 $ (400) $ 3 $ (1) $ (398) Other comprehensive income (loss) before reclassifications (31) (1) 1 (31) Amounts reclassified from accumulated other comprehensive loss — — — — Net current period other comprehensive income (loss) (31) (1) 1 (31) Balance at December 31, 2021 $ (431) $ 2 $ — $ (429) __________ (1) All amounts are net of tax. Tax effects were immaterial. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted loss per share of common stock: Year Ended December 31, (in millions, except per share data. Shares in thousands) 2021 2020 2019 Net Earnings (Loss) per Share: Net Income (Loss) $ (28) $ (118) $ (1,934) Dividend - Preferred Stock (10) (10) (10) Adjusted Net Income (Loss) Available to Common Shareholders $ (38) $ (128) $ (1,944) Weighted Average Common Shares Outstanding - Basic 212,719 210,018 209,318 Common Shares Issuable with Respect to: Restricted Stock And Performance Units / Shares 0 0 0 Weighted Average Common Shares Outstanding - Diluted 212,719 210,018 209,318 Net Earnings (Loss) per Share: Basic $ (0.18) $ (0.61) $ (9.29) Diluted $ (0.18) $ (0.61) $ (9.29) The following securities were not included in the computation of diluted earnings per share as they were either contingently issuable shares or shares that if included would have been anti-dilutive (shares in thousands): Restricted stock and performance shares/units 8,210 12,286 8,943 Convertible preferred stock 5,393 5,393 5,393 Total Anti-Dilutive and Contingently Issuable Securities 13,603 17,679 14,336 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | Transactions with related parties were as follows: Year Ended December 31, (in millions) 2021 2020 2019 Revenue from related parties $ 16 $ 24 $ 33 Purchases from related parties $ 28 $ 36 $ 46 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 4,140 | $ 4,163 | $ 4,467 |
Revenue Recognized | 107 | 101 | |
Transferred at Point in Time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 111 | 110 | 144 |
Transferred over Time | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 4,029 | 4,053 | 4,323 |
Commercial Industries | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 2,076 | 2,163 | 2,385 |
Government services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 1,318 | 1,281 | 1,263 |
Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 746 | 719 | 781 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | 38 |
Other | Disposed of by Sale | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | 36 |
End-User Customer Experience | Commercial Industries | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 629 | 648 | 669 |
Transaction Processing | Commercial Industries | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 567 | 566 | 632 |
Commercial Healthcare [Domain] | Commercial Industries | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 435 | 431 | 482 |
Human Resource and Learning Services | Commercial Industries | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 445 | 518 | 602 |
Government Healthcare | Government services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 576 | 603 | 675 |
Payment Solutions | Government services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 742 | 678 | 588 |
Tolling | Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 327 | 318 | 327 |
Transit | Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 262 | 248 | 254 |
Photo and Parking | Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 67 | 73 | 83 |
Commercial Vehicle Operations | Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 8 | 8 | 10 |
Education | Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | 0 | 0 | 2 |
Curbside Management Solutions [Domain] | Transportation Services | |||
Disaggregation of Revenue [Line Items] | |||
Revenue | $ 82 | $ 72 | $ 107 |
Revenue - Contract Assets and L
Revenue - Contract Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract Assets (Unearned Income) | |||
Contract assets | $ 154 | $ 151 | |
Long-term Contract Asset | 8 | [1] | 13 |
Current Unearned Income | (82) | (133) | |
Unearned Income, Non-Current | (48) | [2] | (29) |
Net Contract Assets (Unearned Income) | 32 | 2 | |
Accounts receivable, net | $ 699 | $ 670 | |
[1] | Presented in Other long-term assets in the Consolidated Balance Sheets | ||
[2] | Presented in Other long-term liabilities in the Consolidated Balance Sheets |
Revenue - Performance Obligatio
Revenue - Performance Obligation (Details) $ in Billions | Dec. 31, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Amount | $ 1.2 |
Revenue, Remaining Performance Obligation, Percentage | 76.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 2 years |
Revenue - Costs to Obtain and F
Revenue - Costs to Obtain and Fulfill a Contract (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Capitalized Contract Cost [Line Items] | |||
Capitalized Contract Cost, Amortization | $ 39 | $ 41 | $ 42 |
Amortization of Customer Contract Costs CY Plus 1 | 25 | ||
Amortization of Customer Contract Costs CY Plus 2 | 15 | ||
Amortization of Customer Contract Costs CY Plus 3 | 8 | ||
Amortization of Customer Contract Costs CY Plus 4 | 5 | ||
Amortization of Customer Contract Costs CY Plus 5 | 3 | ||
Amortization of Customer Contract Costs CY Plus 6 and Beyond | 17 | ||
Sales Commissions | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized Contract Cost, Net, Noncurrent | 25 | 23 | |
Inducement Payments | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized Contract Cost, Net, Noncurrent | 19 | 21 | |
Contract Fulfillment Cost | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized Contract Cost, Net, Noncurrent | $ 29 | $ 32 |
Segment Reporting - Segment Rev
Segment Reporting - Segment Revenue and Segment Profit (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 4,140 | $ 4,163 | $ 4,467 |
Segment profit (loss) | 237 | 265 | 273 |
Commercial Industries | |||
Segment Reporting Information [Line Items] | |||
Revenue | 2,076 | 2,163 | 2,385 |
Segment profit (loss) | 137 | 150 | 270 |
Government services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,318 | 1,281 | 1,263 |
Segment profit (loss) | 412 | 372 | 279 |
Transportation Services | |||
Segment Reporting Information [Line Items] | |||
Revenue | 746 | 719 | 781 |
Segment profit (loss) | 75 | 82 | 69 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 38 |
Other | Education | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 2 |
Segment profit (loss) | 1 | 9 | (1) |
Other | Disposed of by Sale | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 36 |
Segment profit (loss) | 0 | 0 | 1 |
Corporate Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | 0 | 0 | 0 |
Segment profit (loss) | $ (388) | $ (348) | $ (345) |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation Of Operating Profit Loss (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting [Abstract] | |||||
Loss Before Income Taxes | $ (25) | $ (139) | $ (2,106) | ||
Reconciling items: | |||||
Amortization of acquired intangible assets | 135 | 239 | 246 | ||
Restructuring and related costs | 45 | 67 | 71 | ||
Interest expense | 55 | 60 | 78 | ||
Loss on extinguishment of debt | 15 | 0 | 0 | ||
Goodwill impairment | $ 1,100 | $ 284 | 0 | 0 | 1,952 |
Loss on divestitures and sales of fixed assets, net | (3) | (17) | (25) | ||
Other (income) expenses, net | 6 | 1 | (10) | ||
Segment profit (loss) | $ 237 | $ 265 | $ 273 |
Segment Reporting - Geographic
Segment Reporting - Geographic Revenue and Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | $ 4,140 | $ 4,163 | $ 4,467 |
Long-Lived Assets | 786 | 786 | |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 3,712 | 3,748 | 4,000 |
Long-Lived Assets | 651 | 628 | |
Europe | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 368 | 357 | 386 |
Long-Lived Assets | 39 | 44 | |
Other areas | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenue | 60 | 58 | $ 81 |
Long-Lived Assets | $ 96 | $ 114 |
Divestiture (Details)
Divestiture (Details) - USD ($) $ in Millions | Feb. 08, 2022 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accounts receivable, net | $ 670 | $ 699 | ||
Other current assets | 306 | 228 | ||
Product Software, net | 72 | 93 | ||
Goodwill | 1,528 | 1,339 | $ 1,502 | |
Other long-term assets | 413 | 453 | ||
Assets held for sale | 0 | 184 | ||
Accounts payable | 182 | 198 | ||
Accrued compensation and benefits costs | 237 | 243 | ||
Unearned income | 133 | 82 | ||
Liabilities held for sale | 0 | 29 | ||
Other current liabilities | 450 | 443 | ||
Midas | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Accounts receivable, net | 9 | |||
Other current assets | 1 | |||
Product Software, net | 10 | |||
Goodwill | 162 | |||
Other long-term assets | 2 | |||
Assets held for sale | 184 | |||
Accounts payable | 1 | |||
Accrued compensation and benefits costs | 3 | |||
Unearned income | 24 | |||
Liabilities held for sale | 29 | |||
Other current liabilities | $ 1 | |||
Midas | Subsequent Event | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 321 | |||
Customer Care Contracts | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Additional Pre-tax loss on disposal and adjustment to final sales price | 17 | |||
Divestiture revenue | $ 36 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Receivables [Abstract] | ||
Accounts receivable, net | $ 699 | $ 670 |
Allowance for Doubtful Accounts Receivable | 0 | 2 |
Accounts Receivable Sales | $ 422 | $ 529 |
Land, Buildings, Equipment an_3
Land, Buildings, Equipment and Software, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Gross, Total | $ 1,193 | $ 1,182 | |
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (912) | (877) | |
Land, buildings and equipment, net | 281 | 305 | |
Depreciation | 116 | 125 | $ 123 |
Capitalized Computer Software, Gross | (28) | 0 | $ 0 |
Hosting Arrangement, Service Contract, Implementation Cost, Impairment | 4 | ||
Land [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Land | 1 | 1 | |
Building and building equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Buildings and Improvements, Gross | 7 | 7 | |
Leasehold Improvements [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Leasehold Improvements, Gross | 250 | 268 | |
Office furniture and equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Furniture and Fixtures, Gross | 883 | 869 | |
Other [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Other Land, Building, Equipment and Software | 3 | 2 | |
Construction in progress [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Construction in Progress, Gross | $ 49 | $ 35 | |
Minimum [Member] | Building and building equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 25 years | ||
Minimum [Member] | Office furniture and equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 3 years | ||
Minimum [Member] | Other [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 4 years | ||
Maximum [Member] | Building and building equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 50 years | ||
Maximum [Member] | Office furniture and equipment [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 15 years | ||
Maximum [Member] | Other [Member] | |||
Property, Plant, Equipment and Software [Line Items] | |||
Property, Plant and Equipment, Useful Life | 20 years |
Land, Buildings, Equipment an_4
Land, Buildings, Equipment and Software, Net - Internal Use Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant, Equipment and Software [Line Items] | |||
Capitalized Computer Software, Additions | $ 65 | $ 63 | $ 70 |
capitalized product software | 45 | 36 | 9 |
Capitalized Computer Software, Net | 181 | 163 | |
Capitalized software development costs for software sold to customers, gross [Line Items] | 171 | 144 | |
Product software | 93 | 72 | |
internal use and product software, amortization | $ 62 | 54 | $ 48 |
Internal Use and Product Software, Useful Lives Maximum | 7 years | ||
Internal Use and Product Software, Useful Lives Minimum | 1 year | ||
Capitalized Computer Software, Gross | $ 563 | 524 | |
Capitalized Computer Software, Accumulated Amortization | (382) | (361) | |
capitalized software development costs for software sold to customers, accumulated amortization | $ (78) | $ (72) | |
capitalized cloud computing costs, useful lives minimum | 3 years |
Land, Buildings, Equipment an_5
Land, Buildings, Equipment and Software, Net (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |||
capitalized cloud computing costs, additions | $ 6 | $ 3 | $ 39 |
Cloud computing implementation costs, at cost | 53 | 47 | |
Impairment charges | 28 | 0 | 0 |
capitalized cloud computing costs, accumulated amortization | 11 | 6 | |
cloud computing costs, net | 14 | 41 | |
amortization expense for cloud computing | $ 2 | $ 4 | $ 2 |
capitalized cloud computing costs, useful lives, maximum | 5 years | ||
capitalized cloud computing costs, useful lives minimum | 3 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Amortization of right of use assets | $ 10 | $ 8 | $ 10 |
Interest on lease liabilities | 1 | 1 | 1 |
Total Finance Lease Costs | 11 | 9 | 11 |
Base rent | 85 | 95 | 112 |
Short-term lease costs | 4 | 5 | 12 |
Variable lease cost | 23 | 26 | 30 |
Sublease income | (1) | (3) | (7) |
Total Operating Lease Costs | $ 111 | $ 123 | $ 147 |
Leases - Cash Flow (Details)
Leases - Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating cash flows from operating leases | $ 99 | $ 117 | $ 137 |
Operating cash flows from finance leases | 1 | 1 | 1 |
Total Cash Flow from Operating Activities | 100 | 118 | 138 |
Financing cash flow from finance leases | 9 | 11 | 11 |
Operating leases | 68 | 73 | 32 |
Finance leases | $ 5 | $ 14 | $ 2 |
Leases - Balance Sheet Classifi
Leases - Balance Sheet Classification (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 231 | $ 246 |
Other current liabilities | $ 71 | $ 81 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities |
Operating lease liabilities | $ 184 | $ 207 |
Present value of lease liabilities | 255 | 288 |
Land, buildings and equipment, net | $ 17 | $ 19 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Land, buildings and equipment, net | Land, buildings and equipment, net |
Current portion of long-term debt | $ 8 | $ 8 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of long-term debt | Current portion of long-term debt |
Long-term debt | $ 8 | $ 12 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Long-term debt | Long-term debt |
Present value of lease liabilities | $ 16 | $ 20 |
Leases - Lease Info (Details)
Leases - Lease Info (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating Leases, Weighted average discount rate (in percent) | 5.80% | 6.10% |
Finance Leases, Weighted average discount rate (in percent) | 5.00% | 5.30% |
Operating Leases, Weighted average remaining lease term | 5 years | 5 years |
Finance Leases, Weighted average remaining lease term | 3 years | 3 years |
LesseeOperatingLeaseNotYetCommencedLiability | $ 6 | |
LesseeOperatingLeaseNotYetCommencedTermOfContract | 5 years |
Leases - Maturity (Details)
Leases - Maturity (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Lease Payments | ||
2022 | $ 84 | |
2023 | 60 | |
2024 | 47 | |
2025 | 37 | |
2026 | 28 | |
Thereafter | 36 | |
Total undiscounted lease payments | 292 | |
Less imputed interest | 37 | |
Present value of lease liabilities | 255 | $ 288 |
Finance Lease, Liability, Payment, Due, Rolling Maturity [Abstract] | ||
2022 | 8 | |
2023 | 5 | |
2024 | 2 | |
2025 | 2 | |
2026 | 0 | |
Thereafter | 0 | |
Total undiscounted lease payments | 17 | |
Less imputed interest | 1 | |
Present value of lease liabilities | $ 16 | $ 20 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Goodwill (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2021 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill [Roll Forward] | ||||||
Beginning Balance, Goodwill | $ 1,528 | $ 1,502 | ||||
Foreign currency translation | (27) | 26 | ||||
Goodwill, Impairment Loss | $ (1,100) | $ (284) | 0 | 0 | $ (1,952) | |
Ending Balance, Goodwill | $ 1,339 | 1,339 | 1,528 | 1,502 | ||
Goodwill, Gross | 4,226 | 4,226 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (2,887) | (2,887) | ||||
Asset Impairment Charges | $ 284 | |||||
Midas | ||||||
Goodwill [Roll Forward] | ||||||
Ending Balance, Goodwill | 162 | 162 | ||||
Commercial Industries segment | ||||||
Goodwill [Roll Forward] | ||||||
Beginning Balance, Goodwill | 837 | 821 | ||||
Foreign currency translation | (14) | 16 | ||||
Ending Balance, Goodwill | 661 | 661 | 837 | 821 | ||
Goodwill, Gross | 2,214 | 2,214 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (1,553) | (1,553) | ||||
Commercial Industries segment | Midas | ||||||
Goodwill [Roll Forward] | ||||||
Ending Balance, Goodwill | 162 | 162 | ||||
Government services | ||||||
Goodwill [Roll Forward] | ||||||
Beginning Balance, Goodwill | 623 | 621 | ||||
Foreign currency translation | (6) | 2 | ||||
Goodwill, Impairment Loss | (512) | |||||
Ending Balance, Goodwill | 617 | 617 | 623 | 621 | ||
Goodwill, Gross | 1,371 | 1,371 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (754) | (754) | ||||
Government services | Midas | ||||||
Goodwill [Roll Forward] | ||||||
Ending Balance, Goodwill | 0 | 0 | ||||
Transportation Services | ||||||
Goodwill [Roll Forward] | ||||||
Beginning Balance, Goodwill | 68 | 60 | ||||
Foreign currency translation | (7) | 8 | ||||
Ending Balance, Goodwill | 61 | 61 | $ 68 | $ 60 | ||
Goodwill, Gross | 641 | 641 | ||||
Goodwill, Impaired, Accumulated Impairment Loss | (580) | (580) | ||||
Transportation Services | Midas | ||||||
Goodwill [Roll Forward] | ||||||
Ending Balance, Goodwill | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Intangible Assets by Major Class (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,658 | $ 2,890 | |
Accumulated Amortization | 1,606 | 2,703 | |
Net Amount | 52 | 187 | |
Amortization of Intangible Assets | 135 | 239 | $ 246 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2019 | 12 | ||
2020 | 7 | ||
2021 | 6 | ||
2022 | 4 | ||
2023 | 4 | ||
Capitalized Computer Software, Net | $ 181 | $ 163 | |
Customer relationships [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Useful Life | 12 years | ||
Commercial Industries segment | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Amount | $ 50 | ||
Government services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Amount | 2 | ||
Transportation Services | |||
Finite-Lived Intangible Assets [Line Items] | |||
Net Amount | $ 0 |
Restructuring and Asset Impai_3
Restructuring and Asset Impairment Charges (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Restructuring Cost and Reserve [Line Items] | ||||
Net current period restructuring charges, continuing operations | $ 41 | $ 59 | $ 67 | |
Restructuring reserve [Roll Forward] | ||||
Balance at beginning of period | 6 | 21 | ||
Restructuring provision | 44 | 55 | ||
Changes in estimates | (3) | 4 | ||
Total Net Current Period Charges | [1] | 41 | 59 | |
restructuring cash payments and other charges against the reserve | (41) | (74) | ||
Balance at end of period | 6 | 6 | 21 | |
Strategic transformation costs | 4 | 8 | 4 | |
Commercial Industries | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net current period restructuring charges, continuing operations | 4 | 11 | 24 | |
Government services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net current period restructuring charges, continuing operations | 1 | 1 | 1 | |
Transportation Services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net current period restructuring charges, continuing operations | 1 | 2 | 2 | |
Corporate Segment | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Net current period restructuring charges, continuing operations | 35 | 45 | 40 | |
Employee Severance [Member] | ||||
Restructuring reserve [Roll Forward] | ||||
Balance at beginning of period | 3 | 15 | ||
Restructuring provision | 8 | 13 | ||
Changes in estimates | 0 | 1 | ||
Total Net Current Period Charges | [1] | 8 | 14 | |
restructuring cash payments and other charges against the reserve | (6) | (26) | ||
Balance at end of period | 5 | 3 | 15 | |
Lease Cancellation and Other Costs [Member] | ||||
Restructuring reserve [Roll Forward] | ||||
Balance at beginning of period | 3 | 6 | ||
Restructuring provision | 27 | 27 | ||
Changes in estimates | (3) | 3 | ||
Total Net Current Period Charges | [1] | 24 | 30 | |
restructuring cash payments and other charges against the reserve | (26) | (33) | ||
Balance at end of period | 1 | 3 | 6 | |
Lease Cancellation and Other Costs [Member] | Data Center Consolidation [Member] | ||||
Restructuring reserve [Roll Forward] | ||||
Restructuring provision | 23 | 23 | 21 | |
Facility Closing [Member] | ||||
Restructuring reserve [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | ||
Restructuring provision | 9 | 15 | ||
Changes in estimates | 0 | 0 | ||
Total Net Current Period Charges | [1] | 9 | 15 | |
restructuring cash payments and other charges against the reserve | (9) | (15) | ||
Balance at end of period | $ 0 | $ 0 | $ 0 | |
[1] | Represents amounts recognized within the Consolidated Statements of Income (Loss) for the years shown. |
Supplementary Financial Infor_3
Supplementary Financial Information, Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Financial Information [Abstract] | ||||
Prepaid Expense and Other Assets, Current | $ 84 | $ 73 | ||
Income Taxes Receivable, Current | 46 | 48 | ||
Value Added Tax Receivable, Current | 12 | 21 | ||
Restricted Cash and Investments, Current | 5 | 8 | $ 9 | |
Cloud computing implementation costs, net | 6 | 8 | ||
Other Assets, Miscellaneous, Current | [1] | 75 | 148 | |
Other current assets | $ 228 | $ 306 | ||
[1] | CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 (and which the Company paid in December 2021) and the remainder due on December 31, 2022. As of December 31, 2021, the remaining portion of this liability is classified as current and is included in Accrued compensation and benefits costs. |
Supplementary Financial Infor_4
Supplementary Financial Information, Other Current Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Condensed Financial Information Disclosure [Abstract] | ||
Other Accrued Liabilities, Current | $ 246 | $ 229 |
Estimated Litigation Liability, Current | 64 | 73 |
Other current liabilities | 71 | 81 |
Restructuring Reserve, Current | 6 | 1 |
Taxes Payable, Current | 10 | 16 |
Accrual for Taxes Other than Income Taxes, Current | 14 | 16 |
Other Sundry Liabilities, Current | 22 | 31 |
Other current liabilities | $ 443 | $ 450 |
Supplementary Financial Infor_5
Supplementary Financial Information, Other Long-Term Assets (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |||
Capitalized Computer Software, Net | $ 181 | $ 163 | |
Deferred Costs, Noncurrent | [1] | 73 | 76 |
Product Software, net | 93 | 72 | |
Cloud computing implementation costs, net | 8 | 33 | |
Other Assets, Miscellaneous, Noncurrent | [2] | 98 | 69 |
Other long-term assets | 453 | 413 | |
Interest Payable, Current | $ 10 | $ 3 | |
[1] | The balances at December 31, 2021 and 2020 are expected to be amortized over a weighted average remaining life of approximately 12 and 11 years, respectively | ||
[2] | CARES Act allows for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 (and which the Company paid in December 2021) and the remainder due on December 31, 2022. As of December 31, 2021, the remaining portion of this liability is classified as current and is included in Accrued compensation and benefits costs. |
Supplementary Financial Infor_6
Supplementary Financial Information, Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |||
Accrued Income Taxes, Noncurrent | $ 15 | $ 15 | |
Long-term Unearned Income | 48 | [1] | 29 |
Restructuring Reserve, Noncurrent | 0 | 5 | |
Other Sundry Liabilities, Noncurrent | 32 | 35 | |
Other long-term liabilities | 95 | 108 | |
Cloud computing implementation costs, net | 6 | 8 | |
Cloud computing implementation costs, net | 8 | 33 | |
CARES Act deferred payroll tax liability | $ 0 | $ 24 | |
[1] | Presented in Other long-term liabilities in the Consolidated Balance Sheets |
Supplementary Financial Infor_7
Supplementary Financial Information, Deferred Contract Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |||
Weighted Average Life, Services Revenue, Deferred Set-up Costs | 12 years | 11 years | |
Amortization of Customer Contract Costs CY Plus 1 | $ 25 | ||
Amortization of Customer Contract Costs CY Plus 2 | 15 | ||
Amortization of Customer Contract Costs CY Plus 3 | 8 | ||
Amortization of Customer Contract Costs CY Plus 4 | 5 | ||
Amortization of Customer Contract Costs CY Plus 5 | 3 | ||
Amortization of Customer Contract Costs CY Plus 6 and Beyond | 17 | ||
Capitalized Contract Cost, Amortization | $ 39 | $ 41 | $ 42 |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Oct. 15, 2021 | Dec. 07, 2016 | |
Debt Instrument [Line Items] | |||||
Present value of lease liabilities | $ 16 | $ 20 | |||
Other Loans Payable | 24 | 4 | |||
Total Long-term Debt | 1,383 | 1,420 | |||
Long-term debt from continuing operations, maturities, repayments of principal debt in next twelve months | 30 | ||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal Debt in Year Two | 27 | ||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Three | 24 | ||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Four | 23 | ||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal in Year Five | 327 | ||||
Long-term Debt from Continuing Operations, Maturities, Repayments of Principal after Year Five | 1,009 | ||||
Long-term Debt from Continuing Operations, Gross | 1,440 | ||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 27 | 18 | |||
Current portion of long-term debt | 30 | 90 | |||
Cloud computing implementation costs, net | 8 | 33 | |||
Proceeds from revolving credit facility | 100 | 150 | $ 0 | ||
Gain (Loss) on Extinguishment of Debt | (15) | 0 | $ 0 | ||
Debt Issuance Costs, Gross | 30 | ||||
Senior Notes due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | $ 2 | ||||
Debt Instrument, Interest Rate, Stated Percentage | 10.50% | ||||
2016 credit facility | |||||
Debt Instrument [Line Items] | |||||
Gain (Loss) on Extinguishment of Debt | $ 13 | ||||
2021 Credit Facility revolver | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Commitment Fee Percentage | 0.40% | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||||
2016 Credit Facility revolver | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 750 | ||||
2021 Credit Facility revolver | |||||
Debt Instrument [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | 550 | ||||
Term Loan A due 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal debt | 0 | 654 | $ 700 | ||
Term Loan B due 2023 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal debt | 0 | 816 | 850 | ||
Senior Notes due 2024 [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal debt | $ 0 | 34 | |||
Capital Lease Obligations [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 5.01% | ||||
Present value of lease liabilities | $ 16 | 20 | |||
Principal Debt Balance | |||||
Debt Instrument [Line Items] | |||||
Principal debt | $ 1,440 | 1,528 | |||
Term Loan A due 2026 | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 3.10% | ||||
Principal debt | $ 265 | 0 | |||
Debt Instrument, Description of Variable Rate Basis | 2.25 | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 6.04% | ||||
Principal debt | $ 520 | 0 | |||
2021 Credit Facility revolver | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 2.58% | ||||
Principal debt | $ 100 | $ 0 | |||
Term Loan B due 2026 | |||||
Debt Instrument [Line Items] | |||||
Debt, Weighted Average Interest Rate | 5.00% | ||||
Principal debt | $ 515 | ||||
Debt Instrument, Description of Variable Rate Basis | 4.25 | ||||
Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal debt | $ 300 | $ 300 |
Debt - Credit Facility, Senior
Debt - Credit Facility, Senior Notes, and Loan Repricing (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Oct. 15, 2021 | Dec. 31, 2020 | Dec. 07, 2016 |
Line of Credit Facility [Line Items] | ||||
Letters of Credit Outstanding, Amount | $ 20 | |||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 27 | $ 18 | ||
Senior Notes due 2024 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Debt Instrument, Unamortized Discount (Premium) and Debt Issuance Costs, Net | 2 | |||
Term Loan B due 2023 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | 0 | 816 | $ 850 | |
Letter of Credit [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | $ 300 | 300 | ||
Senior Notes due 2024 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | 0 | 34 | ||
Term Loan A due 2022 [Member] | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | 0 | 654 | $ 700 | |
2021 Credit Facility revolver | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | 100 | 0 | ||
Line of Credit Facility, Current Borrowing Capacity | 430 | |||
Term Loan B due 2026 | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | 515 | |||
Term Loan A due 2026 | ||||
Line of Credit Facility [Line Items] | ||||
Letter of credit sub-facility | $ 265 | $ 0 |
Debt - Interest Income_Expense
Debt - Interest Income/Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Interest paid on short-term and long-term debt | $ 40 | $ 51 | $ 69 |
Interest Expense | 55 | 60 | 78 |
Interest Income | $ 1 | $ 2 | $ 6 |
Financial Instruments - Foreign
Financial Instruments - Foreign Exchange Risk Management (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | |
Philippine Peso U.S. Dollar [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | $ 55 | $ 53 | |
Indian Rupee U S Dollar Member | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | 47 | 52 | |
Mexican Peso U. S. Dollar [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | 0 | 2 | |
All Other Currency [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | 30 | 56 | |
Euro US Dollar | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | $ 18 | 17 | |
Designated as Hedging Instrument [Member] | |||
Foreign Exchange Contracts [Line Items] | |||
Average Maturity of Foreign Exchange Hedging Contracts - within Three Months | 73.00% | ||
Average Maturity of Foreign Exchange Hedging Contracts - within Three and Six Months | 10.00% | ||
Average Maturity of Foreign Exchange Hedging Contracts - within Six and Twelve Months | 13.00% | ||
Average Maturity of Foreign Exchange Hedging Contracts - greater than twelve months | 4.00% | ||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Derivative, Notional Amount | $ 150 | 180 | |
Foreign exchange contract [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | [1] | (1) | 2 |
Foreign exchange contract [Member] | Philippine Peso U.S. Dollar [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | [1] | (2) | 1 |
Foreign exchange contract [Member] | Indian Rupee U S Dollar Member | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | [1] | 1 | 1 |
Foreign exchange contract [Member] | Mexican Peso U. S. Dollar [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | [1] | 0 | 0 |
Foreign exchange contract [Member] | All Other Currency [Member] | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | [1] | 0 | 0 |
Foreign exchange contract [Member] | Euro US Dollar | |||
Summary of Foreign Exchange Hedging Positions [Abstract] | |||
Fair Value Asset (Liability) | $ 0 | $ 0 | |
[1] | Represents the net receivable (payable) amount included in the Consolidated Balance Sheet. |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities - Recurring (Details) - USD ($) $ in Millions | 1 Months Ended | |||
Jan. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | Jan. 01, 2019 | |
Health Solutions Plus | ||||
Liabilities: | ||||
Consideration transferred for acquisition | $ 90 | |||
Maximum contingent consideration payment | $ 8 | |||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||
Assets: | ||||
Total | $ 1 | $ 2 | ||
Liabilities: | ||||
Foreign exchange contracts - forwards | 2 | 0 | ||
Total | 2 | 0 | ||
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Foreign exchange contracts - forwards [Member] | ||||
Assets: | ||||
Foreign exchange contracts - forwards | $ 1 | $ 2 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities - Nonrecurring (Details) - Fair Value, Measurements, Nonrecurring [Member] - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Carrying Amount [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,383 | $ 1,420 |
Fair Value [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,374 | $ 1,378 |
Employee Benefit Plans - Define
Employee Benefit Plans - Defined Benefit Plans (Details) - Non-US - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | ||
Defined Benefit Plan, Benefit Obligation | $ 16 | $ 13 |
Fair value of plan assets | $ 1 | $ 2 |
Employee Benefit Plans - Defi_2
Employee Benefit Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Post employment benefit plan contributions by employer | $ 21 | $ 6 | $ 9 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Domestic loss | $ (68) | $ (186) | $ (2,177) |
Foreign income | 43 | 47 | 71 |
Loss Before Income Taxes | $ (25) | $ (139) | $ (2,106) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit), Current Deferred, by Jurisdiction (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Current Federal Tax (Benefit) Expense | $ 6 | $ (22) | $ (3) |
Deferred Federal Income Tax Expense | (23) | (17) | (170) |
Current Foreign Tax Expense | 15 | 18 | 47 |
Deferred Foreign Income Tax Expense (Benefit) | 2 | (4) | (8) |
Current State Tax Expense | 3 | 5 | 5 |
Deferred State Income Tax Expense | 0 | (1) | (43) |
Total Provision (Benefit) | $ 3 | $ (21) | $ (172) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Statutory Tax Rate to Effective Tax Rate (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Income Tax Disclosure [Abstract] | ||||||
U.S. federal statutory income tax rate | 21.00% | 21.00% | 21.00% | |||
Nondeductible expenses | (15.50%) | (2.10%) | (0.20%) | |||
Change in valuation allowance for deferred tax assets | (20.40%) | 0.60% | (1.20%) | |||
State taxes, net of federal benefit | (8.60%) | (2.10%) | 1.80% | |||
Tax-exempt income, credits and incentives | 38.40% | 5.10% | 0.30% | |||
Foreign rate differential adjusted for U.S. taxation of foreign profits | (11.10%) | (0.90%) | (0.20%) | |||
Divestitures | 2.10% | 0.00% | [1] | 0.20% | [1] | |
Impairments | (3.10%) | [2] | 0.00% | (14.10%) | ||
Unrecognized tax benefits | 0.80% | (1.20%) | (0.30%) | |||
Audit and other tax adjustments | (22.90%) | (5.30%) | 0.10% | |||
Excess tax benefits | 7.50% | 0.00% | 0.00% | |||
Other | 2.10% | 0.00% | 0.80% | |||
Effective Income Tax Rate | (9.70%) | 15.10% | 8.20% | |||
Income taxes paid | $ 25 | $ (1) | $ 46 | |||
[1] | (2) | |||||
[2] | mpairment represents adjustments for impairment of an equity investment and the non-deductible component of goodwill.(3) In 2021, the "Other" line includes two reconciling items above 5% of the federal statutory rate. The impact to the effective rate is driven by the low pretax book income in 2021, and these items are otherwise immaterial. As such, the Company believes it is appropriate for these items to remain in “Other”. |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits Rollforward (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | |
Valuation Allowance [Line Items] | ||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 0 | $ 4 | $ 1 | |
Unrecognized Tax Benefits | 23 | 23 | 24 | $ 20 |
Additions related to current year | 0 | 0 | 1 | |
Additions related to prior years positions | 3 | 3 | 7 | |
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions | 3 | 0 | 3 | |
unrecognized tax benefits, other uncertain tax positions offsetting benefits from other jurisdictions | 12 | 15 | 16 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 12 | 13 | 14 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 22 | |||
Decrease in Unrecognized Tax Benefits is Reasonably Possible | 11 | |||
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||
Balance, Beginning | 23 | 24 | ||
Additions related to current year | 0 | 0 | 1 | |
Additions related to prior years positions | 3 | 3 | 7 | |
Reductions related to prior years positions | (3) | 0 | (3) | |
Settlements with taxing authorities | 0 | (4) | (1) | |
Balance, Ending | $ 23 | $ 23 | $ 24 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Asset And Liability (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | ||
Undistributed Earnings of Foreign Subsidiaries | $ 307 | |
Net operating losses and capital loss carryforward | 84 | $ 96 |
Operating reserves, accruals and deferrals | 49 | 57 |
Deferred compensation | 5 | 7 |
Deferred Tax Assets, Tax Deferred Expense, Reserves and Accruals, Legal Settlements | 18 | 17 |
Operating lease liabilities | 63 | 68 |
deferred tax assets, deferred tax expense, credits | 42 | 42 |
Other | 4 | 7 |
Subtotal | 265 | 294 |
Valuation allowance | (82) | (83) |
Total | 183 | 211 |
Unearned income | 0 | 27 |
Intangibles and goodwill | 79 | 100 |
Depreciation | 85 | 75 |
Deferred Tax Liabilities, Operating lease ROU assets | 56 | 57 |
Other | 18 | 26 |
Total | 238 | 285 |
Total Deferred Tax Assets (Liabilities), Net | (55) | (74) |
Valuation Allowance, Deferred Tax Asset, Change in Amount | 1 | $ (11) |
Deferred Tax Assets, Tax Credit Carryforwards | 42 | |
Operating loss carryforwards | 603 | |
Deferred Tax Assets, Capital Loss Carryforwards | 7 | |
Deferred Tax, Capital Loss Carryforwards to Offset Capital Gain | 12 | |
Carryforward Indefinitely [Member] | ||
Operating Loss Carryforwards [Line Items] | ||
Net Operating Loss Carryforwards, Expire | $ 143 |
Contingencies and Litigation -
Contingencies and Litigation - Litigation Against the Company (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2021USD ($) | Dec. 31, 2019USD ($)claim | |
Gain Contingencies [Line Items] | ||
Contingencies and Litigation | Contingencies and Litigation As more fully discussed below, the Company is involved in a variety of claims, lawsuits, investigations and proceedings concerning a variety of matters, including: governmental entity contracting, servicing and procurement law; intellectual property law; employment law; commercial and contracts law; the Employee Retirement Income Security Act (ERISA); and other laws and regulations. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. The Company assesses its potential liability by analyzing its litigation and regulatory matters using available information. The Company develops its view on estimated losses in consultation with outside counsel handling its defense in these matters, which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments in any of these matters cause a change in the Company's determination as to an unfavorable outcome and result in the need to recognize a material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts in excess of any accrual for such matter or matters, this could have a material adverse effect on the Company's results of operations, cash flows and financial position in the period or periods in which such change in determination, judgment or settlement occurs. The Company believes it has recorded adequate provisions for any such matters as of December 31, 2021. Litigation is inherently unpredictable, and it is not possible to predict the ultimate outcome of these matters and such outcome in any such matters could be more than any amounts accrued and could be material to the Company's results of operations, cash flows or financial position in any reporting period. Additionally, guarantees, indemnifications and claims arise during the ordinary course of business from relationships with suppliers, customers and non-consolidated affiliates when the Company undertakes an obligation to guarantee the performance of others if specified triggering events occur. Nonperformance under a contract could trigger an obligation of the Company. These potential claims include actions based upon alleged exposures to products, real estate, intellectual property such as patents, environmental matters and other indemnifications. The ultimate effect on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to the outcome of these claims. However, while the ultimate liabilities resulting from such claims may be significant to results of operations in the period recognized, management does not anticipate they will have a material adverse effect on the Company's Consolidated Financial position or liquidity. As of December 31, 2021, the Company had accrued its estimate of liability incurred under its indemnification arrangements and guarantees. Litigation Against the Company Employees’ Retirement System of the Puerto Rico Electric Power Authority et al v. Conduent Inc. et al.: On March 8, 2019, a putative class action lawsuit alleging violations of certain federal securities laws in connection with our statements and alleged omissions regarding our financial guidance and business and operations was filed against us, our former Chief Executive Officer, and our former Chief Financial Officer in the United States District Court for the District of New Jersey. The complaint seeks certification of a class of all persons who purchased or otherwise acquired our securities from February 21, 2018 through November 6, 2018, and also seeks unspecified monetary damages, costs, and attorneys’ fees. We moved to dismiss the class action complaint in its entirety. In June 2020, the court denied the motion to dismiss and allowed the claims to proceed. We intend to defend the litigation vigorously. The Company maintains insurance that may cover any costs arising out of this litigation up to the insurance limits, and subject to meeting certain deductibles and to other terms and conditions thereof. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Skyview Capital LLC and Continuum Global Solutions, LLC v. Conduent Business Services, LLC: On February 3, 2020, plaintiffs filed a lawsuit in the Superior Court of New York County, New York. The lawsuit relates to the sale of a portion of Conduent Business Service, LLC’s (CBS) select standalone customer care call center business to plaintiffs, which sale closed in February 2019. Under the terms of the sale agreement, CBS received approximately $23 million of notes from plaintiffs (Notes). The lawsuit alleges various causes of action in connection with the acquisition, including: indemnification for breach of representation and warranty; indemnification for breach of contract and fraud. Plaintiffs allege that their obligation to mitigate damages and their contractual right of set-off permits them to withhold and deduct from any amounts that are owed to CBS under the Notes, and plaintiffs seek a judgement that they have no obligation to pay the Notes. On August 20, 2020, Conduent filed a counterclaim against Skyview LLC (Skyview) seeking the outstanding balance on the Notes, the amounts owed for the Jamaica deferred closing, and other transition services agreement and late rent payment obligations. Conduent also moved to dismiss Skyview’s claims in 2020. In May 2021, the court denied the motion and allowed the claims to proceed. Conduent denies all of the plaintiffs' allegations, believes that it has strong defenses to all of plaintiffs’ claims and it intends to defend the litigation vigorously. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Dennis Nasrawi v. Buck Consultants et al.: On October 8, 2009, plaintiffs filed a lawsuit in the Superior Court of California, Stanislaus County, and on November 24, 2009, the case was removed to the U.S. Court for the Eastern District of California, Fresno Division. Plaintiffs allege actuarial negligence against Buck Consultants, LLC (Buck), which was a wholly-owned subsidiary of Conduent, for the use of faulty actuarial assumptions in connection with the 2007 actuarial valuation for the Stanislaus County Employees Retirement Association (StanCERA). Plaintiffs allege that the employer contribution rate adopted by StanCERA based on Buck’s valuation was insufficient to fund the benefits promised by the County. On July 13, 2012, the Court entered its ruling that the plaintiffs lacked standing to sue in a representative capacity on behalf of all plan participants. The Court also ruled that plaintiffs had adequately pleaded their claim that Buck allegedly aided and abetted StanCERA in breaching its fiduciary duty. Plaintiffs then filed their Fifth Amended Complaint and added StanCERA to the litigation. Buck and StanCERA filed demurrers to the amended complaint. On September 13, 2012, the Court sustained both demurrers with prejudice, completely dismissing the matter and barring plaintiffs from refiling their claims. Plaintiffs appealed, and ultimately the California Court of Appeals (Sixth District) reversed the trial court’s ruling and remanded the case back to the trial court as to Buck only, and only with respect to plaintiff’s claim of aiding and abetting StanCERA in breaching its fiduciary duty. This case has been stayed pending the outcome of parallel litigation the plaintiffs are pursuing against StanCERA. The parallel litigation was tried before the bench in June 2018, and on January 24, 2019, the court found in favor of StanCERA, holding that it had not breached its fiduciary duty to plaintiffs. On April 26, 2019, plaintiffs in the parallel litigation filed an appeal. On December 8, 2021, the appellate court affirmed the trial court’s decision, and the judgment became final on January 7, 2022. Plaintiffs in the parallel litigation filed a petition for review to the California Supreme Court. Nasrawi remains stayed until the parallel litigation is finally concluded. Absent the court finding that StanCERA breached its fiduciary duty, plaintiffs’ claim against Buck for aiding and abetting said breach would not appear viable. Buck will continue to aggressively defend these lawsuits. In August 2018, Conduent sold Buck; however, the Company retained this liability after the sale. The Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Conduent Business Services, LLC v. Cognizant Business Services Corporation: On April 12, 2017, CBS filed a lawsuit against Cognizant Business Services Corporation (Cognizant) in the Supreme Court of New York County, New York. The lawsuit relates to the Amended and Restated Master Outsourcing Services Agreement effective as of October 24, 2012, and the service delivery contracts and work orders thereunder, between CBS and Cognizant, as amended and supplemented (Contract). The Contract contains certain minimum purchase obligations by CBS through the date of expiration. The lawsuit alleges that Cognizant committed multiple breaches of the Contract, including Cognizant’s failure to properly perform its obligations as subcontractor to CBS under CBS's contract with the New York Department of Health to provide Medicaid Management Information Systems. In the lawsuit, CBS seeks damages in excess of $150 million. During the first quarter of 2018, CBS provided notice to Cognizant that it was terminating the Contract for cause and recorded in the same period certain charges associated with the termination. CBS also alleges that it terminated the Contract for cause, because, among other things, Cognizant violated the Foreign Corrupt Practices Act. In its answer, Cognizant asserted two counterclaims for breach of contract seeking recovery of damages in excess of $47 million, which includes amounts alleged not paid to Cognizant under the Contract and an alleged $25 million termination fee. Cognizant's second amended counterclaim increased Cognizant's damages to $89 million. CBS will continue to vigorously defend itself against the counterclaims, but the Company is not able to determine or predict the ultimate outcome of this proceeding or reasonably provide an estimate or range of estimate of the possible outcome or loss, if any, in excess of currently recorded reserves. Other Matters: Since 2014, Xerox Education Services, Inc. (XES) has cooperated with several federal and state agencies regarding a variety of matters, including XES' self-disclosure to the U.S. Department of Education (Department) and the Consumer Financial Protection Bureau (CFPB) that some third-party student loans under outsourcing arrangements for various financial institutions required adjustments. With the exception of one remaining state attorney general inquiry, the Company has resolved all investigations by the CFPB, several state agencies, the Department and the U.S. Department of Justice. The Company cannot provide assurance that the CFPB, another regulator, a financial institution on behalf of which XES serviced third-party student loans, or another party will not ultimately commence a legal action against XES in which fines, penalties or other liabilities are sought from XES. Nor is the Company able to predict the likely outcome of these matters, should any such matter be commenced, or reasonably provide an estimate or range of estimates of any loss in excess of currently recorded reserves. The Company could, in future periods, incur judgments or enter into settlements to resolve these potential matters for amounts in excess of current reserves and there could be a material adverse effect on the Company's results of operations, cash flows and financial position in the period in which such change in judgment or settlement occurs. Guarantees and Indemnifications Indemnifications Provided as Part of Contracts and Agreements Acquisitions/Divestitures: The Company has indemnified, subject to certain deductibles and limits, the purchasers of businesses or divested assets for the occurrence of specified events under certain of its divestiture agreements. In addition, the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants, including such matters as adequate title to assets sold, intellectual property rights and certain income taxes arising prior to the date of acquisition. Where appropriate, an obligation for such indemnifications is recorded as a liability at the time of the acquisition or divestiture. Since the obligated amounts of these types of indemnifications are often not explicitly stated or are contingent on the occurrence of future events, the overall maximum amount, or range of amount of the obligation under such indemnifications cannot be reasonably estimated. Other than obligations recorded as liabilities at the time of divestiture, the Company has not historically made significant payments for these indemnifications. Additionally, under certain of the Company's acquisition agreements, it has provided for additional consideration to be paid to the sellers if established financial targets are achieved within specific timeframes post-closing. The Company has recognized liabilities for these contingent obligations based on an estimate of the fair value of these contingencies at the time of acquisition. Contingent obligations related to indemnifications arising from divestitures and contingent consideration provided for by acquisitions are not expected to be material to the Company's financial position, results of operations or cash flows. Other Agreements: The Company is also party to the following types of agreements pursuant to which it may be obligated to indemnify the other party with respect to certain matters: • Guarantees on behalf of the Company's subsidiaries with respect to real estate leases. These lease guarantees may remain in effect after the sale of the subsidiary. • Agreements to indemnify various service providers, trustees and bank agents from any third-party claims related to their performance on the Company's behalf, except for claims that result from the third-party's own willful misconduct or gross negligence. • Guarantees of the Company's performance in certain services contracts to its customers and indirectly the performance of third parties with whom the Company has subcontracted for their services. This includes indemnifications to customers for losses that may be sustained because of the Company's performance of services at a customer's location. In each of these circumstances, payment is conditioned on the other party making a claim pursuant to the procedures specified in the particular contract and such procedures also typically allow the Company to challenge the other party's claims. In the case of lease guarantees, the Company may contest the liabilities asserted under the lease. Further, obligations under these agreements and guarantees may be limited in terms of time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments it made. Intellectual Property Indemnifications The Company does not own all of the software that it uses to run its business. Instead, the Company licenses this software from a small number of primary vendors. The Company indemnifies certain software providers against claims that may arise as a result of the Company's use or its subsidiaries', customers' or resellers' use of their software in the Company's services and solutions. These indemnities usually do not include limits on the claims, provided the claim is made pursuant to the procedures required in the services contract. Indemnification of Officers and Directors The Company's corporate by-laws require that, except to the extent expressly prohibited by law, the Company must indemnify its officers and directors against judgments, fines, penalties and amounts paid in settlement and reasonable expenses, including attorneys' fees, incurred in connection with civil or criminal action or proceedings or any appeal, as it relates to their services to the Company and its subsidiaries. Although the by-laws provide no limit on the amount of indemnification, the Company may have recourse against its insurance carriers for certain payments made by the Company. However, certain indemnification payments may not be covered under the Company's directors' and officers' insurance coverage. The Company also indemnifies certain fiduciaries of its employee benefit plans for liabilities incurred in their service as fiduciary whether or not they are officers of the Company. Finally, in connection with the Company's acquisition of businesses, it may become contractually obligated to indemnify certain former and current directors, officers and employees of those businesses in accordance with pre-acquisition by-laws or indemnification agreements or applicable state law. Other Contingencies Certain contracts, primarily in the Company's Government Services and Transportation segments, require the Company to provide a surety bond or a letter of credit as a guarantee of performance. As of December 31, 2021, the Company had $560 million of outstanding surety bonds used to secure its performance of contractual obligations with its clients and $109 million of outstanding letters of credit issued to secure the Company's performance of contractual obligations to its clients as well as other corporate obligations. In general, the Company would only be liable for these guarantees in the event of default in the Company's performance of its obligations under each contract. The Company believes it has sufficient capacity in the surety markets and liquidity from its cash flow and its various credit arrangements to allow it to respond to future requests for proposals that require such credit support. | |
Surety Bond [Member] | ||
Loss Contingencies [Line Items] | ||
Damages sought, multiplier of overpayment amount | $ 560 | |
Other contingencies letter of credits [Member] | ||
Loss Contingencies [Line Items] | ||
Damages sought, multiplier of overpayment amount | 109 | |
Conduent Business Services, LLC v. Cognizant Business Service, LLC [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, New Claims Filed, Number | claim | 2 | |
Gain Contingencies [Line Items] | ||
Gain Contingency, Unrecorded Amount | $ 150 | |
Conduent Business Services, LLC v. Cognizant Business Service, LLC [Member] | Pending Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | 47 | |
Loss on Contract Termination | $ 25 | |
Loss Contingency, Increase To Damages Sought, Value | 89 | |
Skyview Capital LLC and Continuum Global Solutions, LLC v. Conduent Business Services, LLC [Member] | Pending Litigation [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Damages Sought, Value | $ 23 |
Preferred Stock (Details)
Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2018 | Dec. 31, 2016 | |
Class of Stock [Line Items] | |||
Preferred stock, XRX separation shares issued (in shares) | 120,000 | ||
Preferred Stock, Liquidation Preference, Value | $ 120 | ||
Preferred stock aggregate fair value | $ 142 | ||
Preferred stock, dividend rate, percentage | 8.00% | ||
Preferred stock annual dividends | $ 9.6 | ||
Convertible Preferred Stock, Shares Reserved for Future Issuance | 5,393,000 | ||
Total conversion of preferred stock shares into common stock, initial conversion price per share (in dollars per share) | $ 22.25 | ||
Convertible Preferred Stock, Terms of Conversion | 137 | ||
Common Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock converted into common shares (in shares) | 44.9438 |
Shareholder's Equity - Stock (D
Shareholder's Equity - Stock (Details) shares in Millions | Dec. 31, 2021$ / sharesshares |
Class of Stock [Line Items] | |
Preferred Stock, Shares Authorized (in shares) | 100 |
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.01 |
Common Stock, Shares Authorized (in shares) | 1,000 |
Common Stock, Par or Stated Value Per Share (in dollars per share) | $ / shares | $ 0.01 |
Incentive compensation [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 28.9 |
Preferred Stock [Member] | |
Class of Stock [Line Items] | |
Common Stock, Capital Shares Reserved for Future Issuance (in shares) | 5.4 |
Shareholders' Equity - Total St
Shareholders' Equity - Total Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |||
Stock-based compensation expense, pre-tax | $ 21 | $ 20 | $ 24 |
Income tax benefit recognized in earnings | $ 3 | $ 3 | $ 0 |
Officers and Select Executives [Member] | Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Requisite service period | 3 years | ||
Share-based Compensation Arrangement by Share-based Payment Award - Maximum over-achievement | 50.00% |
Shareholders' Equity - Share-ba
Shareholders' Equity - Share-based Compensation, Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Units (RSUs) [Member] | |||
Awards Other Than Options, Number of Shares [Roll Forward] | |||
Outstanding at January 1 (in shares) | 5,620 | 1,741 | 2,399 |
Granted (in shares) | 2,677 | 7,778 | 2,503 |
Vested (in shares) | (3,117) | (2,816) | (2,135) |
Cancelled (in shares) | (1,388) | (1,083) | (1,026) |
Outstanding at December 31 (in shares) | 3,792 | 5,620 | 1,741 |
Awards Other Than Options, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding at January 1 (in dollars per share) | $ 3.49 | $ 13.07 | $ 16.90 |
Granted (in dollars per share) | 6.65 | 2.25 | 12.57 |
Vested (in dollars per share) | 4.69 | 4.99 | 15.54 |
Cancelled (in dollars per share) | 3.96 | 6.11 | 15.68 |
Outstanding at December 31 (in dollars per share) | $ 4.57 | $ 3.49 | $ 13.07 |
Performance Shares [Member] | |||
Awards Other Than Options, Number of Shares [Roll Forward] | |||
Outstanding at January 1 (in shares) | 5,453 | 3,597 | 4,557 |
Granted (in shares) | 1,545 | 7,010 | 1,229 |
Vested (in shares) | (1,945) | (3,163) | (1,069) |
Cancelled (in shares) | (1,444) | (1,991) | (1,120) |
Outstanding at December 31 (in shares) | 3,609 | 5,453 | 3,597 |
Awards Other Than Options, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Outstanding at January 1 (in dollars per share) | $ 3.83 | $ 16.17 | $ 16.76 |
Granted (in dollars per share) | 6.54 | 1.37 | 13.35 |
Vested (in dollars per share) | 3.37 | 7.33 | 15.64 |
Cancelled (in dollars per share) | 5.13 | 11.91 | 16 |
Outstanding at December 31 (in dollars per share) | $ 4.71 | $ 3.83 | $ 16.17 |
Deferred Compensation, Share-based Payments [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award Other Than Options [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 329 |
Shareholders' Equity - Share-_2
Shareholders' Equity - Share-based Compensation, Awards, Unrecognized Compensation (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 15 |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 11 |
Awards Compensation Costs Remaining Weighted Average Vesting Term, (Years) | 1 year 8 months 12 days |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation | $ 4 |
Awards Compensation Costs Remaining Weighted Average Vesting Term, (Years) | 1 year 4 months 24 days |
Shareholders' Equity - Share-_3
Shareholders' Equity - Share-based Compensation, Awards, Intrinsic Value (Details) $ in Millions | Dec. 31, 2021USD ($) |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award Other Than Options [Line Items] | |
Aggregate intrinsic value of outstanding non option awards | $ 20 |
Performance Shares [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award Other Than Options [Line Items] | |
Aggregate intrinsic value of outstanding non option awards | $ 19 |
Shareholders' Equity - Share-_4
Shareholders' Equity - Share-based Compensation, Awards, Intrinsic Value, Cash Received and Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Restricted Stock Units (RSUs) [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value | $ 17 | $ 13 | $ 17 |
Cash Received | 0 | 0 | 0 |
Tax Benefit - RSU and PS awards | 3 | 3 | 4 |
Performance Shares [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total Intrinsic Value | 11 | 14 | 11 |
Cash Received | 0 | 0 | 0 |
Tax Benefit - RSU and PS awards | $ 2 | $ 2 | $ 2 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Equity [Abstract] | ||||
Currency Translation Adjustments, Before Tax | $ (31) | $ 8 | $ 3 | |
Currency translation adjustments, net | [1] | (31) | 8 | 3 |
Reclassification of currency translation adjustments on divestitures, Before Tax | 0 | 0 | 15 | |
Reclassification of currency translation adjustments on divestitures | [1] | 0 | 0 | 15 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Gain (Loss), before Reclassification and Tax | (31) | 8 | 18 | |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | (31) | 8 | 18 | |
Changes in fair value of cash flow hedges gains (losses), pre-tax | (1) | 0 | 1 | |
Unrecognized gains (losses), net | [1] | (1) | 0 | 1 |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax | [2] | 0 | 0 | (1) |
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax | [2] | 0 | 0 | 0 |
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, before Tax | (1) | 0 | 0 | |
Unrecognized gains (losses), net | (1) | 0 | 1 | |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss), Reclassification Adjustment from AOCI, before Tax | 0 | 0 | 1 | |
Reclassification of divested benefit plans and other | [1] | 0 | 0 | (1) |
Other Comprehensive Income (Loss), Defined Benefit Plan, Gain (Loss) Arising During Period, before Tax | 1 | 1 | 0 | |
Net actuarial/prior service (losses) gains, net of tax | [1] | 1 | 1 | 0 |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, before Tax | 1 | 1 | 1 | |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 1 | 1 | (1) | |
Other Comprehensive (Loss) Income, before Tax | (31) | 9 | 19 | |
Other comprehensive income (loss), net | [1] | $ (31) | $ 9 | $ 18 |
[1] | All amounts are net of tax. Tax effects were immaterial. Refer to Note 19 – Other Comprehensive Income (Loss) for information about pre-tax amounts. | |||
[2] | Reclassified to Cost of services - refer to Note 12 – Financial Instruments for additional information regarding our cash flow hedges. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss (AOCL) (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at beginning of period | $ (398) | $ (407) | $ (425) | |
Change in AOCI before reclassification | (31) | 9 | 4 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | 14 | |
Other comprehensive income (loss), net | [1] | (31) | 9 | 18 |
Balance at end of period | (429) | (398) | (407) | |
Accumulated Foreign Currency Adjustment Attributable to Parent [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at beginning of period | (400) | (408) | (426) | |
Change in AOCI before reclassification | (31) | 8 | 3 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | 15 | |
Other comprehensive income (loss), net | (31) | 8 | 18 | |
Balance at end of period | (431) | (400) | (408) | |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at beginning of period | 3 | 3 | 2 | |
Change in AOCI before reclassification | (1) | 0 | 1 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | 0 | |
Other comprehensive income (loss), net | (1) | 0 | 1 | |
Balance at end of period | 2 | 3 | 3 | |
Accumulated Defined Benefit Plans Adjustment Attributable to Parent [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance at beginning of period | (1) | (2) | (1) | |
Change in AOCI before reclassification | 1 | 1 | 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | 0 | 0 | (1) | |
Other comprehensive income (loss), net | 1 | 1 | (1) | |
Balance at end of period | $ 0 | $ (1) | $ (2) | |
[1] | All amounts are net of tax. Tax effects were immaterial. Refer to Note 19 – Other Comprehensive Income (Loss) for information about pre-tax amounts. |
Earnings per Share - Reconcilia
Earnings per Share - Reconciliation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Basic And Diluted Earnings [Line Items] | |||
Net income (loss) from continuing operations attributable to Conduent | $ (28) | $ (118) | $ (1,934) |
Accrued dividends on preferred stock | (10) | (10) | (10) |
Earnings Per Share, Basic [Abstract] | |||
Adjusted Net Income Available to Common Shareholders | $ (38) | $ (128) | $ (1,944) |
Weighted-average common shares outstanding (in shares) | 212,719 | 210,018 | 209,318 |
Basic Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Earnings Per Share, Diluted [Abstract] | |||
Weighted-average common shares outstanding (in shares) | 212,719 | 210,018 | 209,318 |
Incremental Weighted Average Shares Attributable to Dilutive Effect [Abstract] | |||
Diluted Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 13,603 | 17,679 | 14,336 |
Basic Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Diluted Earnings (Loss) per Share (in dollars per share) | $ (0.18) | $ (0.61) | $ (9.29) |
Weighted-average common shares outstanding (in shares) | 212,719 | 210,018 | 209,318 |
Restricted Stock and Performance Shares [Member] | |||
Schedule of Basic And Diluted Earnings [Line Items] | |||
Stock options | 0 | 0 | 0 |
Restricted Stock and Performance Shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 8,210 | 12,286 | 8,943 |
Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 5,393 | 5,393 | 5,393 |
Earnings per Share - Anti-Dilut
Earnings per Share - Anti-Dilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 13,603 | 17,679 | 14,336 |
Restricted stock and performance shares [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 8,210 | 12,286 | 8,943 |
Convertible preferred stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Total Securities (in shares) | 5,393 | 5,393 | 5,393 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |||
Revenue from Related Parties | $ 16 | $ 24 | $ 33 |
Total Allocated Corporate Expenses | $ 28 | $ 36 | $ 46 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | Feb. 11, 2022 | Feb. 08, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||||
Disposal Group, Including Discontinued Operation, Revenue | $ 70 | $ 72 | |||
Repayments of Lines of Credit | $ 0 | $ 150 | $ 0 | ||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from divestitures and sale of assets, net of cash | $ 321 | ||||
Repayments of Lines of Credit | $ 100 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
AR Amounts (credited) charged to other income statement accounts | $ 0 | $ 0 | $ 0 |
Tax Valuation Allowances and Reserves Beginning Balance | 83 | 72 | 44 |
Tax Valuation Allowances and Reserves, Period Increase (Decrease) | 10 | 17 | 38 |
Tax Valuation Allowances and Reserves, Deductions | (11) | (6) | (10) |
Tax Valuation Allowances and Reserves Ending Balance | 82 | 83 | 72 |
Accounts Receivable [Member] | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
AR Valuation and Qualifying Accounts Beginning Balance | 2 | 2 | 1 |
AR Additions charged to bad debt provision | 1 | 1 | 3 |
AR Amounts (credited) charged to other income statement accounts | 0 | 0 | 0 |
AR Deductions and other, net of recoveries | (3) | (1) | (2) |
AR Valuation and Qualifying Accounts Ending Balance | $ 0 | $ 2 | $ 2 |