The following Management's Discussion and Analysis (MD&A) is intended to help
the reader understand the results of operations and financial condition of
Conduent Incorporated and its consolidated subsidiaries. MD&A is provided as a
supplement to, and should be read in conjunction with, our Condensed
Consolidated Financial Statements and the accompanying Notes.

Overview



As one of the largest business process services companies in the world, Conduent
delivers mission-critical  services and solutions on behalf of businesses and
governments - creating exceptional outcomes for its clients and the millions of
people who count on them. Through people, process expertise in
transaction-intensive processing and technology such as analytics and
automation, Conduent's solutions and services create value by improving
efficiencies, reducing costs and enabling revenue growth. A majority of Fortune
100 companies and over 500 government entities depend on Conduent every day to
manage their business processes and essential interactions with their end-users.

We create value for our clients through efficient service delivery combined with
a personalized and seamless experience for the end-user. We apply our expertise,
technology and innovation to continually modernize our offerings for improved
customer and constituent satisfaction and loyalty, increase process efficiency
and respond rapidly to changing market dynamics. Our strategy is to drive
portfolio focus, operational discipline, sales and delivery excellence and
innovation, complemented by tightly aligned investments. Our differentiated
services and solutions improve experiences for millions of people every day.

Headquartered in Florham Park, New Jersey, we have a team of approximately 63,000 associates, including approximately 2,000 furloughed associates as of June 30, 2020, servicing customers from service centers in 24 countries.

Executive Summary



We continue to transform our business through an intense focus on growth,
quality, and efficiency - utilizing a programmatic, project management approach.
Beginning in the first quarter of 2020 and through the second quarter of 2020,
we have expanded the focus of our transformation initiative to include both
permanent and temporary cost efficiencies, which we also refer to as a cost
reduction initiative, aimed to offset as much of the COVID-19 related negative
impacts as possible.

We intend to drive portfolio focus, operating discipline, sales and delivery
excellence and innovation, complemented by tightly aligned investments to
achieve this mission and purpose. Our strategy is designed to deliver value by
delivering profitable growth, expanding operating margins and deploying a
disciplined capital allocation strategy. During the three and six months ended
June 30, 2020, our strategy contributed to the following results:

•Revenue of $1,016 million and $2,067 million for the three and six months ended
June 30, 2020, respectively. Revenue performance in our Government Services
segment was positively affected by the COVID-19 pandemic from increased volumes,
partially offset by a negative COVID-19 effect on our Transportation and
Commercial Industries segments,

•Strong new business signings results:
•The strongest quarter of new business total contract value (TCV) signings since
our separation as a stand-alone public company, of $623 million for the three
months ended June 30, 2020, normalizing for any divestiture impact. New business
TCV signings were up 90% compared to that of the prior year period and $947
million for the six months ended June 30, 2020, up 71% compared to that of the
prior year period.

•Annual recurring revenue signings of $105 million for the three months ended
June 30, 2020, up 25% compared to that of the prior year period and $162 million
for the six months ended June 30, 2020, up 19% compared to that of the prior
year period.
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•The Company has shown year-over-year operational progress, including a reduction of the number and duration of technology related incidents and outages.

COVID-19 Outbreak



Throughout the COVID-19 pandemic, we have continued to provide critical and
best-in-class services to our customers and their end-users, while ensuring the
health and safety of our greatest assets - our associates. To address the
potential impact to our business, over the near-term, our Business Continuity
team has established a proactive plan, in the first quarter of 2020 and
continuing into the second quarter, which includes:

•Supporting our associates with a number of specific initiatives, including
making improvements to our policies to extend short term disability, providing
extra supplemental sick leave coverage and introducing a hardship leave policy.

•At the end of the second quarter of 2020, approximately 75% of our workforce
had been shifted to work-from-home. We are starting a slow and measured approach
to bringing associates back to Conduent offices, as appropriate. This will be a
phased process and based on the specific COVID-19 conditions in certain
geographies, as well as, business requirements.

•Increased sanitation and social distancing for required on-site essential associates.

•Draw down on our revolving credit facility (Revolver) as a precautionary measure.

In addition, the Company's response to the COVID-19 pandemic has also resulted in diversion of management's time and delayed investments from strategic, transformational and technology initiatives which had been planned.

As the crisis continues, we may revise our approach to these initiatives or take additional actions to meet the needs of our employees, customers and their end-users and the Company and to continue to provide our mission-critical

services and solutions.

Refer to the discussion of results of operations below for a quantification and discussion of COVID-19 pandemic related effects.



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Financial Review of Operations



                                                          Three Months Ended
                                                               June 30,                                       2020 vs. 2019
($ in millions)                                         2020              2019            $ Change            % Change
Revenue                                              $  1,016          $  1,112          $    (96)                  (9) %

Operating Costs and Expenses
Cost of services (excluding depreciation and
amortization)                                             795               879               (84)                 (10) %
Selling, general and administrative (excluding
depreciation and amortization)                            111               121               (10)                  (8) %
Research and development (excluding
depreciation and amortization)                              -                 2                (2)                (100) %
Depreciation and amortization                             115               112                 3                    3  %
Restructuring and related costs                            29                26                 3                   12  %
Interest expense                                           15                20                (5)                 (25) %
Goodwill impairment                                         -             1,067            (1,067)                (100) %
(Gain) loss on divestitures and transaction
costs                                                       2                 2                 -                    -  %
Litigation costs (recoveries), net                         14                 1                13
Other (income) expenses, net                               (1)                1                (2)                (200) %
Total Operating Costs and Expenses                      1,080             2,231            (1,151)

Income (Loss) Before Income Taxes                         (64)           (1,119)            1,055
Income tax expense (benefit)                              (13)              (90)               77
Net Income (Loss)                                    $    (51)         $ (1,029)         $    978



                                                           Six Months Ended
                                                               June 30,                                     2020 vs. 2019
($ in millions)                                         2020             2019            $ Change           % Change
Revenue                                              $ 2,067          $  2,270          $  (203)                  (9) %

Operating Costs and Expenses
Cost of services (excluding depreciation and
amortization)                                          1,627             1,785             (158)                  (9) %
Selling, general and administrative (excluding
depreciation and amortization)                           227               248              (21)                  (8) %
Research and development (excluding
depreciation and amortization)                             1                 5               (4)                 (80) %
Depreciation and amortization                            232               227                5                    2  %
Restructuring and related costs                           36                42               (6)                 (14) %
Interest expense                                          32                40               (8)                 (20) %
Goodwill impairment                                        -             1,351           (1,351)                (100) %
(Gain) loss on divestitures and transaction
costs                                                      6                16              (10)                 (63) %
Litigation costs (recoveries), net                        20                13                7                   54  %
Other (income) expenses, net                               1                 -                1
Total Operating Costs and Expenses                     2,182             3,727           (1,545)

Income (Loss) Before Income Taxes                       (115)           (1,457)           1,342
Income tax expense (benefit)                             (15)             (120)             105
Net Income (Loss)                                    $  (100)         $ (1,337)         $ 1,237



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Revenue

Revenue for the three and six months ended June 30, 2020 decreased, compared to
the prior year periods, primarily due to lost business and the effect of the
COVID-19 pandemic within our Transportation segment due to lower tolling volumes
and within our Commercial Industries segment due to lower revenue in our Human
Resource Service (HRS) service offering and lower volumes in our Commercial
Healthcare Solutions (CHS) and Business Operations Solutions (BOS) service
offerings. These were partially offset by higher revenue due to COVID-19 related
increased volumes in the government payments business, which is part of our
Government Services Solutions service offering in our Government Services
segment. Additionally, the decrease for the six months ended June 30, 2020 was
also due to the impact from divestitures completed during the first quarter of
2019.

Approximately $35 million and $49 million of the revenue decline for the three and six months ended June 30, 2020, respectively, were attributable to the COVID-19 pandemic or COVID-19 related effects.

Cost of Services (excluding depreciation and amortization)



Cost of services for the three months ended June 30, 2020 decreased, compared to
the prior year period, driven by lost business and lower volumes as well as the
cost reduction initiative, which led to reductions in real estate, information
technology and labor costs. Also contributing to the decline were lower costs to
support volume loss resulting from the effect of the COVID-19 pandemic.

Cost of services for the six months ended June 30, 2020 decreased, compared to
the prior year period, mainly driven by lost business and lower volumes, the
cost reduction initiative, which led to reductions in real estate, information
technology and labor costs, as well as divestitures completed in the first
quarter of 2019. Also contributing to the decline were lower costs to support
volume loss resulting from the effect of the COVID-19 pandemic.

Our net impact of temporary cost actions to mitigate the effect of the COVID-19
pandemic on revenue and contribution margin on the business resulted in
approximately $27 million and $31 million of cost savings for the three and six
months ended June 30, 2020, respectively. These temporary cost actions were
primarily driven by furloughs, reduced travel and vendor spend, reduced
facilities spend and a suspension of 401(k) match for all U.S. employees. These
cost reductions are split between Costs of services and Selling, general, and
administrative. These cost savings are net of incremental costs such as the
costs to support work-from home and the costs of increased facilities
sanitation.

The approximate effect of the COVID-19 pandemic on our pre-tax income, which
includes the net revenue impact, the incremental costs, and the temporary cost
mitigation actions, was a loss of $8 million and $18 million for the three and
six months ended June 30, 2020, respectively.

Selling, General and Administrative (SG&A) (excluding depreciation and amortization)



Lower SG&A for the three months ended June 30, 2020, compared to the prior year
period, was driven by the cost reduction initiative, which led to reductions in
real estate costs, lower corporate overhead costs and reductions in labor costs
as well as temporary savings from lower travel expenses.

Lower SG&A for the six months ended June 30, 2020, compared to the prior year
period, was driven by divested SG&A expenses as well as the cost reduction
initiative, which led to the reductions in real estate costs, lower corporate
overhead costs and reductions in labor costs.

Depreciation and Amortization

Depreciation and amortization for the three and six months ended June 30, 2020 increased, compared to the prior year periods, primarily due to increased capitalized software amortization for new projects placed in service.



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Restructuring and Related Costs



We engage in a series of restructuring programs related to optimizing our
employee base, reducing our real estate
footprint, exiting certain activities, outsourcing certain internal functions,
consolidating our data centers and engaging in other actions designed to reduce
our cost structure and improve productivity. Additionally, during the latter
part of the first quarter of 2020, the Company began an expanded cost
transformation program to partially offset the negative effects of the COVID-19
pandemic, also referred to as a cost reduction initiative. This resulted in
increased Restructuring and related costs for the three months ended June 30,
2020. This included the elimination of approximately 1,500 positions and closure
of approximately 20 facilities across all geographies. The following are the
components of our Restructuring and related costs:

                                                      Three Months Ended                                     Six Months Ended
                                                           June 30,                                              June 30,
(in millions, except headcount in whole
numbers)                                            2020               2019              2020                   2019
Severance and related costs                     $      10           $     13          $     10          $           16
Data center consolidation                               6                  9                 8                      18
Termination, asset impairment and other
costs                                                  11                  2                14                       6
Total net current period charges                       27                 24                32                      40
Consulting and other costs(1)                           2                  2                 4                       2
Restructuring and related costs                 $      29           $     26          $     36          $           42


___________

(1)Represents professional support costs associated with our strategic transformation program.

Refer to Note 5 - Restructuring Programs and Related Costs to the Condensed Consolidated Financial Statements for additional information regarding our restructuring programs.

Interest Expense

Interest expense represents interest on long-term debt and the amortization of debt issuance costs. The decrease in Interest expense for the three and six months ended June 30, 2020, compared to the prior year periods, was driven primarily by a lower average debt balance. Refer to Note 6 - Debt in the Condensed Consolidated Financial Statements for additional information.

Goodwill Impairment



There were no goodwill impairment charges for the three and six months ended
June 30, 2020. The goodwill impairment for the three and six months ended June
30, 2019 related to the write-down of the carrying values of all the Company's
reporting units.

(Gain) Loss on Divestitures and Transaction Costs



The costs included in the three and six months ended June 30, 2020 consist of
professional fees related to the strategic review by the Company's Board of
Directors. The costs included in the six months ended June 30, 2019 consist of
$5 million of changes in estimates related to losses on divestitures and $9
million of transaction and related costs, $4 million of which relates to costs
to remediate Payment Card Industry Data Security Standards compliance issues
related to the sale of select standalone customer care contracts to Skyview
Capital LLC.

Litigation Costs (Recoveries), Net



Net litigation costs for the three and six months ended June 30, 2020 primarily
consist of reserves for various matters that are subject to litigation and costs
related to certain reimbursement matters with our former parent company, Xerox
Corporation. Net litigation costs for the six months ended June 30, 2019
primarily consist of the $13 million expense related to the Texas litigation.

Refer to Note 11 - Contingencies and Litigation to the Condensed Consolidated Financial Statements for additional information.



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Income Taxes

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES
Act) was signed into law. The CARES Act provides for various tax relief and tax
incentive measures, which are not expected to have a material impact on the
Company's income tax provision. The payment of the employer share of payroll
taxes for the remainder of 2020 will be deferred to 2021 and 2022 under the
CARES Act, which will provide a temporary operating cash flow benefit.

The effective tax rate for the three months ended June 30, 2020 was 20.3%,
compared to 8.0% for the three months ended June 30, 2019. The June 30, 2020
rate was slightly lower than the U.S. statutory rate of 21%, primarily due to
the geographic mix of income. The effective tax rate for the three months ended
June 30, 2019 was lower than the U.S. statutory tax rate of 21%, primarily due
to the goodwill impairment charge being partially non-deductible for tax, the
geographic mix of income and the inclusion of Global Intangible Low Tax Income
(GILTI).

Excluding the impact of amortization of intangible assets and restructuring
costs, the normalized effective tax rate for the three months ended June 30,
2020 was 32.5%. The normalized effective tax rate of 30.2% for the three months
ended June 30, 2019, was predominantly impacted by the exclusion of a goodwill
impairment, divestitures, charges for amortization of intangible assets and
restructuring costs.

The effective tax rate for the six months ended June 30, 2020 was 13.0%,
compared to 8.2% for the six months ended June 30, 2019. The June 30, 2020 rate
was lower than the U.S. statutory rate of 21%, primarily due to the geographic
mix of income, valuation allowances and tax charges recognized on the vesting of
employee equity awards, partially offset by tax credits. The effective tax rate
for the six months ended June 30, 2019 was lower than the U.S. statutory tax
rate of 21%, primarily due to the goodwill impairment charge being partially
non-deductible for tax and the geographic mix of income, partially offset by
U.S. federal tax credits and tax benefits recognized on the sale of a portfolio
of select standalone customer care contracts to Skyview Capital LLC.

Excluding the impact of valuation allowances, vesting of equity awards,
amortization of intangible assets and restructuring costs, the normalized
effective tax rate for the six months ended June 30, 2020 was 32.8%. The
normalized effective tax rate of 32.6% for the six months ended June 30, 2019,
was predominantly impacted by the goodwill impairment, divestitures, the Texas
litigation reserve, charges for amortization of intangible assets and
restructuring costs.

The Company believes it is reasonably possible that unrecognized tax benefits of
approximately $13 million will reverse within 12 months due to an anticipated
audit settlement.

Operations Review of Segment Revenue and Profit

During the first quarter of 2020, we realigned our sales organization and certain shared IT and other allocated costs to reflect how we currently manage our business. All prior periods presented have been revised to reflect this change. Our financial performance is based on Segment Profit / (Loss) and Segment Adjusted EBITDA for the following three segments:



•Commercial Industries,
•Government Services, and
•Transportation.

Other includes our divestitures and our Student Loan business, which the Company exited in the third quarter of 2018.



Shared IT / Infrastructure & Corporate Costs includes both normal ongoing IT
infrastructure and enterprise application costs and costs related to the
modernization of a significant portion of our infrastructure with new systems
and processes. It also includes costs related to corporate overhead functions
and shared real estate costs. These costs are not allocated to the reportable
segments.

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There is a risk, however, that our modernization efforts and data center
consolidations could materially and adversely disrupt our operations. In
addition, the Company's COVID-19 response has also resulted in diversion of
management's time and delayed investments from strategic, transformational and
technology initiatives which had been planned. See Part I, Item 1A - Risk
Factors of our Annual Report on Form 10-K for the year ended December 31, 2019
and see Part II, Item 1A - Risk Factors of this Form 10-Q for additional
information.

Results of financial performance by segment were:



                                                                                                Three Months Ended
                                                                                                     June 30,
                                                                                                                                                                   Shared IT /
                                 Commercial              Government                                                                                             Infrastructure &
(in millions)                    Industries               Services             Transportation                     Other                                          Corporate Costs          Total
2020                                                                                                  Divestitures          Other
Revenue                       $       520             $       331             $         165          $       -            $     -          $     -          $           1,016
Segment profit (loss)         $        72             $       115             $          31          $       -            $    (1)         $  (162)         $              55
Segment depreciation
and amortization              $        24             $         5             $           8          $       -            $     -          $    18          $              55
Adjusted EBITDA               $        96             $       120             $          39          $       -            $    (1)         $  (144)         $             110

% of Total Revenue                   51.2     %              32.6     %                16.2  %               -    %             -  %             -  %                   100.0       %
Adjusted EBITDA Margin               18.5     %              36.3     %                23.6  %               -    %             -  %             -  %                    10.8       %

2019
Revenue                       $       592             $       326             $         194          $       -            $     -          $     -          $           1,112
Segment profit (loss)         $       111             $        95             $          29          $       -            $     -          $  (176)         $              59
Segment depreciation
and amortization              $        21             $         7             $           8          $       -            $     -          $    15          $              51
Adjusted EBITDA               $       132             $       102             $          41          $       -            $     -          $  (161)         $             114

% of Total Revenue                   53.2     %              29.3     %                17.5  %               -    %             -  %             -  %                   100.0       %
Adjusted EBITDA Margin               22.3     %              31.3     %                21.1  %               -    %             -  %             -  %                    10.3       %


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                                                                                                 Six Months Ended
                                                                                                     June 30,
                                                                                                                                                                  Shared IT /
                                 Commercial             Government                                                                                             Infrastructure &
(in millions)                    Industries              Services             Transportation                     Other                                          Corporate Costs          Total
2020                                                                                                 Divestitures          Other
Revenue                       $     1,092            $       621             $         354          $         -          $     -          $     -          $           2,067
Segment profit (loss)         $       162            $       208             $          54          $         -          $     3          $  (327)         $             100
Segment depreciation
and amortization              $        49            $        11             $          17          $         -          $     -          $    36          $             113
Adjusted EBITDA               $       211            $       219             $          71          $         -          $    (4)         $  (291)         $             206

% of Total Revenue                   52.8    %              30.1     %                17.1  %                 -  %             -  %             -  %                   100.0       %
Adjusted EBITDA Margin               19.3    %              35.3     %                20.1  %                 -  %             -  %             -  %                    10.0       %

2019
Revenue                       $     1,204            $       651             $         378          $        36          $     1          $     -          $           2,270
Segment profit (loss)         $       228            $       175             $          48          $         1          $     -          $  (324)         $             128
Segment depreciation
and amortization              $        43            $        16             $          17          $         -          $     -          $    29          $             105
Adjusted EBITDA               $       271            $       191             $          69          $         1          $     -          $  (295)         $             237

% of Total Revenue                   53.0    %              28.7     %                16.7  %               1.6  %             -  %             -  %                   100.0       %
Adjusted EBITDA Margin               22.5    %              29.3     %                18.3  %               2.8  %             -  %             -  %                    10.4       %


Commercial Industries Segment

Revenue

Commercial Industries revenue for the three months ended June 30, 2020
decreased, compared to the prior year period, primarily driven by lost business
within our Customer Experience Management (CXM) and our HRS service offerings,
as well as COVID-19 related volume declines and interest rate impact in our
BenefitWallet business. For the three months ended June 30, 2020, approximately
$44 million of the revenue decline in the Commercial Industries segment was
attributable to the COVID-19 pandemic or COVID-19 related effects. This was
primarily due to: 1) lower transaction processing activity for client in the
auto, dental, financial services and travel industries within of our BOS service
offering, 2) reduced workers compensation claims and commercial healthcare
claims processing in our Commercial Healthcare Solutions (CHS) service offering,
and 3) reduced revenue from BenefitWallet in our HRS service offering, as a
result of interest rate reductions.

Commercial Industries revenue for the six months ended June 30, 2020 decreased,
compared to the prior year period, primarily driven by loss of business within
our CXM and HRS service offerings, as well as COVID-19 and COVID 19 related
volume declines and interest rate impact. For the six months ended June 30,
2020, approximately $51 million of the revenue decline in the Commercial
Industries segment was directly attributable to the effects of the COVID-19
pandemic.

Segment Profit and Adjusted EBITDA



Decreases in the Commercial Industries segment profit and adjusted EBITDA margin
for the three and six months ended June 30, 2020, compared to the prior year
periods, were mainly driven by overall revenue declines, the adverse effects of
the COVID-19 pandemic and current period exit costs from prior year contract
losses, partially offset by reductions in IT, real estate and labor costs.

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Government Services Segment

Revenue

Government Services revenue for the three months ended June 30, 2020 increased
compared to the prior year period, primarily driven by ramp of new business and
volume increases and COVID-19 related volume increases. These increases were
partially offset by contract losses and volume pressure. For the three months
ended June 30, 2020, approximately $45 million of the revenue increase in the
Government Services segment was attributable to the COVID-19 pandemic or
COVID-19 related effects. This was largely driven by: 1) increases in the
Supplemental Nutrition Assistance Program (SNAP) volumes and Pandemic SNAP
volumes, 2) an increase in the number of citizens to which we distribute
unemployment insurance benefits, and 3) the additional unemployment insurance
benefit distributions under the CARES Act. Within the unemployment benefit
business, we generate revenue based on the amount of spending by card holders.

Government Services revenue for the six months ended June 30, 2020 decreased
compared to the prior year period, primarily driven by contract losses,
partially offset by ramp up of new business, volume increases and COVID-19
related volume increases, particularly in the second quarter of 2020. For the
six months ended June 30, 2020, approximately $46 million of revenue in the
Government Services segment was attributable to the COVID-19 pandemic or
COVID-19 related effects.

Segment Profit and Adjusted EBITDA



Increases in the Government Services segment profit and adjusted EBITDA margin
for the three and six months ended June 30, 2020, compared to the prior year
periods, were mainly driven by increased revenue and reductions in IT and
delivery spend.

Transportation Segment

Revenue

Transportation revenue for the three and six months ended June 30, 2020
decreased, compared to the prior year periods, primarily driven by lost business
and COVID-19 related impact, partially offset by ramp of new business. For the
three and six months ended June 30, 2020, approximately $36 million and $44
million, respectively, of the revenue declines in the Transportation segment
were attributable to the COVID-19 pandemic or COVID-19 related effects. The
COVID-19 related impacts were primarily driven by volume pressure in the Roadway
Charging & Management Services and Curbside Management Solutions service
offerings and project delays in the Transit Solutions service offering.

Segment Profit and Adjusted EBITDA



Transportation segment profit and adjusted EBITDA margin for the three and six
months ended June 30, 2020 increased, compared to the prior year periods, mainly
driven by reduced IT and labor costs as a result of the cost reduction
initiative.

Other

Revenue

Other revenue for the three months ended June 30, 2020 remained flat, compared to the prior year period.

Other revenue for the six months ended June 30, 2020 decreased, compared to the prior year period, driven mainly by the divestitures completed in the first quarter of 2019.



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Segment Profit (Loss) and Adjusted EBITDA



Increase in Other segment profit for the six months ended June 30, 2020,
compared to the prior year period, was primarily due to the adjustment to the
remaining California MMIS settlement liability of $7 million as a result of the
contract expiration on March 31, 2020, partially offset by ongoing costs related
to the portfolio of select standalone customer care contracts that were sold to
Skyview Capital LLC in 2019. The $7 million benefit was removed from adjusted
EBITDA for segment reporting purposes due to its non-recurring nature.

Shared IT / Infrastructure & Corporate Costs



Shared IT/Infrastructure and Corporate costs for the three and six months ended
June 30, 2020 decreased, compared to the prior year period. This was primarily
driven by the efficiencies created by the cost reduction initiative and lower
facilities costs as a result of the COVID-19 related stay-at-home orders,
partially offset by an increase in shared infrastructure related IT due to some
discrete non-recurring credits benefiting the prior year, as well as increased
costs incurred due to the effects of the COVID-19 pandemic.

Metrics

Signings



Signings are defined as estimated future revenues from contracts signed during
the period, including renewals of existing contracts. TCV is the estimated total
contractual revenue related to signed contracts.

Total signings for the three and six months ended June 30, 2020 increased,
compared to the prior year periods, driven by increases in new business and
renewal TCV signings. TCV signings are defined as estimated future revenues from
contracts signed during the period, including renewals of existing contracts.
TCV is the estimated total contractual revenue related to signed contracts,
excluding the impact of divested business as required.

For the three months ended June 30, 2020, the Company signed $623 million of new
business, representing a 90% increase compared to the prior year period, which
is the strongest quarter of new business TCV signings since our separation as a
stand-alone public company. Renewal TCV for the three months ended June 30, 2020
was $912 million, an increase of 88% compared to the prior year period. The
Company continues to build the size and strength of the newly centralized sales
team.

For the six months ended June 30, 2020, the Company signed $947 million of new
business, representing 71% increase compared to the prior year period. Renewal
TCV for the six months ended June 30, 2020 was $1,427 million, an increase of
18% compared to the prior year period.

The amounts in the following table exclude divestitures.



                                                Three Months Ended
                                                     June 30,                                2020 vs. 2019
($ in millions)                                  2020           2019       $ Change         % Change
New business TCV                            $      623        $ 328       $    295                 90  %
Renewals TCV                                       912          485            427                 88  %
Total Signings                              $    1,535        $ 813       $    722                 89  %

Annual recurring revenue signings(1) $ 105 $ 84 $

     21                 25  %
Non-recurring revenue signings(2)           $       76        $  49       $     27                 55  %



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                                                Six Months Ended
                                                    June 30,                               2020 vs. 2019
($ in millions)                                2020          2019        $ Change         % Change
New Business TCV                            $   947       $   553       $    394                 71  %
Renewals TCV                                  1,427         1,212            215                 18  %
Total Signings                              $ 2,374       $ 1,765       $    609                 35  %

Annual recurring revenue signings(1) $ 162 $ 136 $

   26                 19  %
Non-recurring revenue signings(2)           $   120       $    81       $     39                 48  %


___________


(1)Recurring revenue signings are for new business contracts longer than one
year.
(2)Non-recurring revenue signings are for contracts shorter than one year.

The total new business pipeline at the end of June 30, 2020 and 2019 was $22.0
billion and $18.0 billion, respectively. Total new business pipeline is defined
as total new business TCV pipeline of deals in all sell stages. This extends
past the next twelve-month period to include total pipeline, excluding the
impact of divested business as required.

Critical Accounting Policies

COVID-19 Outbreak



The Company is experiencing disruptions to its business, costs, operations,
supply chain, and customer demand for its services and solutions due to the
rapid and widening spread of the COVID-19 pandemic. While we experienced
expansion of volumes and revenues in some of our service offerings, mainly
increases in certain government subsidy programs such as SNAP and Unemployment
Insurance, these were more than offset with declines in retail call volumes,
large banking, healthcare, automotive and other client volume declines in
transaction processing, interest rate exposure in our BenefitWallet business,
declines in our tolling business, which is part of our Transit solutions service
offering, and our Curbside management solutions volume, among other challenges.
We expect similar challenges and potential declines in volume ahead of us, but
we also anticipate other factors to offset these declines such as leveraging
automation, focusing on temporary and long-term cost solutions through
re-engineering our operating model and leveraging our work-from-home
infrastructure.

The Company also continues to monitor the potential effect on the carrying
values of certain assets. These foregoing factors and other factors, which may
worsen, can be expected to have a material adverse effect on our business,
operations, financial results and capital resources. The ultimate effect of the
COVID-19 pandemic on us is highly uncertain and subject to change and will
depend on future developments, which cannot be accurately predicted, including
the duration of the pandemic, additional or modified government actions, new
information that will emerge concerning the severity and effects of COVID-19 and
the actions taken to contain the pandemic or address its impact in the short and
long term, among others. We do not yet know and cannot predict the full extent
of potential impacts on our business, our services and business offerings or our
operating results, financial condition and cash flow. Management uses
significant judgment in determining the impact of the COVID-19 pandemic on its
financial results for the current period and for any future periods. Changes in
management's assumptions and judgment relating to the impact of COVID-19 could
significantly affect the amounts disclosed in the MD&A - Financial Review of
Operations and the MD&A - Operations Review of Segment Revenue and Profit, as
the effect of the COVID-19 pandemic remains ongoing. For additional information
on various COVID-19 impacts, uncertainties and risks, see Part II, Item 1A -
Risk Factors included in our Annual Report on Form 10-K for the year ended
December 31, 2019 (2019 Annual Report on Form 10-K), as updated by our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2020.


                                      CNDT Q2 2020 Form 10-Q


                                       33

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Capital Resources and Liquidity



As of June 30, 2020, and December 31, 2019, total cash and cash equivalents were
$428 million and $496 million, respectively. The Company also has a $750 million
Revolver for its various cash needs, of which $150 million was drawn in March
2020 as a precautionary measure in response to the COVID-19 pandemic, and $8
million issued for letters of credit. The net amount available to be drawn upon
under our Revolver as of June 30, 2020, was $592 million.

Pursuant to the terms of the State of Texas Agreement, the Company was required
to pay the State of Texas $236 million, of which $118 million was paid in 2019
and $118 million paid in January 2020. The case has been dismissed with
prejudice with a full release and discharge of the Company. Refer to Note 11 -
Contingencies and Litigation to the Condensed Consolidated Financial Statements
for additional information.

As of June 30, 2020, our total long-term debt outstanding was $1.6 billion of which $68 million was due within one year. Refer to Note 6 - Debt in the Condensed Consolidated Financial Statements for additional debt information.



In order to provide financial flexibility and finance certain investments and
projects, we may continue to utilize external financing arrangements. However,
we believe that our cash on hand, projected cash flow from operations, sound
balance sheet and revolving line of credit will continue to provide sufficient
financial resources to meet our expected business obligations for at least the
next twelve months.

Cash Flow Analysis

The following table summarizes our cash flows, as reported in our Condensed
Consolidated Statement of Cash Flows in the accompanying Condensed Consolidated
Financial Statements:

                                                                      Six Months Ended
                                                                          June 30,
(in millions)                                              2020         2019        Better (Worse)
Net cash provided by (used in) operating activities      $ (118)      $ (234)      $         116
Net cash provided by (used in) investing activities      $  (58)      $ (209)                151

Net cash provided by (used in) financing activities $ 114 $ (39)

                153



Historically the Company generates the majority of its cash from operating activities in the latter part of the year.

Operating activities



The net improvement in cash used in operating activities of $116 million,
compared to the prior year period, was primarily related to timing of payments
of Accounts payable and other current liabilities of $30 million, the deferral
of payroll taxes allowed by the CARES Act of $18 million, lower net cash income
tax payments of $36 million and other working capital changes of $30 million.

Investing activities



The decrease in cash used in investing activities of $151 million was primarily
due to decreased spending for capital expenditures and the absence of the HSP
acquisition in the first quarter of 2019 and lower divestiture payments.

Financing activities

The increase in cash from financing activities was primarily related to the $150 million draw down from our $750 million Revolver in the first quarter of 2020.



                                      CNDT Q2 2020 Form 10-Q


                                       34

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Market Risk Management

We are exposed to market risk from changes in foreign currency exchange rates
which could affect operating results, financial position and cash flows. We
manage our exposure to these market risks through our regular operating and
financing activities and, when appropriate, through the use of derivative
financial instruments. We may utilize derivative financial instruments to hedge
economic exposures, as well as to reduce earnings and cash flow volatility
resulting from shifts in market rates. We also may hedge the cost to fund
material non-dollar entities by buying currencies periodically in advance of the
funding date. This is accounted for using derivative accounting.

Recent market and economic events, including the effects of the COVID-19
pandemic, have not caused us to materially modify nor change our financial risk
management strategies with respect to our exposures to foreign currency risk.
Refer to Note 7 - Financial Instruments in the Condensed Consolidated Financial
Statements for additional discussion on our financial risk management.

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