UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly reporting period ended ~~June 30, 2018~~March 31, 2019

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission file number001-38467

Ceridian HCM Holding Inc.

(Exact name of registrant as specified in its charter)

Delaware

46-3231686

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification Number)

3311 East Old Shakopee Road

Minneapolis, Minnesota 55425

(952)853-8100

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

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

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

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

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as the latest practicable date: ~~137,645,395~~140,840,259 shares of Common Stock, $0.01 par value per share, as of ~~August 6, 2018.~~April 29, 2019.

Ceridian HCM Holding Inc.

Table of Contents


		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		3

PART I. FINANCIAL INFORMATION			4

Item 1.	Condensed Consolidated Financial Statements (unaudited)		5	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		29	27

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		50	38

Item 4.	Controls and Procedures		51	39

PART II. OTHER INFORMATION			40

Item 1.	Legal Proceedings		52	40

Item 1A.	Risk Factors		52	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		52	40

Item 3.	Defaults Upon Senior Securities		52	40

Item 4.	Mine Safety Disclosures		52	40

Item 5.	Other Information		52	40

Item 6.	Exhibits		53	41

CAUTIONARY NOTE REGARDING ~~FORWARD-LOOKING~~FORWARD-LOOKING STATEMENTS

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

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

our inability to attain or to maintain profitability;

significant competition for our solutions;

our inability to continue to develop or to sell our existing Cloud solutions;

our inability to manage our growth effectively;

the risk that we may not be able to successfully migrate our Bureau customers to our Cloud solutions or to offset the decline in Bureau revenue with Cloud revenue;

the market for enterprise cloud computing develops slower than we expect or declines;

efforts to increase use of our Cloud solutions and our other applications may not succeed;

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

failure to comply ~~with~~ the Federal Trade Commission’s (“FTC”) ongoing consent order regarding data protection;

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

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

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

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

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

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

we fail to manage our technical operations infrastructure;

we are unable to maintain necessary third party relationships, and third party software licenses or ~~errors;~~there are errors in the software we license;

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

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

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

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

PART I. ~~FINANCIAL~~FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Ceridian HCM Holding Inc.

Condensed Consolidated Balance Sheets

(~~Dollars~~Unaudited, dollars in millions, except share data)


	June 30,			December 31,			March 31,			December 31,
	2018			2017			2019			2018
	(unaudited)									*As Adjusted
ASSETS
Current assets:
Cash and equivalents	$	171.8		$	94.2		$	206.3		$	217.8
Trade and other receivables, net		63.9			66.6			68.8			63.9
Prepaid expenses		42.0			36.4
Assets of discontinued operations		—			156.2
Other current assets		2.7			5.3

Prepaids expenses and other current assets								55.3			48.9
Total current assets before customer trust funds		280.4			358.7			330.4			330.6
Customer trust funds		3,703.9			4,099.7			4,559.7			2,603.5

Total current assets		3,984.3			4,458.4			4,890.1			2,934.1
Right of use lease asset								39.9			—
Property, plant, and equipment, net		100.1			102.0			103.9			104.4
Goodwill		1,942.6			1,961.0			1,944.9			1,927.4
Other intangible assets, net		196.6			206.5			184.3			187.5
Other assets		1.8			2.0			96.0			94.4
	��
Total assets	$	6,225.4		$	6,729.9		$	7,259.1		$	5,247.8

LIABILITIES AND EQUITY
Current liabilities:
Current portion of long-term debt	$	5.1		$	—		$	6.8		$	6.8
Short-term lease liabilities								13.9			—
Accounts payable		39.2			44.4			31.8			41.5
Accrued interest		0.2			15.9
Deferred revenue		15.1			14.0			23.0			23.2
Employee compensation and benefits		55.4			68.8			38.9			54.5
Liabilities of discontinued operations		0.2			19.6
Other accrued expenses		20.1			15.0			15.3			23.9

Total current liabilities before customer trust funds obligations		135.3			177.7			129.7			149.9
Customer trust funds obligations		3,728.3			4,105.5			4,554.0			2,619.7

Total current liabilities		3,863.6			4,283.2			4,683.7			2,769.6
Long-term debt, less current portion		666.4			1,119.8			662.1			663.5
Employee benefit plans		141.4			152.4			151.1			153.3
Long-term lease liabilities								32.7			—
Other liabilities		40.2			45.5			42.7			45.9

Total liabilities		4,711.6			5,600.9			5,572.3			3,632.3
Commitments and contingencies (Note 14)
Commitments and contingencies (Note 15)
Stockholders’ equity:
Senior preferred stock, $0.01 par, 70,000,000 shares authorized, 16,802,144 shares issued and outstanding as of December 31, 2017		—			184.8
Junior preferred stock, $0.01 par, 70,000,000 shares authorized, 58,244,308 shares issued and outstanding as of December 31, 2017		—			0.6
Common stock, $0.01 par, 500,000,000 shares authorized, 137,465,215 shares issued and outstanding as of June 30, 2018 and 150,000,000 shares authorized, 65,285,962 shares issued and outstanding as of December 31, 2017		1.4			0.7
Common stock, $0.01 par, 500,000,000 shares authorized, 140,675,332 and 139,453,710 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively								1.4			1.4
Additional paid in capital		2,284.6			1,565.4			2,351.7			2,325.6
Accumulated deficit		(423.5	)		(348.2	)		(297.3	)		(335.6	)
Accumulated other comprehensive loss		(348.7	)		(312.1	)		(369.0	)		(375.9	)

Total stockholders’ equity		1,513.8			1,091.2			1,686.8			1,615.5
Noncontrolling interest		—			37.8

Total equity		1,513.8			1,129.0

Total liabilities and equity	$	6,225.4		$	6,729.9		$	7,259.1		$	5,247.8

*Please refer to Note 2 for a summary of adjustments.

See accompanying notes to condensed consolidated financial statements.

Ceridian HCM Holding Inc.

Condensed Consolidated Statements of Operations

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

													Three Months Ended March 31,
	Three Months Ended June 30,						Six Months Ended June 30,						2019		2018
	2018			2017			2018			2017					*As Adjusted
Revenue:
Recurring services	$	156.6		$	140.8		$	323.6		$	292.6		$	172.8	$	160.9
Professional services and other		22.7			16.7			42.9			32.3			30.9		27.9

Total revenue		179.3			157.5			366.5			324.9			203.7		188.8
Cost of revenue:
Recurring services		49.5			48.1			100.2			97.4			50.9		50.7
Professional services and other		33.4			34.1			66.2			68.0			35.3		32.8
Product development and management		15.1			10.0			28.8			20.8			15.2		13.7
Depreciation and amortization		8.5			7.6			17.2			15.2			8.7		8.7

Total cost of revenue		106.5			99.8			212.4			201.4			110.1		105.9

Gross profit		72.8			57.7			154.1			123.5			93.6		82.9
Costs and expenses:
Selling, general, and administrative		84.1			54.8			140.9			108.6
Selling, general, and administrative expense														66.2		54.9
Operating profit														27.4		28.0
Other expense (income), net		—			2.0			(2.8	)		3.1			1.6		(2.2	)

Operating (loss) profit		(11.3	)		0.9			16.0			11.8
Interest expense, net		43.4			22.0			65.6			43.4			8.9		22.2

Loss from continuing operations before income taxes		(54.7	)		(21.1	)		(49.6	)		(31.6	)
Income from continuing operations before income taxes														16.9		8.0
Income tax expense		1.1			1.9			6.7			2.9			5.7		5.8

Loss from continuing operations		(55.8	)		(23.0	)		(56.3	)		(34.5	)
(Loss) income from discontinued operations		(9.7	)		0.2			(11.8	)		0.5

Net loss		(65.5	)		(22.8	)		(68.1	)		(34.0	)

Net income (loss) attributable to noncontrolling interest		—			0.1			(0.5	)		0.1

Net loss attributable to Ceridian	$	(65.5	)	$	(22.9	)	$	(67.6	)	$	(34.1	)

Net loss per share attributable to Ceridian - basic and diluted (Note 17)	$	(0.60	)	$	(0.43	)	$	(0.84	)	$	(0.68	)
Weighted-average shares used to compute net loss per share attributable to Ceridian - basic and diluted (Note 17)		113,311,107			65,225,104			89,445,371			65,130,383
Income from continuing operations														11.2		2.2
Loss from discontinued operations														—		(2.1	)
Net income														11.2		0.1
Net loss attributable to noncontrolling interest														—		(0.5	)
Net income attributable to Ceridian													$	11.2	$	0.6
Net income (loss) per share attributable to Ceridian:
Basic													$	0.08	$	(0.07	)
Diluted													$	0.08	$	(0.07	)
Weighted average shares outstanding:
Basic														140,149,271		65,314,462
Diluted														147,042,228		65,314,462

*Please refer to Note 2 for a summary of adjustments.

See accompanying notes to condensed consolidated financial statements.

Ceridian HCM Holding Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, dollars in millions)

   Three Months Ended June 30, Six Months Ended June 30,
   2018 2017 2018 2017
Net loss
   $ (65.5 ) $ (22.8 ) $ (68.1 ) $ (34.0 )
Items of other comprehensive income (loss) before income taxes:

Change in foreign currency translation adjustment
   (9.9 ) 14.7 (26.0 ) 19.6
Change in unrealized loss from invested customer trust funds
   (5.1 ) (4.0 ) (18.5 ) (2.2 )
Change in pension liability adjustment⁽¹⁾
   2.9 2.5 5.8 5.1


Other comprehensive (loss) income before income taxes
   (12.1 ) 13.2 (38.7 ) 22.5
Income tax expense (benefit), net
   (0.6 ) (2.8 ) (1.4 ) (1.2 )


Other comprehensive (loss) income after income taxes
   (11.5 ) 16.0 (37.3 ) 23.7


Comprehensive loss
   (77.0 ) (6.8 ) (105.4 ) (10.3 )


Comprehensive income (loss) attributable to noncontrolling interest
   0.2 0.3 (0.5 ) 0.4


Comprehensive loss attributable to Ceridian
   $ (77.2 ) $ (7.1 ) $ (104.9 ) $ (10.7 )

	Three Months Ended March 31,
	2019			2018
				*As Adjusted
Net income	$	11.2		$	0.1
Items of other comprehensive income (loss) before income taxes:
Change in foreign currency translation adjustment		12.3	��		(16.6	)
Change in unrealized gain (loss) from invested customer trust funds		21.9			(13.4	)
Change in pension liability adjustment ⁽¹⁾		2.5			2.9
Other comprehensive income (loss) before income taxes		36.7			(27.1	)
Income tax expense, net		2.7			0.8
Other comprehensive income (loss) after income taxes		34.0			(27.9	)
Comprehensive income (loss)		45.2			(27.8	)
Comprehensive loss attributable to noncontrolling interest		—			(0.7	)
Comprehensive income (loss) attributable to Ceridian	$	45.2		$	(27.1	)

(1)

The amount of the pension liability adjustment recognized in the condensed consolidated statements of operations within ~~selling, general,~~other expense (income), net was $2.6 and ~~administrative expense was~~ $3.0 ~~and $2.6~~ during the three months ended ~~June 30,~~March 31, 2019, and 2018, ~~and 2017, respectively, and $6.0 and $5.2 during the six months ended June 30, 2018, and 2017,~~ respectively.

*Please refer to Note 2 for a summary of adjustments.

See accompanying notes to condensed consolidated financial statements.

Ceridian HCM Holding Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited, dollars in millions)

	Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive			Total Stockholders
	Shares		$		Capital		Deficit			Loss			Equity
Balance as of December 31, 2018, as adjusted*		139,453,710	$	1.4	$	2,325.6	$	(335.6	)	$	(375.9	)	$	1,615.5
Cumulative-effect adjustment to accumulated deficit related to the adoption of ASU 2018-02 (Please refer to Note 2)		—		—		—		27.1			(27.1	)		—
Net income		—		—		—		11.2			—			11.2
Issuance of common stock upon exercise of options		1,221,622		—		20.1		—			—			20.1
Share-based compensation		—		—		6.0		—			—			6.0
Foreign currency translation		—		—		—		—			12.3			12.3
Change in unrealized loss, net of tax of ($2.7)		—		—		—		—			19.2			19.2
Change in minimum pension & postretirement liability, net of tax of $0.0		—		—		—		—			2.5			2.5
Balance as of March 31, 2019		140,675,332	$	1.4	$	2,351.7	$	(297.3	)	$	(369.0	)	$	1,686.8

	Senior Preferred Stock				Junior Preferred Stock				Common Stock				Additional Paid In		Accumulated			Accumulated Other Comprehensive			Total Stockholders			Non-controlling			Total
	Shares		$		Shares		$		Shares		$		Capital		Deficit			Loss			Equity			Interest			Equity
Balance as of December 31, 2017, as adjusted*		16,802,144	$	184.8		58,244,308	$	0.6		65,285,962	$	0.7	$	1,565.4	$	(267.3	)	$	(311.0	)	$	1,173.2		$	37.8		$	1,211.0
Net loss		—		—		—		—		—		—		—		0.6			—			0.6			(0.5	)		0.1
Issuance of common stock upon exercise of options		—		—		—		—		12,157		—		—		—			—			—			—			—
Issuance of common stock upon vesting of restricted stock units		—		—		—		—		76,190		—		—		—			—			—			—			—
Senior preferred dividends declared		—		5.3		—		—		—		—		—		(5.3	)		—			—			—			—
Share-based compensation		—		—		—		—		—		—		2.9		—			—			2.9			—			2.9
Foreign currency translation		—		—		—		—		—		—		—		—			(16.4	)		(16.4	)		(0.2	)		(16.6	)
Change in unrealized loss, net of tax of ($0.8)		—		—		—		—		—		—		—		—			(12.6	)		(12.6	)		—			(12.6	)
Change in minimum pension & postretirement liability, net of tax of $0.0		—		—		—		—		—		—		—		—			2.9			2.9			—			2.9
Balance as of March 31, 2018, as adjusted*		16,802,144	$	190.1		58,244,308	$	0.6		65,374,309	$	0.7	$	1,568.3	$	(272.0	)	$	(337.1	)	$	1,150.6		$	37.1		$	1,187.7

*Please refer to Note 2 for a summary of adjustments.

See accompanying notes to condensed consolidated financial statements.

Ceridian HCM Holding Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, dollars in millions)

							Three Months Ended March 31,
	Six Months Ended June 30,						2019			2018
	2018			2017						*As Adjusted
Net loss	$	(68.1	)	$	(34.0	)
Loss (income) from discontinued operations		11.8			(0.5	)
Adjustments to reconcile net loss to net cash used in operating activities:
Net income							$	11.2		$	0.1
Loss from discontinued operations								—			2.1
Adjustments to reconcile net income to net cash used in operating activities:
Deferred income tax benefit		(6.7	)		(1.6	)		(1.9	)		(0.2	)
Depreciation and amortization		28.1			26.1			14.4			13.9
Amortization of debt issuance costs and debt discount		1.6			1.8			0.3			1.0
Loss on debt extinguishment		25.7			—
Net periodic pension and postretirement cost		1.2			0.6			1.3			0.6
Share-based compensation		13.2			8.5
Non-cash share-based compensation								6.0			2.7
Other		(0.8	)		(1.3	)		0.5			(0.2	)
Changes in operating assets and liabilities excluding effects of acquisitions and divestitures:
Trade and other receivables		0.8			14.6			(3.8	)		(1.3	)
Prepaid expenses and other current assets		(5.8	)		(8.7	)		(7.0	)		(13.3	)
Accounts payable and other accrued expenses		(4.6	)		(4.5	)		(5.8	)		(2.0	)
Deferred revenue		1.3			1.5			(0.2	)		3.3
Employee compensation and benefits		(19.0	)		(22.1	)		(16.9	)		(17.0	)
Accrued interest		(15.6	)		(5.2	)		3.4			(13.1	)
Accrued taxes		4.2			(10.2	)		(8.1	)		6.3
Other assets and liabilities		(1.4	)		(0.4	)		(2.2	)		(5.2	)

Net cash used in operating activities - continuing operations		(34.1	)		(35.4	)		(8.8	)		(22.3	)
Net cash used in operating activities - discontinued operations		(1.1	)		(3.2	)		—			(1.1	)

Net cash used in operating activities		(35.2	)		(38.6	)		(8.8	)		(23.4	)
Cash Flows from Investing Activities
Purchase of customer trust funds marketable securities		(610.3	)		(252.2	)		(143.3	)		(520.6	)
Proceeds from sale and maturity of customer trust funds marketable securities		609.7			273.4			49.8			175.4
Net change in restricted cash and other restricted assets held to satisfy customer trust funds obligations		339.5			(36.8	)
Expenditures for property, plant, and equipment		(4.9	)		(4.6	)		(4.0	)		(2.9	)
Expenditures for software and technology		(13.9	)		(14.6	)		(9.9	)		(7.4	)
Net proceeds from divestitures		—			0.9

Net cash provided by (used in) investing activities - continuing operations		320.1			(33.9	)
Net cash used in investing activities - discontinued operations		—			(0.2	)

Net cash provided by (used in) investing activities		320.1			(34.1	)
Acquisition costs, net of cash acquired								(10.2	)		—
Net cash used in investing activities								(117.6	)		(355.5	)
Cash Flows from Financing Activities
(Decrease) increase in customer trust funds obligations, net		(338.9	)		15.6
Net proceeds from issuance of common stock		595.0			78.4
Increase in customer trust funds obligations, net								1,916.1			230.4
Proceeds from issuance of common stock upon exercise of stock options		14.4			—			20.1			—
Repurchase of stock		—			(1.8	)
Proceeds from debt issuance		680.0			—
Repayment of long-term debt obligations		(1,132.3	)		—			(1.7	)		(0.3	)
Payment of debt refinancing costs		(23.3	)		—

Net cash (used in) provided by financing activities		(205.1	)		92.2
Effect of Exchange Rate Changes on Cash		(2.7	)		2.6

Net increase in cash and equivalents		77.1			22.1
Net cash provided by financing activities								1,934.5			230.1
Effect of exchange rate changes on cash, restricted cash, and equivalents								3.9			(4.5	)
Net increase (decrease) in cash, restricted cash, and equivalents								1,812.0			(153.3	)
Elimination of cash from discontinued operations		0.5			1.6			—			1.0
Cash and equivalents at beginning of period		94.2			120.8

Cash and equivalents at end of period	$	171.8		$	144.5

Cash, restricted cash, and equivalents at beginning of period								1,106.3			2,411.8
Cash, restricted cash, and equivalents at end of period							$	2,918.3		$	2,259.5
Reconciliation of cash, restricted cash, and equivalents to the condensed consolidated balance sheets
Cash and equivalents							$	206.3		$	57.8
Restricted cash and equivalents included in customer trust funds								2,712.0			2,201.7
Total cash, restricted cash, and equivalents							$	2,918.3		$	2,259.5

*Please refer to Note 2 for a summary of adjustments.

See accompanying notes to condensed consolidated financial statements.

Ceridian HCM Holding Inc.

Notes to Condensed Consolidated Financial Statements

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

1. Organization

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

On ~~April 30, 2018,~~March 22, 2019, we completed ~~our initial public~~a secondary offering, ~~(“IPO”),~~ in which ~~we issued and~~certain of our stockholders (the “Selling Stockholders”) sold ~~21,000,000~~13,000,000 shares of common stock, ~~at a~~in an underwritten public offering ~~price of $22.00~~at $50.50 per share. WeThe Selling Stockholders granted the underwriters a30-day option to purchase an additional ~~3,150,000~~1,950,000 shares of common stock at the offering price, which was partially exercised ~~in full.~~on April 3, 2019 for 1,222,142 shares. A total of ~~24,150,000~~14,222,142 shares of common stock were ~~issued in our IPO. Concurrently~~sold by the Selling Stockholders, with ~~our IPO, we issued an additional 4,545,455 shares of our common stock in a private placement at $22.00 per share. We received gross~~all proceeds ~~of $631.3 from the IPO and concurrent private placement before deducting underwriting discounts, commissions, and other offering related expenses. The use of the proceeds from the IPO were as follows:~~

Gross proceeds
   $ 631.3
Less:

Underwriters’ discounts and commissions
   29.2
IPO-related expenses
   11.8
Redemption of 11% Senior Notes due 2021 (Note 8)
   475.0
Call premium on redemption of 11% Senior Notes due 2021
   13.1
Interest on redemption of 11% Senior Notes due 2021
   10.9
Sponsor management termination fee
   11.3
Debt refinancing expenses
   11.4


Cash to balance sheet
   $ 68.6

Prior to our IPO, Ceridian HCM Holding Inc. was primarily owned by Ceridian LLC (the “Parent”) and Ceridian Holding II LLC (“Ceridian Holding II”). The Parent was 100% owned by Foundation Holding LLC, which in turn was 100% owned by Ceridian Holding LLC (“Ceridian Holding”). The owners of Ceridian Holding and Ceridian Holding II included (i) affiliates and~~co-investors~~ of Thomas H. Lee Partners, L.P. (“THL Partners”) and Cannae Holdings, LLC (“Cannae”) (THL Partners and Cannae are together referred to as the “Sponsors”), who collectively owned approximately 96% of the outstanding interests of both Ceridian Holding and Ceridian Holding II, and (ii) other individuals, who collectively owned approximately 4% of the outstanding interests of each holding company.

~~Subsequent~~going to the ~~IPO~~Selling Stockholders. We incurred expenses of $0.9 during the three months ended March 31, 2019, related to the secondary offering within selling, general and concurrent private placement, we completed an internal corporate reorganization, pursuant to which the limited liability companies that held shares in us were merged with and into Ceridian HCM Holding Inc. At the time of these transactions, these limited liability companies had no assets other than equity interests in us or the other limited liability companies. As a result of these transactions, our previous stockholders now hold shares of our common stock directly, rather than through a series of limited liability companies. These transactions had no impact on our assets, liabilities, or operations.administrative expense.

2. Summary of Significant Accounting Policies

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,” which replaced all existing revenue guidance created by Accounting Standards Codification (“ASC”) Topic 605, including prescriptive industry-specific guidance, and created ASC Topic 606 for revenue and ASC Subtopic 340-40 for incremental costs of obtaining a contract with customers. This standard’s core principle is that an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. We have adopted ASU No. 2014-09 as of January 1, 2019, using the full retrospective method for adoption. Please refer to the tables below for the retrospective impacts of the adoption of this guidance. Adoption of the new standard resulted in changes to our accounting policies for revenue recognition, as detailed below.

The adoption of the new standard resulted in changes to the classification and timing of our revenue recognition. Specifically, revenue classified as professional services and other revenue was increased, and revenue classified as recurring services revenue was reduced under the new standard, compared to ASC Topic 605. Adoption of the new standard also resulted in changes to the timing of our revenue recognition compared to ASC Topic 605 because professional services and other revenue is generally recognized earlier in the contract period than recurring services revenue. In compliance with the new standard, a contract asset is reflected on the consolidated balance sheets when revenue recognized for professional service performance obligations exceed the billings and is amortized over the contract period, which is generally three years. We also have changed the timing of certain selling, general, and administrative expenses, as the new standard required capitalizing and amortizing certain selling expenses, such as commissions and bonuses paid to the sales force. These sales expenses are now amortized over the period of benefit, which we have determined to be five years.

In February 2016, the FASB issued ASU No. 2016-02, “Leases,” which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and by disclosing key information about leasing arrangements. This standard requires balance sheet recognition for both finance leases and operating leases. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvement,” which allowed an additional (and optional) transition method to adopt the new lease requirements. We have adopted ASU No. 2016-02 and ASU No. 2018-11 as of January 1, 2019, by recording a cumulative-effect adjustment to the opening balance of accumulated deficit on this date. Please refer to Note 14, “Leases,” for additional discussion of the impacts of adoption of this guidance.

In November 2016, the FASB issued ASU No. 2016-18, “Restricted Cash,” which requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash. We have adopted this guidance as of January 1, 2019 on a retrospective basis for all periods presented. Accordingly, the condensed consolidated statement of cash flows has been revised to include restricted cash and restricted cash equivalents held to satisfy customer trust funds obligations, as a component of cash, cash equivalents, restricted cash and restricted cash equivalents. Please refer to the tables below for the retrospective impacts of the adoption of this guidance.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation—Retirement Benefits,” which aims to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. The amendments in this update require that an employer (a) report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period, and (b) report the other components of net benefit cost in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. We have adopted this guidance as of January 1, 2019, on a retrospective basis for all periods presented. Please refer to the tables below for the retrospective impacts of the adoption of this guidance.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income,” in response to a narrow-scope financial reporting issue that arose as a consequence of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”). The amendment in this update allows entities to reclassify from accumulated other comprehensive income to retained earnings, the impact of the reduced federal statutory tax rate for corporations included in the Tax Act. We have adopted this guidance as of January 1, 2019, resulting in an increase in accumulated other comprehensive loss of $27.1, and a decrease in accumulated deficit for the same amount on our consolidated balance sheets. As of January 1, 2019, we have changed our policy for releasing income tax effects from accumulated other comprehensive loss to comply with this guidance, which is considered a change in accounting principle.

We have adjusted our condensed consolidated financial statements from amounts previously reported due to the adoption of ASC Topic 606, ASU No. 2017-07, and ASU No. 2016-18. Selected condensed consolidated financial statement line items, which reflect the adoption of the new ASUs, are as follows:

December 31, 2018

Condensed Consolidated Balance Sheet

As previously
reported

ASC Topic 606
Adjustments

As adjusted

ASSETS

Trade and other receivables, net

$
69.9

$
(6.0
)

$
63.9

Prepaid expenses and other current assets

42.3

6.6

48.9

Other assets

1.6

92.8

94.4

LIABILITIES

Deferred revenue

$
17.2

$
6.0

$
23.2

Other liabilities

42.0

3.9

45.9

Three Months Ended March 31, 2018

Condensed Consolidated Statement of Operations

As previously
reported

ASC Topic 606
Adjustments

ASU 2017-07
Adjustments

As
adjusted

Revenue:

Recurring services

$
167.0

$
(6.1
)

$
—

$
160.9

Professional services and other

20.2

7.7

—

27.9

Total revenue

$
187.2

$
1.6

$
—

$
188.8

Selling, general, and administrative expense

56.8

(1.3
)

(0.6
)

54.9

Operating profit

24.5

2.9

0.6

28.0

Other income, net

(2.8
)

—

0.6

(2.2
)
Income tax expense

5.6

0.2

—

5.8

Net (loss) income attributable to Ceridian

$
(2.1
)

$
2.7

$
—

$
0.6

Net loss per share attributable to Ceridian, basic and diluted

$
(0.11
)

$
0.04

$
—

$
(0.07
)

Three Months Ended March 31, 2018

Condensed Consolidated Statement of Cash Flows

As previously
reported

ASC Topic 606
Adjustments

ASU 2016-18
Adjustments

As
adjusted

Net (loss) income

$
(2.6
)

$
2.7

$
—

$
0.1

Adjustments to reconcile net (loss) income to net cash used in
   operating activities:

Deferred income tax benefit

(0.4
)

0.2

—

(0.2
)
Other

0.4

(0.6
)

—

(0.2
)
Changes in operating assets and liabilities excluding effects of
   acquisitions and divestitures:

Trade and other receivables

(0.2
)

(1.1
)

—

(1.3
)
Prepaid expenses and other current assets

(11.4
)

(1.9
)

—

(13.3
)
Deferred revenue

2.1

1.2

—

3.3

Accrued taxes

5.9

0.4

—

6.3

Other assets and liabilities

(4.3
)

(0.9
)

(5.2
)
Net cash used in operating activities- continuing operations

(22.3
)

—

—

(22.3
)
Cash Flows from Investing Activities

Net change in restricted cash and other restricted assets held
   to satisfy customer trust funds obligations

114.8

—

(114.8
)

—

Net cash used in investing activities

(240.7
)

—

(114.8
)

(355.5
)
Effect of Exchange Rate Changes on Cash, Restricted Cash, and
   Equivalents

(3.4
)

—

(1.1
)

(4.5
)
Net decrease in cash, restricted cash, and equivalents

(37.4
)

—

(115.9
)

(153.3
)
Elimination of cash from discontinued operations

1.0

—

—

1.0

Cash, restricted cash, and equivalents at beginning of period

94.2

—

2,317.6

2,411.8

Cash, restricted cash, and equivalents at end of period

$
57.8

$
—

$
2,201.7

$
2,259.5

Basis of Presentation

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

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

~~Reverse Stock Split~~

~~On April 10, 2018, we effected a1-for-2~~ ~~reverse stock split of our common stock. All of the common stock and per share information referenced throughout this report have been retroactively adjusted to reflect this reverse stock split.~~

~~Use of Estimates~~

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

Internally Developed Software Costs

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

Revenue Recognition

~~Foreign Currency Translation~~

~~We have international operations whereby the local currencies serve as functional currencies. We translate foreign currency denominated assets and liabilities at theend-of-period~~ ~~exchange rates and foreign currency denominated statements~~The core principle of operations at the weighted-average exchange rates for each period. We report the effect of changes in the U.S. dollar carrying values of assets and liabilities of our international operations that are due to changes in exchange rates between the U.S. dollar and their functional currency as foreign currency translation within accumulated other comprehensive income (loss) in the accompanying condensed consolidated statements of comprehensive income (loss). Gains and losses from transactions and translation of assets and liabilities denominated in currencies other than the functional currency of the international operation are recorded in the condensed consolidated statements of operations within other expense, net.

~~Recently Issued and Adopted Accounting Pronouncements~~

~~In May 2014 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2014-09,~~ ~~“Revenue from Contracts with Customers,” which replaced all existing revenue guidance created by~~ ASC Topic 606 ~~including prescriptive industry-specific guidance. This standard’s core principle~~ is that ~~an entity will recognize~~ revenue ~~when it transfers~~is recognized upon transfer of control of promised ~~goods~~products or services to customers in an amount that reflects the consideration we expect to ~~which the entity expects to be entitled~~receive in exchange for those ~~goods~~products or services. ~~Entities will need~~In accordance with ASC Topic 606, we perform the following steps to ~~apply more judgment~~determine revenue to be recognized:

1) Identify the contract(s) with a customer;

2) Identify the performance obligations in the contract;

3) Determine the transaction price;

4) Allocate the transaction price to the performance obligations in the contract; and ~~make more~~

5) Recognize revenue when (or as) we satisfy a performance obligation.

The significant majority of our two major revenue sources (recurring and professional services and other) are derived from contracts with customers. Recurring revenues are primarily related to our cloud subscription performance obligations. Professional services and other revenues are primarily related to professional services for our cloud customers (including implementation services to activate new accounts, as well as post-go live professional services typically billed on a time and materials basis) and, to a much lesser extent, fees for other non-recurring services, including sales of time clocks and certain client reimbursable out-of-pocket expenses. Fees charged to cloud subscription performance obligations are generally priced either on a per-employee-per-month (“PEPM”) basis for a given month or on a per-employee-per-process basis for a given process, both based on usage; and fees charged for professional services are typically priced on a fixed fee basis for activating new accounts and on a time and materials basis for post go-live professional services.

Our recurring cloud subscription performance obligations are generally priced based on the number of active customer employees, as of the signing of the contract, at the contract PEPM rate over the initial contract term. Our professional services are generally based on a fixed fee charged to our customers for activating new accounts and on a time and materials basis for post go-live professional services. There is typically no variable consideration related to our recurring cloud subscriptions or our activation services, nor do they include a significant financing component, non-cash consideration, or consideration payable to a customer. Our recurring cloud subscriptions are typically billed one month in advance while our professional services are billed over the implementation period for activation of new accounts and as work is performed for post go-live professional services.

Our cloud services arrangements include multiple performance obligations, and transaction price allocations are based on the stand-alone selling price ("SSP") for each performance obligation. Our contract renewal rates serve as an observable input to establish SSP for our recurring cloud subscription performance obligations. The SSP for professional services performance obligations is estimated based on market conditions and observable inputs, including rates charged by third parties to perform implementation services.

For our performance obligations, the consideration allocated to cloud subscription revenues is recognized as recurring revenues, typically commencing with the date the customer processes their first live payroll using the solution (referred to as the "go-live" date). The consideration allocated to professional services to activate a new account is recognized as professional services revenues based on the proportion of total work performed, using reasonably dependable estimates ~~than under~~(in relation to progression through the ~~previous guidance.~~ implementation phase), by solution.

Deferred Costs

Deferred costs primarily consist of deferred sales commissions. Sales commissions paid based on the annual contract value of a signed customer contract are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions paid based on the annual contract value are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to be five years.

Deferred costs included within Other assets on our condensed consolidated balance sheets were $86.1 and $83.5 as of March 31, 2019 and December 31, 2018, respectively. Amortization expense for the deferred costs was $7.7 and $6.1 for the three months ended March 31, 2019 and 2018, respectively.

Recently Issued Accounting Pronouncements

In ~~July 2015~~August 2018, the FASB ~~deferred the effective date for all entities by one year, making the guidance fornon-public~~ ~~companies effective for annual reporting periods beginning after December 15, 2018. Early adoption was permitted~~issued ASU No. 2018-14, “Disclosure Framework—Changes to the ~~original effective date~~Disclosure Requirements for Defined Benefit Plans,” which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This update removes disclosures that are no longer considered cost beneficial, adds disclosures identified as relevant, and clarifies certain specific requirements of ~~December 15, 2016 (including interim reporting periods within that reporting period). The standard permits~~disclosures to improve the ~~use~~effectiveness of either the retrospective or cumulative effect transition method. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. An emerging growth company can, therefore, delay adoption of certain accounting standards until those standards would otherwise apply to private companies. Management has chosen to take advantage of this extended transition period to adopt ASU~~2014-09~~ ~~beginning in the first quarter of 2019. Management anticipates using the retrospective method for adoption.~~

~~In preparation for this planned adoption, we have been evaluating the impact of the new standard to our financial statements and accompanying~~ disclosures in the notes to ~~our consolidated~~ financial statements. ~~Our assessment of the impact includes an evaluation of the five-step process set forth~~The amendments in ~~the new standard along with the enhancement of disclosures that will be required. To date, we have developed our initial plan~~this update are effective for implementing the standard, which includes identifying customer contracts within the scope of the new standard, identifying performance obligations within those customer contracts, and evaluating the impact of incremental variable consideration paid to obtain those customer contracts. We have also undertaken a comprehensive review of all contracts that fall under the scope of the new standard; and, as of the date of this report, we have substantially completed our review of~~in-scope~~ ~~contracts.~~

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

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

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

   Three Months Ended June 30, 2018
   As Reported    Under ASC 606    Impact
Revenue:

Recurring services
   $ 156.6    $ 151.3    $ (5.3 )
Professional services and other
   22.7    28.4    5.7






Total revenue
   $ 179.3    $ 179.7    $ 0.4
Operating (loss) profit
   $ (11.3 )    $ (8.1 )    $ 3.2
   Three Months Ended June 30, 2017
   As Reported    Under ASC 606    Impact
Revenue:

Recurring services
   $ 140.8    $ 134.3    $ (6.5 )
Professional services and other
   16.7    23.8    7.1






Total revenue
   $ 157.5    $ 158.1    $ 0.6
Operating profit
   $ 0.9    $ 3.5    $ 2.6
   Six Months Ended June 30, 2018
   As Reported    Under ASC 606    Impact
Revenue:

Recurring services
   $ 323.6    $ 310.7    $ (12.9 )
Professional services and other
   42.9    57.4    14.5






Total revenue
   $ 366.5    $ 368.1    $ 1.6
Operating profit
   $ 16.0    $ 22.3    $ 6.3
   Six Months Ended June 30, 2017
   As Reported    Under ASC 606    Impact
Revenue:

Recurring services
   $ 292.6    $ 280.2    $ (12.4 )
Professional services and other
   32.3    46.1    13.8






Total revenue
   $ 324.9    $ 326.3    $ 1.4
Operating profit
   $ 11.8    $ 16.6    $ 4.8

~~In February 2016, the FASB issued ASUNo. 2016-02,~~ “Leases,” which is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This standard requires balance sheet recognition for both finance leases and operating leases. This guidance is effective for~~non-public~~ ~~companies~~public business entities for fiscal years ~~beginning after December 15, 2019, and interim periods within fiscal years beginning~~ending after December 15, 2020. Early adoption is permitted. The ~~guidance is required~~amendments in this update should be applied on a retrospective basis to be adopted using a modified retrospective approach. An entity will, in effect, continue to account for leases that commence before the effective date in accordance with previous U.S. GAAP unless the lease is modified, except that lessees are required to recognize a~~right-of-use~~ ~~asset and a lease liability for~~ all ~~operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous U.S. GAAP.~~periods presented. We are currently evaluating the impact of the adoption of this standard.

~~In August 2016 the FASB issued ASU2016-15,~~ “Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments”, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice of certain cash receipts and cash payments. This guidance is effective for~~non-public~~ companies for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. We have chosen to early adopt this guidance as of January 1, 2018, and have applied this guidance to the presentation of our debt refinancing transactions that occurred during 2018.

~~In February 2018 the FASB issued ASU2018-02,~~ “Income Statement—Reporting Comprehensive Income,” which is in response to a narrow-scope financial reporting issue that arose because of the Tax Cuts and Jobs Act. The amendment in this update allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This amendment is intended to improve the usefulness of information reported to financial statement users by requiring certain disclosures about stranded tax effects. The amendment in this update is effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact of the adoption of this standard. Please refer to Note 13, “Income Taxes,” for further discussion of this new guidance.

3. Discontinued Operations

Distribution of LifeWorks Business

On March 1, 2016, we entered into a strategic joint venture with WorkAngel Technology Limited ~~(“WorkAngel”)~~ in which we contributed our existing LifeWorks employee assistance program business to WorkAngel Organisation Limited, ~~a newly formed~~an English limited company. On January 20, 2017, WorkAngel Organisation Limited changed its name to LifeWorks Corporation Ltd (“LifeWorks”). We had a controlling interest in LifeWorks, including certain preferential distribution rights; therefore, LifeWorks was consolidated within our financial statements, and the other joint venture ownership interest component was presented as a noncontrolling interest. During the ~~six~~three months ended ~~June 30,~~March 31, 2018, there was loss attributable to the noncontrolling interest of $0.5. ~~During the three and six months ended June 30, 2017, there was income attributable to the noncontrolling interest of $0.1 and $0.1, respectively.~~

In the second quarter of 2018, contemporaneously with our ~~IPO~~initial public offering (“IPO”) and concurrent private placement, we distributed our controlling financial interest in LifeWorks to our stockholders of record prior to the IPO on a pro rata basis in accordance with their pro rata interests in us (the “LifeWorks Disposition”).

~~The~~ At this time, the LifeWorks Disposition ~~represents~~represented a strategic shift in our overall business and had a significant impact on the financial statement results. Therefore, the LifeWorks business has been presented as discontinued operations in the condensed consolidated financial statements and accompanying notes for all periods presented. Ceridian’s net book value related to LifeWorks of $95.7 was recorded as a distribution through additional paid in capital within our condensed consolidated balance sheet during the second quarter of 2018.

The amounts in the table below reflect the operating results of LifeWorks reported as discontinued operations, as well as supplemental disclosures of the discontinued operations:


	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018			2017			Three Months Ended March 31, 2018
Net revenues	$	6.6		$	19.3	$	28.3		$	38.9		$	21.7
Income (loss) from operations before income taxes		—			0.2		(0.9	)		1.5
Loss from operations before income taxes													(0.9	)
Income tax expense		(9.7	)		—		(10.9	)		(1.5	)		(1.2	)
(Loss) income from discontinued operations, net of income taxes	$	(9.7	)	$	0.2	$	(11.8	)	$	—
Loss from discontinued operations, net of income taxes													(2.1	)
Depreciation and amortization	$	0.4		$	1.0	$	1.4		$	2.0			1.0
Capital expenditures	$	—		$	0.1	$	—		$	0.2		$	—

~~The amounts in the table below reflect the assets and liabilities reported as discontinued operations for LifeWorks:~~

   December 31,
2017
Assets:

Cash and equivalents
   $ 5.3
Trade and other receivables, net
   13.3
Prepaid expenses
   1.5
Property, plant and equipment, net
   1.8
Other intangible assets, net
   5.9
Goodwill
   126.3
Other assets
   2.1


Assets of discontinued operations
   $ 156.2


Liabilities:

Accounts payable
   $ 4.4
Deferred revenue
   2.8
Employee compensation and benefits
   1.3
Other liabilities
   10.8


Liabilities of discontinued operations
   $ 19.3

~~Sale of Divested Benefits Continuation Businesses~~

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

These three transactions represented a strategic shift in our overall business and had a significant impact on the financial statement results. Accordingly, the Divested Benefits Continuation Businesses, as well as the Consumer-Directed Benefit Services, have been presented as discontinued operations in the condensed consolidated financial statements and accompanying notes for all periods presented. The amounts in the table below reflect the operating results and gain on sale of the Divested Benefits Continuation Businesses reported as discontinued operations:

   Six Months
Ended June 30,
   2017
Net revenues
   $ —
Loss from operations before income taxes
   (0.1 )
Gain on sale of businesses
   0.9
Income tax expense
   (0.3 )
Income from discontinued operations, net of income taxes
   $ 0.5

For both sales of the Divested Benefits Continuation Businesses, consideration received was contingent upon the number and dollar value of successful customer transitions and was recorded when earned. Proceeds of $0.9 were received and earned based on the customers transitioned during the six months ended June 30, 2017. These proceeds were for a final purchase price~~true-up~~ ~~related to one of the transactions.~~

The remaining liabilities related to discontinued operations for the Divested Benefits Continuation Businesses as of June 30, 2018, and December 31, 2017, were $0.2 and $0.3 of other accrued expenses.

4. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). U.S. GAAP outlines a valuation framework and creates a fair value hierarchy intended to increase the consistency and comparability of fair value measurements and the related disclosures. Certain assets and liabilities must be measured at fair value, and disclosures are required for items measured at fair value.

~~We measure our financial instruments using inputs from the following three levels of the fair value hierarchy. The three levels are as follows:~~

~~Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date.~~

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

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

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

As of ~~June 30, 2018,~~March 31, 2019, our financial assets and liabilities measured at fair value on a recurring basis were categorized as follows:


	Total		Level 1		Level 2			Level 3		Total		Level 1		Level 2			Level 3
Assets
Available for sale customer trust funds assets	$	1,727.4	$	—	$	1,727.4	(a)	$	—	$	1,847.7	$	—	$	1,847.7	(a)	$	—

Total assets measured at fair value	$	1,727.4	$	—	$	1,727.4		$	—	$	1,847.7	$	—	$	1,847.7		$	—

As of December 31, ~~2017,~~2018, our financial assets and liabilities measured at fair value on a recurring basis were categorized as follows:


	Total		Level 1		Level 2			Level 3		Total		Level 1		Level 2			Level 3
Assets
Available for sale customer trust funds assets	$	1,782.1	$	—	$	1,782.1	(a)	$	—	$	1,719.6	$	—	$	1,719.6	(a)	$	—

Total assets measured at fair value	$	1,782.1	$	—	$	1,782.1		$	—	$	1,719.6	$	—	$	1,719.6		$	—

(a)	Fair value is based on inputs that are observable for the asset or liability, other than quoted prices.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During the ~~six~~three months ended ~~June 30, 2018,~~March 31, 2019, and the year ended December 31, ~~2017,~~2018, we did notre-measure any financial assets or liabilities at fair value on a nonrecurring basis.

5. Customer Trust Funds

~~Overview~~

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

Our customer trust funds are held and invested with the primary objectives being to ensure adequate liquidity to meet cash flow requirements and to protect the principal balance. In accordance with these objectives, we maintain approximately 46% of customer trust funds in liquidity portfolios with maturities ranging from one to 120 days, consisting of high-quality bank deposits, money market mutual funds, commercial paper, or collateralized short-term investments; and we maintain approximately 54% of customer trust funds in fixed income portfolios with maturities ranging from 120 days to 10 years, consisting of U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate and bank securities. To maintain sufficient liquidity in the trust to meet payment obligations, we also have financing arrangements and may pledge fixed income securities for short-term financing.

~~Financial Statement Presentation~~

Investment income from invested customer trust funds is a component of our compensation for providing services under agreements with our customers. Investment income from invested customer trust funds included in revenue was ~~$16.2~~$24.3 and ~~$11.2~~$17.6 for the three months ended ~~June 30,~~March 31, 2019, and 2018, ~~and 2017, respectively, and $33.8 and $22.6 for the six months ended June 30, 2018, and 2017,~~ respectively. Investment income includes interest income, realized gains and losses from sales of customer trust funds’ investments, and unrealized credit losses determined to be other-than-temporary.

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

Investments of Customer Trust Funds at ~~June 30, 2018~~March 31, 2019


	Amortized		Gross Unrealized					Fair		Amortized		Gross Unrealized					Fair
	Cost		Gain		Loss			Value		Cost		Gain		Loss			Value
Money market securities, investments carried at cost and other cash equivalents	$	1,970.4						$	1,970.4	$	2,701.2	$	—	$	—		$	2,701.2
Available for sale investments:
U.S. government and agency securities		573.3		—		(16.5	)		556.8		598.2		1.1		(5.1	)		594.2
Canadian and provincial government securities		404.1		3.6		(1.9	)		405.8		396.4		6.8		(0.3	)		402.9
Corporate debt securities		498.8		0.4		(6.1	)		493.1		551.4		4.8		(1.1	)		555.1
Asset-backed securities		247.6		—		(3.5	)		244.1		257.0		0.7		(1.1	)		256.6
Mortgage-backed securities		11.2		—		(0.3	)		10.9		24.3		0.1		(0.1	)		24.3
Other securities		16.8		—		(0.1	)		16.7		14.7		—		(0.1	)		14.6

Total available for sale investments		1,751.8		4.0		(28.4	)		1,727.4		1,842.0		13.5		(7.8	)		1,847.7

Invested customer trust funds		3,722.2	$	4.0	$	(28.4	)		3,697.8		4,543.2	$	13.5	$	(7.8	)		4,548.9

Trust receivables		6.1							6.1		10.8							10.8

Total customer trust funds	$	3,728.3						$	3,703.9	$	4,554.0						$	4,559.7

Investments of Customer Trust Funds at December 31, ~~2017~~2018


	Amortized		Gross Unrealized					Fair		Amortized		Gross Unrealized					Fair
	Cost		Gain		Loss			Value		Cost		Gain		Loss			Value
Money market securities, investments carried at cost and other cash equivalents	$	2,309.3	$	—	$	—		$	2,309.3	$	872.3	$	—	$	—		$	872.3
Available for sale investments:
U.S. government and agency securities		584.6		0.1		(7.1	)		577.6		573.4		0.2		(11.4	)		562.2
Canadian and provincial government securities		418.2		6.6		(1.5	)		423.3		392.5		3.4		(1.4	)		394.5
Corporate debt securities		472.3		0.8		(2.5	)		470.6		499.5		0.5		(4.7	)		495.3
Asset-backed securities		280.8		—		(1.8	)		279.0		247.1		0.2		(2.7	)		244.6
Mortgage-backed securities		15.0		—		(0.2	)		14.8		8.5		—		(0.2	)		8.3
Other securities		17.0		—		(0.2	)		16.8		14.8		—		(0.1	)		14.7

Total available for sale investments		1,787.9		7.5		(13.3	)		1,782.1		1,735.8		4.3		(20.5	)		1,719.6

Invested customer trust funds		4,097.2	$	7.5	$	(13.3	)		4,091.4		2,608.1	$	4.3	$	(20.5	)		2,591.9

Trust receivables		8.3							8.3		11.6							11.6

Total customer trust funds	$	4,105.5						$	4,099.7	$	2,619.7						$	2,603.5

The following represents the gross unrealized losses and the related fair value of the investments of customer trust funds available for sale, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at ~~June 30, 2018.~~March 31, 2019.


	Less than 12 months					12 months or more					Total					Less than 12 months					12 months or more					Total
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
U.S. government and agency securities	$	(11.4	)	$	442.8	$	(5.1	)	$	111.6	$	(16.5	)	$	554.4	$	(0.1	)	$	24.7	$	(5.0	)	$	384.6	$	(5.1	)	$	409.3
Canadian and provincial government securities		(0.4	)		35.9		(1.6	)		99.4		(2.0	)		135.3		—			—		(0.3	)		98.7		(0.3	)		98.7
Corporate debt securities		(3.7	)		259.7		(2.3	)		120.8		(6.0	)		380.5	(a)				16.4		(1.1	)		169.3		(1.1	)		185.7
Asset-backed securities		(2.1	)		150.2		(1.3	)		82.3		(3.4	)		232.5	(a)				5.0		(1.1	)		156.7		(1.1	)		161.7
Mortgage-backed securities		(0.1	)		2.6		(0.3	)		8.1		(0.4	)		10.7	(a)				4.0		(0.1	)		7.4		(0.1	)		11.4
Other securities		(a	)		4.1		(0.1	)		12.4		(0.1	)		16.5		—			—		(0.1	)		10.3		(0.1	)		10.3

Total available for sale investments	$	(17.7	)	$	895.3	$	(10.7	)	$	434.6	$	(28.4	)	$	1,329.9	$	(0.1	)	$	50.1	$	(7.7	)	$	827.0	$	(7.8	)	$	877.1

(a)	These investments have been in an unrealized loss position; however, the amount of unrealized loss is less than $0.05.

Management does not believe that any individual unrealized loss as of ~~June 30, 2018,~~March 31, 2019, represents an other-than-temporary impairment. The unrealized losses are primarily attributable to changes in interest rates and not to credit deterioration. We currently do not intend to sell or expect to be required to sell the securities before the time required to recover the amortized cost.

The amortized cost and fair value of investment securities available for sale at ~~June 30, 2018,~~March 31, 2019, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or to prepay obligations with or without call or prepayment penalties.

   June 30, 2018
   Cost    Fair Value
Due in one year or less
   $ 2,339.5    $ 2,339.3
Due in one to three years
   475.5    469.9
Due in three to five years
   588.1    580.8
Due after five years
   319.1    307.8




Invested customer trust funds
   $ 3,722.2    $ 3,697.8

~~6. Property, Plant, and Equipment~~

~~Property, plant, and equipment consisted of the following:~~

	March 31, 2019
	Cost		Fair Value
Due in one year or less	$	3,161.8	$	3,160.9
Due in one to three years		545.1		545.3
Due in three to five years		601.1		608.0
Due after five years		235.2		234.7
Invested customer trust funds	$	4,543.2	$	4,548.9

   June 30,    December 31,
   2018    2017
Land
   $ 7.5    $ 7.5
Software
   209.5    197.4
Machinery and equipment
   119.2    120.3
Buildings and improvements
   38.9    36.3




Total property, plant, and equipment
   375.1    361.5
Accumulated depreciation
   (275.0 )    (259.5 )




Property, plant, and equipment, net
   $ 100.1    $ 102.0

Depreciation expense of property, plant, and equipment totaled $9.6 and $8.4 for the three months ended June 30, 2018, and 2017, respectively, and $18.8 and $16.9 for the six months ended June 30, 2018, and 2017, respectively.15

7.6. Goodwill and Intangible Assets

Goodwill

Goodwill and changes therein were as follows for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019, and the year ended December 31, ~~2017:~~2018:


Balance at December 31, 2016	$	1,933.1
Translation		27.9

Balance at December 31, 2017		1,961.0		$	1,961.0
Translation		(18.4	)		(33.6	)

Balance at June 30, 2018	$	1,942.6

Balance at December 31, 2018					1,927.4
Asset acquisition					9.0
Translation					8.5
Balance at March 31, 2019				$	1,944.9

Intangible Assets

Other intangible assets consisted of the following as of ~~June 30, 2018:~~March 31, 2019:


	Gross Carrying Amount		Accumulated Amortization			Net		Estimated Life Range (Years)		Gross Carrying Amount		Accumulated Amortization			Net		Estimated Life Range (Years)
Customer lists and relationships	$	207.6	$	(183.6	)	$	24.0		5-15	$	206.8	$	(195.7	)	$	11.1	5-15
Trade name		173.8		(2.0	)		171.8		—		173.7		(1.9	)		171.8		—
Technology		153.5		(152.7	)		0.8		2-7		154.1		(152.7	)		1.4	3-4

Total other intangible assets	$	534.9	$	(338.3	)	$	196.6			$	534.6	$	(350.3	)	$	184.3

~~The LifeWorks Disposition was considered a triggering event for testing~~

We perform an impairment assessment of ~~the~~our trade name intangible ~~asset for impairment. There was no impairment indicated~~assets as of ~~April 30, 2018. Please refer~~October 1 of each year. We continue to ~~Note 3, “Discontinued Operations,” for further discussion~~evaluate the use of our trade names and branding in our sales and marketing efforts. If there is a fundamental shift in the ~~LifeWorks Disposition.~~method of our branding in the future, we will assess the impact on the carrying amount of our trade name intangible assets and to determine whether an impairment exists. If it is determined that an impairment has occurred, a non-cash expense would be recognized during the period in which the decision was made to make the fundamental shift.

Other intangible assets consisted of the following as of December 31, ~~2017:~~2018:


	Gross Carrying Amount		Accumulated Amortization			Net		Estimated Life Range (Years)		Gross Carrying Amount		Accumulated Amortization			Net		Estimated Life Range (Years)
Customer lists and relationships	$	210.1	$	(177.0	)	$	33.1		5-15	$	205.4	$	(190.2	)	$	15.2	5-15
Trade name		174.1		(2.1	)		172.0		—		173.5		(1.9	)		171.6		—
Technology		155.6		(154.2	)		1.4		2-7		152.2		(151.5	)		0.7	3-4

Total other intangible assets	$	539.8	$	(333.3	)	$	206.5			$	531.1	$	(343.6	)	$	187.5

Amortization expense related to definite-lived intangible assets was ~~$4.6~~$4.7 and ~~$4.6~~$4.7 for the three months ended ~~June 30,~~March 31, 2019, and 2018, ~~and 2017, respectively, and $9.3 and $9.2 for the six months ended June 30, 2018, and 2017,~~ respectively.

8.16

7. Debt

Overview

Our debt obligations consisted of the following as of the periods presented:

					March 31,		December 31,
	June 30,		December 31,		2019		2018
	2018		2017
Term Debt, interest rate of 5.4% and 5.1% as of June 30, 2018 and December 31, 2017, respectively	$	680.0	$	657.3
Senior Notes, interest rate of 11.0% as of December 31, 2017		—		475.0
Revolving Credit Facility ($300.0 and $130.0 available capacity less amounts reserved for letters of credit, which were $2.7 and $2.9 as of June 30, 2018 and December 31, 2017, respectively)		—		—

Term Debt, interest rate of 5.5% and 5.8% as of March 31, 2019 and December 31, 2018, respectively					$	676.6	$	678.3
Revolving Credit Facility ($300.0 available capacity less amounts reserved for letters of credit, which were $2.7 and $2.7 as of March 31, 2019 and December 31, 2018, respectively)						—		—
Canada Line of Credit (CDN $7.0 available capacity as of March 31, 2019 and December 31, 2018; USD $5.2 as of March 31, 2019 and USD $5.1 as of December 31, 2018)						—		—
Total debt		680.0		1,132.3		676.6		678.3
Less unamortized discount on Term Debt		1.8		0.9		1.6		1.7
Less unamortized debt issuance costs on Senior Notes and Term Debt		6.7		11.6		6.1		6.3
Less current portion of long-term debt		5.1		—		6.8		6.8

Long-term debt, less current portion	$	666.4	$	1,119.8	$	662.1	$	663.5

Senior Secured Credit Facility

Ceridian entered into a credit agreement dated as of November 14, 2014, pursuant to the terms of which Ceridian became borrower of (i) a $702.0 term loan debt facility (the “2014 Term Debt”) and (ii) a $130.0 revolving credit facility (the “2014 Revolving Credit Facility”) (the 2014 Term Debt and the 2014 Revolving Credit Facility are together referred to as the “2014 Senior Secured Credit Facility”). The 2014 Senior Secured Credit Facility was secured by all assets of Ceridian and was senior to Ceridian’s other debt. The 2014 Term Debt had a maturity date of September 2020, and the 2014 Revolving Credit Facility had a maturity date of September 2019. During the three months ended March 31, 2018, Ceridian made a final mandatory~~pre-payment~~ ~~of $0.3 towards the principal balance of the Term Debt from the proceeds received from the 2016 sale of our United Kingdom and Ireland business.~~

On April 30, 2018, Ceridian completed the refinancing of ~~the remaining~~its debt ~~under the 2014 Senior Secured Credit Facility~~ by entering into a new credit agreement. Pursuant to the terms of the new credit agreement, Ceridian became borrower of (i) a $680.0 term loan debt facility (the “2018 Term Debt”) and (ii) a $300.0 revolving credit facility (the “2018 Revolving Credit Facility”) (the 2018 Term Debt and the 2018 Revolving Credit Facility are together referred to as the “2018 Senior Secured Credit Facility”). The 2018 Senior Secured Credit Facility is secured by all assets of Ceridian. The 2018 Term Debt has a maturity date of April 30, 2025, and the 2018 Revolving Credit Facility has a maturity date of April 30, 2023. The 2018 Term Debt ~~is currently~~was subject to an interest rate of LIBOR plus 3.25%. ~~In the event~~As a result of a ratings upgrade on March 26, 2019, of our ~~corporate rating from~~senior secured credit facilities by Moody’s Investors Service, ~~Inc. is~~from B3 to B2, ~~or better,~~ the Company’s floating rate term debt interest rate is reduced from LIBOR plus 3.25% to LIBOR plus 3.00%, so long as the rating is maintained.

~~In connection with~~ Accrued interest related to the ~~refinancing of the 2014~~2018 Senior Secured Credit Facility ~~we capitalized $3.6~~was $3.5 and $0.1 as of ~~financing costs~~March 31, 2019 and ~~recognized a loss on debt extinguishment of $7.1~~December 31, 2018, respectively, and is included within ~~interest expense, net on~~Other accrued expenses in our condensed consolidated ~~statement of operations during the three months ended June 30, 2018.~~balance sheets.

~~Senior Notes~~

Using the net proceeds received from the IPO and concurrent private placement, we satisfied and discharged the indenture governing our Senior Notes on April 30, 2018, and the Senior Notes were redeemed on May 30, 2018. In connection with the redemption of the Senior Notes, we recognized a loss on debt extinguishment of $18.6 within interest expense, net on our condensed consolidated statement of operations during the three months ended June 30, 2018.

Future Payments and Maturities of Debt

The future principal payments and maturities of our debt are as follows:


Years Ending December 31,	Amount		Amount
2018	$	1.7
2019		6.8	$	5.1
2020		6.8		6.8
2021		6.8		6.8
2022		6.8		6.8
2023				6.8
Thereafter		651.1		644.3
			$	676.6
	$	680.0

Fair Value of Debt

Our debt does not trade in active markets. Based on the borrowing rates currently available to us for bank loans with similar terms and average maturities and the limited trades of our debt, the fair value of our debt was estimated to be ~~$678.3~~$674.9 and ~~$1,154.1~~$649.5 as of ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, respectively.

9.8. Employee Benefit Plans

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


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
Net Periodic Pension Cost	2018			2017			2018			2017			2019			2018
Interest cost	$	4.1		$	4.3		$	8.2		$	8.6		$	4.5		$	4.1
Actuarial loss amortization		3.6			3.2			7.2			6.4			3.2			3.6
Less: Expected return on plan assets		(6.5	)		(6.6	)		(13.0	)		(13.2	)		(5.9	)		(6.5	)

Net periodic pension cost	$	1.2		$	0.9		$	2.4		$	1.8		$	1.8		$	1.2

													Three Months Ended March 31,
Net Periodic Postretirement Benefit	Three Months Ended June 30,						Six Months Ended June 30,
Net Periodic Postretirement Benefit	2018			2017			2018			2017			2019			2018
Service benefit	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	(0.2	)	$	—		$	—
Interest cost		0.1			0.1			0.2			0.2			0.1			0.1
Actuarial gain amortization		(0.6	)		(0.6	)		(1.2	)		(1.2	)		(0.6	)		(0.6	)

Prior service credit amortization														—			(0.1	)
Net periodic postretirement benefit gain	$	(0.6	)	$	(0.6	)	$	(1.2	)	$	(1.2	)	$	(0.5	)	$	(0.6	)

~~10.~~

9. Share-Based Compensation

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

. Effective November 1, 2013, although most participants who held stock options under the 2007 SIP converted their options to a newly created option plan, the 2013 Ceridian HCM Holding Inc. Stock Incentive Plan, as amended (“2013 SIP”)~~. A~~, a small number of participants maintained their stock options in the 2007 SIP. Concurrent with the IPO and legal reorganization, all outstanding stock options under the 2007 SIP were converted into options to purchase common stock of Ceridian. As of ~~June 30, 2018,~~March 31, 2019, there were ~~5,000~~2,500 stock options outstanding under the 2007 SIP.

The 2013 SIP authorized the issuance of up to 12,500,000 shares of common stock of Ceridian to eligible participants through stock options and other stock awards, which was increased to 15,000,000 on March 20, 2017, by the Board of Directors. Eligible participants in the 2013 SIP include Ceridian’s directors, employees, and consultants.

As part of the 2013 SIP, the Board of Directors approved a stock appreciation rights program that authorized the issuance of up to 600,000 stock appreciation rights. The performance criteria for all stock appreciation rights was met on April 30, 2018, resulting in the vesting of all outstanding stock appreciation rights. We recognized $1.5 of share-based compensation expense related to the vesting of these stock appreciation rights during the three months ended June 30, 2018. As of June 30, 2018, there were no remaining outstanding stock appreciation rights.

Stock options awarded under the 2013 SIP vest either annually on a pro rata basis over a four- or five-year period or on a specific date if certain performance criteria are satisfied and certain equity values are attained. In addition, upon termination of service, all vested options must be exercised generally within 90 days after termination, or these awards will be forfeited. The stock option awards have a10-year contractual term and have an exercise price that is not less than the fair market value of the underlying stock on the date of grant. As of ~~June 30, 2018,~~March 31, 2019, there were ~~11,387,416~~8,104,518 stock options and restricted stock units outstanding under the 2013 SIP. We do not intend to grant any additional awards under the 2007 SIP or the 2013 ~~SIP following our IPO.~~SIP.

On April 24, 2018, in connection with the IPO, the Board of Directors approved the Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (“2018 EIP”), which authorizes the issuance of up to 13,500,000 shares of common stock to eligible participants through equity awards. (the “Share Reserve”). The Share Reserve may be increased on March 31 of each of the first ten calendar years during the term of the 2018 EIP, by the lesser of (i) three percent of the number of shares of our common stock outstanding on each January 31 immediately prior to the data of increase or (ii) such number of shares of our common stock determined by the Board of Directors. On March 31, 2019, the Share Reserve was increased by three percent of the number of shares of common stock outstanding on January 31, 2019, or 4,196,193 shares.

Equity awards under the 2018 EIP vest annually on a pro rata basis, generally over a four-year period. In addition, upon termination of service, all vested awards must be exercised within 90 days after termination, or these awards will be forfeited. The equity awards have a10-year contractual term and have an exercise price that is not less than the fair market value of the underlying stock on the date of the grant. As of ~~June 30, 2018,~~March 31, 2019, there were ~~4,675,472~~9,359,755 stock options and restricted stock units outstanding ~~under the 2018 EIP. As of June 30, 2018, there were 8,824,528~~and 8,336,438 shares available for future grants of ~~stock options and stock~~equity awards under the 2018 EIP.

On November 9, 2018, the Compensation Committee of the Board of Directors approved the Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (the “GESPP”), which authorizes the issuance of up to 2,500,000 shares of common stock to eligible participants through purchases via payroll deductions at a discount to the fair market value of our common stock. The GESPP has a 10-year contractual term, and purchases will commence in the second quarter of 2019, subject to approval by the Company’s stockholders at our May 1, 2019 annual meeting of stockholders.

Total share-based compensation expense was ~~$12.0~~$6.0 and ~~$4.3~~$2.7 for three months ended ~~June 30,~~March 31, 2019, and 2018, ~~and 2017, respectively, and $14.7 and $8.5 for the six months ended June 30, 2018, and 2017.~~respectively.

Performance-Based Stock Options

Performance-based option activity under the 2007 SIP and the 2013 ~~HCM~~ SIP for the period was as follows:

											Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
	Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Performance-based options outstanding at December 31, 2017		1,038,147		$	13.46			3.5	$	—
Performance-based options outstanding at December 31, 2018												366,377		$	13.50			3.1	$	7.7
Granted		—			—			—		—		—			—			—		—
Exercised		(546,609	)		(13.46	)		—		—		(43,849	)		(13.64	)		—		—
Forfeited or expired		(8,358	)		(13.46	)		—		—		—			—			—		—

Performance-based options outstanding at June 30, 2018		483,180		$	13.49			3.4	$	9.5
Performance-based options exercisable at June 30, 2018		483,180		$	13.49			3.4	$	9.5
Performance-based options outstanding at March 31, 2019												322,528		$	13.48			2.9	$	12.2
Performance-based options exercisable at March 31, 2019												322,528		$	13.48			2.9	$	12.2

The performance criteria for all outstanding performance-based stock options was met on June 7, 2018, resulting in the vesting of all outstanding performance-based stock options on this date. ~~We recognized $4.8 of share-based compensation expense related to the vesting of these performance-based stock options during the three months ended June 30, 2018.~~ As of ~~June 30, 2018,~~March 31, 2019, there was no share-based compensation expense related to unvested performance-based stock options not yet recognized.

Term-Based Stock Options

Term-based option activity, including stock options under the 2007 SIP, the 2013 ~~HCM~~ SIP and the 2018 EIP, for the period was as follows:

											Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
	Shares			Weighted Average Exercise Price (per share)			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Term-based options outstanding at December 31, 2017		10,994,181		$	16.52			6.9	$	48.8
Term-based options outstanding at December 31, 2018												13,549,769		$	19.28			7.5	$	206.8
Granted		4,822,517			21.96			—		—		4,112,295			49.66			—		—
Exercised		(623,511	)		(13.95	)		—		—		(1,186,362	)		(16.69	)		—		—
Forfeited or expired		(136,434	)		(17.10	)		—		—		(45,530	)		(21.22	)		—		—

Term-based options outstanding at June 30, 2018		15,056,753		$	18.37			7.6	$	223.1
Term-based options exercisable at June 30, 2018		7,364,017		$	16.48			5.8	$	123.1
Term-based options outstanding at March 31, 2019												16,430,172		$	26.83			8.1	$	402.1
Term-based options exercisable at March 31, 2019												4,960,532		$	16.84			5.6	$	170.9

As of ~~June 30, 2018,~~March 31, 2019, there was ~~$51.8~~$107.7 of share-based compensation expense related to unvested term based awards not yet recognized, which is expected to be recognized over a weighted average period of ~~2.0~~2.3 years. ~~As of June 30, 2018, there were 7,364,017 vested term-based stock options.~~

Restricted Stock Units

Restricted stock units (“RSUs”) activity, including RSUs under the 2013 ~~HCM~~ SIP and the 2018 EIP, for the period was as follows:

	Shares
		~~Shares~~
RSUs outstanding at December 31, ~~2017~~2018		664,073	~~605,990~~
Granted		50,000	~~27,955~~
Shares issued upon vesting of RSUs		—	~~(105,990~~	)
Forfeited or canceled			—
			—
RSUs outstanding at ~~June 30, 2018~~March 31, 2019		714,073	~~527,955~~
RSUs releasable at ~~June 30, 2018~~March 31, 2019		250,000	~~125,000~~

During the ~~six~~three months ended ~~June 30, 2018, 27,955 restricted stock units were granted and 230,990 restricted stock units~~March 31, 2019, 125,000 RSUs vested. ~~Of the vested restricted stock units, 105,990 shares of common stock were issued, and 125,000 restricted stock units remained vested and releasable.~~ As of ~~June 30, 2018,~~March 31, 2019, there were ~~402,955~~464,073 unvested ~~restricted stock units~~RSUs outstanding and 250,000 vested RSUs outstanding. ~~Restricted stock units~~RSUs generally vest annually over a three- or four-year period. ~~There were 29,800 RSUs that vested upon completion of the IPO.~~ As of ~~June 30, 2018,~~March 31, 2019, there was ~~$6.6~~$11.2 of share-based compensation expense related to unvested ~~restricted stock units~~RSUs not yet recognized, which is expected to be recognized over a weighted average period of ~~2.8~~2.4 years.

10. Revenue

Our Solutions

We currently categorize our solutions into two categories, Cloud and Bureau.

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

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

Disaggregation of Revenue

Revenue by solution and category is as follows:

	Three Months Ended March 31,
	2019		2018
Cloud recurring services revenue	$	124.4	$	99.9
Cloud professional services revenue		30.2		27.0
Total Cloud revenue		154.6		126.9
Bureau recurring services revenue		48.4		61.0
Bureau professional services revenue		0.7		0.9
Total Bureau revenue		49.1		61.9
Total revenue	$	203.7	$	188.8

Cloud revenue by offering is as follows:

	Three Months Ended March 31,
	2019		2018
Dayforce	$	132.8	$	104.1
Powerpay		21.8		22.8
Total Cloud	$	154.6	$	126.9

Contract Balances

The Company records a contract asset when revenue recognized for professional service performance obligations exceed the billings. Contract assets were $38.2 and $40.0 as of March 31, 2019, and December 31, 2018, respectively. Contract assets expected to be recognized in revenue within twelve months are included within Prepaid expenses and other current assets, with the remaining contract assets included within Other assets on our condensed consolidated balance sheets.

Deferred Revenue

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

	Three Months Ended March 31,
	2019			2018
Deferred revenue, beginning of period	$	23.2		$	16.5
New billings		63.6			44.9
Revenue recognized		(63.8	)		(41.7	)
Deferred revenue, end of period	$	23.0		$	19.7

Transaction Price for Remaining Performance Obligations

In accordance with ASC Topic 606, the following represents the aggregate amount of transaction price allocated to the remaining performance obligations that are unsatisfied as of the end of the reporting period. As of March 31, 2019, approximately $785.2 of revenue is expected to be recognized over the next three years from remaining performance obligations, which represents contracted revenue for recurring services and fixed price professional services, primarily implementation services, that has not yet been recognized, including deferred revenue and unbilled amounts that will be recognized as revenue in future periods. In accordance with the practical expedient provided in ASC Topic 606, performance obligations that are billed and recognized as they are delivered, primarily professional services contracts that are on a time and materials basis, are excluded from the transaction price for remaining performance obligations disclosed above.

11. Supplementary Data to Statements of Operations

Other expense, net for the three months ended March 31, 2019, consisted of foreign currency translation expense of ~~$2.0~~$0.3 and net periodic benefit expense, excluding service cost of $1.3. Other income, net for the three months ended ~~June 30, 2017,~~March 31, 2018, consisted of foreign currency translation income of $2.8 and net periodic benefit expense, excluding service cost of $0.6. For the three months ended March 31, 2018, the foreign currency translation is primarily related to a remeasurement ~~loss~~gains and losses resulting from an intercompany ~~payable~~receivables or payables of a U.S. subsidiary denominated in Canadian dollars. This intercompany payable was repaid in the second quarter of 2018.

Other (income) expense, net consisted of foreign currency translation income of $2.8, and foreign currency translation expense of $3.1 for the six months ended June 30, 2018, and 2017, respectively. The foreign currency translation is primarily related to remeasurement gains and losses resulting from intercompany receivables or payables denominated in foreign currencies.

12. Accumulated Other Comprehensive ~~Income (Loss)~~Loss

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

   Foreign
Currency
Translation
Adjustment    Unrealized Gain
(Loss) from
Invested
Customer Trust
Funds    Pension
Liability
Adjustment    Total
Balance as of December 31, 2017
   $ (160.6 )    $ (9.0 )    $ (142.5 )    $ (312.1 )
Other comprehensive income (loss) before income taxes and reclassifications
   (26.0 )    (18.5 )    (0.2 )    (44.7 )
Income tax benefit
   —      1.4    —      1.4
Reclassifications to earnings
   —      —      6.0    6.0








Other comprehensive income (loss) attributable to Ceridian
   (26.0 )    (17.1 )    5.8    (37.3 )
LifeWorks Disposition
   0.7    —      —      0.7








Balance as of June 30, 2018
   $ (185.9 )    $ (26.1 )    $ (136.7 )    $ (348.7 )

	Foreign Currency Translation Adjustment			Unrealized Gain (Loss) from Invested Customer Trust Funds			Pension Liability Adjustment			Total
Balance as of December 31, 2018	$	(207.5	)	$	(18.3	)	$	(150.1	)	$	(375.9	)
Other comprehensive income (loss) before income taxes and reclassifications		12.3			21.9			(0.1	)		34.1
Income tax expense		—			(2.7	)		—			(2.7	)
Reclassifications to earnings		—			—			2.6			2.6
Other comprehensive income		12.3			19.2			2.5			34.0
Cumulative-effect adjustment related to the adoption of ASU 2018-02 (Please refer to Note 2)		—			0.4			(27.5	)		(27.1	)
Balance as of March 31, 2019	$	(195.2	)	$	1.3		$	(175.1	)	$	(369.0	)

13. Income Taxes

Our income tax provision represents federal, state, and international taxes on our income recognized for financial statement purposes ~~which~~and includes the ~~effect~~effects of temporary differences between financial statement income and income recognized for tax return purposes. ~~Our income~~Deferred tax ~~provision is negatively affected by~~assets and liabilities are recorded for temporary differences between the ~~need~~financial reporting basis and the tax basis of assets and liabilities as adjusted for ~~a valuation allowance against our deferred tax assets.~~the expected benefits of utilizing net operating loss carryforwards. We record a valuation allowance to reduce our deferred tax ~~asset when it is more likely than not that all or a portion of~~assets to reflect the net deferred tax ~~asset~~assets that we believe will ~~not~~ be realized. In ~~determining~~assessing the ~~requirement~~likelihood that we will be able to recover our deferred tax assets and the need for a valuation allowance, we ~~assess the~~consider all available evidence, both positive and negative, ~~evidence to estimate if sufficient~~including historical levels of pre-tax book income, expiration of net operating losses, expectations and risks associated with estimates of future taxable income ~~will be generated to utilize our deferred~~and ongoing prudent and feasible tax ~~assets not already identified~~planning strategies, as ~~requiring a valuation allowance.~~well as current tax laws. As of ~~June 30, 2018,~~March 31, 2019, and December 31, ~~2017,~~2018, we ~~continued~~continue to record a full valuation allowance against our domestic deferred tax assets that are not offset by the reversal of deferred tax liabilities. InWe evaluate the likelihood of recovering our deferred taxes on a quarterly basis, and in the future, if it is determined that we no longer have a requirement to record a valuation allowance against all or a portion of our deferred tax assets, the release of the valuation allowance would have a positive impact on our income tax provision.

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

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

We recorded income tax expense of ~~$6.7~~$5.7 during the ~~six~~three months ended ~~June 30, 2018. Included in this amount are the estimated impacts~~March 31, 2019, consisting primarily of ~~requiring a current inclusion in U.S. federal income~~$3.9 of ~~certain earnings of controlled foreign corporations, allowing a domestic corporation an immediate deduction in the U.S. taxable income for a portion of its foreign-derived intangible income, and the~~ base erosion anti-abuse ~~tax.~~

~~In January~~tax (“BEAT”) in the U.S., and ~~April~~$1.6 of ~~2018, the Internal Revenue Service (the “IRS”) issued guidance that provides additional clarification on certain aspects of the transition~~income tax calculation. We did not record any change to our transition tax liability during the six months ended June 30, 2018. We are considering the additional IRS guidance as we continue to gather additional information related to the transition tax estimates and deferred tax estimates to more precisely compute the transition tax and remeasurement of deferred taxes. We anticipate additional IRS guidance relative to the impacts of the Act will be forthcoming throughout 2018.expense from foreign operation.

The total amount of unrecognized tax benefits as of ~~June 30, 2018,~~March 31, 2019, and December 31, ~~2017,~~2018, were ~~$1.4,~~$1.5, including $0.2 of accrued interest, and ~~$1.5,~~$1.3, including ~~$0.4~~$0.2 of accrued interest, respectively. Of the total amount of unrecognized tax benefits as of ~~June 30, 2018, $1.4~~March 31, 2019, $1.5 represents the amount that, if recognized, would favorably impact our effective income tax rate. It is reasonable to expect that the amount of unrecognized tax benefits will change in the next twelve months; however, we do not expect the change to have a significant impact on our results of operations or financial condition.

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

14. Leases

Our leases primarily consist of office space. Leases with an initial term of 12 months or less are not recorded on the balance sheet; we recognize lease expense for these leases on a straight-line basis over the lease term. For leases beginning 2019 and later, we account for lease components (e.g., fixed payments including rent, real estate taxes and insurance costs) separately from the non-lease components (e.g., common-area maintenance costs).

Most leases include options to renew, and the lease renewal is at our sole discretion. Therefore, the depreciable life of assets and leasehold improvements is limited by the expected lease term unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We rent or sublease certain real estate to third parties. Our sublease portfolio mainly consists of operating leases for space within our office facilities.

Supplemental balance sheet information related to leases were as follows:

Lease Type	Balance Sheet Classification	March 31, 2019
ASSETS
Operating lease assets	Trade and other receivables, net	$	1.9
Operating lease assets	Prepaid expenses and other current assets		1.6
Operating lease assets	Right of use lease asset		39.9
Total lease assets		$	43.4
LIABILITIES
Current
Operating lease liabilities	Short-term lease liabilities	$	13.9
Noncurrent
Operating lease liabilities	Long-term lease liabilities		32.7
Total lease liabilities		$	46.6

~~14.~~

The components of lease expense were as follows:

	Three Months Ended March 31,
Lease Cost	2019
Operating lease cost	$	4.0
Sublease income		(1.2	)
Net lease cost	$	2.8

Maturities of lease liabilities were as follows:

Years Ending December 31,	Operating Leases
2019	$	11.9
2020		14.3
2021		9.6
2022		9.1
2023		7.3
Thereafter		6.7
Total lease payments (a)	$	58.9
Less: Interest		6.7
Present value of lease liabilities	$	52.2

(a)	Maturities of lease liabilities have not been reduced by minimum sublease rentals of $11.8 due in the future under noncancellable subleases.

Weighted average remaining lease term and weighted average discount rate were as follows:

We had operating cash outflows related to operating leases of $3.8 for the three months ended March 31, 2019. This represents cash paid for amounts included in the measurement of lease liabilities.

15. Commitments and Contingencies

Legal Matters

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

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

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

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

~~15.~~16. Related Party Transactions

Management Agreements

Prior to our IPO, Ceridian was party to management agreements with affiliates of our Sponsors, Fidelity National Financial, Inc. (“FNF”) and THL Managers VI, LLC (“THLM”). FNF assigned its management agreement to Cannae in November 2017. Pursuant to these management agreements, Cannae and THLM each, respectively, agreed to provide us with financial advisory, strategic, and general oversight services. These management agreements provided that we pay annual management fees to each of Cannae and THLM in an amount equal to the greater of (a) $0.9, or (b) 0.5 percent of Adjusted EBITDA. Adjusted EBITDA, for purposes of the management agreements, was EBITDA as defined in the 2014 Senior Secured Credit Facility, further adjusted to exclude the payments made pursuant to the management agreements and certain stock options or other equity compensation.

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

We recorded a management fee expense in selling, general, and administrative expense of ~~$11.5, and~~ $0.5 for the three months ended ~~June 30,~~March 31, 2018, ~~and 2017, respectively,~~ related to these management agreements. ~~During~~In April 2018, the ~~six months ended June 30, 2018, and 2017, we recorded a~~ management ~~fee expense in selling, general, and administrative expense~~agreements terminated upon consummation of ~~$12.0 and $0.9, respectively, related to these management agreements.~~our IPO.

~~Debt~~24

~~Prior to itssplit-off~~ from FNF, Cannae was an affiliate of FNF. FNF and its subsidiaries owned $24.0 of the Senior Notes as of December 31, 2017. Based on this ownership, $0.5 and $0.8 in interest payments were made to FNF and its subsidiaries during the three months ended June 30, 2018, and 2017, respectively, and $1.3 and $1.6 during the six months ended June 30, 2018, and 2017, respectively. FNF and its subsidiaries conducted the debt transactions through third parties in the ordinary course of their business and not directly with us. Following Cannae’s~~split-off~~ ~~from FNF, FNF retained ownership of the Senior Notes.~~

Service and Vendor Related Agreements

Ceridian is a party to a service agreement with CompuCom Systems, Inc. (“CompuCom”), an investment portfolio company of THL Partners. Pursuant to the service agreement, CompuCom agrees to provide us with service desk and desk side support services. Pursuant to this arrangement, we made payments to CompuCom totaling $0.5 and ~~$0.9~~$0.2 during the three months ended ~~June 30,~~March 31, 2019, and 2018, respectively.

Other Transactions

On July 23, 2018, Ronald F. Clarke was appointed to our Board of Directors. Mr. Clarke has been the chief executive officer of FleetCor Technologies Inc. (“FleetCor Technologies”) since August 2000 and ~~2017, respectively,~~its chairman of the board of directors since March 2003. We provide services to FleetCor Technologies or one of its wholly owned affiliates through certain commercial arrangements entered into in the ordinary course of business, which include provision of Dayforce HCM services, reseller or referral arrangements whereby we resell or refer FleetCor Technologies services to its customers, and ~~$0.7~~other administrative services. For these services, we have recorded revenue of $0.2 and ~~$1.4 during~~$0.3 for the ~~six~~three months ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~ respectively.

~~Other Transactions~~

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

We provide ~~Dayforce and related~~payroll-related tax filings services to FNF for which we recorded revenue of $0.1 and $0.1 for the three months ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017, respectively, and $0.2 and $0.4 for the six months ended June 30, 2018, and 2017,~~ respectively.

~~16. Financial Data by Segment and Geographic Area~~

~~Segments~~

After consideration of the LifeWorks Disposition, management has concluded that we have one operating and reportable segment. This conclusion aligns with how management monitors operating performance, allocates resources, and deploys capital. Please refer to Note 3, “Discontinued Operations,” for further discussion of the LifeWorks Disposition.

~~Our Solutions~~

We ~~categorize our solutions into two categories: Cloud and Bureau.~~

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

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

~~Revenue by solution is~~these portfolio companies was as follows:

   Three Months Ended June 30,    Six Months Ended June 30,
   2018    2017    2018    2017
Cloud
   $ 127.8    $ 94.3    $ 253.0    $ 185.0
Bureau
   51.5    63.2    113.5    139.9








Total revenue
   $ 179.3    $ 157.5    $ 366.5    $ 324.9

	Three Months Ended March 31,
	2019		2018
American Blue Ribbon Holdings, LLC	$	0.5	$	0.5
Essex Bargain Hunt Superstores		0.1		0.1
Guaranteed Rate		0.3		—
System One Holdings LLC		—		0.2

17. Net ~~Loss~~Income (Loss) per Share

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

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

For the calculation of diluted net ~~loss~~income (loss) per share, net ~~loss~~income (loss) per share is adjusted by the effect of dilutive securities, including awards under our share-based compensation plans. Diluted net ~~loss~~income (loss) per share is computed by dividing the resulting net ~~loss~~income (loss) attributable to Ceridian available to common stockholders by the weighted-average number of fully diluted common shares outstanding. During the three ~~and six~~ months ended ~~June 30,~~March 31, 2018, ~~and 2017,~~ our potential dilutive shares, such as stock options, RSUs, and shares of senior and junior convertible preferred stock were not included in the computation of diluted net loss per share as the effect of including these shares in the calculation would have been anti-dilutive.

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

   Three Months Ended June 30,    Six Months Ended June 30,
   2018    2017    2018    2017
Numerator:

Net loss attributable to Ceridian
   $ (65.5 )    $ (22.9 )    $ (67.6 )    $ (34.1 )
Less: (Loss) income from discontinued operations
   (9.7 )    0.2    (11.8 )    0.5








Net loss from continuing operations attributable to Ceridian
   (55.8 )    (23.1 )    (55.8 )    (34.6 )
Less: Senior Preferred Stock dividends declared
   2.4    5.3    7.7    10.0








Net loss from continuing operations attributable to Ceridian available to common stockholders
   $ (58.2 )    $ (28.4 )    $ (63.5 )    $ (44.6 )








Denominator:

Weighted-average shares outstanding - basic
   113,311,107    65,225,104    89,445,371    65,130,383
Weighted-average shares outstanding - diluted
   113,311,107    65,225,104    89,445,371    65,130,383
Net loss per share from continuing operations attributable to Ceridian - basic and diluted
   $ (0.51 )    $ (0.44 )    $ (0.71 )    $ (0.68 )
Net income per share from discontinued operations - basic and diluted
   $ (0.09 )    $ 0.01    $ (0.13 )    $ —








Net loss per share attributable to Ceridian - basic and diluted
   $ (0.60 )    $ (0.43 )    $ (0.84 )    $ (0.68 )

	Three Months Ended March 31,
	2019		2018
			*As Adjusted
Numerator:
Net income attributable to Ceridian	$	11.2	$	0.6
Less: Loss from discontinued operations		—		(2.1	)
Net income from continuing operations attributable to Ceridian		11.2		2.7
Less: Senior Preferred Stock dividends declared		—		5.3
Net income (loss) from continuing operations attributable to Ceridian available to common stockholders	$	11.2	$	(2.6	)
Denominator:
Weighted-average shares outstanding - basic		140,149,271		65,314,462
Effect of dilutive equity instruments		6,892,957		—
Weighted-average shares outstanding - diluted		147,042,228		65,314,462
Net income (loss) per share from continuing operations attributable to Ceridian - basic	$	0.08	$	(0.04	)
Net loss per share from discontinued operations - basic	$	—	$	(0.03	)
Net income (loss) per share attributable to Ceridian - basic	$	0.08	$	(0.07	)
Net income (loss) per share from continuing operations attributable to Ceridian - diluted	$	0.08	$	(0.04	)
Net loss per share from discontinued operations - diluted	$	—	$	(0.03	)
Net income (loss) per share attributable to Ceridian - diluted	$	0.08	$	(0.07	)

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


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
	2018		2017		2018		2017		2019		2018
Senior convertible preferred stock		5,539,168		16,802,144		11,139,543		16,802,144		—		16,802,144
Junior convertible preferred stock		19,201,420		58,244,308		38,615,011		58,244,308		—		58,244,308
Stock options		15,000,923		11,536,649		13,503,505		11,130,826		1,059,230		12,055,839
Outstanding RSUs		519,691		605,990		550,395		413,435
Restricted stock units										—		581,440

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

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

Overview

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

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

We sell Dayforce through our direct sales force on a subscriptionper-employee,per-month (“PEPM”) basis. Our subscriptions are typically structured with an initial fixed term of between three and five years, with evergreen renewal thereafter. Dayforce can serve customers of all sizes, ranging from 100 to over 100,000 employees. We have rapidly grown the Dayforce platform to more than ~~3,300~~3,850 live Dayforce customers as of ~~June 30, 2018.~~March 31, 2019. For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, we added over ~~150 and 300~~130 net new live Dayforce ~~customers, respectively.~~customers.

In addition to Dayforce, we sell Powerpay, a cloud HR and payroll solution for the Canadian small business market, through both direct sales and established partner channels. We also continue to support customers using our Bureau solutions, which we generally stopped actively selling to new customers following the acquisition of Dayforce. We invest in maintenance and necessary updates to support our Bureau customers and continue to migrate them to Dayforce.27

~~How We Generate Revenue~~

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

~~Our Solutions~~

~~We categorize our solutions into two categories: Cloud and Bureau.~~

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

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

~~Our History~~

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

As part of our strategy to focus on the growth of our Cloud solutions business, we (i) sold our consumer-directed benefit services business in 2013, (ii) merged Comdata, our payment systems business unit, with FleetCor Technologies Inc. in 2014, (iii) sold our benefits administration and post-employment compliance businesses in 2015, (iv) sold our United Kingdom and Ireland businesses and a portion of our operations that supported such businesses in the Republic of Mauritius in 2016, and (v) contributed our LifeWorks employee assistance program business to a joint venture, LifeWorks, in 2016, then distributed our ownership in this joint venture to our stockholders in April 2018. Our benefits administration and post-employee compliance businesses, our United Kingdom and Ireland businesses, our divested Mauritius operations, and our LifeWorks joint venture are presented as discontinued operations in our condensed consolidated financial statements. Our consumer-directed benefits services business and our benefits administration and post-employment compliance businesses are collectively referred to as our “Divested Benefits Businesses.” As a result of these transactions, we operate one segment and only actively sell Dayforce and Powerpay, which we believe simplifies our business model and positions us well for continued growth.

~~Recent Developments~~

On April 30, 2018, we completed our initial public offering (“IPO”), in which we issued and sold 21,000,000 shares of common stock at a public offering price of $22.00 per share. We granted the underwriters a~~30-day~~ option to purchase an additional 3,150,000 shares of common stock at the offering price, which was exercised in full. A total of 24,150,000 shares of common stock were issued on April 30, 2018, with gross proceeds of $531.3 million from the IPO before deducting underwriting discounts, commissions, and other offering expenses. Immediately subsequent to the closing of our IPO on April 30, 2018, THL / Cannae Investors LLC, one of our existing stockholders controlled by our Sponsors, purchased from us in a private placement $100.0 million of our common stock at a price per share equal to the offering price. Based on the offering price of $22.00 per share, 4,545,455 shares were issued in this private placement. Please refer to Note 1, “Organization,” for further discussion of the IPO transaction.

We applied the net proceeds from the IPO to satisfy and to discharge the indenture governing our outstanding $475.0 million principal amount Senior Notes, and they were redeemed on May 30, 2018. Concurrently, we also refinanced our remaining debt under our (i) $702.0 million (original principal amount) Senior Term Debt and (ii) $130.0 million Revolving Credit Facility, including accrued interest and related costs and expenses, with new senior credit facilities consisting of a $680.0 million term loan debt facility and a $300.0 million revolving credit facility. Please refer to Note 8, “Debt,” for further discussion of the debt transactions.

~~The IPO, private placement, and debt refinancing had the following impacts to our results of operations and cash:~~

   Impact to
Statement of
Operations    Impact to Cash
Gross proceeds from the IPO and private placement
      $ 631.3
Costs capitalized within stockholders’ equity
      (36.3 )
Redemption of Senior Notes
      (475.0 )
Debt refinancing fees, reflected as a reduction to long-term debt
      (3.6 )
IPO and debt refinancing related expenses reflected within results of operations:

Cost of revenue
   $ (2.1 )
Selling, general, and administrative
   (23.2 )



Impact on operating profit
   $ (25.3 )
Interest expense
   (25.7 )



Impact on net loss
   $ (51.0 )    (51.0 )



Non-cashIPO-related share-based compensation expense
      8.1
Non-cash interest expense adjustments
      (4.9 )


Cash to balance sheet from the IPO and private placement
      $ 68.6
Proceeds from issuance of the new $680.0 million Senior Term Debt
      680.0
Repayment of the $702.0 million Senior Term Debt
      (657.0 )


Cash to balance sheet from the IPO, private placement and debt refinancing
      $ 91.6

Contemporaneously with the IPO and concurrent private placement, we distributed our interest in LifeWorks to our existing stockholders of record prior to the IPO on a pro rata basis in accordance with their pro rata interests in us (“LifeWorks Disposition”). As a result of the LifeWorks Disposition, we no longer have any material obligations under the LifeWorks joint venture agreement. Please refer to Note 3, “Discontinued Operations,” for further discussion of the LifeWorks Disposition.

Our Business Model

Our business model focuses on supporting the rapid growth of Dayforce and maximizing the lifetime value of our Dayforce customer relationships. Due to our subscription model, where we recognize subscription revenues ratably over the term of the subscription period, and high customer retention rates, we have a high level of visibility into our future revenues. The profitability of a customer depends, in large part, on how long they have been a customer. Because in our business model, PEPM subscription fees are not charged until the customer goes live, and because we incur costs in advance of receiving PEPM revenue that are not fully offset by our implementation fees, we estimate that it takes an average of 2.5 years before we are able to recover our implementation, customer acquisition, and other direct costs on a new Dayforce customer contract. As the proportion of Dayforce customers who have been live for two or more years increases, our related profitability increases. The following sets forth the number of live Dayforce customers at the end of ~~the last seven quarters:~~each quarter presented:

June 30, March 31, December 31, September 30, June 30, March 31, December 31,
2018 2018 2017 2017 2017 2017 2016
Live Dayforce customers
3,308 3,154 3,001 2,855 2,690 2,480 2,339
Dayforce customers live for two or more years
2,014 1,872 1,770 1,628 1,524 1,377 1,276
Proportion of Dayforce customers live for two or more years
61 % 59 % 59 % 57 % 57 % 56 % 55 %

	March 31,			December			September			June 30,			March 31,			December			September			June 30,
	2019			31, 2018			30, 2018			2018			2018			31, 2017			30, 2017			2017
Live Dayforce customers		3,851			3,718			3,465			3,308			3,154			3,001			2,855			2,690
Dayforce customers live for two or more years		2,480			2,339			2,148			2,014			1,872			1,770			1,628			1,524
Proportion of Dayforce customers live for two or more years		64	%		63	%		62	%		61	%		59	%		59	%		57	%		57	%

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

~~Key Factors and Trends Affecting Our Results of Operations~~

~~Set forth below is a discussion of some of the key factors and trends affecting our results of operations.~~

~~Growing our Dayforce Customer Base~~

A key part of our strategy is to continue to grow our Dayforce customer base. We have developed sales and marketing efforts that are designed for effective customer acquisition. As of June 30, 2018, we had more than 3,300 live Dayforce customers, an increase of approximately 620 customers as compared to the total at June 30, 2017. Our continued focus on sales execution is important to drive further penetration of the Dayforce platform and to expand our market share. We also believe that there is a significant opportunity for our solution outside of our core North American markets. Dayforce was designed as a global platform; and we intend to expand globally through both the expansion of our own proprietary payroll functionality, as well as through new and existing partnerships with local vendors, including our existing membership in the Payroll Services Alliance.

~~Extending Product Leadership~~

We are committed to delivering market-leading HCM solutions preferred by employers and employees alike. We believe that maintaining our product leadership is critical to driving further revenue growth. Our leading market position in technology is based on our ability to innovate and to bring new solutions to market. Dayforce is designed around our proprietary single application architecture, which features continuous calculation and includes a single cross-domain rules engine and a complete employee record, which facilitates new innovation. Since 2012, we have developed a full suite of HCM functionality. We intend to continue to extend the functionality and breadth of our platform in the future. We have a roadmap for continued development, which includes adding native payroll capabilities for additional countries. We intend to continue to invest in our product development and innovation to maintain our strong, differentiated technology position.

~~Retaining and Expanding Revenue from Existing Dayforce Customers~~

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

~~Managing the Migration of our Bureau Customers to Dayforce~~

We generally stopped actively selling our Bureau solutions to new customers in the United States in 2012 and have been marketing our Dayforce platform to new and existing customers since that time. For the three months ended June 30, 2018, Bureau revenue declined by $11.7 million, or 18.5%, as compared to the three months ended June 30, 2017. Of the $11.7 million decline in Bureau revenue for the three months ended June 30, 2018, $6.1 million was associated with customers migrating to Dayforce, which represented 18% of the increase in Cloud revenue during this period. As the number of Bureau customers continues to decline, our results of operations will depend, in part, on replacing the revenue from Bureau customer attrition and on maintaining the profitability of services to our remaining Bureau customers. We believe that our cloud Dayforce platform is attractive to many customers that currently use an outsourced service bureau for their payroll and~~HCM-related~~ needs; and, as a result, that sales to new customers and sales of additional functionality to our growing Dayforce customer base will continue to more than offset the decline in revenue from Bureau customers. We also believe that we will continue to be able to provide services to our remaining Bureau customers at attractive margins. As we migrate our Bureau customers to Dayforce, we typically experience a revenue increase from such customers driven by increased product density on the Dayforce platform.

~~Profitably Managing our Growth~~

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

How We Assess Our Performance

In assessing our performance, we consider a variety of performance indicators in addition to revenue and net ~~income, including live Dayforce customers, Adjusted EBITDA and Adjusted EBITDA margin.~~income. Set forth below is a description of our key performance measures.

Live Dayforce Customers

We use the number of customers live on Dayforce as an indicator of future revenue and the overall performance of the business and to assess the performance of our implementation services. We had ~~3,308~~3,851 customers live on Dayforce as of ~~June 30,~~March 31, 2019, compared to 3,154 customers live on Dayforce as of March 31, 2018. ~~Refer~~Please refer to the “Our Business Model” section above for the number of live Dayforce customers at the end of the ~~last seven quarters.~~quarters presented.

Adjusted EBITDA

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

~~Our presentation~~our business operations. Please refer to the “Results of Operations” section below for a discussion of Adjusted EBITDA and Adjusted EBITDA margin are intended as supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA and Adjusted EBITDA margin should not be considered as alternatives to operating profit (loss), net income (loss), earnings per share, or any other performance measures derived in accordance with U.S. GAAP, or as measures of operating cash flows or liquidity. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed to imply that our future results will be unaffected by these items. Adjusted EBITDA and Adjusted EBITDA margin are included in this discussion because they are key metrics used by management to assess our operating performance.margin.

Adjusted EBITDA and Adjusted EBITDA margin are not defined under U.S. GAAP, are not measures of net income, operating income, or any other performance measures derived in accordance with U.S. GAAP, and are subject to important limitations. Our use of the terms Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with U.S. GAAP.28

Adjusted EBITDA and Adjusted EBITDA margin have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

~~Adjusted EBITDA and Adjusted EBITDA margin do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;~~

~~Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in, or cash requirements for, our working capital needs;~~

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

~~Adjusted EBITDA and Adjusted EBITDA margin do not reflect the impact of share-based compensation upon our results of operations;~~

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

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

~~In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation.~~

~~The following table reconciles operating profit to Adjusted EBITDA for the periods presented:~~

   Three Months Ended June 30, Six Months Ended June 30,
   2018 2017 2018 2017
   (Dollars in millions)
Operating (loss) profit
   $ (11.3 ) $ 0.9 $ 16.0 $ 11.8
Depreciation and amortization
   14.2 13.0 28.1 26.1


EBITDA from continuing operations (1)
   2.9 13.9 44.1 37.9
Sponsorship management fees (2)
   11.5 0.5 12.0 1.0
Intercompany foreign exchange loss (gain)
   —   2.1 (2.8 ) 2.9
Share-based compensation (3)
   12.0 4.3 14.7 8.5
Severance charges (4)
   1.1 1.6 3.0 3.5
Restructuring consulting fees (5)
   2.4 0.2 2.5 —
IPO transaction costs (6)
   3.7 —   3.7 —


Adjusted EBITDA
   $ 33.6 $ 22.6 $ 77.2 $ 53.8


Adjusted EBITDA margin
   18.7 % 14.3 % 21.1 % 16.6 %

~~(1)~~

~~We define EBITDA from continuing operations as net income or loss before interest, taxes, depreciation and amortization, and net income or loss from discontinued operations.~~

~~(2)~~

Represents expenses related to our management, monitoring, consulting, transaction, and advisory fees and related expenses paid to the affiliates of our Sponsors pursuant to the management agreement with THL Managers VI, LLC (“THLM”) and Cannae. In April 2018, the management agreements terminated upon consummation of our IPO. Upon termination, the management agreements provided that we pay a termination fee equal to the net present value of the management fee for a seven-year period, which was $11.3 million. See Note 15 to our condensed consolidated financial statements, “Related Party Transactions,” for further information.

~~(3)~~

Share-based compensation expense in 2018 includes $8.1 million of expense recognized upon meeting the performance criteria of all stock appreciation rights and performance-based stock options, which were triggered by our IPO, resulting in the vesting of all stock appreciation rights and performance-based stock options, as well as the vesting of certain stock options which accelerated upon IPO.

~~(4)~~

~~Represents costs for severance compensation paid to employees whose positions have been eliminated, resulting primarily from the shift of business from our Bureau solutions to our Cloud solutions.~~

~~(5)~~

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

~~(6)~~

~~Represents expenses related to the IPO and refinancing of our debt, that were not eligible for capitalization.~~

~~The following tables present a reconciliation of our reported results to ournon-GAAP~~ ~~Adjusted EBITDA basis for all periods presented:~~

   Three Months Ended June 30, 2018
   As Reported Share-based
compensation    Severance
charges    Other
operating
expenses (1)    Adjusted
   (Dollars in millions)
Cost of revenue:

Recurring services
   $ 49.5 $ 1.3    $ 0.3    $ —      $ 47.9
Professional services and other
   33.4 0.7    0.1    —      32.6
Product development and management
   15.1 0.5    —      —      14.6
Depreciation and amortization
   8.5 —      —      —      8.5








Total cost of revenue
   106.5 2.5    0.4    —      103.6
Sales and marketing
   32.3 2.4    0.3    —      29.6
General and administrative
   51.8 7.1    0.4    17.6    26.7
Other (income) expense, net
   —   —      —      —      —
Operating profit (loss)
   (11.3 ) 12.0    1.1    17.6    19.4
Depreciation and amortization
   14.2 —      —      —      14.2








EBITDA from continuing operations
   $ 2.9 $ 12.0    $ 1.1    $ 17.6    $ 33.6

~~(1)~~

~~Other operating expenses includes sponsor management fees, intercompany foreign exchange loss (gain), restructuring consulting fees, and IPO transaction costs.~~

   Three Months Ended June 30, 2017
   As Reported    Share-based
compensation    Severance
charges    Other
operating
expenses (1)    Adjusted
   (Dollars in millions)
Cost of revenue:

Recurring services
   $ 48.1    $ 0.3    $ 0.8    $ —      $ 47.0
Professional services and other
   34.1    0.3    0.4    —      33.4
Product development and management
   10.0    0.2    —      —      9.8
Depreciation and amortization
   7.6    —      —      —      7.6










Total cost of revenue
   99.8    0.8    1.2    —      97.8
Sales and marketing
   28.3    0.4    0.2    —      27.7
General and administrative
   26.5    3.1    0.2    0.7    22.5
Other (income) expense, net
   2.0    —      —      2.1    (0.1 )
Operating profit (loss)
   0.9    4.3    1.6    2.8    9.6
Depreciation and amortization
   13.0    —      —      —      13.0










EBITDA from continuing operations
   $ 13.9    $ 4.3    $ 1.6    $ 2.8    $ 22.6

~~(1)~~

~~Other operating expenses includes sponsor management fees, intercompany foreign exchange loss (gain), restructuring consulting fees, and IPO transaction costs.~~

   Six Months Ended June 30, 2018
   As Reported Share-based
compensation    Severance
charges    Other
operating
expenses (1) Adjusted
   (Dollars in millions)
Cost of revenue:

Recurring services
   $ 100.2 $ 1.4    $ 0.8    $ —   $ 98.0
Professional services and other
   66.2 0.8    0.6    —   64.8
Product development and management
   28.8 0.6    0.1    —   28.1
Depreciation and amortization
   17.2 —      —      —   17.2






Total cost of revenue
   212.4 2.8    1.5    —   208.1
Sales and marketing
   62.6 2.8    1.0    —   58.8
General and administrative
   78.3 9.1    0.5    18.2 50.5
Other (income) expense, net
   (2.8 ) —      —      (2.8 ) —
Operating profit (loss)
   16.0 14.7    3.0    15.4 49.1
Depreciation and amortization
   28.1 —      —      28.1






EBITDA from continuing operations
   $ 44.1 $ 14.7    $ 3.0    $ 15.4 $ 77.2

~~(1)~~

~~Other operating expenses includes sponsor management fees, intercompany foreign exchange loss (gain), restructuring consulting fees, and IPO transaction costs.~~

   Six Months Ended June 30, 2017
   As Reported    Share-based
compensation    Severance
charges    Other
operating
expenses (1)    Adjusted
   (Dollars in millions)
Cost of revenue:

Recurring services
   $ 97.4    $ 0.5    $ 1.5    $ —      $ 95.4
Professional services and other
   68.0    0.6    0.5    —      66.9
Product development and management
   20.8    0.4    0.5    —      19.9
Depreciation and amortization
   15.2    —      —      —      15.2










Total cost of revenue
   201.4    1.5    2.5    —      197.4
Sales and marketing
   54.7    0.8    0.5    —      53.4
General and administrative
   53.9    6.2    0.5    1.0    46.2
Other (income) expense, net
   3.1    —      —      2.9    0.2
Operating profit (loss)
   11.8    8.5    3.5    3.9    27.7
Depreciation and amortization
   26.1    —      —      —      26.1










EBITDA from continuing operations
   $ 37.9    $ 8.5    $ 3.5    $ 3.9    $ 53.8

~~(1)~~

~~Other operating expenses includes sponsor management fees, intercompany foreign exchange loss (gain), restructuring consulting fees, and IPO transaction costs.~~

Results of Operations

Three Months Ended ~~June 30, 2018~~March 31, 2019 Compared With Three Months Ended ~~June 30, 2017~~

~~The following table sets forth our results of operations for the periods presented.~~March 31, 2018

																			Three Months Ended						Increase /
	Three Months Ended						Increase /												March 31,						(Decrease)						% of Revenue
	June 30,						(Decrease)						% of Revenue						2019			2018			Amount			%			2019			2018
	2018			2017			Amount			%			2018			2017						As Adjusted (b)
	(Dollars in millions)																		(Dollars in millions)
Revenue:
Recurring services
Cloud	$	105.7		$	78.5		$	27.2			34.6	%		59.0	%		49.8	%	$	124.4		$	99.9		$	24.5			24.5	%		61.1	%		52.9	%
Bureau		50.9			62.3			(11.4	)		(18.3	)%		28.4	%		39.6	%		48.4			61.0			(12.6	)		(20.7	)%		23.8	%		32.3	%

Total recurring services		156.6			140.8			15.8			11.2	%		87.3	%		89.4	%		172.8			160.9			11.9			7.4	%		84.8	%		85.2	%
Professional services and other		22.7			16.7			6.0			35.9	%		12.7	%		10.6	%		30.9			27.9			3.0			10.8	%		15.2	%		14.8	%

Total revenue		179.3			157.5			21.8			13.8	%		100.0	%		100.0	%		203.7			188.8			14.9			7.9	%		100.0	%		100.0	%
Cost of revenue:
Recurring services
Cloud		34.1			30.2			3.9			12.9	%		19.0	%		19.2	%		37.2			33.1			4.1			12.4	%		18.3	%		17.5	%
Bureau		15.4			17.9			(2.5	)		(14.0	)%		8.6	%		11.4	%		13.7			17.6			(3.9	)		(22.2	)%		6.7	%		9.3	%

Total recurring services		49.5			48.1			1.4			2.9	%		27.6	%		30.5	%		50.9			50.7			0.2			0.4	%		25.0	%		26.9	%
Professional services and other		33.4			34.1			(0.7	)		(2.1	)%		18.6	%		21.7	%		35.3			32.8			2.5			7.6	%		17.3	%		17.4	%
Product development and management		15.1			10.0			5.1			51.0	%		8.4	%		6.3	%		15.2			13.7			1.5			10.9	%		7.5	%		7.3	%
Depreciation and amortization		8.5			7.6			0.9			11.8	%		4.7	%		4.8	%		8.7			8.7			—			—			4.3	%		4.6	%

Total cost of revenue		106.5			99.8			6.7			6.7	%		59.4	%		63.4	%		110.1			105.9			4.2			4.0	%		54.1	%		56.1	%

Gross profit		72.8			57.7			15.1			26.2	%		40.6	%		36.6	%		93.6			82.9			10.7			12.9	%		45.9	%		43.9	%
Costs and expenses:
Selling, general, and administrative		84.1			54.8			29.3			53.5	%		46.9	%		34.8	%
Other expense, net		—			2.0			(2.0	)		(100.0	)%		—	%		1.3	%

Operating (loss) profit		(11.3	)		0.9			(12.2	)		(1,355.6	)%		(6.3	)%		0.6	%
Selling, general, and administrative expense																				66.2			54.9			11.3			20.6	%		32.5	%		29.1	%
Operating profit																				27.4			28.0			(0.6	)		(2.1	)%		13.5	%		14.8	%
Other expense (income), net																				1.6			(2.2	)		3.8			172.7	%		0.8	%		(1.2	)%
Interest expense, net		43.4			22.0			21.4			97.3	%		24.2	%		14.0	%		8.9			22.2			(13.3	)		(59.9	)%		4.4	%		11.8	%

Loss from continuing operations before income taxes		(54.7	)		(21.1	)		(33.6	)		(159.2	)%		(30.5	)%		(13.4	)%
Income from continuing operations before income taxes																				16.9			8.0			8.9			111.3	%		8.3	%		4.2	%
Income tax expense		1.1			1.9			(0.8	)		(42.1	)%		0.6	%		1.2	%		5.7			5.8			(0.1	)		(1.7	)%		2.8	%		3.1	%

Loss from continuing operations		(55.8	)		(23.0	)		(32.8	)		(142.6	)%		(31.1	)%		(14.6	)%
(Loss) income from discontinued operations		(9.7	)		0.2			(9.9	)		(4,950.0	)%		(5.4	)%		0.1	%

Net loss		(65.5	)		(22.8	)		(42.7	)		(187.3	)%		(36.5	)%		(14.5	)%
Net income attributable to noncontrolling interest		—			0.1			(0.1	)		(100.0	)%		—	%		0.1	%

Net loss attributable to Ceridian	$	(65.5	)	$	(22.9	)	$	(42.6	)		(186.0	)%		(36.5	)%		(14.5	)%

Income from continuing operations																				11.2			2.2			9.0			409.1	%		5.5	%		1.2	%
Loss from discontinued operations																				—			(2.1	)		2.1			100.0	%		—			(1.1	)%
Net income																				11.2			0.1			11.1			11100.0	%		5.5	%		0.1	%
Net loss attributable to noncontrolling interest																				—			(0.5	)		0.5		n.m.				—			(0.3	)%
Net income attributable to Ceridian																			$	11.2		$	0.6		$	10.6			1766.7	%		5.5	%		0.3	%
Adjusted EBITDA (a)	$	33.6		$	22.6		$	11.0			48.7	%		18.7	%		14.3	%	$	49.8		$	46.5		$	3.3			7.1	%		24.4	%		24.6	%
Adjusted EBITDA margin (a)																				24.4	%		24.6	%		(0.2	)%		(0.7	)%

(a)	Please refer to the ~~“How We Assess Our Performance”~~“Non-GAAP Measures” section ~~above~~below for a discussion and reconciliation of Adjusted EBITDA and Adjusted EBITDA margin, anon-GAAP financial measure.

(b)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

n.m	Not meaningful.

~~Revenue.~~We have two categories of revenues: (i) recurring services and (ii) professional services and other. Recurring services revenues consist of the recurring fees that we charge for our Cloud and Bureau solutions. We also generate recurring services revenue from investment income on our Cloud and Bureau customer funds held in trust before such funds are remitted to taxing authorities, customer employees, or other third parties. We refer to this investment income as float revenue. Professional services and other revenues consist primarily of charges relating to the work performed to assist customers with the implementation of their solutions. Also included in professional services and other revenues are post-implementation professional services, purchased time clocks, and any related training services.

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

										Three Months Ended March 31,				Percentage change in revenue as reported			Impact of changes in foreign currency (a)			Percentage change in revenue on constant currency basis (a)
										2019		2018		2019 vs. 2018						2019 vs. 2018
												As Adjusted (b)
	Percentage change in revenue as reported			Impact of changes in foreign currency (a)			Percentage change in revenue on constant currency basis (a)			(Dollars in millions)
Revenue:
Cloud
Recurring services		34.6	%		1.9	%		32.7	%	$	124.4	$	99.9		24.5	%		(2.2	)%		26.7	%
Professional services and other		39.9	%		2.8	%		37.1	%		30.2		27.0		11.9	%		(0.7	)%		12.6	%

Total Cloud revenue		35.5	%		2.1	%		33.4	%		154.6		126.9		21.8	%		(1.9	)%		23.7	%
Bureau^(b)		(18.5	)%		0.7	%		(19.2	)%

Bureau
Recurring services											48.4		61.0		(20.7	)%		(1.2	)%		(19.5	)%
Professional services and other											0.7		0.9		(22.2	)%		(0.0	)%		(22.2	)%
Total Bureau revenue											49.1		61.9		(20.7	)%		(1.2	)%		(19.5	)%
Total revenue		13.8	%		1.4	%		12.4	%	$	203.7	$	188.8		7.9	%		(1.6	)%		9.5	%

(a)

We present revenue growth in a constant currency to assess how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. We calculate percentage change in revenue on a constant currency basis by applying a fixed planning rate of $1.30 Canadian dollar to $1.00 U.S. dollar foreign exchange rate to revenues originally booked in Canadian dollars for all applicable periods.

~~(b)~~

U.S. GAAP Bureau revenue consists of $50.9 million of Recurring services revenue and $0.6 million of Professional services and other revenue for the three months ended June 30, 2018, compared to $62.3 million of Recurring services revenue and $0.9 million of Professional services and other revenue for the three months ended June 30, 2017.

Total revenue increased $21.8 million, or 13.8%, to $179.3 million for the three months ended June 30, 2018, compared to $157.5 million for the three months ended June 30, 2017. This increase was primarily attributable to an increase in Cloud revenue of $33.5 million, or 35.5%, from $94.3 million for the three months ended June 30, 2017, to $127.8 million for the three months ended June 30, 2018. The Cloud revenue increase was driven by an increase of $27.2 million, or 34.6%, in Cloud recurring services revenue, and $6.3 million, or 39.9%, in Cloud professional services and other revenue. The increase in Cloud recurring services revenue of $27.2 million was due to $16.3 million from new customers,~~add-ons,~~ and revenue uplift from migrations of Bureau customers, net of customer losses; $6.1 million from the migration of Bureau customers; and $4.8 million from increased float revenue related to Cloud recurring services revenue. The increase in Cloud revenue of $33.5 million was partially offset by a decline in Bureau revenue of $11.7 million, or 18.5%. Excluding the impact of migrations to Dayforce, Bureau revenue declined by $5.6 million, or 8.9%.

On a constant currency basis, total revenue grew 12.4%. On a constant currency basis, Cloud revenue increased 33.4%, partially offset by a decline of 19.2% in Bureau revenue. Cloud revenue growth reflected a 32.7% increase in Cloud recurring services revenue and a 37.1% increase in Cloud professional services and other revenue. Of the decline in Bureau revenue, 48% was attributable to customer attrition and 52% was due to customer migrations to Dayforce.

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

   Three Months Ended June 30,    Growth rate
year-over-year Growth rate on a
constant
currency basis (a)
   2018    2017    2018 vs. 2017 2018 vs. 2017
   (Dollars in millions)
Dayforce
   $ 106.3    $ 75.3    41.2 % 40.0 %
PowerPay
   21.5    19.0    13.2 % 8.1 %






Total Cloud revenue
   $ 127.8    $ 94.3    35.5 % 33.4 %

~~(a)~~

(b)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

~~Cloud~~Total revenue ~~was $127.8~~increased $14.9 million, or 7.9%, to $203.7 million for the three months ended ~~June 30,~~March 31, 2019, compared to $188.8 million for the three months ended March 31, 2018. This increase was primarily attributable to an increase in Cloud revenue of $27.7 million, or 21.8%, from $126.9 million for the three months ended March 31, 2018, to $154.6 million for the three months ended March 31, 2019. The Cloud revenue increase was driven by an increase of ~~$33.5~~$24.5 million, or ~~35.5%~~24.5%, ~~when~~in Cloud recurring services revenue, and $3.2 million, or 11.9%, in Cloud professional services and other revenue. The increase in Cloud recurring services revenue of $24.5 million was due to $13.9 million from new customers, add-ons, and revenue uplift from migrations of Bureau customers, net of customer losses; $4.7 million from the migration of Bureau customers; and $6.0 million from increased float revenue related to Cloud recurring services revenue.

The increase in Cloud revenue of $27.7 million was partially offset by a decline in Bureau revenue of $12.8 million, or 20.7%. Of the $12.8 million decline in Bureau revenue for the three months ended March 31, 2019, approximately 63% was driven by customer attrition and approximately 37% was attributable to customer migrations to Dayforce. Excluding the impact of migrations to Dayforce, Bureau revenue declined by $8.1 million, or 13.1%.

On a constant currency basis, total revenue grew 9.5%, reflecting a 23.7% increase in Cloud revenue, partially offset by a 19.5% decline in Bureau revenue. Cloud revenue growth reflected a 26.7% increase in Cloud recurring services revenue and a 12.6% increase in Cloud professional services and other revenue.

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

	Three Months Ended March 31,				Growth rate year-over-year			Growth rate on a constant currency basis
	2019		2018		2019 vs. 2018			2019 vs. 2018
			As Adjusted (a)
	(Dollars in millions)
Dayforce	$	132.8	$	104.1		27.6	%		28.6	%
PowerPay		21.8		22.8		(4.4	)%		0.5	%
Total Cloud revenue	$	154.6	$	126.9		21.8	%		23.7	%

(a)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

Cloud revenue was $154.6 million for the three months ended March 31, 2019, an increase of $27.7 million, or 21.8%, compared to Cloud revenue for the three months ended ~~June 30, 2017.~~March 31, 2018. Dayforce revenue increased ~~41.2%~~27.6%, and Powerpay revenue ~~increased 13.2%~~declined 4.4% for the three months ended ~~June 30, 2018,~~March 31, 2019, as compared to revenues for the three months ended ~~June 30, 2017.~~March 31, 2018. On a constant currency basis, Dayforce revenue increased ~~40.0%~~28.6%, and Powerpay revenue increased ~~8.1%~~0.5% for the three months ended ~~June 30,~~March 31, 2019. Powerpay revenue is recognized on a per-employee, per-process basis, and the timing of customer processing at year-end can vary from year to year. A larger proportion of year-end processing occurred in the fourth quarter of 2018 and a smaller proportion of year-end processing occurred in the first quarter of 2019 as compared to the comparable periods in the prior year. This pull-forward of revenue into the fourth quarter of 2018 was driven by the fact that December 31 was a Monday, and a number of customers processed their first 2019 payroll on Monday, December 31st, 2018. ~~Customer migrations~~We estimate that approximately $1 million in Powerpay revenue that would otherwise have been recognized in the first quarter of 2019 was recognized in the fourth quarter of 2018. Excluding this pull-forward, Powerpay revenue on a constant currency basis would have grown by approximately 5%. Our new business sales to Dayforce ~~from~~and Powerpay customers comprised 83% of our ~~Bureau solutions accounted for $6.1 million, or 18%, of the total~~ increase in Cloud revenue for the three months ended ~~June 30, 2018, as compared~~March 31, 2019, and the remaining 17% consisted primarily of customer migrations to ~~$7.3 million, or 28%, of total Cloud~~Dayforce from out Bureau solutions. As we migrate our Bureau customers to Dayforce, we typically experience a revenue ~~for~~increase from such customers driven by increased product density on the ~~three months ended June 30, 2017.~~Dayforce platform.

Float revenue. Investment income from invested customer trust funds included in revenue was ~~$16.2~~$24.3 million and ~~$11.2~~$17.6 million for the three months ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~ respectively. The average float balance for our customer trust funds for the three months ended ~~June 30, 2018,~~March 31, 2019, was ~~$3,346.8~~$4,075.4 million, compared to ~~$3,231.2~~$4,072.0 million for the three months ended ~~June 30, 2017.~~March 31, 2018. On a constant currency basis, the average float balance for our customer trust funds increased 1.8% for the three months ended March 31, 2019, compared to three months ended March 31, 2018. The average yield was ~~1.94%~~2.42% during the three months ended ~~June 30, 2018,~~March 31, 2019, an increase of 5567 basis points compared to the average yield in the three months ended ~~June 30, 2017.~~March 31, 2018. For the three months ended March 31, 2019, approximately 33% of our average float balance consisted of Canadian customer trust funds, compared to approximately 35% for the three months ended March 31, 2018. Based on current market conditions, portfolio composition and investment practices, a 100 basis point increase in market investment rates would result in approximately $17 million of increased float revenue over the ensuing twelve month period. There are no incremental costs of revenue associated with increases or declines in float revenue.

Cost of revenue. Total cost of revenue for the three months ended ~~June 30, 2018,~~March 31, 2019, was ~~$106.5~~$110.1 million, an increase of ~~$6.7~~$4.2 million, or ~~6.7%~~4.0%, compared to the three months ended ~~June 30, 2017.~~March 31, 2018.

Recurring services cost of revenue increased by ~~$1.4~~$0.2 million for the three months ended ~~June 30, 2018,~~March 31, 2019, compared to the three months ended ~~June 30, 2017,~~March 31, 2018, due to additional costs incurred to support the growing Dayforce customer base, particularly internationally, partially offset by reductions in Bureau costs.

The ~~reduction~~increase in cost of revenue for professional services and other of ~~$0.7~~$2.5 million, or 7.6%, for the three months ended ~~June 30, 2018,~~March 31, 2019, compared to the three months ended ~~June 30, 2017,~~March 31, 2018, was primarily due to ~~productivity improvements in implementing~~additional costs incurred to implement new customers ~~reflecting the increased experience of our implementation consultants~~ and ~~the continued use of automation in our implementation processes.~~to provide post go-live professional services.

In accordance with ASC 350, we are required to capitalize certain software development costs. Please refer to Note 2, “Summary of Significant Accounting Policies,” for further discussion of our accounting policy for internally developed software costs. Costs related to software development activities that do not qualify for capitalization, such as development, quality assurance, testing of new technologies, enhancements to our existing solutions that do not result in additional functionality, and costs related to the management of our solutions are presented as product development and management expense. The increase in product development and management expense of ~~$5.1~~$1.5 million for the three months ended ~~June 30, 2018,~~March 31, 2019, compared to the three months ended ~~June 30, 2017,~~March 31, 2018, reflected increases in Dayforce product development ~~efforts.~~efforts, including the build out of our international offerings. For the three months ended ~~June 30,~~March 31, 2019 and 2018, ~~and 2017,~~ our investment in software development was ~~$14.0~~$15.1 million and ~~$10.6~~$12.5 million, respectively, consisting of ~~$7.6~~$7.8 million and ~~$4.1~~$6.4 million, of research and development expense, which is included within product development and management expense, and ~~$6.4~~$7.3 million and ~~$6.5~~$6.1 million in capitalized software development, respectively.

Depreciation and amortization expense associated with cost of revenue increased by $0.9 million for the three months ended June 30, 2018, compared to the three months ended June 30, 2017, as we continue to capitalize Dayforce related and other development costs and subsequently amortize those costs.

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

							Three Months Ended March 31,
	Three Months Ended June 30,						2019			2018
	2018			2017						As Adjusted (a)
Total gross margin		40.6	%		36.6	%		45.9	%		43.9	%
Gross margin by solution:
Cloud recurring services		67.7	%		61.5	%		70.1	%		66.9	%
Bureau recurring services		69.7	%		71.3	%		71.7	%		71.1	%
Professional services and other		(47.1	)%		(104.2	)%		(14.2	)%		(17.6	)%

(a)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

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

The overall ~~13.8%~~7.9% increase in revenue outpaced the ~~6.7%~~4.0% increase in cost of revenue, and gross profit increased by ~~$15.1~~$10.7 million, or ~~26.2%~~12.9%, as we continued to leverage our investment in people and processes to realize economies of ~~scale.~~scale, while also expanding our service offerings internationally.

Cloud recurring services gross margin was ~~67.7%~~70.1% for the three months ended ~~June 30, 2018,~~March 31, 2019, compared to ~~61.5%~~66.9% for the three months ended ~~June 30, 2017.~~March 31, 2018. The increase in Cloud recurring services gross margin reflects an increase in the proportion of Dayforce customers live for more than two years, which increased from ~~57%~~59% as of ~~June 30, 2017~~March 31, 2018, to ~~61%~~64% as of ~~June 30, 2018,~~March 31, 2019, and was also attributable to consistent configuration that enabled us to continue to realize economies of scale in hosting and customer ~~support and hosting costs. Bureau recurring services gross margin was 69.7% for the three months ended June 30, 2018, compared to 71.3% for the three months ended June 30, 2017.~~support. Professional services and other gross margin was ~~(47.1)~~(14.2)% for the three months ended ~~June 30, 2018,~~March 31, 2019, improving from ~~(104.2)~~(17.6)% for the three months ended ~~June 30, 2017,~~March 31, 2018, reflecting an increase in profitable postgo-live professional services and continued productivity improvements in implementing new customers.

Selling, general, and administrative expense. Selling, general, and administrative expense increased ~~$29.3~~$11.3 million for the three months ended ~~June 30, 2018,~~March 31, 2019, compared to the three months ended ~~June 30, 2017. Of the total $29.3 million increase, $23.2 million was attributable to expenses associated with our IPO and debt refinancing, including $11.3~~March 31, 2018, reflecting increases of $6.2 million in ~~sponsor management termination fees, $6.0~~sales and marketing expense and $5.1 million in~~IPO-related~~ ~~share-based compensation expense, $3.7 million~~ general and administrative expense. The increase in ~~other IPO transaction costs, and $2.2 million in restructuring consulting expenses. ExcludingIPO-related~~ ~~items, selling,~~ general and administrative expense ~~increased $6.1~~is comprised primarily of $1.9 million ~~primarily due~~in share-based compensation expense, $0.9 million in costs related to ~~sales commissions expense, employee benefit related costs, and~~the secondary offering completed in March 2019, as well as increased costs associated with being a public company.

Operating profit. Operating profit declined $0.6 million, or 2.1%, to $27.4 million for the three months ended March 31, 2019, compared to $28.0 million for the three months ended March 31, 2018, primarily due to the increase in selling, general and administrative expense. Excluding the impact of share-based compensation expense, restructuring consulting fees, and severance charges, operating profit would have increased $3.5 million for the three months ended March 31, 2019, compared to the three months ended March 31, 2018.

Other expense (income), net. For the three months ended ~~June 30, 2017,~~March 31, 2019 we incurred $1.6 of other expense, net compared to $2.2 of ~~$2.0 million,~~other income for the three months ended March 31, 2018. The other expense, net for the three months ended March 31, 2019, was primarily comprised of net periodic pension expense of $1.3 million. The other income, net for the three months ended March 31, 2018, was primarily related to a foreign currency remeasurement ~~loss~~gain on an intercompany payable of a U.S. subsidiary denominated in Canadian ~~dollars.~~dollars, partially offset by net periodic pension expense of $0.6 million. This intercompany payable was repaid in the second quarter of 2018.

~~Operating (loss) profit.~~We incurred an operating loss of $11.3 million for the three months ended June 30, 2018, compared to an operating profit of $0.9 million for the three months ended June 30, 2017. This $12.2 million decline was primarily attributable to $23.2 million in~~IPO-related~~ ~~selling, general, and administrative~~Interest expense, ~~and $2.1 million in other increased share-based compensation expense related to the IPO. These increased expenses were partially offset by an increase in gross profit.~~

~~Interest expense.~~net. Interest expense for the three months ended ~~June 30, 2018,~~March 31, 2019, was ~~$43.4~~$8.9 million, compared to ~~$22.0~~$22.2 million for the three months ended ~~June 30, 2017.~~March 31, 2018. This ~~increase was primarily~~reduction is due to the ~~refinancing of our debt, which resulted in a loss on extinguishment of debt of $25.7 million, partially offset by a decrease in interest expense of $4.5 million upon~~ extinguishment of the Senior Notes during the second quarter of 2018. As a result of a ratings upgrade on March 26, 2019, of our senior secured credit facilities by Moody’s Investors Service, from B3 to B2, the Company’s floating rate term debt interest rate is reduced from LIBOR plus 3.25% to LIBOR plus 3.00%, so long as the rating is maintained. This 25 basis point rate reduction which ~~represents one less month~~will result in a savings of ~~interest on~~approximately $1.7 million over the ~~Senior Notes as compared to the prior year.~~ensuing twelve-month period. A 100 basis point increase in LIBOR rates would result in an approximately $7 million increase in our interest expense over the ensuing twelve-month period. ~~Please refer to Note 8, “Debt,” for further discussion.~~

~~Income tax expense.~~ For the three months ended June 30, 2018, we incurred income tax expense of $1.1 million, compared to $1.9 million for the three months ended June 30, 2017. The reduction is due to a decrease in the amount of valuation allowance required to be recorded against our deferred tax assets, offset by an increase attributable to the tax law changes that became effective in 2018 as part of the 2017 U.S. Tax Reform legislation.

~~(Loss) income~~Loss from discontinued operations.As a result of the LifeWorks Disposition, the financial results of the LifeWorks business have been included within discontinued operations for all periods presented. For the three months ended ~~June 30,~~March 31, 2018, the loss from discontinued operations was ~~$9.7~~$2.1 million, primarily related to income tax expense attributable to LifeWorks.

Net income attributable to Ceridian. Net income attributable to Ceridian was $11.2 million for the three months ended March 31, 2019, compared to $0.6 million for the three months ended March 31, 2018.

Adjusted EBITDA. Adjusted EBITDA increased by $3.3 million, for the three months ended March 31, 2019, compared to the three months ended ~~June 30, 2017, income from discontinued operations~~March 31, 2018, and Adjusted EBITDA margin was ~~$0.2 million. The loss from discontinued operations~~24.4% for the three months ended ~~June 30, 2018, is primarily related to income tax expense incurred as a result~~March 31, 2019, consistent with the Adjusted EBITDA margin of ~~the LifeWorks Disposition.~~

~~Net loss attributable to Ceridian.~~ ~~Net loss attributable to Ceridian was $65.5 million~~24.6% for the three months ended June 30, 2018, compared to $22.9 million for the three months ended June 30, 2017. The increase in net loss was primarily due to the expenses incurred related to our IPO and debt refinancing transactions, partially offset by an increase in gross profit.

~~Adjusted EBITDA.~~ Adjusted EBITDA increased by $11.0 million, for the three months ended June 30, 2018, compared to the three months ended June 30, 2017, and Adjusted EBITDA margin increased to 18.7% in 2018 from 14.3% in 2017.

~~Six Months Ended June 30, 2018 Compared With Six Months Ended June 30, 2017~~

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

   Six Months Ended Increase /
   June 30, (Decrease) % of Revenue
   2018 2017 Amount % 2018 2017
   (Dollars in millions)
Revenue:

Recurring services

Cloud
   $ 211.7 $ 154.9 $ 56.8 36.7 % 57.8 % 47.7 %
Bureau
   111.9 137.7 (25.8 ) (18.7 )% 30.5 % 42.4 %


Total recurring services
   323.6 292.6 31.0 10.6 % 88.3 % 90.1 %
Professional services and other
   42.9 32.3 10.6 32.8 % 11.7 % 9.9 %


Total revenue
   366.5 324.9 41.6 12.8 % 100.0 % 100.0 %
Cost of revenue:

Recurring services

Cloud
   67.2 59.1 8.1 13.7 % 18.3 % 18.2 %
Bureau
   33.0 38.3 (5.3 ) (13.8 )% 9.0 % 11.8 %


Total recurring services
   100.2 97.4 2.8 2.9 % 27.3 % 30.0 %
Professional services and other
   66.2 68.0 (1.8 ) (2.6 )% 18.1 % 20.9 %
Product development and management
   28.8 20.8 8.0 38.5 % 7.9 % 6.4 %
Depreciation and amortization
   17.2 15.2 2.0 13.2 % 4.7 % 4.7 %


Total cost of revenue
   212.4 201.4 11.0 5.5 % 58.0 % 62.0 %


Gross profit
   154.1 123.5 30.6 24.8 % 42.0 % 38.0 %
Costs and expenses:

Selling, general, and administrative
   140.9 108.6 32.3 29.7 % 38.4 % 33.4 %
Other expense (income), net
   (2.8 ) 3.1 (5.9 ) (190.3 )% (0.8 )% 1.0 %


Operating profit
   16.0 11.8 4.2 35.6 % 4.4 % 3.6 %
Interest expense, net
   65.6 43.4 22.2 51.2 % 17.9 % 13.4 %


Loss from continuing operations before income taxes
   (49.6 ) (31.6 ) (18.0 ) (57.0 )% (13.5 )% (9.7 )%
Income tax expense
   6.7 2.9 3.8 131.0 % 1.8 % 0.9 %


Loss from continuing operations
   (56.3 ) (34.5 ) (21.8 ) (63.2 )% (15.4 )% (10.6 )%
(Loss) income from discontinued operations
   (11.8 ) 0.5 (12.3 ) (2,460.0 )% (3.2 )% 0.2 %


Net loss
   (68.1 ) (34.0 ) (34.1 ) (100.3 )% (18.6 )% (10.5 )%
Net (loss) income attributable to noncontrolling interest
   (0.5 ) 0.1 (0.6 ) (600.0 )% (0.1 )% — %


Net loss attributable to Ceridian
   $ (67.6 ) $ (34.1 ) $ (33.5 ) (98.2 )% (18.4 )% (10.5 )%


Adjusted EBITDA (a)
   $ 77.2 $ 53.8 $ 23.4 43.5 % 21.1 % 16.6 %

~~(a)~~

~~Please refer to the “How We Assess Our Performance” section above for a discussion and reconciliation of Adjusted EBITDA, anon-GAAP~~ ~~financial measure.~~

~~The following table sets forth certain information regarding our revenues for the six months ended June 30, 2018, compared with the six months ended June 30, 2017.~~

   Percentage change in
revenue as reported Impact of changes in
foreign currency (a) Percentage change in
revenue on constant
currency basis (a)
Revenue:

Cloud

Recurring services
   36.7 % 2.0 % 34.7 %
Professional services and other
   37.2 % 3.5 % 33.7 %


Total Cloud revenue
   36.8 % 2.3 % 34.5 %
Bureau (b)
   (18.9 )% 0.7 % (19.6 )%


Total revenue
   12.8 % 1.6 % 11.2 %

~~(a)~~

~~(b)~~

U.S. GAAP Bureau revenue consists of $111.9 million of Recurring services revenue and $1.6 million of Professional services and other revenue for the six months ended June 30, 2018, compared to $137.7 million of Recurring services revenue and $2.2 million of Professional services and other revenue for the six months ended June 30, 2017.

Total revenue increased $41.6 million, or 12.8%, to $366.5 million for the six months ended June 30, 2018, compared to $324.9 million for the six months ended June 30, 2017. This increase was primarily attributable to an increase in Cloud revenue of $68.0 million, or 36.8%, from $185.0 million for the six months ended June 30, 2017, to $253.0 million for the six months ended June 30,March 31, 2018. The Cloud revenue increase was driven by an increase of $56.8 million, or 36.7%, in Cloud recurring services revenue, and $11.2 million, or 37.2%, in Cloud professional services and other revenue. The increase in Cloud recurring services revenue of $56.8 million was due to $34.0 million from new customers,~~add-ons,~~ and revenue uplift from migrations of Bureau customers, net of customer losses; $12.2 million from the migration of Bureau customers; and $10.6 million from increased float revenue related to Cloud recurring services revenue. The increase in Cloud revenue of $68.0 million was partially offset by a decline in Bureau revenue of $26.4 million, or 18.9%. Excluding the impact of migrations to Dayforce, Bureau revenue declined by $14.2 million, or 10.1%.

On a constant currency basis, total revenue grew 11.2%. On a constant currency basis, Cloud revenue increased 34.5%, partially offset by a decline of 19.6% in Bureau revenue. Cloud revenue growth reflected a 34.7% increase in Cloud recurring services revenue and a 33.7% increase in Cloud professional services and other revenue. Of the decline in Bureau revenue, approximately 54% was attributable to customer attrition and approximately 46% was due to customer migrations to Dayforce.

   Six Months Ended June 30,    Growth rate
year-over-year Growth rate on a
constant
currency basis (a)
   2018    2017    2018 vs. 2017 2018 vs. 2017
   (Dollars in millions)
Dayforce
   $ 208.7    $ 146.3    42.7 % 41.4 %
PowerPay
   44.3    38.7    14.5 % 9.0 %






Total Cloud revenue
   $ 253.0    $ 185.0    36.8 % 34.5 %

~~(a)~~

We present revenue growth in a constant currency to assess how our underlying businesses performed, excluding the effect of foreign currency rate fluctuations. We calculate percentage change in revenue on a constant currency basis by applying a fixed planning rate of $1.30 Canadian dollar to $1.00 U.S. dollar foreign exchange rate to revenues originally booked in Canadian dollars for all applicable periods.

Cloud revenue was $253.0 million for the six months ended June 30, 2018, an increase of $68.0 million, or 36.8%, when compared to cloud revenue for the six months ended June 30, 2017. Dayforce revenue increased 42.7%, and Powerpay revenue increased 14.5% for the six months ended June 30, 2018, compared to the six months ended June 30, 2017. On a constant

currency basis, Dayforce revenue increased 41.4%, and Powerpay revenue increased 9.0% for the six months ended June 30, 2018, compared to the six months ended June 30, 2017. Customer migrations to Dayforce from our Bureau solutions accounted for $12.2 million, or 18%, of the total increase in Cloud revenue for the six months ended June 30, 2018, as compared to $14.5 million, or 28%, of total Cloud revenue for the six months ended June 30, 2017.

~~Float revenue.~~ Investment income from invested customer trust funds included in revenue was $33.8 million and $22.6 million for the six months ended June 30, 2018, and 2017, respectively. The average float balance for our customer trust funds for the six months ended June 30, 2018, was $3,707.4 million, compared to $3,496.5 million for the six months ended June 30, 2017. The average yield was 1.84% during the six months ended June 30, 2018, an increase of 53 basis points compared to the average yield in the six months ended June 30, 2017. Based on current market conditions, portfolio composition and investment practices, a 100 basis point increase in market investment rates would result in approximately $17 million of increased float revenue over the ensuing twelve month period.

~~Cost of revenue.~~ ~~Total cost of revenue for the six months ended June 30, 2018, was $212.4 million, an increase of $11.0 million, or 5.5%, compared to the six months ended June 30, 2017.~~

Recurring services cost of revenue increased by $2.8 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, due to additional costs incurred to support the growing Dayforce customer base, partially offset by reductions in Bureau costs.

The reduction in cost of revenue for professional services and other of $1.8 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, was primarily due to productivity improvements in implementing new customers, reflecting the increased experience of our implementation consultants and the continued use of automation in our implementation processes.

In accordance with ASC 350, we are required to capitalize certain software development costs. Please refer to Note 2, “Summary of Significant Accounting Policies,” for further discussion of our accounting policy for internally developed software costs. Costs related to software development activities that do not qualify for capitalization, such as development, quality assurance, testing of new technologies, enhancements to our existing solutions that do not result in additional functionality, and costs related to the management of our solutions are presented as product development and management expense. The increase in product development and management expense of $8.0 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, reflected increases in Dayforce product development efforts. For the six months ended June 30, 2018 and 2017, our investment in software development was $26.5 million and $21.2 million, respectively, consisting of $14.0 million and $9.3 million, of research and development expense, which is included within product development and management expense, and $12.5 million and $11.9 million in capitalized software development, respectively.

Depreciation and amortization expense associated with cost of revenue increased by $2.0 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, as we continue to capitalize Dayforce related and other development costs and subsequently amortize those costs.

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

   Six Months Ended June 30,
   2018 2017
Total gross margin
   42.0 % 38.0 %
Gross margin by solution:

Cloud recurring services
   68.3 % 61.8 %
Bureau recurring services
   70.5 % 72.2 %
Professional services and other
   (54.3 )% (110.5 )%

The overall 12.8% increase in revenue outpaced the 5.5% increase in cost of revenue, and gross profit increased by $30.6 million, or 24.8%, as we continued to leverage our investment in people and processes to realize economies of scale.

Cloud recurring services gross margin was 68.3% for the six months ended June 30, 2018, compared to 61.8% for the six months ended June 30, 2017. The increase in Cloud recurring services gross margin reflects an increase in the proportion of Dayforce customers live for more than two years, which increased from 57% as of June 30, 2017 to 61% as of June 30, 2018, and was also attributable to consistent configuration that enabled us to realize economies of scale in customer support and hosting costs. Bureau recurring services gross margin was 70.5% for the six months ended June 30, 2018, compared to 72.2% for the six months ended June 30, 2017. Professional services and other gross margin was (54.3)% for the six months ended June 30, 2018, improving from (110.5)% for the six months ended June 30, 2017, reflecting an increase in profitable post~~go-live~~ ~~professional services and productivity improvements in implementing new customers.~~

~~Selling, general, and administrative expense.~~ Selling, general, and administrative expense increased $32.3 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017. Of the total $32.3 million increase, $23.2 million was attributable to expenses associated with our IPO and debt refinancing, including $11.3 million in sponsor management termination fees, $6.0 million in~~IPO-related~~ ~~share-based compensation expense, $3.7 million in other IPO transaction costs, and $2.2 million in restructuring consulting expenses. ExcludingIPO-related~~ items, selling, general, and administrative expense increased $9.1 million, primarily due to sales commissions expense, employee benefit related costs, and increased costs associated with being a public company.

~~Other (income) expense, net.~~ For the six months ended June 30, 2018, we generated $2.8 million of other income, net, compared to $3.1 million of other expense, net, for the six months ended June 30, 2017. The other income and expense, net, for the six months ended June 30, 2017, and 2018, respectively, were primarily related to remeasurement gains and losses on intercompany receivables or payables denominated in foreign currencies.

~~Operating profit.~~Operating profit increased $4.2 million, to $16.0 million for the six months ended June 30, 2018, from $11.8 million for the six months ended June 30, 2017. This $4.2 million increase was primarily attributable to an increase in gross profit, partially offset by $23.2 million in~~IPO-related~~ ~~selling, general, and administrative expense and $2.1 million in other increased share-based compensation expense related to the IPO.~~

~~Interest expense.~~ Interest expense for the six months ended June 30, 2018, was $65.6 million, compared to $43.4 million for the six months ended June 30, 2017. This increase was primarily due to the refinancing of our debt, which resulted in a loss on extinguishment of debt of $25.7 million, partially offset by a decrease in interest expense of $4.5 million upon extinguishment of the Senior Notes, which represents one less month of interest on the Senior Notes as compared to the prior year. A 100 basis point increase in LIBOR rates would result in an approximately $7 million increase in our interest expense over the ensuing twelve-month period. Please refer to Note 8, “Debt,” for further discussion.

~~Income tax expense.~~ For the six months ended June 30, 2018, we incurred income tax expense of $6.7 million, compared to $2.9 million for the six months ended June 30, 2017. The increase is attributable to the tax law changes that became effective in 2018 as part of the 2017 U.S. Tax Reform legislation, offset by a reduction in the amount of valuation allowance required to be recorded against our deferred tax assets.

~~(Loss) income from discontinued operations.~~As a result of the LifeWorks Disposition, the financial results of the LifeWorks business have been included within discontinued operations for all periods presented. For the six months ended June 30, 2018, loss from discontinued operations was $11.8 million, compared to the six months ended June 30, 2017, income from discontinued operations was $0.5 million. The loss from discontinued operations for the six months ended June 30, 2018, is primarily related to income tax expense incurred as a result of the LifeWorks Disposition.

~~Net loss attributable to Ceridian.~~ Net loss attributable to Ceridian was $67.6 million for the six months ended June 30, 2018, compared to $34.1 million for the six months ended June 30, 2017, primarily due to the expenses incurred related to our IPO and debt refinancing transactions, partially offset by an increase in gross profit.

~~Adjusted EBITDA.~~ Adjusted EBITDA increased by $23.4 million for the six months ended June 30, 2018, compared to the six months ended June 30, 2017, and Adjusted EBITDA margin increased to 21.1% in 2018 from 16.6% in 2017.

Liquidity and Capital Resources

Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities, borrowings under our credit facilities, and proceeds from equity offerings. As of ~~June 30, 2018,~~March 31, 2019, we had cash and equivalents of ~~$171.8~~$206.3 million and availability under our revolving credit facility of $300.0 million. No cash amounts were drawn on the revolving credit facility and $2.7 million in letters of credit were issued under the facility as of ~~June 30, 2018.~~March 31, 2019. Our total debt was ~~$680.0~~$676.6 million as of ~~June 30, 2018.~~March 31, 2019. Please refer to Note 8,7, “Debt,” to our condensed consolidated financial statements, for further information on our debt.

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

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

Our customer trust funds are held and invested with the primary objectives being to protect the principal balance and to ensure adequate liquidity to meet cash flow ~~requirements and to protect the principal balance.~~requirements. In accordance with these objectives, we maintain approximately ~~46%~~47% of customer trust funds in liquidity portfolios with maturities ranging from one to 120 days, consisting of high-quality bank deposits, money market mutual funds, commercial paper, or collateralized short-term investments; and we maintain approximately ~~54%~~53% of customer trust funds in fixed income portfolios with maturities ranging from 120 days to 10 years, consisting of U.S. Treasury and agency securities, Canada government and provincial securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate and bank securities. To maintain sufficient liquidity in the trust to meet payment obligations, we also have financing arrangements and may pledge fixed income securities for short-term financing. The assets held in trust are intended for the specific purpose of satisfying client fund obligations and therefore are not freely available for our general business use.

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

Statements of Cash Flows

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

   Six Months Ended June 30,
   2018    2017
   (Dollars in millions)
Net cash flows

Net cash used in operating activities - continuing operations
   $ (34.1 )    $ (35.4 )
Net cash provided by (used in) investing activities - continuing operations
   320.1    (33.9 )
Net cash (used in) provided by financing activities
   (205.1 )    92.2
Net cash flows used in discontinued operations
   (1.1 )    (3.4 )
Effect of exchange rate on cash
   (2.7 )    2.6




Net cash flows provided
   77.1    22.1
Cash and equivalents at end of period
   $ 171.8    $ 144.5
Net cash flows of customer trust funds

Net cash provided by (used in) investing activities - continuing operations
   $ 338.9    $ (15.6 )
Net cash (used in) provided by financing activities - continuing operations
   (338.9 )    15.6




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

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

Three Months Ended March 31,

2019

2018

As Adjusted (a)

(Dollars in millions)

Net cash used in operating activities - continuing operations

$
(8.8
)

$
(22.3
)
Net cash used in investing activities, excluding customer trust funds

(24.1
)

(10.3
)
Net cash provided by (used in) financing activities, excluding customer trust funds

18.4

(0.3
)
Effect of exchange rate changes on cash and equivalents

3.0

(3.5
)
Net decrease in cash and equivalents

(11.5
)

(36.4
)
Cash and equivalents at beginning of period

217.8

94.2

Cash and equivalents at end of period

206.3

57.8

Net customer trust funds restricted cash used in investing activities

(93.5
)

(345.2
)
Net customer trust funds restricted cash provided by financing activities

1,916.1

230.4

Effect of exchange rate changes on restricted cash and equivalents

0.9

(1.1
)
Net increase (decrease) in restricted cash and equivalents

1,823.5

(115.9
)
Restricted cash and equivalents included in customer trust funds at beginning of period

888.5

2,317.6

Restricted cash and equivalents included in customer trust funds at end of period

2,712.0

2,201.7

Net cash used in operating activities - discontinued operations

—

(1.1
)
Net increase (decrease) in cash, restricted cash, and equivalents

1,812.0

(153.4
)
Elimination of cash from discontinued operations

—

1.1

Cash, restricted cash, and equivalents at beginning of period

1,106.3

2,411.8

Cash, restricted cash, and equivalents at end of period

$
2,918.3

$
2,259.5

(a)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

Operating Activities

Net cash used in operating activities from continuing operations of ~~$34.1~~$8.8 million during the ~~six~~three months ended ~~June 30, 2018,~~March 31, 2019, was primarily attributable to a net ~~loss from continuing operations~~reduction in cash as a result of ~~$56.3 million and a net change~~changes in working capital of ~~$40.1~~$40.6 million, partially offset by net income of $11.2 million and certainnon-cash items, primarily ~~$28.1~~$14.4 million of depreciation and amortization, ~~a $25.7~~and $6.0 million ~~loss on extinguishment~~ of ~~debt, primarily attributable to a call premium and debt issuance costs, and $13.2 million of~~non-cash share-based compensation expense. The net $40.6 million change in working capital included reductions of $16.9 million in liabilities for employee compensation and benefits, primarily due to payments of accrued incentive ~~compensation, and reductions~~compensation; $8.1 million in liabilities for accrued ~~interest,~~taxes, primarily due to ~~our debt refinancing.~~cash tax payments of $15.5 million; and $7.0 million of increases in prepaid expenses and other current assets, primarily due to annual maintenance contracts. Included within net cash flows used in operating activities for the ~~six~~three months ended ~~June 30, 2018,~~March 31, 2019, was ~~$55.1~~$6.6 million in cash interest payments on our long-term ~~debt, $11.5 million in cash taxes, and $4.8 million in pension payments.~~debt.

Net cash used in operating activities from continuing operations of ~~$35.4~~$22.3 million during the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, was primarily attributable to a net ~~change~~changes in working capital of ~~$35.0 million and a net loss from continuing operations of $34.5~~$42.3 million, partially offset by certainnon-cash items, primarily ~~$26.1~~$13.9 million of depreciation and amortization, ~~and $8.5~~$2.7 million of share-based compensation ~~expense.~~expense, and net income from continuing operations of $2.2 million. Net changes in working capital included reductions of $17.0 million in liabilities for employee compensation and benefits, primarily due to payments of accrued incentive ~~compensation, and~~compensation; reductions of $13.1 million in liabilities for accrued ~~taxes.~~

interest primarily as a result of $34.8 million in cash interest payments on our long-term debt; and $13.3 million of increases in prepaid expenses and other current assets, primarily due to annual maintenance contracts. Included within net cash flows used in operating activities for the three months ended March 31, 2018, was $5.5 million in cash taxes and $1.9 million in pension payments.

Investing Activities

During the ~~six~~three months ended ~~June 30,~~March 31, 2019, net cash used in investing activities from continuing operations, excluding customer trust fund activity, was $24.1 million, related to capital expenditures of $13.9 million and acquisition costs, net of cash acquired of $10.2 million. Our capital expenditures included $9.9 million for software and technology and $4.0 million for property and equipment.

During the three months ended March 31, 2018, net cash used in investing activities from continuing operations, excluding customer trust fund activity, was ~~$18.8~~$10.3 million, related to capital expenditures. Our capital expenditures included ~~$13.9 million~~

for software and technology and $4.9 million for property and equipment. For the six months ended June 30, 2018, capital expenditures for software development were $12.5 million which is included in capitalized expenditures for software and technology.

During the six months ended June 30, 2017, net cash used in investing activities from continuing operations, excluding customer trust fund activity, was $18.3 million, primarily related to capital expenditures, partially offset by net proceeds from divestitures of $0.9 million. Our capital expenditures included $14.6$7.4 million for software and technology and ~~$4.6~~$2.9 million for property and equipment. ~~For the six months ended June 30, 2017, capital expenditures for software development were $11.9 million which is included in capitalized expenditures for software and technology.~~

Financing Activities

Net cash provided by financing activities from continuing operations, excluding the change in customer trust fund obligations, was ~~$133.8~~$18.4 million during the ~~six~~three months ended ~~June 30, 2018.~~March 31, 2019. This cash inflow is primarily attributable to ~~the net proceeds received from our IPO and concurrent private placement of $595.0 million, a net increase in the principal of our term loan of $23.0 million, and~~ proceeds from the issuance of common stock upon exercise of stock options of ~~$14.4~~$20.1 million, partially offset by ~~payment to redeem~~principal payments on our ~~Senior Notes~~long-term debt obligations of ~~$475.0 million and payment of debt refinancing costs of $23.3~~$1.7 million.

Net cash used in financing activities from continuing operations, excluding the change in customer trust fund obligations, was ~~$76.6~~$0.3 million during the ~~six~~three months ended ~~June 30, 2017, primarily~~March 31, 2018, related to ~~the funding~~repayment of ~~the remaining $75.2 million from the issuance of our senior convertible preferred stock.~~long-term debt obligations.

Cash Flows from Discontinued Operations

During the ~~six~~three months ended ~~June 30,~~March 31, 2018, net cash used in discontinued operations was $1.1 million. ~~During the six months ended June 30, 2017, net cash used in discontinued operations was $3.4 million.~~ The net cash used in discontinued operations ~~for both periods~~ was primarily related to changes in working capital.

Off-Balance Sheet Arrangements

As of March 31, 2019, we did not have any “off-balance sheet arrangements” (as such term is defined in Item 303 of Regulation S-K).

Critical Accounting Policies and Estimates

~~There have been no material changes to our~~Our critical accounting ~~policies and estimates from~~policy on revenue recognition has been updated as a result of the ~~information provided in the “Management’s Discussion and Analysis~~adoption of ~~Financial Conditions and Results of Operations—Critical Accounting Policies and Estimates” contained in our 2017 Annual Report.~~ASU No. 2016-02. For discussion of our new revenue recognition policy and recently ~~issued and~~ adopted accounting pronouncements, please refer to Note 2, “Summary of Significant Accounting Policies,” to our condensed consolidated financial statements included herein.

~~Off-Balance~~ ~~Sheet Arrangements~~Non-GAAP Measures

Adjusted EBITDA and Adjusted EBITDA Margin

We ~~do not~~believe that Adjusted EBITDA and Adjusted EBITDA margin, non-GAAP financial measures, are useful to management and investors as supplemental measures to evaluate our overall operating performance. Adjusted EBITDA is a component of ~~June 30, 2018, we did not, have anyoff-balance~~ ~~sheet arrangements (as~~our management incentive plan and Adjusted EBITDA and Adjusted EBITDA margin are used by management to assess performance and to compare our operating performance to our competitors. We define Adjusted EBITDA as net income or loss before interest, taxes, depreciation, and amortization, as adjusted to exclude net income or loss from discontinued operations, sponsor management fees, non-cash charges for asset impairments, gains or losses on assets and liabilities held in a foreign currency other than the functional currency of a company subsidiary, share-based compensation expense, severance charges, restructuring consulting fees, transaction costs, and environmental reserve charges. Adjusted EBITDA margin is determined by calculating the percentage Adjusted EBITDA is of Total Revenue. Management believes that ~~term is defined~~Adjusted EBITDA and Adjusted EBITDA margin are helpful in ~~applicable SEC rules)~~highlighting management performance trends because Adjusted EBITDA and Adjusted EBITDA margin exclude the results of decisions that are ~~reasonably likely to have a current or future material effect on our financial condition, results~~outside the control of ~~operations, liquidity, capital expenditures or capital resources.~~

operating management.

~~Forward-Looking Statements~~

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

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

Adjusted EBITDA and Adjusted EBITDA margin do not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

Adjusted EBITDA and Adjusted EBITDA margin do not reflect changes in, or cash requirements for, our working capital needs;

Adjusted EBITDA and Adjusted EBITDA margin do not reflect any charges for the assets being depreciated and amortized that ~~are difficult~~may need to ~~predict. Our actual results could differ materially from those contained~~be replaced in the ~~forward-looking statements due~~future;

Adjusted EBITDA and Adjusted EBITDA margin do not reflect the impact of share-based compensation upon our results of operations;

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

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

In evaluating Adjusted EBITDA and Adjusted EBITDA margin, you should be aware that in ~~our quarterly~~the future we may incur expenses similar to those eliminated in this presentation.

The following table reconciles operating ~~results, concentration~~profit to Adjusted EBITDA for the periods presented:

	Three Months Ended March 31,
	2019			2018
				As Adjusted (5)
	(Dollars in millions)
Operating profit	$	27.4		$	28.0
Other (expense) income, net		(1.6	)		2.2
Depreciation and amortization		14.4			13.9
EBITDA from continuing operations (1)		40.2			44.1
Sponsorship management fees (2)		—			0.5
Intercompany foreign exchange loss (gain)		0.3			(2.8	)
Share-based compensation		6.0			2.7
Severance charges (3)		2.1			1.9
Restructuring consulting fees (4)		1.2			0.1
Adjusted EBITDA	$	49.8		$	46.5
Adjusted EBITDA margin		24.4	%		24.6	%

(1)	We define EBITDA from continuing operations as net income or loss before interest, taxes, depreciation and amortization, and net income or loss from discontinued operations.

(2)	Represents expenses related to our management, monitoring, consulting, transaction, and advisory fees and related expenses paid to the affiliates of our Sponsors pursuant to the management agreement with THLM and Cannae.

(3)	Represents costs for severance compensation paid to employees whose positions have been eliminated, resulting primarily from the shift of business from our Bureau solutions to our Cloud solutions.

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

(5)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

The following tables present a reconciliation of our ~~product offerings, development risks involved with new products and technologies, competition,~~reported results to our contractual relationships with third parties, contract renewals with business partners, compliance by our customers with the terms of their contracts with us, and other factors disclosed in our filings with the SEC. Other factors that may cause such differences include, but are not limited to, those discussed in this Form~~10-Q~~non-GAAP Adjusted EBITDA basis for all periods presented: and the Prospectus, including the risk factors set forth in “Risk Factors” of the Prospectus. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law or the terms of our debt. These risks and uncertainties should be considered in evaluating any forward-looking statements contained herein.

	Three Months Ended March 31, 2019
	As Reported		Share-based compensation		Severance charges		Other operating expenses (a)		Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	50.9	$	0.4	$	0.2	$	—	$	50.3
Professional services and other		35.3		0.2		0.2		—		34.9
Product development and management		15.2		0.5		0.1		—		14.6
Depreciation and amortization		8.7		—		—		—		8.7
Total cost of revenue		110.1		1.1		0.5		—		108.5
Sales and marketing		35.2		1.0		1.0		—		33.2
General and administrative		31.0		3.9		0.6		1.2		25.3
Operating profit		27.4		6.0		2.1		1.2		36.7
Other expense, net		1.6		—		—		0.3		1.3
Depreciation and amortization		14.4		—		—		—		14.4
EBITDA from continuing operations	$	40.2	$	6.0	$	2.1	$	1.5	$	49.8

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

Three Months Ended March 31, 2018

As Reported
As Adjusted (b)

Share-based
compensation

Severance
charges

Other
operating
expenses (a)

Adjusted

(Dollars in millions)

Cost of revenue:

Recurring services

$
50.7

$
0.1

$
0.5

$
—

$
50.1

Professional services and other

32.8

0.1

0.5

—

32.2

Product development and management

13.7

0.1

0.1

—

13.5

Depreciation and amortization

8.7

—

—

—

8.7

Total cost of revenue

105.9

0.3

1.1

—

104.5

Sales and marketing

29.0

0.4

0.7

—

27.9

General and administrative

25.9

2.0

0.1

0.6

23.2

Operating profit

28.0

2.7

1.9

0.6

33.2

Other (income) expense, net

(2.2
)

—

—

(2.8
)

0.6

Depreciation and amortization

13.9

—

—

—

13.9

EBITDA from continuing operations

$
44.1

$
2.7

$
1.9

$
(2.2
)

$
46.5

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

(b)	Please refer to Note 2 of the notes to the condensed consolidated financial statements for a summary of adjustments.

ITEM 3. QUANTITATIVE AND ~~QUALITATIVE~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risks related to foreign currency exchange rates, interest rates, and pension obligations. We seek to minimize or to manage these market risks through normal operating and financing activities. We do not trade or use instruments with the objective of earning financial gains on the market fluctuations, nor do we use instruments where there are not underlying exposures.

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

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

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

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

Pension Obligation Risk. We provide a pension plan for certain current and former U.S. employees that closed to new participants on January 2, 1995. In 2007, the U.S. pension plan was amended (1) to exclude from further participation any participant or former participant who was not employed by the company or another participating employer on January 1, 2008, (2) to discontinue participant contributions, and (3) to freeze the accrual of additional benefits as of December 31, 2007. In applying relevant accounting policies, we have made critical estimates related to actuarial assumptions, including assumptions of expected returns on plan assets, discount rates, and health care cost trends. The cost of pension benefits in future periods will depend on actual returns on plan assets, assumptions for future periods, contributions, and benefit experience. In ~~2017,~~2018, we contributed ~~$23.0~~$18.5 million to our pension plan. The effective discount rate used in accounting for pension and other benefit obligations in ~~2017~~2018 ranged from ~~3.01%~~3.70% to ~~3.25%~~3.92%. The expected rate of return on plan assets for qualified pension benefits in ~~2018~~2019 is ~~6.30%~~6.00%.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Control over Financial Reporting

There were no changes to our internal control over financial reporting during the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

PART II. ~~OTHER~~OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, we believe would individually or taken together have a material adverse effect on our business, financial condition or liquidity. Discussion of Legal Matters is incorporated by reference from Part I, Item 1, Note 15, “Commitments and Contingencies,” of this Form 10-Q and should be considered an integral part of Part II, Item 1, “Legal Proceedings”.

ITEM 1A. RISK FACTORS

There have been no material changes to our principal risks that we believe are material to our business, results of operations and financial condition, from the risk factors previously disclosed in ~~the prospectus, dated April 25,~~our 2018 ~~filed pursuant to Rule 424(b)(4) with the SEC on April 26, 2018, relating to our initial public offering~~Form 10-K which is accessible on the SEC’s website at www.sec.gov.

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

~~Initial Public Offering~~None.

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

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

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

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

~~Concurrent Private Placement~~

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. ~~EXHIBITS~~EXHIBITS

(a) Exhibits

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


Exhibit No.		Description

10.1		Senior Secured Credit Agreement, dated April 30, 2018, between Ceridian HCM Holding Inc., as borrowers, the lenders party thereto, Deutsche Bank AG New York Branch (as administrative agent and collateral agent) and Deutsche Bank AG Canadian branch (as Canadian subagent).

~~10.2~~		~~Voting Agreement by and among~~ Ceridian HCM Holding Inc. ~~and the other parties thereto.~~2019 Management Incentive Plan

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

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

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

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

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

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


	CERIDIAN HCM HOLDING INC.

Date: ~~August 9, 2018~~May 1, 2019	By:	/s/ David D. Ossip
	Name:	~~Name:~~	David D. Ossip
	Title:	~~Title:~~	Chief Executive Officer
			(Principal Executive Officer)

Date: ~~August 9, 2018~~May 1, 2019	By:	/s/ Arthur Gitajn
	Name:	~~Name:~~	Arthur Gitajn
	Title:	~~Title:~~	Executive Vice President and Chief Financial Officer
			(Principal Financial Officer and
			Principal Accounting Officer)

5442


Gross proceeds	$	631.3
Less:
Underwriters’ discounts and commissions		29.2
IPO-related expenses		11.8
Redemption of 11% Senior Notes due 2021 (Note 8)		475.0
Call premium on redemption of 11% Senior Notes due 2021		13.1
Interest on redemption of 11% Senior Notes due 2021		10.9
Sponsor management termination fee		11.3
Debt refinancing expenses		11.4

Cash to balance sheet	$	68.6

	December 31, 2018
Condensed Consolidated Balance Sheet	As previously reported		ASC Topic 606 Adjustments			As adjusted
ASSETS
Trade and other receivables, net	$	69.9	$	(6.0	)	$	63.9
Prepaid expenses and other current assets		42.3		6.6			48.9
Other assets		1.6		92.8			94.4
LIABILITIES
Deferred revenue	$	17.2	$	6.0		$	23.2
Other liabilities		42.0		3.9			45.9

	Three Months Ended March 31, 2018
Condensed Consolidated Statement of Operations	As previously reported			ASC Topic 606 Adjustments			ASU 2017-07 Adjustments			As adjusted
Revenue:
Recurring services	$	167.0		$	(6.1	)	$	—		$	160.9
Professional services and other		20.2			7.7			—			27.9
Total revenue	$	187.2		$	1.6		$	—		$	188.8
Selling, general, and administrative expense		56.8			(1.3	)		(0.6	)		54.9
Operating profit		24.5			2.9			0.6			28.0
Other income, net		(2.8	)		—			0.6			(2.2	)
Income tax expense		5.6			0.2			—			5.8
Net (loss) income attributable to Ceridian	$	(2.1	)	$	2.7		$	—		$	0.6
Net loss per share attributable to Ceridian, basic and diluted	$	(0.11	)	$	0.04		$	—		$	(0.07	)

	Three Months Ended March 31, 2018
Condensed Consolidated Statement of Cash Flows	As previously reported			ASC Topic 606 Adjustments			ASU 2016-18 Adjustments			As adjusted
Net (loss) income	$	(2.6	)	$	2.7		$	—		$	0.1
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Deferred income tax benefit		(0.4	)		0.2			—			(0.2	)
Other		0.4			(0.6	)		—			(0.2	)
Changes in operating assets and liabilities excluding effects of acquisitions and divestitures:
Trade and other receivables		(0.2	)		(1.1	)		—			(1.3	)
Prepaid expenses and other current assets		(11.4	)		(1.9	)		—			(13.3	)
Deferred revenue		2.1			1.2			—			3.3
Accrued taxes		5.9			0.4			—			6.3
Other assets and liabilities		(4.3	)		(0.9	)					(5.2	)
Net cash used in operating activities- continuing operations		(22.3	)		—			—			(22.3	)
Cash Flows from Investing Activities
Net change in restricted cash and other restricted assets held to satisfy customer trust funds obligations		114.8			—			(114.8	)		—
Net cash used in investing activities		(240.7	)		—			(114.8	)		(355.5	)
Effect of Exchange Rate Changes on Cash, Restricted Cash, and Equivalents		(3.4	)		—			(1.1	)		(4.5	)
Net decrease in cash, restricted cash, and equivalents		(37.4	)		—			(115.9	)		(153.3	)
Elimination of cash from discontinued operations		1.0			—			—			1.0
Cash, restricted cash, and equivalents at beginning of period		94.2			—			2,317.6			2,411.8
Cash, restricted cash, and equivalents at end of period	$	57.8		$	—		$	2,201.7		$	2,259.5


	Three Months Ended June 30, 2018
	As Reported			Under ASC 606			Impact
Revenue:
Recurring services	$	156.6		$	151.3		$	(5.3	)
Professional services and other		22.7			28.4			5.7

Total revenue	$	179.3		$	179.7		$	0.4
Operating (loss) profit	$	(11.3	)	$	(8.1	)	$	3.2

	Three Months Ended June 30, 2017
	As Reported			Under ASC 606			Impact
Revenue:
Recurring services	$	140.8		$	134.3		$	(6.5	)
Professional services and other		16.7			23.8			7.1

Total revenue	$	157.5		$	158.1		$	0.6
Operating profit	$	0.9		$	3.5		$	2.6

	Six Months Ended June 30, 2018
	As Reported			Under ASC 606			Impact
Revenue:
Recurring services	$	323.6		$	310.7		$	(12.9	)
Professional services and other		42.9			57.4			14.5

Total revenue	$	366.5		$	368.1		$	1.6
Operating profit	$	16.0		$	22.3		$	6.3

	Six Months Ended June 30, 2017
	As Reported			Under ASC 606			Impact
Revenue:
Recurring services	$	292.6		$	280.2		$	(12.4	)
Professional services and other		32.3			46.1			13.8

Total revenue	$	324.9		$	326.3		$	1.4
Operating profit	$	11.8		$	16.6		$	4.8


	December 31, 2017
Assets:
Cash and equivalents	$	5.3
Trade and other receivables, net		13.3
Prepaid expenses		1.5
Property, plant and equipment, net		1.8
Other intangible assets, net		5.9
Goodwill		126.3
Other assets		2.1

Assets of discontinued operations	$	156.2

Liabilities:
Accounts payable	$	4.4
Deferred revenue		2.8
Employee compensation and benefits		1.3
Other liabilities		10.8

Liabilities of discontinued operations	$	19.3


	Six Months Ended June 30,
	2017
Net revenues	$	—
Loss from operations before income taxes		(0.1	)
Gain on sale of businesses		0.9
Income tax expense		(0.3	)
Income from discontinued operations, net of income taxes	$	0.5


	June 30, 2018
	Cost		Fair Value
Due in one year or less	$	2,339.5	$	2,339.3
Due in one to three years		475.5		469.9
Due in three to five years		588.1		580.8
Due after five years		319.1		307.8

Invested customer trust funds	$	3,722.2	$	3,697.8


	Impact to Statement of Operations			Impact to Cash
Gross proceeds from the IPO and private placement				$	631.3
Costs capitalized within stockholders’ equity					(36.3	)
Redemption of Senior Notes					(475.0	)
Debt refinancing fees, reflected as a reduction to long-term debt					(3.6	)
IPO and debt refinancing related expenses reflected within results of operations:
Cost of revenue	$	(2.1	)
Selling, general, and administrative		(23.2	)

Impact on operating profit	$	(25.3	)
Interest expense		(25.7	)

Impact on net loss	$	(51.0	)		(51.0	)

Non-cashIPO-related share-based compensation expense					8.1
Non-cash interest expense adjustments					(4.9	)

Cash to balance sheet from the IPO and private placement				$	68.6
Proceeds from issuance of the new $680.0 million Senior Term Debt					680.0
Repayment of the $702.0 million Senior Term Debt					(657.0	)

Cash to balance sheet from the IPO, private placement and debt refinancing				$	91.6


	Three Months Ended June 30,				Growth rate year-over-year			Growth rate on a constant currency basis (a)
	2018		2017		2018 vs. 2017			2018 vs. 2017
	(Dollars in millions)
Dayforce	$	106.3	$	75.3		41.2	%		40.0	%
PowerPay		21.5		19.0		13.2	%		8.1	%

Total Cloud revenue	$	127.8	$	94.3		35.5	%		33.4	%


	Six Months Ended						Increase /
	June 30,						(Decrease)						% of Revenue
	2018			2017			Amount			%			2018			2017
	(Dollars in millions)
Revenue:
Recurring services
Cloud	$	211.7		$	154.9		$	56.8			36.7	%		57.8	%		47.7	%
Bureau		111.9			137.7			(25.8	)		(18.7	)%		30.5	%		42.4	%

Total recurring services		323.6			292.6			31.0			10.6	%		88.3	%		90.1	%
Professional services and other		42.9			32.3			10.6			32.8	%		11.7	%		9.9	%

Total revenue		366.5			324.9			41.6			12.8	%		100.0	%		100.0	%
Cost of revenue:
Recurring services
Cloud		67.2			59.1			8.1			13.7	%		18.3	%		18.2	%
Bureau		33.0			38.3			(5.3	)		(13.8	)%		9.0	%		11.8	%

Total recurring services		100.2			97.4			2.8			2.9	%		27.3	%		30.0	%
Professional services and other		66.2			68.0			(1.8	)		(2.6	)%		18.1	%		20.9	%
Product development and management		28.8			20.8			8.0			38.5	%		7.9	%		6.4	%
Depreciation and amortization		17.2			15.2			2.0			13.2	%		4.7	%		4.7	%

Total cost of revenue		212.4			201.4			11.0			5.5	%		58.0	%		62.0	%

Gross profit		154.1			123.5			30.6			24.8	%		42.0	%		38.0	%
Costs and expenses:
Selling, general, and administrative		140.9			108.6			32.3			29.7	%		38.4	%		33.4	%
Other expense (income), net		(2.8	)		3.1			(5.9	)		(190.3	)%		(0.8	)%		1.0	%

Operating profit		16.0			11.8			4.2			35.6	%		4.4	%		3.6	%
Interest expense, net		65.6			43.4			22.2			51.2	%		17.9	%		13.4	%

Loss from continuing operations before income taxes		(49.6	)		(31.6	)		(18.0	)		(57.0	)%		(13.5	)%		(9.7	)%
Income tax expense		6.7			2.9			3.8			131.0	%		1.8	%		0.9	%

Loss from continuing operations		(56.3	)		(34.5	)		(21.8	)		(63.2	)%		(15.4	)%		(10.6	)%
(Loss) income from discontinued operations		(11.8	)		0.5			(12.3	)		(2,460.0	)%		(3.2	)%		0.2	%

Net loss		(68.1	)		(34.0	)		(34.1	)		(100.3	)%		(18.6	)%		(10.5	)%
Net (loss) income attributable to noncontrolling interest		(0.5	)		0.1			(0.6	)		(600.0	)%		(0.1	)%		—	%

Net loss attributable to Ceridian	$	(67.6	)	$	(34.1	)	$	(33.5	)		(98.2	)%		(18.4	)%		(10.5	)%

Adjusted EBITDA (a)	$	77.2		$	53.8		$	23.4			43.5	%		21.1	%		16.6	%

	Three Months Ended March 31, 2018
	As Reported As Adjusted (b)			Share-based compensation		Severance charges		Other operating expenses (a)			Adjusted
	(Dollars in millions)
Cost of revenue:
Recurring services	$	50.7		$	0.1	$	0.5	$	—		$	50.1
Professional services and other		32.8			0.1		0.5		—			32.2
Product development and management		13.7			0.1		0.1		—			13.5
Depreciation and amortization		8.7			—		—		—			8.7
Total cost of revenue		105.9			0.3		1.1		—			104.5
Sales and marketing		29.0			0.4		0.7		—			27.9
General and administrative		25.9			2.0		0.1		0.6			23.2
Operating profit		28.0			2.7		1.9		0.6			33.2
Other (income) expense, net		(2.2	)		—		—		(2.8	)		0.6
Depreciation and amortization		13.9			—		—		—			13.9
EBITDA from continuing operations	$	44.1		$	2.7	$	1.9	$	(2.2	)	$	46.5

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