Discontinued Operations and Assets Held for Sale

3 Months Ended

Mar. 31, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations and Assets Held for Sale

4. Discontinued Operations and Assets Held for Sale

On March 20, 2024, the Company entered into the Disposition Agreement to sell its Payroll & Professional Services business to an affiliate of H.I.G. Capital for up to $1.2 billion, in the form of $1 billion in cash and up to $200 million in a seller notes, of which $150 million is contingent upon the Payroll & Professional Services business 2025 financial performance. The transaction is expected to close by mid-year 2024, subject to customary closing conditions, including regulatory approvals.

After the sale is complete, upon satisfaction or waiver of the closing conditions, a number of services are expected to continue under a Transition Services Agreement.

The following tables presents the carrying value of assets and liabilities for the Payroll & Professional Services business as presented within assets and liabilities held for sale on our condensed consolidated balance sheets and results as reported in income (loss) from discontinued operations, net of tax, within our condensed consolidated statements of comprehensive income (loss) (in millions):

	March 31,		December 31,
	2024		2023
Assets
Cash and cash equivalents	$	30	$	34
Receivables, net		259		263
Other current assets		63		59
Fiduciary assets		1,211		1,167
Goodwill		330		—
Intangible assets, net		408		—
Fixed assets, net		40		—
Deferred tax assets, net		6		—
Other assets		154		—
Current assets held for sale		2,501		1,523
Goodwill		—		331
Intangible assets, net		—		418
Fixed assets, net		—		40
Deferred tax assets, net		—		3
Other assets		—		156
Long-term assets held for sale	$	—	$	948
Liabilities
Accounts payable and accrued liabilities	$	105	$	119
Other current liabilities		89		84
Fiduciary liabilities		1,211		1,167
Deferred tax liabilities		—		—
Other liabilities		70		—
Current liabilities held for sale		1,475		1,370
Deferred tax liabilities		—		—
Other liabilities		—		68
Long-term liabilities held for sale	$	—	$	68

	Three Months Ended March 31,
	2024		2023
Revenue	$	257	$	245
Cost of services, exclusive of depreciation and amortization		187		173
Depreciation and amortization		3		2
Gross Profit		67		70
Operating Expenses
Selling, general and administrative		37		34
Depreciation and intangible amortization		8		9
Total Operating Expenses		45		43
Income (loss) from Discontinued Operations		22		27
Interest expense		-		-
Other (income) expense, net		2		2
Income (Loss) from Discontinued Operations Before Income Taxes		20		25
Income tax expense (benefit)		15		15
Net Income (Loss) from Discontinued Operations, Net of Tax	$	5	$	10

The expense amounts reflected above represent only the direct costs attributable to the Payroll & Professional Services business and excludes allocations of corporate costs that will be retained following the sale. Neither the discontinued operations presented above, nor continuing operations, reflect the impact of any cost reimbursement that will be received under a Transition Services Agreement following the close of the transaction upon the satisfaction or waiver of closing conditions.

The Company's cash flows are presented inclusive of discontinued operations on the condensed consolidated statement of cash flows for all periods presented. The significant operating and investing non-cash components included in our condensed consolidated statement of cash flows for the discontinued operations are as follows (in millions):

	Three Months Ended March 31,
	2024		2023
Depreciation	$	3	$	2
Intangible asset amortization	$	9	$	9
Capital expenditures	$	5	$	3
Share-based compensation expense	$	—	$	3