Alight 8K Financial Statement Presentation | ALIT 20 Apr 23

Exhibit 99.1

Alight, Inc.

Recast of Segment Information

For the quarters of fiscal 2022 and for the years ended

December 31, 2022 and 2021

Financial Statement Presentation

As a result of the Business Combination, this exhibit includes certain historical consolidated financial and other data for Alight Holding Company, LLC (formerly known as Tempo Holding Company, LLC) (“Alight Holdings”) and its subsidiaries. Specifically the tables in this exhibit include selected financial data for the Company Successor six months ended December 31, 2021, and Alight Holdings as the Predecessor for the six months ended June 30, 2021.

Non-GAAP Financial Measures

Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this exhibit to the most directly comparable GAAP financial measure in the tables below. The presentation of non-GAAP financial measures is used to enhance our investors’ and lenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Adjusted Gross Profit and Adjusted Gross Margin Percent. Adjusted gross profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation. Adjusted gross margin percent is defined as adjusted gross profit divided by revenue. Management uses gross profit and gross margin percent as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting adjusted gross profit and adjusted gross margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.


Alight, Inc.
Recast of Segment Revenues

	As Previously Reported
($ in millions)	Q1'22		Q2'22		Q3'22		Q4'22		FY'22
Segment Revenues
Employer Solutions
Recurring	$	570	$	559	$	583	$	755	$	2,467
Project		53		55		62		81		251
Total Employer Solutions		623		614		645		836		2,718
Professional Services
Recurring		30		32		32		34		128
Project		60		59		63		61		243
Total Professional Services		90		91		95		95		371
Hosted Business		12		10		10		11		43
Total	$	725	$	715	$	750		942	$	3,132



	As Reported Herein
($ in millions)	Q1'22		Q2'22		Q3'22		Q4'22		FY'22
Segment Revenues
Employer Solutions:
Recurring	$	570	$	559	$	583	$	755	$	2,467
Project		53		55		62		81		251
Total Employer Solutions		623		614		645		836		2,718
Professional Services:
Recurring		30		32		32		34		128
Project		60		59		63		61		243
Total Professional Services		90		91		95		95		371
Total Reportable Segments		713		705		740		931		3,089
Other		12		10		10		11		43
Total	$	725	$	715	$	750	$	942	$	3,132


	As Previously Reported
	Successor		Predecessor
	Six Months Ended		Six Months Ended
($ in millions)	December 31, 2021		June 30, 2021
Segment Revenues
Employer Solutions
Recurring	$	1,213	$	1,049
Project		134		107
Total Employer Solutions		1,347		1,156
Professional Services
Recurring		65		60
Project		121		124
Total Professional Services		186		184
Hosted Business		21		21
Total	$	1,554	$	1,361

	As Reported Herein
	Successor		Predecessor
	Six Months Ended		Six Months Ended
($ in millions)	December 31, 2021		June 30, 2021
Segment Revenues
Employer Solutions:
Recurring	$	1,213	$	1,049
Project		134		107
Total Employer Solutions		1,347		1,156
Professional Services:
Recurring		65		60
Project		121		124
Total Professional Services		186		184
Total Reportable Segments		1,533		1,340
Other		21		21
Total	$	1,554	$	1,361



Recast of Segment Profit
(Unaudited)
	As Previously Reported
(in millions)	Q1'22			Q2'22			Q3'22			Q4'22			FY'22
Employer Solutions	$	142		$	147		$	130		$	240		$	659
Professional Services		-			(3	)		3			1			1
Hosted Business		-			(2	)		-			1			(1	)
Total of all reportable segments (1)		142			142			133			242			659

Share-based compensation		33			42			54			52			181
Transaction and integration expenses (2)		6			3			2			8			19
Restructuring		6			14			23			20			63
Other (3)		3			8			5			(1	)		15
Depreciation		17			18			21			23			79
Intangible amortization		79			80			78			79			316
Operating Income (Loss)		(2	)		(23	)		(50	)		61			(14	)
(Gain) Loss from change in fair value of financial instruments		(13	)		(50	)		10			15			(38	)
(Gain) Loss from change in fair value of tax receivable agreement		(5	)		(38	)		(20	)		22			(41	)
Interest expense		29			29			31			33			122
Other (income) expense, net		(1	)		(7	)		(6	)		(2	)		(16	)
Income (Loss) Before Income Tax Expense (Benefit)	$	(12	)	$	43		$	(65	)	$	(7	)	$	(41	)





	As Reported Herein
(in millions)	Q1'22			Q2'22			Q3'22			Q4'22			FY'22
Employer Solutions	$	204		$	200		$	189		$	318		$	911
Professional Services		19			20			23			24			86
Other (4)		-			(1	)		-			-			(1	)
Total Gross Profit		223			219			212			342			996

Selling, general and administrative		140			157			178			196			671
Depreciation and intangible amortization		85			85			84			85			339
Operating Income (Loss)		(2	)		(23	)		(50	)		61			(14	)
(Gain) Loss from change in fair value of financial instruments		(13	)		(50	)		10			15			(38	)
(Gain) Loss from change in fair value of tax receivable agreement		(5	)		(38	)		(20	)		22			(41	)
Interest expense		29			29			31			33			122
Other (income) expense, net		(1	)		(7	)		(6	)		(2	)		(16	)
Income (Loss) Before Income Tax Expense (Benefit)	$	(12	)	$	43		$	(65	)	$	(7	)	$	(41	)

(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance.
(2) Transaction and integration expenses related to acquisition activity.
(3) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net.
(4) Includes activity related to the former Hosted segment.


	As Previously Reported
	Successor			Predecessor
	Six Months Ended			Six Months Ended
(in millions)	December 31, 2021			June 30, 2021
Employer Solutions	$	344		$	274
Professional Services		1			7
Hosted Business		(2	)		(3	)
Total of all reportable segments (1)		343			278

Share-based compensation		67			5
Transaction and integration expenses (2)		13			-
Non-recurring professional expenses (3)		19			18
Restructuring		5			9
Other (4)		(10	)		(5	)
Depreciation		31			49
Intangible amortization		153			100
Operating Income (Loss)		65			102
(Gain) Loss from change in fair value of financial instruments		65			-
(Gain) Loss from change in fair value of tax receivable agreement		(37	)		-
Interest expense		57			123
Other (income) expense, net		3			9
Income (Loss) Before Income Tax Expense (Benefit)	$	(23	)	$	(30	)


	As Reported Herein
	Successor			Predecessor
	Six Months Ended			Six Months Ended
(in millions)	December 31, 2021			June 30, 2021
Employer Solutions	$	489		$	392
Professional Services		44			46
Other (5)		(1	)		(3	)
Total Gross Profit		532			435

Selling, general and administrative		304			222
Depreciation and intangible amortization		163			111
Operating Income (Loss)		65			102
(Gain) Loss from change in fair value of financial instruments		65			-
(Gain) Loss from change in fair value of tax receivable agreement		(37	)		-
Interest expense		57			123
Other (income) expense, net		3			9
Income (Loss) Before Income Tax Expense (Benefit)	$	(23	)	$	(30	)

(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance.
(2) Transaction and integration expenses related to acquisition activity.
(3) Non-recurring professional expenses includes external advisor and legal costs related to the Company’s Business Combination.
(4) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net.
(5) Includes activity related to the former Hosted segment.


Gross Profit GAAP to Non-GAAP Reconciliation by Segment
(Unaudited)

	Q1'22
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	204		$	19		$	-		$	223
Add: stock-based compensation		7			-			-			7
Add: depreciation and amortization		10			-			1			11
Adjusted Gross Profit	$	221		$	19		$	1		$	241
Gross Margin		33	%		21	%		0	%		31	%
Adjusted Gross Margin		35	%		21	%		8	%		33	%


	Q2'22
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	200		$	20		$	(1	)	$	219
Add: stock-based compensation		9			1			-			10
Add: depreciation and amortization		12			-			1			13
Adjusted Gross Profit	$	221		$	21		$	-		$	242
Gross Margin		33	%		22	%		-10	%		31	%
Adjusted Gross Margin		36	%		23	%		0	%		34	%


	Q3'22
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	189		$	23		$	-		$	212
Add: stock-based compensation		11			1			-			12
Add: depreciation and amortization		14			1			-			15
Adjusted Gross Profit	$	214		$	25		$	-		$	239
Gross Margin		29	%		24	%		0	%		28	%
Adjusted Gross Margin		33	%		26	%		0	%		32	%


	Q4'22
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	318		$	24		$	-		$	342
Add: stock-based compensation		10			1			-			11
Add: depreciation and amortization		17			-			-			17
Adjusted Gross Profit	$	345		$	25		$	-		$	370
Gross Margin		38	%		25	%		0	%		36	%
Adjusted Gross Margin		41	%		26	%		0	%		39	%


	FY'22
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	911		$	86		$	(1	)	$	996
Add: stock-based compensation		37			3			-			40
Add: depreciation and amortization		53			1			2			56
Adjusted Gross Profit	$	1,001		$	90		$	1		$	1,092
Gross Margin		34	%		23	%		-2	%		32	%
Adjusted Gross Margin		37	%		24	%		2	%		35	%


	Successor
	Six Months Ended
	December 31, 2021
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	489		$	44		$	(1	)	$	532
Add: stock-based compensation		18			1			-			19
Add: depreciation and amortization		20			-			1			21
Adjusted Gross Profit	$	527		$	45		$	-		$	572
Gross Margin		36	%		24	%		-5	%		34	%
Adjusted Gross Margin		39	%		24	%		0	%		37	%

	Predecessor
	Six Months Ended
	June 30, 2021
($ in millions)	Employer Solutions			Professional Services			Other			Total
Gross Profit	$	392		$	46		$	(3	)	$	435
Add: stock-based compensation		1			-			-			1
Add: depreciation and amortization		36			1			1			38
Adjusted Gross Profit	$	429		$	47		$	(2	)	$	474
Gross Margin		34	%		25	%		-14	%		32	%
Adjusted Gross Margin		37	%		26	%		-10	%		35	%

Alight (ALIT) 8-KFinancial Statement Presentation