As disclosed above in Note 1 “Basis of Presentation and Nature of Business”, on July 12, 2024, the Company closed on its previously announced sale of the Divested Business.

Under the terms of the Purchase Agreement, the Buyer agreed to acquire the Divested Business (or "Strada") for total consideration of up to $1.2 billion, in the form of (1) $1.0 billion in cash (the “Closing Cash Consideration”) payable at the closing of the transactions (the “Closing”) contemplated by the Purchase Agreement, (2) a note with an aggregate principal amount of $50 million and fair value of $35 million as of July 12, 2024 issued at Closing (the “Seller Note”) by an indirect parent of Buyer (the “Note Issuer”) and (3) contingent upon the financial performance of the Divested Business

for the 2025 fiscal year, a note with an aggregate principal amount of up to $150 million (the “Additional Seller Note”) and fair value of $52 million as of July 12, 2024 to be issued by the Note Issuer. The Seller Note has a stated interest rate of 8.0%.

In conjunction with the Transaction, the Company entered into a Transition Services Agreement (the "TSA") with the Buyer. The TSA outlines the terms under which the Company will provide certain reimbursable post-closing services to support the business on a transitional basis and are anticipated to be provided for an initial period of up to 18 months, with the option to extend for an additional six months. As part of the TSA agreement, $15 million of the Closing Cash Consideration payable at closing will be accounted for as a prepayment to the Company for services provided under the TSA.

During each of the three and nine months ended September 30, 2024, TSA services income of $9 million was recognized in Other (income) expense, net, with the corresponding expenses recorded in Cost of services and Selling, general and administrative expense in the condensed consolidated statement of comprehensive income (loss).

During each of the three and nine months ended September 30, 2024, pass-through costs of approximately $22 million were incurred under the TSA, and were netted against the equal and offsetting reimbursement amounts due from Strada.

Revenue earned during each of the three and nine months ended September 30, 2024 from customer care commercial services provided to Strada was $11 million.

A gain on sale of Strada of $4 million, net of tax, was recorded upon closing of the sale and reflects the impact of the excess of the net proceeds received less cost to sell over the carrying value of the Strada net assets. Post-closing selling price adjustment and completion of other Purchase Agreement provisions in connection with the sale could result in further adjustments to the gain on sale amount.

The following tables presents the carrying value of assets and liabilities for the Payroll & Professional Services business as presented within assets and liabilities of discontinued operations on our condensed consolidated balance sheets and results as reported in Income (Loss) from Discontinued Operations, Net of Tax, within our Condensed Consolidated Statements of comprehensive Income (Loss) (in millions):


	September 30, 2024		December 31, 2023
Assets
Cash and cash equivalents	$	—	$	34
Receivables, net	—		263
Other current assets	—		59
Fiduciary assets	—		1,167





Current assets, discontinued operations	—		1,523
Goodwill	—		331
Intangible assets, net	—		418
Fixed assets, net	—		40
Deferred tax assets, net	—		3
Other assets	—		156
Long-term assets, discontinued operations	$	—	$	948

Liabilities
Accounts payable and accrued liabilities	$	—	$	119
Other current liabilities	—		84
Fiduciary liabilities	—		1,167


Current liabilities, discontinued operations	—		1,370

Other liabilities	—		68
Long-term liabilities, discontinued operations	$	—	$	68


	Three Months Ended September 30				Nine Months Ended September 30,

	2024		2023		2024		2023
Revenue	$	33	$	256	$	539	$	746
Cost of services, exclusive of depreciation and amortization	33		163		387		508
Depreciation and amortization	—		2		3		7
Gross Profit	—		91		149		231

Operating Expenses
Selling, general and administrative	—		41		89		119
Depreciation and intangible amortization	—		9		8		29
Total Operating Expenses	—		50		97		148
Income (loss) from Discontinued Operations	—		41		52		83

Other (income) expense, net	—		2		2		8
Income (Loss) from Discontinued Operations Before Income Taxes	—		39		50		75
Gain on sale of disposition, net of tax	4		—		4		—
Income tax expense (benefit)	34		45		52		71
Net Income (Loss) from Discontinued Operations, Net of Tax	$	(30)	$	(6)	$	2	$	4

The Company concluded that it controlled a portion of Strada services subsequent to separation as a result of certain shared contractual relationships that had not been legally assigned as of September 30, 2024. As such, the Company determined it was the principal for these services and, therefore, during each of the three and nine months ended September 30, 2024, the Company recorded $33 million of Revenue and Cost of services on a gross basis within discontinued operations in the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss).

The additional income tax expense of $34 million recorded for the three and nine months ended September 30, 2024 is due to application of the dual consolidated loss rules as a result of the filing of the federal tax return during the interim period. The application of the dual consolidated loss rule was impacted by the sale of the Divested Business, which disallowed foreign losses previously elected.

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