Alight, Inc. / Delaware - 10-K filing on 2022-03-10

Segment Reporting

12 Months Ended

Dec. 31, 2021

12. Segment Reporting

The Company’s reportable segments have been determined using a management approach, which is consistent with the basis and manner in which the Company’s chief operating decision maker (“CODM”) uses financial information for the purposes of allocating resources and evaluating performance. The Company’s CODM is its Chief Executive Officer. The CODM evaluates the performance of the Company based on its total revenue and segment profit.

The CODM also uses revenue and segment profit to manage and evaluate our business, make planning decisions, and as performance measures for Company-wide bonus plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business.

The accounting policies of the segments are the same as those described in Note 2 “Accounting Policies and Practices.” The Company does not report assets by reportable segments as this information is not reviewed by the CODM on a regular basis.

Information regarding the Company’s current reportable segments is as follows (in millions):


	Revenue

	Successor		Predecessor
	Six Months Ended		Six Months Ended		Year Ended
	December 31,		June 30,		December 31,
	2021		2021		2020		2019
Employer Solutions
Recurring	$	1,213	$	1,049	$	2,051	$	1,834
Project		134		107		237		250
Total Employer Solutions		1,347		1,156		2,288		2,084
Professional Services
Recurring		65		60		108		56
Project		121		124		260		229
Total Professional Services		186		184		368		285
Hosted Business		21		21		72		183
Total	$	1,554	$	1,361	$	2,728	$	2,552


	Segment Profit

	Successor			Predecessor
	Six Months Ended			Six Months Ended			Year Ended
	December 31,			June 30,			December 31,
	2021			2021			2020			2019
Employer Solutions	$	344		$	274		$	533		$	554
Professional Services		1			7			31			7
Hosted Business		(2	)		(3	)		—			35
Total of all reportable segments		343			278			564			596
Share-based compensation		67			5			5			9
Transaction and integration expenses(1)		13			—			—			—
Non-recurring professional expenses(2)		19			18			—			14
Transformation initiatives(3)		—			—			8			22
Restructuring		5			9			77			14
Other(4)		(10	)		(5	)		36			19
Depreciation		31			49			91			68
Intangible amortization		153			100			200			185
Operating Income		65			102			147			265
Loss from change in fair value of financial instruments		65			—			—			—
Gain from change in fair value of tax receivable agreement		(37	)		—			—			—
Interest expense		57			123			234			224
Other expense, net		3			9			7			3
(Loss) Income Before Income Tax Expense (Benefit)	$	(23	)	$	(30	)	$	(94	)	$	38

(1)

Transaction and integration expenses related to acquisitions in 2021.

(2)

Non-recurring professional expenses includes external advisor and legal costs related to the Company’s Business Combination.

(3)

Transformation initiatives in fiscal years 2020 and 2019 includes expenses related to enhancing our data center for both periods, and severance expense for the first half of 2019.

(4)

Other primarily includes activity related to long-term incentives and expenses related to acquisitions in fiscal years 2020 and 2019, offset by Other expense, net.

There was no single client who accounted for more than 10% of the Company’s revenues in any of the periods presented.

Revenue by geographic location is as follows (in millions):


	Successor		Predecessor
	Six Months Ended		Six Months Ended		Year Ended
	December 31,		June 30,		December 31,
	2021		2021		2020		2019
United States	$	1,358	$	1,168	$	2,353	$	2,361
Rest of world		196		193		375		191
Total	$	1,554	$	1,361	$	2,728	$	2,552

Long-lived assets, representing Fixed assets, net and Operating lease right of use assets, by geographic location is as follows (in millions):


	Successor		Predecessor
	December 31,		December 31,
	2021		2020
United States	$	305	$	415
Rest of world		51		48
Total	$	356	$	463