Ceridian HCM

2022 Annual Report

Dear Fellow Ceridian Stockholders,

As we reflect on the past year, we are tremendously proud of Ceridian’s performance as we exceeded guidance
across all revenue and profitability metrics.

We achieved several remarkable milestones including the delivery of more than $1.2 billion in total revenue.
This was driven by a 30.1% increase in Dayforce recurring revenue or 31.7% on a constant currency basis. On
the Dayforce platform, we are proud to now have 5.95 million active global users and 5,993 customers live, and
we have maintained our Dayforce retention rate of 97.1%.1

We also continued to drive market leadership and achieved important validation underscoring our differentiation.
For the third consecutive year, Ceridian was named a leader in the 2022 Gartner® Magic Quadrant™ for Cloud
HCM Suites for 1,000+ employee enterprises, driven by Ceridian’s Ability to Execute and Completeness of
Vision. Ceridian was recognized as the only true HCM vendor among Enterprise Resource Planning (ERP)
vendors in the Leaders Quadrant.

Extending Dayforce innovation

We continued to drive a strong innovation agenda backed by a highly differentiated product suite. In 2022, our
continued investment in the Dayforce platform resulted in 39% of customers purchasing the Dayforce suite, and
more than 25% of sales representing add-ons to existing customer base.

Additionally in 2022, we furthered Dayforce innovations to help organizations drive their transformations in this
dynamic market, including:

• A More Differentiated, Complete HCM Suite: We continued to add new modules to the Dayforce
platform and expanded our global payroll capabilities – ultimately growing the size of our target
market. We now offer the most comprehensive HCM suite in the industry that is unique in its payroll
capabilities for 57 countries. This differentiation is furthered because Dayforce is a single solution,
with a single database, and a single, continuous calculation engine – giving customers greater
efficiency and compliance than any other solution.

• Expanded Reach of Dayforce Wallet: Dayforce Wallet is enabled by our continuous calculation

engine, which elevates our platform as the only HCM suite in the market that can pay people accurately
and on-demand for their work, while helping customers maintain payroll compliance. This is truly
modern payroll – helping improve financial wellness for workers while reducing employer turnover
and costs. The product continues to be incredibly differentiated with high attachment rates to new sales.
In fact, in 2022, we had more than 1,450 Dayforce Wallet customers with more than 880 live. The
average registration rate was above 45% of all eligible users, and the average user interacted with the
product approximately 25 times per month. We also continued to expand the reach of the product with
the release of Dayforce Wallet in the United Kingdom, as well as further employee financial flexibility
with a new cash back program, Dayforce Rewards.

•

Stronger Intelligence and Analytics: Intelligence is central to Dayforce, and we continue to integrate
artificial intelligence (AI) seamlessly into the platform. As an example, we released our data-driven
Intelligent Search capability within Dayforce, which enables users to search for critical information
simply and instantly. Also, with Dayforce People Analytics, we gave employers more access to metrics
and analytics across the entire employee lifecycle, covering DEI, performance, compensation, flight
risk, benefits, and more. We also added Intelligent Automation to Dayforce Recruiting making the
talent acquisition process more efficient and accurate.

• A Best-in-Class User Experience: We continued to advance our user experience to meet changing

work needs, including a focus on mobile experiences. With the launch of Mobile Benefits Enrollment,

1

Excluding the 2021 acquisitions of Ascender and ADAM HCM.

employees can now fully manage their benefits on their mobile devices. Additionally, we delivered
Experience Hub, enabling customers to easily put their branding on the application and personalize
content and communications for specific groups.

• More Differentiation at the Core: We continued to deliver differentiated features at the very core of
Dayforce that extend across the suite to meet the demands of the modern workplace. For example, our
Dayforce Skills Engine, the backbone of Dayforce Talent Intelligence, creates an open standards-based
approach to skills. With this engine at the center, we announced the intent to deliver Ideal Talent
Marketplace, which will enable our customers to increase the flexibility of their staffing models and
adapt to the future world of work.

• Modernized Ceridian Tax Services: We also continued to advance the capabilities of Ceridian Tax

Services, which has always been a highly competitive offering. To support the largest global
organizations, we modernized the architecture of our North American tax systems to enable customers
to access tax solutions through the same technology as the Dayforce platform.

Delivering quantifiable value to our customers

It’s clear that organizations of all sizes, segments, and parts of the world continue to reach for digital
transformation, efficiency, and globalization of their employee base to drive efficiencies to support growth. And
our results show that Dayforce is the answer to deliver on these transformational goals – with more customers
leaning into our complete suite.

This momentum is furthered by our success moving up market and across regions, while maintaining leadership
in our core segments. In 2022, we saw triple digit growth in our global markets, and our average deal size
increased 22%. This coupled with our Dayforce retention rate of 97.1% and customer satisfaction NPS scores
increasing across Services and Support shows that our platform strategy works: continued innovation and happy,
satisfied customers are the combination that drives profitable, long-term growth.

As we grow, we also continue expanding our partner ecosystem, which now has more than 170 partners globally.
Today, more than 40% of our global bookings are supported by partners, and 14% of our kick-offs in year were
completed by partners – a trend we expect to continue increasing significantly in 2023 and beyond.

Investing in our people, culture, and communities

We’re committed to investing in our employees to drive strong engagement, foster a best-in-class culture, and
validate our position as an employer of choice. We achieved high employee net promoter scores (eNPS) for
another year by enhancing learning and development opportunities, promoting employee wellbeing, and
deepening our focus on diversity, equity, and inclusion within the workplace.

We believe that organizations that choose to embrace their responsibility to the global community will succeed
well into the future. In 2022, we further integrated environmental, social, and governance (ESG) frameworks into
our overall corporate strategy. This approach supports long-term performance and value creation, allows us to
more effectively mitigate risks and seize opportunities, and strengthens our ability to sustainably effect change.
We are proud of our performance in each of the five pillars of our framework: Governance and Trust; Our
People; Tech for Good; Our Communities; and the Environment.

In 2022, we were honored for organizational excellence in numerous awards, including recognition on the Bloomberg
Gender-Equality Index (GEI) for our efforts advancing gender equality and building an inclusive work environment.

Driving durable growth

In 2022, our five strategic levers continued to guide our execution and overall growth agenda:

• Acquiring new customers in markets where we have seen success to date;

• Extending the Dayforce platform, allowing us to deliver more value to our current and prospective

customers;

• Expanding within the enterprise segment;

• Accelerating our global expansion both by serving local customers in new geographies, and by

extending our scope to service global multinational customers; and

• Driving incremental value for our customers by innovating in adjacent markets, such as Dayforce

Wallet.

Our strong customer focus, differentiated product vision, scale, and geographic reach give us great confidence in
our ability to deliver sustainable, profitable growth.

On behalf of the Ceridian Board of Directors, we want to thank our employees who embody our brand promise
and strive to improve the work lives of our customers, their employees, and our own teams at Ceridian – every
day and with everything we do. Our winning company culture and our commitment to our people and our
customers will help guide us as the pace of change accelerates.

As we look to the year ahead, we’re confident that our strong leadership team, focus on operational excellence,
and continued investments in the Dayforce HCM platform will enable us to drive efficient and durable growth
over the medium term. Thus, creating value for our employees, customers, and shareholders.

David D. Ossip, Chair and Co-CEO

Leagh E. Turner, Co-CEO

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2022
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
TRANSITION PERIOD FROM

TO

Commission File Number 001-38467

Ceridian HCM Holding Inc.

(Exact name of Registrant as specified in its Charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

46-3231686
(I.R.S. Employer
Identification No.)

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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class
Common Stock, $.01 par value

Trading Symbol(s)
CDAY

Name of each exchange on which registered
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☒ NO ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐ NO ☒
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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging
growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of
the Exchange Act.

Large accelerated filer

Non-accelerated filer

☒

☐

Accelerated filer

Small reporting company

Emerging growth company

☐

☐

☐

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 pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit
report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, based on the $47.08 closing price of the shares of
common stock on the New York Stock Exchange on June 30, 2022, was $7,084.4 million.
The number of shares of Registrant’s Common Stock outstanding as of February 20, 2023 was 154,106,560.

Portions of the Registrant’s Definitive Proxy Statement relating to the 2023 Annual Meeting of Stockholders, scheduled to be held on April 28, 2023, are
incorporated by reference into Part III of this Form 10-K.

DOCUMENTS INCORPORATED BY REFERENCE

1 |

2022 Form 10-K

Page

3
10
25
25
25
25

26
27
28
45
47
97
97
98

99
99
99
100
100

101

Table of Contents

Business

PART I
Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.
Item 3.
Item 4.

Properties
Legal Proceedings
Mine Safety Disclosures

PART II
Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Reserved
Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 6.
Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Item 8.
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services

PART IV

Item 15. Exhibits, Financial Statement Schedules

1 |

2022 Form 10-K

Unless the context requires otherwise, references in this Annual Report on Form 10-K for the fiscal year ended
December 31, 2022 of Ceridian HCM Holding Inc. and subsidiaries (“Form 10-K”) to “our company,” the “Company,” “we,”
“us,” “our,” and “Ceridian” refer to Ceridian HCM Holding Inc. and its direct and indirect subsidiaries on a consolidated
basis.

We and our subsidiaries own or have the rights to various trademarks, trade names and service marks, including the

following: Ceridian®, Dayforce®, Makes Work Life Better™, Powerpay® and various logos used in association with these
terms. Solely for convenience, the trademarks, trade names and service marks and copyrights referred to herein are listed
without the ©, ®, and ™, symbols, but such references are not intended to indicate, in any way, that Ceridian, or the
applicable owner, will not assert, to the fullest extent under applicable law, Ceridian’s or their, as applicable, rights to
these trademarks, trade names, and service marks. Other trademarks, service marks, or trade names appearing in this
Form 10-K are the property of their respective owners.

FORWARD-LOOKING STATEMENTS

This Form 10-K 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. All statements other than statements of historical fact or relating to present facts or current conditions
included in this Form 10-K are forward-looking statements. Forward-looking statements give our current expectations and
projections relating to our financial condition, results of operations, plans, objectives, future performance and business.
You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These
statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “seek,” “plan,” “intend,” “believe,” “will,”
“may,” “could,” “continue,” “likely,” “should,” and other words and terms of similar meaning in connection with any
discussion of the timing or nature of future operating or financial performance or other events but not all forward-looking
statements contain these identifying words.

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 those risks described in Part I, Item IA,
“Risk Factors” of this Form 10-K. 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
Form 10-K. 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 Form 10-K. For the reasons described above, we caution against relying on any
forward-looking statements. Any forward-looking statement made by us in this Form 10-K 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.

2 |

2022 Form 10-K

Item 1. Business.

Overview

PART I

Ceridian is a global human capital management (“HCM”) software company. Dayforce, our flagship Cloud HCM
platform, provides human resources (“HR”), payroll, benefits, workforce management, and talent intelligence functionality.
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 legacy
North America Bureau solutions, which we generally stopped actively selling to new customers following the acquisition of
Dayforce, and customers using our acquired Bureau solutions in the Asia Pacific Japan ("APJ") region. We invest in
maintenance and necessary updates to support our Bureau customers and continue to migrate them to Dayforce.
Revenue from our Cloud and Bureau solutions include investment income generated from holding customer funds before
funds are remitted to taxing authorities, also referred to as float revenue or float.

Our five strategic growth levers drive our long-term perspectives, near-term decision making and stockholder

alignment:









Acquiring new customers in the markets where we have seen success to-date;

Extending the Dayforce platform, thereby allowing us to deliver more value to our current and prospective
customers;

Expanding within the Enterprise segment;

Accelerating our global expansion both by serving local customers in new geographies, and by extending
our scope to service global multinational customers; and finally,

 Driving incremental value for our customers by innovating in adjacent markets around our core HCM suite,

such as the Dayforce Wallet.

Products and Services

Dayforce

Dayforce, our principal Cloud HCM platform, is a single application that 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. Dayforce offers a comprehensive range of functionality,
including global HR, payroll and tax, workforce management, benefits, and talent intelligence on web and native iOS and
Android platforms. Our Dayforce mobile app enables employees not only to request and to trade schedules, but also to
see the real-time impact of schedule changes on their pay. Our Dayforce 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. In 2022, we received several accolades for our Dayforce solution, including being
named as a Leader in the 2022 Gartner Magic Quadrant™ for Cloud HCM Suites for 1,000+ Employee Enterprises for the
third consecutive year; Leader in Nucleus Research’s 2022 Human Capital Management Value Matrix and 2022
Workforce Management Technology Value Matrix; Leader in the Human Capital Management – Enterprise Data Quadrant
by SoftwareReviews; and Canadian HR Reporter’s 5-Star Software and Technology Provider for 2022.

Human Resources

Dayforce Human Resources functionality provides customers with a single, complete record for all employees. Our
HR functionality is centered on a comprehensive, flexible workflow engine that streamlines and automates administrative
tasks. The component maintains a record of critical forms for the employee, such as signed workplace policy agreements,
Occupational Safety and Health Administration regulations, and direct deposit information.

In addition to its primary record-keeping functionality, Dayforce HR comes with an organizational management

system that allows managers to view the profiles of their team members, which includes contact and time off details, as
well as pay, benefits, and performance data. It is also accessible to employees, who can view the organizational chart,
appropriate information about other employees in the organization, and their own pay and time details. There are several
self-service options available in the product as well, such as change of address or adding a dependent, making it easy for
employees to keep their profiles up to date.

3 |

2022 Form 10-K

Payroll and Tax

Dayforce empowers employers to manage their global payroll needs within a single system. Through our Dayforce

platform, users with localized payroll functionality are able to make updates to time and pay in real-time. Dayforce
supports payroll in over 160 countries around the world, whilst providing employers with a centralized global view of their
payroll data. This global payroll model is powered by a combination of Ceridian-owned and partner unified payroll engines
with an automated data exchange that affords users and administrators to have a consistent, intuitive single user
experience. As of December 31, 2022, native payroll was available in eight countries (United States, Canada, United
Kingdom, Ireland, Australia, New Zealand, Mauritius, and Singapore), where Dayforce’s continuous calculation engine
offers flexibility, accuracy, and efficiency in the payroll process. In these native markets, we also manage the movement
and remittance of taxes to federal and local tax authorities on behalf of our customers. With a flexible rules-based
configuration, and regional partnerships, Dayforce helps organizations with regulation and compliance concerns
regardless of where employees work or live. We are continuing to innovate and expand into new markets to enhance the
customer experience for large enterprises operating globally.

Workforce Management

Dayforce Workforce Management provides functionality to help organizations to equitably manage their workforces,

improve operational efficiency, and enhance compliance by configuring the system to meet complex employment and
working time rules and policies. Through Dayforce, users are offered time and attendance, absence management,
scheduling, task management, and labor planning. A variety of options are available for organizations to capture time and
attendance data such as physical clocks and the mobile app.

Dayforce Wallet

Dayforce Wallet is a digital payment solution for customers using Dayforce Payroll. A benefactor of Dayforce’s

continuous calculation engine, Dayforce Wallet offers employees on-demand access to their earned pay anytime,
anywhere, in an intuitive mobile app experience. Rather than a plug-in or integration, Dayforce Wallet and Dayforce
Payroll leverage the same underlying technology and system of record, providing real-time payroll accuracy. All on-
demand payments are processed as regular pay runs and account for the appropriate taxes, deductions and
garnishments in real-time, meaning there’s minimal impact to payroll administrators and no change to the employer’s cash
flow.

Dayforce Wallet is designed to empower employees with greater financial flexibility and choice. The solution can be

used for regular payroll, off-cycle payments, as a pay-card solution, and for on-demand pay. The Dayforce Wallet app
allows employees to make any day payday by tracking their earned pay in real-time and requesting a payout of all or a
portion of their earnings from the pay period. The app also allows employees to transfer funds to other financial
institutions, manage and pay bills, leverage cashback rewards, and view their transaction history. As a fee-free means of
bridging the gap between paydays, Dayforce Wallet offers an effective alternative to cash advances, high-interest credit
cards, and payday loans, helping reduce employees’ financial stress and drive employee engagement.

Dayforce Wallet was launched in the U.S. in 2020, in Canada in 2021, and in the United Kingdom in 2022. We

continue to introduce new features and enhancements (which vary by country/region) to the Dayforce Wallet, such as
Dayforce Wallet Rewards, referrals, and access for workers aged 14-17 years old to use the Dayforce Wallet with parental
consent. We believe these features will enhance our Dayforce Wallet consumer experience and help bring greater
financial flexibility and control to even more employees through Dayforce.

Benefits

Dayforce Benefits assists users from enrollment to ongoing benefits administration, including eligibility, open

enrollment and Affordable Care Act ("ACA") management. Our proprietary Benefits Decision Support scoring system
guides employees through a self-service experience, giving information about each of the available benefit plans and the
impact of plan options, to help them choose the best option for their specific needs.

The system integrates with hundreds of benefits carriers, contains a library of qualifiers to help define eligibility rules,
and leverages real-time connections to payroll and HR to inform eligibility and calculate employee deductions. In addition,
we offer Benefits Intelligence, which leverages enrollment data to get visibility into elections at the plan and option levels
to help administrators analyze their program.

4 |

2022 Form 10-K

Talent Intelligence

Dayforce Talent Intelligence, a suite of next generation talent acquisition and talent management solutions powered

by Artificial Intelligence (“AI”) and driven by data, helps organizations recruit, retain, and reskill their workforce. Talent
Intelligence transforms talent management and recruitment strategies by using AI in conjunction with talent data from
across the employee lifecycle to provide organizations insights that enable them to make more efficient, accurate, and fair
talent decisions. Talent Intelligence can also objectively measure workforce demographics while identifying inequity in
everything from payroll to promotion opportunities to help employers create actionable policy changes. Users can
leverage Talent Intelligence tools for recruiting, onboarding, engagement, performance management, succession
planning, compensation management, and employee career planning and skills development.

Powerpay

We offer Powerpay for Canadian organizations with fewer than 100 employees. Powerpay is a Cloud platform that

provides scalable and straightforward payroll and HR solutions. Specifically designed for small businesses, Powerpay
enables clients to pay their employees accurately and on-time.

Bureau

Our Bureau solutions offer payroll and payroll-related services using legacy technology and on-premise technology
from our acquired businesses. We invest in maintenance and necessary updates to support our Bureau customers. We
generally stopped selling our legacy North America Bureau payroll solutions to new customers in the United States in
2012, and in Canada in 2015, and we also intend to stop actively selling our acquired Bureau payroll solutions to new
customers on a stand-alone basis. In addition to customers who use our payroll services, certain customers use our
legacy Bureau tax filing services on a stand-alone basis; and in 2019 we started to sell stand-alone legacy Bureau tax
services again as well as begin the process of modernizing the technology platforms used to provide those services.
Beginning in 2023, with the technology migration complete, we will begin classifying recurring revenues from stand-alone
tax customers as Dayforce revenue on a go-forward basis.

Customers

Dayforce is designed to serve organizations with 100 to over 100,000 employees. The Dayforce customer base has

increased from 482 as of December 31, 2012 to 5,993 customers* on the platform as of December 31, 2022. For 2022,
our 5,993 Dayforce customers* represented approximately 5.9 million global employees*. We define a customer as a
single organization, such as a company, a non-profit association, an educational institution, or government entity. We also
have approximately 38,500 Powerpay customer accounts. No single customer accounted for more than 10% of our
revenues during the year ended December 31, 2022.

Sales and Marketing

We sell our Cloud solutions through a direct sales force and a variety of third-party channels, organized by customer

size and geography. We market Dayforce to organizations with more than 100 employees. We market Powerpay to
organizations with fewer than 100 employees in Canada. The majority of our revenue growth comes from new Cloud
customers.

Services and Support

We offer a broad portfolio of services aimed to ensure customer success. We believe it’s important to work closely

with our customers to understand their needs and deliver technology solutions and support that address them. We
continue to increase our global reach in supporting and serving our customers. As part of our international strategy, we
work with partners to perform services in certain geographies where we do not currently have international operations or
the particular service required by our customers.

* Excluding the 2021 acquisitions of Ascender and ADAM HCM

5 |

2022 Form 10-K

Implementation and Professional Services

Our internal implementation team leverages proprietary onboarding technology for new customer activation and
professional services work. Our internal team is supplemented by third party services partners and system integration
partners (“SI”). Our implementation services include solution configuration and activation for new customers. Professional
services include add-on implementation services for existing customers, ongoing product configuration changes when the
customer does not have the resources to do it themselves, product usage consulting and a variety of additional services,
such as report writing, usage audits, and process improvement.

Customer Support

Our global customer support organization provides 24/7 application support from locations across North America

and in the United Kingdom, Mauritius, Australia, Singapore, Philippines, and India. Our support function is organized into
teams of representatives with deep domain expertise across our platform. These teams are aligned to groups of
customers based on geography, product type, and client vertical to provide a combination of deep product and industry
knowledge, consistent relationships, and high availability.

Technology, Hosting, and Research and Development (“R&D”)

Technology and innovation are at the core of Ceridian. Our innovation and development process is customer-driven.

We work directly with customers to understand their needs and to deliver solutions that address their challenges, taking
into consideration the entire user experience, without being constrained by individual modules or applications. We are
committed to protecting our customer information, along with our employee and contractor information and other business
data.

Our R&D team is responsible for the design, development, and testing of our applications. We believe that our
modern Cloud technology stack, agile design and development methodology, and efficient software deployment process
enable us to innovate quickly in response to industry trends. We host Cloud-based applications and serve the majority of
our customers from data centers operated by third party providers, primarily Microsoft Azure, AWS, VMWare Cloud on
AWS, and Navisite. While we control and have access to our servers and all of the components of our network that are
located in our external data centers, we do not control the operation of these facilities. Additionally, we host our internal
systems through data centers that we operate and lease in the United States and APJ.

Intellectual Property

Our success depends, in part, on our ability to protect our proprietary technology and intellectual property. We rely

on a combination of patents, copyrights, trade secrets, and trademarks, as well as confidentiality and nondisclosure
agreements and other contractual protections, to establish and to safeguard our intellectual property rights.

Competition

The market for HCM technology solutions is highly competitive and subject to changing technology and shifting

client needs. We compete with firms that provide both integrated and point solutions for HCM, as well as with local
providers in each jurisdiction that we operate. Globally, we compete with legacy payroll service providers, as well as
Cloud-enabled client-server HCM providers. We also face competition from modern HCM providers, whose solutions have
been specifically built as single application platforms in the Cloud. In addition, we face competition from large, long-
established enterprise application software vendors.

Competition in the global HCM market is primarily based on product and service quality, including ease of use and

accessibility of technology, breadth of offerings, reputation, and price. We believe that we are competitive in each of these
areas and that our single application always-on technology and product innovations, combined with our commitment to
service and our geographic reach, distinguishes us from our competitors.

6 |

2022 Form 10-K

Seasonality

We have in the past and expect in the future to experience seasonal fluctuations in our revenues and new customer

contracts with the fourth quarter historically being our strongest quarter for new customer contracts, renewals, and
customer go-lives. Although the growth of our Cloud solutions and the ratable nature of our fees makes this seasonality
less apparent in our overall results of operations, we expect our revenue to fluctuate quarterly and to be higher in the
fourth and first quarters of each year. Fourth quarter revenue is driven by year-end processing fees and Dayforce
customer go-lives; and first quarter revenue is driven by revenue earned for printing of year-end tax packages.

Environmental, Social, and Governance ("ESG") and Human Capital

At Ceridian, we believe that transparency and accountability are essential to any company’s success. Our ESG and
Human Capital approach is guided by five pillars: Governance and Trust; Our People; Tech for Good; Our Communities;
and the Environment.

Governance and Trust

We safeguard the trust given to us by our partners, our customers, and their employees. That means upholding the
highest standards of corporate governance and ethics, ensuring customer data is protected, and developing products that
are reliable and effective.

Our People

As of December 31, 2022, we had 8,526 employees, including 4,436 in North America, 2,547 in APJ, and 1,543 in
Europe, the Middle East, and Africa ("EMEA"). We provide a wide range of compensation and benefits to our employees
which enhance the workplace experience and drive our Makes Work Life Better™ brand. In addition to salaries, these
benefits (which vary by country/region) include annual bonuses, equity awards, a global employee stock purchase
program, retirement savings plans, healthcare and insurance benefits, fertility and family building benefits, health savings
and flexible savings spending accounts, unlimited time away from work, parental leave, flexible and remote work options,
employee assistance programs, and tuition reimbursement.

Promoting diversity, equity and inclusion ("DEI") within our workforce is also a priority for Ceridian. We have a

company-wide employee Global Diversity Advisory Council, and we provide funding to our nine inclusive-building
employee resource YOUnity groups. In 2022, we also launched a new Achieving Corporate Equity program that
empowers high-potential talent from underrepresented or underserved communities to rise within our organization. As of
December 31, 2022, women represent approximately 49% of our global workforce, including approximately 44% of
employees in manager-level roles and above, and approximately 38% in vice president-level roles and above. At Ceridian,
in the United States, approximately 12% of our workforce is Black or African American, 15% is Asian, 6% is Hispanic or
Latino, 2% is multiracial, less than 1% is Native Hawaiian or Pacific Islander, American Indian or Alaska Native, and
approximately 62% is White. In the United States, people of color represent approximately 26% of employees in manager-
level roles and above, and approximately 28% of employees in vice president-level roles and above.

The health, safety, and wellbeing of our employees is of paramount importance to us. In 2022, we hosted our first-
ever global Mental Health Summit and offered two paid wellness days to all employees. We also expanded access to a
platform that provides digital and in-person solutions that help support overall wellbeing to all employees. We developed a
new emergency communications system to ensure connectivity and support for our employees both during and after
natural disasters and other dangerous events. We ensure that all necessary policies and procedures are in place at our
facilities to protect employee health and safety, which includes those for vaccination, testing, masking, and physical
distancing that conform to COVID-19 government requirements.

We are committed to providing meaningful learning and leadership development opportunities to our workforce. In

2022, nearly 200,000 hours of in-person trainings, digital learning, and webinars related to leadership and learning
development topics were completed by over 95% of our employees. We also continued the global expansion of our
professional skills curriculum courses for all employees and leadership development programming.

7 |

2022 Form 10-K

Tech for Good

We believe that Tech for Good and responsible innovation can have a positive impact on all stakeholders. In 2022,

we published our AI Ethics Principles, which will inform our management philosophy, guide our approach to product
development, and provide our customers and partners with a framework that enables feedback and reflects our
commitment to trust. Our Dayforce Wallet product provides individuals with on-demand access to their earned pay, which
enables them to better cover both everyday expenses as well as urgent or unplanned costs. Our Dayforce Engagement
product’s Inclusivity Survey provides organizations with actionable inclusivity data to ensure their efforts to make progress
on DEI are successful.

Our Communities

We are committed to giving back to the communities in which we live and work. Through our employee-led charity,
Ceridian Cares, we provide financial support to individuals and families struggling with basic needs and quality of life. In
2022, the organization granted over $1 million to people in need across the United States and Canada, reaching the
exciting milestone of over $5 million in grants given to over 3,500 people since inception. Additionally, Ceridian and our
employees donated a combined total of nearly $1 million to the Ceridian Cares Foundation and hundreds of other
nonprofits around the world in 2022. We supported over 700 non-profits globally and contributed more than 5,000
volunteer hours to projects on five continents.

Environment

We are actively working to reduce our Scope 1 and 2 emissions. This includes our ongoing efforts to consolidate our

physical footprint globally to meet the needs of an increasingly virtual-first era.

We encourage you to review our Ceridian ESG Report for more detailed information which can be found on our

website at https://www.ceridian.com/company/corporate/corporateresponsibility. In addition, past ESG reports, our Task
Force on Climate-related Financial Disclosures Index, SASB Index, consolidated EEO-1 report, and ESG-related policies
and principles can be found here. Our website and the information contained on, or that can be accessed through, the
website is not deemed to be incorporated by reference into, and is not considered part of, this Form 10-K.

Available Information

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy and

information statements, Section 16 reports, and amendments to reports and any registration statements filed or furnished
pursuant to Sections 13(a), 14 and 15(d) of the Exchange Act are available, free of charge at http://investors.ceridian.com
as soon as reasonably practicable after we file such material with, or furnish it to, the Securities and Exchange
Commission (“SEC”), and are also available on the SEC’s website at http://www.sec.gov.

Our fourth amended and restated certificate of incorporation, our second amended and restated bylaws, charters of
our Acquisition and Finance, Audit, Compensation, and Corporate Governance and Nominating Committees of our Board
of Directors (our “Board”), our Corporate Governance Guidelines, and our Code of Conduct, as well as any waivers from
and amendments to our Code of Conduct are available on our website at https://investors.ceridian.com/corporate-
governance/governance-documents. Our website and the information contained on, or that can be accessed through, the
website is not deemed to be incorporated by reference into, and is not considered part of, this Form 10-K.

Executive Officers

Our executive officers as of March 1, 2023 are as follows:

Name

David D. Ossip
Leagh E. Turner
Christopher R. Armstrong
Noémie C. Heuland
Stephen H. Holdridge
Jeffrey S. Jacobs
Joseph B. Korngiebel
William E. McDonald

Age
56
51
54
45
62
47
52
58

Position

Chair and Co-Chief Executive Officer
Co-Chief Executive Officer
Executive Vice President and Chief Operating Officer
Executive Vice President and Chief Financial Officer
President, Customer and Revenue Operations
Head of Accounting and Financial Reporting
Executive Vice President, Chief Product and Technology Officer
Executive Vice President, General Counsel and Corporate Secretary

8 |

2022 Form 10-K

David D. Ossip

Mr. Ossip is our Chair and Co-Chief Executive Officer. Mr. Ossip has held the position of Chair since August 2015

and Co-Chief Executive Officer since February 2022. Mr. Ossip has served as Chief Executive Officer from July 2013 until
February 2022. Mr. Ossip joined the Company following the Company’s acquisition of Dayforce Corporation in 2012,
where he held the position of Chief Executive Officer. Mr. Ossip serves as a director of Dragoneer Growth Opportunities
Corp. III, a NASDAQ listed special acquisition company. Mr. Ossip previously served as a director for Dragoneer Growth
Opportunities Corp, a NYSE listed company, and Dragoneer Growth Opportunities Corp II, a NASDAQ listed company.

Leagh E. Turner

Ms. Turner is our Co-Chief Executive Officer since February 2022 and has been a member of our Board of Directors
since February 2022. Ms. Turner joined Ceridian in 2018, serving as President from August 2018 until February 2022 and
Chief Operating Officer from February 2020 until February 2022. Prior to joining Ceridian, Ms. Turner held the position of
global Chief Operating Officer, strategic customer program of SAP, an enterprise software and programming company,
from October 2016 to August 2018. Ms. Turner is a member of the board of directors for Manulife Financial Corporation, a
NYSE listed company.

Christopher R. Armstrong

Mr. Armstrong is our Executive Vice President, Chief Operating Officer, a position he has held since February 2022.

Mr. Armstrong joined Ceridian in 2004, and since then has held several commercial and operational leadership roles,
including Executive Vice President, Chief Customer Officer from February 2020 until February 2022, Executive Vice
President, Chief Operating Officer from May 2019 until February 2020, Executive Vice President, Operations from March
2018 until May 2019, and Executive Vice President, Customer Support from April 2016 until March 2018.

Noémie C. Heuland

Ms. Heuland is our Executive Vice President and Chief Financial Officer, positions she has held since October 2020.
Prior to joining the Company, Ms. Heuland held the position of Senior Vice President, Chief Financial Officer of SAP Latin
America and Caribbean region since April 2018. In addition, Ms. Heuland held the positions of Vice President, Chief
Financial Officer of SAP Latin America and Caribbean North and South from April 2015 to March 2018. Ms. Heuland is a
certified public accountant.

Stephen H. Holdridge

Mr. Holdridge is our President, Customer and Revenue Operations since February 2023. Mr. Holdridge joined
Ceridian in January 2020, serving as Global Head of Services until February 2022 and Executive Vice President, Chief
Customer Officer from February 2022 until February 2023. Prior to joining the Company, Mr. Holdridge held the position of
Senior Executive Vice President, Worldwide Services at MicroStrategy, Inc. from November 2017 until July 2019.

Jeffrey S. Jacobs

Mr. Jacobs is our Head of Accounting and Financial Reporting and serves as the principal accounting officer,
positions he has held since May 2020. Mr. Jacobs served as our Vice President, Finance from December 2016 until May
2020. Mr. Jacobs is a certified public accountant (inactive).

Joseph B. Korngiebel

Mr. Korngiebel is our Executive Vice President, Chief Product and Technology Officer, positions he has held since

August 2020. Prior to joining the Company, Mr. Korngiebel held various positions at Workday, Inc. since March 2006,
including Chief Technology Officer from May 2017 until July 2020.

William E. McDonald

Mr. McDonald is our Executive Vice President and General Counsel, positions he has held since July 2021, and
Corporate Secretary, a position he has held since February 2016. Mr. McDonald served as Senior Vice President, Deputy
General Counsel from February 2016 until July 2021.

9 |

2022 Form 10-K

Item 1A. Risk Factors.

Risks Related to Our Business and Industry

Our business ordinarily encounters and addresses risks, some of which can cause our future results to be different

than we currently anticipate. The risk factors described below represent our current view of some of the most important
risks facing our business and are important to its understanding. The following information includes a number of forward-
looking statements and should be read in conjunction with information contained in this Annual Report on Form 10-K,
including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, the Quantitative
and Qualitative Disclosures About Market Risk and the consolidated financial statements and related notes.

Revenues from our Cloud solutions have grown substantially over the last few years, and we believe a significant
portion of our market valuation is based upon maintaining our high Cloud solutions growth rate. Our efforts to
continue increasing use of our Cloud solutions may not succeed and may reduce our revenue growth rate.

Our ability to continue to grow the revenues from our Cloud solutions through execution against our growth levers

depends on the quality of our platform and solutions, and our ability to design our Cloud solutions to meet consumer
demand; and our ability to increase sales from existing customers depends on our customers’ satisfaction with our
product and need for additional solutions. Our participation in new markets for native payroll, sales to our existing base of
customers, and application expansion in various modules and features, including the Dayforce Wallet, is relatively new,
and it is uncertain whether these areas will ever result in significant revenues for us. Further, the entry into new markets,
sales to our existing base of customers, or the introduction of new features, functionality, or applications beyond our
current markets and functionality may not be successful.

The success of our growth strategies will depend upon our ability to anticipate and to adapt to changes in technology

and industry standards, and to effectively develop, to introduce, to market, and to gain broad acceptance of new product
and service offerings and enhancements incorporating the latest technological advancements. We may not be able to
successfully provide new or enhanced functionality and features for our existing solutions that achieve market acceptance
or that keep pace with rapid technological developments.

We believe a significant portion of our market valuation is based upon our high Cloud revenue growth rate, and if we

are unable to sell our Cloud solutions, including the Dayforce Wallet, into new markets or to further penetrate existing
markets, or to increase sales from existing customers, or we have failures in new product functionalities, our revenue may
not grow as expected, which could have a material adverse effect on our market valuation, and our business, financial
condition, and results of operations.

If the movement of funds to initiate payroll-related transactions on behalf of our customers is disrupted, we may
suffer significant losses which could have a material adverse effect on our business, financial condition, and
results of operations.

Our payroll and tax processing services involve the movement of significant funds from the account of a customer to
its employees and to relevant taxing authorities. Typically, we rely upon third party vendors to initiate payments on behalf
of our customers. These payments are made in a large number of jurisdictions, in great volume and in short time
windows, all of which raise the possibility of an error that disrupts the movement of funds. Further, these types of
transactions are subject to an increasingly complex series of regulations and laws that we, and/or our third-party vendors
must comply with. Failure to comply with these regulations and laws could result in consequences up to and including a
regulator enjoining us and/or our third-party vendors from engaging in the movement of funds. In addition, as described
elsewhere, the systems on which these payroll-related transactions are based are in some cases antiquated or manual or
may be subject to processing and/or technological errors in communicating with third-party technology systems. Any
disruption or delay to data flow in these critical time periods could lead to the disruption of fund movement. Any disruption
of fund movement could have significant consequences, including defaults under our customer agreements and exposure
to monetary damages, in addition to reputational harm, that could have a material adverse effect on our business,
financial condition and results of operations.

10 |

2022 Form 10-K

Our aging software infrastructure, technology, and sophistication of these systems, and our migration to new
platforms, has and will continue to lead to increased costs, vulnerability to cyber-attack, or disruptions in
operations that could have a material adverse effect on our business, market brand, financial condition, and
results of operations.

Our business continues to demand the use of sophisticated systems and technology, including technology
infrastructure assets. These systems and technologies must be refined, updated and/or replaced with more advanced
systems on a regular basis in order for us to meet both our customers’ and employees’ demands and expectations. Some
of the crucial platforms on which we host our back office and bureau systems are aged and need to be replaced or are in
the process of being replaced. Some of our customer instances have, and in the future will be, migrated to public Cloud
environments. These technological changes are expensive and have and will continue to impact our profitability and
demand attention from our senior leadership. If we are unable to replace our aged, crucial platforms, if some or all these
platforms fail to operate due to a software error or infrastructure failure, if we fail to continue to refine and update our
systems and technologies on a timely basis or within reasonable cost parameters, if we do not appropriately and timely
train our employees to operate any of these new systems, if we fail to migrate to new systems in a manner free from
disruption, if the new systems fail to perform as desired, or if we are unable to appropriately protect any of these systems,
we could suffer the loss of data, vulnerabilities to cyber-attack, system outages or other performance problems, which
could have a material adverse effect on our business, financial condition, and results of operations.

An information security breach of our systems or the loss of, or unauthorized access to, customer information or
sensitive company information; the failure to comply with the U.S. Federal Trade Commission’s (“FTC”) ongoing
consent order regarding data protection; or a system disruption could have a material adverse effect on our
business, market brand, financial condition, and results of operations.

Our business is dependent on our payroll, transaction, financial, accounting, and other data processing systems. We
rely on these systems, which are maintained both internally and externally at third parties, to process, on a daily and time
sensitive basis, a large number of complicated transactions. We, both through our internal systems and systems
maintained by third parties, electronically receive, process, store, and transmit data and personal information about our
customers and their employees, as well as our vendors and other business partners. We keep this information
confidential. However, both our internal and third-party partners’ websites, networks, applications and technologies, and
other information systems may be targeted by malevolent parties for sabotage, disruption, ramson, or data
misappropriation. Further, as we grow by acquisition, these risks become acute in the period following the acquisition, as
we set about integrating the acquisition target’s systems into ours. Additionally, as we retire our legacy products like our
bureau payroll services or sunset certain acquired products, we are decreasing investments in maintaining those systems
which creates the potential for a potential security breach of one of those systems. The uninterrupted operation of our
information systems and our ability to maintain the confidentiality of personal information and other customer and
individual and company information that resides on our systems are critical to the successful operation of our business.
We, and our third party providers, maintain systems and processes designed to protect this data and maintain business
continuity, but notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could
compromise the integrity and privacy of this data. Any information security breach in our business processes or of our
processing systems (whether they are maintained internally or externally at third parties) has the potential to impact our
customer information and sensitive company information, including our financial reporting capabilities, which could result
in the potential loss of business and our ability to accurately report financial results. If any of these systems fail to operate
properly or become disabled even for a brief period of time, we could potentially miss a critical filing period, resulting in
potential fees and penalties, or lose control of customer data, all of which could result in financial loss, a disruption of our
business, liability to customers, regulatory intervention, or damage to our reputation.

We are subject to a twenty-year consent order with the FTC that became final in June 2011 stemming from a
December 2009 criminal hack into our discontinued U.S. payroll application. We conceded no wrongdoing in the order
and we were not subject to any monetary fines or penalties. However, in connection with the order, we are required to,
among other things, maintain a comprehensive information security program that is reasonable and appropriate for our
size and complexity, and for the type of personal information we collect. We are also required to have portions of our
security program, which apply to certain segments of our U.S. business, reviewed by an independent third party on a
biennial basis. Maintaining, updating, monitoring, and revising an information security program in an effort to ensure that it
remains reasonable and appropriate in light of changes in security threats, changes in technology, and security
vulnerabilities that arise from legacy systems is time-consuming and complex, and is an ongoing effort.

11 |

2022 Form 10-K

While we have taken and continue to take steps to ensure compliance with the consent order, if we are determined
not to be in compliance with the consent order, or if any new breaches of security occur, the FTC may take enforcement
actions or other parties may initiate a lawsuit. Any such resulting fines and penalties could have a material adverse effect
on our liquidity and financial results, and any reputational damage therefrom could adversely affect our relationships with
our existing customers and our ability to attain new customers. Insurance may be inadequate or may not be available in
the future on acceptable terms, or at all. In addition, our insurance policies may not cover all claims made against us, and
defending a lawsuit, regardless of its merit, could be costly, divert management’s attention, or damage our reputation.

Our solutions and our business are subject to a variety of laws and regulations, including those regarding
privacy, data protection, and information security. Any failure by us or our third party service providers, as well
as the failure of our services, to comply with these laws could have a material adverse effect on our business,
financial condition, and results of operations.

Failure to comply with privacy, data protection, and information security laws and regulations could have a material
adverse effect on our business, results of operations or financial condition, or have other adverse consequences. These
laws, which are not uniform, govern the collection, storage, hosting, transfer (including in some cases, the transfer outside
the country of collection), use, disclosure, security, retention, and destruction of personal information; they require us to
give notice to individuals of privacy practices; give individuals certain access and correction rights with respect to their
personal information; and regulate the use or disclosure of personal information for secondary purposes such as
marketing. Under certain circumstances, some of these laws require us to provide notification to affected individuals,
clients, data protection authorities and/or other regulators in the event of a data breach. In many cases, these laws apply
not only to third-party transactions, but also to transfers of information among the Company and its subsidiaries. The
European Union (the “EU”) General Data Protection Regulation (the “GDPR”), the California Consumer Protection Act (the
“CCPA”) and its successor, the California Privacy Rights Act (“CPRA”), are among the most comprehensive of these laws.
The number of related laws and regulations we are subject to continue to increase as we enter new markets in Europe,
Asia Pacific, and Latin America, and as we continue our entry into the consumer space through our Dayforce Wallet
product. Restrictions on transfers of personal information from one geography to another continue to evolve. Complying
with these laws and requirements, has resulted in significant costs to our business and may continue to require us to
amend certain of our business practices. Further, enforcement actions and investigations by regulatory authorities related
to data security incidents and privacy violations continue to increase. The future enactment of more restrictive laws, rules,
or regulations and/or future enforcement actions or investigations could have a material adverse impact on us through
increased costs or restrictions on our businesses and noncompliance could result in significant regulatory penalties and
legal liability and damage our reputation. Restrictions on cross border data flows and data residency requirements may
negatively impact our clients’ and our own ability to transfer personal information to the United States and other countries
as part of our provision of services, and in support of our own operations, potentially impacting revenues. In addition, data
security events and concerns about privacy abuses by other companies are changing consumer and social expectations
for enhanced privacy and data protection. As a result, even the perception of noncompliance, whether or not valid, may
damage our reputation. Finally, our ability to produce data-driven insights for our customers as we begin to leverage
artificial intelligence (AI) in our HCM technology may be constrained by current and future privacy and ethics regulatory
requirements, thereby restricting our ability to use data in innovative ways.

Our business plan is focused on an aggressive growth strategy. If we fail to manage our growth effectively or if
our strategy is not successful, we may be unable to execute our business plan, to maintain high levels of service,
or to adequately address competitive challenges.

We have and we believe we will continue to experience a period of rapid growth in our operations and Cloud
solutions. The growth of our operations and Cloud solutions has and may continue to place a strain on our management,
administrative, operational, technological, and financial infrastructure. In order to manage our growth effectively, we will
need to continuously improve our operational, financial, technological, and management systems, and our internal
controls, reporting systems, and procedures to scaled global capabilities which may require investment as we grow and
could result in disruption as we transform. Our attempts to develop new or enhanced functionality to our services, whether
as part of our anticipated development road map or in response to enhancement requests we have committed to our
customers, has been, and will continue to be expensive and impact our profitability. Failure to effectively manage growth
or to achieve a profitable growth strategy could result in problems or delays in implementing customers, declines in quality
or customer satisfaction, decreased profitability on new customer deals, increases in costs, complications or delays in
introducing new features or fixing or updating our existing technology and infrastructure, or other operational challenges;
and any of these difficulties could have a material adverse effect on our business, financial condition, and results of
operations.

12 |

2022 Form 10-K

The markets in which we participate are highly competitive, and if we do not compete effectively, it could have a
material adverse effect on our business, financial condition, and results of operations.

The markets in which we participate are highly competitive, and competition could intensify in the future. We believe
the principal competitive factors in our market include: breadth and depth of product functionality, scalability and reliability
of applications, robust workforce management, comprehensive tax services, modern and innovative Cloud technology
platforms combined with an intuitive user experience, multi-country and jurisdiction domain expertise in payroll and HCM,
quality of implementation and customer service, integration with a wide variety of third party applications and systems,
total cost of ownership and return on investment, brand awareness, and reputation, pricing and distribution.

We face a variety of competitors, some of which are long-established providers of HCM solutions. Many of our
current and potential competitors are larger, have greater name recognition, longer operating histories, larger marketing
budgets, and significantly greater resources than we do, and are able to devote greater resources to the development,
promotion, and sale of their products and services. Some of our competitors do or could offer HCM solutions bundled as
part of a larger product offering. Furthermore, our current or potential competitors may be acquired by third parties with
greater available resources and the ability to initiate or to withstand substantial price competition. In addition, many of our
competitors have established marketing relationships, access to larger customer bases, and major distribution
agreements with consultants, system integrators, and resellers. Our competitors have and may continue to establish
cooperative relationships among themselves or with third parties that may further enhance their product offerings or
resources. Although we have a global partnership strategy, additional investment and efforts will be necessary to fully
implement and scale such a strategy.

If our competitors’ products, services, or technologies become more accepted than our applications are today, if they

are successful in bringing their products or services to market earlier than ours, or if their products or services are more
technologically capable than ours, it could have a material adverse effect on our business, financial condition, and results
of operations. In addition, some of our competitors may offer their products and services at a lower price compared to our
products or their current pricing impacting our ability to achieve our target pricing. If we are unable to achieve our target
pricing levels or if we experience significant pricing pressures, it could have a material adverse effect on our business,
financial condition, and results of operations.

Our international growth strategy has and will continue to expose us to risks inherent in international sales

and operations.

We have and will continue to expand our operations and sales into new international markets. Our expanding
international operations are subject to risks that could adversely affect those operations or our business as a whole,
including but not limited to the costs of establishing a market presence, localizing product and service offerings for foreign
customers, difficulties in managing and staffing international operations, and increased expenses related to introducing
corporate policies and controls in our international operations and increased reliance on partners to provide services in
additional geographies. Further, the expansion of our product offering into new international markets has and will continue
to result in an expansion of our monitoring of local laws and regulations, which increases our costs as well as the risk of
the product not incorporating in a timely fashion or at all the necessary changes to enable a customer to be compliant with
such laws, or in manual workarounds that are prone to errors.

Moreover, as part of our international strategy, we work with partners to perform services in certain geographies

where we do not currently have international operations or the particular service required by our customers. As a result,
we may experience business impact if our partners do not carry out the services as committed, or at a quality level that
our customers demand, including potential for reduced margin from additional expense or impact to customer
relationships.

Our international growth strategy has and may continue to include growth via acquisition. Our growth following an

acquisition may also be dependent on our ability to transition acquired customers from current and legacy products to
Dayforce, migrate and integrate acquired technologies or to increase sales by addressing broader HCM needs with
additional modules of Dayforce.

If we are unable to provide the required services on a multinational basis, or if we are unable to effectively manage

our international expansion, we could be subject to negative customer experiences, harm to our reputation or loss of
customers, claims for any fines, penalties or other damages suffered by our customer, and other financial harm, including
fines, penalties, or other damages suffered by us directly, which would negatively impact revenue and earnings. Although
we have a multinational strategy, additional investment and efforts may be necessary to implement such strategy. Some
of our business partners also have international operations and are subject to the risks described above.

13 |

2022 Form 10-K

Customers depend on our solutions to assist them to comply with applicable laws, which requires us and our
third party providers to constantly monitor applicable laws and to make applicable changes to our solutions. If
our solutions have not been updated to enable the customer to comply with applicable laws or we fail to update
our solutions on a timely basis, it could have a material adverse effect on our business, financial condition, and
results of operations.

Customers use our solutions to assist them to comply with payroll, HR, and other applicable laws for which the

solutions are intended for use. We and our third party providers must monitor all applicable laws and as such laws
expand, evolve, or are amended in any way, and when new regulations or laws are implemented, we may be required to
modify our solutions to assist our customers to comply with such new regulations or laws, which requires an investment of
our time and resources. We are also reliant on our third party providers to modify the solutions that they provide to our
customers as part of our solutions to comply with changes to such laws and regulations. The number of laws and
regulations that we are required to monitor has and will continue to increase as we expand both the geographic regions in
which the solutions are offered and the types of products we offer to customers. These risks have become exacerbated as
we expand by acquisition and are most acute in the period following the acquisition as we integrate the acquired business
and its systems. In the event our solutions fail to assist a customer to comply with applicable laws, we are subject to
negative customer experiences, harm to our reputation or loss of customers, claims for any fines, penalties or other
damages suffered by our customer, and other financial harm, including fines, penalties, or other damages suffered by us
directly.

If our current or future applications fail to perform properly, our reputation could be adversely affected, our
market share could decline, and we could be subject to liability claims, which could have a material adverse
effect on our business, financial condition, and results of operations.

Our applications are inherently complex and may contain material defects or errors that we are not yet aware of.
Because of the large amount of data that we collect and manage, it is possible that failures or errors in our systems could
result in data loss or corruption or cause the information that we collect to be incomplete or to contain inaccuracies that
our customers regard as significant. Any defects in functionality or that cause interruptions in the availability of our
applications could result in reputational, competitive, operational, or other business harm as well as financial costs and
regulatory action, any of which could have a material adverse effect on our business, financial condition, and results of
operations. In addition, the costs incurred in correcting any material defects or errors might be substantial. While we
conduct standard due diligence during our acquisition process, these risks are heightened as we grow by acquisition and
dedicate resources to integrating the acquisition target’s systems into ours and take on the vulnerabilities that may exist at
the acquisition target.

If we fail to manage our technical operations infrastructure, our existing customers may experience service
outages, and our new customers may experience delays in the implementation of our applications, which could
have a material adverse effect on our business, financial condition, and results of operations.

We have experienced and will continue to experience significant growth in the number of users, transactions, and
data that our operations infrastructure supports, including the acquisition of new systems via strategic transactions. We
seek to maintain sufficient excess capacity in our operations infrastructure to meet the needs of all of our customers and
to facilitate the rapid provision of new customer activations and the expansion of existing customer activations. In addition,
we need to continue to properly manage our technological operations infrastructure to support version control, changes in
hardware and software parameters, and the evolution of our applications. We have experienced, and may in the future
experience, website disruptions, outages, and other performance problems. These problems may be caused by a variety
of factors, including infrastructure changes, human or software errors, viruses, security attacks, fraud, increased resource
consumption from expansion or modification to our Dayforce code, spikes in customer usage, denial of service issues and
Cloud interruptions run by third party service providers and our ability to react. The risks of these problems occurring may
be exacerbated by our strategic acquisitions, especially in the period following the acquisition as we integrate the
acquisition target’s systems into ours, as well as our aging technology infrastructure which in some cases is supported by
older platforms. In some instances, we may not be able to identify the cause or causes of these performance problems
within an acceptable period of time. If we do not accurately predict our infrastructure requirements, our existing customers
may experience service outages that may subject them to financial penalties, causing us to incur financial liabilities and
customer losses; and our operations infrastructure may fail to keep pace with increased sales, causing new customers to
experience delays as we seek to obtain additional capacity, which could have a material adverse effect on our business,
financial condition, and results of operations.

14 |

2022 Form 10-K

Our growth depends in part on the success of our strategic relationships with third parties who provide us with
services and license us software for use in or with both our applications and our internal operations.

In order to maintain and grow our business, we do, and we anticipate that we will continue to, depend on the
continuation and expansion of relationships with third parties who provide us with services. These service provider
partners include connected payroll partners, implementation partners, systems integrators, third party sales channel
partners, the operators of data centers, and banks and other providers who execute wire transfers and other money
movement services to support our customer payroll and tax services. Our agreements with these third party service
providers are typically non-exclusive and do not prohibit them from working with our competitors. If any third-party service
providers on which we rely to provide us with services experience a disruption, go out of business, are acquired by our
competitors, experience a decline in quality, or terminate their relationship with us, we could experience a material
adverse effect on our business, financial condition, and results of operation.

In addition, we license software from third parties for use in or with both our applications and our internal operations,

and the inability to maintain these licenses could result in increased costs, or reduced service levels, which could have a
material adverse effect on our business, financial condition, and results of operations. To the extent that our applications
depend upon the successful operation of third party software in conjunction with our software, any undetected errors or
defects in this third party software could prevent the deployment or impair the functionality of our applications, delay new
application introductions, and result in a failure of our applications, which could have a material adverse effect on our
business, financial condition, and results of operations.

Any failure to offer high-quality technical support services may adversely affect our relationships with our
customers and could have a material adverse effect on our business, financial condition, and results of
operations.

Once our applications are deployed, our customers depend on our support organization and the support capabilities

of our partners to resolve technical issues relating to our applications, as well as our partner’s applications. We have
recently engaged in a rebalancing of our global workforce that particularly impacted our support organization, which may
result in disruption as we fill existing positions in our APJ geographies. We or our partners may be unable to respond
quickly enough to accommodate short-term increases in customer demand for support services, and we may be limited in
our ability to resolve the technical issues our customers have with our technology, or our partner’s technology. We or our
partners also may be unable to modify the format of our or our partners’ support services to compete with changes in
support services provided by our competitors. Increased customer demand for these services, without corresponding
revenues, could increase costs and have an adverse effect on our results of operations. Ultimately, a client could elect to
terminate their agreement due to dissatisfaction with support, resulting in lost recurring revenue. In addition, our sales
process is highly dependent on our applications and business reputation and on positive recommendations from our
existing customers. Any failure to maintain high-quality technical support, or a market perception that we do not maintain
high-quality support, could adversely affect our reputation and our ability to sell our applications to existing and
prospective customers, which could have a material adverse effect on our business, financial condition, and results of
operations.

If our customers are not satisfied with the implementation and professional services provided by us or our
partners, it could have a material adverse effect on our business, financial condition, and results of operations.

Our business depends on the ability to implement our solutions on a timely, accurate, and cost-efficient basis and to

provide professional services at the high level demanded by our customers. Implementation and other professional
services may be performed by our own staff, by a third party, or by a combination of the two. If a customer is not satisfied
with the timely access or the quality of work performed, then we could incur in loss of revenue or additional costs to
address the situation, the customer’s dissatisfaction with such services could damage our ability to expand the number of
applications subscribed to by that customer or we could be liable for loss or damage suffered as a result, any of which
could have a material adverse effect on our business, financial condition, and results of operations. If a new customer is
dissatisfied with implementation, the customer could refuse to go-live, which could result in a delay in our collection of
fees or could result in a customer seeking repayment of its implementation fees or suing us for damages or could force us
to enforce the termination provisions in our customer contracts in order to collect revenue. In addition, negative publicity
related to our customer relationships, regardless of its accuracy, may affect our ability to compete for new business with
current and prospective customers, which could also have a material adverse effect on our business, financial condition,
and results of operations.

15 |

2022 Form 10-K

We depend on our senior management team, and the loss of one or more key employees or an inability to attract
and to retain highly skilled employees could have a material adverse effect on our business, financial condition,
and results of operations.

Our success depends largely upon the continued services of our senior management team. Our executive officers,

senior management or other key personnel have limited or no notice period applicable to their employment. Therefore,
they could terminate their employment with us at any time. Additionally, we do not maintain key employee insurance on
any of our executive officers, senior management, or key employees. The loss of one or more of our executive officers,
senior management, or key employees could have a material adverse effect on our business, financial condition, and
results of operations.

To execute our growth plan, we must attract and retain highly qualified personnel. Competition for talent is intense
and has become more intense in recent years, including without limitation for individuals with high levels of experience in
designing and developing software and Internet-related services and senior sales executives. We have, from time to time,
experienced the need to increase compensation for current and prospective employees to retain and recruit employees of
the desired qualifications which impacts our ability to profitably operate our business. In addition, we have and we expect
to continue to experience, difficulty in hiring and retaining employees with appropriate qualifications, the cumulative loss of
which could raise the risk of failures to operate our business to the quality needed and could have a material adverse
effect on our business, financial condition, and results of operations.

If our vendors or affiliates initiate payroll-related transactions on behalf of our customers and do not receive
funds from the customer sufficient to cover the amounts paid on their behalf, we may suffer significant losses
which could have a material adverse effect on our business, financial condition, and results of operations.

Under certain circumstances, funds may not be received from our customers to cover the transactions that our

affiliates and third party vendors have initiated on our customers’ behalf. Additionally, there is a risk that an erroneous
payment instruction may trigger inaccurate payments. There is, therefore, a risk that the customer’s funds will be
insufficient to cover the amounts already paid on its behalf. Should customers default on their payment obligations in the
future, should our affiliates or vendors make erroneous payments on behalf of a customer, should erroneous or defaulted
payment recovery be unsuccessful, or should our affiliates or vendors suffer losses from similar issues, we may be
required to advance substantial amounts of funds to cover such obligations, or to make our partners whole for any losses
they suffer. In such an event, we may be required to seek additional sources of short-term liquidity, which may not be
available on reasonable terms, which could have a material adverse effect on our business, financial condition, and
results of operations. Further, should a customer on whose behalf our affiliate or vendor has initiated a transaction
subsequently have financial difficulty or refuse to pay, collection of any funds advanced on its behalf may be difficult and
we may suffer losses that could have a material adverse effect on our business, financial condition, and results of
operation.

Regulatory requirements placed on our software and services could impose increased costs on us, delay or
prevent our introduction of new products and services, and impair the function or value of our existing products
and services.

Our products and services are subject to increasing regulatory requirements, and as these requirements proliferate,

we are required to change or adapt to comply. Changing regulatory requirements might render our services obsolete or
might block us from developing new products and services. This might in turn impose additional costs upon us to comply
or to further develop our products and services. Changing regulatory requirements can make introduction of new services
more costly or more time-consuming than we currently anticipate and could even prevent introduction by us of new
services or cause the continuation of our existing services to become more costly.

Federal, state, or foreign government bodies or agencies have in the past adopted, and may in the future adopt,
laws or regulations affecting the use of the Internet as a commercial medium. Future changes in these laws or regulations
could require us to modify our applications in order to comply with these changes. In addition, government agencies or
private organizations may begin to impose taxes, fees, or other charges for accessing the Internet or commerce
conducted via the Internet. These laws or charges could limit the growth of Internet-related commerce or communications
generally, resulting in reductions in the demand for Internet-based applications such as ours, any of which could have a
material adverse effect on our business, financial condition, and results of operations.

16 |

2022 Form 10-K

For our Dayforce Wallet service, we advance earned net wages and associated tax amounts on behalf of
customers in connection with the “on demand pay” payroll feature of the service in order to provide their
employees access to earned wages in advance of their standard payroll cycles. A customer may fail to satisfy its
obligation to repay us for those advanced monies which could have a material adverse effect on our business,
financial condition, and results of operations.

In the case of our “on demand pay” service (a service that is offered as part of the Dayforce Wallet), credit is
provided to our customers and funds are advanced on the customers’ behalf in order to fund the customers’ employees’
interim earned net wage payroll demands (including associated source and other deductions) with the requirement that
the customers will repay the advance on the date of their next ordinary payroll run. These advances may or may not have
priority over other creditors of our customers, and our other credit protection measures, if implemented, may be
inadequate to make us whole. There is, therefore, a risk that our customers do not pay back the amounts we have already
paid on their behalf, and in that event, we may possess limited legal recourse to recoup those funds from our customers.
In the event of a customer’s failure to repay us, we may be required to seek additional sources of short-term liquidity,
which may not be available on reasonable terms, or suffer credit losses, which could have a material adverse effect on
our business, financial condition, and results of operations.

Customer funds and wage funds of their employees that our trustees and third-party financial institution partners
hold are subject to market, interest rate, credit, and liquidity risks. The loss of these funds could have a material
adverse effect on our business, financial condition, and results of operations.

Our trustees (in the case of customer funds held in our U.S. Employer Funds Trust and our Ceridian Canada Payroll

Trust) and our third party financial institution partners (in the case of employee wage funds held on their behalf as part of
the U.S. Dayforce Wallet program and certain of our non-U.S. operations) may invest funds in one or more high-quality
bank deposits, money market mutual funds, commercial paper, collateralized short-term investments, government
securities, as well as highly rated asset-backed, mortgage-backed, municipal, corporate, and bank securities. These
assets are subject to varying degrees of general market, interest rate, credit, and liquidity risks. These risks may be
exacerbated, individually or in unison, during periods of unusual financial market volatility. We are required to fund the
payroll and wage funds of our customers and their employees regardless of any loss realized on those investments
affecting the principal funds held. In the event of a global financial crisis, such as that experienced in 2008, we could be
faced with a severe constriction of the availability of liquidity, which could impact our ability to fund payrolls. Any loss of
principal, or inability to access customer funds could have an adverse impact on our cash position and results of
operations and could require us to obtain additional sources of liquidity, and could have a material adverse effect on our
business, financial condition, and results of operations.

We may acquire other companies or technologies, which could divert our management’s attention, result in
additional indebtedness or dilution to our stockholders, and otherwise disrupt our operations, which could have
a material adverse effect on our business, financial condition, and results of operations.

We have, and we may in the future seek to acquire or to invest in businesses, applications, or technologies that we

believe could complement or expand our applications, enhance our technical capabilities, or otherwise offer growth
opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various
expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated. In
addition, we have limited experience in acquiring other businesses. If we acquire additional businesses, we may incur
significant costs to integrate such businesses. Further, we may not be able to integrate the acquired personnel,
operations, and technologies successfully or profitably, or to effectively manage the combined business following the
acquisition. If an acquired business fails to meet our expectations, it could have a material adverse effect on our business,
financial condition, and results of operations. In order to fund acquisitions, we may issue dilutive equity securities or incur
additional debt, resulting in an increase in our interest payments.

A significant portion of the purchase price of companies we acquire may be allocated to goodwill and other
intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield
expected returns, we may be required to record charges based on this impairment assessment, which could have a
material adverse effect on our financial condition and results of operations.

17 |

2022 Form 10-K

Failure to comply with anti-corruption laws and regulations, economic and trade sanctions, anti-money
laundering laws and regulations, and similar laws could have a materially adverse effect on our reputation,
results of operations or financial condition, or have other adverse consequences.

Regulators worldwide are exercising heightened scrutiny with respect to anti-corruption, economic and trade
sanctions, and anti-money laundering laws and regulations. Such heightened scrutiny has resulted in more aggressive
investigations and enforcement of such laws and more burdensome regulations, any of which could have a material
adverse impact on our business. We are growing our business throughout the world, including in numerous developing
economies where companies and government officials are more likely to engage in business practices that are prohibited
by domestic and foreign laws and regulations, including the United States Foreign Corrupt Practices Act. Such laws
generally prohibit improper payments or offers of payments to foreign government officials and leaders of political parties,
and in some cases, to other persons, for the purpose of obtaining or retaining business. We are also subject to economic
and trade sanctions programs, including those administered by the U.S. Treasury Department’s Office of Foreign Assets
Control, which prohibit or restrict transactions or dealings with specified countries, their governments and, in certain
circumstances, their nationals, and with individuals and entities that are specially designated, including narcotics
traffickers and terrorists or terrorist organizations, among others. In addition, some of our businesses and entities in the
U.S. and a number of other countries in which we operate are and will continue to be subject to anti-money laundering
laws and regulations. These laws require us to develop and implement risk-based anti-money laundering programs, report
large cash transactions and suspicious activity, and maintain transaction records. These laws and regulations include the
Bank Secrecy Act of 1970 as amended by the USA PATRIOT Act of 2000 (the “BSA”), that requires banks and money
services businesses, among others, to develop and implement risk-based anti-money laundering programs, report large
cash transactions and suspicious activity, and maintain transaction records

We have implemented policies and procedures to monitor and address compliance with applicable anti-corruption,

economic and trade sanctions and anti-money laundering laws and regulations, and we are continuously in the process of
reviewing, upgrading, and enhancing certain of our policies and procedures. However, there can be no assurance that our
employees, consultants, or agents will not take actions in violation of our policies for which we may be ultimately
responsible, or that our policies and procedures will be adequate or will be determined to be adequate by regulators. Any
violations of applicable anti-corruption, economic and trade sanctions or anti-money laundering laws or regulations could
limit certain of our business activities until they are satisfactorily remediated and could result in civil and criminal penalties,
including fines, which could damage our reputation and have a material adverse effect on our results of operation or
financial condition. Further, bank regulators, including the Office of Comptroller of the Currency ("OCC"), which now
regulates Ceridian National Trust Bank, continue to impose additional and stricter requirements on banks to ensure they
are meeting their BSA obligations, and banks are increasingly viewing money services businesses, as a class, to be
higher risk customers for money laundering. As a result, our banking partners that assist in processing our money
movement transactions may limit the scope of services they provide to us or may impose additional material requirements
on us. Further, bank regulators, including the OCC, may increase regulatory investigations or governmental oversight to
ensure we are meeting our BSA obligations. These regulatory restrictions on banks and changes to banks’ internal risk-
based policies and procedures may result in a decrease in the number of banks that may do business with us, may
require us to materially change the manner in which we conduct some aspects of our business, may decrease our
revenues and earnings and could have a material adverse effect on our results or financial condition.

We may not be able to utilize a significant portion of our net operating loss, which could have a material adverse
effect on our financial condition and results of operations.

As of December 31, 2022, we had federal and state net operating loss carryforwards due to prior period losses,

which, if not utilized, will begin to expire in 2031 and 2023 for federal and state purposes, respectively. These net
operating loss carryforwards could expire unused and be unavailable to offset future income tax liabilities, which could
have a material adverse effect on our financial condition and results of operations.

In addition, under Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), our ability to utilize
net operating loss carryforwards or other tax attributes in any taxable year may be limited if we experience an “ownership
change.” A Section 382 “ownership change” generally occurs if one or more stockholders or groups of stockholders who
own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership
percentage within a rolling three-year period. Similar rules may apply under state tax laws. Future issuances of our stock
could cause an “ownership change.” It is possible that an ownership change could have a material effect on our ability to
utilize our net operating loss carryforwards, which could have a material adverse effect on our financial condition and
results of operations.

18 |

2022 Form 10-K

Litigation and regulatory investigations aimed at us or resulting from actions of our predecessor may result in
significant financial losses and harm to our reputation.

We face risk of litigation, regulatory investigations, and similar actions in the ordinary course of our business,
including the risk of lawsuits and other legal actions relating to breaches of contractual obligations, tortious claims,
employment and labor law matters, securities law claims, or claims related to erroneous transactions or breach of data
privacy laws from customers, stockholders, employees or other third parties which could result in fines, penalties, interest,
or other damages. In particular, our clients have sought to pursue indemnification claims against us where they have been
subject to wage compliance claims. Litigation might result in substantial costs and may divert management’s attention and
resources, which might materially harm our business, overall financial condition, and operating results. We may also be
subject to various regulatory inquiries, such as information requests, subpoenas, and book and records examinations,
from regulators and other authorities in the geographic markets in which we operate. A substantial liability arising from a
lawsuit judgment or settlement or a significant regulatory action against us or a disruption in our business arising from
adverse adjudications in proceedings against our directors, officers, or employees could have a material adverse effect on
our business, financial condition, and results or operations. Insurance might not cover such claims, might not provide
sufficient payments to cover all the costs to resolve one or more such claims and might not continue to be available on
terms acceptable to us. A claim brought against us that is uninsured or underinsured could result in unanticipated costs,
thereby harming our operating results and leading analysts or potential investors to lower their expectations of our
performance, which could reduce the trading price of our stock or potentially result in a lawsuit related to the reduced
trading price of our stock.

Additionally, we are subject to claims and investigations as a result of our predecessor, Control Data Corporation

(“CDC”), Ceridian Corporation, and other former entities for whom we are successor-in-interest with respect to assumed
liabilities. For example, in September 1989, CDC became party to an environmental matters agreement with Seagate
Technology plc (“Seagate”) related to groundwater contamination on a parcel of real estate in Omaha, Nebraska sold by
CDC to Seagate. In February 1988, CDC entered into an arrangement with Northern Engraving Corporation and the
Minnesota Pollution Control Agency in relation to groundwater contamination at a site in Spring Grove, Minnesota. In 2021
and 2022, we have been subject to asbestos related claims for former CDC employees. Although we are fully reserved for
these groundwater contamination liabilities, and partially insured for the asbestos claims, we cannot be certain if additional
claims, investigations, or liabilities related to such predecessor companies will surface.

Any failure to protect our intellectual property rights could impair our ability to protect our proprietary
technology and our brand.

Our success and ability to compete depend in part upon our intellectual property. We primarily rely on copyright,

trade secret, and trademark laws; trade secret protection; and confidentiality or license agreements with our employees,
customers, partners, and others to protect our intellectual property rights. However, the steps we take to protect our
intellectual property rights may be ineffective or inadequate.

In order to protect our intellectual property rights, we have and will likely be required to continue to spend significant
resources to monitor and to protect these rights. Litigation brought to protect and to enforce our intellectual property rights
could be costly, time-consuming, and distracting to management, with no guarantee of success, and could result in the
impairment or loss of portions of our intellectual property. Furthermore, our efforts to enforce our intellectual property
rights may be met with defenses, counterclaims, and countersuits attacking the validity and enforceability of our
intellectual property rights. Our failure to secure, to protect, and to enforce our intellectual property rights could have a
material adverse effect on our business, financial condition, and results of operations.

We may be sued by third parties for alleged infringement of their proprietary rights which could have a material
adverse effect on our business.

There is considerable intellectual property development activity in our industry. Third parties, including our
competitors, may own or claim to own intellectual property relating to our service offerings and may claim that we are
infringing their intellectual property rights. We may be found to be infringing upon such rights, even if we are unaware of
their intellectual property rights. Any claims or litigation could cause us to incur significant expenses and, if successfully
asserted against us or if we decide to settle, could require that we pay substantial damages or ongoing royalty payments,
obtain licenses, modify applications, prevent us from offering our services, or require that we comply with other
unfavorable terms. We may also be obligated to indemnify our customers, vendors, or partners in connection with any
such claim or litigation. Even if we were to prevail in such a dispute, any litigation regarding our intellectual property could
be costly and time consuming.

19 |

2022 Form 10-K

The use of open source software in our applications may expose us to additional risks and harm our intellectual
property rights.

Some of our applications include software covered by open source licenses. From time to time, there have been
claims challenging the ownership of open source software against companies that incorporate such software into their
products or applications. The terms of various open source licenses have not been interpreted by U.S. courts, and there is
a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our
ability to market our applications. By the terms of certain open source licenses, we could be required to release the source
code of our proprietary software and to make our proprietary software available under open source licenses if we combine
our proprietary software with open source software in a certain manner. In the event that portions of our proprietary
software are determined to be subject to an open source license, we could be required to publicly release the affected
portions of our source code, to re-engineer all or a portion of our technologies, or otherwise to be limited in the licensing of
our technologies, each of which could reduce or eliminate the value of our technologies and services. In addition to risks
related to license requirements, usage of open source software can lead to greater risks than use of third party
commercial software, as open source licensors generally do not provide warranties or controls on the origin of the
software. Many of the risks associated with usage of open source software cannot be eliminated and could have a
material adverse effect on our business, financial condition, and results of operations.

The implementation of new accounting systems or applications could interfere with our business and operations.

The implementation of new systems and enhancements may be disruptive to our business and can be time-

consuming and divert management’s attention. Any disruptions relating to our systems or any problems with
implementation, particularly any disruptions impacting our operations or our ability to accurately report our financial
performance on a timely basis, could materially and adversely affect our business and operations.

Risks Related to Our Indebtedness

Our outstanding indebtedness could have a material adverse effect on our financial condition and our ability to
operate our business, and we may not be able to generate sufficient cash flows to meet our debt service
obligations.

Our obligations under the Senior Secured Credit Facility are secured by first priority security interests in substantially

all of our assets and the domestic subsidiary guarantors, subject to permitted liens and certain exceptions. Our
outstanding indebtedness and any additional indebtedness we incur may have important consequences for us, including,
without limitation, that:











we may be required to use a substantial portion of our cash flow to pay the principal of and interest on our
indebtedness;

our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and
industry conditions, as well as to competitive pressures;

our ability to obtain additional financing for working capital, capital expenditures, acquisitions and for general
corporate and other purposes may be limited;

our indebtedness may expose us to the risk of increased interest rates because certain of our borrowings,
including and most significantly our borrowings under our Senior Secured Credit Facility, are at variable rates
of interest; and

our indebtedness may prevent us from taking advantage of business opportunities as they arise or successfully
carrying out our plans to expand our business.

Under the terms of the agreements governing our debt facilities, we are required to comply with specified operating
covenants and, under certain circumstances, a financial covenant applicable to the Revolving Credit Facility, which may
limit our ability to operate our business as we otherwise might operate it. If not cured, an event of default under our Senior
Secured Credit Facility could result in any amounts outstanding, including any accrued interest and unpaid fees,
becoming immediately due and payable, which would require us, among other things, to seek additional financing in the
debt or equity markets, to refinance or restructure all or a portion of our indebtedness, to sell selected assets, and/or to
reduce or to delay planned capital or operating expenditures. Such measures might not be sufficient to enable us to
service our debt, and any such financing or refinancing might not be available on economically favorable terms or at all. If
we are not able to generate sufficient cash flows to meet our debt service obligations or are forced to take additional
measures to be able to service our indebtedness, it could have a material adverse effect on our business, financial
condition, and results of operations.

20 |

2022 Form 10-K

Aspects of the Capped Calls may not operate as planned and may affect the value of the Convertible Senior
Notes and our common stock, and we are subject to counterparty credit risk with respect to the Capped Calls.

In connection with the pricing of the Convertible Senior Notes, we entered into the Capped Calls. Please refer to

Note 9, "Debt" for additional information. The Capped Calls are expected generally to reduce the potential dilution to our
common stock upon any conversion of the Convertible Senior Notes and/or offset any potential cash payments we are
required to make in excess of the principal amount of converted Convertible Senior Notes, as the case may be, with such
reduction and/or offset subject to a cap. The Capped Calls are complex transactions that are not part of the terms of the
Convertible Senior Notes, and may not operate as planned. If the Capped Calls do not operate as we intend, it may have
an effect on the price of the Convertible Senior Notes or our common stock.

The option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding
various derivatives with respect to our common stock and/or purchasing or selling our common stock or other securities of
ours in secondary market transactions following any conversion of the Convertible Senior Notes, any repurchase of the
Convertible Senior Notes by us on any fundamental change repurchase date, any redemption date, or any other date on
which the Convertible Senior Notes are retired by us, in each case if we exercise our option to terminate the relevant
portion of the Capped Calls. This activity could cause or avoid an increase or a decrease in the market price of our
common stock or the Convertible Senior Notes, which could affect the ability of a noteholder to convert the Convertible
Senior Notes and, to the extent the activity occurs during any observation period related to a conversion of Convertible
Senior Notes, could affect the number of shares of common stock, if any, and value of the consideration that a noteholder
will receive upon conversion of the Convertible Senior Notes. If any such Capped Call fails to become effective, the option
counterparties or their respective affiliates may unwind their hedge positions with respect to our common stock, which
could adversely affect the value of our common stock and the value of the Convertible Senior Notes. The option
counterparties are financial institutions, and we are subject to the risk that they might default under the Capped Calls. Our
exposure to the credit risk of the option counterparties is not secured by any collateral. If an option counterparty becomes
subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our
exposure at that time under our transactions with that option counterparty. Our exposure will depend on many factors, but,
generally, the increase in our exposure will be correlated with increases in the market price or the volatility of our common
stock. In addition, upon a default by an option counterparty, we may suffer adverse tax consequences and more dilution
than we currently anticipate with respect to our common stock. We can provide no assurances as to the financial stability
or viability of any option counterparty.

Risks associated with the conversion of our Convertible Senior Notes issued under the Indenture may adversely
affect our financial condition and results of operations.

Under certain circumstances, noteholders may convert their Convertible Senior Notes at their option prior to the
scheduled maturities. Upon conversion of the Convertible Senior Notes, we will be obligated to make cash payments in an
amount no less than the principal amount being converted, and any excess of the conversion value over the principal
amount will be settled, at the Company’s election, in cash or shares of the Company’s common stock. In addition,
noteholders will have the right to require us to repurchase their Convertible Senior Notes upon the occurrence of a
fundamental change at a repurchase price equal to 100% of the principal amount of the Convertible Senior Notes to be
repurchased, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date (as
defined in the Indenture). There is a risk that we may not have enough available cash or be able to obtain financing at the
time we are required to make repurchases of Convertible Senior Notes surrendered therefor or Convertible Senior Notes
being converted. Our failure to repurchase Convertible Senior Notes when the Indenture requires the repurchase or to pay
any cash payable on future conversions of the Convertible Senior Notes as required by the Indenture would constitute a
default under the Indenture. A default under the Indenture or the fundamental change itself could also lead to a default
under agreements governing our future indebtedness. If the repayment of the related indebtedness were to be
accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and
repurchase the Convertible Senior Notes or make cash payments upon conversions thereof. In addition, even if
noteholders do not elect to convert their Convertible Senior Notes, we could be required under applicable accounting rules
to reclassify all or a portion of the outstanding principal of the Convertible Senior Notes as a current, rather than long-
term, liability, which would result in a material reduction of our net working capital.

21 |

2022 Form 10-K

Risks Related to Ownership of Our Common Stock

The price of our common stock may be volatile and investors may lose all or part of their investment.

The market price and volume of our common stock trading has experienced, and may continue to experience, wide
fluctuations and volatility. Factors that may impact our performance and market price include those discussed elsewhere
in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: market factors such as economic
recession or monetary policy actions by central banking authorities, announcement or filing with the SEC by us or our
competitors of acquisitions, business plans or commercial relationships as well as new services; any major change in our
senior management or board of director; sales, or anticipated sales, of our stock, including sales by our officers, directors,
and significant stockholders; issuance of new, negative, or changed securities analysts’ reports or recommendations or
estimates; investor perceptions of us and the industries in which we or our customers operate; and threatened or actual
litigation and governmental investigations.

These and other factors may cause the market price and demand for shares of our common stock to fluctuate
substantially, which may limit or prevent investors from readily selling their shares of common stock and may otherwise
negatively affect the liquidity of our common stock. In addition, securities class action litigation has often been instituted
against companies following periods of volatility in the overall market and in the market price of a company’s securities.
Securities litigation against us, regardless of the merits or outcome, could result in substantial costs, damage to our
reputation, and divert the time and attention of our management from our business, which could have a material adverse
effect on our business, financial condition, and results of operations.

The issuance of additional stock, including common stock issued upon conversion of our Convertible Senior
Notes, will dilute all other stockholders.

The issuance of additional stock in connection with acquisitions, financings, our equity incentive plans, our
Convertible Senior Notes, or otherwise will dilute all other stockholders. Our fourth amended and restated certificate of
incorporation authorizes us to issue up to five hundred million shares of common stock and up to ten million shares of
preferred stock with such rights and preferences as may be determined by our board of directors. Subject to compliance
with applicable rules and regulations, we may issue all of these shares that are not already outstanding without any action
or approval by our stockholders. We intend to continue to evaluate strategic acquisitions or opportunities in the future. We
may pay for such acquisitions or opportunities, in part or in full, through the issuance of additional equity securities.
Further, the conversion of some or all of the Convertible Senior Notes will dilute the ownership interests of existing
stockholders to the extent we deliver shares of our common stock upon conversion of any of the Convertible Senior
Notes.

Because we do not intend to pay cash dividends in the foreseeable future, investors may not receive any return
on investment unless they are able to sell common stock for a price greater than the purchase price.

We have never declared nor paid cash dividends on our common stock. We currently intend to retain any future
earnings to finance the operation and expansion of our business, and we do not expect to declare or to pay any dividends
in the foreseeable future. Consequently, stockholders must rely on sales of their common stock after price appreciation,
which may never occur, as the only way to realize any future gains on their investment. There is no guarantee that shares
of our common stock will appreciate in value or even maintain the price at which investors have purchased their shares.

Anti-takeover protections in our fourth amended and restated certificate of incorporation, our second amended
and restated bylaws, or our contractual obligations may discourage or prevent a takeover of our company, even
if an acquisition would be beneficial to our stockholders.

Provisions contained in our fourth amended and restated certificate of incorporation and second amended and

restated bylaws, as well as provisions of Delaware law, could delay or make it more difficult to remove incumbent
directors or could impede a merger, takeover or other business combination involving us or the replacement of our
management, or discourage a potential investor from making a tender offer for our common stock, which, under certain
circumstances, could reduce the market value of our common stock, even if it would benefit our stockholders.

In addition, under the agreements governing our credit facilities, a change of control would cause us to be in default
or could trigger dilutive or additional expenses. For example, in the event of a change of control default, the administrative
agent under our credit facilities would have the right (or, at the direction of lenders holding a majority of the loans and
commitments under our credit facilities, the obligation) to accelerate the outstanding loans and to terminate the
commitments under our credit facilities, and if so accelerated, we would be required to repay all of our outstanding
obligations under our credit facilities.

22 |

2022 Form 10-K

Further, certain provisions in the Convertible Senior Notes and the Indenture could increase the cost of acquiring us

or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction
that noteholders or holders of our common stock may view as favorable.

General Risk Factors

Our quarterly results of operations have and may continue to fluctuate significantly and may not fully reflect the
underlying performance of our business.

Our quarterly results of operations, including the levels of our revenues, gross margin, profitability, cash flow, and
deferred revenue, has varied and may vary significantly in the future, and period-to-period comparisons of our results of
operations may not be meaningful. Accordingly, the results of any one quarter should not be relied upon as an indication
of future performance. Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are
outside of our control, and as a result, may not fully reflect the underlying performance of our business. These factors
include: our ability to attract and retain new and current Cloud customers, as well as Dayforce Wallet customers; changes
to services or pricing impacting our customer contracts; seasonal variations in sales of and revenue from our applications,
changes to our operating expenses related to the maintenance and expansion of our business including new acquired
businesses, operations, and infrastructure; and general economic, industry, and market conditions, including the addition
or loss of employees by our Cloud customers who generally pay on a “per employee per month” basis, interest rates, and
accounting rules.

Catastrophic events as well as expectations related to environmental, social and governance (ESG) matters may
disrupt our business and expose us to risks that could adversely affect our business, financial condition, results
of operations and reputation.

Our business, financial condition, results of operations, access to capital markets and borrowing costs may be

adversely affected by a major natural disaster or catastrophic event, including civil unrest, economic recession,
geopolitical instability, war, terrorist attack, the effects of climate change, or pandemics or other public health emergencies
such as the COVID-19 outbreak, and measures taken in response thereto. In the event of a major disaster or event
impacting any of our locations or locations where our employees work virtually, we may be unable to continue our
operations and may endure system interruptions, reputational harm, delays in our application development, lengthy
interruptions in our services, breaches of data security and loss of critical data. These catastrophic events have the
potential to disrupt the business of our third-party suppliers, partners, or customers. All the potential impacts could have a
material adverse effect on our business, financial condition, and results of operations.

For instance, the COVID-19 pandemic created significant global volatility, uncertainty, and economic disruption. The
extent to which it will continue to adversely affect our business, operations, and financial results will depend on numerous
evolving factors, including developments which are highly uncertain and cannot be predicted, such as the duration and
scope of the event, and that affect our ability to sell and to provide our services to our current and future customers, and
the ability of our customers to pay for our services or to make us whole for advances of earned net wages and associated
tax amounts made on their behalf by us.

Our disclosures and ambitions related to ESG matters may expose us to risks that could adversely affect our
reputation and performance. We publicly share certain information about our ESG initiatives and goals. Our disclosures
on these matters, and goals we set for ourselves or a failure to meet these goals may harm our reputation and brand. By
electing to set and share publicly these corporate ESG initiatives and goals, our business may also face increased
scrutiny related to ESG activities.

We operate and are subject to tax in multiple jurisdictions. Audits, investigations, and tax proceedings could
have a material adverse effect on our business, results of operations, and financial condition.

We are subject to income and non-income taxes in multiple jurisdictions. Income tax accounting often involves
complex issues, and significant judgment is often required in determining our worldwide provision for income taxes. We
are regularly subject to tax examinations in these jurisdictions during which the tax authorities may challenge our tax
positions. We regularly assess the likely outcomes of these examinations to determine the appropriateness of our tax
reserves as well as our future tax liabilities. In addition, the application of withholding tax, value added tax, goods and
services tax, sales tax, and other non-income taxes is not always certain, and we may be subject to examinations relating
to such withholding or non-income taxes. We believe that our tax positions are reasonable and our tax reserves are
adequate to cover any potential liability. However, if any of these tax authorities successfully challenge our positions, we
may be liable for additional tax, penalties, and interest in excess of any reserves established, which may have a
significant impact on our results and operations and future cash flow.

23 |

2022 Form 10-K

Changes in generally accepted accounting principles in the United States could have a material adverse effect on
our previously reported results of operations.

Generally accepted accounting principles in the United States are subject to interpretation by the Financial

Accounting Standards Board (the “FASB”), the SEC, and various bodies formed to promulgate and to interpret appropriate
accounting principles. A change in these principles or interpretations could have a significant effect on our previously
reported results of operations and could affect the reporting of transactions completed before the announcement of a
change. Please refer to Part II, Item 8, Note 2, “Summary of Significant Accounting Policies”, of this report for our
assessment of recently issued and adopted accounting pronouncements.

Our debt may be downgraded, which could have a material adverse effect on our business, financial condition,
and results of operations.

A reduction in the ratings that rating agencies assign to our debt may negatively impact our access to the debt
capital markets and increase our cost of borrowing, which could have a material adverse effect on our business, financial
condition, and results of operations.

Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing
costs for us.

Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other

counterparties. During periods of volatile credit markets, there is risk that lenders, even those with strong balance sheets
and sound lending practices, could fail, no longer participate in credit offerings, or refuse to honor their existing legal
commitments and obligations to us, including but not limited to, extending credit up to the maximum amount permitted by
the Revolving Credit Facility. If our lenders are unable to fund borrowings under their revolving credit commitments or we
are unable to borrow or refinance our debt in the financial markets, it could be difficult to obtain sufficient funding to
execute our business strategy or to meet our liquidity needs, which could have a material adverse effect on our business,
financial condition, and results of operations.

Our failure to maintain effective internal control over financial reporting in accordance with Section 404 of the
Sarbanes-Oxley Act could have a material adverse effect on our business, financial condition, and results of
operations.

As a public company, we are required to design and maintain proper and effective internal controls over financial

reporting and to report any material weaknesses in such internal controls. Section 404 of the Sarbanes-Oxley Act of 2002
requires that we evaluate and determine the effectiveness of our internal controls over financial reporting and provide a
management report on the internal controls over financial reporting, which must be attested to by our independent
registered public accounting firm. We have previously identified and reported material weaknesses, and we may identify
additional material weaknesses in internal controls in future periods. If we were to have another material weakness in our
internal controls over financial reporting, we may not detect errors on a timely basis and our financial statements may be
materially misstated. There could also be a negative reaction in the financial markets due to a loss of investor confidence
in us and the reliability of our consolidated financial statements, which could have a material adverse effect on our
business, financial condition, and results of operations.

24 |

2022 Form 10-K

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our corporate headquarters is located in Minneapolis, Minnesota and we also have a major office location in
Toronto, Ontario, Canada, both in leased facilities. In addition, as of December 31, 2022, we lease office space in various
other locations across North America, APJ, and EMEA. We believe that our current facilities meet our needs, and we are
confident that we will be able to obtain additional space on commercially reasonable terms to accommodate future growth
as needed. Refer to Note 15, "Leases," to our consolidated financial statements for additional discussion of our leases.

Item 3. 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 II, Item 8, Note 17, “Commitments and Contingencies,” of this Form 10-K and
should be considered an integral part of Part I, Item 3, “Legal Proceedings”.

On October 21, 2021, a claim was issued by purported stockholder, Bluemoon Capital Ltd., in the Superior Court of
Justice of Ontario, Canada. The claim is against the Company, together with David Ossip, Chair and Co-Chief Executive
Officer of the Company, Arthur Gitajn, former EVP and Chief Financial Officer of the Company, Gnaneshwar Rao, director
of the Company and Brent Bickett, director of the Company, as well as certain third parties. The action, which is a
proposed class action, alleges misrepresentations and negligence in connection with the disclosure made by the
Company in its April 25, 2018 Prospectuses (which were later incorporated by reference into the Company’s May 24,
2018 Interim Financial Statements and MD&A) regarding matters surrounding the Company’s distribution to its pre-IPO
stockholders of its 50% interest in LifeWorks Corporation Ltd. On January 19, 2022, the Ontario court rejected the
Norwich Application for discovery by plaintiff (equitable or discretionary remedy in Canada for disclosure of documentation
to form an action), which had been filed prior to filing the class action on the basis that it did not meet the key criteria for
pre-action discovery. Plaintiff has appealed this decision which was denied, with costs, by the Ontario Court of Appeal on
December 14, 2022.

The action seeks unspecified monetary damages under the Ontario Securities Act and at common law.

A motion brought by the Company for Security for Costs regarding the class action is pending and a motion to strike

the class action application is currently set for a hearing on March 31, 2023. At this stage of the proceeding, the ultimate
disposition is not yet determinable, but we believe that the likelihood of a material loss arising out of this claim is remote.

Item 4. Mine Safety Disclosures.

Not applicable.

25 |

2022 Form 10-K

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities.

Market Information for Common Stock

Our common stock has traded on the New York Stock Exchange (“NYSE”) and the Toronto Stock Exchange under

the symbol “CDAY” since April 26, 2018, the date of our initial public offering.

Dividend Policy

We do not currently intend to pay cash dividends on our common stock in the foreseeable future. However, in the

future, subject to factors described below and our future liquidity and capitalization, we may change this policy and choose
to pay dividends.

Stockholders

As of December 31, 2022, there were 58 stockholders of record of our common stock. The actual number of

stockholders is considerably greater than this number of record holders, and includes stockholders who are beneficial
owners but whose shares are held in street name by brokers and other nominees.

Recent Sales of Unregistered Securities

None.

Issuer Purchases of Equity Securities

None.

Stock Performance Graph

The following shall not be deemed "filed" for purposes of Section 18 of the Exchange Act, or incorporated by
reference into any of our other filings under the Exchange Act or the Securities Act, except to the extent we specifically
incorporate it by reference into such filing.

26 |

2022 Form 10-K

The following graph compares the cumulative total shareholder returns on our common stock with the cumulative

total return on the S&P 500 Index and the S&P 1500 Application Software Index. The graph assumes $100 was invested
in each, based on closing prices, from our first trading day to the last trading day of each quarter for the period April 26,
2018 (the date our common stock began trading on the NYSE) through December 31, 2022. Stock price performance
shown in the Stock Performance Graph for our common stock is historical and not necessarily indicative of future
performance.

Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2022.

Item 6. [Reserved]

27 |

2022 Form 10-K

Item 7. 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 together with our

consolidated financial statements and the related notes thereto included elsewhere in this report. This discussion and
analysis contains forward-looking statements, including statements 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 numerous risks and uncertainties, including but not
limited to the risks and uncertainties described in “Risk Factors” and “Forward-Looking Statements.” Our actual results
may differ materially from those contained in or implied by these forward-looking statements.

The following discussion and analysis of our financial condition and results of operations covers fiscal 2022 and

fiscal 2021 items and year-over-year comparisons between fiscal 2022 and fiscal 2021. Discussions of fiscal 2020 items
and year-over-year comparisons between fiscal 2021 and 2020 that are not included in this Form 10-K can be found in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2021, that was filed with the SEC on February 28, 2022.

Overview

Ceridian is a global HCM software company. We categorize our solutions into two categories: Cloud and Bureau

solutions. Cloud revenue is primarily 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 legacy North America Bureau solutions, which we generally
stopped actively selling to new customers following the acquisition of Dayforce, and customers using our acquired Bureau
solutions in APJ. We invest in maintenance and necessary updates to support our Bureau customers and continue to
migrate them to Dayforce. Revenue from our Cloud and Bureau solutions includes investment income generated from
holding customer funds before they are remitted to taxing authorities, also referred to as float revenue or float.

Dayforce provides HR, payroll, workforce management, benefits, and talent intelligence functionality. Our platform is

used by organizations of all sizes, from small businesses to global organizations, regardless of industry, 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 ease administrative work for both employees and managers, creating opportunities
for companies to increase employee engagement. We sell Dayforce through our direct sales force and partner ecosystem
on a subscription per-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.

We have rapidly grown the Dayforce platform to 5,993 live Dayforce customers, representing approximately 5.9

million global employees as of December 31, 2022.* In 2022, we added 559 net new live Dayforce customers. Our
customers vary across industries, and no single customer constituted more than 10% of our revenues for the year ended
December 31, 2022. Our annual Dayforce revenue retention rate continues to exceed 95% due to our focus on solving
complex problems and our superior customer experience.

Dayforce Wallet is a digital payment solution for customers' employees on the Dayforce platform, which was

launched in the U.S. in 2020, Canada in 2021, and the United Kingdom in 2022. The Dayforce Wallet gives our
customers’ employees greater control over their financial well-being by providing them with instant access to their
earnings. This on-demand pay feature allows employees more choice over when they get paid by making any day
payday. Dayforce Wallet enables workers to access their already-earned wages anytime during the pay period, net of
taxes, withholdings and other payroll deductions. Leveraging Dayforce’s continuous pay calculations, Dayforce Wallet
processes a same-day payroll each time a worker requests their pay. The solution is compliant with federal, state, and
local remittances and requires no changes to payroll processing including the funding, timing, and close-out of pay. The
on-demand wages are loaded onto a paycard, which customers’ employees can use anywhere credit or debit cards are
accepted, generating interchange fee revenue. The Dayforce Wallet mobile app makes it easy for customers’ employees
to check their pay deposits, account balance and transaction history.

As of December 31, 2022, we had more than 1,450 customers signed onto Dayforce Wallet with over 880 customers

live on the product and the average registration rate was above 45% of all eligible employees.

*Excluding the 2021 acquisitions of Ascender and ADAM HCM

28 |

2022 Form 10-K

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 our 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. We estimate
that it takes approximately two years before we are able to recover our implementation, customer acquisition, and other
direct costs on a new Dayforce customer contract.

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 suite of capabilities. We also incur costs to manage the account,
to retain customers, and to sell additional functionality. These costs, however, are significantly less than the costs initially
incurred to acquire and to take customers live.

Revenues

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, and implementation of their
Cloud-based solution. Our solutions are typically provided through long-term customer relationships that result in a high
level of recurring revenue. We also generate recurring revenue from investment income on our Cloud and Bureau
customer funds before such funds are remitted to taxing authorities, customer employees, or other third parties. We refer
to this investment income as float 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 twelve months for larger
customers. We begin to generate recurring revenue when we provide a production instance to the customer. We also
provide outsourced human resource solutions to certain of our Dayforce customers, which are tailored to meet their
individual needs, and entail performing the duties of a customer’s human resources department, including payroll
processing, time and labor management, performance management, and recruiting, as needed.

The Powerpay offering serves our 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. 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 typically charge recurring fees 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 ACA management.

29 |

2022 Form 10-K

Global Events

In March 2020, the World Health Organization declared the outbreak of COVID-19 to be a pandemic. The global

spread of the COVID-19 pandemic created significant global volatility, uncertainty, and economic disruption. We
experienced curtailed customer demand, primarily as a result of declining employment levels at our customers in certain
sectors, such as retail and hospitality, as well as lower customer utilization of professional services, due to the effects of
the COVID-19 pandemic. While we experienced adverse impacts on our revenue in 2021 and 2020, we ended 2021 with
employment levels at our customers in-line with pre-pandemic levels. Additionally, the federal funds rate cuts by the U.S.
Federal Reserve and the overnight rate target by the Bank of Canada had negative effects on our float revenue in 2021
and 2020. Conversely, the federal funds rate hikes by the U.S. Federal Reserve and the overnight rate target by the Bank
of Canada in 2022 has had positive effects on our float revenue in 2022. The continued, broader implications of the
pandemic on our results of operations and overall financial performance will depend on numerous evolving factors.
Consequently, the extent of any potential future impacts of COVID-19 remain uncertain and cannot be reasonably
estimated. Please refer to Part II, Item 1A “Risk Factors” for further discussion of the potential impact of the pandemic on
our business.

In February 2022, the Russian Federation (“Russia”) and Belarus commenced a military action with the country of

Ukraine. We are closely monitoring the unfolding events due to the Russia-Ukraine conflict and its regional and global
ramifications. We do not have operations in Russia, Ukraine or Belarus. We are monitoring any broader economic impact
from the current crisis, including increased cybersecurity risks. The specific impact on our financial condition, results of
operations, and cash flows is not material as of the date of these financial statements. However, to the extent that such
military action spreads to other countries, intensifies, or otherwise remains active, such action could adversely affect our
business, financial condition, and results of operations.

How We Assess Our Performance

In assessing our performance, we consider a variety of performance indicators in addition to revenue and net

income (loss). Set forth below is a description of our key performance measures.

Live Dayforce customers (a)
Cloud annualized recurring revenue (ARR) (a,b,d) (in millions)
Annual Dayforce revenue retention rate (a,b,d)
Dayforce recurring revenue per customer (c,d)
Adjusted EBITDA (d) (in millions)
Adjusted EBITDA margin (d)

2022

Year Ended December 31,
2021

2020

$

$
$

5,993
1,041.3

97.1%

121,425
250.4

20.1%

$

$
$

5,434
779.8

97.1%

108,631
162.5

15.9%

$

$
$

4,906
617.9

96.0%

98,655
159.0

18.9%

(a) Excluding the 2021 acquisitions of Ascender and ADAM HCM.
(b) Annual Dayforce revenue retention rate and Cloud ARR are calculated on an annual basis, and the disclosure

reflects data as of the most recent fiscal year end. Please see below for further explanation.

(c) Excluding float revenue, the impact of lower employment levels in 2021 and 2020 due to the COVID-19 pandemic,

Ascender and ADAM HCM revenue, and on a constant currency basis.

(d) Please refer to the “Non-GAAP Measures” and "Results of Operations" sections below for further description and

definition of this performance indicator which is considered a non-GAAP financial measure.

30 |

2022 Form 10-K

Live Dayforce Customers

We use the number of live Dayforce customers as an indicator of future revenue and the overall performance of the

business and to assess the performance of our implementation services. We market Dayforce to customers of all sizes,
including small (under 500 employees), major (500 to 5,999 employees), and enterprise (6,000 or more employees).

The following table sets forth the number of live Dayforce customers* at the end of the years presented:

Cloud Annualized Recurring Revenue (“ARR”)

We use Cloud annualized recurring revenue ("ARR"), a non-GAAP financial measure, to measure the size and
growth of our recurring Cloud business, which we believe is useful to management and investors. We derive the majority
of our Cloud revenues from recurring fees, primarily PEPM subscription charges. We also derive recurring revenue from
fees related to the rental and maintenance of clocks, charges for once-a-year services, such as year-end tax statements,
and float revenue on our customer funds before such funds are remitted to taxing authorities, customer employees, or
other third parties. We set annual targets for Cloud ARR and monitor progress toward those targets on a quarterly basis.

Annual Dayforce Revenue Retention Rate

We use annual Dayforce revenue retention rate, a non-GAAP financial measure, to measure the percentage of

revenues that we retain from our existing Dayforce customers, which we believe is useful to management and investors
as an indicator of customer satisfaction and future revenues. Our annual Dayforce revenue retention rate has been above
97% for the years ended December 31, 2022 and 2021, and above 95% for the year ended December 31, 2020. We set
annual targets for Dayforce revenue retention rate and monitor progress toward those targets on a quarterly basis by
reviewing known and anticipated customer losses. Our Dayforce revenue retention rate may fluctuate as a result of a
number of factors, including the mix of Dayforce solutions used by customers, the level of customer satisfaction, and
changes in the number of users live on our Dayforce solutions.

Dayforce Recurring Revenue Per Customer

We use Dayforce recurring revenue per customer, a non-GAAP financial measure, as an indicator of the average
size of our Dayforce customer, which we believe is also useful to management and investors. We calculate and monitor
Dayforce recurring revenue per customer on a quarterly basis. Our Dayforce recurring revenue per customer may
fluctuate as a result of a number of factors, including the number of live Dayforce customers and the number of customers
purchasing the full HCM suite.

*Excluding the 2021 acquisitions of Ascender and ADAM HCM.

31 |

2022 Form 10-K

Constant Currency Revenue

We present revenue on a constant currency basis to assess how our underlying business performed, excluding the

effect of foreign currency rate fluctuations. We believe this non-GAAP financial measure is useful to management and
investors. We have calculated revenue on a constant currency basis by applying the average foreign exchange rate in
effect during the comparable prior period. The average U.S. dollar to Canadian dollar foreign exchange rate was $1.30,
with a daily range of $1.25 to $1.39 for the twelve months ended December 31, 2022, compared to $1.25, with a daily
range of $1.20 to $1.29 for the twelve months ended December 31, 2021. As of December 31, 2022, the U.S. dollar to
Canadian dollar foreign exchange rate was $1.36.

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin

We believe that EBITDA, 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. Management believes that
EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin are helpful in highlighting management performance trends
because EBITDA, Adjusted EBITDA and Adjusted EBITDA margin exclude the results of decisions that are outside the
normal course of our business operations.

Recent Events

Acquisitions

On May 29, 2020, we completed the purchase of 100% of the outstanding shares of Excelity Global Solutions Pte.

Ltd. (“Excelity”) for $77.2 million. Excelity is a human capital management service provider in the APJ region.

On March 1, 2021, we completed the purchase of 100% of the outstanding shares of Ascender HCM Pty Limited

(“Ascender”) for $359.6 million. Ascender is a payroll and HR solutions provider in the APJ region.

On April 30, 2021, we acquired 100% of the outstanding shares of O5 Systems, Inc. dba Ideal (“Ideal”) for $41.4

million. Ideal is a talent intelligence software provider based in Toronto, Ontario, Canada.

On October 4, 2021, we completed the acquisition of certain assets and liabilities of DataFuzion HCM, Inc.

(“DataFuzion”), for $12.5 million in cash consideration and future contingent consideration payments. DataFuzion designs,
implements, and supports customer specific data solutions that integrate HCM and ERP systems on their FUZE platform.

On December 3, 2021, we completed the acquisition of 100% of the outstanding interests in ATI ROW, LLC and
ADAM HCM MEXICO, S. de R.L. de C.V. (collectively, "ADAM HCM") for $34.5 million. ADAM HCM is a payroll and HCM
company in Latin America.

Financing and Other

In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due

2026. In connection with the pricing of the Convertible Senior Notes, we entered into capped call transactions with the
option counterparties.

On December 15, 2021, we sold our St. Petersburg, Florida facility for $40 million, resulting in a gain on the sale of

$19.1 million, which was recognized in the consolidated statements of operations within selling, general, and
administrative expense.

The OCC authorized the Ceridian National Trust Bank to open on January 3, 2023. Effective on this day, the

Ceridian National Trust Bank commenced banking operations, acting as trustee for our U.S. payroll trust.

Historically, certain aspects of our U.S. client money movement activity have been subject to regulation at both the

federal and individual state levels with resulting inherent complexity across multiple jurisdictions. With the establishment of
the Ceridian National Trust Bank, regulatory oversight will now be under the OCC, a single federal government agency.

Our payroll trust structure will continue to benefit our customers by providing bankruptcy-remoteness protection for

client funds pending remittance to employees of our clients, tax authorities, and other payees.

32 |

2022 Form 10-K

Results of Operations

Year Ended December 31, 2022 Compared with Year Ended December 31, 2021

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

Revenue:

Recurring
Cloud
Bureau
Total recurring
Professional services and other

Total revenue

Cost of revenue:
Recurring
Cloud
Bureau
Total recurring
Professional services and other
Product development and
management
Depreciation and amortization

Total cost of revenue

Gross profit
Selling, general, and administrative
Operating loss

Interest expense, net
Other expense, net
Loss before income taxes
Income tax expense (benefit)
Net loss
Net profit margin (a)
Adjusted EBITDA (b)
Adjusted EBITDA margin (b)

Year Ended
December 31,

Increase/
(Decrease)

2022

2021

Amount

%

(Dollars in millions)

% of Revenue

2022

2021

$

$

908.4
139.2
1,047.6
198.6
1,246.2

712.9
137.8
850.7
173.5
1,024.2

$ 195.5
1.4
196.9
25.1
222.0

27.4%
1.0%
23.1%
14.5%
21.7%

72.9%
11.2%
84.1%
15.9%
100.0%

69.6%
13.5%
83.1%
16.9%
100.0%

254.4
55.0
309.4
238.7
169.9

55.0
773.0
473.2
499.0
(25.8)
28.6
8.5
(62.9)
10.5
(73.4)

(5.9)%

$

250.4

$

20.1%

197.7
64.7
262.4
194.6
134.0

50.9
641.9
382.3
417.8
(35.5)
35.9
18.9
(90.3)
(14.9)
(75.4)

(7.4)%

56.7
(9.7)
47.0
44.1
35.9

4.1
131.1
90.9
81.2
9.7
(7.3)
(10.4)
27.4
25.4
2.0
1.5%

162.5

$

87.9

15.9%

4.2%

28.7%
(15.0)%
17.9%
22.7%
26.8%

8.1%
20.4%
23.8%
19.4%
27.3%
(20.3)%
(55.0)%
30.3%
170.5%
2.7%
20.0%
54.1%
26.6%

20.4%
4.4%
24.8%
19.2%
13.6%

4.4%
62.0%
38.0%
40.0%
(2.1)%
2.3%
0.7%
(5.0)%
0.8%
(5.9)%

19.3%
6.3%
25.6%
19.0%
13.1%

5.0%
62.7%
37.3%
40.8%
(3.5)%
3.5%
1.8%
(8.8)%
(1.4)%
(7.4)%

20.1%

15.9%

(a) Net profit margin is determined by calculating the percentage that net income (loss) is of total revenue.
(b) Please refer to the “Non-GAAP Measures” section for a discussion and reconciliation of Adjusted EBITDA and

Adjusted EBITDA margin, non-GAAP financial measures.

33 |

2022 Form 10-K

Revenue. The following table sets forth certain information regarding our consolidated revenues for periods

presented:

Revenue:

Dayforce recurring, excluding float
Dayforce float

Total Dayforce recurring

Powerpay recurring, excluding float
Powerpay float

Total Powerpay recurring
Total Cloud recurring

Dayforce professional services and other
Powerpay professional services and other
Total Cloud professional services and
other

Total Cloud revenue

Bureau recurring, excluding float
Bureau float

Total Bureau recurring
Bureau professional services and other

Total Bureau revenue

Total revenue

Dayforce
Powerpay

Total Cloud revenue

Dayforce, excluding float
Powerpay, excluding float
Cloud revenue, excluding float

Cloud float

Total Cloud revenue

Cloud recurring, excluding float
Bureau recurring, excluding float

Total recurring, excluding float
Total revenue, excluding float

Year Ended
December 31,

2022
2021
(Dollars in millions)

752.8 $
62.4
815.2
80.7
12.5
93.2
908.4
181.7
0.7
182.4

596.9
29.7
626.6
78.2
8.1
86.3
712.9
159.3
0.9
160.2

1,090.8
133.9
5.3
139.2
16.2
155.4

873.1
134.5
3.3
137.8
13.3
151.1
1,246.2 $ 1,024.2

996.9 $
93.9
1,090.8 $

934.5 $
81.4
1,015.9
74.9
1,090.8 $

833.5 $
133.9
967.4
1,166.0 $

785.9
87.2
873.1

756.2
79.1
835.3
37.8
873.1

675.1
134.5
809.6
983.1

$

$

$

$

$

$

$

$

Percentage
change in
revenue as
reported
2022 vs. 2021

Impact of
changes in
foreign
currency (a)

Percentage
change in
revenue on a
constant
currency
basis (a)
2022 vs. 2021

26.1%
110.1%
30.1%
3.2%
54.3%
8.0%
27.4%
14.1%
(22.2)%
13.9%

24.9%
(0.4)%
60.6%
1.0%
21.8%
2.8%
21.7%

26.8%
7.7%
24.9%

23.6%
2.9%
21.6%
98.1%
24.9%

23.5%
(0.4)%
19.5%
18.6%

(1.6)%
(3.0)%
(1.6)%
(4.0)%
(7.4)%
(4.3)%
(2.0)%
(2.5)%
(—)%
(2.5)%

(2.1)%
(3.6)%
(3.0)%
(3.6)%
(6.8)%
(4.0)%
(2.3)%

(1.9)%
(4.2)%
(2.1)%

(1.7)%
(3.9)%
(2.0)%
(4.0)%
(2.1)%

(1.8)%
(3.6)%
(2.1)%
(2.3)%

27.7%
113.1%
31.7%
7.2%
61.7%
12.3%
29.4%
16.6%
(22.2)%
16.4%

27.0%
3.2%
63.6%
4.6%
28.6%
6.8%
24.0%

28.7%
11.9%
27.0%

25.3%
6.8%
23.6%
102.1%
27.0%

25.3%
3.2%
21.6%
20.9%

(a) We have calculated revenue on a constant currency by applying the average foreign exchange rate in effect during

the comparable prior period.

Total revenue increased $222.0 million, or 21.7%, to $1,246.2 million for the year ended December 31, 2022,
compared to $1,024.2 million for the year ended December 31, 2021. This increase was primarily driven by an increase in
live Dayforce customers, the increase in Dayforce recurring revenue per customer, revenue in 2022 from businesses
acquired during 2021, and the increase in float revenue. The number of live Dayforce customers increased 10.3% to
5,993 at December 31, 2022 from 5,434 at December 31, 2021. At the end of 2022, our 5,993 live Dayforce customers
represented approximately 5.9 million global employees*. Additionally for the trailing twelve months ended December 31,
2022, Dayforce recurring revenue per customer grew to $121,425 compared to $108,631 for the comparable period in
2021.

*Excluding the 2021 acquisitions of Ascender and ADAM HCM.

34 |

2022 Form 10-K

The increase in Dayforce recurring revenue per customer is driven by our growing global customer base and the

growing average size of our customers, as we have been expanding within the enterprise segment. At the end of 2022,
enterprise businesses accounted for 51% of the total number of global employees, major businesses accounted for 41%
of the total number of global employees, and small businesses accounted for 8% of the total number of global
employees.*

The increase in float revenue is driven by the 12.4% increase in average float balance for our customer funds for the

year ended December 31, 2022, which increased to $4,370.7 million, compared to $3,889.5 million for the year ended
December 31, 2021, in addition to an increase in average yield of 76 basis points compared to the year ended
December 31, 2021.

Cost of revenue. Total cost of revenue for the year ended December 31, 2022, was $773.0 million, an increase of

$131.1 million, or 20.4%, compared to the year ended December 31, 2021. Recurring cost of revenue increased by $47.0
million for the year ended December 31, 2022, compared to the year ended December 31, 2021, primarily due to the
integration of our APJ acquisitions, specifically $21.0 million of severance and restructuring costs associated with re-
balancing our global footprint. Further, the increase in recurring cost of revenue is due to additional costs related to global
expansion and costs to support the growing Dayforce customer base. The increase in cost of revenue for professional
services and other of $44.1 million for the year ended December 31, 2022, compared to the year ended December 31,
2021, was primarily due to costs incurred to take new customers live.

Product development and management expense increased $35.9 million for the year ended December 31, 2022,

compared to the year ended December 31, 2021. The increase reflects additional personnel costs, including share-based
compensation and severance. For the years ended December 31, 2022, and 2021, our investment in software
development was $162.2 million and $131.7 million, respectively, consisting of $92.3 million and $81.1 million of research
and development expense, and $69.9 million and $50.6 million of capitalized software development, respectively. Please
refer to Note 2, “Summary of Significant Accounting Policies,” for further discussion of our accounting policy for
capitalizing internally developed software costs.

Depreciation and amortization expense associated with cost of revenue increased by $4.1 million for the year ended
December 31, 2022, compared to the year ended December 31, 2021, as we continue to capitalize Dayforce related and
other development costs and subsequently amortize those costs.

Gross profit and gross margin. Total gross profit for the year ended December 31, 2022, increased by $90.9 million,

or 23.8%, compared to the year ended December 31, 2021. The increase in gross profit was primarily attributable to the
$39.1 million increase in float revenue and total gross margin expansion for the year ended December 31, 2022,
compared to the year ended December 31, 2021.

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

Total gross margin
Gross margin by solution:

Cloud recurring
Bureau recurring
Professional services and other

Year Ended
December 31,

2022

2021

38.0%

37.3%

72.0%
60.5%
(20.2)%

72.3%
53.0%
(12.2)%

Total gross margin is defined as total gross profit as a percentage of total revenue, which is 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, which is exclusive of any product development and management or
depreciation and amortization cost allocations.

*Excluding the 2021 acquisitions of Ascender and ADAM HCM.

35 |

2022 Form 10-K

Cloud recurring gross margin was 72.0% for the year ended December 31, 2022, compared to 72.3% for the year
ended December 31, 2021. The decrease in Cloud recurring gross margin is primarily due to the integration of our APJ
acquisitions, specifically a re-balancing of our resources across our global footprint resulting in severance and
restructuring costs, partially offset by the increase in float revenue and an increase in the proportion of Dayforce
customers live for more than two years, which increased from 80% as of December 31, 2021 to 82% as of December 31,
2022. Bureau recurring gross margin increased from 53.0% for the year ended December 31, 2021, to 60.5% for the year
ended December 31, 2022 reflecting higher associated float revenue. Professional services and other gross margin was
(20.2)% for the year ended December 31, 2022, declining from (12.2)% for the year ended December 31, 2021, reflecting
additional costs incurred to take new customers live, expansion of our capabilities to serve international customers, and
increased share-based compensation.

Selling, general, and administrative expense. Selling, general, and administrative expense increased $81.2 million

for the year ended December 31, 2022, compared to the year ended December 31, 2021. Excluding the impact of share-
based compensation and related employer taxes, severance expense, amortization of acquisition-related intangible
assets, and certain other non-recurring items, selling, general, and administrative expenses would have increased $43.6
million. This adjusted increase of $43.6 million was due to increases of $23.5 in general and administrative expense and
$20.1 million in sales and marketing expenses, both of which are primarily driven by employee-related costs. The increase
in sales and marketing expense represents investment in our sales force in order to support our growth initiatives. Please
refer to the "Non-GAAP Measures" section for additional information on the excluded items.

Operating loss. Operating loss for the year ended December 31, 2022, was $25.8 million, compared to $35.5 million

for the year ended December 31, 2021. The $9.7 million change was primarily due to the increase in float revenue and
gross margin expansion, partially offset by the increase in selling, general, and administrative expense.

Interest expense, net. Interest expense, net for the year ended December 31, 2022, was $28.6 million, compared to
$35.9 million for the year ended December 31, 2021. The $7.3 million decrease in interest expense, net was primarily due
to the adoption of ASU 2020-06 in 2022 which eliminated the non-cash interest expense related to the amortization of the
debt discount on our Convertible Senior Notes, partially offset by an increase in interest expense on our Term Debt due to
the increase in LIBOR rates.

Other expense, net. For the years ended December 31, 2022 and 2021, other expense, net of $8.5 million and $18.9

million, respectively, was comprised of net periodic pension expense and foreign currency translation loss.

Income tax expense (benefit). For the years ended December 31, 2022 and 2021, we had income tax expense of
$10.5 million and income tax benefit of $14.9 million, respectively. The $25.4 million increase in tax expense was primarily
due to increases of $12.9 million attributed to share-based compensation, $7.1 million attributed to U.S. Global Intangible
Low Tax Income regime, and $5.8 million attributed to current operations. We record a valuation allowance to reduce our
deferred tax assets to reflect the net deferred tax assets that we believe will be realized. As of December 31, 2022, we will
continue to record a valuation allowance against certain deferred tax assets including state net operating loss carryovers
and tax basis intangibles.

Net loss. Net loss was $73.4 million for the year ended December 31, 2022, compared to $75.4 million for the year

ended December 31, 2021. The slight decrease in net loss is primarily due to an increase in revenue, including float
revenue, as well as the reduction in interest expense and other expense, partially offset by higher investments in product
development and selling capabilities, share-based compensation, further integration of the APJ acquisitions, specifically a
re-balancing of our resources across our global footprint, and the non-recurring gain of $19.1 million on the sale of our St.
Petersburg, Florida facility in 2021. For the years ended December 31, 2022 and 2021, net profit margin was (5.9)% and
(7.4)%, respectively.

Adjusted EBITDA. Adjusted EBITDA increased by $87.9 million to $250.4 million, for the year ended December 31,

2022, compared to the year ended December 31, 2021, primarily due to the increase in float revenue and gross margin
expansion, partially offset by the increase in sales and marketing and product development and management expense.
Adjusted EBITDA margin increased to 20.1% in 2022 from 15.9% in 2021. Adjusted EBITDA, excluding float revenue,
increased $48.8 million to $170.2 million, for the year ended December 31, 2022, compared to the year ended
December 31, 2021. Please refer to the "Non-GAAP Measures" section for a discussion and reconciliation of Adjusted
EBITDA and Adjusted EBITDA margin and additional information on the excluded items.

36 |

2022 Form 10-K

Liquidity and Capital Resources

Our primary sources of liquidity are our existing cash and equivalents, cash provided by operating activities,

availability under our Revolving Credit Facility, and proceeds from debt issuance and equity offerings. As of December 31,
2022, we had cash and equivalents of $431.9 million and there was no amount drawn on our Revolving Credit Facility of
$300 million.

Our primary liquidity needs are related to funding of general business requirements, including the payment of
interest and principal on our debt, capital expenditures, product development, and funding Dayforce Wallet on demand
pay requests on behalf of our customers. From time to time, we have made investments in businesses or acquisitions of
companies. Our total debt balance was $1,234.5 million as of December 31, 2022. Please refer to Note 9, “Debt,” to our
consolidated financial statements and “Our Indebtedness” section below for further information on our debt.

As of December 31, 2022 and 2021, we held $0.8 million and $1.9 million, respectively, of restricted cash as

collateral for bank guarantees. The bank guarantees provide financial assurance that we will fulfill certain lease
obligations. The cash is restricted as to withdrawal or use while the related bank guarantee is outstanding.

On February 26, 2021, we elected to borrow $295.0 million under the Revolving Credit Facility to fund our

acquisition of Ascender on March 1, 2021. We repaid the $295.0 million draw on March 5, 2021 with proceeds from the
issuance of our Convertible Senior Notes.

In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due
2026. The total net proceeds from the offering, after deducting initial purchase discounts and issuance costs, were $561.8
million. In connection with the Convertible Senior Notes, we entered into capped call transactions which are expected to
reduce the potential dilution of our common stock upon any conversion of the Convertible Senior Notes and/or offset any
cash payments we could be required to make in excess of the principal amount of converted Convertible Senior Notes.
We used an aggregate amount of $45.0 million of the net proceeds of the Convertible Senior Notes to purchase the
Capped Calls. We used the remainder of the net proceeds from the offering (i) to repay $295.0 million principal amount
under the Revolving Credit Facility and pay related accrued interest and (ii) for general corporate purposes.

On December 15, 2021, we completed the second amendment to the Senior Secured Credit Facility, in which the

maturity date of the Revolving Credit Facility was extended from April 30, 2023 to January 29, 2025.

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. Dayforce Wallet on demand pay
requests are currently funded from our operating cash balances, until it is reimbursed by the customers through their
normal payroll funding cycles. We evaluate the creditworthiness of each customer for the Dayforce Wallet feature. We
anticipate that to the extent that we require additional liquidity, it will be funded through the issuance of equity, the
incurrence of additional indebtedness, or a combination thereof. We cannot provide assurance 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 and Dayforce Wallet on demand pay requests 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 provide assurance that our business will generate sufficient cash flow from operations or
that future borrowings will be available from additional indebtedness or otherwise to meet our liquidity needs. 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.

Our customer 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. The customer assets are held in segregated accounts intended
for the specific purpose of satisfying customer funding obligations and therefore are not freely available for our general
business use. Please refer to Note 5, "Customer Funds," for further discussion of these funds.

37 |

2022 Form 10-K

Statements of Cash Flows

Changes in cash flows due to purchases of customer fund marketable securities and proceeds from the sale or
maturity of customer fund marketable securities, as well as the carrying value of customer fund 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 to employees, taxing
authorities, and others. The customer funds are fully segregated from our operating cash accounts and are evaluated and
tracked separately by management. The table below summarizes the activity within the consolidated statements of cash
flows:

Net cash provided by (used in) operating activities
Net cash (used in) provided by investing activities
Net cash provided by financing activities
Effect of exchange rate on cash and equivalents

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

Cash, restricted cash, and equivalents at beginning of period
Cash, restricted cash, and equivalents at end of period

Cash and equivalents
Restricted cash and equivalents
Total cash, restricted cash, and equivalents

Operating Activities

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

$

132.6
(342.5)
870.1
(8.1)
652.1
1,952.8
2,604.9

$

48.8
(711.1)
407.5
(20.9)
(275.7)
2,228.5
1,952.8

(30.2)
38.8
565.3
(4.0)
569.9
1,658.6
2,228.5

431.9
2,173.0
2,604.9

$

$

367.5
1,585.3
1,952.8

$

$

188.2
2,040.3
2,228.5

$

$

$

Net cash provided by operating activities was $132.6 million during the year ended December 31, 2022, compared
to $48.8 during the year ended December 31, 2021. For both periods, cash inflows from operating activities are primarily
generated from the subscriptions of our solutions. Cash outflows from operating activities for both periods are primarily
comprised of personnel-related expenditures that are integral to our business operations. The net positive cash inflow in
both periods is primarily due to our growing revenue and collections of such revenue, partially offset by our operating
costs, mainly, investment in our sales force to support our growth initiatives and our product development and
management costs which are not eligible for capitalization.

Investing Activities

During the year ended December 31, 2022, net cash used in investing activities was $342.5 million, related to net

purchases of customer funds marketable securities of $248.0 million, and capital expenditures of $94.5 million. Our capital
expenditures included $74.3 million for software and technology and $20.2 million for property and equipment.

During the year ended December 31, 2021, net cash used in investing activities was $711.1 million, related to
acquisition costs, net of cash acquired, of $409.5 million, net purchase of customer funds marketable securities of $275.8
million, and capital expenditures of $63.7 million. Our capital expenditures included $52.2 million for software and
technology and $11.5 million for property and equipment.

Financing Activities

Net cash provided by financing activities was $870.1 million during the year ended December 31, 2022. This cash

inflow was primarily attributable to the net increase in our customer funds obligations of $840.1 million and proceeds from
the issuance of common stock under share-based compensation plans of $38.4 million, partially offset by payments on
our long-term debt obligations of $8.4 million.

Net cash provided by financing activities was $407.5 million during the year ended December 31, 2021. This cash

inflow was primarily attributable to proceeds from the issuance of our Convertible Senior Notes of $561.8 million, and
proceeds from the issuance of common stock under share-based compensation plans of $95.4 million, partially offset by
the net decrease in our customer funds obligations of $195.7 million, purchase of the Capped Calls related to the
Convertible Senior Notes of $45.0 million, and payments on our long-term debt obligations of $7.8 million.

38 |

2022 Form 10-K

Backlog and Seasonality

Backlog is equivalent to our remaining performance obligations, which represents contracted revenue for recurring

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. As of December 31, 2022,
approximately $1,143.6 million of revenue is expected to be recognized over the next three years from remaining
performance obligations.

For a discussion of seasonality, please refer to Part 1, Item I, “Business” of this Form 10-K.

Our Indebtedness

Our primary liquidity needs are related to funding of general business requirements, including the payment of
interest and principal on our debt, capital expenditures, product development, and funding Dayforce Wallet on demand
pay requests on behalf of our customers. From time to time, we have made investments in businesses or acquisitions of
companies, which are also liquidity needs. We believe our current sources of liquidity 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 indebtedness, or a combination thereof. During 2021 and
2020, we incurred additional debt in the form of draws on our Revolving Credit Facility, which was subsequently repaid,
and issuance of our Convertible Senior Notes for purposes of either (i) conserving our liquidity position during the
uncertainty created by the COVID-19 pandemic, and (ii) general corporate purposes, including acquisitions of companies.

Senior Secured Credit Facility

On April 30, 2018, we entered into a credit agreement pursuant to which the lenders agreed to provide Senior
Secured Credit Facility, consisting of the Term Debt in the original principal amount of $680.0 million and a $300.0 million
Revolving Credit Facility. The Revolving Credit Facility may, at our option, be made available in United States Dollars,
Canadian Dollars, Euros and/or Pounds Sterling; up to $70.0 million may, at our option, be made available for letters of
credit and $100.0 million may, at our option, be made available for swingline loans (denominated in Canadian Dollars
and/or United States Dollars).

The Term Debt will mature on April 30, 2025. We are required to make annual amortization payments in respect of

the Term Debt in an amount equal to 1.00% of the original principal amount thereof, payable in equal quarterly
installments of 0.25% of the original principal amount of the first lien term debt. On December 15, 2021, we completed the
second amendment to our Senior Secured Credit Facility, which extended the maturity of the Revolving Credit Facility
from April 30, 2023 to January 29, 2025. The Revolving Credit Facility does not require amortization payments.

Convertible Senior Notes

In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due
2026. The total net proceeds from the offering, after deducting initial purchase discounts and issuance costs, were $561.8
million. In connection with the Convertible Senior Notes, we entered into capped call transactions which are expected to
reduce the potential dilution of our common stock upon any conversion of the Convertible Senior Notes and/or offset any
cash payments we could be required to make in excess of the principal amount of converted Notes. We used an
aggregate amount of $45.0 million of the net proceeds of the Convertible Senior Notes to purchase the Capped Calls. We
used the remainder of the net proceeds from the offering (i) to repay $295.0 million principal amount under the Revolving
Credit Facility and pay related accrued interest and (ii) for general corporate purposes.

For an additional description of the Senior Secured Credit Facility and the Senior Convertible Notes, please refer to

Note 9, “Debt,” to our consolidated financial statements.

Contractual Obligations

Our future contractual obligations generally consist of long-term debt, leases, retirement plans, and vendor

payments. Our long-term debt obligations are described in Note 9, “Debt,” to our consolidated financial statements, and
the “Our Indebtedness” section above.

39 |

2022 Form 10-K

As of December 31, 2022, all of our facilities are leased. Most of these leases contain renewal options and require

payments for taxes, insurance, and maintenance. We also lease equipment for use in our business. We ceased use of
certain leased facilities during 2021 and 2020 and recognized lease abandonment charges within our consolidated
statements of operations; however, we are still required to make future payments under the existing lease terms. Refer to
Note 15, "Leases," to our consolidated financial statements for additional discussion of our leases.

Payments of retirement plan obligations include employer commitments to fund our defined benefit and
postretirement plans and do not include estimated future benefit payments to participants expected to be made from
liquidation of the assets in our defined benefit plan trusts. During the year ended December 31, 2020, we contributed
$105.0 million to our largest U.S. pension plan, satisfying all expected contributions for the foreseeable future for this
defined benefit plan. As of December 31, 2022, our defined benefit pension plans had a projected benefit obligation that
exceeded the fair value of the plans’ assets by $11.1 million and our postretirement benefit plan had a projected benefit
obligation that exceeded the fair value of the plans’ assets by $8.8 million. We expect to satisfy these remaining
obligations through investment income from and appreciation in the fair value of plan assets and from future employer
contributions. Refer to Note 10, "Employee Benefit Plans," to our consolidated financial statements for additional
discussion of our employee benefit plans.

The amount of our future contractual obligation to vendors as of December 31, 2022 was not material.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated

financial statements and related notes, which have been prepared in accordance with GAAP. The preparation of these
financial statements and related notes requires us to make estimates and judgments that affect the reported amounts of
assets, liabilities, revenue, and expenses. Certain of our accounting policies require the application of significant judgment
by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these
judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience,
terms of existing contracts, our evaluation of trends in the industry, information provided by our customers, and
information available from other outside sources, as appropriate. We evaluate our estimates and judgments on an on-
going basis. Our actual results may differ from these estimates. We believe the following is our critical accounting
estimate:

Revenue Recognition

Description: We recognize revenue for professional services and Cloud subscription services performance

obligations based on an allocation of the total transaction price to each performance obligation using the respective stand-
alone selling prices (“SSP”). This can result in revenue being recognized in an amount that exceeds the amount we are
contractually allowed to bill our customer as of a certain point in time, resulting in the recognition of a contract asset up
until the period at which billings are equal to or exceed revenue recognition. We recognized $182.4 million of Cloud
professional services revenue for the year ended December 31, 2022, and the related contract assets were $68.5 million
as of December 31, 2022.

Judgments and Uncertainties: The determination of our stand-alone selling price for the performance obligations
requires us to make assumptions based on market conditions and observable inputs, as well as an estimate of the total
professional service hours expected to be incurred in connection with each customer implementation.

Sensitivity of Estimate to Change: The consideration allocated to professional services performed to activate a
new customer is recognized as professional services revenues based on the proportion of total work performed to date
compared to an estimation of total work expected to complete the implementation project for that customer account. To
the extent this consideration exceeds the customer billings, a contract asset would be recognized, as professional
services revenue related to implementation activities is generally recognized at the beginning of the contract.

Please refer to Note 2, “Summary of Significant Accounting Policies,” for a description of our revenue recognition

policy and our significant accounting policies.

Recently Issued Accounting Pronouncements

Please refer to Note 2, “Summary of Significant Accounting Policies,” for a full discussion of recent accounting

pronouncements.

40 |

2022 Form 10-K

Non-GAAP Measures

We use certain non-GAAP financial measures in this document including EBITDA, Adjusted EBITDA, Adjusted
EBITDA margin, Adjusted operating profit, Adjusted net income, Adjusted diluted net income per share, revenue on a
constant currency basis, Cloud ARR, Annual Dayforce revenue retention rate, and Dayforce recurring revenue per
customer. We believe that these non-GAAP financial measures are useful to management and investors as supplemental
measures to evaluate our overall operating performance including comparison across periods and with competitors. Our
management team uses these non-GAAP financial measures to assess operating performance because these measures
exclude the results of decisions that are outside the normal course of our business operations, and are used for internal
budgeting and forecasting purposes both for short- and long-term operating plans. Additionally, Adjusted EBITDA and
Adjusted EBITDA margin are components of our management incentive plan. These non-GAAP financial measures are
not required by, defined under, or presented in accordance with, GAAP, and should not be considered as alternatives to
our results as reported under GAAP, have important limitations as analytical tools, and our use of these terms may not be
comparable to similarly titled measures of other companies in our industry. Our presentation of non-GAAP financial
measures should not be construed to imply that our future results will be unaffected by similar items to those eliminated in
this presentation.

We define our non-GAAP financial measures as follows:



















EBITDA as net income (loss) before interest, taxes, depreciation, and amortization, and Adjusted EBITDA as
EBITDA, as adjusted to exclude foreign exchange gains (losses), share-based compensation expense and
related employer taxes, severance charges, restructuring consulting fees, and certain other non-recurring
items.

Adjusted EBITDA margin is determined by calculating the percentage that Adjusted EBITDA is of total
revenue.

Adjusted operating profit is defined as operating profit (loss), as adjusted to exclude foreign exchange gains
(losses), share-based compensation expense and related employer taxes, severance charges, restructuring
consulting fees, amortization of acquisition-related intangible assets, and other non-recurring items.

Adjusted net income is defined as net income (loss), as adjusted to exclude foreign exchange gains (losses),
share-based compensation expense and related employer taxes, severance charges, restructuring consulting
fees, amortization of acquisition-related intangible assets, and other non-recurring items, all of which are
adjusted for the effect of income taxes.

Adjusted diluted net income per share is calculated by dividing adjusted net income by diluted weighted
average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted
average common shares outstanding incorporate the effect of dilutive equity instruments.

Revenue on a constant currency basis is calculated by applying the average foreign exchange rate in effect
during the comparable prior period.

Cloud ARR is calculated by starting with recurring revenue at year end, excluding revenue from Ascender and
ADAM HCM, subtracting the once-a-year charges, annualizing the revenue for customers live for less than a
full year to reflect the revenue that would have been realized if the customer had been live for a full year, and
adding back the once-a-year charges. We have not reconciled Cloud ARR because there is no directly
comparable GAAP financial measure.

Annual Dayforce revenue retention rate is calculated as a percentage, excluding Ascender and ADAM HCM,
where the numerator is the Dayforce ARR for the prior year, less the Dayforce ARR from lost Dayforce
customers during that year; and the denominator is the Dayforce ARR for the prior year. We have not
reconciled Annual Dayforce revenue retention rate because there is no directly comparable GAAP financial
measure.

Dayforce recurring revenue per customer is an indicator of the average size of Dayforce recurring revenue
customers. To calculate Dayforce recurring revenue per customer, we start with Dayforce recurring revenue on
a constant currency basis by applying the same exchange rate to all comparable periods for the trailing twelve
months and excludes float revenue, the impact of lower employment levels in 2021 and 2020 due to the
COVID-19 pandemic, and Ascender and ADAM HCM revenue. This amount is divided by the number of live
Dayforce customers at the end of the trailing twelve month period, excluding Ascender and ADAM HCM. We
have not reconciled the Dayforce recurring revenue per customer because there is no directly comparable
GAAP financial measure.

41 |

2022 Form 10-K

The following table reconciles our reported results to our non-GAAP financial measures EBITDA, Adjusted EBITDA,

and Adjusted EBITDA margin for the periods presented:

Net loss

Interest expense, net
Income tax expense (benefit)
Depreciation and amortization

EBITDA

Foreign exchange loss
Share-based compensation (a)
Severance charges (b)
Restructuring consulting fees (c)
Other non-recurring items (d)

Adjusted EBITDA
Net profit margin (e)
Adjusted EBITDA margin

$

$

Year Ended December 31,

2022

2021

(Dollars in millions)

(73.4)
28.6
10.5
89.0
54.7
3.5
145.1
33.7
7.7
5.7
250.4

$

$

(75.4)
35.9
(14.9)
77.5
23.1
9.5
116.8
7.4
16.7
(11.0)
162.5

(5.9)%
20.1%

(7.4)%
15.9%

(a)
(b)

(c)

(d)

(e)

Represents share-based compensation expense and related employer taxes.
Represents costs for severance compensation paid to employees whose positions have been eliminated or who have been terminated not for
cause. During the twelve months ended December 31, 2022, we incurred severance charges in conjunction with the re-balancing of our workforce
across our global footprint in the amount of $21.0 million within cost of recurring revenue.
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.
Represents (1) the net impact of the abandonment of certain leased facilities, resulting in a net gain of $0.3 million in 2022 and $17.2 million in
2021 primarily as a result of the $19.1 million gain on the sale of the St. Petersburg, Florida facility, (2) the impact of $4.6 million and $0.6 million
related to the fair value adjustments of the DataFuzion contingent consideration in 2022 and 2021, respectively, and (3) the difference of $1.4
million and $5.6 million in 2022 and 2021, respectively, between the historical five-year average pension expense and the current period
actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related changes in
investment strategy associated with protecting the now fully funded status.
Net profit margin is determined by calculating the percentage that net loss is of total revenue.

42 |

2022 Form 10-K

The following tables reconciles our reported results to our non-GAAP financial measures Adjusted operating profit,

Adjusted net income, and Adjusted diluted net income per share for the periods presented:

Year Ended December 31, 2022

As reported

Share-based
compensation

Severance
charges

Other (a)
(Dollars in millions, except per share data)

Adjusted (b)

Cost of revenue:
Recurring
Cloud
Bureau
Total recurring
Professional services and other
Product development and management
Depreciation and amortization

Total cost of revenue

Sales and marketing
General and administrative
Operating (loss) profit
Other expense, net
Depreciation and amortization
EBITDA
Interest expense, net
Income tax expense (benefit) (c)
Depreciation and amortization
Net (loss) income
Net (loss) income per share - basic (d)
Net (loss) income per share - diluted (d)

$

$

$
$
$

$

254.4
55.0
309.4
238.7
169.9
55.0
773.0
251.5
247.5
(25.8)
8.5
89.0
54.7
28.6
10.5
89.0
(73.4) $
(0.48) $
(0.48) $

$

14.2
1.5
15.7
13.7
24.7
—
54.1
24.4
66.6
145.1
—
—
145.1
—
—
—
145.1
0.95
0.93

$

$

$
$
$

19.5
3.0
22.5
0.7
4.2
—
27.4
4.2
2.1
33.7
—
—
33.7
—
—
—
33.7
0.22
0.22

$

$

$
$
$

— $
—
—
—
—
—
—
—
43.2
43.2
4.6
(30.9)
16.9
—
(32.7)
30.9
15.1
0.10
0.10

$
$
$

$

220.7
50.5
271.2
224.3
141.0
55.0
691.5
222.9
135.6
196.2
3.9
58.1
250.4
28.6
43.2
58.1
120.5
0.79
0.77

(a)

(b)

(c)
(d)

Other includes amortization of acquisition-related intangible assets, restructuring consulting fees, the impact of the fair value adjustment for the
DataFuzion contingent consideration, foreign exchange loss, the difference between the historical five-year average pension expense and the
current period actuarially determined pension expense associated with the planned termination of the frozen U.S. pension plan and related
changes in investment strategy associated with protecting the now fully funded status, and the net impact of the abandonment of certain leased
facilities.
The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation
expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and
other non-recurring items, all of which are adjusted for the effect of income taxes.
Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted
weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common
shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon
152,940,299 weighted-average shares of common stock and Adjusted basic and diluted net income per share are calculated based upon
152,940,299 and 155,802,557 weighted-average shares of common stock, respectively.

43 |

2022 Form 10-K

As reported

Year Ended December 31, 2021

Share-based
compensation

Severance
charges

Other (a)
(Dollars in millions, except per share data)

Adjusted (b)

Cost of revenue:
Recurring

Cloud
Bureau

Total recurring
Professional services and other
Product development and management
Depreciation and amortization

Total cost of revenue

Sales and marketing
General and administrative
Operating (loss) profit
Other expense, net
Depreciation and amortization
EBITDA
Interest expense, net
Income tax (benefit) expense (c)
Depreciation and amortization
Net (loss) income
Net (loss) income per share - basic (d)
Net (loss) income per share - diluted (d)

$

$

$
$
$

$

197.7
64.7
262.4
194.6
134.0
50.9
641.9
218.5
199.3
(35.5)
18.9
77.5
23.1
35.9
(14.9)
77.5
(75.4) $
(0.50) $
(0.50) $

$

11.0
1.9
12.9
9.5
18.0
—
40.4
13.8
62.6
116.8
—
—
116.8
—
—
—
116.8
0.78
0.74

$

$

$
$
$

0.5
1.5
2.0
0.2
0.6
—
2.8
1.9
2.7
7.4
—
—
7.4
—
—
—
7.4
0.05
0.05

$

$

$
$
$

— $
—
—
—
—
—
—
—
21.9
21.9
17.2
(23.9)
15.2
—
(23.6)
23.9
15.5
0.10
0.10

$
$
$

$

186.2
61.3
247.5
184.9
115.4
50.9
598.7
202.8
112.1
110.6
1.7
53.6
162.5
35.9
8.7
53.6
64.3
0.43
0.41

(a)

(b)

(c)
(d)

Other includes amortization of acquisition-related intangible assets, net gain related to the abandonment of certain leases, primarily as a result of
the $19.1 million gain on the sale of our St. Petersburg, Florida facility, foreign exchange loss, restructuring consulting fees, the difference
between the historical five-year average pension expense and the current period actuarially determined pension expense associated with the
planned termination of the frozen U.S. pension plan and related changes in investment strategy associated with protecting the now fully funded
status, and the impact of the fair value adjustment for the DataFuzion contingent consideration.
The Adjusted column is a non-GAAP financial measure, adjusted to exclude foreign exchange gains (losses), share-based compensation
expense and related employer taxes, severance charges, restructuring consulting fees, amortization of acquisition-related intangible assets, and
other non-recurring items, all of which are adjusted for the effect of income taxes.
Income tax effects have been calculated based on the statutory tax rates in effect in the U.S. and foreign jurisdictions during the period.
Both GAAP and Adjusted net income (loss) per share are calculated by dividing either GAAP or Adjusted net income by the basic or diluted
weighted average common shares outstanding. When adjusted diluted net income per share is positive, diluted weighted average common
shares outstanding incorporate the effect of dilutive equity instruments. GAAP basic and diluted net loss per share are calculated based upon
150,402,321 weighted-average shares of common stock and Adjusted basic and diluted net income per share are calculated based upon
150,402,321 and 156,842,934 weighted-average shares of common stock, respectively.

44 |

2022 Form 10-K

Item 7A. Quantitative and 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. These market risks may be amplified by events and factors surrounding global events. 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. Our exposure to foreign currency
exchange rates has historically been partially hedged as our foreign currency denominated inflows create a
natural hedge against our foreign currency denominated expenses. Accordingly, our results of operations and
cash flows were not materially affected by fluctuation in foreign currency exchange rates, and we believe that a
hypothetical 10% change in foreign currency exchange rates or an inability to access foreign funds would not
materially affect our ability to meet our operational needs or result in a material foreign currency loss in the future.
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. Our operating results and financial condition are subject to fluctuations due to changes in

interest rates, primarily in relation to: (1) our customer funds market valuation and float revenue derived
therefrom, (2) our debt and the interest paid on such, and (3) our cash and equivalents and the interest income
earned on these balances. Collectively, we do not believe that a change in interest rates of 100 basis points
would have a material effect on our operating results or financial condition.

In certain jurisdictions, we collect funds for payment of payroll and taxes; temporarily hold such funds in

segregated accounts 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 have exposure to risks associated with changes in laws and regulations that may affect customer fund
balances. For example, a change in regulations, either reducing the amount of taxes to be withheld or allowing
less time to remit taxes to government authorities, would reduce our average customer fund balances and float
revenue.

Based on current market conditions, portfolio composition and investment practices, a 100 basis point

increase in market investment rates would result in approximately $24 million increase in float revenue over the
ensuing twelve month period. There are no incremental costs of revenue associated with changes in float
revenue.

We pay floating rates of interest on our Term Debt and Revolving Credit Facility. The interest paid on these
borrowings will fluctuate up or down in relation to changes in market interest rates. A 100 basis point increase in
the LIBOR rates would result in approximately $7 million increase in our interest expense over the ensuring
twelve-month period. Please refer to Note 9, “Debt,” for additional information.

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 unrecoverable. 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.

45 |

2022 Form 10-K

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
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. As of December 31, 2022, the
projected benefit obligation ("PBO") exceeded the fair value of plan assets by $11.1 million. Please refer to Note
10, "Employee Benefit Plans," for additional information.

The effective discount rate used in accounting for pension and other benefit obligations in 2022 ranged from

4.72% to 4.84%. The expected rate of return on plan assets for qualified pension benefits in 2022 was 3.30%.
The following table reflects the estimated sensitivity associated with a change in certain significant actuarial
assumptions (each assumption change is presented mutually exclusive of other assumption changes):

Increase in discount rate
Decrease in discount rate
Increase in return on plan asset
Decrease in return on plan asset

Impact on 2023 Pension Expense
Increase (Decrease)

Change in
Assumption

Pension
Benefits

Post
Retirement

50 basis points $
50 basis points $
50 basis points $
50 basis points $

(Dollars in millions)
0.1 $
(0.1) $
(2.2)
2.2

—
—
N/A
N/A

46 |

2022 Form 10-K

Item 8. Financial Statements and Supplementary Data.

INDEX TO FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS OF CERIDIAN HCM HOLDING INC.

Consolidated Balance Sheets as of December 31, 2022 and 2021
Consolidated Statements of Operations for the years ended December 31, 2022, 2021, and 2020
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2022, 2021,

and 2020

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2022, 2021, and 2020
Consolidated Statements of Cash Flows for the years ended December 31, 2022, 2021, and 2020
Notes to Consolidated Financial Statements

Page

51
52

53
54
55
56

47 |

2022 Form 10-K

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Ceridian HCM Holding Inc.:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Ceridian HCM Holding Inc. and subsidiaries
(the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations,
comprehensive income (loss), stockholders’ equity, and cash flows for each of the years in the three-year period
ended December 31, 2022, and the related notes (collectively, the consolidated financial statements). We also
have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its
cash flows for each of the years in the three-year period ended December 31, 2022, in conformity with U.S.
generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2022 based on criteria established in Internal
Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Management's Report on Internal Control over Financial
Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an
opinion on the Company’s internal control over financial reporting based on our audits. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and
are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are
free of material misstatement, whether due to error or fraud, and whether effective internal control over financial
reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. Our audit of internal control over financial reporting included
obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.

48 |

2022 Form 10-K

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of
the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the
consolidated financial statements that were communicated or required to be communicated to the audit
committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements
and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit
matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matters below, providing separate opinions on the critical audit
matters or on the accounts or disclosures to which they relate.

Customer funds and customer funds obligations

As discussed in Note 5 to the consolidated financial statements, in connection with the Company’s payroll and tax
services, it (1) collects funds for payment of payroll and taxes, (2) temporarily holds such funds until payment is
due, and (3) remits the funds to its customers’ employees and taxing authorities. The Company collects and
manages large amounts of data and its applications are inherently complex. At December 31, 2022, customer
funds and customer funds obligations were $4.2 billion and $4.3 billion, respectively.

We identified the evaluation of the sufficiency of audit evidence over customer funds and customer funds
obligations as a critical audit matter. Specifically, complex auditor judgment was required to determine that the
receipt and expenditure of funds used to develop the customer funds and customer funds obligations balances at
December 31, 2022, reconciled to customers’ transaction data. This matter required the use of information
technology (IT) professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We applied auditor
judgment to determine the nature and extent of procedures to be performed to determine that the receipt and
expenditure of funds used to develop the customer funds and customer funds obligations balances at December
31, 2022, reconciled to customers’ transaction data, including the extent of involvement of IT professionals. We
evaluated the design and tested the operating effectiveness of certain internal controls related to the customer
funds and customer funds obligations process. Specifically, we involved IT professionals with specialized skills
and knowledge, who assisted in the identification and testing of general IT controls and process level IT risks and
controls related to:





receipt of customer transaction data

the communication of that data to (1) banks for the purpose of receiving and expending customer
funds, and to (2) the Company’s IT systems used to track customer funds and customer funds
obligations.

We evaluated the customer funds and customer funds obligations by obtaining the amounts from the Company’s
IT systems used to track customer funds and customer funds obligations, and comparing them to the general
ledger, third-party bank statements or confirmations, and underlying documentation for reconciling items. We
evaluated the sufficiency of audit evidence obtained by assessing the results of procedures performed, including
the appropriateness of the nature and extent of such evidence.

49 |

2022 Form 10-K

Stand-alone selling price (SSP) of cloud Dayforce professional services

As discussed in Note 2 and Note 12 to the consolidated financial statements, the Company recognized $181.7
million of cloud Dayforce professional services and other revenue for the year ended December 31, 2022, and
$68.5 million of contract assets as of December 31, 2022. Cloud Dayforce professional services includes
implementation services to activate new accounts. The Company’s cloud services arrangements include multiple
performance obligations and the transaction price allocation is based on the SSP for the performance obligations.
The SSP for cloud Dayforce implementation services is estimated based on market conditions and observable
inputs, including rates charged by third parties to perform implementation services, as well as an estimate of the
hours expected to be incurred.

We identified the assessment of the Company’s estimated hours expected to be incurred that were used to
determine the SSP of cloud Dayforce implementation services as a critical audit matter. Subjective auditor
judgment was required to evaluate the professional services hours assumption that involved unobservable market
data and was susceptible to manipulation.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of certain internal controls related to the Company’s estimated
hours to be incurred that were used to determine the SSP of cloud Dayforce implementation services. To evaluate
the Company’s retrospective review of its estimated implementation services hours, we compared the historical
estimated implementation hours to actual implementation hours incurred for a selection of contracts. For a sample
of contracts entered into during the year ended December 31, 2022:





we obtained the Company's models for allocating the transaction price and compared certain inputs in
those models to the project managers estimate of implementation service hours to be incurred and to
the results of the Company's retrospective review of its estimated implementation service hours

we inquired of the project manager regarding the estimation of the total hours to be incurred.

/s/ KPMG LLP

We have served as the Company’s auditor since 1958.e Company’s auditor since 1958.

Minneapolis, Minnesota
March 1, 2023

50 |

2022 Form 10-K

Ceridian HCM Holding Inc.
Consolidated Balance Sheets

(Dollars in millions, except share data)
ASSETS
Current assets:

Cash and equivalents
Restricted cash
Trade and other receivables, net
Prepaid expenses and other current assets

Total current assets before customer funds

Customer funds

Total current assets

Right of use lease asset
Property, plant, and equipment, net
Goodwill
Other intangible assets, net
Other assets

Total assets

LIABILITIES AND EQUITY
Current liabilities:

Current portion of long-term debt
Current portion of long-term lease liabilities
Accounts payable
Deferred revenue
Employee compensation and benefits
Other accrued expenses

Total current liabilities before customer funds obligations

Customer funds obligations
Total current liabilities
Long-term debt, less current portion
Employee benefit plans
Long-term lease liabilities, less current portion
Other liabilities

Total liabilities

Commitments and contingencies (Note 16)
Stockholders’ equity:

Common stock, $0.01 par, 500,000,000 shares authorized, 153,856,645 and

151,995,031 shares issued and outstanding, respectively

Additional paid in capital
Accumulated deficit
Accumulated other comprehensive loss

Total stockholders’ equity
Total liabilities and equity

December 31,
2022

December 31,
2021

$

$

$

$

431.9 $
0.8
180.1
98.0
710.8
4,183.2
4,894.0
24.3
174.9
2,280.0
281.6
262.4
7,917.2 $

7.8 $

10.0
54.3
41.2
97.4
24.0
234.7
4,298.8
4,533.5
1,213.4
17.7
23.7
19.5
5,807.8

367.5
1.9
146.3
92.6
608.3
3,535.8
4,144.1
29.4
128.2
2,323.6
332.5
208.4
7,166.2

8.3
11.3
51.7
48.7
77.3
24.7
222.0
3,519.9
3,741.9
1,124.4
20.7
32.7
19.0
4,938.7

1.5
2,965.5
(372.6)
(485.0)
2,109.4
7,917.2 $

1.5
2,860.0
(309.2)
(324.8)
2,227.5
7,166.2

See accompanying notes to consolidated financial statements.

51 |

2022 Form 10-K

Ceridian HCM Holding Inc.
Consolidated Statements of Operations

Year Ended December 31,
2021
(Dollars in millions, except share and per share data)

2020

2022

Revenue:

Recurring
Professional services and other

Total revenue

Cost of revenue:
Recurring
Professional services and other
Product development and management
Depreciation and amortization

Total cost of revenue

Gross profit
Selling, general, and administrative
Operating (loss) profit

Interest expense, net
Other expense, net
Loss before income taxes
Income tax expense (benefit)
Net loss
Net loss per share:

Basic
Diluted

Weighted-average shares outstanding:

Basic
Diluted

$

$

$
$

1,047.6 $
198.6
1,246.2

850.7 $
173.5
1,024.2

309.4
238.7
169.9
55.0
773.0
473.2
499.0
(25.8)
28.6
8.5
(62.9)
10.5
(73.4) $

(0.48) $
(0.48) $

262.4
194.6
134.0
50.9
641.9
382.3
417.8
(35.5)
35.9
18.9
(90.3)
(14.9)
(75.4) $

(0.50) $
(0.50) $

690.2
152.3
842.5

213.3
163.7
83.7
40.5
501.2
341.3
333.5
7.8
25.1
2.7
(20.0)
(16.0)
(4.0)

(0.03)
(0.03)

152,940,299
152,940,299

150,402,321
150,402,321

146,774,471
146,774,471

See accompanying notes to consolidated financial statements.

52 |

2022 Form 10-K

Ceridian HCM Holding Inc.
Consolidated Statements of Comprehensive Income (Loss)

Net loss
Items of other comprehensive (loss) income before income taxes:

Change in foreign currency translation adjustment
Change in unrealized (loss) gain from invested customer funds
Change in pension liability adjustment (a)

Other comprehensive (loss) income before income taxes
Income tax (benefit) expense, net
Other comprehensive (loss) income after income taxes
Comprehensive (loss) income

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

$

(73.4) $

(75.4) $

(4.0)

(56.7)
(134.6)
(5.8)
(197.1)
(36.9)
(160.2)
(233.6) $

(17.6)
(48.4)
6.0
(60.0)
(11.2)
(48.8)
(124.2) $

$

18.7
38.4
21.2
78.3
15.9
62.4
58.4

(a)

The amount of the pension liability adjustment recognized in the consolidated statements of operations within other
expense, net was $11.7 million, $15.1 million, and $13.2 million during the years ended December 31, 2022, 2021, and
2020, respectively.

See accompanying notes to consolidated financial statements.

53 |

2022 Form 10-K

.

c
n

I

i

l

g
n
d
o
H
M
C
H
n
a
d
i
r
e
C

i

y
t
i
u
q
E

’

l

s
r
e
d
o
h
k
c
o
t
S

f
o
s
t
n
e
m
e
t
a
t
S
d
e
t
a
d

i
l

o
s
n
o
C

.

)
0
4
(

7

.

1
9

8

.

5
6

7

.

8
1

2

.

8
2

5

.

5
1

.

3
2
8
8
1

,

.

2
8
9
0
2

,

)
4

.

5
7
(

4

.

5
9

4

.

3
1
1

)
6

.

7
1
(

)
6

.

5
3
(

4
4

.

7

.

7
7

)
0

.

3
3
(

)
4

.

3
7
(

)
7

.

7
6
(

4

.

8
3

8

.

4
4
1

)
7

.

6
5
(

)
2

.

9
9
(

.

)
3
4
(

.

5
7
2
2
2

,

.

4
9
0
1
2

,

$

)
4

.

8
3
3
(

$

)
8

.

9
2
2
(

$

—

—

—

7

.

8
1

2

.

8
2

5

.

5
1

$

)
0

.

6
7
2
(

—

—

—

)
6

.

7
1
(

)
6

.

5
3
(

—

—

4
4

.

$

)
8

.

4
2
3
(

—

—

—

—

)
7

.

6
5
(

)
2

.

9
9
(

.

)
3
4
(

.

)
0
4
(

—

—

—

—

—

$

)
4

.

5
7
(

)
8

.

3
3
2
(

—

—

—

—

—

—

—

$

)
4

.

3
7
(

)
2

.

9
0
3
(

—

—

—

—

—

0

.

0
1

$

$

$

)
0

.

5
8
4
(

$

)
6

.

2
7
3
(

$

—

—

—

—

6

.

1
9

8

.

5
6

.

1
9
4
4
2

,

.

5
6
0
6
2

,

—

4

.

5
9

4

.

3
1
1

—

—

—

7

.

7
7

)
0

.

3
3
(

—

)
7

.

7
7
(

4

.

8
3

8

.

4
4
1

—

—

—

.

0
0
6
8
2

,

.

5
5
6
9
2

,

l

a
t
o
T

l

d
e
t
a
u
m
u
c
c
A

r
e
h
t
O

'

l

s
r
e
d
o
h
k
c
o
t
S

e
v

i

s
n
e
h
e
r
p
m
o
C

l

d
e
t
a
u
m
u
c
c
A

y
t
i
u
q
E

s
s
o
L

t
i
c
i
f
e
D

l

a
n
o
i
t
i
d
d
A

n

I

i

d
a
P

l

a
t
i
p
a
C

)
a
t
a
d
e
r
a
h
s

t
p
e
c
x
e

,

s
n
o

i
l
l
i

m
n

i

s
r
a

l
l

o
D

(

$

$

$

—

4
1

.

1
0

.

—

—

—

—

—

5
1

.

—

—

—

—

—

—

—

—

5
1

.

—

—

—

—

—

—

k
c
o
t
S
n
o
m
m
o
C

$

s
e
r
a
h
S

—

$

8
1
6

,

6
8
3

,

4
4
1

—

—

—

—

,

4
9
7
4
8
1
4

,

n
o

i
t

a
s
n
e
p
m
o
c

d
e
s
a
b
-
e
r
a
h
s

r
e
d
n
u

k
c
o

t
s
n
o
m
m
o
c

f

o
e
c
n
a
u
s
s
I

9
1
0
2

,

1
3
r
e
b
m
e
c
e
D

f
o
s
a
e
c
n
a
a
B

l

s
s
o

l

t

e
N

n
o

i
t

a
s
n
e
p
m
o
c
d
e
s
a
b
-
e
r
a
h
S

n
o

i
t

l

a
s
n
a
r
t

y
c
n
e
r
r
u
c

i

n
g
e
r
o
F

s
n
a
p

l

.

7
5
$

f

o

x
a

t

f

o

t

e
n

,
t

n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

i

n
o
s
n
e
p

.

2
0
1
$

f

o

x
a

t

f

o

t

e
n

,

i

n
a
g
d
e
z

i
l

a
e
r
n
u

n

i

n

i

e
g
n
a
h
C

e
g
n
a
h
C

—

$

2
1
4

,

1
7
5

,

8
4
1

n
o

i
t

a
s
n
e
p
m
o
c

d
e
s
a
b
-
e
r
a
h
s

r
e
d
n
u

k
c
o

t
s
n
o
m
m
o
c

f

o
e
c
n
a
u
s
s
I

0
2
0
2

,

1
3
r
e
b
m
e
c
e
D

f
o
s
a
e
c
n
a
a
B

l

s
s
o

l

t

e
N

—

—

—

—

—

—

,

9
1
6
3
2
4
3

,

.

6
1
$

f

o

x
a

t

f

o

t

e
n

,
t

n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

i

n
o
s
n
e
p

.

)
8
2
1
$
(

f

o
x
a

t

f

o

t

e
n

,
s
s
o

l

d
e
z

i
l

a
e
r
n
u

n

i

n

i

e
g
n
a
h
C

e
g
n
a
h
C

n
o

i
t

a
s
n
e
p
m
o
c
d
e
s
a
b
-
e
r
a
h
S

n
o

i
t

l

a
s
n
a
r
t

y
c
n
e
r
r
u
c

i

n
g
e
r
o
F

s
n
a
p

l

t

s
e
o
n
r
o
n
e
s
e
b

l

i

i
t
r
e
v
n
o
c

f

o

t

n
e
n
o
p
m
o
c

y
t
i

u
q
E

t

s
e
o
n
r
o
n
e
s
e
b

i

l

i
t
r
e
v
n
o
c
o

t

t

d
e
a
e
r

l

s

l
l

a
c

d
e
p
p
a
c

f

o
e
s
a
h
c
r
u
P

$

1
3
0

,

5
9
9

,

1
5
1

1
2
0
2

,

1
3
r
e
b
m
e
c
e
D

f
o
s
a
e
c
n
a
a
B

l

—

—

—

—

—

—

,

4
1
6
1
6
8
1

,

U
S
A

f

o
n
o

i
t

p
o
d
a
e
h

t

o

t

t

d
e
a
e
r

l

s
t
n
e
m
t
s
u
d
a

j

t
c
e

f
f

e
-
e
v
i
t

l

a
u
m
u
C

n
o

i
t

a
s
n
e
p
m
o
c

d
e
s
a
b
-
e
r
a
h
s

r
e
d
n
u

k
c
o

t
s
n
o
m
m
o
c

f

o
e
c
n
a
u
s
s
I

6
0
-
0
2
0
2

.

)
5
1
$
(

f

o

x
a

t

f

o

t

e
n

,
t

n
e
m
t
s
u
d
a
y
t
i
l
i

j

b
a

i
l

i

n
o
s
n
e
p

.

)
4
5
3
$
(

f

o
x
a

t

f

o

t

e
n

,
s
s
o

l

d
e
z

i
l

a
e
r
n
u

n

i

n

i

e
g
n
a
h
C

e
g
n
a
h
C

n
o

i
t

a
s
n
e
p
m
o
c
d
e
s
a
b
-
e
r
a
h
S

n
o

i
t

l

a
s
n
a
r
t

y
c
n
e
r
r
u
c

i

n
g
e
r
o
F

s
n
a
p

l

s
s
o

l

t

e
N

$

5
1

.

$

5
4
6

,

6
5
8

,

3
5
1

2
2
0
2

,

1
3
r
e
b
m
e
c
e
D

f
o
s
a
e
c
n
a
a
B

l

.
s
t
n
e
m
e

t

a

t
s

l

i

a
c
n
a
n

i
f

d
e
a
d

t

i
l

o
s
n
o
c
o

t

i

t

s
e
o
n
g
n
y
n
a
p
m
o
c
c
a
e
e
S

K

-
0
1
m
r
o
F
2
2
0
2

|

4
5

Ceridian HCM Holding Inc.
Consolidated Statements of Cash Flows

2022

Year Ended December 31,
2021
(Dollars in millions)
(75.4) $

(73.4) $

2020

Net loss
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:

$

Deferred income tax benefit
Depreciation and amortization
Amortization of debt issuance costs and debt discount
Provision for doubtful accounts
Net periodic pension and postretirement cost
Share-based compensation
Change in fair value of contingent consideration
Gain on sale of assets
Lease abandonment costs
Other
Changes in operating assets and liabilities excluding effects of acquisitions
and divestitures:

Trade and other receivables
Prepaid expenses and other current assets
Accounts payable and other accrued expenses
Deferred revenue
Employee compensation and benefits
Accrued interest
Accrued taxes
Other assets and liabilities

Net cash provided by (used in) operating activities
Cash Flows from Investing Activities
Purchase of customer funds marketable securities
Proceeds from sale and maturity of customer funds marketable securities
Expenditures for property, plant, and equipment
Expenditures for software and technology
Net proceeds from sale of assets
Acquisition costs, net of cash and restricted cash acquired
Net cash (used in) provided by investing activities
Cash Flows from Financing Activities
Increase (decrease) in customer funds obligations, net
Proceeds from issuance of common stock under share-based compensation
plans
Repayment of long-term debt obligations
Proceeds from revolving credit facility
Repayment of revolving credit facility
Proceeds from issuance of convertible senior notes, net of issuance costs
Purchases of capped calls related to convertible senior notes
Payment of debt refinancing costs
Net cash provided by financing activities
Effect of exchange rate changes on cash, restricted cash, and
equivalents
Net increase (decrease) in cash, restricted cash, and equivalents
Cash, restricted cash, and equivalents at beginning of year
Cash, restricted cash, and equivalents at end of year
Reconciliation of cash, restricted cash, and equivalents to the
consolidated balance sheets
Cash and equivalents
Restricted cash
Restricted cash and equivalents included in customer funds
Total cash, restricted cash, and equivalents
Supplemental Cash Flow Information
Cash paid for interest
Cash paid for income taxes
Cash received from income tax refunds

(1.7)
89.0
4.6
2.2
4.8
144.8
4.6
—
—
(0.2)

(39.5)
(11.4)
(0.2)
(5.6)
21.2
0.2
7.5
(14.3)
132.6

(652.8)
404.8
(20.2)
(74.3)
—
—
(342.5)

840.1

38.4
(8.4)
—
—
—
—
—
870.1

(38.5)
77.5
16.9
1.8
8.8
113.4
0.6
(19.1)
2.9
0.9

(34.8)
(12.3)
9.3
5.5
2.3
0.4
0.4
(11.8)
48.8

(763.8)
488.0
(11.5)
(52.2)
37.9
(409.5)
(711.1)

(195.7)

95.4
(7.8)
295.0
(295.0)
561.8
(45.0)
(1.2)
407.5

(8.1)
652.1
1,952.8
2,604.9

431.9
0.8
2,172.2
2,604.9

30.1
17.6
8.0

$

$

$

$

(20.9)
(275.7)
2,228.5
1,952.8

367.5
1.9
1,583.4
1,952.8

19.1
33.4
3.3

$

$

$

$

$

$

$

$

See accompanying notes to consolidated financial statements.

55 |

2022 Form 10-K

(4.0)

(7.0)
51.8
1.2
2.0
3.3
65.8
—
—
16.8
1.0

(12.0)
(6.8)
(1.4)
(1.2)
(104.0)
—
(3.7)
(32.0)
(30.2)

(212.4)
369.3
(18.1)
(41.7)
—
(58.3)
38.8

483.6

91.7
(10.0)
295.0
(295.0)
—
—
—
565.3

(4.0)
569.9
1,658.6
2,228.5

188.2
—
2,040.3
2,228.5

26.7
4.2
9.6

Ceridian HCM Holding Inc.
Notes to Consolidated Financial Statements

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, 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. While we operate in 18 countries globally, our operations are primarily located in the United States and
Canada.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”). The accompanying consolidated financial statements
include the operations and accounts of Ceridian and all subsidiaries, as well as any variable interest entity (“VIE”)
in which we have controlling financial interest. All intercompany balances and transactions have been eliminated
from our consolidated financial statements.

We consolidate the grantor trusts that hold funds provided by our payroll and tax filing customers pending

remittance to employees of those customers or tax authorities in the United States and Canada, although
Ceridian does not own the grantor trusts. Under consolidation accounting, the enterprise with a controlling
financial interest consolidates a VIE. A controlling financial interest in an entity is determined through analysis that
identifies the primary beneficiary which has (1) the power to direct the activities of a VIE that most significantly
impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could
potentially be significant to the VIE or the right to receive benefits from the entity that could potentially be
significant to the VIE. In addition, ongoing reassessments must be performed to confirm whether an enterprise is
the primary beneficiary of a VIE. The grantor trusts are VIEs, and we are deemed to have a controlling financial
interest as the primary beneficiary. Please refer to Note 5, “Customer Funds,” for further information on our
accounting for these funds.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of our financial statements and our 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 include the assignment of fair values to goodwill and other intangible
assets and testing for impairment; the testing of impairment of long-lived assets; the determination of our liability
for pensions and postretirement benefits; the determination of fair value of equity awards granted; and the
resolution of tax matters and legal contingencies. Further discussion on these estimates can be found in related
disclosures elsewhere in our notes to the consolidated financial statements.

Cash and Equivalents

As of December 31, 2022 and 2021, cash and equivalents were comprised of cash held in bank accounts

and investments with an original maturity of three months or less.

Concentrations

Cash deposits of client and corporate funds are maintained primarily in large credit-worthy financial

institutions in the countries in which we operate. These deposits may exceed the amount of any deposit insurance
that may be available through government agencies. All deliverable securities are held in custody with large
credit-worthy financial institutions, which bear the risk of custodial loss. Non-deliverable securities, primarily
money market securities, are held in custody by large, credit-worthy broker-dealers and financial institutions.

56 |

2022 Form 10-K

Trade and Other Receivables, Net

Trade and other receivables balances are presented on the consolidated balance sheets net of the

allowance for doubtful accounts and the reserve for sales adjustments. We experience credit losses on accounts
receivable and, accordingly, must make estimates related to the ultimate collection of the receivables.
Specifically, management analyzes accounts receivable, historical bad debt experience, customer concentrations,
customer creditworthiness, and current economic trends when evaluating the adequacy of the allowance for
doubtful accounts. We estimate the reserve for sales adjustment based on historical sales adjustment experience.
We write off accounts receivable when we determine that the accounts are uncollectible, generally upon customer
bankruptcy or the customer’s nonresponse to continued collection efforts.

Property, Plant, and Equipment, Net

Our property, plant, and equipment assets are stated at cost less accumulated depreciation. Depreciation is

calculated on a straight-line basis over the shorter of the remaining lease term or estimated useful life of the
related assets, which are generally as follows:

Building improvements
Machinery and equipment
Computer equipment

5 years
4-6 years
3-4 years

Repairs and maintenance costs are expensed as incurred. We capitalized interest of $0.8 million and $0.4

million in property, plant, and equipment, net during the years ended December 31, 2022 and 2021, respectively.
Property, plant, and equipment assets are assessed for impairment as described under the heading “Impairment
of Long-Lived Assets” below.

Business Combinations

In accordance with Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, we use
the acquisition method of accounting and allocate the fair value of purchase consideration to the assets acquired
and liabilities assumed based on their respective estimated fair values as of the acquisition date. Goodwill
represents the excess of purchase consideration transferred over the estimated fair value of the identifiable net
assets acquired in a business combination.

Assigning estimated fair values to the net assets acquired requires the use of significant estimates,

judgments, inputs, and assumptions regarding the fair value of the assets acquired and liabilities assumed.
Estimated fair values of assets acquired and liabilities assumed are generally based on available historical
information, independent valuations or appraisals, future expectations, and assumptions determined to be
reasonable but are inherently uncertain with respect to future events, including economic conditions, competition,
the useful life of the acquired assets, and other factors. The measurement period for assigning fair values to the
net assets acquired will end when the information, or the facts and circumstances, becomes available, but will not
exceed one year from the date of acquisition. The judgments made in determining the estimated fair value
assigned to assets acquired and liabilities assumed, as well as the estimated useful life and depreciation or
amortization method of each asset, can materially impact the net earnings of the periods subsequent to the
acquisition through depreciation and amortization, and in certain instances through impairment charges, if the
asset becomes impaired in the future. During the measurement period, any purchase price allocation changes
that impact the carrying value of goodwill affects any measurement of goodwill impairment taken during the
measurement period, if applicable. If necessary, purchase price allocation revisions that occur outside of the
measurement period are recorded within our consolidated statement of operations depending on the nature of the
adjustment.

Refer to Note 3, “Business Combinations”, for additional information regarding our accounting for recent

business combinations.

57 |

2022 Form 10-K

Goodwill and Intangible Assets

Goodwill, which represents the excess purchase price over the fair value of net assets of businesses

acquired, is assigned to reporting units based on the benefits derived from the acquisition. Goodwill and
indefinite-lived intangible assets, which consist of trade names, are not amortized against earnings, but instead
are tested for impairment on an annual basis, or more frequently if certain events or circumstances occur that
could indicate impairment. We perform our annual assessment of goodwill and indefinite-lived intangible assets
as of October 1.

We assess goodwill impairment risk by comparing the fair value of the net assets with the carrying amount

of the reporting unit. We determine the fair value of the reporting unit based on our market capitalization at the
testing date. If the carrying amount of the goodwill exceeds the fair value of the reporting unit, goodwill may be
impaired. To the extent that the carrying amount of the reporting unit exceeds the fair value of the reporting unit,
an impairment loss is recognized.

We assess indefinite-lived intangible assets impairment by performing a qualitative review. If the qualitative
assessment indicates it is more likely than not the fair value of an indefinite-lived intangible asset is less than the
carrying amount, a quantitative test is applied and, the carrying amount is compared to its estimated fair value.
The estimate of fair value is based on a relief from royalty method which calculates the cost savings associated
with owning rather than licensing the trade name. An estimated royalty rate is applied to forecasted revenue and
the resulting cash flows are discounted.

Definite-lived assets are assessed for impairment as described under the heading “Impairment of Long-

Lived Assets” below.

Intangible assets represent amounts assigned to specifically identifiable intangible assets at the time of an

acquisition. Definite-lived assets are amortized on a straight-line basis generally over the following periods:

Customer lists and relationships
Trade name
Technology

4-12 years
3-5 years
3-5 years

Internally Developed Software Costs

In accordance with 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. Research and development costs, product
management, and other software maintenance costs related to software development are expensed as incurred.

We had capitalized software costs, net of accumulated amortization, of $133.4 million and $92.8 million as

of December 31, 2022, and 2021, respectively, included in property, plant, and equipment, net in the
accompanying consolidated balance sheets. We amortize software costs on a straight-line basis over the
expected life of the software, generally a range of two to seven years. Amortization of software costs totaled
$43.5 million, $37.0 million, and $30.6 million for the years ended December 31, 2022, 2021, and 2020,
respectively.

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, capitalized software, and definite-lived intangible

assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset group may not be recoverable. Recoverability of asset groups to be held and used is
measured by a comparison of the carrying amount of an asset group to the estimated undiscounted future cash
flows expected to be generated by the asset group. If the carrying amount of an asset group exceeds its
estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of
the asset group exceeds the fair value of the asset group.

58 |

2022 Form 10-K

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. As of December 1, 2022, we increased the
expected period of benefit of our deferred sales commissions from five years to ten years. This change in
accounting estimate and related customer period of benefit is largely attributable to new evidence of longer
customer relationships such as increases in the proportion of new customer contracts greater than three years as
well as our continued high customer retention rates. The change was made on a prospective basis. The effect of
this change reduced amortization expense by $3.2 million for the twelve months ended December 31, 2022. The
change in estimate will also impact future periods, with an estimated reduction to amortization expense in the
range of $35 million to $37 million for the twelve months ended December 31, 2023.

Deferred costs included within Other assets on our consolidated balance sheets were $151.2 million and

$144.5 million as of December 31, 2022 and 2021, respectively. Amortization expense for the deferred costs was
$48.9 million, $46.4 million, and $38.8 million for the years ended December 31, 2022, 2021, and 2020,
respectively.

Revenue Recognition

The core principle of ASC Topic 606 is that revenue is recognized upon transfer of control of promised
products or services to customers in an amount that reflects the consideration we expect to receive in exchange
for those products or services. In accordance with ASC Topic 606, we perform the following steps to determine
revenue to be recognized:

1)

2)

Identify the contract(s) with a customer;

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

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; 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. 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 when an instance is provisioned to the customer. 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 (in relation to
progression through the implementation phase), by solution.

59 |

2022 Form 10-K

Recurring Revenues

For our Dayforce solutions, 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 at the customer. We charge Powerpay customers monthly recurring fees on a per-
employee, per-process basis. For our Bureau solutions, we typically charge monthly recurring fees on a per-
process basis. The typical recurring customer contract has an initial term between three and five years. Any
credits related to service level commitments are recognized as incurred, as service level failures are not
anticipated at contract signing. Should a customer cancel the initial contract, an early termination fee may be
applicable, and revenue is recognized upon collection. We also generate recurring revenue from investment
income on our Cloud and Bureau customer funds before such funds are remitted to taxing authorities, customer
employees, or other third parties. We refer to this investment income as float revenue. Please refer to Note 12,
“Revenue,” for a full description of our sources of revenue.

Professional Services and Other Revenues

Professional services and other revenues consist primarily of charges relating to the work performed to

assist customers with the planning, design, and implementation of their solutions. Also included in professional
services are any related training services, post-implementation professional services, and shipment of time clocks
purchased by customers. We also generate professional services and other revenues from custom professional
services and consulting services that we provide and for certain third-party services that we arrange for our
Bureau customers. Professional services revenue is primarily recognized as hours are incurred.

Costs and Expenses

Cost of Revenue

Cost of revenue consists of costs to deliver our revenue-producing services. Most of these costs are

recognized as incurred, that is, as we become obligated to pay for them. Some costs of revenue are recognized in
the period that a service is sold and delivered. Other costs of revenue are recognized over the period of use or in
proportion to the related revenue.

The costs recognized as incurred consist primarily of customer service staff costs, customer technical
support costs, implementation personnel costs, costs of hosting applications, consulting and purchased services,
delivery services, and royalties. The costs of revenue recognized over the period of use are depreciation and
amortization, rentals of facilities and equipment, and direct and incremental costs associated with deferred
implementation service revenue.

Cost of recurring revenues primarily consists of costs to provide maintenance and technical support to our
customers, and the costs of hosting our applications. The cost of recurring revenues includes compensation and
other employee-related expenses for data center staff, payments to outside service providers, data center, and
networking expenses.

Cost of professional services and other revenues primarily consists of costs to provide implementation

consulting services and training to our customers, as well as the cost of time clocks. Costs to provide
implementation consulting services include compensation and other employee-related expenses for professional
services staff, costs of subcontractors, and travel.

Product development and management expense includes costs related to software development activities

that do not qualify for capitalization, such as development, quality assurance, testing of new technologies, and
enhancements to our existing solutions that do not result in additional functionality. Product development and
management expense also includes costs related to the management of our solutions. Research and
development expense was $92.3 million, $81.1 million, and $39.6 million for the years ended December 31, 2022,
2021, and 2020, respectively.

Depreciation and amortization related to cost of revenue primarily consists of amortization of capitalized

software.

60 |

2022 Form 10-K

Selling, General, and Administrative Expense

Selling expense includes costs related to maintaining a direct marketing infrastructure and sales force and

other direct marketing efforts, such as marketing events, advertising, telemarketing, direct mail, and trade shows.
Advertising costs are expensed as incurred. Advertising expense was $11.3 million, $7.5 million, and $5.5 million
for the years ended December 31, 2022, 2021, and 2020, respectively.

General and administrative expense includes costs that are not directly related to delivery of services,
selling efforts, or product development, primarily consisting of corporate-level costs, such as administration,
finance, legal, and human resources. Also included in this category are depreciation, and amortization of other
intangible assets not reflected in cost of revenue, and the provision for doubtful accounts receivable.

Other Expense (Income), Net

Other expense (income), net includes the results of transactions that are not appropriately classified in

another category. These items are primarily foreign currency translation gains and losses resulting from
transactions denominated in foreign currencies and net periodic pension costs.

Income Taxes

Income taxes have been provided for using the asset and liability method. Deferred tax assets and liabilities

are recorded for temporary differences between the financial reporting basis and the tax basis of assets and
liabilities as adjusted for the expected benefits of utilizing net operating loss carryforwards. The impact on
deferred taxes of changes in tax rates and laws, if any, applied to the years during which temporary differences
are expected to be settled, is reflected in the consolidated financial statements in the period of enactment.

We classify interest and penalties related to income taxes as a component of income tax expense (benefit).

Fair Value of Financial Instruments

The carrying amounts of cash and equivalents, trade and other receivables, net, customer funds obligations,

customer advance payments, and accounts payable approximate fair value because of the short-term nature of
these items.

Share-Based Compensation

Our employees participate in share-based compensation plans. Under the fair value recognition provisions
of share-based compensation accounting, we measure share-based compensation cost at the grant date based
on the fair value of the award and recognize the compensation expense over the requisite service period, which is
the period during which an employee is required to provide services in exchange for the award.

We use the Black-Scholes standard option pricing model (“Black-Scholes model”) to determine the fair value
of stock awards with term-based vesting conditions. The determination of the fair value of the awards on the date
of grant using the Black-Scholes model is affected by the value of our common stock as well as other inputs and
assumptions described below.

If factors change and we employ different assumptions for estimating share-based compensation expense in

future periods or if we adopt a different valuation model, future periods may differ significantly from what we have
recorded in the current period and could materially affect our operating results.

To determine the fair value of both term-based and certain performance-based stock awards, the risk-free
interest rate used was based on the implied yield currently available on U.S. Treasury zero coupon issues with
remaining term equal to the contractual term of the performance-based options and the expected term of the
term-based awards. The estimated volatility of our common stock is based on volatility data for selected
comparable public companies, including the historical volatility of our stock price, over the expected term of our
stock awards. Because we do not anticipate paying any cash dividends in the foreseeable future, we use an
expected dividend yield of zero. The amount of share-based compensation expense we recognize during a period
is based on the portion of the awards that are ultimately expected to vest. We recognize stock compensation
expense using the straight-line method.

61 |

2022 Form 10-K

For performance-based stock options with a market condition, a Monte Carlo simulation model is used to

determine the fair value. The Monte Carlo model utilizes multiple input variables that determine the probability of
satisfying the market conditions stipulated in the award.

We estimate forfeitures at the time of grant based on historical data and record share-based compensation

expense for those awards expected to vest.

Pension and Other Postretirement Benefits Liability

We present information about our pension and postretirement benefit plans in Note 10, “Employee Benefit
Plans” to our consolidated financial statements. Liabilities and expenses for pensions and other postretirement
benefits are determined with the assistance of third-party actuaries, using actuarial methodologies and
incorporating significant assumptions, including the rate used to discount the future estimated liability, the long-
term rate of return on plan assets, and several assumptions relating to the employee workforce (medical costs,
retirement age, and mortality). The discount rate assumption utilizes a full yield curve approach by applying the
specific spot rates along the yield curve used in the determination of the benefit obligation to the relevant
projected cash flows. The impact of a change in the discount rate of 25 basis points would be approximately $6.7
million on the liabilities and an immaterial impact on pre-tax earnings in the following year. The long-term rate of
return is estimated by considering historical returns and expected returns on current and projected asset
allocations and is generally applied to a five-year average market value of assets. A change in the assumption for
the long-term rate of return on plan assets of 25 basis points would impact pre-tax earnings by approximately $1.1
million.

Foreign Currency Translation

We have international operations whereby the local currencies serve as functional currencies. We translate

foreign currency denominated assets and liabilities at the end-of-period exchange rates and foreign currency
denominated statements of operations at the 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 subsidiaries that are due to
changes in exchange rates between the U.S. dollar and the subsidiaries’ functional currency as foreign currency
translation within accumulated other comprehensive income (loss) in the accompanying consolidated statements
of stockholders’ equity and comprehensive income (loss). Gains and losses from transactions and translation of
assets and liabilities denominated in currencies other than the functional currency of the subsidiaries are recorded
in the consolidated statements of operations within other expense (income), net.

62 |

2022 Form 10-K

Recently Issued and Adopted Accounting Pronouncements

Standard

Accounting Standards Update
("ASU") 2020-06, Debt - Debt with
Conversion and Other Options
(Subtopic 470-20) and Derivatives and
Hedging - Contracts in Entity's Own
Equity (Subtopic 815-40)

Issuance
Date
August
2020

Adoption
Date
January
2022

Description
This amendment simplifies the accounting
for convertible instruments by removing
certain separation models required under
current GAAP for (1) convertible debt with
a cash conversion feature and (2)
convertible instruments with a beneficial
conversion feature. As a result, a
convertible debt instrument will be
accounted for as a single liability
measured at its amortized cost.

ASU 2022-06, Reference Rate Reform
(Topic 848): Deferral of the Sunset Date
of Topic 848

December
2022

Not yet
adopted

This amendment provides optional
expedients and exceptions for applying
GAAP to contracts, hedging relationships,
and other transactions affected by
reference rate reform if certain criteria are
met. The amendments apply only to
contracts, hedging relationships, and other
transactions that reference LIBOR or
another reference rate expected to be
discontinued because of reference rate
reform.

Effect on the Financial
Statements
We adopted the guidance as
of January 1, 2022, using the
modified retrospective
method of transition. The
adoption resulted in the
elimination of the debt
discount (and related deferred
tax liability) that was recorded
within equity related to our
Convertible Senior Notes.
The net impact of the
adjustments was recorded to
the opening balance of
accumulated deficit and
additional paid in capital. The
impact to the consolidated
balance sheet was as follows:
(1) increase of $92.9 million
to long-term debt, (2)
decrease of $77.7 million to
additional paid-in capital, net
of allocated issuance costs of
$2.7 million and deferred tax
impact of $28.2 million, and
(3) decrease to accumulated
deficit of $10.0 million.
This amendment may be
elected over time through
December 31, 2024 as
reference rate reform
activities occur. We do not
expect the adoption of this
guidance to have a significant
impact on our financial
statements.

3. Business Combinations

Ascender

On March 1, 2021, we completed the purchase of 100% of the outstanding shares of Ascender HCM Pty

Limited (“Ascender”) for $359.6 million. Ascender is a payroll and human resources solutions provider in the Asia
Pacific Japan ("APJ") region. We entered into a forward foreign currency contract to hedge the purchase price for
the Ascender acquisition which was denominated in Australian dollars, resulting in the recognition of a realized
gain of $4.2 million for the year ended December 31, 2021, included as a component of other expense, net in our
consolidated statement of operations.

The financial results of Ascender have been included within our consolidated financial statements from the

acquisition date forward and are classified among both Cloud and Bureau solutions. The purchase accounting
was considered complete as of December 31, 2021. The intangible assets consist of $76.5 million of customer
relationships, $55.0 million of developed technology, and $6.5 million of trade name. Of the goodwill associated
with this acquisition, no amount is deductible for income tax purposes. The goodwill of $242.8 million arising from
the Ascender acquisition is primarily attributable to the synergies to enable both multi-national customers and
customers within the APJ region to leverage one global HCM platform, Dayforce, as well as the assembled
workforce of Ascender.

63 |

2022 Form 10-K

The major classes of assets and liabilities to which we have allocated the purchase price were as follows:

(Dollars in millions)

Cash and equivalents
Restricted cash
Trade receivables, prepaid expenses, and other current assets
Customer funds
Property, plant, and equipment
Goodwill
Other intangible assets
Other assets
Accounts payable and other current liabilities
Customer funds obligations
Other non-current liabilities

Total purchase price

$

$

5.1
2.0
16.0
18.9
13.1
242.8
138.0
18.8
(33.4)
(18.8)
(42.9)
359.6

Ideal

On April 30, 2021, we completed the purchase of 100% of the outstanding shares of O5 Systems, Inc. dba
Ideal (“Ideal”) for $41.4 million. Ideal is a talent intelligence software provider based in Toronto, Ontario, Canada.

The financial results of Ideal have been included within our consolidated financial statements from the

acquisition date forward and are classified as a Cloud solution. The purchase accounting was considered
complete as of December 31, 2021. The intangible assets consist of $18.0 million of developed technology, $0.2
million of trade name, and $0.1 million of customer relationships. Of the goodwill associated with this acquisition,
no amount is deductible for income tax purposes.

The major classes of assets and liabilities to which we have allocated the purchase price were as follows:

Cash and equivalents
Trade receivables, prepaid expenses, and other current assets
Property, plant, and equipment
Goodwill
Other intangible assets
Accounts payable and other current liabilities
Other non-current liabilities

Total purchase price

(Dollars in millions)

2.6
1.0
0.1
26.3
18.3
(3.8)
(3.1)
41.4

$

$

DataFuzion

On October 4, 2021, we completed the acquisition of certain assets and liabilities of DataFuzion HCM, Inc.

(“DataFuzion”) for $12.5 million in cash consideration and future contingent consideration payments. The asset
purchase agreement allows the sellers to receive additional payments based on 1) the go live of DataFuzion’s
payroll processing solution for a certain customer (“Milestone Payment”) and 2) qualifying annualized recurring
revenue ("ARR") performance generated from DataFuzion's solution at each measurement date (“Earn-out
Payments”, collectively with the Milestone Payment, the “Contingent Consideration Payments”). The Milestone
Payment will not exceed a payout of $2.5 million whereas the Earn-out Payments are performance based and do
not have an established maximum payout. The earn-out will be measured and subsequently paid annually as of
June 30, with the first measurement in 2023 and the final measurement in 2026. The fair value of the Contingent
Consideration Payments was $5.4 million at the date of acquisition.

The purchase accounting was considered complete as of December 31, 2021 and we allocated the
purchase price of $17.9 million as follows: $15.6 million to goodwill and $2.3 million to developed technology. Of
the goodwill associated with this acquisition, $10.2 million is deductible for income tax purposes.

64 |

2022 Form 10-K

ADAM HCM

On December 3, 2021, we completed the acquisition of 100% of the outstanding interests in ATI ROW, LLC

and ADAM HCM MEXICO, S. de R.L. de C.V. (collectively, "ADAM HCM") for $34.5 million. ADAM HCM is a
payroll and HCM company in Latin America.

We finalized the final purchase price adjustments, specifically the net working capital and tax adjustments,

resulting in the completion of the purchase accounting as of June 30, 2022. Intangible assets recorded for this
acquisition consist of $7.5 million of customer relationships, $2.9 million of developed technology, and $0.4 million
of trade name. Of the goodwill associated with this acquisition, $24.0 million is deductible for income tax
purposes.

The major classes of assets and liabilities to which we have allocated the purchase price were as follows:

Cash and equivalents
Trade receivables, prepaid expenses, and other current assets
Goodwill
Other intangible assets
Other assets
Accounts payable and other current liabilities

Total purchase price

(Dollars in millions)

0.2
0.9
24.0
10.8
0.2
(1.6)
34.5

$

$

The acquisition of Ascender, Ideal, DataFuzion, and ADAM HCM were recorded using the acquisition
method of accounting, in which the assets and liabilities assumed are recognized at their fair value. Additionally,
after consideration of these acquisitions, management has concluded that we continue to have one operating and
reportable segment. This conclusion aligns with how management monitors operating performance, allocates
resources, and deploys capital. Pro forma financial information is not presented as none of the acquisitions
qualified as a significant business combination individually or in aggregate.

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). 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.

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.

65 |

2022 Form 10-K

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

Our financial assets and liabilities measured at fair value on a recurring basis were categorized as follows:

Assets
Available for sale customer funds assets
Total assets measured at fair value

Liabilities
DataFuzion contingent consideration

Total liabilities measured at fair value

Assets
Available for sale customer funds assets
Total assets measured at fair value

Liabilities
DataFuzion contingent consideration

Total liabilities measured at fair value

December 31, 2022

Level 1

Level 2

Level 3

Total

(Dollars in millions)

$
— $

2,011.0 (a) $
$
2,011.0

—
—

$
$

2,011.0
2,011.0

— $
— $

—
—

$
$

10.6 (b) $
$
10.6

10.6
10.6

December 31, 2021

Level 1

Level 2

Level 3

Total

(Dollars in millions)

— $
— $

1,952.4 (a) $
$
1,952.4

—
—

$
$

1,952.4
1,952.4

— $
— $

—
—

$
$

6.0 (b) $
$
6.0

6.0
6.0

$

$
$

$
$

$
$

(a)
(b)

Fair value is based on inputs that are observable for the asset or liability, other than quoted prices.
For the contingent consideration related to the 2021 acquisition of certain assets and liabilities of
DataFuzion HCM, Inc. ("DataFuzion"), we utilize an option pricing model, specifically a Black-Scholes-
Merton model, to estimate the fair value of the contingent liability as of the reporting dates. This model uses
certain assumptions related to risk-free rates and volatility as well as certain judgments in forecasting annual
recurring revenue. The contingent consideration has been measured as Level 3 given the unobservable
inputs that are significant to the measurement of liability. The contingent consideration is included within
other liabilities in our consolidated balance sheets.

During the year ended December 31, 2022 and 2021, we recognized expense of $4.6 million and $0.6

million, respectively, within selling, general, and administrative expense in our consolidated statements of
operations due to the remeasurement of the DataFuzion contingent consideration.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

During the year ended December 31, 2022, we did not re-measure any financial assets or liabilities at fair

value on a nonrecurring basis. During the year ended December 31, 2021, assets acquired and liabilities
assumed as part of a business combination and recognized as part of our convertible debt issuance have been
measured at fair value on a nonrecurring basis.

5. Customer Funds

Overview

In connection with our U.S., Canada, India, Singapore, China, and Malaysia payroll and tax filing services,

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

66 |

2022 Form 10-K

Our customer 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. Accordingly, we maintain on average
approximately 45% to 55% of customer 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 on average approximately 45% to 55% of customer 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 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 funds, also referred to as float revenue or float, is a component

of our compensation for providing services under agreements with our customers. Investment income from
invested customer funds included in revenue amounted to $80.2 million, $41.1 million, and $52.3 million for the
years ended December 31, 2022, 2021, and 2020, respectively. Investment income includes interest income,
realized gains and losses from sales of customer funds’ investments, and unrealized credit losses determined to
be unrecoverable.

The amortized cost of customer funds as of December 31, 2022, and 2021, is the original cost of assets
acquired. The amortized cost and fair values of investments of customer funds available for sale were as follows:

Money market securities, investments carried at cost and
other cash equivalents
Available for sale investments:

U.S. government and agency securities
Canadian and provincial government securities
Corporate debt securities
Asset-backed securities
Mortgage-backed securities
Other short-term investments
Other securities

Total available for sale investments
Invested customer funds

Receivables
Total customer funds

Amortized
Cost

December 31, 2022
Gross Unrealized

Gain
Loss
(Dollars in millions)

Fair
Value

$

2,152.4 $

— $

— $

2,152.4

721.3
438.7
653.8
169.6
14.5
57.0
74.4
2,129.3
4,281.7 $
20.0
4,301.7

$

—
0.1
0.5
0.1
—
—
—
0.7
0.7 $

(53.1)
(17.8)
(35.5)
(6.1)
(0.7)
—
(5.9)
(119.1)
(119.1)

668.2
421.0
618.8
163.6
13.8
57.0
68.6
2,011.0
4,163.4
19.8
4,183.2

$

67 |

2022 Form 10-K

Money market securities, investments carried at cost and
other cash equivalents
Available for sale investments:

U.S. government and agency securities
Canadian and provincial government securities
Corporate debt securities
Asset-backed securities
Mortgage-backed securities
Other short-term investments
Other securities

Total available for sale investments
Invested customer funds

Receivables
Total customer funds

Amortized
Cost

December 31, 2021
Gross Unrealized

Gain
Loss
(Dollars in millions)

Fair
Value

$

1,562.4 $

— $

— $

1,562.4

697.8
399.9
551.4
174.2
2.7
41.4
71.7
1,939.1
3,501.5 $
18.4
3,519.9

$

9.5
5.3
8.3
1.5
—
—
—
24.6
24.6 $

(5.8)
(1.3)
(3.1)
(0.3)
—
—
(0.8)
(11.3)
(11.3)

$

701.5
403.9
556.6
175.4
2.7
41.4
70.9
1,952.4
3,514.8
21.0
3,535.8

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

Less than 12 months

Unrealized
Losses

Fair
Value

December 31, 2022

12 months or more
Fair
Value

Unrealized
Losses

(Dollars in millions)

Total

Unrealized
Losses

Fair
Value

U.S. government and agency securities $
Canadian and provincial government
securities
Corporate debt securities
Asset-backed securities
Other securities
Total available for sale investments

$

(14.7) $

341.7 $

(38.3) $ 323.9 $

(53.0) $ 665.6

(11.8)
(17.9)
(4.6)
(1.0)
(50.0) $

348.1
422.6
114.4
20.7
1,247.5 $

(6.0)
(17.6)
(1.5)
(5.7)

65.1
175.7
26.2
61.3

(69.1) $ 652.2 $

(17.8)
(35.5)
(6.1)
(6.7)

413.2
598.3
140.6
82.0
(119.1) $ 1,899.7

Management does not believe that any individual unrealized loss was unrecoverable as of December 31,

2022. 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 December 31, 2022, 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.

Fair Value

December 31, 2022
Cost
(Dollars in millions)
2,565.7 $
638.7
906.5
170.8
4,281.7 $

2,560.8
608.3
835.8
158.5
4,163.4

Due in one year or less
Due in one to three years
Due in three to five years
Due after five years
Invested customer funds

$

$

68 |

2022 Form 10-K

6. Trade and Other Receivables, Net

Trade and other receivables, net, consist of the following:

Trade receivables from customers
Interest receivable from invested customer funds
Dayforce Wallet on-demand pay receivables
Other
Total gross receivables
Less: reserve for sales adjustments
Less: allowance for doubtful accounts
Trade and other receivables, net

The activity related to the allowance for doubtful accounts was as follows:

December 31,

2022

2021

(Dollars in millions)

$

$

143.0 $

12.7
22.2
11.4
189.3
(4.6)
(4.6)
180.1 $

130.3
3.2
9.3
11.4
154.2
(4.0)
(3.9)
146.3

Balance at beginning of year
Provision for doubtful accounts
Charge-offs, net of recoveries
Balance at end of year

7. Property, Plant, and Equipment, Net

Property, plant, and equipment, net consist of the following:

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

$

$

3.9 $
2.2
(1.5)
4.6 $

3.1 $
1.8
(1.0)
3.9 $

2.4
2.0
(1.3)
3.1

Software
Machinery and equipment
Buildings and improvements
Total property, plant, and equipment
Accumulated depreciation
Property, plant, and equipment, net

December 31,

2022
2021
(Dollars in millions)

449.4 $
126.4
41.8
617.6
(442.7)
174.9 $

357.2
121.7
31.9
510.8
(382.6)
128.2

$

$

Depreciation expense related to property, plant, and equipment, net was $58.1 million, $53.6 million, and

$48.0 million for the years ended December 31, 2022, 2021, and 2020, respectively.

8. Goodwill and Intangible Assets

Goodwill

Goodwill and changes therein were as follows:

Balance at December 31, 2020
Acquisitions
Translation
Balance at December 31, 2021
Remeasurement from provisional purchase price accounting
Translation
Balance at December 31, 2022
Tax-deductible goodwill at December 31, 2022

69 |

2022 Form 10-K

(Dollars in millions)

2,031.8
308.2
(16.4)
2,323.6
0.5
(44.1)
2,280.0
49.9

$

$
$

Please refer to Note 3, “Business Combinations,” for further discussion of our acquisitions.

We perform an impairment assessment of our goodwill balances as of October 1 of each year. Goodwill

impairment testing is performed at the reporting unit level, which is the operating segment level or one level
below. We performed a qualitative assessment as of October 1, 2022 and concluded that it is more likely than not
that the fair value of our reporting unit is more than its carrying amount.

Intangible Assets

Other intangible assets, net consist of the following:

Customer lists and relationships
Trade name
Technology
Total other intangible assets

Customer lists and relationships
Trade name
Technology
Total other intangible assets

December 31, 2022

Gross Carrying
Amount

Accumulated
Amortization
(Dollars in millions)

Net

$

$

299.8 $
183.4
213.5
696.7 $

(228.6) $
(4.7)
(181.8)
(415.1) $

71.2
178.7
31.7
281.6

December 31, 2021

Gross Carrying
Amount

Accumulated
Amortization
(Dollars in millions)

Net

$

$

308.4 $
184.4
233.9
726.7 $

(220.4) $
(3.2)
(170.6)
(394.2) $

88.0
181.2
63.3
332.5

Estimated Life
Range (Years)

4-12
3-5 and Indefinite
3-5

Estimated Life
Range (Years)

4-12
3-5 and Indefinite
3-5

As of October 1 each year, we perform an impairment assessment of our indefinite-lived intangible assets,
which includes our Ceridian and Dayforce trade names, which have a carrying value of $167.2 million and $4.4
million, respectively as of December 31, 2022. We performed a qualitative assessment as of October 1, 2022 and
concluded that it is more likely than not that the fair value of our Ceridian and Dayforce trade names exceeded
their respective carrying amounts. We continue to evaluate the use of our trade names and branding in our sales
and marketing efforts. If there is a fundamental shift in the method of our branding in the future, we will assess the
impact on the carrying amount of our trade name intangible assets to determine whether an impairment exists. If it
is determined that an impairment has occurred, it would be recognized during the period in which the decision
was made to make the fundamental shift.

Amortization expense related to definite-lived intangible assets was $30.9 million, $23.9 million, and $3.8

million for the years ended December 31, 2022, 2021, and 2020, respectively. We estimate the future
amortization of other intangible assets is as follows:

Years Ending December 31,

Amount
(Dollars in millions)

2023
2024
2025
2026
2027
Thereafter

$

25.2
24.5
18.2
10.2
7.7
24.2

70 |

2022 Form 10-K

Long-Lived Assets by Geographic Area

Long-lived assets consist of right of use lease asset, property, plant and equipment, net, goodwill, and other

intangible assets, net. Long-lived assets by country consist of the following:

United States
Canada
Australia
Other

Total long-lived assets

9. Debt

Overview

Our debt obligations consist of the following:

Term Debt, interest rate of 6.9% and 2.6%, respectively
Revolving Credit Facility ($300.0 million available capacity less amounts
reserved for letters of credit, which were $1.4 million and $2.1 million,
respectively)
Convertible Senior Notes, interest rate of 0.25%
Australia Line of Credit (AUD $1.5 million and $2.9 million letter of credit
capacity, respectively, which were fully utilized; USD $1.0 million and USD
$2.1 million, respectively)
Financing lease liabilities (Please refer to Note 15)
Total debt
Less unamortized discount on Term Debt and Convertible Senior Notes (a)
Less unamortized debt issuance costs on Term Debt and Convertible Senior
Notes (a)
Less current portion of long-term debt
Long-term debt, less current portion

December 31,

2022

2021

(Dollars in millions)
1,803.5 $
507.4
259.3
190.6
2,760.8 $

1,795.6
530.9
370.0
117.2
2,813.7

$

$

December 31,

2022

2021

(Dollars in millions)

$

651.1 $

657.9

—
575.0

—
8.4
1,234.5
0.6

12.7
7.8
1,213.4 $

$

—
575.0

—
9.6
1,242.5
95.5

14.3
8.3
1,124.4

a) We adopted ASU 2020-06 as of January 1, 2022. The unamortized discount and debt issuance costs

on the Convertible Senior Notes is presented post-adoption of ASU 2020-06 as of December 31, 2022
and is presented pre-adoption of ASU 2020-06 as of December 31, 2021. Refer to the Convertible
Senior Notes section below for further discussion of the impacts of the adoption of ASU 2020-06 on
our consolidated financial statements.

Accrued interest and fees related to our debt obligations was $0.7 million and $0.5 million as of

December 31, 2022 and 2021, respectively, and is included within Other accrued expenses in our consolidated
balance sheets.

Senior Secured Credit Facility

Principal Amounts and Maturity Dates

On April 30, 2018, we completed the refinancing of our debt by entering into a new credit agreement.

Pursuant to the new credit agreement, we became borrower of (i) a $680.0 million term loan debt facility (the
“Term Debt”) and (ii) a $300.0 million revolving credit facility (the “Revolving Credit Facility”) (collectively, the
“Senior Secured Credit Facility”). Our obligations under the Senior Secured Credit Facility are secured by first
priority security interests in substantially all of our assets and the domestic subsidiary guarantors, subject to
permitted liens and certain exceptions.

71 |

2022 Form 10-K

The Term Debt will mature on April 30, 2025. We are required to make annual amortization payments in

respect of the Term Debt in an amount equal to 1.00% of the original principal amount thereof, payable in equal
quarterly installments of 0.25% of the original principal amount of the first lien term debt. On December 15, 2021,
we completed the second amendment to our Senior Secured Credit Facility, which extended the maturity date of
the Revolving Credit Facility from April 30, 2023 to January 29, 2025. The Revolving Credit Facility does not
require amortization payments.

Interest

The effective interest rate on the Term Debt at December 31, 2022 and 2021, was 6.9% and 2.6%,
respectively. The Term Debt was initially subject to an interest rate of LIBOR plus 3.25%. As a result of a ratings
upgrade on March 26, 2019, of our Senior Secured Credit Facility by Moody’s Investor Service, from B3 to B2, the
Company’s floating rate Term Debt interest rate was reduced from LIBOR plus 3.25% to LIBOR plus 3.00%, so
long as the rating is maintained. On February 19, 2020, we completed the first amendment to the Senior Secured
Credit Facility in which the interest rate was reduced from LIBOR plus 3.00% to LIBOR plus 2.5%. Further, the
interest rate trigger under the applicable rating by Moody’s Investor Service was removed by the first amendment.

Financing Costs and Issuance Discounts

In connection with our debt refinancing in 2018, we capitalized $3.6 million of additional financing costs. The
Term Debt had associated unamortized deferred financing costs of $3.7 million and $5.2 million at December 31,
2022, and 2021, respectively, which are being amortized at an effective interest rate of 5.3%. In connection with
the second amendment in 2021, we capitalized $0.8 million of additional financing costs.

Collateral and Guarantees

The Senior Secured Credit Facility names us as the sole borrower and is unconditionally guaranteed by our
domestic, wholly-owned financially material restricted subsidiaries, subject to certain customary exceptions. The
Senior Secured Credit Facility is secured by a perfected first priority security interest, subject to certain exceptions
(including customer funds), in substantially all of our and the subsidiary guarantors’ tangible and intangible assets.
The security interest includes a pledge of the capital stock of certain of our direct and indirect material restricted
subsidiaries.

Representations, Warranties and Covenants

The documents governing the Senior Secured Credit Facility contain certain customary representations and

warranties. In addition, those documents contain customary covenants restricting our ability and certain of our
subsidiaries’ ability to, among other things: incur additional indebtedness, issue disqualified stock and preferred
stock; create liens; declare dividends; redeem capital stock; make investments; engage in a materially different
line of business; engage in certain mergers, consolidations, acquisitions, asset sales, or other fundamental
changes; engage in certain transactions with affiliates; enter into certain restrictive agreements; make
prepayments on any subordinated indebtedness; modify junior financing documentation; and make changes to
our fiscal year.

The Senior Secured Credit Facility documents contain a requirement that we maintain a ratio of adjusted

first lien debt to Credit Facility EBITDA below specified levels on a quarterly basis; however, such requirement is
applicable only if more than 35% of the Revolving Credit Facility is drawn. As of December 31, 2022, no portion of
the Revolving Credit Facility was drawn.

Events of Default

Events of default under the Senior Secured Credit Facility documents include, but are not limited to: failure

to pay interest, principal and fees, or other amounts when due; material breach of any representation or warranty;
covenant defaults; cross defaults to other material indebtedness; events of bankruptcy, invalidity of security
interests; a change of control; material judgments for payment of money; involuntary acceleration of any debt; and
other customary events of default. There were no events of default as of December 31, 2022.

72 |

2022 Form 10-K

Convertible Senior Notes

In March 2021, we issued $575.0 million in aggregate principal amount of 0.25% Convertible Senior Notes

due 2026 in a private offering to qualified institutional buyers pursuant to Rule 144A promulgated under the
Securities Act of 1933, as amended, and pursuant to exemptions from the prospectus requirements of applicable
Canadian securities laws, including the exercise in full by the initial purchasers of their option to purchase an
additional $75.0 million in aggregate principal amount of 0.25% Convertible Senior Notes due 2026 (collectively,
the “Convertible Senior Notes”). The Convertible Senior Notes bear interest at a rate of 0.25% per year and
interest is payable semiannually in arrears on March 15 and September 15 of each year, beginning on September
15, 2021. The Convertible Senior Notes mature on March 15, 2026, unless earlier converted, redeemed or
repurchased. The total net proceeds from the offering, after deducting initial purchase discounts and other debt
issuance costs, were $561.8 million.

The Convertible Senior Notes are unsecured obligations and do not contain any financial covenants or

restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of
securities by us or any of our subsidiaries.

The following table presents details of the Convertible Senior Notes:

Convertible Senior Notes

7.5641 shares $

132.20

Initial Conversion Rate per
$1,000 Principal

Initial Conversion
Price per Share

The Convertible Senior Notes will be convertible at the option of the holders at any time only under the

following circumstances:

 During any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last
reported sale price per share of our common stock exceeds 130% of the conversion price for each of at
least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day
of the immediately preceding calendar quarter;

 During the five consecutive business days immediately after any 10 consecutive trading day period (such

10 consecutive trading day period, the “measurement period”) in which the trading price per $1,000
principal amount of Convertible Senior Notes for each trading day of the measurement period was less
than 98% of the product of the last reported sale price per share of our common stock on such trading
day and the conversion rate on such trading day;

 Upon the occurrence of certain corporate events or distributions on our common stock, as described in

the Indenture under which the Convertible Senior Notes were issued;

 If we call such Convertible Senior Notes for redemption; or

 At any time from, and including, September 15, 2025 until the close of business on the second scheduled

trading day immediately before the maturity date.

Upon conversion, we may satisfy the conversion obligation by paying or delivering, as applicable, cash,
shares of our common stock or a combination of cash and shares of our common stock, at our election, in the
manner and subject to the terms and conditions provided in the Indenture under which the Convertible Senior
Notes were issued. On December 30, 2021, we notified the holders of the Convertible Senior Notes of our
irrevocable election to settle the conversion obligations in connection with the Convertible Senior Notes submitted
for conversion on or after January 1, 2022, or at maturity with a combination of cash and shares of our common
stock. Generally, under this settlement method, the conversion value will be settled in cash in an amount no less
than the principal amount being converted, and any excess of the conversion value over the principal amount will
be settled, at the Company's election, in cash or shares of our common stock. The conditions allowing holders of
the Convertible Senior Notes to convert have not been met and therefore were not convertible as of
December 31, 2022.

73 |

2022 Form 10-K

We may not redeem the Convertible Senior Notes prior to March 20, 2024. On or after March 20, 2024, and

on or before the 30th scheduled trading day immediately preceding the maturity date, we may redeem the
Convertible Senior Notes at a cash purchase price equal to the principal amount of the Convertible Senior Notes
to be redeemed, plus accrued and unpaid interest, if any, but only if the last reported sale price per share of our
common stock exceeds 130% of the conversion price on (1) each of at least 20 trading days, whether or not
consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before
the date we send the related redemption notice; and (2) the trading day immediately before the date we send
such notice. In addition, calling any Convertible Senior Note for redemption will constitute a make-whole
fundamental change with respect to that Convertible Senior Note, in which case the conversion rate applicable to
the conversion of that Convertible Senior Note will be increased in certain circumstances if it is converted after it
is called for redemption.

If a “fundamental change” (as defined in the Indenture under which the Convertible Senior Notes were

issued) occurs, then noteholders may require us to repurchase their Convertible Senior Notes at a cash
repurchase price equal to the principal amount of the Convertible Senior Notes to be repurchased, plus accrued
and unpaid interest, if any.

On January 1, 2022, we adopted ASU 2020-06 using the modified retrospective transition method. Under

such transition, prior-period information has not been retrospectively adjusted for this change in accounting
guidance.

Upon the adoption of ASU 2020-06, the Convertible Senior Notes are accounted for as a single liability, and

the carrying amount of the Convertible Senior Notes was $565.4 million as of December 31, 2022, with principal
of $575.0 million, net of issuance costs of $9.6 million. The Convertible Senior Notes are included within long-term
debt, less current portion in our consolidated balance sheets as of December 31, 2022. The issuance costs
related to the Convertible Senior Notes are being amortized to interest expense over the contractual term of the
Convertible Senior Notes at an effective interest rate of 5.1%.

The following table sets forth total interest expense recognized related to the Convertible Senior Notes for

the period:

Year Ended December 31, 2022
(Post-adoption of ASU 2020-06)

Year Ended December 31, 2021
(Pre-adoption of ASU 2020-06)

Contractual interest expense
Amortization of debt discount
Amortization of debt issuance costs
Total

$

$

(Dollars in millions)
1.5 $
—
3.1
4.6 $

1.2
14.0
1.7
16.9

Capped Calls

In March 2021, in connection with the pricing of the Convertible Senior Notes, we entered into capped call

transactions with the option counterparties (the “Capped Calls”). The Capped Calls each have an initial strike
price of $132.20 per share, and an initial cap price of $179.26 per share, both subject to certain adjustments. The
capped call transactions are generally expected to reduce potential dilution to our common stock upon any
conversion of the Convertible Senior Notes and/or offset any potential cash payments we would be required to
make in excess of the principal amount of converted Convertible Senior Notes, as the case may be, with such
reduction and/or offset subject to a cap based on the cap price. For accounting purposes, the Capped Calls are
separate transactions, and not part of the terms of the Convertible Senior Notes. As the Capped Calls qualify for a
scope exception from derivative accounting for instruments that are both indexed to the issuer's own stock and
classified in stockholder’s equity in our consolidated balance sheet, we have recorded an amount of $33.0 million
as a reduction to additional paid-in capital, which will not be remeasured. This represents the premium of $45.0
million paid for the purchase of the Capped Calls, net of the deferred tax impact of $12.0 million.

74 |

2022 Form 10-K

Other Information Relating to Indebtedness

Future Payments and Maturities of Debt

The future principal payments and maturities of our indebtedness, excluding financing lease obligations, are

as follows:

Years Ending December 31,

Amount
(Dollars in millions)

2023
2024
2025
2026

$

$

6.8
6.8
637.5
575.0
1,226.1

We may be required to make additional payments on the Term Debt from various sources, including

proceeds of certain indebtedness which may be incurred from time to time, certain asset sales, and a certain
percentage of cash flow. There is an excess cash flow calculation associated with the Term Debt, and based on
this calculation, we are not required to make a prepayment on the Term Debt in 2023.

Fair Value of Debt

Our debt does not trade in active markets and was considered to be a Level 2 measurement at December

31, 2022. The fair value of the Term Debt was 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 the
Convertible Senior Notes was determined based on the closing trading price per $1,000 of the Convertible Senior
Notes as of the last day of trading for the period and is primarily affected by the trading price of our common stock
and market interest rates. The fair value of our debt was estimated to be $1,142.3 million and $1,248.9 million as
of December 31, 2022, and 2021, respectively.

Other Debt Financing

Ceridian Australia had available a bank credit facility that provides for the issuance of letters of credit. The

credit facility is a discretionary line at the option of the bank. The amount of letters of credit capacity and letters of
credit outstanding under this facility were AUD $1.5 million (USD $1.0 million) and AUD $2.9 million (USD $2.1
million) at December 31, 2022 and 2021, respectively.

10. Employee Benefit Plans

Ceridian maintain numerous benefit plans for current and former employees. As of December 31, 2022, our
current active benefit plans include defined contribution plans for the majority of our employees. All of our defined
benefit plans have been frozen.

Defined Contribution Plans

We maintain defined contribution plans that provide retirement benefits to the majority of our employees.

Contributions are based upon the contractual obligations of each respective plan. We recognized expense of
$23.0 million, $15.4 million, and $11.1 million for the years ended December 31, 2022, 2021, and 2020,
respectively, related to employer contributions to these plans.

Defined Benefit Plans

We maintain defined benefit pension plans covering certain of our current and former U.S. employees (the

U.S. pension plan and nonqualified defined benefit plan, collectively referred to as our “defined benefit plans”), as
well as other postretirement benefit plans for certain U.S. retired employees that include heath care and life
insurance benefits.

75 |

2022 Form 10-K

Pension Benefits

The largest defined benefit pension plan (the “U.S. pension plan”) is a defined benefit 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 Ceridian 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. The measurement date for pension
benefit plans is December 31.

Assets of the U.S. pension plan are held in an irrevocable trust and do not include any Ceridian securities.
Benefits under this plan are generally calculated on final or career average earnings and years of participation in
the plan. Most participating employees were required to permit salary reduction contributions to the plan on their
behalf by the employer as a condition of active participation. Retirees and other former employees are inactive
participants in this plan and constitute approximately 99% of the plan participants. This plan is funded in
accordance with funding requirements under the Employee Retirement Income Security Act of 1974, based on
determinations of a third-party consulting actuary. Investment of the U.S. pension plan assets in Ceridian
securities is prohibited by the investment policy. As of December 31, 2022, the U.S. defined benefit plan is fully
funded.

In addition to the U.S. defined benefit plan, we also sponsor a nonqualified supplemental defined benefit

plan (the “nonqualified defined benefit plan”), which is unfunded and provides benefits to selected U.S.
employees. We made contributions to the nonqualified defined benefit plan amounting to $1.4 million in 2022 and
expect to make contributions of $1.2 million during 2023.

We account for our defined benefit plans using actuarial models. These models use an attribution approach
that generally spreads the effect of individual events over the estimated life expectancy of the employees in such
plans. These events include plan amendments and changes in actuarial assumptions such as the expected long-
term rate of return on plan assets, discount rate related to the benefit obligation, and mortality rates.

One of the principal components of the net periodic pension calculation is the expected long-term rate of

return on plan assets. The required use of expected long-term rate of return on plan assets may result in
recognized pension income that is greater or less than the actual returns of those plan assets in any given year.
Over time, however, the expected long-term returns are designed to approximate the actual long-term returns that
contribute to the settlement of the liability. Differences between actual and expected returns are recognized in the
net periodic pension calculation over three years. We use long-term historical actual return information, the mix of
investments that comprise plan assets, and future estimates of long-term investment returns by reference to
external sources to develop our expected return on plan assets.

The discount rate assumption is used to determine the benefit obligation and the interest portion of the net

periodic pension cost (credit) for the following year. We utilize a full yield curve approach for our discount rate
assumption by applying the specific spot rates along the yield curve used in the determination of the benefit
obligation to the relevant projected cash flows. As of December 31, 2022, a 25 basis point decrease in the
discount rate would result in an immaterial impact to expense for all pension plans.

At December 31, 2021, we updated our mortality assumptions utilizing an improvement scale issued by the

Society of Actuaries in October 2021, which resulted in a $2 million increase in the projected benefit obligation.
The mortality assumption was not updated at December 31, 2022.

The funded status of defined benefit plans represents the difference between the projected benefit obligation
(“PBO”) and the plan assets at fair value. The PBO of defined benefit plans exceeded the fair value of plan assets
by $11.1 million at December 31, 2022; whereas the fair value of plan assets exceeded the PBO of defined
benefit plans by $1.6 million at December 31, 2021. We are required to record the funded status as an asset or
liability in our consolidated balance sheets and recognize the change in the funded status in comprehensive
income, net of deferred income taxes.

76 |

2022 Form 10-K

The projected future payments to participants from defined benefit plans are as follows:

Years Ending December 31,

2023
2024
2025
2026
2027
Next five years

Amount
(Dollars in millions)

42.4
40.6
38.6
36.6
35.0
147.5

$

$

The accompanying tables reflect the combined funded status and net periodic pension cost and combined

supporting assumptions for the defined benefit elements of our defined benefit plans.

Year Ended December 31,

2022
2021
(Dollars in millions)

Funded Status of Defined Benefit Retirement
Plans at Measurement Date
Change in Projected Benefit Obligation During the
Year:

Projected benefit obligation at beginning of year
Interest cost
Actuarial gain
Benefits paid and plan expenses
Projected benefit obligation at end of year
Change in Fair Value of Plan Assets During the Year:
Plan assets at fair value at beginning of year
Actual return on plan assets
Employer contributions
Benefits paid and plan expenses
Plan assets at fair value at end of year
Funded status of plans

$

$

$

503.4 $
8.8
(83.1)
(45.6)
383.5 $

505.0
(88.4)
1.4
(45.6)
372.4
(11.1) $

555.2
6.7
(10.5)
(48.0)
503.4

558.7
(7.2)
1.6
(48.1)
505.0
1.6

Amounts recognized in Consolidated Balance
Sheets

Noncurrent asset
Current liability
Noncurrent liability

Amounts recognized in Accumulated Other
Comprehensive Loss

Accumulated other comprehensive loss, net of
tax of $51.2 million and $49.4 million,
respectively

December 31,

2022
2021
(Dollars in millions)

$

— $
1.2
9.9

12.1
1.4
9.1

$

163.6 $

157.9

The overall decrease in our benefit obligation for the year ended December 31, 2022 was primarily driven by

benefit payments paid, plan expenses, and actuarial gains.

77 |

2022 Form 10-K

The other comprehensive (income) loss related to pension benefit plans was as follows:

Net actuarial loss (gain)
Amortization of net actuarial loss
Tax expense
Other comprehensive loss (income), net of tax

Assumptions Used in Calculations
Discount rate used to determine net benefit cost
Expected return on plan assets
Discount rate used to determine benefit obligations

Net Periodic Pension Cost
Interest cost
Actuarial loss amortization
Less: Expected return on plan assets
Net periodic pension cost

$

$

$

$

2022

Year Ended December 31,
2021
(Dollars in millions)
9.9 $

2020

21.2 $
(13.6)
(1.9)
5.7 $

(17.3)
2.0
(5.4) $

(8.0)
(15.7)
6.4
(17.3)

Year Ended December 31,
2021

2022

2020

2.36%
3.30%
4.84%

1.87%
2.70%
2.36%

2.81%
5.70%
1.87%

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

8.8 $

13.6
(15.9)

6.5 $

6.7 $

17.3
(13.1)
10.9 $

12.7
15.7
(22.9)
5.5

Our overall investment strategy for the U.S. pension plan is to achieve a mix of approximately 86% for
liability hedging purposes, 13% of investments for long term growth, and 1% for near-term benefit payments.
Target asset allocations are based upon actuarial and capital market studies performed by experienced outside
consultants. The target allocations for the long term growth assets are 58% public equity, 25% fixed income, and
17% alternative investments. Specifically, the target allocation is managed through investments in fixed income
securities, equity funds, collective investment funds, partnerships and other investment types. The underlying
equity securities include exposure to large/mid-cap companies and small-cap companies. Fixed income securities
include emerging market debt and high yield debt securities. The alternative investment strategy is allocated to
investments in hedge funds. The liability hedging portfolio fair value is intended to move in a direction that
substantially offsets the increase or decrease in the liabilities resulting from changes in interest rates. To achieve
this objective, the portfolio will invest in corporate debt securities, U.S. Treasury strips and various interest rate
derivatives contracts. We hire outside managers to manage all assets of the U.S. defined benefit plan.

In determining the fair values of the defined benefit plan’s assets, we calculate the fair value of certain
investments using net asset value ("NAV") per share. Mutual funds are valued at the NAV, which is based on the
readily determinable fair value of the underlying securities owned by the fund. The NAV unit price is quoted on a
private market or one that is not active. The NAV represents the value at which the defined benefit plan initiates a
transaction. These investments do not have any significant unfunded commitments, conditions or restrictions on
redemption, or any other significant restriction on their sale.

The fair values of our defined benefit plan’s assets by asset category were as follows:

Investments, at fair value:
Short-term investments
Government securities
Corporate debt securities
Collective investment funds
Total investments, at fair value

78 |

2022 Form 10-K

December 31, 2022

Level 1

Level 2

Level 3

Total

(Dollars in millions)

$

$

17.2 $
—
—
—
17.2 $

— $
6.3
301.8
47.1
355.2 $

— $
—
—
—
— $

17.2
6.3
301.8
47.1
372.4

Investments, at fair value:
Short-term investments
Government securities
Corporate debt securities
Collective investment funds
Total investments, at fair value

Postretirement Benefits

December 31, 2021

Level 1

Level 2

Level 3

Total

(Dollars in millions)

$

$

26.7 $
—
—
—
26.7 $

— $

16.7
384.2
77.4
478.3 $

— $
—
—
—
— $

26.7
16.7
384.2
77.4
505.0

We provide health care and life insurance benefits for eligible retired employees, including individuals who

retired from operations we subsequently sold or discontinued. We sponsor several health care plans in the United
States for both pre- and post-age 65 retirees. The contributions to these plans differ for various groups of retirees
and future retirees. Most retirees outside of the U.S. are covered by governmental health care programs, and our
cost is not significant. The measurement date for postretirement benefit plans is December 31.

The discount rate assumption is used to determine the benefit obligation and the interest portion of the net
periodic postretirement cost (credit) for the following year. We utilize a full yield curve approach for our discount
rate assumption by applying the specific spot rates along the yield curve used in the determination of the benefit
obligation to the relevant projected cash flows. As of December 31, 2022, a 25 basis point decrease in the
discount rate would result in an immaterial impact on expense for the postretirement plan.

The accompanying tables present the amounts and changes in the aggregate benefit obligation and the

components of net periodic postretirement benefit cost for U.S. plans. We fund these costs as they become due.

Funded Status of Postretirement Health Care and
Life Insurance Plans
Change in Benefit Obligation:

At beginning of year
Interest cost
Participant contributions
Actuarial gain
Benefits paid
At end of year

Change in Plan Assets:
At beginning of year
Company contributions
Participant contributions
Benefits paid
At end of year
Funded Status

Year Ended
December 31,

2022
2021
(Dollars in millions)

$

$

$

$

12.6 $
0.2
0.6
(3.1)
(1.5)
8.8 $

— $
0.9
0.6
(1.5)
—
(8.8) $

14.1
0.1
0.3
(0.8)
(1.1)
12.6

—
0.8
0.3
(1.1)
—
(12.6)

79 |

2022 Form 10-K

December 31,

2022
2021
(Dollars in millions)

Amounts recognized in Consolidated Balance
Sheets

Current liability
Noncurrent liability

$

1.6 $
7.2

1.8
10.8

Amounts recognized in Accumulated Other
Comprehensive Loss

Accumulated other comprehensive loss (income),
net of tax of ($5.4) million and $(5.0) million,
respectively

$

(8.4) $

(7.6)

The other comprehensive (income) loss related to postretirement benefits was as follows:

Net actuarial gain
Amortization of net actuarial gain
Tax benefit
Other comprehensive (gain) loss, net of tax

Net Periodic Postretirement Benefit
Interest cost
Actuarial gain amortization
Prior service credit amortization
Net periodic postretirement benefit gain

$

$

$

$

2022

2020

Year Ended December 31,
2021
(Dollars in millions)
(0.8) $
2.2
(0.4)
1.0 $

(3.1) $
1.9
0.4
(0.8) $

—
2.5
(0.7)
1.8

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

0.2 $
(1.9)
—
(1.7) $

0.1 $
(2.0)
(0.2)
(2.1) $

0.3
(2.2)
(0.3)
(2.2)

The assumed health care cost trend rate represents the rate at which health care costs are assumed to

increase. The assumed health care cost trend rate used in measuring the benefit obligation in 2022 is 6.8% for
pre-age 65 retirees and 8.0% for post-age 65 retirees. These rates are assumed to decrease gradually to the
ultimate health care cost trend rate of 4.5% in 2029 for both groups.

Year Ended December 31,
2021

2022

2020

Assumptions Used in Calculations
Weighted average discount rate used to determine

net periodic postretirement cost (credit)

Weighted average discount rate used to determine

benefit obligation at measurement date

2.00%

1.42%

2.52%

4.72%

2.00%

1.42%

The projected future postretirement benefit payments and future receipts from the federal subsidy for each

of the next five years and the five-year period following are as follows:

Years Ending December 31,

2023
2024
2025
2026
2027
Next five years

Payments

Receipts

(Dollars in millions)
1.6 $
1.3
1.2
1.1
1.0
3.1 $

—
—
—
—
—
—

$

$

80 |

2022 Form 10-K

11. Share-Based Compensation

Our share-based compensation consists of stock options, restricted stock units (“RSU”), and performance-

based stock units (“PSU”). We also offer an employee stock purchase plan.

Prior to November 1, 2013, our employees participated in a share-based compensation plan of the former

ultimate parent of Ceridian, the 2007 Stock Incentive Plan (“2007 SIP”). 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 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 December 31, 2022, there were no stock options outstanding under the 2007 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 authorized the issuance of up to 13,500,000 shares of
common stock to eligible participants through equity awards (the “Share Reserve”). The 2018 EIP serves as a
successor to the 2013 SIP as we ceased granting awards under the 2013 SIP as of April 24, 2018, and we do not
intend to grant any additional awards under the 2013 SIP. Most of our equity awards under the 2013 EIP and
2018 EIP vest either annually or quarterly on a pro rata basis, generally over a one-, three-, 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 awards must be exercised generally within 90 days after
termination, or these awards will be forfeited. The equity awards have a 10-year contractual term, and the options
have an exercise price that is not less than the fair market value of the underlying stock on the date of grant.

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 date of increase or (ii) such number of shares of our common stock
determined by the Board of Directors. Pursuant to the evergreen refresh provision of the 2018 EIP, on February
23, 2022, the Board of Directors approved an increase to the share reserve of the three percent of the number of
shares of common stock outstanding on January 31, 2022 to take place on March 31, 2022. Further, our Board of
Directors approved an amendment effective April 1, 2022, to remove the evergreen refresh provision of the 2018
EIP.

As of December 31, 2022, there were 850,736 stock options and RSUs outstanding under the 2013 SIP.
We do not intend to grant any additional awards under the 2007 SIP or the 2013 SIP. As of December 31, 2022,
there were 11,803,072 stock options, RSUs, and PSUs outstanding and 13,726,148 shares available for future
grants of equity awards under the 2018 EIP.

Share-based compensation expense was $144.8 million, $113.4 million, and $65.8 million for the years

ended December 31, 2022, 2021, and 2020, respectively.

81 |

2022 Form 10-K

Performance-Based Stock Options

Performance-based option activity under the 2007 SIP, the 2013 SIP, and the 2018 EIP was as follows:

Performance-based options outstanding at
December 31, 2019
Granted
Exercised
Performance-based options outstanding at
December 31, 2020
Exercised
Forfeited or expired
Performance-based options outstanding at
December 31, 2021
Exercised
Forfeited or expired
Performance-based options outstanding at
December 31, 2022
Performance-based options exercisable at
December 31, 2022

Weighted
Average
Exercise
Price
(per share)

Weighted
Average
Remaining
Contractual
Term
(in years)

Aggregate
Intrinsic
Value
(in millions)

$
$

$

$

$

$

13.58
65.27
(13.46)

64.55
(47.23)
—

64.72
(13.46)
—

66.10

70.90

2.6 $
—
—

9.2 $
—
—

8.3 $
—
—

7.4 $

7.5 $

3.7

—

77.5
—
—

70.6
—
—

0.1

0.1

Shares

68,281
1,818,728
(42,730)

1,844,279
(65,882)
(1,347)

1,777,050
(14,755)
(1,857)

1,760,438

260,438

In 2020, 1,500,000 performance-based stock options (“Performance Option Award”) were granted under the

2018 EIP with an exercise price of $65.26. The vesting conditions for the Performance Option Award are based
on our performance on the New York Stock Exchange (“NYSE”) with (i) 750,000 shares available to vest when
our per share closing price on the NYSE meets or exceeds $110.94, or 1.7 times the exercise price, for ten
consecutive trading days (“Performance Metric #1”) and (ii) the remaining 750,000 shares are available to vest
when our per share closing price on the NYSE meets or exceeds $130.52, or 2.0 times the exercise price, for ten
consecutive trading days (“Performance Metric #2”, collectively with Performance Metric #1, the “Performance
Metrics”). The vesting conditions of the Performance Metrics must be achieved prior to May 8, 2025, or any
unvested portion of the Performance Option Award will terminate. Further, no portion of the Performance Option
Award will vest and become exercisable until May 8, 2023, the third anniversary of the Grant Date (the “Time-
Based Metric”). The shares underlying Performance Metric #1, which was achieved on October 6, 2021, will vest
and become exercisable on May 8, 2023 provided that continuous employment is maintained through that date. If
Performance Metric #2 is met prior to satisfying the Time-Based Metric, the shares underlying Performance Metric
#2 will vest and become exercisable on May 8, 2023 provided that continuous employment is maintained through
that date. If the Time-Based Metric is met and Performance Metric #2 has not been met on or prior to May 8,
2025, the Performance Option Award will be terminated. We have estimated an expected term of 5.3 years,
based on the vesting period and contractual term.

The remaining performance-based stock options granted during the twelve months ended December 31,

2020, under the 2018 EIP primarily include vesting conditions based on migrations of customers to Dayforce.
There are two tranches of stock options, in which the vesting conditions must be met either prior to September 13,
2021, or September 13, 2022. The weighted average grant date fair value of these performance-based stock
options granted in 2020 was $16.03 per share. The performance criteria for certain of these awards have been
met and share-based compensation expense was recognized during the year ended December 31, 2022.

As of December 31, 2022, there was $2.6 million of share-based compensation expense related to unvested

performance-based stock option awards not yet recognized, which is expected to be recognized over a weighted
average period of 0.3 years.

82 |

2022 Form 10-K

Term-Based Stock Options

Term-based stock option activity under the 2007 SIP, the 2013 SIP, and the 2018 EIP, was as follows:

Term-based options outstanding at December 31, 2019
Granted
Exercised
Forfeited or expired
Term-based options outstanding at December 31, 2020
Granted
Exercised
Forfeited or expired
Term-based options outstanding at December 31, 2021
Granted
Exercised
Forfeited or expired
Term-based options outstanding at December 31, 2022
Term-based options exercisable at December 31, 2022

Weighted
Average
Exercise
Price
(per share)
29.74
66.06
(20.42)
(32.09)
40.47
84.07
(26.71)
(48.62)
48.87
56.29
(32.14)
(58.59)
50.59
44.23

Shares

13,144,937 $

2,282,334
(3,889,096)
(555,101)
10,983,074 $
759,126
(2,942,465)
(283,866)
8,515,869 $
81,145
(931,520)
(369,408)
7,296,086 $
4,965,415 $

Weighted
Average
Remaining
Contractual
Term
(in years)

Aggregate
Intrinsic
Value
(in millions)
501.3
—
—
—
725.9
—
—
—
473.4
—
—
—
117.4
104.9

7.8 $
—
—
—
7.8 $
—
—
—
7.3 $
—
—
—
6.4 $
6.4 $

Other information pertaining to term-based options was as follows:

Year Ended December 31,
2021

2022

2020

Weighted average grant date fair value per share

$

24.12 $

33.09 $

21.15

The fair value of the term-based stock options was estimated at the date of grant using the Black-Scholes

option pricing model with the following weighted-average assumptions:

Expected volatility
Expected dividend rate
Risk-free interest rate

Year Ended December 31,
2021

2022

2020

40.7%
—
2.6%

35.8%
—
1.3%

29.8%
—
0.6%

For stock options granted under the 2013 SIP and 2018 EIP, we estimated an expected term of 7.0 years,

based on the vesting period and contractual life. As of December 31, 2022, there was $30.0 million 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 0.7 years. As of December 31, 2022, there were 4,965,415 vested
term-based stock options.

83 |

2022 Form 10-K

Restricted Stock Units

RSU activity under the 2013 SIP and the 2018 EIP, was as follows:

RSUs outstanding at December 31, 2019
Granted
Shares issued upon vesting of RSUs
Forfeited or canceled
RSUs outstanding at December 31, 2020
Granted
Shares issued upon vesting of RSUs
Forfeited or canceled
RSUs outstanding at December 31, 2021
Granted
Shares issued upon vesting of RSUs
Forfeited or canceled
RSUs outstanding at December 31, 2022
RSUs releasable at December 31, 2022

Shares
819,818
685,997
(73,475)
(42,955)
1,389,385
890,852
(262,239)
(82,059)
1,935,939
1,624,345
(504,586)
(164,881)
2,890,817
661,484

Other information pertaining to RSUs was as follows:

Year Ended December 31,
2021

2022

2020

Weighted average grant date fair value per share

$

69.35 $

85.08 $

69.57

During the year ended December 31, 2022, 568,134 RSUs vested, of which 504,586 shares of common

stock were issued. As of December 31, 2022, there were 661,484 RSUs vested and releasable. RSUs generally
vest quarterly or annually over a one-, three-, or four-year period. As of December 31, 2022, there was $102.6
million of share-based compensation expense related to unvested RSUs not yet recognized, which is expected to
be recognized over a weighted average period of 1.4 years.

Performance Stock Units

PSU activity under the 2018 EIP was as follows:

PSUs outstanding at December 31, 2019
Granted
Forfeited or canceled
PSUs outstanding at December 31, 2020
Granted
Shares issued upon vesting of PSUs
Forfeited or canceled
PSUs outstanding at December 31, 2021
Granted
Shares issued upon vesting of PSUs
Forfeited or canceled
PSUs outstanding at December 31, 2022
PSUs releasable at December 31, 2022

Shares

—
145,017
(9,797)
135,220
348,483
(2,050)
(162,908)
318,745
582,662
(168,414)
(26,526)
706,467
—

The vesting conditions for the PSUs granted in 2020 were based on the Company’s performance against
Cloud revenue and adjusted EBITDA margin goals under Ceridian HCM Holding Inc. 2020 Management Incentive
Plan (the “2020 MIP”) for the incentive period of January 1, 2020 through December 31, 2020. The vesting
conditions for the PSUs were not met for the 2020 incentive period and as a result, the PSUs did not vest and no
share-based compensation expense was recognized for these awards during the year ended December 31, 2020.

84 |

2022 Form 10-K

In 2021, we granted PSUs under the Ceridian HCM Holding Inc. 2021 Management Incentive Plan (the
“2021 MIP”) for the incentive period of January 1, 2021 through December 31, 2021, and also as part of long term
incentive grants to certain members of management. Under the 2021 MIP, the vesting conditions were based on
our performance criteria, including Cloud revenue and adjusted EBITDA margin goals. The maximum incentive
vesting of PSUs may not exceed 150%. Both the Cloud revenue and adjusted EBITDA margin goals were
calculated based on our operating results, adjusted for foreign currency and interest rate impacts plus other
unique impacts as approved by the Compensation Committee of the Board of Directors. Upon vesting of a PSU, a
participant will receive shares of our common stock. Based on the performance criteria achieved, most of the
PSUs vested in March 2022 and share-based compensation was recognized in accordance with the achievement
level. One-third of the PSUs granted in 2021 as part of long term incentive grants to certain members of
management vested on March 8, 2022, and will vest on each March 8, 2023, and March 8, 2024.

On February 24, 2022, we granted PSUs under the 2022 Ceridian HCM Holding Inc. Management Incentive
Plan (the “2022 MIP”) for the incentive period of January 1, 2022 through December 31, 2022, and also as part of
long term incentive grants to certain members of management. The vesting conditions were based on the
following performance criteria: (1) the Cloud revenue, excluding float revenue (the “Cloud Revenue Goal”) (2) the
adjusted EBITDA, excluding float revenue (the “Adjusted EBITDA Goal”), and (3) the Sales per employee per
month (“PEPM”) annual contract value (“ACV”) (the “Sales PEPM ACV Goal”), for fiscal year 2022 (collectively
the “Performance Goals”). Both the Cloud Revenue Goal and the Adjusted EBITDA Goal are calculated based on
our operating results on a constant currency basis as adjusted to exclude: float revenue; foreign exchange gain
(loss); share-based compensation expense and related employer taxes; severance charges; restructuring
consulting fees; significant acquisitions or disposals and related transaction costs; as well as other non-recurring
items, subject to the Board of Directors approval. The Sales PEPM ACV Goal is calculated based on the sales of
our solutions on a constant currency basis that contribute to Cloud recurring revenue.

The vesting conditions for the PSU awards granted in 2022 were determined based on our performance
against the achievement of the Performance Goals, and the payout that a participant can receive may be between
0% for not meeting the applicable thresholds of any of the Performance Goals, up to a maximum total payout of
167% for achieving the maximum level of all of the Performance Goals. Upon vesting of a PSU, a participant will
receive shares of our common stock. Based on the performance criteria achieved, most of the PSUs related to
the 2022 MIP and one-third of the PSUs related to the long term incentive grants to certain members of
management are expected to vest in March 2023 and share-based compensation was recognized in accordance
with the achievement level.

As of December 31, 2022, there was $11.8 million of share-based compensation expense related to
unvested PSUs not recognized related to certain members of management with long term incentive PSUs that
have a three-year vesting period.

Global Employee Stock Purchase Plan

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. The
purchase price is the lower of 85% of the fair market value of a share of common stock on (i) January 1 or (ii) the
purchase date. The GESPP shall continue for ten years, unless terminated sooner as provided under the GESPP.
During 2022, shares were purchased on March 31, June 30, September 30, and December 31.

Our GESPP activity was as follows:

Shares issued
Weighted average purchase price (per share)

$

Year Ended December 31,
2021
2022
153,235
243,043
81.69

48.59 $

85 |

2022 Form 10-K

The fair value of the stock purchase rights granted under the GESPP was estimated using the following

weighted-average assumptions:

Expected volatility
Expected dividend rate
Risk-free interest rate
Expected term (in years)
Grant date fair value per share

Year Ended December 31,
2021

2020

2022

29.3%
—
0.2%
0.3
21.16 $

33.7%
—
0.1%
0.3
22.07 $

46.4%
—
1.1%
0.3
17.11

$

12. Revenue

Our Solutions

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

 Cloud revenue is primarily generated from solutions that are delivered via two Cloud offerings, Dayforce
and Powerpay. The Dayforce offering is a single application with continuous calculation that offers a
comprehensive range of functionality, including global HR, payroll, benefits, workforce management, and
talent intelligence on web and native iOS and Android platforms. Dayforce recurring revenue is primarily
generated from monthly recurring fees charged on a PEPM basis and the allocation of investment income
generated from holding Dayforce customer funds before funds are remitted to taxing authorities, Dayforce
customer employees, or other third parties. Dayforce professional services and other revenue is primarily
generated from implementation and post go-live professional services revenue. Other sources of
Dayforce revenues include revenue from the sale, rental and maintenance of time clocks; revenue from
the sale of third-party services; billable travel expenses for Dayforce customers, and Dayforce Wallet
interchange fee revenue. The Powerpay offering is our solution designed primarily for small market
Canadian customers, which typically have fewer than 20 employees. Powerpay recurring revenue is
primarily generated from recurring fees charged on a per-employee, per-process basis and the allocation
of investment income generated from holding Powerpay customer funds before funds are remitted to
taxing authorities, Powerpay customer employees, or other third parties. Typical processes include the
customer’s payroll runs, year-end tax packages, and delivery of customers’ remittance advices or checks.
Powerpay professional services revenue is primarily generated from the setup of the Powerpay customer
on their platform.



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. As a result of a
modernization upgrade of the technology platforms used to provide those services, recurring revenues
from stand-alone tax customers will be classified as Dayforce revenue on a go-forward basis, beginning
in 2023. 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; the allocation of investment
income generated from holding Bureau customer funds before funds are remitted to taxing authorities,
Bureau customer employees, or other third parties; consulting services related to Bureau offerings;
revenue from the sale of third party services to Bureau customers; and Excelity revenue.

Customer Information

No single customer accounts for 10% or more of our consolidated revenue for any of the periods presented.

86 |

2022 Form 10-K

Disaggregation of Revenue

Revenue by solution and category was as follows:

Revenue:
Cloud

Dayforce

Recurring
Professional services and other
Total Dayforce revenue

Powerpay

Recurring
Professional services and other
Total Powerpay revenue

Total Cloud revenue

Bureau

Recurring
Professional services and other

Total Bureau revenue

Total revenue

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

$

$

815.2 $
181.7
996.9

626.6 $
159.3
785.9

93.2
0.7
93.9
1,090.8

86.3
0.9
87.2
873.1

139.2
16.2
155.4
1,246.2 $

137.8
13.3
151.1
1,024.2 $

500.2
148.6
648.8

79.5
1.1
80.6
729.4

110.5
2.6
113.1
842.5

Recurring revenue includes float revenue of $80.2 million, $41.1 million, and $52.3 million for the year ended

December 31, 2022, 2021, and 2020, respectively.

Revenue by Geographic Area

The country in which the revenue is recorded is determined by the legal entity with which the customer has

contracted. Revenue by country was as follows:

United States
Canada
Other

Total revenue

Contract Balances

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

$

$

784.1 $
288.6
173.5
1,246.2 $

624.4 $
254.2
145.6
1,024.2 $

579.3
223.5
39.7
842.5

The Company records a contract asset when revenue recognized for professional services or cloud

recurring subscription performance obligations exceed the contractual amount of billings for implementation
related professional services and recurring subscriptions. Contract assets were $68.5 million and $62.7 million as
of December 31, 2022 and 2021, 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 consolidated balance sheets.

87 |

2022 Form 10-K

Deferred Revenue

Deferred revenue primarily consists of payments received in advance of revenue recognition. The changes

in deferred revenue were as follows:

Deferred revenue, beginning of period
New billings
Acquired billings
Revenue recognized
Effect of exchange rate
Deferred revenue, end of period

December 31,

2022

2021

(Dollars in millions)

$

$

48.7 $

673.6
—
(679.2)
(1.9)
41.2 $

24.4
565.0
16.6
(556.5)
(0.8)
48.7

Transaction Price for Remaining Performance Obligations

As of December 31, 2022, approximately $1,143.6 million 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.

13. Accumulated Other Comprehensive Income (Loss)

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

Foreign
Currency
Translation
Adjustment

(159.7) $

Unrealized Gain
(Loss) from
Invested
Customer
Funds
(Dollars in millions)
38.4 $

Pension
Liability
Adjustment

(154.7) $

(17.6)
—
—
(17.6)
(177.3)

(56.7)
—
—
(56.7)
(234.0) $

(48.4)
12.8
—
(35.6)
2.8

(9.1)
(1.6)
15.1
4.4
(150.3)

(134.6)
35.4
—
(99.2)
(96.4) $

(17.5)
1.5
11.7
(4.3)
(154.6) $

Balance as of December 31, 2020
Other comprehensive loss before income taxes and
reclassifications
Income tax benefit (expense)
Reclassifications to earnings
Other comprehensive (loss) income
Balance as of December 31, 2021
Other comprehensive loss before income taxes and
reclassifications
Income tax benefit
Reclassifications to earnings
Other comprehensive loss
Balance as of December 31, 2022

$

$

88 |

2022 Form 10-K

Total

(276.0)

(75.1)
11.2
15.1
(48.8)
(324.8)

(208.8)
36.9
11.7
(160.2)
(485.0)

14. Income Taxes

2022

Year Ended December 31,
2021
(Dollars in millions)

2020

Components of Earnings and Taxes from Operations
Loss before income taxes:

U.S.
International
Total

Income tax expense (benefit):

Current:
U.S.
State and local
International

Total current income tax expense (benefit)

Deferred:
U.S.
State and local
International

Total deferred income tax benefit

Total income tax expense (benefit)

Effective Tax Rate Reconciliation
Federal statutory tax rate
Change in valuation allowance
State income taxes, net of federal benefit
Share-based compensation
International tax rate differential
Foreign capital gain income
Unremitted foreign earnings
Acquisition costs
Base erosion tax
Global intangible low taxed income
Reserve for tax contingencies
Change in tax rate
Unutilized tax benefits
Other
Total tax rate

$

$

$

$

(0.7) $

(62.2)
(62.9) $

(73.6) $
(16.7)
(90.3) $

41.5
(61.6)
(20.0)

4.5 $
1.9
5.8
12.2

7.8
(2.1)
(7.4)
(1.7)
10.5 $

0.9 $
0.4
22.3
23.6

(22.3)
(5.0)
(11.2)
(38.5)
(14.9) $

(6.5)
0.1
(2.6)
(9.0)

(1.1)
0.1
(6.0)
(7.0)
(16.0)

Year Ended December 31,
2021

2022

2020

21.0%
2.5
0.8
(25.6)
0.2
—
—
—
(5.7)
(11.3)
—
1.6
—
(0.2)
(16.7)%

21.0%
(0.7)
5.9
(3.5)
(2.4)
(1.3)
2.9
(2.3)
(1.6)
—
2.1
—
(3.4)
(0.2)
16.5%

21.0%
(0.3)
2.2
3.9
8.9
(7.5)
14.5
—
33.9
—
1.2
—
—
2.2
80.0%

Our income tax provision represents federal, state, and international taxes on our income recognized for

financial statement purposes and includes the effects of temporary differences between financial statement
income and income recognized for tax return purposes. Deferred tax assets and liabilities are recorded for
temporary differences between the financial reporting basis and the tax basis of assets and liabilities. We record a
valuation allowance to reduce our deferred tax assets to reflect the net deferred tax assets that we believe will be
realized. In assessing the likelihood that we will be able to recover our deferred tax assets and the need for a
valuation allowance, we consider all available evidence, both positive and negative, including historical levels of
pre-tax book income, expiration of net operating losses, changes in our debt and equity structure, expectations
and risks associated with estimates of future taxable income, ongoing prudent and feasible tax planning
strategies, as well as current tax laws. As of December 31, 2022, we have a valuation allowance of $44.1 million
against certain deferred tax assets primarily consisting of $31.0 million for deferred tax assets attributable to
previous business combinations, and $12.4 million attributable to state net operating loss carryovers.

89 |

2022 Form 10-K

Tax Effect of Items That Comprise a Significant
Portion of the Net Deferred Tax Asset and
Deferred Tax Liability
Deferred tax asset:

Employment related accruals
Intangibles
Software development costs
Customer funds
Other
Foreign tax credit carryover and other credit

carryovers

Net operating loss carryforwards
Total gross deferred tax asset
Valuation allowance

Total deferred tax asset

Deferred tax liability:

Intangibles
Deferred contract costs
Other

Total deferred tax liability
Net deferred tax asset

Net Deferred Tax by Geography
U.S.
International
Total

December 31,

2022
2021
(Dollars in millions)

$

$

$

$

27.8 $
13.5
14.9
31.2
33.7

0.3
120.8
242.2
(44.1)
198.1 $

(60.8) $
(33.5)
(7.8)
(102.1)

96.0 $

16.9
10.6
—
—
19.2

0.6
161.5
208.8
(46.8)
162.0

(75.4)
(29.4)
(24.6)
(129.4)
32.6

December 31,

2021
2022
(Dollars in millions)

$

$

79.8 $
16.2
96.0 $

38.9
(6.3)
32.6

As of December 31, 2022, we had federal, state, and foreign net operating loss carryovers, which will
reduce future taxable income when utilized. Approximately $66.2 million in net federal tax benefit is available from
the loss carryovers and an additional $0.3 million is available in tax credit carryovers. $14.8 million of the federal
net operating loss tax benefit will expire from 2031 to 2037. The remaining $51.4 million has an indefinite
carryover period. The state loss carryovers and foreign loss carryovers will result in a tax benefit of approximately
$32.5 million and $22.1 million, respectively, when utilized. The state net operating loss carryovers will begin to
expire in 2023. The majority of the foreign operating loss carryovers have an indefinite carryover period. The $0.3
million tax credit carryover is composed of a variety of credits most of which expire between 2027 and 2042.

We file income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With a
few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by
tax authorities for years before 2018.

The following table summarizes the activity for unrecognized tax benefits:

Federal, State and Foreign Tax
Beginning unrecognized tax balance
Increase prior period positions
Increase current period positions
Decrease prior period positions
Ending unrecognized tax benefits

90 |

2022 Form 10-K

Year Ended
December 31,

2022
2021
(Dollars in millions)

$

$

— $
—
—
—
— $

1.8
—
—
(1.8)
—

There were no unrecognized tax benefits as of December 31, 2022 and 2021. We make adjustments to

these reserves when facts and circumstances change, such as the closing of tax audits or the refinement of an
estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such
differences will affect the provision for income taxes in the period in which such determination is made and could
have a material impact on our financial condition and operating results.

As of December 31, 2022, we have $343.5 million of unremitted foreign earnings. We consider all the

unremitted earnings to be indefinitely reinvested. Because all unremitted earnings are considered to be
indefinitely reinvested, no deferred tax liability has been recorded. It is not practical to make a determination of
any unrecognized tax liability because of the complexities of the hypothetical calculation.

15. 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 separately from the non-lease
components.

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.

As a result of the coronavirus disease 2019 ("COVID-19") and our pivot to a virtual working environment, we

evaluated our lease portfolio resulting in the decision to close certain office locations and transition the impacted
employees to fully virtual work. During the year ended December 31, 2021, we recognized $1.8 million of charges
related to lease abandonment costs, and during the year end December 31, 2020, we recognized $16.8 million of
charges, which was comprised of $14.7 million of accelerated amortization of the right of use assets and $2.1
million of accelerated depreciation of leasehold improvements, related to the abandonment of the leases
associated with these office locations. These charges were recognized within selling, general and administrative
expense in the consolidated statements of operations.

On December 15, 2021, we sold the office building, land, and fixed assets of our St. Petersburg, Florida

facility for $40 million, less fees and expenses, resulting in a gain on the sale of $19.1 million, which was
recognized in the consolidated statements of operations within selling, general, and administrative expense. Upon
the sale of the building, we entered into a two year agreement to lease a portion of the building as of the sale
date.

Supplemental balance sheet information related to leases was as follows:

Lease Type

ASSETS

Balance Sheet Classification

December 31, 2022

December 31,
2021

(Dollars in millions)

Operating lease assets
Operating lease assets
Operating lease assets
Financing lease assets

Trade and other receivables, net
Prepaid expenses and other current assets
Right of use lease asset
Property, plant, and equipment, net

Total lease assets
LIABILITIES
Current

Financing lease liabilities Current portion of long-term debt
Operating lease liabilities Current portion of long-term lease liabilities

Noncurrent

Financing lease liabilities Long-term debt, less current portion
Operating lease liabilities Long-term lease liabilities, less current portion

Total lease liabilities

$

$

$

$

0.1 $
2.8
24.3
7.0

34.2 $

1.0 $

10.0

7.4
23.7
42.1 $

0.2
3.4
29.4
8.3
41.3

1.5
11.3

8.1
32.7
53.6

91 |

2022 Form 10-K

The components of lease expense were as follows:

Lease Cost
Operating lease cost
Financing lease cost:

Depreciation of lease assets
Interest on lease liabilities

Sublease income
Net lease cost

2022

Year Ended December 31,
2021
(Dollars in millions)
6.1 $

9.8 $

2020

1.3
0.3
(0.5)
10.9 $

1.3
0.3
(2.2)
5.5 $

9.1

0.8
0.4
(4.1)
6.2

$

$

Supplemental cash flow information related to leases was as follows:

Cash paid for amounts included in the measurement of lease
liabilities:

Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases

Lease assets obtained in exchange for new lease liabilities:

Operating leases

$

Year Ended December 31,
2021
2022

(Dollars in millions)

8.7 $
0.3
1.6

7.8

11.6
1.9
1.0

2.2

The future minimum lease payments under our operating and financing leases were as follows:

Years Ending December 31,

2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: Interest
Total

Amount
(Dollars in millions)

14.3
11.0
7.9
4.7
2.3
6.2
46.4
4.3
42.1

$

$

$

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

Weighted average remaining lease term (in years)

Operating leases
Financing leases

Weighted average discount rate

Operating leases
Financing leases

December 31,

2022

2021

3.6
8.3

4.34%
3.88%

5.8
8.9

4.07%
3.81%

92 |

2022 Form 10-K

16. 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 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.

Environmental Matters

We accrue for losses associated with environmental remediation obligations when such losses are probable

and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally
are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further
information develops or circumstances change. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value.

In February 1988, our predecessor entered into an arrangement with Northern Engraving Corporation

(“NEC”) and the Minnesota Pollution Control Agency (“MPCA”) in relation to groundwater contamination on a
parcel of real estate sold by our predecessor to NEC. We are now responsible for the arrangement with NEC and
the MPCA. The arrangement requires expense sharing between us and NEC for the remediation of groundwater
contamination.

In September 1989, our predecessor entered into an environmental matters agreement ("EMA") with
Seagate related to groundwater contamination on a parcel of real estate sold by our predecessor to Seagate. We
are now responsible for the EMA. The EMA requires expense sharing between us and Seagate for the
remediation of groundwater contamination up to a certain limit. We have recognized an environmental reserve
liability equal to the EMA limit.

We have recognized an undiscounted liability of approximately $4.3 million and $4.5 million as of

December 31, 2022 and 2021, respectively, in our consolidated balance sheets to comply with the NEC
arrangement and EMA described above. The ultimate cost, however, will depend on the extent of continued
monitoring activities as these projects progress.

93 |

2022 Form 10-K

17. Related Party Transactions

We provide Dayforce and related services to certain companies that are considered related parties. The

revenue from these related parties was as follows:

Counter-Party

Related Persons Interest

FleetCor
Technologies, Inc.

The Stronach Group

Verve Senior Living

Environmental 360
Solutions

Shared board members. One board
member is also the chief executive
officer and the chairman of the
counter-party's board
The brother of David D. Ossip, our
Chair and Co-Chief Executive Officer,
was formerly the chief executive
officer, and is currently a minority
shareholder
David D. Ossip, our Chair and Co-
Chief Executive Officer, and his
brother are currently minority
shareholders
David D. Ossip's, our Chair and Co-
Chief Executive Officer, brother is a
board member
Shared board members

Fidelity National
Financial, Inc.
Guaranteed Rate, Inc. Portfolio company of Thomas H. Lee

HighTower Advisors,
LLC

Ten-X, LLC

Smile Doctors

The Dun and
Bradstreet
Corporation

Partners, L.P. ("THL"), of which certain
members of our board are managing
directors
Portfolio company of THL, of which
certain members of our board are
managing directors. One board
member also serves on the board of
the counter-party
Portfolio company of THL, of which
certain members of our board are
managing directors
Portfolio company of THL, of which
certain members of our board are
managing directors
Shared board members with Dun &
Bradstreet Holdings, Inc., which owns
the counter-party

Year Ended December 31,

2022

2021

2020

$

0.8

(Dollars in millions)
$

0.6

$

0.1

0.1

0.4

0.2

0.4

1.7

0.4

0.2

1.0

1.8

0.4

—

0.4

1.7

0.3

0.2

—

—

0.9

0.1

0.5

—

0.4

0.9

0.2

0.2

—

—

We are party to service agreements with certain companies that are considered related parties. Payments

made to related parties were as follows:

Counter-Party

Related Persons Interest

The Dun and
Bradstreet
Corporation
Manulife Financial

Shared board members with Dun &
Bradstreet Holdings, Inc., which owns
the counter-party
Shared board members. Leagh E.
Turner, our Co-Chief Executive Officer,
also serves as a director

94 |

2022 Form 10-K

Year Ended December 31,

2022

2021

2020

$

0.3

(Dollars in millions)
$

0.4

$

6.0

8.1

0.4

7.3

18. Capital Stock and Net Loss per Share

As of December 31, 2022 and 2021, there were 153,856,645 and 151,995,031 shares of common stock

issued and outstanding, respectively.

Holders of our common stock are entitled to the rights set forth as follows. Directors are elected by a
plurality of the votes entitled to be cast except as set forth below with respect to directors to be elected by the
holders of common stock. Our stockholders do not have cumulative voting rights. Except as otherwise provided in
our fourth amended and restated certificate of incorporation or as required by law, all matters to be voted on by
our stockholders other than matters relating to the elections and removal of directors must be approved by a
majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter or by
a written resolution of the stockholders representing the number of affirmative votes required for such matter at a
meeting.

Our stockholders have no preemptive or other rights to subscribe for additional shares. All holders of our
common stock are entitled to share equally on a share-for-share basis in any assets available for distribution to
common stockholders upon our liquidation, dissolution or winding up. All outstanding shares are validly issued,
fully paid and nonassessable.

Basic net loss per share is computed by dividing net loss 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 per share, net loss per share is adjusted by the effect of dilutive
securities, including awards under our share-based compensation plans. Diluted net loss per share is computed
by dividing the resulting net loss by the weighted-average number of fully diluted common shares outstanding. In
the years ended December 31, 2022, 2021, and 2020 our potential dilutive shares, such as term-based stock
options, RSUs, and PSUs 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 basic and diluted net loss per share computations were calculated as follows:

Year Ended December 31,
2021
(Dollars in millions, except share and per share data)

2020

2022

Numerator:
Net loss

Denominator:
Weighted-average shares outstanding - basic
Effect of dilutive equity instruments
Weighted-average shares outstanding - diluted

Net loss per share - basic
Net loss per share - diluted

$

$
$

(73.4) $

(75.4) $

(4.0)

152,940,299
—
152,940,299

150,402,321
—
150,402,321

146,774,471
—
146,774,471

(0.48) $
(0.48) $

(0.50) $
(0.50) $

(0.03)
(0.03)

The following potentially dilutive shares were excluded from the calculation of diluted net loss per share

because their effect would have been anti-dilutive:

Stock options
Restricted stock units
Performance stock units

Year Ended December 31,

2022
5,565,875
517,130
1,383,847

2021

5,874,818
604,770
549,583

2020
7,135,159
745,955
229,433

95 |

2022 Form 10-K

The shares underlying the conversion option in the Convertible Senior Notes were not considered in the
calculation of diluted net loss per share as the effect would have been anti-dilutive. Based on the initial conversion
price, the entire outstanding principal amount of the Convertible Senior Notes as of December 31, 2022, would
have been convertible into approximately 4.3 million shares of our common stock. Since we expect to settle the
principle amount of the Convertible Senior Notes in cash, we use the treasury stock method for calculating any
potential dilutive effect on diluted net income per share, if applicable. As a result, only the amount by which the
conversion value exceeds the aggregate principal amount of the Convertible Senior Notes (the “conversion
spread”) is considered in the diluted earnings per share computation. The conversion spread has a dilutive impact
on diluted net income per share when the average market price of our common stock for a given period exceeds
the initial conversion price of $132.20 per share for the Convertible Senior Notes. We excluded the potentially
dilutive effect of the conversion spread of the Convertible Senior Notes as the average market price of our
common stock during the twelve months ended December 31, 2022, was less than the conversion price of the
Convertible Senior Notes. In connection with the issuance of the Convertible Senior Notes, we entered into
Capped Calls, which were not included for purposes of calculating the number of diluted shares outstanding, as
their effect would have been anti-dilutive.

19. Subsequent Events

The Office of Comptroller of the Currency authorized the Ceridian National Trust Bank to open on January 3,

2023. Effective on this day, the Ceridian National Trust Bank commenced banking operations, acting as trustee
for our U.S. payroll trust.

96 |

2022 Form 10-K

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures, as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange

Act, are designed to ensure that information required to be disclosed by a company in the reports that it files or
submits under the Exchange Act is recorded, processed, summarized and reported within the time periods
specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by a company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to our management, including our
principal executive and principal financial officers, as appropriate to allow timely decisions regarding required
disclosure.

Our management, with the participation of our Co-Chief Executive Officers and our Chief Financial Officer,

evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2022. Based on the
evaluation of our disclosure controls and procedures as of December 31, 2022, our Co-Chief Executive Officers
and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective
at the reasonable assurance level.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial

reporting (as defined in Rule 13a-15(f) under the Exchange Act). Management conducted an assessment of the
effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework). Based on the assessment, management has concluded that its internal control over financial
reporting was effective as of December 31, 2022, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements in accordance with GAAP. Our independent
registered public accounting firm, KPMG LLP, has issued an audit report with respect to our internal control over
financial reporting, which appears in Part II, Item 8 of this Annual Report on Form 10-K.

On March 1, 2021, we completed the acquisition of Ascender. Prior to this acquisition, Ascender was a

privately-held company not subject to the Sarbanes-Oxley Act of 2002, the rules and regulations of the SEC, or
other corporate governance requirements to which public companies may be subject. In accordance with
guidance issued by the SEC, companies are permitted to exclude acquisitions from their final assessment of
internal control over financial reporting during the year of acquisition. As of the end of fiscal 2022, we have
completed our integration activities related to internal control over financial reporting for Ascender. Accordingly,
we have included Ascender within our assessment of
2022.

internal control over financial reporting as of December 31,

Changes in Internal Control Over Financial Reporting

With the exception of internal control-related integration activities related to our acquisition of Ascender,

there were no changes in our internal control over financial reporting identified in connection with the evaluation
required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fiscal quarter ended
December 31, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

97 |

2022 Form 10-K

Inherent Limitations on Effectiveness of Controls

Our management, including our Co-Chief Executive Officers and Chief Financial Officer, believes that our

disclosure controls and procedures and internal control over financial reporting are designed to provide
reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However,
our management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the
design of a control system must reflect the fact that there are resource constraints, and the benefits of controls
must be considered relative to their costs. 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, have been
detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the
individual acts of some persons, by collusion of two or more people or by management override of the controls.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all
potential future conditions; over time, controls may become inadequate because of changes in conditions, or the
degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-
effective control system, misstatements due to error or fraud may occur and not be detected.

Item 9B. Other Information.

None.

98 |

2022 Form 10-K

Item 10. Directors, Executive Officers and Corporate Governance.

Directors

PART III

The information provided under the headings “Election of Directors” under Proposal One and “Board of
Directors” in the Proxy Statement for Ceridian’s 2023 Annual Meeting of Stockholders (“Proxy Statement”), is
incorporated herein by reference.

Executive Officers

Information regarding our executive officers is set forth in Item 1 in Part I of this Form 10-K captioned

“Executive Officers”.

Code of Ethics

We have adopted a code of ethics known as the “Code of Conduct” that applies to all employees,

contractors, officers and directors of Ceridian. The Code of Conduct may be viewed online on Ceridian’s website
https://www.ceridian.com/Ceridian/media/Files/ceridian-code-of-conduct-2018.pdf. We intend to satisfy the
disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a provision of
our Code of Conduct that applies to our principal executive officer, principal financial officer or principal
accounting officer by posting such information on our website within four business days following the date of such
amendment or waiver.

Director Nomination Process

There have been no material changes to the procedures by which shareholders may recommend nominees

to our Board.

Audit Committee; Audit Committee Financial Expert

The information provided under the subheadings “Committees of the Board of Directors” under the Board of

Directors heading and “Report of the Audit Committee of the Board of Directors” under Proposal Three in the
Proxy Statement is incorporated herein by reference.

Item 11. Executive Compensation.

The information required by this item is incorporated herein by reference to the information set forth in
Ceridian’s Proxy Statement under the headings “Director Compensation”, Executive Compensation”, “Equity
Compensation Plan Information”, and “Corporate Governance”.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by this item is incorporated herein by reference to the information set forth in the

Proxy Statement under the heading “Equity Compensation Plan Information”.

Security Ownership of Certain Beneficial Owners and Management

The information required by this item is incorporated herein by reference to the information set forth in the

Proxy Statement under the heading “Security Ownership of Certain Beneficial Owners and Management”.

99 |

2022 Form 10-K

Item 13. Certain Relationships and Related Transactions, and Director Independence.

The information required by this item is incorporated herein by reference to the information set forth in the

Proxy Statement under the headings “Certain Relationships and Related Party Transactions”, “Election of
Directors” under Proposal One, “Board of Directors” and “Corporate Governance”.

Item 14. Principal Accounting Fees and Services.

Our independent registered public accounting firm is KPMG LLP, Minneapolis, MN, Auditor Firm ID: 185.

The information required by this item is incorporated herein by reference to the information set forth in the

Proxy Statement under the heading “Ratification of the Appointment of KPMG LLP as our Independent Registered
Public Accounting Firm for Fiscal Year 2023” under Proposal Three.

100 |

2022 Form 10-K

Item 15. Exhibits, Financial Statement Schedules.

(1) Consolidated Financial Statements

See Index to Consolidated Financial Statements at Item 8 herein.

PART IV

(2)

Financial Statement Schedules

All schedules are omitted because they are not applicable or the required information is shown in the

consolidated financial statements or notes thereto.

(3) Exhibits

The following is a list of exhibits filed as part of this Annual Report on Form 10-K.

Exhibit
Number
3.1

3.2

4.1

4.2

4.3^

4.4

4.5

10.1

10.2

10.3

10.4

10.5*

10.6*

10.7*

Description

Fourth Amended and Restated Certificate of Incorporation of Ceridian HCM Holding Inc.
(incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q filed by the Company
on May 5, 2021).
Second Amended and Restated Bylaws of Ceridian HCM Holding Inc. (incorporated by reference to
Exhibit 3.1 to the Current Report on Form 8-K filed by the Company on February 9, 2022).
Certificate of Common Stock (incorporated by reference to Exhibit 4.1 to the Quarterly Report on
Form 10-Q filed by the Company on May 24, 2018).
Registration Rights Agreement, dated April 30, 2018, by and among Ceridian HCM Holding Inc. and
the other parties thereto (incorporated by reference to Exhibit 4.4 to the Quarterly Report on Form
10-Q filed by the Company on May 24, 2018).
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities
Exchange Act of 1934.
Indenture, dated as of March 5, 2021, between Ceridian HCM Holding Inc. and Wells Fargo Bank,
National Association (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed
by the Company on March 5, 2021).
Form of 0.25% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to the
Current Report on Form 8-K filed by the Company on March 5, 2021).
Credit Agreement, dated April 30, 2018, between Ceridian HCM Holding Inc., as borrowers, the
lenders party thereto, and Deutsche Bank AG New York Branch (as administrative agent and
collateral agent) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q
filed by the Company on August 9, 2018).
First Amendment to Credit Agreement, dated February 19, 2020, between Ceridian HCM Holding
Inc., as borrowers, the lenders party thereto, Deutsche Bank AG New York Branch (as administrative
agent and collateral agent) (incorporated by reference to Exhibit 10.4 to the Quarterly Report on
Form 10-Q filed by the Company on May 6, 2020).
Second Amendment to Credit Agreement, dated as of December 15, 2021, between Ceridian HCM
Holding Inc., as borrowers, the lenders party thereto, Deutsche Bank AG New York Branch (as
administrative agent and collateral agent) (incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K filed by the Company on December 16, 2021).
Form of Capped Call Transaction Confirmation (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed by the Company on March 5, 2021).
Employment Agreement, dated April 2, 2012, by and between Ceridian Dayforce Corporation and
David D. Ossip (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1
filed by the Company on March 26, 2018).
Performance-Based Stock Option Award Agreement dated May 8, 2020 by and between Ceridian
HCM Holding Inc. and David Ossip (incorporated by reference to Exhibit 10.2 to the Quarterly Report
on Form 10-Q filed by the Company on August 5, 2020).
Amended and Restated Restrictive Covenant Agreement, effective as of March 20, 2017, by and
among Ceridian Holding LLC, Ceridian LLC, Ceridian Canada Ltd., Ceridian Dayforce Corporation
and David D. Ossip (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form
S-1 filed by the Company on March 26, 2018).

101 |

2022 Form 10-K

10.8*

10.9*

10.10*

10.11*

10.12*

10.13*

10.14*

10.15*

10.16*

10.17*

10.18*^

10.19*

10.20*

10.21*

10.22*

10.23*

10.24*

10.25*

10.26*

Amended and Restated Employment Agreement, effective February 9, 2022, between Leagh E.
Turner and Ceridian Canada Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K filed by the Company on February 9, 2022).
Employment Agreement, dated May 1, 2019, by and between Chris R. Armstrong and Ceridian HCM,
Inc. (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the
Company on July 30, 2019).
Amendment to Employment Agreement, dated November 5, 2019, by and between Christopher R.
Armstrong and Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.6 to the Annual Report on
Form 10-K filed by the Company on February 26, 2020).
Second Amendment to Employment Agreement, effective February 3, 2020, between Christopher R.
Armstrong and Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.1 to the Current Report
on Form 8-K filed by the Company on February 5, 2020).
Third Amendment to Employment Agreement, effective February 23, 2022, between Christopher R.
Armstrong and Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.2 to the Quarterly Report
on Form 10-Q filed by the Company on May 4, 2022).
Employment Agreement, dated September 15, 2020, by and between Noémie C. Heuland and
Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q
filed by the Company on November 5, 2020).
Employment Agreement, effective July 30, 2020, between Joseph B. Korngiebel and Ceridian HCM,
Inc. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the
Company on May 5, 2021).
Employment Agreement, effective February 26, 2021, between Rakesh Subramanian and Ceridian
HCM, Inc., (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q filed by
the Company on May 5, 2021).
Amendment to Employment Agreement, effective March 15, 2021, between Rakesh Subramanian
and Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form
10-Q filed by the Company on May 5, 2021).
Employment Agreement, effective June 7, 2021, between William McDonald and Ceridian HCM, Inc.
(incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q filed by the
Company on August 4, 2021).
Employment Agreement, dated November 27, 2019, between Stephen Holdridge and Ceridian HCM,
Inc.
First Amendment to Employment Agreement, effective February 23, 2022, between Stephen
Holdridge and Ceridian HCM, Inc. (incorporated by reference to Exhibit 10.3 to the Quarterly Report
on Form 10-Q filed by the Company on May 4, 2022).
2013 Ceridian HCM Holding Inc. Stock Incentive Plan, dated October 1, 2013, and as amended on
March 30, 2016, August 11, 2016, December 30, 2016, and March 20, 2017 (incorporated by
reference to Exhibit 10.10 to the Registration Statement on Form S-1 filed by the Company on March
26, 2018).
Form of Director Indemnification Agreement for Ceridian HCM Holding Inc. (incorporated by
reference to Exhibit 10.11 to the Registration Statement on Form S-1 filed by the Company on April
12, 2018).
Ceridian HCM Holding Inc. 2018 Equity Incentive Plan (amended and restated as of April 1,
2022)(incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q filed by the
Company on May 4, 2022).
Form of Director Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.13
to the Registration Statement on Form S-1 filed by the Company on April 12, 2018).
Form of Director Restricted Stock Unit Award Agreement (for awards made after May 1, 2019)
(incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q filed by the
Company on July 30, 2019).
Form of Director Restricted Stock Unit Award Agreement (for annual compensation awards made
after May 1, 2020) (incorporated by reference to Exhibit 10.3 to the Quarterly Reported on Form 10-
Q filed by the Company on August 5, 2020).
Form of Restricted Stock Unit Award Agreement (for Canadian executive awards made after
February 25, 2021) (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed
by the Company on February 26, 2021).

102 |

2022 Form 10-K

10.27*

10.28*

10.29*

10.30*

10.31*

10.32*

10.33*

10.34*

10.35*

10.36*

10.37*

10.38*

10.39*

10.40*

10.41*

10.42*#

21.1^
23.1^
24.1
31.1^

31.2^

31.3^

32.1^

32.2^

Form of Director Stock Option Award Agreement (for annual compensation awards made after May
1, 2020) (incorporated by reference to Exhibit 10.4 to the Quarterly Reported on Form 10-Q filed by
the Company on August 5, 2020).
Form of Performance Stock Unit Award Agreement (for Canadian executive awards made after
February 25, 2021) (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K filed
by the Company on February 26, 2021).
Form of Performance Stock Unit Award Agreement (for Canadian executive awards made after
January 1, 2022) (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed
by the Company on February 24, 2022).
Form of Employee Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit
10.14 to the Registration Statement on Form S-1 filed by the Company on April 12, 2018).
Form of Employee Stock Option Award Agreement (incorporated by reference to Exhibit 10.15 to the
Registration Statement on Form S-1 filed by the Company on April 12, 2018).
Form of Stock Option Award Agreement (for awards made after February 25, 2021) (incorporated by
reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company on February 26,
2021.
Form of Employee Performance-Based Stock Option Award Agreement (incorporated by reference to
Exhibit 10.1 to the Quarterly Reported on Form 10-Q filed by the Company on August 5, 2020).
Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K filed by the Company on February 10, 2020).
Form of Restricted Stock Unit Award Agreement (for awards made after February 25, 2021
(incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed by the Company
on February 26, 2021).
Form of Restricted Stock Unit Award Agreement (for awards made after January 1, 2022)
(incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K filed by the Company
on February 24, 2022).
Form of Performance Stock Unit Award Agreement (incorporated by reference to Exhibit 10.2 to the
Current Report on Form 8-K filed by the Company on March 2, 2020).
Form of Performance Stock Unit Award Agreement (for awards made after February 25, 2021)
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed by the Company
on February 26, 2021).
Form of Performance Stock Unit Award Agreement (for awards made after January 1, 2022)
(incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed by the Company
on February 24, 2022).
Ceridian HCM Holding Inc. Global Employee Stock Purchase Plan (incorporated by reference to
Exhibit 99.1 to the Registration Statement on Form S-8 filed by the Company on November 28,
2018).
Ceridian HCM Holding Inc. 2022 Management Incentive Plan (incorporated by reference to Exhibit
10.2 to the Current Report on Form 8-K filed by the Company on February 24, 2022).
Sales Incentive Plan for Rakesh Subramanian, effective February 23, 2022 (redacted) (incorporated
by reference to Exhibit 10.4 to the Form 10-Q filed by the Company on May 4, 2022).
List of subsidiaries of Ceridian HCM Holding Inc.
Consent of KPMG LLP, Independent Registered Public Accounting Firm.
Power of Attorney (included on signature page).
Certification of Co-Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Co-Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the
Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Co-Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Co-Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

103 |

2022 Form 10-K

32.3^

101.INS^

101.SCH^
101.CAL^
101.DEF^
101.LAB^
101.PRE^
104^

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.
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File
because its XBRL tags are embedded within the Inline XBRL document)
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Management compensatory plan or arrangement.
^ Filed herewith.
# Confidential portions of this exhibit have been redacted in compliance with Item 601(b)(10) of Regulation S-K.

104 |

2022 Form 10-K

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended,

the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.

SIGNATURES

Date: March 1, 2023

Date: March 1, 2023

CERIDIAN HCM HOLDING INC.

By:

By:

/s/ David D. Ossip
Name: David D. Ossip
Title: Co-Chief Executive Officer

/s/ Leagh E. Turner
Name: Leagh E. Turner
Title: Co-Chief Executive Officer

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned constitutes and appoints each of

Noémie C. Heuland and William E. McDonald, or any of them, each acting alone, his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her
name, place and stead, in any and all capacities, to sign this Annual Report on Form 10-K, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming that any such
attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

105 |

2022 Form 10-K

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been
signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name

Title

Date

/s/ David D. Ossip
David D. Ossip

/s/ Leagh E. Turner
Leagh E. Turner

/s/ Noémie C. Heuland
Noémie C. Heuland

/s/ Jeffrey S. Jacobs
Jeffrey S. Jacobs

/s/ Brent B. Bickett
Brent B. Bickett

/s/ Ronald F. Clarke
Ronald F. Clarke

/s/ Deborah A. Farrington
Deborah A. Farrington

/s/ Thomas M. Hagerty
Thomas M. Hagerty

/s/ Linda P. Mantia
Linda P. Mantia

/s/ Ganesh B. Rao
Ganesh B. Rao

/s/ Andrea S. Rosen
Andrea S. Rosen

/s/ Gerald C. Throop
Gerald C. Throop

Chair and Co-Chief Executive Officer
(Co-Principal Executive Officer)

March 1, 2023

Co-Chief Executive Officer and Director
(Co-Principal Executive Officer)

March 1, 2023

Executive Vice President and Chief Financial
Officer (Principal Financial Officer)

March 1, 2023

Head of Accounting and Financial Reporting
(Principal Accounting Officer)

Director

Director

Director

Director

Director

Director

Director

Director

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

March 1, 2023

106 |

2022 Form 10-K

EXECUTIVE OFFICERS

BOARD OF DIRECTORS

David D. Ossip

Chair of the Board
Co-Chief Executive Officer

Leagh E. Turner

Co-Chief Executive Officer

Christopher R. Armstrong

Executive Vice President
Chief Operating Officer

Noémie C. Heuland

Executive Vice President
Chief Financial Officer

Stephen H. Holdridge

President
Customer and Revenue Operations

Jeffrey S. Jacobs

Head of Accounting and Financial Reporting

Joseph B. Korngiebel

Executive Vice President
Chief Product and Technology Officer

William E. McDonald

Executive Vice President
General Counsel and Corporate Secretary

David D. Ossip

Chair of the Board

Brent B. Bickett

Ronald F. Clarke

Deborah A. Farrington

Thomas M. Hagerty

Linda P. Mantia

Ganesh B. Rao

Andrea S. Rosen

Gerald C. Throop
Lead Director

Leagh E. Turner

CERIDIAN GLOBAL HEADQUARTERS
3311 East Old Shakopee Road
Minneapolis, MN 55425-1640

WEBSITE
www.ceridian.com

INVESTOR RELATIONS
investors@ceridian.com

STOCKHOLDER QUESTIONS
stockholders@ceridian.com

TRANSFER AGENT
American Stock Transfer & Trust Company, LLC
Operations Center
6201 15th Avenue
Brooklyn, NY 11219
(800) 937-5449 or (718) 921-8124
www.astfinancial.com

Ceridian HCM Holding Inc.
3311 East Old Shakopee Road
Minneapolis, Minnesota 55425