Ceridian HCM Holding, Inc. (CDAY) Q3 2020 Earnings Conference Call November 5, 2020 5:00 PM ET Company Participants Jeremy Johnson - Vice President, Finance & Investor Relations David Ossip - Chairman & Chief Executive Officer Noemie Heuland - Chief Financial Officer Conference Call Participants Matt Coss - JPMorgan Siti Panigrahi - Mizuho Dan Jester - Citi Michael Turrin - Wells Fargo Samad Samana - Jefferies Bryan Bergin - Cowen & Company Mark Marcon - Baird Raimo Lenschow - Barclays Matthew Pfau - Willia ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly reporting period ended September 30, 2020 ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number 001-38467 Ceridian HCM Holding Inc. (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorpora ...

Financial Data and Key Metrics Changes - Ceridian reported a strong quarter with Dayforce recurring revenue ex float growing by 24.2% on a constant-currency basis [6] - Cloud recurring services gross margin increased by 140 basis points to 70.7%, and excluding float revenue, it expanded by 360 basis points [6] Business Line Data and Key Metrics Changes - Sales in the second quarter increased year over year, marking the best second quarter in the company's history [7] - The incremental revenue per new client increased by 68% in the quarter [12] Market Data and Key Metrics Changes - The company has seen a significant increase in attendance at virtual summits, doubling year over year [14] Company Strategy and Development Direction - The launch of Dayforce Wallet is progressing well, with over 40 customers piloting the product and more than 100 ready for implementation [7] - The company is confident in achieving record sales in the third quarter, aligning with pre-COVID-19 growth targets [14] Management's Comments on Operating Environment and Future Outlook - Management noted that while there were initial delays due to COVID-19, they are confident in the implementation pace and the ability to get customers live [21] - Retention rates have remained stable, with no material negative changes observed [22] Other Important Information - The company emphasized the importance of digital marketing, which has positively impacted their sales pipeline and momentum [15] Q&A Session Summary Question: Expectations for net new additions and customer size - Management indicated that the incremental revenue per new client has increased significantly, and they expect the trend to continue [12][13] Question: Competitive landscape and market commentary - Management expressed confidence in their competitive position and noted an acceleration in sales pipeline momentum [14][15] Question: Implementation pace and client behavior changes - Management reported that clients continue to go live, and while there were initial distractions due to COVID-19, they are optimistic about future implementations [20][21] Question: Retention rates and changes - Management confirmed that retention has been very sticky, with no notable changes in enterprise departures [22]

PART I. FINANCIAL INFORMATION Unaudited financial statements, management's analysis, market risk, and internal controls are presented [Item 1. Condensed Consolidated Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) Unaudited condensed consolidated financial statements and detailed notes for the quarter ended June 30, 2020 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Snapshot of the company's financial position, detailing assets, liabilities, and equity as of June 30, 2020 Balance Sheet Highlights (as of June 30, 2020 vs. December 31, 2019) | Metric | June 30, 2020 (unaudited) | December 31, 2019 | | :--- | :--- | :--- | | Cash and equivalents | $526.9 million | $281.3 million | | Total current assets | $3,350.0 million | $3,623.7 million | | Goodwill | $2,004.5 million | $1,973.5 million | | Total assets | $5,853.9 million | $6,085.7 million | | Total current liabilities | $2,744.5 million | $3,371.7 million | | Long-term debt, less current portion | $958.6 million | $666.3 million | | Total liabilities | $3,868.2 million | $4,203.4 million | | Total stockholders' equity | $1,985.7 million | $1,882.3 million | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Outlines financial performance, presenting revenues, expenses, and net income for Q2 and H1 ended June 30 Statement of Operations Summary (in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $192.6 | $196.3 | $415.3 | $400.0 | | Gross profit | $78.6 | $88.0 | $179.1 | $181.6 | | Operating profit | $4.0 | $18.7 | $30.3 | $46.1 | | Net income | $5.5 | $6.3 | $14.1 | $17.5 | | Diluted EPS | $0.04 | $0.04 | $0.09 | $0.12 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Details cash flows from operating, investing, and financing activities for the six months ended June 30 Cash Flow Summary (Six Months Ended June 30) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $23.9 million | $10.2 million | | Net cash provided by (used in) investing activities | $101.2 million | ($101.9) million | | Net cash (used in) provided by financing activities | ($230.3) million | $1,349.6 million | | Net (decrease) increase in cash, restricted cash, and equivalents | ($117.6) million | $1,265.3 million | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed disclosures on accounting policies, acquisitions, revenue, debt, and share-based compensation - On May 29, 2020, the company acquired 100% of Excelity Global Solutions Pte. Ltd. for **$77.2 million** to expand its human capital management services in the Asia-Pacific region[37](index=37&type=chunk) - Investment income from customer trust funds (float revenue) decreased to **$11.5 million** for Q2 2020 from **$20.3 million** in Q2 2019, and to **$31.1 million** for H1 2020 from **$44.6 million** in H1 2019[43](index=43&type=chunk) - Total debt increased to **$973.5 million** as of June 30, 2020, from **$683.9 million** at year-end 2019, primarily due to drawing **$295.0 million** from the revolving credit facility as a precautionary measure amid the COVID-19 pandemic[53](index=53&type=chunk)[55](index=55&type=chunk) - Total share-based compensation expense was **$15.3 million** for Q2 2020 and **$27.8 million** for H1 2020, up from **$9.6 million** and **$15.6 million** in the respective prior-year periods[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, emphasizing Cloud solution growth, COVID-19 impacts, and liquidity [Overview and Business Model](index=25&type=section&id=Overview%20and%20Business%20Model) Describes Ceridian's global HCM software business, focusing on Cloud and Bureau solutions and Dayforce - Ceridian is a global Human Capital Management (HCM) software company with two main solution categories: Cloud (Dayforce and Powerpay) and Bureau. The business model focuses on the **rapid growth of Dayforce**, a subscription-based platform[100](index=100&type=chunk)[105](index=105&type=chunk) - The company launched Dayforce Wallet in 2020, an on-demand pay feature that gives employees instant access to their earned wages[102](index=102&type=chunk) - The number of live Dayforce customers grew to **4,603** as of June 30, 2020, up from **4,006** a year prior[103](index=103&type=chunk)[109](index=109&type=chunk) [COVID-19 Pandemic Impact](index=26&type=section&id=COVID-19%20Pandemic%20Impact) Details adverse effects of the COVID-19 pandemic on customer demand, employment levels, and float revenue - The COVID-19 pandemic has adversely affected the business through curtailed customer demand, declining employment levels at customers (especially in retail and hospitality), and lower float revenue due to interest rate cuts by the U.S. Federal Reserve and Bank of Canada[107](index=107&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Analyzes revenue, gross profit, and operating expenses, highlighting COVID-19 and float revenue declines Q2 2020 vs. Q2 2019 Revenue Performance (in millions) | Revenue Category | Q2 2020 | Q2 2019 | % Change | | :--- | :--- | :--- | :--- | | Total Cloud Revenue | $167.9 | $155.7 | +7.8% | | Total Bureau Revenue | $24.7 | $40.6 | -39.2% | | **Total Revenue** | **$192.6** | **$196.3** | **-1.9%** | - For Q2 2020, the estimated negative revenue impact from lower customer employment levels due to COVID-19 was **$8 million**. The impact on float revenue was **$7 million**[117](index=117&type=chunk) H1 2020 vs. H1 2019 Revenue Performance (in millions) | Revenue Category | H1 2020 | H1 2019 | % Change | | :--- | :--- | :--- | :--- | | Total Cloud Revenue | $358.8 | $310.3 | +15.6% | | Total Bureau Revenue | $56.5 | $89.7 | -37.0% | | **Total Revenue** | **$415.3** | **$400.0** | **+3.8%** | - Float revenue declined to **$11.5 million** in Q2 2020 from **$20.3 million** in Q2 2019, primarily due to an **86 basis point decline** in the average yield and a decrease in average float balances[121](index=121&type=chunk) - Gross margin for Q2 2020 declined to **40.8%** from **44.8%** in Q2 2019, primarily due to the **$8.8 million decline** in high-margin float revenue[125](index=125&type=chunk)[126](index=126&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) Discusses cash position, operating cash flows, and credit facilities, including a precautionary draw - Primary sources of liquidity are cash on hand, cash from operations, and credit facilities. As of June 30, 2020, the company had cash and equivalents of **$526.9 million**[156](index=156&type=chunk) - On April 2, 2020, the company borrowed **$295.0 million** under its revolving credit facility as a precautionary measure to increase its cash position and preserve financial flexibility amid the COVID-19 pandemic[156](index=156&type=chunk) [Non-GAAP Measures](index=37&type=section&id=Non-GAAP%20Measures) Provides reconciliations and definitions for non-GAAP financial measures, such as Adjusted EBITDA and margin Adjusted EBITDA Reconciliation (in millions) | Metric | Three Months Ended June 30, 2020 | Three Months Ended June 30, 2019 | Six Months Ended June 30, 2020 | Six Months Ended June 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | Operating profit | $4.0 | $18.7 | $30.3 | $46.1 | | **Adjusted EBITDA** | **$37.5** | **$44.0** | **$92.7** | **$93.8** | | **Adjusted EBITDA margin** | **19.5%** | **22.4%** | **22.3%** | **23.5%** | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Examines market risks from foreign currency, interest rate fluctuations, and pension obligations - The company's results are subject to fluctuations from foreign currency exchange rates, particularly the Canadian Dollar, but **no active hedging program is in place**[186](index=186&type=chunk) - Interest rate risk affects the income generated from customer trust funds held for payroll and tax services. The portfolio is invested in high-quality, available-for-sale securities, and changes in their value are recorded in other comprehensive income unless sold[187](index=187&type=chunk)[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective; no material internal control changes - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the Form 10-Q[192](index=192&type=chunk) - Despite an increase in employees working from home due to the COVID-19 pandemic, there were **no changes** during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls over financial reporting[193](index=193&type=chunk) PART II. OTHER INFORMATION Details legal proceedings, updated risk factors, and exhibits filed with the quarterly report [Item 1. Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) No legal proceedings are expected to have a material adverse effect on the company's business - Ceridian is not currently a party to any legal proceedings that are expected to have a **material adverse effect** on its business, financial condition, or liquidity[195](index=195&type=chunk) [Item 1A. Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) Updates risk factors: COVID-19, Dayforce Wallet, regulatory compliance, and third-party reliance - The COVID-19 pandemic continues to pose a **significant risk**, with potential adverse effects on customer employee headcount, demand for services, and float revenue due to low interest rates[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - The Dayforce Wallet program introduces new risks, including potential fraud against customers and the risk of customer failure to repay advanced wages, which could lead to **credit losses**[202](index=202&type=chunk)[218](index=218&type=chunk) - The company is subject to a variety of U.S. and international laws regarding privacy and data protection (e.g., GDPR) and financial services, with non-compliance potentially leading to **fines and reputational harm**[203](index=203&type=chunk)[205](index=205&type=chunk)[208](index=208&type=chunk) - Ceridian relies heavily on third-party service providers for critical operations, including data centers, electronic funds transfers, and program management for the Dayforce Wallet. A failure by any of these providers could **materially harm the business**[209](index=209&type=chunk)[210](index=210&type=chunk)[216](index=216&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) Lists exhibits filed, including compensation agreements and Sarbanes-Oxley Act certifications - Exhibits filed with the report include forms of employee and director stock option and restricted stock unit award agreements[228](index=228&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[228](index=228&type=chunk)

Ceridian HCM Holding, Inc. (CDAY) Q1 2020 Earnings Conference Call May 6, 2020 5:00 PM ET Company Participants Jeremy Johnson - VP, Finance & IR David Ossip - Chairman & CEO Conference Call Participants Daniel Jester - Citigroup Mark Marcon - Robert W. Baird & Co. Raimo Lenschow - Barclays Bank Robert Simmons - RBC Capital Markets Samad Samana - Jefferies Joshua Reilly - Needham & Company Bryan Bergin - Cowen and Company Matthew Coss - JPMorgan Chase & Co. Stephanie Price - CIBC Capital Markets Yao Chew - C ...

[Part I. Financial Information](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements (unaudited)](index=5&type=page&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) For Q1 2020, Ceridian reported total revenue of $222.7 million, a 9.3% increase, and net income of $8.6 million, with total assets rising to $6.47 billion due to increased customer trust funds Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total Assets** | **$6,470.1** | **$6,085.7** | | Cash and equivalents | $255.3 | $281.3 | | Customer trust funds | $3,649.5 | $3,204.1 | | Goodwill | $1,939.5 | $1,973.5 | | **Total Liabilities** | **$4,584.5** | **$4,203.4** | | Customer trust funds obligations | $3,605.2 | $3,193.6 | | Long-term debt, less current portion | $665.0 | $666.3 | | **Total Stockholders' Equity** | **$1,885.6** | **$1,882.3** | Condensed Consolidated Statement of Operations (in millions, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Total Revenue** | **$222.7** | **$203.7** | | Gross Profit | $100.5 | $93.6 | | Operating Profit | $26.3 | $27.4 | | **Net Income** | **$8.6** | **$11.2** | | Diluted EPS | $0.06 | $0.08 | Condensed Consolidated Statement of Cash Flows Highlights (in millions) | Cash Flow Activity | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1.4 | $(8.8) | | Net cash provided by (used in) investing activities | $9.3 | $(117.6) | | Net cash provided by financing activities | $489.5 | $1,934.5 | [Note 4: Customer Trust Funds](index=11&type=page&id=Note%204.%20Customer%20Trust%20Funds) Investment income from customer trust funds decreased to $19.6 million in Q1 2020, primarily due to interest rate changes, while total funds held increased to $3.65 billion - Investment income from invested customer trust funds (float revenue) was **$19.6 million** for Q1 2020, compared to **$24.3 million** for Q1 2019[39](index=39&type=chunk) Customer Trust Funds (in millions) | Date | Total Customer Trust Funds | | :--- | :--- | | March 31, 2020 | $3,649.5 | | December 31, 2019 | $3,204.1 | [Note 6: Debt](index=14&type=page&id=Note%206.%20Debt) Total debt was $681.2 million as of March 31, 2020, with the company amending its credit facility to reduce interest rates and borrowing $295.0 million as a COVID-19 precautionary measure - On February 19, 2020, Ceridian amended its credit facility, reducing the Term Debt interest rate to **LIBOR plus 2.50%**[53](index=53&type=chunk) - On April 2, 2020, the company borrowed **$295.0 million** under its revolving credit facility as a precautionary measure in response to the COVID-19 pandemic[54](index=54&type=chunk) [Note 9: Revenue](index=18&type=page&id=Note%209.%20Revenue) Total revenue for Q1 2020 was $222.7 million, driven by significant Cloud revenue growth to $190.9 million, while Bureau revenue declined, with remaining performance obligations at $908.3 million Revenue Disaggregation (in millions) | Revenue Source | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | **Total Cloud Revenue** | **$190.9** | **$154.6** | | - Dayforce | $168.8 | $132.8 | | - Powerpay | $22.1 | $21.8 | | **Total Bureau Revenue** | **$31.8** | **$49.1** | | **Total Revenue** | **$222.7** | **$203.7** | - As of March 31, 2020, approximately **$908.3 million** of revenue is expected to be recognized over the next three years from remaining performance obligations[77](index=77&type=chunk) [Note 16: Subsequent Events](index=23&type=page&id=Note%2016.%20Subsequent%20Events) On May 6, 2020, the company agreed to acquire Excelity Global Solutions Pte. Ltd., an Asia-Pacific human capital management service provider, with the transaction expected to close in Q2 2020 - On May 6, 2020, Ceridian agreed to acquire Excelity Global Solutions Pte. Ltd., an HCM provider in the Asia-Pacific region, with the deal expected to close in Q2 2020[95](index=95&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=24&type=page&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 9.3% year-over-year revenue growth primarily to strong Cloud solutions performance, anticipating adverse effects on future revenue due to COVID-19 and lower interest rates, while Adjusted EBITDA increased to $55.2 million - The number of live Dayforce customers grew to **4,480** as of March 31, 2020, from **3,851** a year prior[107](index=107&type=chunk) - Management anticipates adverse effects on revenue for the remainder of 2020 due to declining employment levels at customers (especially in retail and hospitality) and lower interest rates impacting float revenue[105](index=105&type=chunk) Adjusted EBITDA Reconciliation (in millions) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Operating profit | $26.3 | $27.4 | | Adjustments (Depreciation, Amortization, Share-based comp, etc.) | $28.9 | $22.4 | | **Adjusted EBITDA** | **$55.2** | **$49.8** | | **Adjusted EBITDA Margin** | **24.8%** | **24.4%** | [Results of Operations](index=26&type=page&id=Results%20of%20Operations) Total revenue increased by $19.0 million (9.3%) to $222.7 million in Q1 2020, driven by 23.5% Cloud revenue growth, while Bureau revenue declined 35.2%, partly due to customer migrations Revenue Growth Analysis (Q1 2020 vs Q1 2019) | Revenue Category | Reported Growth | Constant Currency Growth | | :--- | :--- | :--- | | Total Revenue | 9.3% | 9.5% | | Total Cloud Revenue | 23.5% | 23.7% | | - Dayforce Revenue | 27.1% | 27.3% | | Total Bureau Revenue | (35.2)% | (35.0)% | - Float revenue decreased to **$19.6 million** from **$24.3 million** year-over-year, primarily due to a **49 basis point** decline in the average yield on investments[118](index=118&type=chunk) - Cloud recurring services gross margin increased to **72.6%** from **70.1%** in Q1 2019, reflecting economies of scale and a higher proportion of mature customers[125](index=125&type=chunk) [Liquidity and Capital Resources](index=30&type=page&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2020, the company had $255.3 million in cash and equivalents and $300.0 million available credit, drawing $295.0 million as a COVID-19 precaution, believing existing liquidity is sufficient - Primary sources of liquidity are cash on hand (**$255.3 million** as of March 31, 2020), cash from operations, and borrowings under the credit facility[132](index=132&type=chunk) - On April 2, 2020, Ceridian borrowed **$295.0 million** under its revolving credit facility to increase its cash position and preserve financial flexibility amid the COVID-19 pandemic[135](index=135&type=chunk) - The company believes its current liquidity sources are sufficient to meet its needs for the foreseeable future[137](index=137&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=35&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risks from foreign currency exchange rates, interest rates affecting float revenue and debt expense, and pension obligations, but does not currently hedge foreign currency risk - Key market risks include foreign currency fluctuations (especially CAD), interest rate changes impacting float revenue and debt expense, and pension obligations[159](index=159&type=chunk) - A **100 basis point** change in interest rates is not expected to have a material effect on operating results or financial condition[163](index=163&type=chunk) [Controls and Procedures](index=36&type=page&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal controls, though remote work impacts due to COVID-19 are being evaluated - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the reporting period[166](index=166&type=chunk) - No material changes were made to internal controls over financial reporting in Q1 2020, but the company is monitoring the impact of remote work due to COVID-19[167](index=167&type=chunk) [Part II. Other Information](index=37&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=37&type=page&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business, financial condition, or liquidity - Ceridian is not presently a party to any legal proceedings that would have a material adverse effect on the company[169](index=169&type=chunk) [Risk Factors](index=37&type=page&id=Item%201A.%20Risk%20Factors) This section highlights material risks, including significant new focus on COVID-19 impacts on revenue and operations, potential fraud from Dayforce Wallet, reliance on third-party service providers, and credit risk from advancing funds - The COVID-19 pandemic is identified as a major risk, potentially affecting revenue through customer job cuts, delayed sales decisions, and reduced float revenue from lower interest rates[171](index=171&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - The Dayforce Wallet service introduces new risks, including potential fraud, credit risk from advancing wages on behalf of customers, and increased regulatory requirements[176](index=176&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) - The company relies heavily on third-party providers for essential services, including data centers, electronic funds transfer processing, and program management for the Dayforce Wallet. A failure by these providers could materially harm the business[183](index=183&type=chunk)[184](index=184&type=chunk)[186](index=186&type=chunk) - Customer funds held in trust are subject to market, interest rate, and credit risks. A significant loss of principal could adversely affect the company's financial condition[196](index=196&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=page&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[197](index=197&type=chunk) [Defaults Upon Senior Securities](index=42&type=page&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[198](index=198&type=chunk) [Mine Safety Disclosures](index=42&type=page&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[199](index=199&type=chunk) [Other Information](index=42&type=page&id=Item%205.%20Other%20Information) There was no other information to report for the period - None[200](index=200&type=chunk) [Exhibits](index=43&type=page&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to employment and credit agreements, various award agreements, and required CEO/CFO certifications - Exhibits filed include the First Amendment to the Senior Secured Credit Agreement and various management compensation plans and agreements[202](index=202&type=chunk)

PART I [Item 1. Business.](index=4&type=section&id=Item%201.%20Business.) Ceridian is a global HCM software company, offering Dayforce and Powerpay, actively migrating legacy customers to Dayforce while focusing on innovation and global expansion - Ceridian is a global HCM software company, with **Dayforce** as its flagship cloud platform providing HR, payroll, benefits, workforce management, and talent management functionality. **Powerpay** serves the Canadian small business market[18](index=18&type=chunk)[19](index=19&type=chunk)[25](index=25&type=chunk) - The company generally stopped actively selling its legacy Bureau solutions to new customers in **2012 (US)** and **2015 (Canada)**, focusing on maintenance and migrating existing Bureau customers to Dayforce[18](index=18&type=chunk)[26](index=26&type=chunk) Dayforce Customer Growth (2012-2019) | Year | Live Dayforce Customers | | :--- | :----------------------: | | 2012 | 482 | | 2019 | 4,363 | - As of December 31, 2019, Ceridian had approximately **38,000 Powerpay customer accounts** and **4,363 live Dayforce customers**, representing about **3.9 million active global users**. No single customer accounted for more than **1% of revenues in 2019**[25](index=25&type=chunk)[28](index=28&type=chunk) - Ceridian employs a direct sales force and third-party channels, segmented by customer size and geography, with a dedicated team for Bureau customer migration. Implementation and professional services are provided by an internal team, supplemented by third-party partners[29](index=29&type=chunk)[30](index=30&type=chunk) - The company's global customer support operates **24/7** from offices in North America, the UK, Mauritius, and Australia, organized into specialized pods for deep domain expertise[31](index=31&type=chunk) - Ceridian's R&D team focuses on customer-driven innovation, utilizing a modern cloud technology stack and agile development. Dayforce and Powerpay applications are hosted by third-party providers across multiple global data centers[32](index=32&type=chunk)[33](index=33&type=chunk) - The HCM market is highly competitive, with Ceridian competing against legacy payroll providers (e.g., ADP), cloud-enabled client-server HCM providers (e.g., Ultimate Software), modern cloud HCM providers (e.g., Workday), large enterprise application vendors (e.g., Oracle, SAP), and point solution providers (e.g., Kronos, Cornerstone OnDemand)[34](index=34&type=chunk) - Key competitive factors include product functionality, scalability, workforce management, tax services, technology, multi-country expertise, service quality, third-party integration, total cost of ownership, brand, pricing, and distribution[36](index=36&type=chunk) - As of December 31, 2019, Ceridian had **5,011 active employees**, with a significant presence in North America, Europe, Australia, and Mauritius. The company emphasizes diversity and equality, receiving over **15 workplace awards in 2019**[35](index=35&type=chunk)[36](index=36&type=chunk) Executive Officers (as of Feb 28, 2020) | Name | Age | Position | | :-------------- | :-- | :----------------------------- | | David D. Ossip | 53 | Chairman and Chief Executive Officer | | Leagh E. Turner | 48 | President and Chief Operating Officer | | Christopher Armstrong | 51 | Executive Vice President, Chief Customer Officer | | Arthur Gitajn | 67 | Executive Vice President and Chief Financial Officer | | Scott A. Kitching | 50 | Executive Vice President, General Counsel and Assistant Secretary | [Item 1A. Risk Factors.](index=9&type=section&id=Item%201A.%20Risk%20Factors.) Ceridian faces risks in operations, market competition, technology, regulation, data security, international business, and financial leverage - Ceridian has a history of losses and negative cash flows from operating activities, with net income of **$78.7 million in 2019**, a net loss of **$60.6 million in 2018**, and net income of **$3.3 million in 2017**. The company had an accumulated deficit of **$229.8 million** as of December 31, 2019[50](index=50&type=chunk) - The HCM market is highly competitive, with larger competitors having greater resources and brand recognition. Failure to compete effectively, manage growth of Cloud solutions, or successfully migrate Bureau customers could adversely affect the business[51](index=51&type=chunk)[52](index=52&type=chunk)[55](index=55&type=chunk)[57](index=57&type=chunk) - The company faces risks from rapid technological changes, evolving industry standards, and the need to continuously develop new or enhanced functionality to remain competitive[63](index=63&type=chunk) - Information security breaches, loss of customer data, or system disruptions could severely impact the business, reputation, and financial results, especially given the company's FTC consent order regarding data protection[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Compliance with a variety of U.S. and international laws and regulations, particularly concerning privacy, data protection (e.g., GDPR, Privacy Shield), and information security, is critical. Non-compliance or perceived violations could lead to enforcement actions, fines, litigation, and reputational damage[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Reliance on third-party service providers for data centers, electronic funds transfers, check printing, and legal monitoring introduces risks of disruption, quality decline, or termination of services[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - International operations (approximately **30% of revenue**, primarily from Canada) expose the company to risks such as localization costs, management difficulties, compliance with foreign laws, currency exchange rate fluctuations, and political/economic conditions[105](index=105&type=chunk)[106](index=106&type=chunk) - The company's substantial indebtedness (**$671.5 million** outstanding principal under Senior Term Loan as of Dec 31, 2019) could adversely affect its financial condition, ability to operate, and flexibility, with variable interest rates exposing it to interest rate risk[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) - The price of Ceridian's common stock may be volatile due to market conditions, operational results, industry developments, and other factors, potentially leading to investor losses[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) - The company does not intend to pay cash dividends in the foreseeable future, meaning investors must rely on stock price appreciation for returns[166](index=166&type=chunk) [Item 1B. Unresolved Staff Comments.](index=34&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) There are no unresolved staff comments from the SEC - The company has no unresolved staff comments[171](index=171&type=chunk) [Item 2. Properties.](index=34&type=section&id=Item%202.%20Properties.) Ceridian's corporate headquarters is in Minneapolis, Minnesota, with major offices globally; most facilities are leased, one is owned - Ceridian's corporate headquarters is located in Minneapolis, Minnesota, occupying approximately **195,000 square feet**[172](index=172&type=chunk) - The company has major North American offices in Atlanta, Alpharetta, Fountain Valley, Honolulu, Minneapolis, St. Petersburg, Montreal, Ottawa, Toronto, and Winnipeg, as well as international offices in Ebene (Mauritius), Glasgow (Scotland), Sydney, and Melbourne (Australia)[173](index=173&type=chunk) - All facilities are leased, except for the St. Petersburg, Florida, facility, which is owned[173](index=173&type=chunk) [Item 3. Legal Proceedings.](index=34&type=section&id=Item%203.%20Legal%20Proceedings.) Ceridian is involved in ordinary course legal proceedings, not anticipating material adverse effects on its financial condition or liquidity - Ceridian is subject to legal proceedings arising in the ordinary course of business, including employment, contract, intellectual property disputes, and government audits[174](index=174&type=chunk) - Management believes that the final disposition of current legal proceedings will not have a material adverse effect on the company's financial position or results of operations[174](index=174&type=chunk) [Item 4. Mine Safety Disclosures.](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to Ceridian HCM Holding Inc - Item 4. Mine Safety Disclosures is not applicable to the Registrant[175](index=175&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Ceridian's common stock trades on NYSE and TSX under 'CDAY' since April 2018; no cash dividends are planned, and no equity securities were repurchased - Ceridian's common stock began trading on the New York Stock Exchange ("NYSE") and the Toronto Stock Exchange under the symbol "**CDAY**" on **April 26, 2018**[178](index=178&type=chunk) - The company does not currently intend to pay cash dividends on its common stock in the foreseeable future, planning to retain future earnings for business operations and debt repayment[179](index=179&type=chunk)[166](index=166&type=chunk) Common Stock Outstanding (as of Feb 25, 2020) | Metric | Value | | :--- | :--- | | Shares Outstanding | 144,710,100 | - As of December 31, 2019, there were **105 stockholders of record**. The company has not made any issuer purchases of equity securities[180](index=180&type=chunk)[182](index=182&type=chunk) [Item 6. Selected Financial Data](index=37&type=section&id=Item%206.%20Selected%20Financial%20Data) This section presents Ceridian's selected historical consolidated financial data for 2017-2019, reflecting retrospective adoption of FASB ASC Topic 606 Consolidated Statements of Operations Data (2017-2019, in millions USD) | Metric | 2019 | 2018 | 2017 | | :----------------------------------------- | :------ | :------ | :------ | | Total revenue | $824.1 | $740.7 | $676.2 | | Cost of revenue | $455.9 | $425.8 | $406.7 | | Selling, general, and administrative expenses | $295.9 | $258.8 | $214.1 | | Operating profit | $72.3 | $56.1 | $55.4 | | Interest expense, net | $32.4 | $83.2 | $87.1 | | Income (loss) from continuing operations before income taxes | $34.3 | $(26.9) | $(40.5) | | Income tax (benefit) expense | $(44.4) | $8.4 | $(48.5) | | Income (loss) from continuing operations | $78.7 | $(35.3) | $8.0 | | Net income (loss) attributable to Ceridian | $78.7 | $(60.6) | $3.3 | | Basic EPS | $0.55 | $(0.60) | $(0.26) | | Diluted EPS | $0.53 | $(0.60) | $(0.26) | Consolidated Balance Sheet Data (as of Dec 31, 2017-2019, in millions USD) | Metric | 2019 | 2018 | 2017 | | :------------------------ | :-------- | :-------- | :-------- | | Cash and equivalents | $281.3 | $217.8 | $94.2 | | Total assets | $6,085.7 | $5,247.8 | $6,817.9 | | Long-term debt (1) | $666.3 | $663.5 | $1,119.8 | | Total liabilities | $4,203.4 | $3,632.3 | $5,606.9 | | Working capital | $252.0 | $164.5 | $180.5 | | Total stockholders' equity | $1,882.3 | $1,615.5 | $1,173.2 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed analysis of Ceridian's financial condition and operations, including Cloud/Bureau solutions, KPIs, comparative results, liquidity, and critical accounting policies - Ceridian's business model focuses on rapid growth of Dayforce and maximizing customer lifetime value, with high visibility into future revenues due to its subscription model and high retention rates[197](index=197&type=chunk) - It takes approximately **2 years** to recover implementation, customer acquisition, and other direct costs for a new Dayforce customer, as PEPM subscription fees are not charged until the customer goes live[197](index=197&type=chunk) Key Performance Measures (2017-2019) | Metric | 2019 | 2018 | 2017 | | :----------------------------------- | :------ | :------ | :------ | | Live Dayforce customers | 4,363 | 3,718 | 3,001 | | Annual Cloud revenue retention rate | 96.3% | 96.0% | 96.7% | | Cloud annualized recurring revenue (ARR) (in millions) | $582.0 | $476.2 | $366.7 | | Adjusted EBITDA (in millions) | $184.6 | $160.6 | $131.4 | | Adjusted EBITDA margin | 22.4% | 21.7% | 19.4% | - Dayforce customer base grew from **482 in 2012** to **4,363 in 2019**, with over **640 net new customers** contracted but not yet live as of December 31, 2019[202](index=202&type=chunk) - In 2019, **72% of new live Dayforce customers** were net new, and **28% were migrations** from Bureau solutions. Dayforce serves small (under 500 employees), major (500-5,999), and enterprise (6,000+) businesses[204](index=204&type=chunk) - Cloud revenue has surpassed Bureau revenue since **Q3 2016**, growing from **41% of total revenue in Q4 2015** to **83% in Q4 2019**[210](index=210&type=chunk) - Ceridian completed its IPO on **April 30, 2018**, issuing **24.15 million shares** and raising **$531.3 million gross proceeds**, plus a **$100 million private placement**. Proceeds were used to redeem Senior Notes and refinance debt[213](index=213&type=chunk)[214](index=214&type=chunk) - The company generates recurring revenue from Cloud (Dayforce, Powerpay) and Bureau solutions, and professional services revenue from implementation and other services. Float revenue from invested customer trust funds is also a recurring revenue component[215](index=215&type=chunk) - Dayforce primarily charges monthly PEPM fees, with contracts typically **3-5 years**. Powerpay charges per-employee, per-process fees for Canadian small businesses. Bureau solutions charge per-process fees[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) - Cost of revenue includes customer service, technical support, implementation, hosting, consulting, delivery, royalties, depreciation, amortization, and product development and management expenses[219](index=219&type=chunk)[220](index=220&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) - Selling, general, and administrative expenses include direct marketing, sales force costs, corporate administration, finance, legal, HR, and amortization of other intangible assets[226](index=226&type=chunk)[227](index=227&type=chunk) - Other expense, net, includes foreign currency translation gains/losses and net periodic benefit plan expense[228](index=228&type=chunk) - Income tax provision accounts for federal, state, and international taxes, including deferred tax assets and liabilities, and the impact of the **2017 Tax Cut and Jobs Act**[229](index=229&type=chunk)[230](index=230&type=chunk) Revenue Growth (2019 vs. 2018, in millions USD) | Revenue Category | 2019 | 2018 | Change ($) | Change (%) | Constant Currency Change (%) | | :------------------------------- | :------ | :------ | :--------- | :--------- | :--------------------------- | | Total revenue | $824.1 | $740.7 | $83.4 | 11.3% | 12.1% | | Total Cloud revenue | $660.0 | $528.8 | $131.2 | 24.8% | 25.7% | | Dayforce recurring services, excl. float | $377.9 | $288.2 | $89.7 | 31.1% | 31.7% | | Dayforce float | $51.1 | $37.5 | $13.6 | 36.3% | 37.1% | | Total Dayforce recurring services | $429.0 | $325.7 | $103.3 | 31.7% | 32.3% | | Powerpay recurring services, excl. float | $76.9 | $78.0 | $(1.1) | (1.4)% | 0.6% | | Powerpay float | $12.1 | $12.0 | $0.1 | 0.8% | 4.2% | | Total Powerpay recurring services | $89.0 | $90.0 | $(1.0) | (1.1)% | 1.1% | | Total Bureau revenue | $164.1 | $211.9 | $(47.8) | (22.6)% | (22.1)% | - Cloud revenue growth in 2019 was driven by new customers, add-ons, and Bureau customer migrations, with an average revenue increase of **27%** from migrated Bureau customers[237](index=237&type=chunk)[240](index=240&type=chunk) - Bureau revenue declined by **$47.8 million (22.6%) in 2019**, with approximately **40% of the decline** due to customer migrations to Dayforce. The annual Bureau revenue retention rate was **83.2% in 2019**[238](index=238&type=chunk) Float Revenue and Yield (2018-2019) | Metric | 2019 | 2018 | | :----------------- | :------ | :------ | | Investment income | $80.2M | $67.0M | | Average float balance | $3,427.3M | $3,361.5M | | Average yield | 2.34% | 2.00% | - Total cost of revenue increased by **$30.1 million (7.1%) in 2019**, driven by increased Dayforce customer support, professional services for new implementations, and product development efforts[242](index=242&type=chunk)[243](index=243&type=chunk) Gross Margin by Solution (2018-2019) | Metric | 2019 | 2018 | | :-------------------------- | :---- | :---- | | Total gross margin | 44.7% | 42.5% | | Cloud recurring services | 69.6% | 66.1% | | Bureau recurring services | 72.7% | 71.7% | | Professional services and other | (4.0)% | (14.3)% | - Cloud recurring services gross margin improved to **69.6% in 2019** due to an increased proportion of Dayforce customers live for more than two years and economies of scale in customer support and hosting[247](index=247&type=chunk) - Operating profit increased by **$16.2 million (28.9%) to $72.3 million in 2019**, primarily due to revenue growth and gross margin improvement[249](index=249&type=chunk) - Interest expense, net, decreased by **$50.8 million (61.1%) to $32.4 million in 2019**, mainly due to debt refinancing in 2018 and increased interest income[250](index=250&type=chunk) - Net income attributable to Ceridian was **$78.7 million in 2019**, a significant increase from a **$60.6 million net loss in 2018**, primarily due to a **$62.6 million tax benefit** from the release of a valuation allowance[252](index=252&type=chunk)[254](index=254&type=chunk) - Adjusted EBITDA increased by **$24.0 million to $184.6 million in 2019**, with Adjusted EBITDA margin rising to **22.4% from 21.7% in 2018**[255](index=255&type=chunk) Revenue Growth (2018 vs. 2017, in millions USD) | Revenue Category | 2018 | 2017 | Change ($) | Change (%) | Constant Currency Change (%) | | :------------------------------- | :------ | :------ | :--------- | :--------- | :--------------------------- | | Total revenue | $740.7 | $676.2 | $64.5 | 9.5% | 9.5% | | Total Cloud revenue | $528.8 | $409.9 | $118.9 | 29.0% | 29.1% | | Dayforce recurring services, excl. float | $288.2 | $208.9 | $79.3 | 38.0% | 38.0% | | Dayforce float | $37.5 | $19.6 | $17.9 | 91.3% | 92.3% | | Total Dayforce recurring services | $325.7 | $228.5 | $97.2 | 42.5% | 42.6% | | Powerpay recurring services, excl. float | $78.0 | $73.2 | $4.8 | 6.6% | 6.7% | | Powerpay float | $12.0 | $9.9 | $2.1 | 21.2% | 21.4% | | Total Powerpay recurring services | $90.0 | $83.1 | $6.9 | 8.3% | 8.5% | | Total Bureau revenue | $211.9 | $266.3 | $(54.4) | (20.4)% | (20.5)% | - Cloud revenue increased by **$118.9 million (29.0%) in 2018**, driven by new customers, add-ons, and Bureau customer migrations. Bureau revenue declined by **$54.4 million (20.4%)**, with **42% of the decline** from migrations[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk) Float Revenue and Yield (2017-2018) | Metric | 2018 | 2017 | | :----------------- | :------ | :------ | | Investment income | $67.0M | $46.5M | | Average float balance | $3,361.5M | $3,228.2M | | Average yield | 2.00% | 1.45% | - Total cost of revenue increased by **$19.1 million (4.7%) in 2018**, primarily due to Dayforce product development efforts and IPO-related share-based compensation[266](index=266&type=chunk)[269](index=269&type=chunk) Gross Margin by Solution (2017-2018) | Metric | 2018 | 2017 | | :-------------------------- | :---- | :---- | | Total gross margin | 42.5% | 39.9% | | Cloud recurring services | 66.1% | 59.9% | | Bureau recurring services | 71.7% | 72.7% | | Professional services and other | (14.3)% | (32.0)% | - Cloud recurring services gross margin improved to **66.1% in 2018** due to increased proportion of Dayforce customers live for more than two years and consistent configuration[274](index=274&type=chunk) - Operating profit increased slightly to **$56.1 million in 2018**, driven by revenue growth and gross margin improvement, despite increased selling, general, and administrative expenses[275](index=275&type=chunk)[276](index=276&type=chunk) - Net loss attributable to Ceridian was **$60.6 million in 2018**, primarily due to **$51.0 million in IPO and debt refinancing expenses**, compared to a net income of **$3.3 million in 2017**[281](index=281&type=chunk) - Adjusted EBITDA increased by **$29.2 million in 2018**, with Adjusted EBITDA margin rising to **21.7% from 19.4% in 2017**[282](index=282&type=chunk) - Primary liquidity sources are cash and equivalents, operating activities, credit facilities, and equity offerings. As of December 31, 2019, cash and equivalents were **$281.3 million**, with **$300.0 million** available under the revolving credit facility[285](index=285&type=chunk) - Customer trust funds are invested in liquid, investment-grade securities, with primary objectives of principal protection and liquidity. These funds are segregated from operating cash[288](index=288&type=chunk) Net Cash Flows (excluding customer trust funds, in millions USD) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------- | :-------- | :-------- | :-------- | | Net cash provided by (used in) operating activities—continuing operations | $61.8 | $10.7 | $(29.4) | | Net cash used in investing activities—continuing operations | $(85.4) | $(40.2) | $(51.1) | | Net cash provided by financing activities | $79.8 | $163.5 | $50.7 | - Operating cash flow (excluding trust funds) was **$61.8 million in 2019**, driven by net income and non-cash adjustments, partially offset by working capital changes[293](index=293&type=chunk) - Net cash used in investing activities (excluding trust funds) was **$85.4 million in 2019**, primarily for capital expenditures (**$55.2 million**) and acquisition costs (**$30.2 million**)[296](index=296&type=chunk) - Net cash provided by financing activities (excluding trust funds) was **$79.8 million in 2019**, mainly from common stock issuance under share-based compensation plans, partially offset by debt payments[299](index=299&type=chunk) - The company experiences seasonal fluctuations, with the fourth quarter historically strongest for new customer contracts, renewals, and go-lives, and revenue typically higher in **Q4 and Q1**[304](index=304&type=chunk) - As of December 31, 2019, total debt was **$683.9 million**, consisting of a **$671.5 million Senior Term Loan** and a **$300.0 million Revolving Facility (undrawn)**[285](index=285&type=chunk)[306](index=306&type=chunk) Contractual Obligations (as of Dec 31, 2019, in millions USD) | Obligation Category | Less than one year | 1-3 Years | 3-5 Years | More than 5 Years | Total | | :-------------------------------------- | :----------------- | :-------- | :-------- | :---------------- | :-------- | | Long-term debt, excluding financing lease obligations | $6.8 | $13.6 | $13.6 | $637.5 | $671.5 | | Interest payable on long-term debt | $32.9 | $64.1 | $62.0 | $10.6 | $169.6 | | Operating leases | $7.2 | $16.0 | $9.4 | $5.2 | $37.8 | | Financing leases | $2.6 | $1.4 | $2.0 | $7.5 | $13.5 | | Postretirement plan obligations | $2.2 | $3.6 | $3.0 | $5.2 | $14.0 | | Retirement plan obligations | $18.7 | $39.9 | $26.4 | $20.0 | $105.0 | | **Total** | **$70.4** | **$138.6**| **$116.4**| **$686.0** | **$1,011.4**| - Critical accounting policies include revenue recognition, assignment of fair values to goodwill and intangible assets, impairment testing, pension and postretirement benefit liabilities, and share-based compensation[320](index=320&type=chunk)[321](index=321&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk.](index=66&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) Ceridian faces market risks from foreign currency, interest rates, and pension obligations, managed through normal operations without speculative instruments - Ceridian is exposed to market risks related to foreign currency exchange rates (primarily **Canadian Dollar**), interest rates, and pension obligations[342](index=342&type=chunk)[343](index=343&type=chunk) - The company does not actively hedge foreign currency exposure due to the relative size of international operations but monitors it for future hedging consideration[343](index=343&type=chunk) - Customer trust funds are invested in high-quality, liquid securities (bank deposits, money market funds, government/agency securities, corporate debt) to protect principal and ensure liquidity[344](index=344&type=chunk) - A **100 basis point** change in interest rates is not believed to have a material effect on operating results or financial condition, as investment securities are classified as 'available for sale'[346](index=346&type=chunk) - Pension obligations are subject to actuarial assumptions (discount rates, expected returns, mortality). A **50 basis point decrease** in the discount rate would decrease pension expense by **$0.2 million**, while a **50 basis point decrease** in return on plan assets would increase expense by **$2.0 million**[347](index=347&type=chunk)[348](index=348&type=chunk) [Item 8. Financial Statements and Supplementary Data.](index=67&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section presents Ceridian's audited consolidated financial statements, including balance sheets, statements of operations, cash flows, auditor's report, critical audit matters, and detailed notes - The consolidated financial statements are prepared in accordance with **U.S. GAAP** and include the operations of Ceridian and its subsidiaries, as well as consolidated grantor trusts holding customer funds[394](index=394&type=chunk)[395](index=395&type=chunk) - **KPMG LLP** issued an unqualified opinion on the consolidated financial statements and an effective opinion on internal control over financial reporting as of December 31, 2019[354](index=354&type=chunk) - Critical audit matters identified include the evaluation of deferred tax asset realizability, requiring subjective judgment on forecasted future taxable income, and the assessment of stand-alone selling price for cloud professional services, which relies on internally-developed estimates of service hours[364](index=364&type=chunk)[365](index=365&type=chunk)[367](index=367&type=chunk)[368](index=368&type=chunk) Consolidated Balance Sheets (as of Dec 31, in millions USD) | ASSETS | 2019 | 2018 | | :--------------------------------------- | :-------- | :-------- | | Cash and equivalents | $281.3 | $217.8 | | Trade and other receivables, net | $80.4 | $63.9 | | Prepaid expenses and other current assets | $57.9 | $48.9 | | Total current assets before customer trust funds | $419.6 | $330.6 | | Customer trust funds | $3,204.1 | $2,603.5 | | Total current assets | $3,623.7 | $2,934.1 | | Right of use lease asset | $32.0 | — | | Property, plant, and equipment, net | $128.3 | $104.4 | | Goodwill | $1,973.5 | $1,927.4 | | Other intangible assets, net | $177.9 | $187.5 | | Other assets | $150.3 | $94.4 | | **Total assets** | **$6,085.7**| **$5,247.8**| | LIABILITIES AND EQUITY | | | | Current portion of long-term debt | $10.8 | $6.8 | | Current portion of long-term lease liabilities | $8.8 | — | | Accounts payable | $43.2 | $41.5 | | Deferred revenue | $25.5 | $23.2 | | Employee compensation and benefits | $75.9 | $54.5 | | Other accrued expenses | $13.9 | $23.9 | | Total current liabilities before customer trust funds obligations | $178.1 | $149.9 | | Customer trust funds obligations | $3,193.6 | $2,619.7 | | Total current liabilities | $3,371.7 | $2,769.6 | | Long-term debt, less current portion | $666.3 | $663.5 | | Employee benefit plans | $117.2 | $153.3 | | Long-term lease liabilities, less current portion | $30.1 | — | | Other liabilities | $18.1 | $45.9 | | **Total liabilities** | **$4,203.4**| **$3,632.3**| | Total stockholders' equity | $1,882.3 | $1,615.5 | | **Total liabilities and equity** | **$6,085.7**| **$5,247.8**| Consolidated Statements of Operations (Years Ended Dec 31, in millions USD) | Metric | 2019 | 2018 | 2017 | | :----------------------------------------- | :------ | :------ | :------ | | Recurring services | $680.1 | $625.0 | $573.9 | | Professional services and other | $144.0 | $115.7 | $102.3 | | **Total revenue** | **$824.1**| **$740.7**| **$676.2**| | Cost of revenue | $455.9 | $425.8 | $406.7 | | Gross profit | $368.2 | $314.9 | $269.5 | | Selling, general and administrative | $295.9 | $258.8 | $214.1 | | Operating profit | $72.3 | $56.1 | $55.4 | | Interest expense, net | $32.4 | $83.2 | $87.1 | | Other expense (income), net | $5.6 | $(0.2) | $8.8 | | Income (loss) from continuing operations before income taxes | $34.3 | $(26.9) | $(40.5) | | Income tax (benefit) expense | $(44.4) | $8.4 | $(48.5) | | Income (loss) from continuing operations | $78.7 | $(35.3) | $8.0 | | Loss from discontinued operations | — | $(25.8) | $(6.0) | | Net income (loss) | $78.7 | $(61.1) | $2.0 | | Net income (loss) attributable to Ceridian | $78.7 | $(60.6) | $3.3 | | Basic EPS | $0.55 | $(0.60) | $(0.26) | | Diluted EPS | $0.53 | $(0.60) | $(0.26) | Consolidated Statements of Cash Flows (Years Ended Dec 31, in millions USD) | Metric | 2019 | 2018 | 2017 | | :------------------------------------------- | :-------- | :-------- | :-------- | | Net cash provided by (used in) operating activities | $50.6 | $9.5 | $(39.8) | | Net cash used in investing activities | $(119.3) | $(51.1) | $(39.6) | | Net cash provided by (used in) financing activities | $609.7 | $(1,251.6)| $406.8 | | Effect of Exchange Rate Changes on Cash | $11.3 | $(12.8) | $11.0 | | Net increase (decrease) in cash and equivalents | $552.3 | $(1,306.0)| $338.4 | | Cash, restricted cash, and equivalents at end of year | $1,658.6 | $1,106.3 | $2,411.8 | - Ceridian acquired **RITEQ**, an Australian workforce management solutions provider, for approximately **$20.1 million** on **September 13, 2019**, expanding its international offerings[446](index=446&type=chunk) - As of December 31, 2019, goodwill was **$1,973.5 million**, and other intangible assets, net, were **$177.9 million**. The company performs annual impairment assessments[466](index=466&type=chunk)[468](index=468&type=chunk) - Total long-term debt (excluding current portion) was **$666.3 million** as of December 31, 2019, with an effective interest rate of **4.8%** on the 2018 Term Debt[471](index=471&type=chunk)[475](index=475&type=chunk) - The company maintains defined contribution plans and frozen defined benefit pension plans. The projected benefit obligation of defined benefit plans exceeded plan assets by **$121.6 million** as of December 31, 2019[489](index=489&type=chunk)[490](index=490&type=chunk)[499](index=499&type=chunk) - Share-based compensation expense was **$36.5 million in 2019**, with **$83.7 million** of unrecognized expense for unvested term-based awards and **$14.0 million** for unvested RSUs[528](index=528&type=chunk)[533](index=533&type=chunk)[534](index=534&type=chunk) - As of December 31, 2019, approximately **$838.3 million of revenue** is expected to be recognized over the next three years from remaining performance obligations[544](index=544&type=chunk) - The company recognized an income tax benefit of **$44.4 million in 2019**, primarily due to a **$62.6 million release of a valuation allowance** against domestic deferred tax assets[551](index=551&type=chunk) - A material weakness in internal control over financial reporting related to duplicate payroll payments was identified in **Q3 2019** but remediated by December 31, 2019[600](index=600&type=chunk) [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.](index=114&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) There have been no changes in or disagreements with accountants on accounting and financial disclosure - There have been no changes in or disagreements with accountants on accounting and financial disclosure[596](index=596&type=chunk) [Item 9A. Controls and Procedures.](index=114&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded disclosure controls were effective as of December 31, 2019; a material weakness in payroll payments was remediated, making internal controls effective by year-end - Management, with CEO and CFO participation, evaluated the effectiveness of disclosure controls and procedures as of December 31, 2019, concluding they were effective at a reasonable assurance level[598](index=598&type=chunk) - A material weakness related to duplicate payroll payments was identified in **Q3 2019**, rendering internal control over financial reporting ineffective as of September 30, 2019. However, additional monitoring controls were implemented, and remediation was completed by December 31, 2019, leading to a conclusion of effective internal control over financial reporting at year-end[599](index=599&type=chunk)[600](index=600&type=chunk) - Management acknowledges the inherent limitations of control systems, which can only provide reasonable, not absolute, assurance against errors or fraud[603](index=603&type=chunk) [Item 9B. Other Information.](index=115&type=section&id=Item%209B.%20Other%20Information.) There is no other information required to be disclosed in this section - There is no other information required to be disclosed in this section[604](index=604&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance.](index=118&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) This section incorporates by reference information on directors, executive officers, corporate governance, related party transactions, and code of ethics from the Proxy Statement - Information on directors, executive officers, corporate governance, related party transactions, code of ethics, and director nomination process is incorporated by reference from the Proxy Statement for Ceridian's **2020 Annual Meeting of Stockholders**[607](index=607&type=chunk)[608](index=608&type=chunk)[609](index=609&type=chunk)[610](index=610&type=chunk)[611](index=611&type=chunk)[612](index=612&type=chunk) - The Code of Conduct applies to all employees, contractors, officers, and directors and is available on Ceridian's website[610](index=610&type=chunk) [Item 11. Executive Compensation.](index=118&type=section&id=Item%2011.%20Executive%20Compensation.) This item incorporates by reference information on executive and director compensation, as well as equity compensation plan details, from Ceridian's Proxy Statement - Information regarding executive compensation, director compensation, and equity compensation plan details is incorporated by reference from Ceridian's Proxy Statement[613](index=613&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.](index=118&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) This section incorporates by reference details on equity compensation plans and security ownership of beneficial owners and management from the Proxy Statement - Information on securities authorized for issuance under equity compensation plans and security ownership of certain beneficial owners and management is incorporated by reference from the Proxy Statement[614](index=614&type=chunk)[615](index=615&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence.](index=119&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) This item incorporates by reference information concerning certain relationships, related party transactions, and director independence from the Proxy Statement - Information regarding certain relationships, related party transactions, and director independence is incorporated by reference from the Proxy Statement[616](index=616&type=chunk) [Item 14. Principal Accounting Fees and Services.](index=119&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services.) This item incorporates by reference information on principal accounting fees and services from the Proxy Statement, including KPMG's ratification for 2020 - Information on principal accounting fees and services is incorporated by reference from the Proxy Statement, specifically related to the ratification of **KPMG** as the independent registered public accounting firm for **2020**[617](index=617&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules.](index=120&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules.) This section includes consolidated financial statements, confirms the omission of schedules, and provides a comprehensive list of exhibits filed with the Annual Report on Form 10-K - The consolidated financial statements are included as part of **Item 8** of this report[619](index=619&type=chunk) - All financial statement schedules are omitted because they are not applicable or the required information is presented in the consolidated financial statements or notes[620](index=620&type=chunk) - A detailed list of exhibits, including corporate governance documents, debt agreements, employment contracts, equity plans, and certifications, is provided[621](index=621&type=chunk)[622](index=622&type=chunk)[624](index=624&type=chunk) [Item 16. Form 10-K Summary.](index=120&type=section&id=Item%2016.%20Form%2010-K%20Summary.) This item indicates that a Form 10-K Summary is not applicable for this report - Form 10-K Summary is not applicable[625](index=625&type=chunk)

Ceridian HCM Holding, Inc. (CDAY) Q4 2019 Results Conference Call February 5, 2020 5:00 PM ET CompanyParticipants Jeremy Johnson - Vice President of Finance and Investor Relations David Ossip - Chairman and Chief Executive Officer Arthur Gitajn - Executive Vice President, Chief Financial Officer Conference Call Participants Nandan Amladi - Guggenheim Partners Samad Samana - Jefferies Daniel Jester - Citi Siti Panigrahi - Mizuho Mark Marcon - Baird Drew Kootman - Cantor Fitzgerald Scott Berg - Needham Raimo ...

Ceridian HCM Holding Inc. (CDAY) Q3 2019 Earnings Conference Call November 7, 2019 5:00 PM ET Company Participants Jeremy Johnson – Vice President, Finance and Investor Relations David Ossip – President and Chief Executive Office Arthur Gitajn – Chief Financial Officer Conference Call Participants Samad Samana – Jefferies Mark Marcon – Baird Daniel Jester – Citi Nandan Amladi – Guggenheim Partners Matt Pfau – William Blair Scott Berg – Needham Siti Panigrahi – Mizuho Raimo Lenschow – Barclays Chris Merwin – ...

[PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section covers Ceridian's financial statements, management's analysis, market risks, and internal control assessments [Condensed Consolidated Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20%28unaudited%29) This section presents Ceridian's unaudited financial statements, highlighting revenue growth, a shift to net income, and key accounting changes [Financial Statements Overview](index=4&type=section&id=Financial%20Statements%20Overview) Ceridian reported increased revenues and a shift to net income for the nine months ended September 30, 2019, with improved operating cash flow Condensed Consolidated Balance Sheet Data (in millions) | Account | Sep 30, 2019 | Dec 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Cash and equivalents | $270.9 | $217.8 | | Total current assets | $3,004.3 | $2,934.1 | | Goodwill | $1,961.2 | $1,927.4 | | Total assets | $5,436.2 | $5,247.8 | | **Liabilities & Equity** | | | | Total current liabilities | $2,743.2 | $2,769.6 | | Long-term debt, less current portion | $659.3 | $663.5 | | Total liabilities | $3,583.1 | $3,632.3 | | Total stockholders' equity | $1,853.1 | $1,615.5 | Condensed Consolidated Statements of Operations (in millions, except per share data) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $202.3 | $178.1 | $602.3 | $545.9 | | Gross profit | $88.8 | $73.5 | $270.4 | $228.9 | | Operating profit | $6.5 | $16.2 | $52.6 | $35.8 | | Net income (loss) attributable to Ceridian | $62.7 | $4.2 | $80.2 | $(58.5) | | Diluted EPS | $0.42 | $0.03 | $0.54 | $(0.63) | Condensed Consolidated Statements of Cash Flows (in millions) | Cash Flow Activity | Nine Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $24.6 | $(18.1) | | Net cash used in investing activities | $(124.8) | $(15.6) | | Net cash provided by (used in) financing activities | $17.1 | $(483.9) | [Notes to Financial Statements](index=10&type=section&id=Notes%20to%20Financial%20Statements) Notes detail accounting policy changes, the RITEQ acquisition, revenue disaggregation, a service incident loss, and a significant income tax benefit - Adopted new accounting standards **ASC 606 (Revenue)** and **ASC 842 (Leases)** as of January 1, 2019, applying changes retrospectively, altering revenue timing and bringing operating lease assets onto the balance sheet[36](index=36&type=chunk)[38](index=38&type=chunk) - On September 13, 2019, the company acquired **RITEQ**, an Australian workforce management solutions provider, for approximately **$19.4 million**[56](index=56&type=chunk) Disaggregation of Revenue (in millions) | Revenue Source | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | **Total Cloud Revenue** | **$165.5** | **$131.7** | **$475.8** | **$385.9** | | - Dayforce | $143.7 | $110.4 | $411.0 | $320.3 | | - Powerpay | $21.8 | $21.3 | $64.8 | $65.6 | | **Total Bureau Revenue** | **$36.8** | **$46.4** | **$126.5** | **$160.0** | | **Total Revenue** | **$202.3** | **$178.1** | **$602.3** | **$545.9** | - An isolated service incident on September 26, 2019, resulted in **$18.8 million** of duplicate payroll payments, with **$12.6 million** unrecovered and recorded as a loss[114](index=114&type=chunk) - The company released **$65.8 million** of its valuation allowance against domestic deferred tax assets, resulting in a significant income tax benefit[104](index=104&type=chunk)[105](index=105&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong Dayforce Cloud revenue growth, improved gross margins, a net income surge from a tax benefit, and a solid liquidity position [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Q3 2019 saw total revenue increase by 13.6% driven by Cloud growth, improved gross margins, and a significant tax benefit boosting net income Q3 2019 vs Q3 2018 Revenue Growth (Constant Currency) | Revenue Category | Growth (Reported) | Growth (Constant Currency) | | :--- | :--- | :--- | | Total Revenue | 13.6% | 14.0% | | Total Cloud Revenue | 25.7% | 26.2% | | - Dayforce Revenue | 30.2% | 30.5% | | Total Bureau Revenue | (20.7)% | (20.4)% | - The number of live Dayforce customers grew to **4,169** as of September 30, 2019, with the proportion of customers live for two or more years increasing from **62% to 68%**, contributing to improved profitability[135](index=135&type=chunk)[139](index=139&type=chunk)[162](index=162&type=chunk) Gross Margin Analysis | Gross Margin Type | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Total Gross Margin | 43.9% | 41.3% | 44.9% | 41.9% | | Cloud Recurring Services | 70.2% | 65.8% | 69.9% | 66.1% | | Professional Services & Other | (7.7)% | (13.6)% | (8.6)% | (15.6)% | - Investment income from customer trust funds increased to **$18.3 million** in Q3 2019, driven by a higher average float balance and a **22 basis point increase** in average yield to **2.33%**[155](index=155&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position, supported by cash reserves and an undrawn revolving credit facility, with manageable debt levels - Primary sources of liquidity as of September 30, 2019, include **$270.9 million** in cash and equivalents and **$300.0 million** available under a revolving credit facility[197](index=197&type=chunk) - Total principal debt balance was **$673.2 million** as of September 30, 2019, with a credit rating upgrade reducing the interest rate on term debt[197](index=197&type=chunk)[198](index=198&type=chunk) - For the nine months ended September 30, 2019, capital expenditures totaled **$38.4 million**, and acquisition costs were **$29.4 million**[206](index=206&type=chunk) [Non-GAAP Measures](index=44&type=section&id=Non-GAAP%20Measures) The company utilizes non-GAAP measures like Constant Currency Revenue and Adjusted EBITDA to assess performance, showing strong growth and margin expansion Adjusted EBITDA Reconciliation (in millions) | Metric | Q3 2019 | Q3 2018 | YTD 2019 | YTD 2018 | | :--- | :--- | :--- | :--- | :--- | | Operating profit | $6.5 | $16.2 | $52.6 | $35.8 | | Depreciation and amortization | $14.9 | $14.3 | $43.9 | $42.4 | | Share-based compensation | $11.4 | $4.8 | $27.0 | $19.5 | | Other non-recurring charges (e) | $12.6 | $— | $12.6 | $— | | **Adjusted EBITDA** | **$46.4** | **$36.4** | **$140.2** | **$118.8** | | **Adjusted EBITDA Margin** | **22.9%** | **20.4%** | **23.3%** | **21.8%** | - Other non-recurring charges of **$12.6 million** in Q3 and YTD 2019 represent the loss on unrecovered duplicate payments from the isolated service incident[222](index=222&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks including foreign currency fluctuations, interest rate changes affecting float income and debt, and pension obligations - Primary market risks include **foreign currency exchange rates**, **interest rate fluctuations** impacting customer trust fund investments and debt, and **pension obligation risks** related to a frozen defined benefit plan[231](index=231&type=chunk) - A **100 basis point change** in interest rates is estimated to have an approximately **$18 million impact on float revenue** and a **$7 million impact on net interest expense** over a twelve-month period[155](index=155&type=chunk)[165](index=165&type=chunk) [Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness in internal control over financial reporting from a duplicate payment incident - A **material weakness** in internal control over financial reporting was identified as of September 30, 2019[240](index=240&type=chunk) - The weakness relates to ineffective controls to detect duplicate payments in advance, stemming from a September 26, 2019 incident that caused **$18.8 million** in duplicate payments[239](index=239&type=chunk)[240](index=240&type=chunk) - Due to this material weakness, the CEO and CFO concluded that disclosure controls were not effective, with remediation efforts including additional monitoring controls underway[237](index=237&type=chunk)[240](index=240&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity sales, and a list of exhibits filed with the report [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - Ceridian is not presently a party to any legal proceedings believed to have a **material adverse effect** on its business[244](index=244&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) A new material risk factor relates to the identified material weakness in internal control over financial reporting, with potential adverse impacts - A new risk factor was disclosed concerning the recently identified **material weakness** in internal control over financial reporting[246](index=246&type=chunk) - The material weakness stems from an isolated service incident resulting in duplicate customer payroll payments, with failure to remediate potentially leading to inaccurate reporting and loss of investor confidence[247](index=247&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None [Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include **CEO and CFO certifications** (Sections 302 and 906 of Sarbanes-Oxley) and **XBRL interactive data files**[252](index=252&type=chunk)