As filed with the Securities and Exchange Commission on March 11, 2019.

Registration No. 333-229677

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 2

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Alight Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

7374

83-1936294

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

4 Overlook Point

Lincolnshire, Illinois 60069

Telephone: (224) 737-7000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Paulette R. Dodson

General Counsel & Corporate Secretary

Alight Inc.

4 Overlook Point

Lincolnshire, Illinois 60069

Telephone: (224) 737-7000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Joshua Ford Bonnie

Edgar J. Lewandowski

Simpson Thacher & Bartlett LLP

900 G Street, N.W.

Washington, D.C. 20001

Telephone: (202) 636-5500

Joshua N. Korff

Michael Kim

Luke R. Jennings

Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Telephone: (212) 446-4800

Approximate date of commencement of the proposed sale of the securities to the public: As soon as practicable after the Registration Statement is declared effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☐

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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.

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 7(a)(2)(B) of the Securities Act. ☐

CALCULATION OF REGISTRATION FEE



Title of Each Class of Securities to be Registered	Amount to be Registered(1)	Proposed Maximum Aggregate Offering Price Per Share	Proposed Maximum Aggregate Offering Price(1)(2)	Amount of Registration Fee(3)
Class A Common Stock, par value $0.01 per share	36,800,000	$25.00(2)	$920,000,000	$111,504

(1)	Includes 4,800,000 shares of Class A common stock that are subject to the underwriters’ option to purchase additional shares.

(2)	Estimated solely for the purpose of determining the amount of the registration fee in accordance with Rule 457(a) under the Securities Act of 1933.

(3)	The Registrant previously paid $12,120 of the registration fee, with respect to $100,000,000 of the proposed maximum aggregate offering price, in connection with the initial filing of this registration statement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MARCH 11, 2019

PRELIMINARY PROSPECTUS

32,000,000 Shares

LOGO

Alight Inc.

Class A Common Stock

$ per share

This is the initial public offering of shares of Class A common stock of Alight Inc. We are selling 32,000,000 shares of our Class A common stock. We currently expect the initial public offering price to be between $22.00 and $25.00 per share of Class A common stock. We have applied to list our shares of Class A common stock on the Nasdaq Global Select Market (“Nasdaq”) under the trading symbol “ALIT.”

Holders of shares of our Class A common stock are entitled to one vote for each share of Class A common stock held of record on all matters on which stockholders are entitled to vote generally. Each holder of Class B common stock shall be entitled, without regard to the number of shares of Class B common stock held by such holder, to one vote for each LLC Unit (as defined herein) held by such holder on all matters on which stockholders of Alight Inc. are entitled to vote generally. See “Description of Capital Stock.”

After the completion of this offering, affiliates of The Blackstone Group L.P. and the Co-Investors (as defined herein) will be parties to a stockholders agreement and will beneficially own approximately 65% of the combined voting power of our Class A and Class B common stock (or 64% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). As a result, we will be a “controlled company” within the meaning of the Nasdaq corporate governance standards. See “Management—Controlled Company Exception” and “Principal Stockholders.”

Investing in shares of our Class A common stock involves risks. See “Risk Factors” beginning on page 20.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions	$	$
Proceeds, before expenses, to Alight Inc.	$	$

Please see the section entitled “Underwriting (Conflicts of Interest)” for a description of compensation payable to the underwriters.

To the extent that the underwriters sell more than 32,000,000 shares of our Class A common stock, the underwriters have the option to purchase up to an additional 4,800,000 shares of our Class A common stock from us at the initial public offering price less the underwriting discounts and commissions, within 30 days from the date of this prospectus.

The underwriters expect to deliver the shares of our Class A common stock against payment in New York, New York on or about , 2019.


BofA Merrill Lynch	J.P. Morgan	Morgan Stanley
Barclays	BMO Capital Markets	Citigroup
Credit Suisse	Deutsche Bank Securities	Goldman Sachs & Co. LLC
Blackstone Capital Markets	CIBC Capital Markets	PNC Capital Markets LLC


Baird		KeyBanc Capital Markets		Macquarie Capital		Stephens Inc.		Stifel


Academy Securities		BTIG		Loop Capital Markets		Ramirez & Co., Inc.		Siebert Cisneros Shank & Co. L.L.C.

The date of this prospectus is , 2019.

LOGO

Table of Contents


	Page
Summary		1
Risk Factors		20
Forward-Looking Statements		45
Market and Industry Data		46
Trademarks, Service Marks and Trade Names		47
Organizational Structure		48
Use of Proceeds		54
Dividend Policy		55
Capitalization		56
Dilution		58
Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information		60
Selected Historical Condensed and Consolidated Financial Data		71
Management’s Discussion and Analysis of Financial Condition and Results of Operations		73


	Page
Business		98
Management		114
Certain Relationships and Related Person Transactions		150
Principal Stockholders		156
Description of Certain Indebtedness		161
Description of Capital Stock		165
Certain U.S. Federal Income and Estate Tax Consequences to Non-U.S. Holders		174
Shares Eligible for Future Sale		177
Underwriting (Conflicts of Interest)		179
Legal Matters		188
Experts		188
Where You Can Find More Information		188
Index to Financial Statements		F-1

Neither we nor the underwriters have authorized anyone to provide you with information different from that contained in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by us or on our behalf. Neither we nor the underwriters take any responsibility for, or can provide any assurance as to the reliability of, any information other than the information in this prospectus, any amendment or supplement to this prospectus or any free writing prospectus prepared by us or on our behalf. We and the underwriters are offering to sell, and seeking offers to buy, shares of our Class A common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our Class A common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

Through and including , 2019 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

About This Prospectus

Financial Statement Presentation

This prospectus includes certain historical condensed and consolidated financial and other data for Tempo Holding Company, LLC, a Delaware limited liability company (“Alight OpCo”). Following this offering, Alight OpCo will be the predecessor of Alight Inc. for financial reporting purposes. Immediately following this offering, Alight Inc. will be a holding company, and its sole material asset will be a controlling equity interest in Alight OpCo. As the sole managing member of Alight OpCo, Alight Inc. will operate and control all of the business and affairs of Alight OpCo and, through Alight OpCo and its subsidiaries, conduct our business. The reorganization will be accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of Alight Inc. will recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Alight OpCo. Alight Inc. will consolidate


		i

Alight OpCo on its consolidated financial statements and record a noncontrolling interest related to the LLC Units (as defined below) held by our pre-IPO owners on its consolidated balance sheet and statement of operations.

On May 1, 2017, Tempo Acquisition, LLC, a wholly-owned subsidiary of Alight OpCo, acquired the technology-enabled human resources (“HR”) business of Aon, plc (“Aon”) (such transaction, the “Separation”). Tempo Acquisition, LLC applied acquisition accounting under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, Business Combinations. As Tempo Acquisition, LLC did not have any previous operations, the Alight business previously owned by Aon is viewed as the predecessor to Alight OpCo and its consolidated subsidiaries. Accordingly, the audited consolidated financial statements of Alight OpCo include a black line as of April 30, 2017, and present combined carve-out information of the predecessor for periods prior to April 30, 2017 and consolidated information of the successor for periods following April 30, 2017.

Exit from Hosted Business

We report our results of operations in two segments: Solutions and Hosted Business. In 2014, we stopped actively pursuing new clients in our Hosted Business and instead chose to focus our strategic efforts and resources on enhancing our suite of Human Capital Management (“HCM”) solutions to help clients realize the benefits of cloud-based solutions. While we have successfully migrated a significant number of our Hosted clients to cloud-based solutions, we continue to support a number of active Hosted clients under agreements that are scheduled to expire by 2023. Accordingly, while we will continue to perform our existing Hosted Business agreements, we do not intend to renew such agreements or enter into any new Hosted Business agreements. See “Business—Hosted Business Services.”

Certain Definitions

As used in this prospectus, unless otherwise noted or the context requires otherwise:

•

“Alight,” the “Company,” “we,” “us” and “our” refer (1) prior to the consummation of the Offering Transactions described under “Organizational Structure—Offering Transactions,” to Alight OpCo and its consolidated subsidiaries and (2) after the Offering Transactions described under “Organizational Structure—Offering Transactions,” to Alight Inc. and its consolidated subsidiaries.

•

“Blackstone” or “our Sponsor” refer to investment funds associated with The Blackstone Group L.P.

•

“Co-Investors” refers to certain co-investors who, together with Blackstone, will be parties to the stockholders agreement we intend to enter into in connection with this offering.

•

“Existing owners” or “pre-IPO owners” refer collectively to Blackstone, the Co-Investors and the management and other equity holders who are the owners of Alight immediately prior to the Offering Transactions.

Descriptions of our “solutions” in this prospectus refer to the solutions that we offer through our Solutions segment.

Unless indicated otherwise, the information included in this prospectus assumes no exercise by the underwriters of their option to purchase up to an additional 4,800,000 shares of Class A common stock from us and that the shares of Class A common stock to be sold in this offering are sold at $23.50 per share, which is the midpoint of the price range indicated on the front cover of this prospectus.


		ii

SUMMARY

This summary highlights information contained elsewhere in this prospectus and does not contain all of the information you should consider before investing in shares of our Class A common stock. You should read this entire prospectus carefully, including the section entitled “Risk Factors” and the financial statements and the related notes thereto included elsewhere in this prospectus, before you decide to invest in shares of our Class A common stock.

Overview

Alight is a leading provider of integrated, cloud-based human capital solutions that empower our clients and their employees to manage their health, wealth and HR needs. Our scale, 25+ year operating history, deep domain expertise and technology platforms enable us to serve the complex demands of our clients and today’s workforce. We provide solutions to nearly 3,000 employers, including 70 of the Fortune 100 and 243 of the Fortune 500, and serve more than 23 million of their current and former employees and their over 11 million family members. In 2018, we processed over 375 million benefits and HR transactions.

Employers are continuously competing to attract, engage and retain talent. Critical to that effort is the seamless delivery of comprehensive health, wealth and HR programs that create an enriched employee experience. Employers are also confronted with rising costs, increasing regulation, growing administrative complexity and the need to integrate and deploy new technologies to address their benefits and HR requirements. At the same time, employees are increasingly required to take greater responsibility for their healthcare and financial decisions and expect an integrated, consumer-centric experience.

We address these challenges for both employers and their employees. We offer innovative, consumer-focused solutions that allow our clients to engage and enable their employees to make better choices while controlling cost, managing risk and driving better business results. When an employee starts a new job, enrolls in healthcare or retirement plans, receives a paycheck, or experiences a variety of life events, our solutions enable employees to comprehensively manage their total well-being across health, wealth and work from employment through retirement. Our solutions include:

•

Health Solutions: We are the #1 provider of health technology and administration solutions that enable employees to enroll in and manage their medical, dental and voluntary benefits. Additionally, we offer consumer-directed healthcare solutions, such as spending accounts, and data and analytics-driven healthcare navigation services for employees.

•

Wealth Solutions: We are a top provider of defined benefit and defined contribution plan administration and financial well-being solutions, including wealth navigation tools and participant advisory services.

•

HCM Solutions: We are a leading provider of cloud advisory and deployment, application management services and HR and payroll services for cloud platforms, such as Workday, Cornerstone OnDemand, Oracle and SAP SuccessFactors.

All of our solutions are supported by a suite of enabling capabilities to drive consumer engagement and understanding, including digital tools, communications consulting services and the Alight Partner Network, a curated set of complementary niche provider solutions.

proprietary technologies include our core benefits processing platforms and consumer engagement tools, which power our solutions across health, wealth and HCM. Our strategic partnerships with providers, such as Alegeus, Personal Capital and Workday, enhance our solutions across our core areas of health, wealth and HCM. The tools, capabilities and culture that comprise the Alight Operating Model enable us to deliver these technologies and partner offerings to our clients with consistency and quality.

We serve a broad range of clients, including Fortune 500 companies and mid-market businesses, across a diverse range of industry verticals, including financial services, retail & hospitality, technology & communications, manufacturing, healthcare & pharmaceuticals and natural resources. We believe our deep domain expertise in benefits and HR, our comprehensive suite of solutions and our deeply-embedded technology platforms differentiate us in the market and provide us with a significant competitive advantage. Additionally, our intense focus on solving the complex needs of our clients has enabled us to establish long-term, deeply-embedded client relationships with high levels of retention. For example, our top 25 Solutions clients, ranked by revenue, have been with us for an average of 13 years as of December 31, 2018. We have also achieved Solutions revenue retention of 97% or greater in each of the last eight years. We calculate revenue retention for a year by identifying the clients from whom we generated Solutions revenue the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year.

Our highly recurring revenue model is primarily based on a contracted fee charged per benefit plan participant per period (e.g., monthly or annually, as applicable), with additional revenue recorded on a time-and-materials, fixed fee or other project specific basis. For the years ended December 31, 2018 and 2017, our Solutions segment generated revenue of $2.2 billion and $2.1 billion, respectively, and Adjusted EBITDA of $540 million and $423 million, respectively. Revenue from our health, wealth and HCM solutions represented 54%, 26% and 19%, respectively, of the revenue of our Solutions segment for the year ended December 31, 2018.

Market Opportunity

We believe there are several important market dynamics that are transforming the way companies engage, manage and retain their employees with respect to health and wealth benefits and other HR decisions. We believe these trends impact organizations regardless of size, industry, and geography, and represent a significant incremental global opportunity for Alight. According to International Data Corporation (“IDC”), the global market for HR Management Services was approximately $151 billion in 2018 and is predicted to grow at a nearly 7% compound annual growth rate and will reach approximately $198 billion by 2022. Key trends driving our market opportunity are as follows:

•

Increased cost and complexity of managing benefits and HR: Employers are challenged by the increasing complexities of managing benefits and HR. These can include the frequent and numerous changes to the types of healthcare plans offered, navigating the changing carrier landscape and subsequently communicating these changes to employees. In addition, employers must constantly adapt to and comply with changing regulatory requirements at the federal, state and local levels, and are focused on managing compliance requirements associated with changing regulatory frameworks. In addition, in order to hire, train and retain the best talent, HR organizations are tasked with utilizing technology and data-driven solutions to provide employees a broader range of benefits, amenities and other services.

•

Employers are shifting the responsibility for managing health and wealth decisions to employees: To manage the costs and risks of navigating the healthcare services market and provision of retirement plans, employers are continuing to redesign the benefits they offer to their employees and other plan participants. Employers are often also shifting a greater percentage of the cost of benefits to the

employees, but at the same time offering greater control of healthcare and financial decisions with the rise of tools and solutions.

•

Employers are demanding integrated, end-to-end human capital management solutions: Companies are often served by a range of niche providers to satisfy their benefits and HR technology and services needs. This construct, characterized by multiple, specialty providers, burdens organizations with siloed solutions that do not seamlessly work together, which leads to higher costs and yields a sub-optimal solution set that reduces functionality and limits the ability to share and use data across solutions. As a result, organizations are increasingly seeking end-to-end, integrated solutions across health and wealth to support participants’ total well-being.

•

Employees are demanding a more personalized, consumer-centric experience: The proliferation of modern, consumer-facing applications has led consumers to expect real-time accessibility and an intuitive user experience. Employees demand and rely on personalized solutions and insights, delivered seamlessly across digital and other channels, to help navigate their health, wealth and career decisions. Further, employees expect a single portal to comprehensively view their benefits, compensation and other HR-related information, and the tools to help them explore, compare and choose health plans and providers, across multiple touchpoints including mobile applications, website or expert advice over the phone.

•

HR solutions are rapidly shifting to the cloud: Organizations are increasingly transitioning their HR technology environments to the cloud in order to reduce cost, increase speed and flexibility, and standardize functionality. As delivery models shift, organizations are increasingly focused on finding strategic partners that can help them migrate and run solutions in a cloud-based environment. For example, according to a May 2018 Gartner forecast report, the global market for Cloud Consulting and Implementation Services was approximately $72 billion in 2017 and is predicted to grow at an approximately 21% compound annual growth rate and reach approximately $183 billion in 2022.

•

Innovative technologies and the automation of core processes provide opportunities to further enhance client offerings: Providers of innovative solutions are increasingly leveraging advancements in technology, such as robotic process automation (“RPA”), to automate the processing of repetitive tasks and allow clients to focus on their core businesses. Such technologies can effectively streamline processes, facilitate digital delivery of services and improve user experience to enhance overall value proposition to clients.

Our Solutions

We offer innovative solutions to employers that address their needs, from the most basic to the most complex, across health, wealth and HR. Our health and wealth solutions are powered by our proprietary, cloud-based core benefits platforms, which serve both large enterprises and small and mid-market clients. We also provide a proprietary, front-end consumer portal, UPoint, which serves as the critical integration point for users, clients and partners, enabling a seamless consumer experience. Through our HCM solutions, we provide cloud advisory and deployment, application management services and HR and payroll services for cloud platforms, such as Workday, Cornerstone OnDemand, Oracle and SAP SuccessFactors.

Health Solutions Health Administration Healthcare Navigation Consumer-Directed Healthcare (CDH) Wealth Solutions Defined Contribution Administration Defined Benifit Administration Financial Wellbeing HCM Solutions Cloud Advisory & Deployment Application Management Services Cloud HR and Payroll Services Enabling Capabilities & Technologies Consumer Experience | UPoint & Cloud-based Platforms Partner Network | Data Analytics

LOGO

Our Competitive Strengths

Leading Scaled Provider of Human Capital Solutions with a Successful 25+ Year Operating History

We are the #1 provider of health technology and administration solutions and a top provider of defined benefit and defined contribution plan administration and financial well-being solutions. We also believe we are one of the largest and most comprehensive providers of Workday services in the world with over 1,000 certified professionals and deep expertise that spans Workday Human Capital Management, Payroll and Financial Management. Throughout our over 25 year history, we have developed significant operational scale, deep domain expertise and innovative technologies to enable us to solve the most complex benefits and HR needs of our clients. As of December 31, 2018, we served more than 23 million of our clients’ employees and their over 11 million family members, and in 2018, we processed over 375 million benefits and HR transactions. We believe that our scale and leadership positions us well to navigate our clients’ broad and complex needs.

Deep Domain Expertise and Operational Excellence

We believe we pioneered the market for benefits technology solutions and throughout our history have developed significant domain expertise that our clients trust. Our rich knowledge and understanding of today’s complex regulatory and compliance environments enable us to develop and deliver tailored solutions to meet the evolving needs of our clients. For example, as of December 31, 2018, nearly 40% of our health-aligned colleagues have ten or more years of experience, and we administer over 13,000 unique health plan designs. Our domain expertise is an important component of the Alight Operating Model, which provides the tools, methodology and infrastructure for our high-quality service delivery. We are widely recognized for our industry and thought leadership. For example, we were recognized in 2018 as a leader in NelsonHall’s NEAT Vendor Evaluation for Health & Wellness Benefits Administration—the fourth straight year we have received such recognition. Additionally, in our HCM solutions, Everest Group identified us as a Leader among Workday-based HR Business Process Services (BPS) providers.

Highly Embedded, Long-Term Relationships with a Broad Base of Clients

We work with chief human resource officers and other senior management at many of the world’s largest and most successful organizations across a diverse range of industry verticals. We believe every business is a people business, and we strive to deliver excellent client service to enable employers and their employees to thrive every day. Our business model is highly recurring and underpinned by long-term, deeply embedded client relationships. Our client relationships are typically structured on a contracted fee basis, charged per benefit plan participant per period (e.g., monthly or annually, as applicable), that is highly stable and predictable. We provide solutions to nearly 3,000 clients, from the largest, most complex organizations, including 70 of the Fortune Global 100 and 243 of the Fortune Global 500, to mid-market businesses. As of December 31, 2018, our top 25 Solutions clients, ranked by revenue, had been with us for an average of 13 years. Our client base has consistently high retention rates, achieving Solutions revenue retention of 97% or greater in each of the last eight years. Additionally, five of our top 20 Solutions clients have been our clients for each of the last 20 years.

Comprehensive Suite of Integrated Health, Wealth and HCM Solutions

We provide a comprehensive suite of integrated solutions across health, wealth and HCM that help our clients control costs, manage risk and improve the health and financial well-being of their employees. Our solutions are delivered through our proprietary, front-end consumer portal, UPoint, and are supplemented by trained professionals that offer high-touch care and support for the most complex needs. Our solutions and UPoint portal, coupled with our scale and distribution, also make us a preferred partner for innovative, adjacent solution technologies that further enhance the holistic solution set we deliver to our clients and their employees. This enables us to cross-sell additional solutions to clients. In 2018, 41% of our Solutions revenue was generated from clients utilizing solutions across health, wealth and HCM.

Proprietary, Cloud-based Technology Platforms

Our proprietary, cloud-based technology platforms power a complex set of health and wealth solutions at scale. We have a service-oriented technology architecture that supports transaction processing at scale, shared productivity, data and analytics and an easily accessible, consumer-facing web portal. Our platforms are able to provide both integrated and standalone health and wealth solutions, and we believe we have one of the leading, multi-service benefits platforms. Our platforms are flexible and scalable and can handle the most complex benefit plan designs for the largest employers, as well as less complex or smaller-scale programs. Additionally, UPoint provides employees with a single access point to manage all of their benefits and HR needs. Our platforms support nearly 1.5 billion web pages and more than 230 million web and call center interactions annually.

Our Growth Strategies

Expand Relationships with Existing Clients

We have a demonstrated track record of selling additional solutions and thereby expanding the scope and depth of our client relationships. For example, from 2015 to 2018, 55% of our top 100 Solutions clients increased the number of solutions purchased from us. Additionally, we have increased the annual revenue generated from each of our top 100 Solutions clients by an average of approximately 26% from 2015 to 2018. Furthermore, during 2018, 28% of our cloud deployment services customers also became cloud services customers. We intend to deepen and expand relationships with existing clients and increase share of spend with clients that do not currently utilize our comprehensive suite of human capital solutions. Further, as our clients continue to consolidate their vendor relationships, we expect opportunities to expand our existing relationships to continue to increase.

Develop Relationships with New Clients

We intend to continue to acquire new clients across a variety of sizes and geographies. Key areas of focus for expanding our client base include the following opportunities:

•

Large-Market: We plan to capitalize on our market leadership position by leveraging our sales and marketing teams to win additional large-market clients, which we define as employers with greater than 10,000 employees. These larger employers often have the most complex benefits and HR demands, which our solutions and technologies are well suited to serve. We will continue to invest in our sales and marketing capabilities to further enhance the effectiveness of our go-to-market strategies targeting the large-market.

•

Mid-Market: We are actively pursuing clients in the middle market, which we define as employers with between 1,000 and 10,000 employees. We are executing a focused sales strategy utilizing a direct salesforce, strategic broker channel partnerships and Human Resources Management Systems (“HRMS”) platform partnerships, while adapting our existing solution portfolio to the needs of mid-market clients. We also provide solutions to clients, whom we have primarily inherited through acquisitions, with smaller employee counts. As of December 31, 2018, we had nearly 2,500 mid-market or smaller Solutions clients.

•

Global Client Expansion: We plan to grow beyond the U.S. and Canada, primarily in our HCM solutions. We believe our HCM solutions and deep domain expertise position us well for global expansion given the increased focus of clients on standardizing their HCM platforms across geographies. We have already had success with more than 85 Workday implementations for companies headquartered outside of the U.S. and Canada, including in Europe and Asia.

Continue to Innovate to Expand Our Capabilities and Expertise

We aim to continuously enhance and improve our solutions and capabilities to better serve the needs of our clients and their employees. Our breadth and depth of capabilities, coupled with our scale and deep client relationships, provides us with significant opportunity to innovate continuously and to bring new solutions to market. In addition, we recently launched and continue to expand the Alight Partner Network to further enhance and extend our offerings. We believe our scale and extensive client relationships make us a preferred partner for innovative, specialized solution providers.

•

treatment options and pricing, analyze healthcare bills and receive high-touch care and outreach from trained professionals. We help employees more cost-effectively manage their health, thereby enabling employees and employers to better manage their healthcare spend and make better decisions regarding the quality, effectiveness and cost of healthcare.

•

Wealth Solutions: Employees and retirees are increasingly expected to take charge of their own wealth decisions and, as a result, seek tools to help them make smart financial decisions. Our recently developed, consumer-centric WealthSpark solution, in partnership with Alliance Bernstein and Personal Capital, combines personalized investment portfolios with comprehensive digital wealth management tools to help employees plan, save and invest more intelligently.

•

HCM Solutions: We have developed deep domain expertise in navigating the shift to cloud-based HR solutions. We continue to leverage our capabilities to broaden our cloud services beyond benefits and HR into other areas such as Learning and Finance & Accounting through Cornerstone OnDemand and Workday, respectively.

We also continue to invest in innovative technologies such as artificial intelligence (“AI”) and RPA to streamline processes across our health, wealth and HCM solutions. These tools allow us to deliver our solutions more effectively by reducing time and expense for both Alight and for our clients, while simultaneously seeking to enhance service quality. For example, these technologies are instrumental in helping us to engage with and respond to employees and reduce average claim processing time.

Continue to Pursue Acquisitions and Strategic Partnerships

We plan to continue pursuing acquisitions opportunistically across the markets that we serve and forging new strategic partnerships to accelerate growth. We view acquisitions as an opportunity to enhance our capabilities and solutions portfolio and believe that we are well-positioned to capitalize on the fragmented industry landscape to make strategic, value-enhancing additions to our business that leverage scale, client relationships and deep domain expertise. We have a successful acquisition track record, as evidenced by our recent acquisitions of Compass and Future Knowledge, which are enhancing our healthcare navigation offerings for new and existing clients and expanding our cloud and Workday deployment capabilities in the Asia-Pacific region, respectively. In February 2019, we agreed, subject to customary closing conditions, to acquire the Workday and Cornerstone OnDemand cloud practices of Wipro Limited (“Wipro”). Operating under the Appirio brand, the cloud practices have a presence across 11 countries including India, Australia, Europe and the Nordics, and are leaders in designing and building Workday and Cornerstone OnDemand solutions for clients of all sizes and across industries. We also completed our acquisition of Carlson Management Consulting, a leading Adaptive Insights implementation partner that provides system implementation, optimizations and integrations to transform financial processes and operations to the cloud. Both of these acquisitions add deep technology capabilities and are expected to further fuel the growth of our cloud business.

In addition, we continue to expand our strategic commercial partnerships to enhance and extend our capabilities. Our scale, market leadership and distribution to more than 23 million of our clients’ current and former employees and their over 11 million family members make us a preferred partner to leading, next-generation technology and solution providers, including Alegeus, Workday, SAP, Oracle, Personal Capital and Ovia Health, among others. Our strategic partner ecosystem provides our clients and their employees with access to a more comprehensive solution set and enhanced technologies that empower them to make more informed decisions across their health, wealth and career.

Exit From Hosted Business

premise HCM software. Our Hosted client contracts typically have five to seven year terms that include a recurring revenue model primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable).

Our Sponsor

Blackstone (NYSE: BX) is one of the world’s leading investment firms. Blackstone’s alternative asset management businesses include the management of corporate private equity funds, real estate funds, hedge fund solutions, credit-oriented funds and closed-end mutual funds. Through its different businesses, Blackstone had total assets under management of over $472 billion as of December 31, 2018.

After the completion of this offering, our Sponsor and Co-Investors will be parties to a stockholders agreement described in “Certain Relationships and Related Person Transactions—Stockholders Agreement” and will beneficially own approximately 65% of the combined voting power of our Class A and Class B common stock (or 64% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). As a result, we will be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power is beneficially owned by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our board of directors consist of independent directors, (2) that our board of directors have a compensation committee that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (3) that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that is comprised entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process. Accordingly, you will not have the same protections afforded to shareholders of companies that are subject to all of these corporate governance requirements. In the event that we cease to be a “controlled company” and our Class A common stock continues to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods.

Investment Risks

An investment in shares of our Class A common stock involves substantial risks and uncertainties that may adversely affect our business, financial condition and results of operations and cash flows. Some of the more significant challenges and risks relating to an investment in our company include, among other things, the following:

•

An overall decline in economic activity could adversely affect the financial condition and results of operations of our business.

•

We face significant competition and our failure to compete successfully could have a material adverse effect on the financial condition and results of operations of our business.

•

We rely on complex information technology systems and networks to operate our business. Any significant system or network disruption due to a breach in the security of our information technology systems could expose us to legal liability, impair our reputation or have a negative impact on our operations, sales and operating results.

•

Improper access to, misappropriation, destruction or disclosure of confidential, personal or proprietary data as a result of employee or vendor malfeasance or cyber-attacks could result in financial loss, regulatory scrutiny, legal liability or harm to our reputation.

•

Changes in regulation, including changes in regulations related to health and welfare plans, fiduciary rules, pension reform and data privacy and data usage, their application and interpretation could have an adverse effect on our business.

•

Our business performance and growth plans could be negatively affected if we are not able to effectively apply technology in driving value for our clients or gaining internal efficiencies. Conversely, investments in innovative product offerings may fail to yield sufficient return to cover their costs.

•

We are subject to professional liability claims against us as well as other contingencies and legal proceedings relating to our delivery of services, some of which, if determined unfavorably to us, could have an adverse effect on our financial condition or results of operations.

•

Our substantial indebtedness could adversely affect our financial condition, our ability to raise additional capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry, our ability to meet our obligations under our outstanding indebtedness and could divert our cash flow from operations for debt payments.

•

Our Sponsor and Co-Investors control us and their interests may conflict with ours or yours in the future.

•

Upon the listing of our Class A common stock on Nasdaq, we will be a “controlled company” within the meaning of Nasdaq rules and, as a result, will qualify for exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Please see “Risk Factors” for a discussion of these and other factors you should consider before making an investment in shares of our Class A common stock.

Organizational Structure

Immediately following this offering, Alight Inc. will be a holding company and its sole material asset will be a controlling equity interest in Alight OpCo. As the sole managing member of Alight OpCo, Alight Inc. will operate and control all of the business and affairs and consolidate the financial results of Alight OpCo and through Alight OpCo and its subsidiaries, conduct our business. Prior to the completion of this offering, (1) certain of our pre-IPO owners (the “Pre-IPO Shareholders”) will receive shares of Class A common stock of Alight Inc. pursuant to the Blocker Mergers as defined and described in “Organizational Structure—Blocker Mergers” and (2) the limited liability company agreement of Alight OpCo will be amended and restated to, among other things, modify its capital structure by reclassifying the interests held by our remaining pre-IPO owners (the “Pre-IPO Unitholders”) into a single new class of units that we refer to as “LLC Units.” We and the Pre-IPO Unitholders will also enter into an exchange agreement under which they (or certain permitted transferees) will have the right (subject to the terms of the exchange agreement) to exchange their LLC Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. For a description of the amended and restated limited liability company agreement of Alight OpCo and the exchange agreement, please read “Certain Relationships and Related Person Transactions.”

the number of shares of Class B common stock held by such holder, to a number of votes that is equal to the aggregate number of LLC Units of Alight OpCo held by such holder on all matters on which stockholders of Alight Inc. are entitled to vote generally. The voting power afforded to holders of LLC Units by their shares of Class B common stock will be automatically and correspondingly reduced as they exchange LLC Units for shares of Class A common stock of Alight Inc. pursuant to the exchange agreement. If at any time the ratio at which LLC Units are exchangeable for shares of our Class A common stock changes from one-for-one as described under “Certain Relationships and Related Person Transactions—Exchange Agreement,” the number of votes to which Class B common stockholders are entitled will be adjusted accordingly. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally, except as otherwise required by law.

Our post-offering organizational structure, as described above, is commonly referred to as an umbrella partnership-C-corporation (or UP-C) structure. This organizational structure will allow our Pre-IPO Unitholders to retain their equity ownership in Alight OpCo, an entity that is classified as a partnership for U.S. federal income tax purposes, in the form of LLC Units. Investors in this offering and the Pre-IPO Shareholders will, by contrast, hold their equity ownership in Alight Inc., a Delaware corporation that is a domestic corporation for U.S. federal income tax purposes, in the form of shares of Class A common stock. We believe that our Pre-IPO Unitholders generally find it advantageous to continue to hold their equity interests in an entity that is not taxable as a corporation for U.S. federal income tax purposes. We do not believe that our UP-C organizational structure will give rise to any significant business or strategic benefit or detriment to us.

The reorganization will be accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of Alight Inc. will recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Alight OpCo. Alight Inc. will consolidate Alight OpCo on its consolidated financial statements and record a noncontrolling interest related to the LLC Units held by our pre-IPO owners on its consolidated balance sheet and statement of operations.

The simplified diagram below depicts our organizational structure immediately following this offering. For additional detail, see “Organizational Structure.”

LOGO

Pre-IPO Unitholders Pre-IPO Shareholders Public Shareholders Class B common, stock % of voting power Alight Inc. (1) No economic rights Class A common stock % of voting power in Alight Inc. 100% of economic interests in Alight Inc. Class A common stock % of voting power in Alight Inc. 100% of economic interests in Alight Inc. Alight Inc. LLC Units No voting rights Exchangeable on a 1-for-1 basis for shares of Class A common stock % of outstanding LLC Units Sole Managing Member and LLC Units 100%of voting power in Alight OpCo % of outstanding LLC Units Tempo Holding Company, LLC ("Alight OpCo") Tempo Acquisition, LLC (2) Operating Subsidiaries

(1)

The Class B common stock will provide each of the Pre-IPO Unitholders with a number of votes that is equal to the aggregate number of LLC Units held by such Pre-IPO Unitholder. Immediately following this offering, the Pre-IPO Unitholders will hold 34% of the voting power in Alight Inc. For additional information, see “Organizational Structure—Organizational Structure Following this Offering” and “Description of Capital Stock—Common Stock—Class B Common Stock.”

(2)

Tempo Acquisition, LLC, together with certain wholly owned subsidiary co-obligors, serves as the borrower under our senior secured revolving credit facility and our senior secured term loan facility (together, the “senior secured credit facilities”) and as the issuer of our senior notes due 2025 (the “senior notes”). See “Description of Certain Indebtedness.”

Alight Inc. was incorporated in Delaware on September 12, 2018. Our principal executive offices are located at 4 Overlook Point, Lincolnshire, Illinois 60069 and our telephone number is (224) 737-7000.

The Offering

Class A common stock offered by Alight Inc.

32,000,000 shares (plus up to an additional 4,800,000 shares at the option of the underwriters).

Class A common stock outstanding after giving effect to this offering

134,962,387 shares (or 139,762,387 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Class A common stock outstanding after this offering assuming exchange of all LLC Units held by the Pre-IPO Unitholders

204,546,274 shares (or 209,346,274 shares if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Voting power held by investors in this offering after giving effect to this offering

16% (or 18% if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Voting power held by our pre-IPO owners after giving effect to this offering

84% (or 82% if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

Use of proceeds

We estimate that the net proceeds to Alight Inc. from this offering, after deducting estimated underwriting discounts and commissions, will be approximately $714 million (or $822 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Alight OpCo will bear or reimburse Alight Inc. for all of the expenses payable by it in this offering. We estimate these offering expenses (excluding underwriting discounts and commissions) will be approximately $15 million.

Alight Inc. intends to cause Alight OpCo to use these proceeds to repay certain outstanding indebtedness. See “Use of Proceeds.”

Voting rights

Each share of our Class A common stock entitles its holder to one vote on all matters to be voted on by stockholders generally.

The Pre-IPO Unitholders will hold all of the outstanding shares of our Class B common stock. The shares of Class B common stock will have no economic rights but will entitle each holder, without regard to the number of shares of Class B common stock held by such holder, to a number of votes that is equal to the aggregate number of LLC Units held by such holder on all matters on which stockholders of Alight Inc. are entitled to vote generally. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally, except as otherwise required by law. See “Description of Capital Stock—Common Stock—Class B Common Stock.”

Dividend policy

The declaration, amount and payment of any future dividends will be at the sole discretion of our board of directors. Our board of directors may take into account general economic and business conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries (including Alight OpCo) to us, and such other factors as our board of directors may deem relevant.

Alight Inc. is a holding company and has no material assets other than Alight OpCo. We intend to cause Alight OpCo to make distributions to us in an amount sufficient to cover cash dividends, if any, declared by us. If Alight OpCo makes such distributions to Alight Inc., the other holders of LLC Units will be entitled to receive equivalent distributions.

Exchange rights of holders of LLC Units

Prior to this offering, we will enter into an exchange agreement with the Pre-IPO Unitholders so that they may, after the completion of this offering (subject to the terms of the exchange agreement), exchange their LLC Units for shares of Class A common stock of Alight Inc. on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. See “Certain Relationships and Related Person Transactions—Exchange Agreement.”

Tax receivable agreement

the Blocker Companies (as defined below) (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. These increases in existing tax basis and tax basis adjustments generated over time may increase (for tax purposes) depreciation and amortization deductions and, therefore, may reduce the amount of tax that Alight Inc. would otherwise be required to pay in the future. Actual tax benefits realized by Alight Inc. may differ from tax benefits calculated under the tax receivable agreement as a result of the use of certain assumptions in the tax receivable agreement, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. This payment obligation is an obligation of Alight Inc. and not of Alight OpCo. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Conflicts of Interest

Affiliates of Blackstone Advisory Partners L.P. own in excess of 10% of our equity. Because Blackstone Advisory Partners L.P. is an underwriter in this offering and its affiliates own in excess of 10% of our equity, Blackstone Advisory Partners L.P. is deemed to have a “conflict of interest” under Financial Industry Regulatory Authority, Inc. Rule 5121. Accordingly, this offering is being made in compliance with the requirements of Rule 5121. Pursuant to that rule, the appointment of a “qualified independent underwriter” is not required in connection with this offering as the members primarily responsible for managing the public offering do not have a conflict of interest, are not affiliates of any member that has a conflict of interest and meet the requirements of paragraph (f)(12)(E) of Rule 5121. See “Underwriting (Conflicts of Interest).”

Risk factors

See “Risk Factors” for a discussion of risks you should carefully consider before deciding to invest in our Class A common stock.

Certain U.S. federal income and estate tax consequences to non-U.S. holders

For a discussion of certain U.S. federal income and estate tax consequences that may be relevant to non-U.S. stockholders, see “Certain U.S. Federal Income and Estate Tax Consequences to Non-U.S. Holders.”

Nasdaq trading symbol

“ALIT”

In this prospectus, unless otherwise indicated, the number of shares of Class A common stock outstanding and the other information based thereon does not reflect:

•

4,800,000 shares of Class A common stock issuable upon exercise of the underwriters’ option to purchase additional shares of Class A common stock from us;

•

69,583,887 shares of Class A common stock issuable upon exchange of 69,583,887 LLC Units that will be held by the Pre-IPO Unitholders immediately following this offering; or

•

18,039,000 shares of Class A common stock that may be granted under the Alight Inc. 2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), of which options to purchase up to 2,200,000 shares of Class A common stock may be granted at the time of this offering to non-executive officer employees. The precise number of options to be granted at the time of this offering will be determined in reference to the actual initial public offering price per share of Class A common stock. Assuming an offering price of $23.50 per share of Class A common stock, which is the midpoint of the price range set forth on the cover of this prospectus, options to purchase 1,840,426 shares are expected to be granted at the time of this offering. See “Management—Executive Compensation—Omnibus Incentive Plan.”

Summary Historical and Pro Forma Financial and Other Data

The following table presents the summary historical condensed and consolidated financial and other data for Alight OpCo and its subsidiaries and the summary pro forma condensed combined and consolidated financial and other data for Alight Inc. for the periods and at the dates indicated. Immediately following this offering, Alight Inc. will be a holding company, and its sole material asset will be a controlling equity interest in Alight OpCo. As the sole managing member of Alight OpCo, Alight Inc. will operate and control all of the business and affairs of Alight OpCo and, through Alight OpCo and its subsidiaries, conduct our business. The reorganization will be accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of Alight Inc. will recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical financial statements of Alight OpCo. Alight Inc. will consolidate Alight OpCo on its consolidated financial statements and record a noncontrolling interest related to the LLC Units held by our pre-IPO owners on its consolidated balance sheet and statement of operations.

Periods prior to May 1, 2017 reflect our financial position, results of operations and changes in financial position prior to the Separation and periods on or after May 1, 2017 reflect our financial position, results of operations and changes in financial position after the Separation. Accordingly, the summary historical condensed and consolidated financial data presented below is presented for periods prior to the Separation labeled “Predecessor” and periods subsequent to the Separation labeled “Successor”. The summary condensed and consolidated statements of operations data and statements of cash flows data for the year ended December 31, 2018 (Successor), the eight months ended December 31, 2017 (Successor), the four months ended April 30, 2017 (Predecessor) and the year ended December 31, 2016 (Predecessor), and the summary condensed and consolidated balance sheet data as of December 31, 2018 are derived from the audited consolidated financial statements of Alight OpCo, included elsewhere in this prospectus.

The summary historical condensed and consolidated financial and other data of Alight Inc. has not been presented because Alight Inc. is a newly incorporated entity, has had no business transactions or activities to date and had no assets or liabilities during the periods presented in this section.

Historical results are not necessarily indicative of the results expected for any future period. You should read the summary historical condensed and consolidated financial data below, together with the consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, as well as “Organizational Structure,” “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information,” “Selected Historical Condensed and Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Certain Indebtedness” and the other information included elsewhere in this prospectus.

The summary unaudited pro forma condensed, combined and consolidated financial data of Alight Inc. presented below has been derived from our unaudited pro forma condensed, combined and consolidated financial statements included elsewhere in this prospectus. The summary unaudited pro forma condensed combined and consolidated statement of operations data for the year ended December 31, 2018 gives effect to the Reorganization Transactions and the Offering Transactions (each as defined under “Organizational Structure”) as if they had occurred on January 1, 2017. The summary unaudited pro forma condensed and consolidated balance sheet data as of December 31, 2018 gives effect to the Reorganization Transactions and the Offering Transactions as if they had occurred on December 31, 2018. The following summary unaudited condensed combined and consolidated pro forma financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the relevant

transactions had been consummated on the dates indicated, nor is it indicative of future operating results or financial position. See “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information.”


			Historical Alight OpCo
	Pro Forma Alight Inc.		Successor						Predecessor
(in millions)	Year Ended December 31, 2018		Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four Months Ended April 30, 2017			Year Ended December 31, 2016
Summary Statements of Operations Data:
Revenue	$	2,378	$	2,378		$	1,588		$	713		$	2,260
Total expenses		2,180		2,174			1,425			686			2,057

Operating Income		198		204			163			27			203
Interest expense (income), net and other		168		208			115			—			(1	)

Income (Loss) Before Income Taxes		30		(4	)		48			27			204
Income taxes		22		17			24			10			78

Net Income (Loss)	$	8	$	(21	)	$	24		$	17		$	126

Less: Net income attributable to non-controlling interests		3

Net income attributable to Alight Inc.	$	5


Summary Balance Sheet Data (at period end):
Total assets	$	5,817	$	5,682
Long-term debt (including current portion)		2,728		3,427
Capital lease obligations		51		51

Summary Statements of Cash Flows Data:
Cash provided by operating activities			$	196		$	224		$	79		$	388
Cash used for investing activities				(130	)		(4,290	)		(13	)		(75	)
Cash (used for) provided by financing activities				(36	)		4,263			(69	)		(311	)

Solutions Segment Measures:(1)
Solutions Revenue			$	2,171		$	1,421		$	632		$	1,911
Solutions Adjusted EBITDA				540			345			78			319
Summary Non-GAAP Data:
Adjusted EBITDA(2)	$	576	$	576		$	388		$	91		$	423

(1)

As discussed in “Business—Hosted Business Services,” in 2014, we stopped actively pursuing new clients in our Hosted Business and instead chose to focus our strategic efforts and resources on enhancing our suite of HCM solutions to help clients realize the benefits of cloud-based solutions. While we have successfully migrated a significant number of our Hosted clients to cloud-based solutions, we continue to support a number of active Hosted clients under agreements that are scheduled to expire by 2023. Accordingly, we have presented Solutions Revenue and Solutions Adjusted EBITDA, which are segment measures that are required to be disclosed by GAAP in conformity with ASC 280, Segment Reporting, because we believe that it is useful to evaluate our business and results of operations excluding the impact of the Hosted Business segment. See Note 12 to the consolidated financial statements of Alight OpCo appearing elsewhere in this prospectus.

(2)

Adjusted EBITDA is a non-GAAP financial measure used by us and our investors and lenders to provide useful supplemental information that enables a better comparison of our performance across periods. Adjusted EBITDA provides visibility to the underlying operating performance by excluding the impact of certain items, including interest expense, income taxes, depreciation of fixed assets, amortization of intangible assets, share-based compensation, transaction expenses, separation expenses, expenses related to transformation initiatives, and other adjustments, because management does not believe these expenses are representative of our core earnings.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure either in isolation or as a substitute for net income or other methods of analyzing our results as reported under GAAP. Some of the limitations are:

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;

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Adjusted EBITDA does not reflect our interest expense or the cash requirements to service interest or principal payments on our indebtedness;

•

Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;

•

Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

•

although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often need to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

•

other companies may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

Adjusted EBITDA is not a liquidity measure and should not be considered as discretionary cash available to us to reinvest in the growth of our business or to distribute to stockholders or as a measure of cash that will be available to us to meet our obligations.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for additional information regarding our use of non-GAAP financial metrics.

The following table provides a reconciliation of our net income to Adjusted EBITDA:


	Pro Forma Alight Inc.		Historical Alight OpCo
	Pro Forma Alight Inc.		Successor					Predecessor
(in millions)	Year Ended December 31, 2018		Year Ended December 31, 2018			Eight Months Ended December 31, 2017		Four Months Ended April 30, 2017		Year Ended December 31, 2016
Net Income (Loss)	$	8	$	(21	)	$	24	$	17	$	126
Interest expense, net		168		208			114		—		—
Income taxes		22		17			24		10		78
Depreciation		49		49			27		23		71
Intangible amortization(a)		180		180			108		34		119

EBITDA		427		433			297		84		394
Share-based compensation		20		14			4		6		31
Transaction-related expenses(b)		1		1			36		—		—
Separation from Aon expenses(c)		49		49			16		—		—
Transformation initiatives(d)		53		53			27		1		2
Other(e)		26		26			8		—		(4	)

Adjusted EBITDA	$	576	$	576		$	388	$	91	$	423

(a)

Represents deal-related amortization of intangible assets acquired through the Separation for the year ended December 31, 2018 and the eight months ended December 31, 2017, and other deal-related amortization for the Predecessor periods.

(b)

Transaction-related expenses include investment banker fees, legal fees, due diligence costs, and other external advisor costs associated with the Separation.

(c)

Separation from Aon expenses relate to costs incurred establishing Alight as a stand-alone company following the separation from Aon. These costs include external advisor costs, implementing stand-alone tax processes and branding costs.

(d)

Transformation initiatives include expenses incurred, primarily subsequentto the Separation, related to cost savings activities, including our strategic transaction with Wipro, severance, restructuring of certain property leases and IT and print and fulfillment functions.

(e)

Other includes long-term incentive expenses, expenses related to acquisitions, income related to the early termination of customer contracts in fiscal year 2016, and purchase accounting adjustments recorded in respect of the Separation.

RISK FACTORS

An investment in shares of our Class A common stock involves risks. You should carefully consider the following information about these risks, together with the other information contained in this prospectus, before investing in shares of our Class A common stock.

Risks Related to Our Business and Industry

An overall decline in economic activity could adversely affect the financial condition and results of operations of our business.

The results of our business are generally affected by the level of business activity of our clients, which in turn is affected by the level of economic activity in the industries and markets these clients serve. Additionally, substantial changes to trade, monetary and fiscal policies, and political conditions, and constriction and volatility in the credit markets may occur and would affect our business. Economic downturns in some markets may cause reductions in technology and discretionary spending by our clients, which may result in reductions in the growth of new business as well as reductions in existing business. If our clients become financially less stable, enter bankruptcy, liquidate their operations or consolidate, our revenues and/or collectability of receivables could be adversely affected. Our contracts also depend upon the number of our clients’ employees or the number of participants in our clients’ employee benefit plans. If our clients become financially less stable, change their staffing models, enter bankruptcy, liquidate their operations or consolidate, that could result in layoffs or other reductions in the number of participants in our clients’ employee benefit plans. We may also experience decreased demand for our services as a result of postponed or terminated outsourcing of HR functions. Reduced demand for our services could increase price competition and have an adverse effect on our financial condition or results of operations.

We face significant competition and our failure to compete successfully could have a material adverse effect on the financial condition and results of operations of our business.

Our competitors may have greater resources, larger customer bases, greater name recognition, stronger presence in certain geographies and more established relationships with their customers and suppliers than we have. In addition, new competitors, alliances among competitors or mergers of competitors could gain significant market share and some of our competitors may have or may develop a lower cost structure, adopt more aggressive pricing policies or provide services that gain greater market acceptance than the services that we offer or develop. Large and well-capitalized competitors may be able to respond to the need for technological changes and innovate faster, or price their services more aggressively. They may also compete for skilled professionals, finance acquisitions, fund internal growth and compete for market share more effectively than we do. Further, pursuant to certain commercial agreements we entered into with Aon, we and Aon generally have agreed not to compete with each other in certain health and retirement businesses for a period of two years following the Separation, in our case, and for a period of two to three years following the Separation, in Aon’s case. These restrictions may limit our ability to compete in certain markets, and Aon’s failure to comply with the restrictions in such commercial agreements could materially and adversely affect our business.If we are unable to compete successfully, we could lose market share and clients to competitors, which could materially adversely affect our results of operations. To respond to increased competition and pricing pressure, we may have to lower the cost of our solutions or decrease the level of service provided to clients, which could have an adverse effect on our financial condition or results of operations.

We rely on the efficient, uninterrupted and secure operation of complex information technology systems and networks, some of which are within our business and some of which are outsourced to third party providers with

the intent of protecting the physical security of our facilities and the data security of our customers’, clients’ and suppliers’ confidential information and information related to identifiable individuals (including financial and health information) against unauthorized access through our information technology systems or by other electronic transmission or through the misdirection, theft or loss of physical media. These include, for example, the appropriate encryption of information, the use of anti-virus, anti-malware and other protections. All information technology systems are potentially vulnerable to damage or interruption from a variety of sources, including but not limited to cyber-attacks, computer viruses, malware, hacking, fraudulent use attempts, phishing attacks and security breaches. Our systems are also subject to compromise from internal threats such as improper action by employees, vendors and other third parties with otherwise legitimate access to our systems. Despite our efforts, we periodically experience attacks to our systems and networks and have from time to time experienced cyber security incidents such as computer viruses, unauthorized parties gaining access to our information technology systems and similar matters, which to date have not had a material impact on our business. Because the techniques used to obtain unauthorized access are constantly changing and becoming increasingly more sophisticated and often are not recognized until launched against a target, we or our third-party providers may be unable to anticipate these techniques or implement sufficient preventative measures. If we are unable to efficiently and effectively maintain and upgrade our system safeguards, we may incur unexpected costs and certain of our systems may become more vulnerable to unauthorized access. In the future, these types of incidents could result in intellectual property or other confidential information being lost or stolen, including client, employee or business data. In addition, we may not be able to detect breaches in our information technology systems or assess the severity or impact of a breach in a timely manner.

We have implemented various measures to manage our risks related to system and network security and disruptions, but an actual or perceived security breach, a failure to make adequate disclosures to the public or law enforcement agencies following any such event or a significant and extended disruption in the functioning of our information technology systems could damage our reputation and cause us to lose clients, adversely impact our operations, sales and operating results and require us to incur significant expense to address and remediate or otherwise resolve such issues. Additionally, in order to maintain the level of security, service and reliability that our clients require, we may be required to make significant additional investments in our methods of delivering services.

One of our significant responsibilities is to maintain the security and privacy of our employees’ and clients’ confidential and proprietary information and the confidential information about clients’ employees’ compensation, medical information and other personally identifiable information. We maintain policies, procedures and technological safeguards designed to protect the security and privacy of this information. Nonetheless, we cannot eliminate the risk of human error or inadequate safeguards against employee or vendor malfeasance or cyber-attacks that could result in improper access to, misappropriation, destruction or disclosure of confidential, personal or proprietary information and we may not become aware in a timely manner of any such security breach. Such unauthorized access, misappropriation, destruction or disclosure could result in the loss of revenue, reputational damage, indemnity obligations, damages for contract breach, civil and criminal penalties for violation of applicable laws, regulations or contractual obligations, and significant costs, fees and other monetary payments for remediation. Furthermore, our clients may not be receptive to services delivered through our information technology systems and networks following an actual or perceived security breach due to concerns regarding transaction security, user privacy, the reliability and quality of internet service and other reasons. The release of confidential information as a result of a security breach could also lead to litigation or other proceedings against us by affected individuals or business partners, or by regulators, and the outcome of such proceedings, which could include penalties or fines, could have a significant negative impact on our business.

In many jurisdictions, including the United States and the European Union, we are subject to laws and regulations relating to the collection, use, retention, security and transfer of this information including the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) and the HIPAA regulations governing, among other things, the privacy, security and electronic transmission of individually identifiable protected health information and The European Union General Data Protection Regulation (“GDPR”). These laws and regulations are frequently changing and are becoming increasingly complex and sometimes conflict among the various jurisdictions and countries in which we provide services both in terms of substance and in terms of enforceability. This makes compliance challenging and expensive. Our failure to adhere to or successfully implement processes in response to changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace. Further, regulatory initiatives in the area of data protection are more frequently including provisions allowing authorities to impose substantial fines and penalties, and therefore, failure to comply could also have a significant financial impact.

In addition to the complexity of the laws and regulations themselves, the development of new laws and regulations, changes in application or interpretation of laws and regulations and our continued operational changes and development into new jurisdictions and new service offerings also increases our legal and regulatory compliance complexity as well as the type of governmental oversight to which we may be subject. These changes in laws and regulations could mandate significant and costly changes to the way we implement our services and solutions or could impose additional licensure requirements or costs to our operations and services. Furthermore, as we enter new jurisdictions or lines of businesses and other developments in our services, we may become subject to additional types of laws and policies and governmental oversight and supervision. In all jurisdictions, the applicable laws and regulations are subject to amendment or interpretation by regulatory authorities. In addition, new regulatory or industry developments could create an increase in competition that could adversely affect us. These potential developments include:

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changes in regulations relating to health and welfare plans including potential changes to the Patient Protection and Affordable Care Act (the “ACA”), defined contribution and defined benefit plans;

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changes in regulations relating to fiduciary rules;

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pension reform that could decrease the attractiveness of certain of our retirement products and services to retirement plan sponsors and administrators or have an unfavorable effect on our ability to earn revenues from these products and services;

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additional requirements respecting data privacy and data usage in jurisdictions in which we operate that may increase our costs of compliance and potentially reduce the manner in which data can be used by us to develop or further our product offerings; and

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additional regulations promulgated by other regulatory bodies in jurisdictions in which we operate.

For example, there have been, and likely will continue to be, legislative and regulatory proposals at the federal and state levels directed at addressing the availability of healthcare and containing or lowering the cost of healthcare. Although we cannot predict the ultimate content or timing of any healthcare reform legislation, potential changes resulting from any amendment, repeal or replacement of these programs, including any reduction in the future availability of healthcare insurance benefits, could adversely affect our business and future results of operations. Further, the federal government from time to time considers pension reform legislation, which could negatively impact our sales of defined benefit or defined contribution plan products and services and cause sponsors to discontinue existing plans for which we provide administrative or other services. Certain tax-favored savings initiatives that have been proposed could hinder sales and persistency of our products and services that support employment-based retirement plans.

Our services are also the subject of ever-evolving government regulation, either because the services provided to or business conducted by our clients are regulated directly or because third parties upon whom we rely to provide services to our clients are regulated, thereby indirectly impacting the manner in which we provide services to those clients. Changes in laws, government regulations or the way those regulations are interpreted in the jurisdictions in which we operate could affect the viability, value, use or delivery of benefits and HR programs, including changes in regulations relating to health and welfare plans (such as medical), defined contribution plans (such as 401(k)), defined benefit plans (such as pension) or payroll delivery, may adversely affect the demand for, or profitability of, our services.

Our success depends, in part, on our ability to develop and implement new or revised solutions that anticipate and keep pace with rapid and continuing changes in technology, industry standards and client preferences. We may not be successful in anticipating or responding to these developments on a timely and cost-effective basis, and our ideas may not be accepted in the marketplace. Additionally, the effort to gain technological expertise and develop new technologies requires us to incur significant expenses.

If we cannot offer new technologies as quickly as our competitors or if our competitors develop more cost-effective technologies, it could have a material adverse effect on our ability to obtain and complete client engagements. Innovations in software, cloud computing or other technologies that alter how our services are delivered could significantly undermine our investments in our business if we are slow or unable to take advantage of these developments.

We are continually developing and investing in innovative and novel service offerings that we believe will address needs that we identify in the markets. Nevertheless, for those efforts to produce meaningful value, we are reliant on a number of other factors, some of which are outside of our control, to deem them suitable, and whether those parties will find them suitable will be subject to their own particular circumstances.

We assist our clients with outsourcing various HR functions. Third parties may allege our potential liability for damages arising from these services in professional liability claims against us. Such claims could include, for example, the failure of our employees or sub-agents, whether negligently or intentionally, to correctly execute transactions. It is not always possible to prevent and detect errors and omissions, and the precautions we take may not be effective in all cases. In addition, we are subject to other types of claims, litigation and proceedings in the ordinary course of business, which along with professional liability claims, may seek damages, including punitive damages, in amounts that could, if awarded, have a material adverse impact on our financial position, earnings, and cash flows. In addition to potential liability for monetary damages, such claims or outcomes could harm our reputation or divert management resources away from operating our business. While we maintain insurance to cover various aspects of such professional liability claims and other claims, such coverage may not be adequate or applicable for such claims, in which case we would be liable for damages in amounts that could have a material adverse impact on our business. In some cases, due to other business considerations, we may elect to pay or settle professional liability or similar claims even where we may not be contractually or legally obligated to do so.

Accruals for exposures, and related insurance receivables, when applicable to us, have been provided to the extent that losses are deemed probable and are reasonably estimable. These accruals and receivables are adjusted from time to time as developments warrant and may also be adversely affected by disputes we may have with our

insurers over coverage. Amounts related to our settlement provisions are recorded in other general expenses in our statements of income.

The ultimate outcome of these claims, lawsuits and proceedings cannot be ascertained, and liabilities in indeterminate amounts may be imposed on us. It is possible that our future results of operations or cash flows for any particular quarterly or annual period could be materially affected by an unfavorable resolution of these matters.

We may become involved in litigation that could harm the value of our business.

We are subject to, and may become a party to, various lawsuits, claims, or other legal matters that arise in the ordinary course of our business. Our business is subject to the risk of litigation involving current and former employees, clients, partners, suppliers, shareholders, or others through various proceedings, actions or other litigation. For example, participants in our clients’ retirement plans could claim that we charged or received unreasonable fees. Regardless of the merits of the claims, the cost to defend litigation may be significant, and such matters can be time-consuming and divert management’s attention and resources. The outcome of such matters in the ordinary course of our business are inherently uncertain, and adverse judgments or settlements could have a material adverse impact on our financial position or results of operations. In addition, we may become subject to future lawsuits, claims, audits and investigations, or suits, any of which could result in substantial costs and divert our attention and resources. Any claims or litigation, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.

Our failure to protect our intellectual property rights, or allegations that we have infringed on the intellectual property rights of others, could harm our reputation, ability to compete effectively and financial condition.

To protect our intellectual property rights, we rely on a combination of trademark laws, copyright laws, patent laws, trade secret protection, confidentiality agreements and other contractual arrangements with our affiliates, employees, clients, strategic partners and others. However, the protective steps that we take may be inadequate to deter misappropriation of our proprietary information and technology. In addition, we may be unable to detect the unauthorized use of, or take appropriate steps to enforce, our intellectual property rights. Further, effective trademark, copyright, patent and trade secret protection may not be available in every country in which we offer our services or competitors may develop products similar to our products that do not conflict with our related intellectual property rights. Failure to protect our intellectual property adequately could harm our reputation and affect our ability to compete effectively.

In addition, to protect or enforce our intellectual property rights, we may initiate litigation against third parties, such as infringement suits or interference proceedings. Third parties may assert intellectual property rights claims against us, which may be costly to defend, could require the payment of damages and could limit our ability to use or offer certain technologies, products or other intellectual property. Any intellectual property claims, with or without merit, could be expensive, take significant time and divert management’s attention from other business concerns. Successful challenges against us could require us to modify or discontinue our use of technology or business processes where such use is found to infringe or violate the rights of others, or require us to purchase licenses from third parties (which may not be available on terms acceptable to us, or at all), any of which could adversely affect our business, financial condition and operating results.

We might not be successful at acquiring, investing in or integrating businesses, entering into joint ventures or divesting businesses.

We expect to continue pursuing strategic and targeted acquisitions, investments and joint ventures to enhance or add to our skills and capabilities or offerings of services and solutions, or to enable us to expand in certain geographic and other markets. For example, in 2018 we acquired Compass and Future Knowledge and,

separately, we entered into a strategic transaction with Wipro in connection with the transfer of our internal operations in India. We may not successfully identify suitable investment opportunities. We also might not succeed in completing targeted transactions or achieve desired results of operations.

Furthermore, we face risks in successfully integrating any businesses we might acquire or create through a joint venture. Ongoing business may be disrupted, and our management’s attention may be diverted by acquisition, investment, transition or integration activities. In addition, we might need to dedicate additional management and other resources, and our organizational structure could make it difficult for us to efficiently integrate acquired businesses into our ongoing operations and assimilate and retain employees of those businesses into our culture and operations. The potential loss of key executives, employees, customers, suppliers, and other business partners of businesses we acquire may adversely impact the value of the assets, operations or businesses. Furthermore, acquisitions or joint ventures may result in significant costs and expenses, including those related to retention payments, equity compensation, severance pay, early retirement costs, intangible asset amortization and asset impairment charges, assumed litigation and other liabilities, and legal, accounting and financial advisory fees, which could negatively affect our profitability. We may have difficulties as a result of entering into new markets where we have limited or no direct prior experience or where competitors may have stronger market positions.

We might fail to realize the expected benefits or strategic objectives of any acquisition, investment or joint venture we undertake. We might not achieve our expected return on investment or may lose money. We may be adversely impacted by liabilities that we assume from a company we acquire or in which we invest, including from that company’s known and unknown obligations, intellectual property or other assets, terminated employees, current or former clients or other third parties. In addition, we may fail to identify or adequately assess the magnitude of certain liabilities, shortcomings or other circumstances prior to acquiring, investing in or partnering with a company, including potential exposure to regulatory sanctions or liabilities resulting from an acquisition target’s previous activities, internal controls and security environment. If any of these circumstances occurs, they could result in unexpected legal or regulatory exposure, unfavorable accounting treatment, unexpected increases in taxes or other adverse effects on our business. Litigation, indemnification claims and other unforeseen claims and liabilities may arise from the acquisition or operation of acquired businesses. If we are unable to complete the number and kind of investments for which we plan, or if we are inefficient or unsuccessful at integrating any acquired businesses into our operations, we may not be able to achieve our planned rates of growth or improve our market share, profitability or competitive position in specific markets or services.

We periodically evaluate, and have engaged in, the disposition of assets and businesses. Divestitures could involve difficulties in the separation of operations, services, products and personnel, the diversion of management’s attention, the disruption of our business and the potential loss of key employees. After reaching an agreement with a buyer for the disposition of a business, the transaction may be subject to the satisfaction of pre-closing conditions, including obtaining necessary regulatory and government approvals, which, if not satisfied or obtained, may prevent us from completing the transaction. Divestitures may also involve continued financial involvement in or liability with respect to the divested assets and businesses, such as indemnities or other financial obligations, in which the performance of the divested assets or businesses could impact our results of operations. Any divestiture we undertake could adversely affect our results of operations.

Our growth depends in part on the success of our strategic partnerships with third parties.

We enter into strategic partnerships with third parties to enhance and extend the capabilities of our solutions in the ordinary course of our business. For example, we maintain strategic partnerships with health and wealth benefits partners, such as Alegeus and Personal Capital, and cloud HCM platform providers, such as Workday. In order to continue to grow our business and enhance and extend our capabilities, we anticipate that we will continue to depend on the continuation and expansion of our strategic partnerships with third parties. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources.

If we are unsuccessful in establishing or maintaining our relationships with third parties, if we fail to comply with material terms (such as maintaining any required certifications) or if our strategic partners fail to perform as expected, our ability to compete in the marketplace or to grow our revenues could be impaired, which could adversely affect our business, financial condition, and results of operations. Even if we are successful, we cannot assure you that these relationships will result in increased customer usage of our solutions or increased revenues.

We might not be successful in converting our Hosted Business clients to our cloud-based solutions.

In 2014, we stopped actively pursuing new clients in our Hosted Business and instead chose to focus our strategic efforts and resources on enhancing our suite of HCM solutions to help clients realize the benefits of cloud-based solutions. While we have successfully migrated a significant number of our Hosted clients to cloud-based solutions, we continue to support a number of active Hosted clients under agreements that are scheduled to expire by 2023. Accordingly, while we intend to continue to perform our existing Hosted Business agreements, we do not intend to renew such agreements or enter into any new Hosted Business agreements. Although we are attempting to convert our Hosted Business clients to a cloud-based platform supported by our HCM solutions, we may not be successful in doing so. Additionally, the exit from our Hosted Business segment could result in the diversion of management’s attention from other business concerns, the disruption of our business or the potential loss of employees. If we are unable to manage these risks, it could adversely affect our results of operations.

Our business is dependent on continued interest in outsourcing.

Our business and growth depend in large part on continued interest in outsourced services. Outsourcing means that an entity contracts with a third party, such as us, to provide services rather than perform such services in-house. There can be no assurance that this interest will continue, as organizations may elect to perform such services themselves and/or the business process outsourcing industry could move to an as-a-service model, thereby eliminating traditional outsourcing tasks. A significant change in this interest in outsourcing could materially adversely affect our results of operations and financial condition.

Our success depends on our ability to retain and attract experienced and qualified personnel, including our senior management team and other professional personnel.

We depend, in material part, upon the members of our senior management team who possess extensive knowledge and a deep understanding of our business and our strategy. The unexpected loss of any of our senior management team could have a disruptive effect adversely impacting our ability to manage our business effectively and execute our business strategy. For example, our senior employees may perceive uncertainty as a result of the exit from our Hosted Business segment, which may result in unexpected loss of senior employees. Competition for experienced professional personnel is intense, particularly for technology professionals in the areas in which we operate, and we are constantly working to retain and attract these professionals. If we cannot successfully do so, our business, operating results and financial condition could be adversely affected. We must develop our personnel to provide succession plans capable of maintaining continuity in the midst of the inevitable unpredictability of personnel retention. While we have plans for key management succession and long-term compensation plans designed to retain the senior employees, if our succession plans do not operate effectively, our business could be adversely affected.

Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability.

Our operations are dependent upon our ability to protect our personnel, offices and technology infrastructure against damage from business continuity events that could have a significant disruptive effect on our operations. Should we or a key vendor or other third party experience a local or regional disaster or other business continuity

problem, such as an earthquake, hurricane, terrorist attack, pandemic, security breach, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of our personnel, office facilities and the proper functioning of existing, new or upgraded computer systems, telecommunications and other related systems and operations. In events like these, while our operational size, the multiple locations from which we operate and our existing back-up systems provide us with some degree of flexibility, we still can experience near-term operational challenges with regard to particular areas of our operations. We could potentially lose access to key executives and personnel, client data or experience material adverse interruptions to our operations or delivery of services to our clients in a disaster recovery scenario.

We regularly assess and take steps to improve upon our existing business continuity plans and key management succession. However, a disaster on a significant scale or affecting certain of our key operating areas within or across regions, or our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships or legal liability.

If our clients are not satisfied with our services, we may face additional cost, loss of profit opportunities and damage to our reputation or legal liability.

We depend, to a large extent, on our relationships with our clients and our reputation to understand the clients’ needs and deliver solutions and services that are tailored to satisfy those needs. If a client is not satisfied with our services, it may be damaging to our business and could cause us to incur additional costs and impair profitability. Many of our clients are businesses that band together in industry groups and/or trade associations and actively share information among themselves about the quality of service they receive from their vendors. Accordingly, poor service to one client may negatively impact our relationships with multiple other clients. Moreover, if we fail to meet our contractual obligations, we could be subject to legal liability or loss of client relationships.

Damage to our reputation could have a material adverse effect on our business.

Our reputation is a key asset of our business. Our ability to attract and retain clients is highly dependent upon the external perceptions of our level of service, trustworthiness, business practices, financial condition and other subjective qualities. Negative perceptions or publicity regarding these matters could erode trust and confidence and damage our reputation among existing and potential clients, which could make it difficult for us to attract new clients and maintain existing ones as mentioned above. Negative public opinion could also result from actual or alleged conduct by us or those currently or formerly associated with us in any number of activities or circumstances, including operations, regulatory compliance, and the use and protection of data and systems, satisfaction of client expectations, and from actions taken by regulators or others in response to such conduct. This damage to our reputation could further affect the confidence of our clients, rating agencies, regulators, stockholders and the other parties in a wide range of transactions that are important to our business having a material adverse effect on our business, financial condition and operating results.

We depend on licenses of third-party software to provide our services. The inability to maintain these licenses or errors in the software we license could result in increased costs, or reduced service levels, which would adversely affect our business.

Our applications incorporate certain third-party software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software and development tools from third parties in the future. Although we believe that there are commercially reasonable alternatives to the third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition, integration of the software used in our applications with new third-party software may require significant work and require substantial investment of our time and resources. 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 own applications, delay new application introductions, result in a failure of our applications and injure our reputation. Our use of additional or alternative third-party software would require us to enter into license agreements with third parties.

We rely on third parties to perform key functions of our business operations and to provide services to our clients. These third parties may act in ways that could harm our business.

As we continue to focus on reducing the expense necessary to support our operations, we have increasingly used outsourcing strategies, such as our strategic transaction with Wipro, for a significant portion of our information technology and business functions. We rely on third parties, and in some cases subcontractors, to provide services, data and information such as technology, information security, funds transfers, data processing, and administration and support functions that are critical to the operations of our business. Recently, we substantially expanded such relationships in the areas of technology support, print and fulfillment service delivery and call center operations, and we expect to continue that trend in the future. As we do not fully control the actions of these third parties, we are subject to the risk that their decisions may adversely impact us and replacing these service providers could create significant delay and expense. A failure by the third parties to comply with service level agreements or regulatory or legal requirements, in a high quality and timely manner, particularly during periods of our peak demand for their services, could result in economic and reputational harm to us. In addition, these third parties face their own technology, operating, business and economic risks, and any significant failures by them, including the improper use or disclosure of our confidential client, employee, or business information, could cause harm to our reputation. An interruption in or the cessation of service by any service provider as a result of systems failures, capacity constraints, financial difficulties or for any other reason could disrupt our operations, impact our ability to offer certain products and services, and result in contractual or regulatory penalties, liability claims from clients and/or employees, damage to our reputation and harm to our business.

Our business is exposed to risks associated with the handling of client funds.

Our business handles payroll processing and retirement and pension plan administration for certain clients. Consequently, at any given time, we may be holding or directing funds of our clients and their employees, while payroll, retirement plan funds or pension payments are being processed. This function creates a risk of loss arising from, among other things, fraud by employees or third parties, execution of unauthorized transactions or errors relating to transaction processing. We are also potentially at risk in the event the financial institution in which we hold these funds suffers any kind of insolvency or liquidity event or fails, for any reason, to deliver their services in a timely manner. The occurrence of any of these types of events in connection with this function could cause us financial loss and reputational harm.

We are subject to extensive governmental regulation, which could reduce our profitability, limit our growth, or increase competition.

Our business is subject to extensive legal and regulatory oversight throughout the world including a variety of laws, rules, and regulations addressing, among other things, licensing, data privacy and protection, wage and hour standards, employment and labor relations, occupational health and safety, environmental matters, anti-competition, anti-corruption, economic sanctions, currency, reserves, and government contracting. This legal and regulatory oversight could reduce our profitability or limit our growth by increasing the costs of legal and regulatory compliance; by limiting or restricting the products or services we sell, the markets we enter, the methods by which we sell our services, the prices we can charge for our services, and the form of compensation we can accept from our clients and third parties; or by subjecting our business to the possibility of legal and regulatory actions or proceedings.

The global nature of our operations increases the complexity and cost of compliance with laws and regulations, including training and employee expenses, adding to our cost of doing business. In addition, many of

these laws and regulations may have differing or conflicting legal standards across jurisdictions, increasing further the complexity and cost of compliance. In emerging markets and other jurisdictions with less developed legal systems, local laws and regulations may not be established with sufficiently clear and reliable guidance to provide us adequate assurance that we are operating our business in a compliant manner with all required licenses or that our rights are otherwise protected. In addition, certain laws and regulations, such as the Foreign Corrupt Practices Act and similar laws in other jurisdictions in which we operate, could impact our operations outside of the legislating country by imposing requirements for the conduct of overseas operations, and in a number of cases, requiring compliance by foreign subsidiaries. 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.

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, our employees, consultants or agents may still take actions in violation of our policies for which we may be ultimately responsible, or our policies and procedures may be inadequate or may be determined to be inadequate 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, that could damage our reputation and have a materially adverse effect on our results of operation or financial condition.

Our global operations and growth strategy expose us to various international risks that could adversely affect our business.

Our operations are conducted globally. Additionally, one aspect of our growth strategy is to expand in key markets around the world. Accordingly, we are subject to legal, economic and market risks associated with operating in, and sourcing from, foreign countries, including:

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difficulties in staffing and managing our foreign offices, such as unexpected wage inflation or job turnover, increased travel and infrastructure costs, as well as legal and compliance costs associated with multiple international locations;

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imposition or increase of investment and other restrictions by foreign governments;

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longer payment cycles;

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greater difficulties in accounts receivable collection;

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insufficient demand for our services in foreign jurisdictions;

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our ability to execute effective and efficient cross-border sourcing of services on behalf of our clients;

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restrictions on the import and export of technologies; and

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trade barriers or sanctions laws.

If we are unable to manage the risks of our global operations and geographic expansion strategy, our results of operations and ability to grow could be materially adversely affected.

Our global delivery capability is concentrated in India and the Philippines, which may expose us to operational risks.

Our business model is dependent on our global delivery capability, which includes employees and third-party personnel based at various delivery centers around the world. While these delivery centers are located

throughout the world, we have based large portions of our delivery capability in India, where we have a significant third-party relationship based in four delivery centers, and the Philippines, where a different third-party maintains locations for call center operations. Concentrating our global delivery capability in these locations presents operational risks, many of which are beyond our control. For example, natural disasters, some of which India and the Philippines have experienced and other countries may experience, could impair the ability of our people to safely travel to and work in our facilities and disrupt our ability to perform work through those delivery centers. Additionally, both India and the Philippines have experienced, and other countries may experience, political instability, worker strikes, civil unrest and hostilities with neighboring countries. If any of these circumstances occurs, we have a greater risk that interruptions in communications with our clients and other locations and personnel, and any down-time in important processes we operate for clients, could result in a material adverse effect on our results of operations and our reputation in the marketplace.

The profitability of our engagements with clients may not meet our expectations due to unexpected costs, cost overruns, early contract terminations, unrealized assumptions used in our contract bidding process or the inability to maintain our prices.

Our profitability is highly dependent upon our ability to control our costs and improve our efficiency. As we adapt to change in our business, adapt to the regulatory environment, enter into new engagements, acquire additional businesses and take on new employees in new locations, we may not be able to manage our large, diverse and changing workforce, control our costs or improve our efficiency. In addition, certain client contracts may include unique or heavily customized requirements that limit our ability to fully recognize economies of scale across our business units.

Most new outsourcing arrangements undergo an implementation process whereby our systems and processes are customized to match a client’s plans and programs. The cost of this process is estimated by us and often only partially funded (if at all) by our clients. If the actual implementation expense exceeds our estimate or if the ongoing service cost is greater than anticipated, the client contract may be less profitable than expected. Even though outsourcing clients typically sign long-term contracts, many of these contracts may be terminated at any time, with or without cause, by the client upon written notice, typically between 90 to 360 days before expiration.

In such cases, our clients are generally required to pay a termination fee; however, this amount may not be sufficient to offset the costs we incurred in connection with the implementation and system set-up or fully compensate us for the profit we would have received if the contract had not been cancelled. A client may choose to delay or terminate a current or anticipated project as a result of factors unrelated to our work product or progress, such as the business or financial condition of the client or general economic conditions. When any of our engagements are terminated, we may not be able to eliminate associated ongoing costs or redeploy the affected employees in a timely manner to minimize the impact on profitability. Any increased or unexpected costs or unanticipated delays in connection with the performance of these engagements, including delays caused by factors outside our control, could have an adverse effect on our profit margin.

Our profit margin, and therefore our profitability, is largely a function of the rates we are able to charge for our services and the staffing costs for our personnel. Accordingly, if we are not able to maintain the rates we charge for our services or appropriately manage the staffing costs of our personnel, we may not be able to sustain our profit margin and our profitability will suffer. The prices we are able to charge for our services are affected by a number of factors, including competitive factors, cost of living adjustment provisions, the extent of ongoing clients’ perception of our ability to add value through our services and general economic conditions. Our profitability is largely based on our ability to drive cost efficiencies during the term of our contracts for our services provided to customers. If we cannot drive suitable cost efficiencies, our profit margins will suffer.

We might not be able to achieve the cost savings required to sustain and increase our profit margins.

We provide our outsourcing services over long-term periods for variable or fixed fees that generally are less than our clients’ historical costs to provide for themselves the services we contract to deliver. Clients’ demand for cost reductions may increase over the term of the agreement. As a result, we bear the risk of increases in the cost of delivering services to our clients, and our margins associated with particular contracts will depend on our ability to control our costs of performance under those contracts and meet our service commitments cost-effectively. Over time, some of our operating expenses will increase as we invest in additional infrastructure and implement new technologies to maintain our competitive position and meet our client service commitments. We must anticipate and respond to the dynamics of our industry and business by using quality systems, process management, improved asset utilization and effective supplier management tools. We must do this while continuing to grow our business so that our fixed costs are spread over an increasing revenue base. If we are not able to achieve this, our ability to sustain and increase profitability may be reduced.

Changes in our accounting estimates and assumptions could negatively affect our financial position and results of operations.

Our financial statements were prepared in conformity with GAAP which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of our financial statements. We are also required to make certain judgments that affect the reported amounts of revenues and expenses during each reporting period. We periodically evaluate our estimates and assumptions including, but not limited to, those relating to recoverability of assets including customer receivables, contingencies, income taxes and estimates and assumptions used for our long-term contracts. We base our estimates on historical experience and various assumptions that we believe to be reasonable based on specific circumstances. These assumptions and estimates involve the exercise of judgment and discretion, which may evolve over time in light of operational experience, regulatory direction, developments in accounting principles and other factors. Actual results could differ from these estimates, or changes in assumptions, estimates or policies or the developments in the business or the application of accounting principles related to long-term contracts may change our initial estimates of future contract results, which could materially affect our business and results of operations.

We may be required to record goodwill or other long-lived asset impairment charges, which could result in a significant charge to earnings.

Under GAAP, we review our long-lived assets, such as goodwill, intangible assets and fixed assets, for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is assessed for impairment at least annually. Factors that may be considered in assessing whether goodwill or other long-lived assets may not be recoverable include reduced estimates of future cash flows and slower growth rates in our industry. We may experience unforeseen circumstances that adversely affect the value of our goodwill or other long-lived assets and trigger an evaluation of the recoverability of the recorded goodwill and other long-lived assets. Future goodwill or other long-lived asset impairment charges could materially impact our financial statements.

Aon’s historical and future actions, or failure to comply with its indemnification obligations, may materially affect our business and operating results.

Although we became an independent company as a result of the Separation, Aon’s historical and future actions may still have a material impact on our business and operating results. In connection with the Separation, we entered into certain agreements with Aon, including a purchase agreement, transition services agreement, and certain other commercial agreements. Aon’s failure to comply with any portion of these agreements, including indemnities therein, for any reason could inhibit us from operating or expanding our business in the future and/or result in significant additional costs to it. For example, pursuant to the purchase agreement, Aon has agreed to

indemnify us for certain liabilities. However, third parties could also seek to hold us directly responsible for any of the liabilities that Aon has agreed to retain, and there can be no assurance that the indemnity from Aon will be sufficient to protect us against the full amount of such liabilities, or that Aon will be able to fully satisfy our indemnification obligations. We could incur material additional costs if Aon fails to meet its obligations or if we otherwise are unable to recover costs associated with such liabilities.

Our work with government clients exposes us to additional risks inherent in the government contracting environment.

A portion of our revenues is derived from contracts with national, state and local governments and their agencies. Government contracts are subject to heightened contractual risks compared to contracts with non-governmental commercial clients. For example, government contracts often contain high or unlimited liability for breaches. Additionally, government contracts are generally subject to audits and investigations by government agencies. If the government discovers improper or illegal activities or contractual non-compliance (including improper billing), we may be subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions or debarment from doing business with the government. Also, the qui tam provisions of the federal and various state civil False Claims Acts authorize a private person to file civil actions under these statutes on behalf of the federal and state governments. Further, the negative publicity that could arise from any such penalties, sanctions or findings could have an adverse effect on our reputation and reduce our ability to compete for new contracts with both government and commercial clients. Moreover, government entities typically finance projects through appropriated funds. While these projects are often planned and executed as multi-year projects, government entities usually reserve the right to change the scope of or terminate these projects for lack of approved funding or at their convenience. Changes in government or political developments, including budget deficits, shortfalls or uncertainties, government spending reductions or other debt or funding constraints, could result in lower governmental sales and our projects being reduced in price or scope or terminated altogether, which also could limit our recovery of incurred costs, reimbursable expenses and profits on work completed prior to the termination. Any of the occurrences and conditions described above could have a material adverse effect on our business, financial condition and operating results.

Risks Related to Our Indebtedness

We have a substantial amount of debt, which requires significant interest and principal payments. As of December 31, 2018, we had total indebtedness of $3.5 billion. In addition, as of December 31, 2018, we had $248 million of availability to incur additional indebtedness under our senior secured revolving credit facility. Subject to the limits contained in the credit agreement that governs the senior secured credit facilities and the indenture that governs our senior notes, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, the risks related to our high level of debt could increase. Specifically, our high level of debt could have important consequences, including the following:

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it may be difficult for us to satisfy our obligations, including debt service requirements under our outstanding debt;

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our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions or other general corporate purposes may be impaired;

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a substantial portion of cash flow from operations are required to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, future business opportunities and other purposes;

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we could be more vulnerable to economic downturns and adverse industry conditions and our flexibility to plan for, or react to, changes in our business or industry is more limited;

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our ability to capitalize on business opportunities and to react to competitive pressures, as compared to our competitors, may be compromised due to our high level of debt and the restrictive covenants in the credit agreement that governs our senior secured credit facilities and the indenture that governs our senior notes;

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our ability to borrow additional funds or to refinance debt may be limited; and

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it may cause potential or existing customers to not contract with us due to concerns over our ability to meet our financial obligations under such contracts.

We are a holding company, and our consolidated assets are owned by, and our business is conducted through, our subsidiaries. Revenue from these subsidiaries is our primary source of funds for debt payments and operating expenses. If our subsidiaries are restricted from making distributions to us, our ability to meet our debt service obligations or otherwise fund our operations may be impaired. Moreover, there may be restrictions on payments by subsidiaries to their parent companies under applicable laws, including laws that require companies to maintain minimum amounts of capital and to make payments to stockholders only from profits. As a result, although a subsidiary of ours may have cash, we may not be able to obtain that cash to satisfy our obligation to service our outstanding debt or fund our operations.

Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors and reimbursement actions of governmental and commercial payors, all of which are beyond our control, including the availability of financing in the international banking and capital markets. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs. Any refinancing or restructuring of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations. Moreover, in the event of a default, the holders of our indebtedness could elect to declare such indebtedness be due and payable and/or elect to exercise other rights, such as the lenders under our senior secured revolving credit facility terminating their commitments thereunder and ceasing to make further loans or the lenders under our senior secured credit facilities instituting foreclosure proceedings against their collateral, any of which could materially adversely affect our results of operations and financial condition.

Furthermore, all of the debt under our senior secured credit facilities bears interest at variable rates. If interest rates increase, our debt service obligations on our senior secured credit facilities would increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, would correspondingly decrease. In addition, our variable rate indebtedness uses the London Interbank Offered Rate (“LIBOR”) as a benchmark for establishing the rate of interest and may be hedged with LIBOR-based interest rate derivatives. LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and other pressures may cause LIBOR to be replaced with a new benchmark or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our variable rate indebtedness.

Certain of our debt agreements impose significant operating and financial restrictions on us and our subsidiaries, which may prevent us from capitalizing on business opportunities.

The credit agreement that governs our senior secured credit facilities and the indenture that governs our senior notes each impose significant operating and financial restrictions on us. These restrictions will limit our ability and/or the ability of our subsidiaries to, among other things:

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incur or guarantee additional debt or issue disqualified stock or preferred stock;

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pay dividends and make other distributions on, or redeem or repurchase, capital stock;

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make certain investments;

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incur certain liens;

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enter into transactions with affiliates;

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merge or consolidate;

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enter into agreements that restrict the ability of restricted subsidiaries to make dividends or other payments to the issuers or the guarantors;

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designate restricted subsidiaries as unrestricted subsidiaries; and

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transfer or sell assets.

As a result of these restrictions, we are limited as to how we conduct our business and we may be unable to raise additional debt or equity financing to compete effectively or to take advantage of new business opportunities. The terms of any future indebtedness we may incur could include similar or more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants. Our failure to comply with the restrictive covenants described above as well as the terms of any future indebtedness could result in an event of default, which, if not cured or waived, could result in us being required to repay these borrowings before their due date. If we are forced to refinance these borrowings on less favorable terms or are unable to refinance these borrowings, our results of operations and financial condition could be adversely affected.

Change in our credit ratings could adversely impact our operations and lower our profitability.

Credit rating agencies continually revise their ratings for the companies that they follow, including us. Credit rating agencies also evaluate our industry as a whole and may change their credit ratings for us based on their overall view of our industry. Failure to maintain our credit ratings on long-term and short-term debt could increase our cost of borrowing, reduce our ability to obtain intra-day borrowing, which we may need to operate our business, and adversely impact our results of operations.

Risks Related to Our Organizational Structure

Alight Inc. is a holding company and its only material asset after completion of this offering will be its interest in Alight OpCo, and it is accordingly dependent upon distributions from Alight OpCo to pay taxes, make payments under the tax receivable agreement and pay dividends.

Alight Inc. will be a holding company and after completion of this offering will have no material assets other than its ownership of LLC Units. Alight Inc. has no independent means of generating revenue. Alight Inc. intends to cause Alight OpCo to make distributions to its holders of LLC Units, including Alight Inc. and our pre-IPO owners, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the tax receivable agreement and dividends, if any, declared by it. Deterioration in the financial condition, earnings or cash flow of Alight OpCo and its subsidiaries for any reason could limit or impair their ability to pay such distributions. Additionally, to the extent that Alight Inc. needs funds, and Alight OpCo is restricted from making such distributions under applicable law or regulation or under the terms of our financing arrangements, or is otherwise unable to provide such funds, it could materially adversely affect our liquidity and financial condition.

We anticipate that Alight OpCo will continue to be treated as a partnership for U.S. federal income tax purposes and, as such, generally will not be subject to any entity-level U.S. federal income tax. Instead, taxable income will be allocated to holders of LLC Units. Accordingly, we will be required to pay income taxes on our allocable share of any net taxable income of Alight OpCo. Recently enacted legislation that is effective for taxable years beginning after December 31, 2017 may impute liability for adjustments to a partnership’s tax

return on the partnership itself in certain circumstances, absent an election to the contrary. Alight OpCo may be subject to material liabilities pursuant to this legislation and related guidance if, for example, its calculations of taxable income are incorrect.

Under the terms of the amended and restated limited liability company agreement, Alight OpCo is obligated to make tax distributions to holders of LLC Units (including us) at certain assumed tax rates. These tax distributions may in certain periods exceed our tax liabilities and obligations to make payments under the tax receivable agreement. Our board of directors, in its sole discretion, will make any determination from time to time with respect to the use of any such excess cash so accumulated, which may include, among other uses, to acquire additional newly issued LLC Units from Alight OpCo at a per unit price determined by reference to the market value of the Class A common stock; to pay dividends, which may include special dividends, on its Class A common stock; to fund repurchases of its Class A common stock; or any combination of the foregoing. We will have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders. To the extent that Alight Inc. does not distribute such excess cash as dividends on our Class A common stock or otherwise undertake ameliorative actions between LLC Units and shares of Class A common stock and instead, for example, holds such cash balances, our pre-IPO owners may benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following a redemption or exchange of their LLC Units, notwithstanding that such pre-IPO owner may previously have participated as holders of LLC Units in distributions by Alight OpCo that resulted in such excess cash balances at Alight Inc. See “Certain Relationships and Related Person Transactions—Alight OpCo Limited Liability Company Agreement.”

Payments of dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion and any legal or contractual limitations on our ability to pay dividends. Our existing senior secured credit facilities and senior notes include and any financing arrangement that we enter into in the future may include restrictive covenants that limit our ability to pay dividends. In addition, Alight OpCo is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Alight OpCo (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Alight OpCo are generally subject to similar legal limitations on their ability to make distributions to Alight OpCo.

Alight Inc. will be required to pay our pre-IPO owners for most of the benefits relating to any additional tax depreciation or amortization deductions that we may claim as a result of Alight Inc.’s allocable share of existing tax basis acquired in this offering, Alight Inc.’s increase in its allocable share of existing tax basis and anticipated tax basis adjustments we receive in connection with sales or exchanges of LLC Units after this offering and our utilization of certain tax attributes of the Blocker Companies.

use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligation under the tax receivable agreement is an obligation of Alight Inc. and not of Alight OpCo. While the amount of existing tax basis, the anticipated tax basis adjustments and the actual amount and utilization of tax attributes, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of exchanges, the extent to which such exchanges are taxable and the amount and timing of our income, we expect that as a result of the size of the transfers and increases in the tax basis of the tangible and intangible assets of Alight OpCo and our possible utilization of tax attributes, including existing tax basis acquired at the time of this offering, the payments that Alight Inc. may make under the tax receivable agreement will be substantial. We estimate the amount of existing tax basis with respect to which our pre-IPO owners will be entitled to receive payments under the tax receivable agreement (assuming all Pre-IPO Unitholders exchange their LLC Units for shares of Class A common stock on the date of this offering) is approximately $3,579 million. The payments under the tax receivable agreement are not conditioned upon continued ownership of us by the exchanging holders of LLC Units or the prior owners of the Investors Entities. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

In certain cases, payments under the tax receivable agreement may be accelerated and/or significantly exceed the actual benefits Alight Inc. realizes in respect of the tax attributes subject to the tax receivable agreement.

Alight Inc.’s payment obligations under the tax receivable agreement will be accelerated in the event of certain changes of control or its election to terminate the tax receivable agreement early. The accelerated payments will relate to all relevant tax attributes then allocable to Alight Inc. in the case of an acceleration upon a change of control and to all relevant tax attributes allocable or that would be allocable to Alight Inc. assuming all LLC Units were then exchanged in the case of an election by Alight Inc. to terminate the tax receivable agreement early. The accelerated payments required in such circumstances will be calculated by reference to the present value (at a discount rate equal to one year LIBOR plus 100 basis points) of all future payments that holders of LLC Units or other recipients would have been entitled to receive under the tax receivable agreement, and such accelerated payments and any other future payments under the tax receivable agreement will utilize certain valuation assumptions, including that Alight Inc. will have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement and sufficient taxable income to fully utilize any remaining net operating losses subject to the tax receivable agreement on a straight line basis over the shorter of the statutory expiration period for such net operating losses or the five-year period after the early termination or change of control. In addition, recipients of payments under the tax receivable agreement will not reimburse us for any payments previously made under the tax receivable agreement if such tax basis and Alight Inc.’s utilization of certain tax attributes is successfully challenged by the IRS (although any such detriment would be taken into account in future payments under the tax receivable agreement). Alight Inc.’s ability to achieve benefits from any existing tax basis, tax basis adjustments or other tax attributes, and the payments to be made under the tax receivable agreement, will depend upon a number of factors, including the timing and amount of our future income. As a result, even in the absence of a change of control or an election to terminate the tax receivable agreement, payments under the tax receivable agreement could be in excess of 85% of Alight Inc.’s actual cash tax benefits.

Accordingly, it is possible that the actual cash tax benefits realized by Alight Inc. may be significantly less than the corresponding tax receivable agreement payments or that payments under the tax receivable agreement may be made years in advance of the actual realization, if any, of the anticipated future tax benefits. There may be a material negative effect on our liquidity if the payments under the tax receivable agreement exceed the actual cash tax benefits that Alight Inc. realizes in respect of the tax attributes subject to the tax receivable agreement and/or distributions to Alight Inc. by Alight OpCo are not sufficient to permit Alight Inc. to make payments under the tax receivable agreement after it has paid taxes and other expenses. Based upon certain assumptions described in greater detail below under “Certain Relationships and Related Person Transactions—Tax Receivable Agreement,” we estimate that if Alight Inc. were to exercise its termination right immediately following this offering, the aggregate amount of these termination payments would be approximately $1,030 million. The foregoing number is merely an estimate and the actual payments could differ materially. We may

need to incur additional indebtedness to finance payments under the tax receivable agreement to the extent our cash resources are insufficient to meet our obligations under the tax receivable agreement as a result of timing discrepancies or otherwise, and these obligations could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.

The acceleration of payments under the tax receivable agreement in the case of certain changes of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock.

In the case of certain changes of control, payments under the tax receivable agreement will be accelerated and may significantly exceed the actual benefits Alight Inc. realizes in respect of the tax attributes subject to the tax receivable agreement. We expect that the payments that we may make under the tax receivable agreement in the event of a change of control will be substantial. As a result, our accelerated payment obligations and/or the assumptions adopted under the tax receivable agreement in the case of a change of control may impair our ability to consummate change of control transactions or negatively impact the value received by owners of our Class A common stock in a change of control transaction.

Risks Related to this Offering and Ownership of our Class A Common Stock

Our Sponsor and Co-Investors control us and their interests may conflict with ours or yours in the future.

Immediately following this offering and the application of net proceeds therefrom, our Sponsor and Co-Investors will beneficially own approximately 65% of the combined voting power of our Class A and Class B common stock (or 64% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Moreover, we will agree to nominate to our board individuals designated by our Sponsor and each of our Co-Investors in accordance with our stockholders agreement. Our Sponsor and each of our Co-Investors will each retain the right to designate directors for so long as they beneficially own at least 5% of the voting power of all shares of our outstanding capital stock entitled to vote generally in the election of our directors. See “Certain Relationships and Related Person Transactions—Stockholders Agreement.” Even when our Sponsor and Co-Investors cease to own shares of our stock representing a majority of the total voting power, for so long as our Sponsor and Co-Investors continue to own a significant percentage of our stock, they will still be able to significantly influence or effectively control the composition of our board of directors and the approval of actions requiring stockholder approval through their voting power. Accordingly, for such period of time, our Sponsor and Co-Investors will have significant influence with respect to our management, business plans and policies, including the appointment and removal of our officers. In particular, for so long as our Sponsor and Co-Investors continue to own a significant percentage of our stock, our Sponsor and Co-Investors will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors and could preclude any unsolicited acquisition of our company. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of Class A common stock as part of a sale of our company and ultimately might affect the market price of our Class A common stock.

In addition, immediately following this offering and the application of the net proceeds therefrom, the Pre-IPO Unitholders will own 34% of the LLC Units (or 33% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). Because they hold their ownership interest in our business directly in Alight OpCo, rather than through Alight Inc., the Pre-IPO Unitholders may have conflicting interests with holders of shares of our Class A common stock. For example, if Alight OpCo makes distributions to Alight Inc., the non-managing members of Alight OpCo will also be entitled to receive such distributions pro rata in accordance with the percentages of their respective limited liability company interests in Alight OpCo and their preferences as to the timing and amount of any such distributions may differ from those of our public stockholders. Our pre-IPO owners may also have different tax positions from us which could influence their decisions regarding whether and when to dispose of assets, especially in light of the existence of the tax receivable agreement that we will enter in connection with this offering, whether and when to incur new or

refinance existing indebtedness, and whether and when Alight Inc. should terminate the tax receivable agreement and accelerate its obligations thereunder. In addition, the structuring of future transactions may take into consideration our pre-IPO owners’ tax or other considerations even where no similar benefit would accrue to us. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Our amended and restated certificate of incorporation will not limit the ability of our Sponsor and certain other pre-IPO investors to compete with us and they and certain of our executive officers may have investments in businesses whose interests conflict with ours.

Our Sponsor, the Co-Investors and other pre-IPO owners that hold 10% or more of our Class A common stock prior to completion of this offering (the “Other Investors”) and their respective affiliates engage in a broad spectrum of activities, including investments in businesses that may compete with us. In the ordinary course of their business activities, our Sponsor, the Co-Investors and the Other Investors and their respective affiliates may engage in activities where their interests conflict with our interests or those of our stockholders. Our amended and restated certificate of incorporation provides that none of our Sponsor, the Co-Investors or the Other Investors, or any of their respective affiliates or any of our directors who are not employed by us (including any non-employee director who serves as one of our officers in both his or her director and officer capacities) or his or her affiliates will have any duty to refrain from engaging, directly or indirectly, in the same business activities or similar business activities or lines of business in which we operate. See “Description of Capital Stock—Conflicts of Interest.” Our Sponsor, the Co-Investors and the Other Investors and their respective affiliates also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us. In addition, our Sponsor, the Co-Investors and the Other Investors may have an interest in our pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their investment, even though such transactions might involve risks to us and our stockholders.

In addition, because of their former positions with Aon, certain of our executive officers own Aon common stock. Even though our executive officers who were employees of Aon ceased to be employees of Aon upon the Separation, continuing ownership of Aon common stock by certain of these executive officers could create, or appear to create, potential conflicts of interest if we and Aon pursue the same corporate opportunities or face decisions that could have different implications for us and Aon. Potential conflicts of interest could also arise if we enter into any new commercial arrangements with Aon in the future.

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are not required to have a board that is composed of a majority of “independent directors,” as defined under the Nasdaq rules;

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are not required to have a compensation committee that is composed entirely of independent directors; and

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are not required to have director nominations be made, or recommended to the full board of directors, by its independent directors or by a nominations committee that is composed entirely of independent directors.

Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a public company, which could lower our profits, make it more difficult to run our business or divert management’s attention from our business.

As a public company, we will be required to commit significant resources and management time and attention to the requirements of being a public company, which will cause us to incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. We also will incur costs associated with the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and related rules implemented by the Securities and Exchange Commission (the “SEC”) and Nasdaq, and compliance with these requirements will place significant demands on our legal, accounting and finance staff and on our accounting, financial and information systems. In addition, we might not be successful in implementing these requirements. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A common stock, fines, sanctions and other regulatory action and potentially civil litigation.

Our internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act, and failure to achieve and maintain effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and the market price of our Class A common stock.

As a public company, we will have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our operating results. Our internal controls over financial reporting currently do not meet all of the standards contemplated by Section 404 of the Sarbanes-Oxley Act that eventually we will be required to meet. Because currently we do not have comprehensive documentation of our internal controls and have not yet tested our internal controls in accordance with Section 404, we cannot conclude in accordance with Section 404 that we do not have a material weakness in our internal controls or a combination of significant deficiencies that could result in the conclusion that we have a material weakness in our internal controls. Beginning with our second annual report on Form 10-K, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting on an annual basis. If we are not able to complete our initial assessment of our internal controls and otherwise implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent registered public accounting firm may not be able to certify as to the adequacy of our internal controls over financial reporting.

Matters impacting our internal controls may cause us to be unable to report our financial information on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of applicable stock exchange listing rules, which may result in a breach of the covenants under existing or future financing arrangements. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm were to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our Class A common stock.

If securities or industry analysts do not publish research or reports about our business, or if they downgrade their recommendations regarding our Class A common stock, our stock price and trading volume could decline.

The trading market for our Class A common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If any of the analysts who cover us downgrade our Class A common stock or publish inaccurate or unfavorable research about our business, our Class A common stock price may decline. If analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our Class A common stock price or trading volume to decline and our Class A common stock to be less liquid.

There may not be an active trading market for shares of our Class A common stock, which may cause shares of our Class A common stock to trade at a discount from their initial offering price and make it difficult to sell the shares of Class A common stock you purchase.

Prior to this offering, there has not been a public trading market for shares of our Class A common stock. The initial public offering price per share of Class A common stock will be determined by agreement among us and the representatives of the underwriters, and may not be indicative of the price at which shares of our Class A common stock will trade in the public market after this offering. If you purchase shares of our Class A common stock, you may not be able to resell those shares at or above the initial public offering price. We cannot predict the extent to which investor interest in the Company will lead to the development of an active trading market on the Nasdaq or how liquid that market might become. An active public market for our Class A common stock may not develop or be sustained after the offering. If an active public market does not develop or is not sustained, it may be difficult for you to sell your shares of Class A common stock at a price that is attractive to you, or at all. Additionally, our Class A common stock likely will not be eligible to be included in certain stock indices because of our dual class voting structure. For example, in July 2017, S&P Dow Jones stated that companies with multiple share classes will not be eligible for inclusion in the S&P Composite 1500 (composed of the S&P 500, S&P MidCap 400 and S&P SmallCap 600). The market price of our Class A common stock may decline below the initial public offering price.

The market price of shares of our Class A common stock may be volatile or may decline regardless of our operating performance, which could cause the value of your investment to decline.

Even if a trading market develops, the market price of our Class A common stock may be highly volatile and could be subject to wide fluctuations. Securities markets worldwide experience significant price and volume fluctuations. This market volatility, as well as general economic, market or political conditions, could reduce the market price of shares of our Class A common stock regardless of our operating performance. In addition, our operating results could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly operating results or dividends, if any, to stockholders, additions or departures of key management personnel, failure to meet analysts’ earnings estimates, publication of research reports about our industry, litigation and government investigations, changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business, adverse market reaction to any indebtedness we may incur or securities we may issue in the future, changes in market valuations

of similar companies or speculation in the press or investment community, announcements by our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, adverse publicity about the industries we participate in or individual scandals, and in response the market price of shares of our Class A common stock could decrease significantly. You may be unable to resell your shares of Class A common stock at or above the initial public offering price.

Stock markets and the price of our Class A shares may experience extreme price and volume fluctuations. In the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Investors in this offering will suffer immediate and substantial dilution.

The initial public offering price per share of Class A common stock will be substantially higher than our pro forma net tangible book value per share immediately after this offering. As a result, you will pay a price per share of Class A common stock that substantially exceeds the per share book value of our tangible assets after subtracting our liabilities. In addition, you will pay more for your shares of Class A common stock than the amounts paid for the LLC Units by the pre-IPO owners. See “Dilution.”

You may be diluted by the future issuance of additional Class A common stock or LLC Units in connection with our incentive plans, acquisitions or otherwise.

After this offering we will have 5,865,037,613 shares of Class A common stock authorized but unissued, including 69,583,887 shares of Class A common stock issuable upon exchange of LLC Units that will be held by the Pre-IPO Unitholders. Our certificate of incorporation authorizes us to issue these shares of Class A common stock and options, rights, warrants and appreciation rights relating to Class A common stock for the consideration and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. Similarly, the amended and restated limited liability company agreement of Alight OpCo permits Alight OpCo to issue an unlimited number of additional limited liability company interests of Alight OpCo with designations, preferences, rights, powers and duties that are different from, and may be senior to, those applicable to the LLC Units, and which may be exchangeable for shares of our Class A common stock. Additionally, we have reserved an aggregate of 18,039,000 shares of Class A common stock and LLC Units for issuance under our Omnibus Incentive Plan. In connection with this offering, we expect to make a grant to certain employees (none of whom are executive officers) of options to purchase up to 2,200,000 shares of Class A common stock under the Omnibus Incentive Plan. Assuming an offering price of $23.50 per share of Class A common stock, which is the midpoint of the price range set forth on the cover of this prospectus, options to purchase 1,840,426 shares are expected to be granted at the time of this offering. Such options are expected to vest in three equal annual installments over three years. Any Class A common stock that we issue, including under our Omnibus Incentive Plan or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership held by the investors who purchase Class A common stock in this offering.

We may issue preferred stock whose terms could adversely affect the voting power or value of our Class A common stock.

Our amended and restated certificate of incorporation will authorize us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designations, preferences, limitations and relative rights, including preferences over our Class A common stock respecting dividends and distributions, as our board of directors may determine. The terms of one or more classes or series of preferred stock could adversely impact the voting power or value of our Class A common stock. For example, we might grant holders of preferred stock the right to elect some number of our directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences we might assign to holders of preferred stock could affect the residual value of the Class A common stock.

If we or our pre-IPO owners sell additional shares of our Class A common stock after this offering or are perceived by the public markets as intending to sell them, the market price of our Class A common stock could decline.

The sale of substantial amounts of shares of our Class A common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our Class A common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell shares of our Class A common stock in the future at a time and at a price that we deem appropriate. Upon completion of this offering, we will have a total of 134,962,387 shares of our Class A common stock outstanding, or 139,762,387 shares if the underwriters exercise in full their option to purchase additional shares of our Class A common stock. All of the shares of our Class A common stock sold in this offering will be freely tradable without restriction or further registration under the Securities Act, by persons other than our “affiliates,” as that term is defined under Rule 144 of the Securities Act of 1933, as amended (the “Securities Act”). See “Shares Eligible for Future Sale.”

In addition, we and the Pre-IPO Unitholders will enter into an exchange agreement under which they (or certain permitted transferees) will have the right, after the completion of this offering (subject to the terms of the exchange agreement), to exchange their LLC Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments. Upon completion of this offering (subject to the terms of the exchange agreement), an aggregate of 69,583,887 LLC Units may be exchanged for shares of our Class A common stock. Any shares we issue upon exchange of LLC Units will be “restricted securities” as defined in Rule 144 and may not be sold in the absence of registration under the Securities Act unless an exemption from registration is available, including the exemptions contained in Rule 144. Under applicable SEC guidance, we believe that for purposes of Rule 144 the holding period in such shares will generally include the holding period in the corresponding LLC Units exchanged. We, our directors, executive officers and holders of substantially all of our outstanding LLC Units immediately prior to this offering, including our Sponsor and each of the Co-Investors and the Other Investors, have agreed, subject to certain exceptions, not to dispose of or hedge any shares of our Class A common stock (including shares issued upon exchange of LLC Units) or securities convertible into or exchangeable for shares of our Class A common stock for 180 days from the date of this prospectus, except with the underwriters’ prior written consent. See “Underwriting (Conflicts of Interest).” As a result of the registration rights agreement, however, all of these shares of our Class A common stock (including shares issued upon exchange of LLC Units) may be eligible for future sale without restriction, subject to applicable lock-up arrangements. See “Shares Eligible for Future Sale—Registration Rights” and “Certain Relationships and Related Person Transactions—Registration Rights Agreement.”

Upon the expiration of the lock-up agreements described above, all of such shares will be eligible for resale in the public market, subject, in the case of shares held by our affiliates, to volume, manner of sale and other limitations under Rule 144. We expect that our Sponsor will continue to be considered an affiliate following the expiration of the lock-up period based on its expected share ownership and its board nomination rights. Certain other of our stockholders may also be considered affiliates at that time. However, subject to the expiration or waiver of the 180-day lock-up period, the holders of these shares of Class A common stock will have the right, subject to certain exceptions and conditions, to require us to register their shares of Class A common stock under the Securities Act, and they will have the right to participate in future registrations of securities by us. Registration of any of these outstanding shares of Class A common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See “Shares Eligible for Future Sale.”

We intend to file one or more registration statements on Form S-8 under the Securities Act to register shares of our Class A common stock or securities convertible into or exchangeable for shares of our Class A common stock issued pursuant to our Omnibus Incentive Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. We expect that the initial registration statement on Form S-8 will cover 18,039,000 shares of our Class A common stock.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our Class A common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of Class A common stock. As restrictions on resale end, the market price of our shares of common stock could drop significantly if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our Class A common stock or other securities or to use our Class A common stock as consideration for acquisitions of other businesses, investments or other corporate purposes.

Anti-takeover provisions in our organizational documents and Delaware law might discourage or delay acquisition attempts for us that you might consider favorable.

Our amended and restated certificate of incorporation and amended and restated bylaws that will become effective immediately prior to the consummation of this offering will contain provisions that may make the merger or acquisition of our company more difficult without the approval of our board of directors. Among other things, these provisions:

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provide that our board of directors will be divided into three classes, as nearly equal in size as possible, which directors in each class serving three-year terms and with terms of the directors of only one class expiring in any given year;

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provide for the removal of directors only for cause and only upon the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors;

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would allow us to authorize the issuance of shares of one or more series of preferred stock, including in connection with a stockholder rights plan, financing transactions or otherwise, the terms of which series may be established and the shares of which may be issued without stockholder approval, and which may include super voting, special approval, dividend, or other rights or preferences superior to the rights of the holders of common stock;

•

prohibit stockholder action by written consent from and after the date on which the parties to our stockholders agreement cease to beneficially own at least 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors unless such action is recommended by all directors then in office;

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provide for certain limitations on convening special stockholder meetings;

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provide (i) that the board of directors is expressly authorized to make, alter, or repeal our bylaws and (ii) that our stockholders may only amend our bylaws with the approval of 66 2/3% or more of all of the outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors;

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provide that certain provisions of our amended and restated certificate of incorporation may be amended only by the affirmative vote of the holders of at least 66 2/3% in voting power of the outstanding shares of our capital stock entitled to vote if the parties to our stockholders agreement beneficially own less than 30% of the total voting power of all then outstanding shares of our capital stock entitled to vote generally in the election of directors; and

•

establish advance notice requirements for nominations for elections to our board or for proposing matters that can be acted upon by stockholders at stockholder meetings.

Further, as a Delaware corporation, we are also subject to provisions of Delaware law, which may impede or discourage a takeover attempt that our stockholders may find beneficial. These anti-takeover provisions and other

provisions under Delaware law could discourage, delay or prevent a transaction involving a change in control of our company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our Class A common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and to cause us to take other corporate actions you desire. For further discussion of these and other such anti-takeover provisions, see “Description of Capital Stock—Anti-Takeover Effects of Our Amended and Restated Certificate of Incorporation and Amended and Restated Bylaws and Certain Provisions of Delaware Law.”

Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with the Company or the Company’s directors, officers or other employees.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, any (i) derivative action or proceeding brought on behalf of our Company, (ii) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee of our Company to our Company or our Company’s stockholders, (iii) action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”) or our amended and restated certificate of incorporation or our amended and restated bylaws or (iv) action asserting a claim governed by the internal affairs doctrine, shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provision in our amended and restated certificate of incorporation. This choice-of-forum provision may limit a stockholder’s ability to bring a claim in a different judicial forum, including one that it may find favorable or convenient for a specified class of disputes with the Company or the Company’s directors, officers, other stockholders or employees, which may discourage such lawsuits. Alternatively, if a court were to find this provision of our amended and restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “predicts,” “intends,” “trends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors include but are not limited to those described under “Risk Factors.” These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

MARKET AND INDUSTRY DATA

This prospectus includes market and industry data and forecasts that we have derived from independent consultant reports, publicly available information, various industry publications, other published industry sources, including International Data Corporation (“IDC”) and Gartner, Inc. (“Gartner”), and our internal data and estimates. Independent consultant reports, industry publications and other published industry sources generally indicate that the information contained therein was obtained from sources believed to be reliable.

The source of certain statistical data, estimates and forecasts contained in this prospectus are the following independent industry publications or reports:

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IDC, Market Forecast: Worldwide and U.S. HR Management Services Forecast, 2018-2022—November 2018

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Gartner, Forecast: Cloud Consulting and Implementation Services, Worldwide, 2017-2022—May 2018

The Gartner Report described herein (the “Gartner Report”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, and are not representations of fact. The Gartner Report speaks as of its original publication date (and not as of the date of this prospectus) and the opinions expressed in the Gartner Report are subject to change without notice.

Although we believe that these third-party sources are reliable, we do not guarantee the accuracy or completeness of this information, and neither we nor the underwriters have independently verified this information. Some market data and statistical information are also based on our good faith estimates, which are derived from management’s knowledge of our industry and such independent sources referred to above. Certain market, ranking and industry data included elsewhere in this prospectus, including the size of certain markets and our size or position and the positions of our competitors within these markets, including our services relative to our competitors, are based on estimates of our management. These estimates have been derived from our management’s knowledge and experience in the markets in which we operate, as well as information obtained from surveys, reports by market research firms, our customers, distributors, suppliers, trade and business organizations and other contacts in the markets in which we operate and have not been verified by independent sources. Unless otherwise noted, all of our market share and market position information presented in this prospectus is an approximation. Our market share and market position in each of our lines of business, unless otherwise noted, is based on our sales relative to the estimated sales in the markets we served. References herein to our being a leader in a market or product category refer to our belief that we have a leading market share position in each specified market, unless the context otherwise requires. As there are no publicly available sources supporting this belief, it is based solely on our internal analysis of our sales as compared to our estimates of sales of our competitors. In addition, the discussion herein regarding our various end markets is based on how we define the end markets for our products, which products may be either part of larger overall end markets or end markets that include other types of products and services.

Our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions. Although we believe that such information is reliable, we have not had this information verified by any independent sources.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and domain names are our service marks or trademarks. We do not intend our use or display of other companies’ trademarks, service marks or trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus are used without the ^® and ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks, and trade names. All trademarks, service marks and trade names appearing in this prospectus are the property of their respective owners.

ORGANIZATIONAL STRUCTURE

Existing Organizational Structure

The diagram below depicts our current organizational structure.

LOGO

Pro-IPO Owners Tempo Holding Company, LLC ("Alight OpCo") Tempo Acquisition, LLC (1) Operating Subsidiaries

(1)	Tempo Acquisition, LLC, together with certain wholly owned subsidiary co-obligors, serves as the borrower under the senior secured credit facilities and as the issuer of the senior notes.

Organizational Structure Following this Offering

Immediately following this offering, Alight Inc. will be a holding company, and its sole material asset will be a controlling equity interest in Alight OpCo. As the sole managing member of Alight OpCo, Alight Inc. will operate and control all of the business and affairs of Alight OpCo and, through Alight OpCo and its subsidiaries, conduct our business. The reorganization will be accounted for as a reorganization of entities under common control. As a result, the consolidated financial statements of Alight Inc. will recognize the assets and liabilities received in the reorganization at their historical carrying amounts, as reflected in the historical consolidated financial statements of Alight OpCo, the accounting predecessor. Alight Inc. will consolidate Alight OpCo in its consolidated financial statements and record a noncontrolling interest related to the LLC Units held by the Pre-IPO Unitholders on its consolidated balance sheet and statement of income.

The Pre-IPO Unitholders will hold all of the issued and outstanding shares of our Class B common stock. The shares of Class B common stock will have no economic rights but will entitle each holder, without regard to the number of shares of Class B common stock held by such holder, to a number of votes that is equal to the aggregate number of LLC Units of Alight OpCo held by such holder on all matters on which stockholders of Alight Inc. are entitled to vote generally. The voting power afforded to holders of LLC Units by their shares of

Class B common stock is automatically and correspondingly reduced as they exchange LLC Units for shares of Class A common stock of Alight Inc. pursuant to the exchange agreement. If at any time the ratio at which LLC Units are exchangeable for shares of our Class A common stock changes from one-for-one as described under “Certain Relationships and Related Person Transactions—Exchange Agreement,” the number of votes to which Class B common stockholders are entitled will be adjusted accordingly. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally, except as otherwise required by law.

The diagram below depicts our organizational structure immediately following this offering.

LOGO

(1)

The Class B common stock will provide each of the Pre-IPO Unitholders with a number of votes that is equal to the aggregate number of LLC Units held by such Pre-IPO Unitholder. Immediately following this offering, the Pre-IPO Unitholders will hold 34% of the voting power in Alight Inc. For additional information, see “Description of Capital Stock—Common Stock—Class B Common Stock.”

(2)	Tempo Acquisition, LLC, together with certain wholly owned subsidiary co-obligors, serves as the borrower under the senior secured credit facilities and as the issuer of the senior notes. See “Description of Certain Indebtedness.”

Incorporation of Alight Inc.

Alight Inc. was incorporated as a Delaware corporation on September 12, 2018. Alight Inc. has not engaged in any business or other activities except in connection with its formation. The amended and restated certificate of incorporation of Alight Inc. authorizes two classes of common stock, Class A common stock and Class B common stock, each having the terms described in “Description of Capital Stock.”

Blocker Mergers

Immediately prior to the completion of this offering, certain entities that are taxable as corporations for U.S. federal income tax purposes in which the Pre-IPO Shareholders hold interests (the “Blocker Companies”) will merge with and into a newly formed subsidiary of Alight Inc. and the surviving entity will then be dissolved (such mergers, the “Blocker Mergers”). In the Blocker Mergers, the Pre-IPO Shareholders, as the 100% owners of the Blocker Companies, will acquire 102,962,387 shares of newly issued Class A common stock and Alight Inc. will acquire an equal number of outstanding LLC Units.

Reclassification and Amendment and Restatement of Limited Liability Company Agreement of Alight OpCo

Prior to the completion of this offering, the limited liability company agreement of Alight OpCo will be amended and restated to, among other things, modify its capital structure by creating a single new class of units that we refer to as “LLC Units.” We refer to this reclassification, together with the transactions described under “—Blocker Mergers” as the “Reorganization Transactions.” Immediately following the Reorganization Transactions but prior to the other Offering Transactions described below, there will be 204,546,274 LLC Units issued and outstanding.

Pursuant to the amended and restated limited liability company agreement of Alight OpCo, Alight Inc. will be the sole managing member of Alight OpCo. Accordingly, Alight Inc. will have the right to determine when distributions will be made to the members of Alight OpCo and the amount of any such distributions. If Alight Inc., as managing member, authorizes a distribution, such distribution will be made to the members of Alight OpCo pro rata in accordance with the percentages of their respective limited liability company interests.

The holders of limited liability company interests in Alight OpCo, including Alight Inc., will incur United States federal, state and local income taxes on their proportionate share of any taxable income of Alight OpCo. Net profits and net losses of Alight OpCo will generally be allocated to its members (including Alight Inc.) pro rata in accordance with the percentages of their respective limited liability company interests, except as otherwise required by law. The amended and restated limited liability company agreement provides for cash distributions to the holders of limited liability company interests in Alight OpCo if Alight Inc. determines that the taxable income of Alight OpCo will give rise to taxable income for its members. In accordance with the amended and restated limited liability company agreement, we intend to cause Alight OpCo to make pro rata cash distributions to the holders of limited liability company interests in Alight OpCo for purposes of funding their tax obligations in respect of the income of Alight OpCo that is allocated to them. Generally, these tax distributions will be computed based on our estimate of the taxable income of Alight OpCo allocated to the holder of LLC Units that receives the greatest proportionate allocation of income multiplied by an assumed tax rate equal to the highest effective marginal combined United States federal, state and local income tax rate prescribed for an individual residing in California or New York, New York. See “Certain Relationships and Related Person Transactions—Alight OpCo Limited Liability Company Agreement.”

Exchange Agreement

We and the holders of outstanding LLC Units will enter into an exchange agreement at the time of this offering under which they (or certain permitted transferees thereof) will have the right on a quarterly basis (subject to the terms of the exchange agreement) to exchange their LLC Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. In addition, subject to certain requirements, our Sponsor and the Co-Investors will generally be permitted to exchange LLC Units for our Class A common stock from and after the closing of this offering provided that the number of LLC Units surrendered in such exchanges during any 30 calendar day period represent, in the aggregate, greater than 2% of total interests in partnership capital or profits. Any Class A common stock received by our Sponsor or the Co-Investors in any such exchange during the applicable restricted periods described in “Shares Eligible for Future Sale—Lock-Up Agreements,” would be subject to the restrictions described in such section. The

exchange agreement will also provide that a holder of LLC Units will not have the right to exchange LLC Units if Alight Inc. determines that such exchange would be prohibited by law or regulation or would violate other agreements with Alight Inc. to which the holder of LLC Units may be subject. Alight Inc. may impose additional restrictions on exchange that it determines to be necessary or advisable so that Alight OpCo is not treated as a “publicly traded partnership” for United States federal income tax purposes. As a holder exchanges LLC Units for shares of Class A common stock, the number of LLC Units held by Alight Inc. is correspondingly increased as it acquires the exchanged LLC Units. See “Certain Relationships and Related Person Transactions—Exchange Agreement.”

Offering Transactions

At the time of the consummation of this offering, Alight Inc. intends to consummate the purchase, for cash, of newly issued LLC Units from Alight OpCo at a purchase price per unit equal to the initial public offering price per share of Class A common stock in this offering net of underwriting discounts and commissions. Assuming that the shares of Class A common stock to be sold in this offering are sold at $23.50 per share, which is the midpoint of the range on the front cover of this prospectus, at the time of this offering, Alight Inc. will purchase from Alight OpCo 32,000,000 newly issued LLC Units for an aggregate of $714 million (or 36,800,000 newly issued LLC Units for an aggregate of $822 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock). The issuance and sale of such newly issued LLC Units by Alight OpCo to Alight Inc. will correspondingly dilute the ownership interests of our pre-IPO owners in Alight OpCo. See “Principal Stockholders” for more information regarding the proceeds from this offering that will be paid to our directors and named executive officers. Accordingly, following this offering Alight Inc. will hold a number of LLC Units that is equal to the number of shares of Class A common stock that it has issued, a relationship that we believe fosters transparency because it results in a single share of Class A common stock representing (albeit indirectly) the same percentage equity interest in Alight OpCo as a single LLC Unit.

Alight Inc. intends to cause Alight OpCo to use the net proceeds from this offering to repay a portion of our senior secured credit facilities. See “Use of Proceeds.”

We refer to the foregoing transactions as the “Offering Transactions.”

As a result of the transactions described above:

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the investors in this offering will collectively own 32,000,000 shares of our Class A common stock (or 36,800,000 shares of Class A common stock if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

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the Pre-IPO Unitholders will hold 69,583,887 LLC Units and the Pre-IPO Shareholders will hold 102,962,387 shares of our Class A common stock;

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Alight Inc. will hold 134,962,387 LLC Units (or 139,762,387 LLC Units if the underwriters exercise in full their option to purchase additional shares of Class A common stock);

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the investors in this offering will collectively have 16% of the voting power in Alight Inc. (or 18% if the underwriters exercise in full their option to purchase additional shares of Class A common stock); and

•

the Pre-IPO Unitholders, as holders of all of the outstanding shares of Class B common stock, will have 34% of the voting power in Alight Inc. (or 33% if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and the Pre-IPO Shareholders will have 50% of the voting power in Alight Inc. (or 49% if the underwriters exercise in full their option to purchase additional shares of Class A common stock).

USE OF PROCEEDS

We estimate that the net proceeds to Alight Inc. from this offering at an assumed initial public offering price of $23.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions, will be approximately $714 million (or $822 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock). A $1.00 increase or decrease in the assumed initial public offering price of $23.50 per share would increase or decrease, as applicable, the net proceeds to Alight Inc. from this offering by approximately $30 million, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions. Alight OpCo will bear or reimburse Alight Inc. for all of the expenses payable by it in this offering. We estimate these offering expenses (excluding underwriting discounts and commissions) will be approximately $15 million.

Alight Inc. intends to use all of the net proceeds from this offering (including from any exercise by the underwriters of their option to purchase additional shares of Class A common stock) to purchase a number of newly issued LLC Units from Alight OpCo that is equivalent to the number of shares of Class A common stock that we offer and sell in this offering, as described under “Organizational Structure—Offering Transactions.” We intend to cause Alight OpCo to use the net proceeds from this offering to repay a portion of our senior secured credit facilities totaling approximately $699 million in aggregate principal amount (or $807 million in aggregate principal amount if the underwriters exercise in full their option to purchase additional shares of Class A common stock) at an assumed initial public offering price of $23.50 per share, which is the midpoint of the price range set forth on the cover page of this prospectus. The term loan facility and the revolving credit facility provided for by our senior secured credit facilities mature on May 1, 2024 and May 1, 2022, respectively. Borrowings under our senior secured credit facilities bear interest, at our option, at a rate per annum equal to an applicable margin over either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime lending rate, (2) the federal funds effective rate plus 1/2 of 1% and (3) the LIBOR rate for a one month interest period plus 1.00% or (b) a LIBOR rate determined by reference to the Reuters LIBOR rate for the interest period relevant to such borrowing, in each case, subject to interest rate floors. See “Description of Certain Indebtedness.” The proceeds of the senior secured credit facilities were used to finance the consummation of the Separation, to make a distribution to our pre-IPO owners, for general corporate purposes and to pay related fees, costs and expenses. Certain of the underwriters, or affiliates thereof, hold a portion of our senior secured credit facilities that will be repaid with the proceeds of this offering. As such, certain of the underwriters, or affiliates thereof, will receive a portion of the proceeds from this offering.

DIVIDEND POLICY

The declaration, amount and payment of any future dividends on shares of Class A common stock will be at the sole discretion of our board of directors and we may reduce or discontinue entirely the payment of such dividends at any time. Our board of directors may take into account general and economic conditions, our financial condition and operating results, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, and such other factors as our board of directors may deem relevant.

Alight Inc. is a holding company and has no material assets other than its ownership of LLC Units in Alight OpCo. We intend to cause Alight OpCo to make distributions to us in an amount sufficient to cover our taxes and obligations under the tax receivable agreement as well as any cash dividends declared by us. If Alight OpCo makes such distributions to Alight Inc., the other holders of LLC Units will also be entitled to receive distributions pro rata in accordance with the percentages of their respective limited liability company interests.

The amended and restated limited liability company agreement of Alight OpCo provides that pro rata cash distributions be made to holders of LLC Units (including Alight Inc.) at certain assumed tax rates, which we refer to as “tax distributions.” See “Certain Relationships and Related Person Transactions—Alight OpCo Limited Liability Company Agreement.” We anticipate that amounts received by Alight Inc. may, in certain periods, exceed Alight Inc.’s actual tax liabilities and obligations to make payments under the tax receivable agreement. We expect that Alight Inc. will use any such excess cash from time to time to acquire additional newly issued LLC Units from Alight OpCo at a per unit price determined by reference to the market value of the Class A common stock; to pay dividends, which may include special dividends, on its Class A common stock; to fund repurchases of its Class A common stock; or any combination of the foregoing. Our board of directors, in its sole discretion, will make any determination with respect to the use of any such excess cash. We also expect, if necessary, to undertake ameliorative actions, which may include pro rata or non-pro rata reclassifications, combinations, subdivisions or adjustments of outstanding LLC Units, to maintain 1:1 parity between LLC Units and shares of Class A common stock. See “Risk Factors—Risks Related to Our Organizational Structure—Alight Inc. is a holding company and its only material asset after completion of this offering will be its interest in Alight OpCo, and it is accordingly dependent upon distributions from Alight OpCo to pay taxes, make payments under the tax receivable agreement and pay dividends.”

The agreements governing our senior secured credit facilities and senior notes contain a number of covenants that restrict, subject to certain exceptions, certain of our subsidiaries’ ability to pay dividends to us. See “Description of Certain Indebtedness.” In addition, one of our subsidiaries, Alight Financial Solutions, LLC, is a broker dealer subject to certain net capital requirements, which could limit its ability to pay dividends to us. See “Business—Licensing and Regulation—Investment Advisers and Broker Dealers.”

Any financing arrangements that we enter into in the future may include restrictive covenants that limit our ability to pay dividends. In addition, Alight OpCo is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Alight OpCo (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Alight OpCo are generally subject to similar legal limitations on their ability to make distributions to Alight OpCo.

Since its formation in September 2018, Alight Inc. has not paid any dividends to holders of its outstanding common stock. In the period from its formation in March 2017 through May 1, 2017, Alight OpCo did not make any distributions to our pre-IPO owners. During the period from May 1, 2017 through December 31, 2017, Alight OpCo made an aggregate of $399 million in cash distributions to our pre-IPO owners. During the year ended December 31, 2018, Alight OpCo made an aggregate of $2 million in cash distributions to our pre-IPO owners.

CAPITALIZATION

The following table sets forth our consolidated cash and cash equivalents and capitalization as of December 31, 2018:

•

on a historical basis; and

•

on a pro forma basis giving effect to the transactions described under “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information,” including the sale by us of 32,000,000 shares of Class A common stock in this offering at an assumed initial public offering price of $23.50 per share (the midpoint of the range set forth on the cover page of this prospectus) and the application of the proceeds therefrom as described in “Use of Proceeds.”

Cash and cash equivalents are not components of our total capitalization. You should read this table together with the other information contained in this prospectus, including “Organizational Structure,” “Use of Proceeds,” “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes thereto included elsewhere in this prospectus.


	December 31, 2018
	Alight OpCo Actual		Alight Inc. Pro Forma(1)
	(Dollars in millions, except per share amounts)
Cash and cash equivalents	$	220	$	220

Long term debt (including the current portion thereof and net of unamortized debt issuance costs) (2)	$	3,427	$	2,728
Members’ equity		815		—
Accumulated other comprehensive income		3		3
Class A common stock, $0.01 par value per share, 1,000 shares authorized and no shares issued and outstanding, actual; and 6,000,000,000 shares authorized and 134,962,387 shares issued and outstanding on a pro forma basis		—		1
Class B common stock, $0.01 par value per share, 1,000 shares authorized and 100 shares issued and outstanding, actual; and 1,000,000 shares authorized and 100 shares issued and outstanding on a pro forma basis		—		—
Additional paid-in capital		—		555
Non-controlling interest		—		512

Total equity		818		1,071

Total capitalization	$	4,245	$	3,799

(1)

To the extent we change the number of shares of Class A common stock sold by us in this offering from the shares we expect to sell or we change the initial public offering price from the $23.50 per share assumed initial public offering price, representing the midpoint of the price range set forth on the cover page of this prospectus, or any combination of these events occurs, the net proceeds to us from this offering and each of as adjusted total stockholders’ equity and total capitalization may increase or decrease. A $1.00 increase (decrease) in the assumed initial public offering price per share, assuming no change in the number of shares to be sold, would increase (decrease) the net proceeds that we receive in this offering and each of as adjusted total stockholders’ equity and total capitalization by approximately $30 million. An increase (decrease) of 1,000,000 shares in the expected number of shares to be sold in the offering, assuming no change in the assumed initial offering price per share, would increase (decrease) our net proceeds from this offering and our as adjusted total stockholders’ equity and total capitalization by approximately $22 million. If the underwriters exercise in full their option to purchase additional shares of Class A common stock, the

as adjusted amount of each of cash, additional paid-in capital, total stockholders’ equity, total equity and total capitalization would increase by approximately $107 million, after deducting underwriting discounts and commissions, and we would have 139,762,387 shares of our Class A common stock issued and outstanding, as adjusted.

(2)	Long-term debt consists of borrowings under our senior secured credit facilities and the senior notes as described in “Description of Certain Indebtedness.”

DILUTION

If you invest in shares of our Class A common stock in this offering, your investment will be immediately diluted to the extent of the difference between the initial public offering price per share of Class A common stock and the pro forma net tangible book value per share of Class A common stock after this offering. Dilution results from the fact that the per share offering price of the shares of Class A common stock is substantially in excess of the pro forma net tangible book value per share attributable to the Class A common stock held by our pre-IPO owners.

Our pro forma net tangible book deficit as of December 31, 2018 was approximately $3,373 million, or $19.55 per share of Class A common stock. Pro forma net tangible book deficit represents the amount of total tangible assets less total liabilities, and pro forma net tangible book deficit per share of Class A common stock represents pro forma net tangible book deficit divided by the number of shares of Class A common stock outstanding, after giving effect to the Reorganization Transactions and assuming that all of the holders of LLC Units in Alight OpCo (other than Alight Inc.) exchanged their LLC Units for newly issued shares of Class A common stock on a one-for-one basis.

After giving effect to the transactions described under “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information,” including the application of the proceeds from this offering as described in “Use of Proceeds,” our pro forma net tangible book deficit as of December 31, 2018 would have been $2,682 million, or $13.11 per share of Class A common stock. This represents an immediate decrease in net tangible book deficit of $6.44 per share of Class A common stock to our pre-IPO owners and an immediate dilution in net tangible book deficit of $36.61 per share of Class A common stock to investors in this offering.

The following table illustrates this dilution on a per share of Class A common stock basis assuming the underwriters do not exercise their option to purchase additional shares of Class A common stock:


Assumed initial public offering price per share of Class A common stock				$	23.50
Pro forma net tangible book deficit per share of Class A common stock as of December 31, 2018	$	19.55
Decrease in pro forma net tangible book deficit per share of Class A common stock attributable to investors in this offering	$	(6.44	)

Pro forma net tangible book deficit per share of Class A common stock after the offering				$	13.11

Dilution in pro forma net tangible book deficit per share of Class A common stock to investors in this offering				$	36.61

Because the Pre-IPO Unitholders do not own any Class A common stock or other economic interests in Alight Inc., we have presented dilution in pro forma net tangible book value per share of Class A common stock to investors in this offering assuming that all of the holders of LLC Units in Alight OpCo (other than Alight Inc.) exchanged their LLC Units for newly issued shares of Class A common stock on a one-for-one basis in order to more meaningfully present the dilutive impact on the investors in this offering.

A $1.00 increase in the assumed initial public offering price of $23.50 per share of our Class A common stock would decrease our pro forma net tangible book deficit after giving effect to this offering by $17 million, or by $0.08 per share of our Class A common stock, assuming the number of shares offered by us remains the same and after deducting estimated underwriting discounts and commissions. A $1.00 decrease in the assumed initial public offering price per share would result in equal changes in the opposite direction.

The following table summarizes, on the same pro forma basis as of December 31, 2018, the total number of shares of Class A common stock purchased from us, the total cash consideration paid to us, and the average price per share of Class A common stock paid by our pre-IPO owners and by new investors purchasing shares of Class A common stock in this offering, assuming that all of the holders of LLC Units in Alight OpCo (other than

Alight Inc.) exchanged their LLC Units for newly issued shares of our Class A common stock on a one-for-one basis.


	Shares of Class A common stock Purchased					Total Consideration					Average Price Per Share of Class A common stock
	Number		Percent			Amount		Percent			Average Price Per Share of Class A common stock
						(in millions)
Pre-IPO owners		172,546,274		84	%	$	1,243		62	%	$	7.20
Investors in this offering		32,000,000		16	%	$	752		38	%	$	23.50

Total		204,546,274		100	%	$	1,995		100	%	$	9.75

Each $1.00 increase in the assumed offering price of $23.50 per share of our Class A common stock would increase total consideration paid by investors in this offering by $32 million, assuming the number of shares offered by us remains the same. A $1.00 decrease in the assumed initial public offering price per share of our Class A common stock would result in equal changes in the opposite direction.

If the underwriters’ option to purchase additional shares is exercised in full, the number of shares held by new investors will be increased to 36,800,000, or approximately 18% of the total number of shares of Class A common stock.

The dilution information above is for illustrative purposes only. Our net tangible book value following the consummation of this offering is subject to adjustment based on the actual initial public offering price of our shares of Class A common stock and other terms of this offering determined at pricing.

UNAUDITED PRO FORMA CONDENSED, COMBINED

AND CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed, combined and consolidated financial information presents Alight’s unaudited pro forma consolidated balance sheet as of December 31, 2018 and unaudited pro forma condensed, combined and consolidated statements of operations for the years ended December 31, 2018 and 2017, after giving effect to the following transactions (collectively, the “Transactions”):

•

the consummation of the Separation and the related financing under the senior secured credit facilities and the senior notes (the “Blackstone Transactions”);

•

the Reorganization Transactions; and

•

the Offering Transactions.

The unaudited pro forma condensed, combined and consolidated statement of operations for the year ended December 31, 2018 gives pro forma effect to the Reorganization Transactions and the Offering Transactions as if they had occurred on January 1, 2017. The unaudited pro forma condensed, combined and consolidated statement of operations for the year ended December 31, 2017 gives pro forma effect to the Blackstone Transactions, the Reorganization Transactions and the Offering Transactions as if they had occurred on January 1, 2017. The unaudited pro forma consolidated balance sheet as of December 31, 2018 gives effect to the Reorganization Transactions and the Offering Transactions as if they had occurred on December 31, 2018.

Alight OpCo’s historical consolidated financial information has been derived from its consolidated financial statements and accompanying notes included elsewhere in this prospectus. Alight Inc. was formed on September 12, 2018 and will have no material assets or results of operations until the completion of this offering. Therefore, its historical financial information is not included in the unaudited pro forma condensed, combined and consolidated financial information.

The unaudited pro forma condensed, combined and consolidated financial information was prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma condensed, combined and consolidated financial information. The unaudited pro forma condensed, combined and consolidated financial information has been adjusted to give effect to events that are (i) directly attributable to the Transactions, (ii) factually supportable and (iii) expected to have a continuing impact on the statement of operations.

We currently estimate costs that we will incur during our transition to being a stand-alone public company will not be material. We have not adjusted the accompanying unaudited pro forma condensed, combined and consolidated statements of operations for these estimated costs as the costs are not expected to have an ongoing impact on our operating results; they are projected amounts based on subjective estimates and assumptions, and would not be factually supportable. Due to the scope and complexity of these activities, the amount of these costs could increase or decrease materially and the timing of incurrence could change.

In July 2018, we announced a strategic partnership with Wipro, which we expect will enable us to accelerate investment in consumer-facing technologies and services across our business and reduce our costs. However, we have not adjusted the accompanying unaudited pro forma condensed, combined and consolidated statements of operations for these estimated cost savings as they are projected amounts based on subjective estimates and assumptions, and would not be factually supportable.

For purposes of the unaudited pro forma financial information, we have assumed that shares of Class A common stock will be issued by us at a price per share equal to the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and as a result, immediately following the completion of this offering, the ownership percentage represented by LLC Units not held by us will be 34%, and the net income attributable to LLC Units not held by us will accordingly represent 34% of our net income. If the underwriters’ option to purchase additional shares is exercised in full, the ownership percentage represented by LLC Units not

held by us will be 33%, and the net income attributable to LLC Units not held by us will accordingly represent 33% of our net income.

The unaudited pro forma condensed, combined and consolidated financial information is provided for informational purposes only and is not necessarily indicative of the operating results that would have occurred if the Transactions had been completed as of the dates set forth above, nor is it indicative of the future results of the Company. The unaudited pro forma condensed, combined and consolidated financial information also does not give effect to the potential impact of any anticipated synergies, operating efficiencies or cost savings that may result from the Transactions or any integration costs that do not have a continuing impact.

The unaudited pro forma condensed, combined and consolidated financial information should be read together with “Organizational Structure,” “Capitalization,” “Selected Historical Condensed and Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical financial statements and related notes thereto included elsewhere in this prospectus.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

As of December 31, 2018

(in millions, except share amounts)


	Alight OpCo As Reported		Reorganization Transactions Adjustments				As Adjusted Before Offering Transactions Adjustments		Offering Transactions Adjustments				Alight Inc. Pro Forma
Assets
Current Assets
Cash and cash equivalents	$	220	$	—			$	220	$	—			$	220
Receivables, net		507		—				507		—				507
Fiduciary assets		680		—				680		—				680
Other current assets		117		—				117		—				117

Total Current Assets		1,524		—				1,524		—				1,524
Goodwill		1,848		—				1,848		—				1,848
Intangible assets, net		1,905		—				1,905		—				1,905
Fixed assets, net		230		—				230		—				230
Deferred tax assets		5		143		(a)(c)		148		—				148
Other assets		170		—				170		(8	)	(e)		162

Total Assets	$	5,682	$	143			$	5,825	$	(8	)		$	5,817

Liabilities and Equity
Liabilities
Current Liabilities
Accounts payable and accrued liabilities	$	341	$	—			$	341	$	—			$	341
Fiduciary liabilities		680		—				680		—				680
Current portion of long term debt		29		—				29		(29	)	(d)		—
Other current liabilities		199		—				199		—				199

Total Current Liabilities		1,249		—				1,249		(29	)			1,220
Deferred tax liabilities		3		—				3		—				3
TRA liability		—		581		(c)		581		—				581
Long term debt		3,398		—				3,398		(670	)	(d)		2,728
Other liabilities		214		—				214		—				214

Total Liabilities	$	4,864	$	581			$	5,445	$	(699	)		$	4,746

Equity
Members’ equity	$	815	$	(815	)	(b)	$	—	$	—			$	—
Accumulated other comprehensive income		3		—				3		—				3
Noncontrolling interest		—		326		(b)		326		186		(d)(e)		512
Class A common stock, $0.01 par value per share		—		1		(b)		1		—				1
Class B common stock, $0.01 par value per share		—		—				—		—				—
Additional paid-in capital		—		50		(a)(b)(c)		50		505		(d)(e)		555

Total Equity	$	818	$	(438	)		$	380	$	691			$	1,071

Total Liabilities and Equity	$	5,682	$	143			$	5,825	$	(8	)		$	5,817

See accompanying notes to unaudited pro forma consolidated balance sheet.

UNAUDITED PRO FORMA CONDENSED, COMBINED AND CONSOLIDATED

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2018

(in millions, except unit and share amounts)


	Alight OpCo Year Ended December 31, 2018			Reorganization Transactions Adjustments				As Adjusted Before Offering Transactions			Offering Transactions Adjustments				Alight Inc. Pro Forma
Revenue	$	2,378		$	—			$	2,378		$	—			$	2,378
Cost of services		1,527			—				1,527			—				1,527

Gross Profit		851			—				851			—				851
Operating Expenses
Selling, general and administrative		452			—				452			6		(n)		458
Depreciation and intangible amortization		195			—				195			—				195

Total operating expenses		647			—				647			6				653

Operating Income (Loss)		204			—				204			(6	)			198
Interest expense, net and other		208			—				208			(40	)	(m)		168

(Loss) Income Before Income Taxes		(4	)		—				(4	)		34				30
Income taxes		17			(1	)	(k)		16			6		(k)		22

Net (Loss) Income		(21	)		1				(20	)		28				8
Net (Loss) Income attributable to noncontrolling interests		—			(8	)	(l)		(8	)		11		(l)		3

Net (Loss) Income Attributable to Alight Inc.	$	(21	)	$	9			$	(12	)	$	17			$	5

Net Loss Per Unit:
Basic	$	(168.52	)
Diluted	$	(168.52	)
Pro Forma Earnings Per Share (o):
Basic															$	0.04
Diluted															$	0.04
Pro Forma Number of Shares Used in Computing Earnings Per Share (o):
Basic																134,962,387
Diluted																204,546,274

See accompanying notes to unaudited pro forma condensed, combined and consolidated statement of operations.

UNAUDITED PRO FORMA CONDENSED, COMBINED AND CONSOLIDATED

STATEMENT OF OPERATIONS

For the Year Ended December 31, 2017

(in millions)


	Alight OpCo Four months Ended April 30, 2017 (Predecessor)		Alight OpCo Eight months Ended December 31, 2017 (Successor)		Blackstone Transaction Purchase Accounting Adjustments					As Adjusted Before Reorganization and Offering Transactions		Reorganization Transactions Adjustments					As Adjusted Before Offering Transactions		Offering Transactions Adjustments					Alight Inc. Pro Forma
Revenue	$	713	$	1,588	$	—				$	2,301	$	—				$	2,301	$	—				$	2,301
Cost of services		517		981		(11	)	(h	)		1,487		—					1,487		—					1,487

Gross Profit		196		607		11					814		—					814		—					814
Operating Expenses
Selling, general and administrative		130		325		(36	)	(f	)		419		—					419		6		(n	)		425
Depreciation and intangible amortization		39		119		23		(g	)(i)		181		—					181		—					181

Total operating expenses		169		444		(13	)				600		—					600		6					606

Operating Income		27		163		24					214		—					214		(6	)				208
Interest expense, net and other		—		115		49		(i	)		164		—					164		(32	)	(m	)		132

Income (Loss) Before Income Taxes		27		48		(25	)				50		—					50		26					76
Income taxes		10		24		(10	)	(j	)		24		8		(k	)		32		5		(k	)		37

Net Income (Loss)		17		24		(15	)				26		(8	)				18		21					39
Net income (loss) attributable to noncontrolling interests		—		—		—					—		7		(l	)		7		6		(l	)		13

Net Income (Loss) Attributable to Alight Inc.	$	17	$	24	$	(15	)			$	26	$	(15	)			$	11	$	15				$	26

See accompanying notes to unaudited pro forma condensed, combined and consolidated statement of operations.

Notes to Unaudited Pro Forma Consolidated Balance Sheet

(a)

Following the Reorganization Transactions, we will be subject to U.S. federal income taxes, in addition to state, local and foreign taxes. As a result, the pro forma balance sheet reflects an adjustment to our taxes assuming the federal rates currently in effect and the highest statutory rates apportioned to each state, local and foreign jurisdiction.

We have recorded a deferred tax asset of $143 million. The deferred tax asset includes (i) $75 million related to Alight Inc.’s investment in Alight OpCo, (ii) $23 million related to tax loss carryforwards and credits from the merged Blocker Companies, and (iii) $45 million related to tax benefits from future deductions attributable to payments under the tax receivable agreement as described further in note (c). To the extent we determine it is more likely-than-not that we will not realize the full benefit represented by the deferred tax asset, we will record an appropriate valuation allowance based on an analysis of the objective or subjective negative evidence.

(b)

Alight OpCo has been, and will continue to be, treated as a partnership for U.S. federal and state income tax purposes. As such, Alight OpCo’s profits and losses will flow through to its partners, including Alight, and are generally not subject to significant entity level taxes at the Alight OpCo level. As described in “Organizational Structure”, upon completion of the Reorganization Transactions, Alight Inc. will become the sole managing member of Alight OpCo. As a result of the Reorganization Transactions, Alight will initially own approximately 60% of the economic interest of Alight OpCo, but will have 100% of the voting power and will control the management of Alight OpCo. Immediately following the completion of the Reorganization Transactions, the ownership percentage held by the non-controlling interest will be 40%.

Represents an adjustment to equity reflecting (i) par value for common stock, (ii) a decrease in $326 million of members’ equity to allocate a portion of Alight OpCo’s equity to the non-controlling interests, and (iii) reclassification of members’ equity of $488 million to additional paid-in capital.

(c)

•

we will record a $581 million liability based on the Company’s estimate of the aggregate amount that it will pay to the pre-IPO owners under the tax receivable agreement as a result of the Offering Transactions;

•

as mentioned in note (a) above, we will record an increase of $45 million in deferred tax assets related to tax benefits from future deductions attributable to payments under the tax receivable agreement as a result of the Offering Transactions; and

•

we will record a decrease to additional paid-in capital of $536 million, which is equal to the difference between the increase in deferred tax assets and the increase in liabilities due to existing owners under the tax receivable agreement as a result of the Offering Transactions.

Due to the uncertainty as to the amount and timing of future exchanges of the LLC Units by the Pre-IPO Unitholders and as to the price per share of our Class A common stock at the time of any such exchanges, the unaudited pro forma condensed, combined and consolidated financial information does not assume that exchanges of LLC Units have occurred. Therefore, no increases in tax basis in Alight Inc.’s assets or other tax benefits that may be realized as a result of any such future exchanges have been reflected in the unaudited pro forma condensed, combined and consolidated financial information. However, if all of the Pre-IPO Unitholders were to exchange their LLC Units immediately following the completion of this offering, we would recognize an incremental deferred tax asset of approximately $443 million, a deferred tax liability of $75 million and a non-current liability of approximately $705 million based on the Company’s estimate of the aggregate amount that it will pay under the tax receivable agreement as a result of such future exchanges, assuming: (i) a price of $23.50 per share (the midpoint of the public offering price range set forth on the cover page of this prospectus); (ii) a constant corporate tax rate of 26%; (iii) we will have sufficient taxable income to fully utilize the tax benefits; and (iv) no material changes in tax law. Assuming no change in the other assumptions, a $1.00 increase (decrease) in the assumed price per share would increase (decrease) the incremental deferred tax asset and non-current liability that we would recognize if all of the Pre-IPO Unitholders were each to exchange all of their LLC Units immediately following the completion of this offering by approximately $22 million and $19 million, respectively. Assuming no change in the other assumptions, if all of the Pre-IPO Unitholders were each to exchange only 50% (rather than all) of their LLC units immediately following the completion of this offering we would recognize only 50% of the incremental deferred tax asset and non-current liability that we would recognize if all of the Pre-IPO Unitholders were each to exchange all of their LLC Units. These amounts are estimates and have been prepared for informational purposes only. The actual amount of deferred tax assets and related liabilities that we will recognize as a result of any such future exchanges will differ based on, among other things: (i) the amount and timing of future exchanges of LLC Units by LLC Unitholders, and the extent to which such exchanges are taxable; (ii) the price per share of our Class A common stock at the time of the exchanges; (iii) the amount and timing of future income against which to offset the tax benefits; and (iv) the tax rates then in effect.

(d)

We estimate that the proceeds to Alight from this offering will be approximately $699 million (or $807 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock), based on an assumed initial public offering price of $23.50 per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, after deducting assumed underwriting discounts and commissions and estimated offering expenses. We intend to cause Alight OpCo to use these proceeds to repay certain of our existing indebtedness, as will be determined prior to this offering, and for general corporate purposes. See “Use of Proceeds.”

(e)

We are deferring the direct costs associated with this offering. These costs primarily represent legal, accounting and other direct costs and are recorded in other assets in our consolidated balance sheet. Upon completion of this offering, these deferred costs will be charged against the proceeds from this offering as a reduction of additional paid-in capital.

Notes to Unaudited Pro Forma Condensed, Combined and Consolidated Statement of Operations

Adjustments related to the Blackstone Transactions

(f)	Reflects an adjustment of $36 million to reverse the non-recurring transaction related expenses associated with the Blackstone Transactions.

(g)	Reflects incremental amortization expense of $30 million for the year ended December 31, 2017 on finite-lived intangible assets established in connection with the Separation. Incremental amortization expense has been calculated as follows:


							Amortization Expense
Intangible assets with finite lives:	Fair Value		Estimated Life (Years)		Amortization Method		Year Ended December 31, 2017
($ in millions)
Customer related and contract based intangibles	$	1,870		15		Straight line	$	125
Technology related intangibles		280		6		Straight line		47

Subtotal		2,150						172

Less: Amortization expenses included in Alight OpCo’s historical consolidated financial statements								(142	)

Incremental amortization expenses							$	30

(h)	Reflects a reduction in depreciation expense of $18 million for the year ended December 31, 2017 related to the fair market value decrease and change in useful lives of fixed assets established in connection with the Separation.


							Depreciation Expense
($ in millions)	Fair Value		Estimated Life (Years)		Depreciation Method		Year Ended December 31, 2017
Capitalized software	$	9		5		Straight line	$	2
Leasehold improvements		38		5		Straight line		7
Computer equipment		12		4		Straight line		3
Furniture, fixtures and equipment		15		4		Straight line		4
Construction in progress		27		—				—

Subtotal	$	101					$	16

Less: Depreciation expenses included in Alight OpCo’s historical consolidated financial statements								(34	)

Reduction of depreciation expenses							$	(18	)

(i)

Reflects four months of incremental interest expense and incremental amortization of deferred financing costs associated with the $2,670 million in senior secured term loans, the $500 million of 6.75% senior notes and the commitment fee on our undrawn senior secured revolving credit facility that were entered into on May 1, 2017, as it is assumed these instruments would have been entered into at the beginning of the year as a means of financing the Separation. Incremental interest expense for the $2,670 million senior secured term loans is calculated using a variable interest rate of 3.86%, which represents 0.86%, the average LIBOR rate taken over January 1, 2017 to April 30, 2017, plus a 3.0% spread. If the interest rates differed

from the rates used in the pro forma interest expense by 0.125% for the fiscal year ended December 31, 2017, interest expense would have increased or decreased by approximately $1 million.


($ in millions)	Principal		Interest Rate			Incremental Interest Expense		Incremental Deferred Financing Amortization		Total Incremental Expense
Senior Secured Term Loan	$	2,670		3.86	%	$	34	$	3	$	37
Senior Notes		500		6.75	%		11		1		12
Revolving Credit Facilities		—					—		—		—

Subtotal	$	3,170					45		4		49

0.5% Commitment Fee on Revolving Credit Facilities							—		—		—

Incremental interest expenses and deferred financing amortization from new borrowings						$	45	$	4	$	49

(j)

Reflects an adjustment to income tax expense assuming the Company was a pass-through entity for income tax purposes starting January 1, 2017. The income tax expense included in the unaudited combined pro forma financial statements relates to (i) U.S. federal and state income tax expense arising from the legal entity conversion of a subsidiary and (ii) foreign income taxes payable in jurisdictions where the Company had operations that generated operating income. Additionally, the tax expense (benefit) of the pro forma adjustments described in notes (f) through (i) to the unaudited combined pro forma statement of income above has been assumed to be $0 based on the pass-through entity structure resulting in an assumed statutory rate of 0%.

Adjustments related to the Reorganization and Offering Transactions

(k)

Following the Reorganization Transactions, Alight Inc. will be subject to U.S. federal income taxes, in addition to state, local and foreign taxes. As a result, the pro forma statement of operations reflects an adjustment to our provision for corporate income taxes to reflect an effective tax rate of 26%, which includes a provision for U.S. federal income taxes and assumes the highest statutory rates apportioned to each state, local and foreign jurisdiction. Alight OpCo has been, and will continue to be, treated as a partnership for U.S. federal and state income tax purposes. As such, Alight OpCo’s profits and losses will flow through to its partners, including Alight, and are generally not subject to tax at the Alight OpCo level.

The pro forma adjustment for income tax expense represents tax expense (benefit) on income (loss) that will be taxable in jurisdictions after our corporate reorganization that previously had not been taxable. The adjustment is calculated as pro forma income (loss) before income taxes multiplied by the ownership percentage of the controlling interest and multiplied by the pro forma effective tax rate of 26%.


	Reorganization Transactions
	December 31, 2018			December 31, 2017
Pro forma (loss) income before taxes	$	(4	)	$	50
Ownership percentage of the controlling interest		60	%		60	%

Pro forma (loss) income attributable to the controlling interest	$	(2	)	$	30
Pro forma effective tax rate		26	%		26	%

Reorganization Transactions adjustment	$	(1	)	$	8


	Offering Transactions
	December 31, 2018			December 31, 2017
Pro forma income before taxes	$	30		$	76
Ownership percentage of the controlling interest		66	%		66	%

Pro forma income attributable to the controlling interest	$	20		$	50
Pro forma effective tax rate		26	%		26	%

Pro forma income tax adjustment	$	5		$	13
Less: Reorganization Transaction adjustment	$	(1	)	$	8

Offering Transactions adjustment (1)	$	6		$	5

(1)

This adjustment is added to the historical income tax expense for the year ended December 31, 2018 of $17 million and to the pro forma income tax expense after the Blackstone Transaction purchase accounting adjustments for the year ended December 31, 2017 of $24 million, which would still be incurred after our reorganization to derive pro forma income tax expense.

(l)

As described in “Organizational Structure,” upon completion of the Reorganization Transactions, Alight will become the sole managing member of Alight OpCo. As a result of this offering, Alight will initially own approximately 66% of the economic interest in Alight OpCo, but will have 100% of the voting power and control the management of Alight OpCo. Immediately following the completion of this offering, the ownership percentage held by the non-controlling interest will be 34%. Net income attributable to the non-controlling interest will represent 34% of loss before income taxes. These amounts have been determined based on an assumption that the underwriters’ option to purchase additional shares is not exercised. If the underwriters’ option to purchase additional shares is exercised in full, the ownership percentage held by the non-controlling interest would decrease to 33%.

(m)	Reflects reduction in interest expense of $40 million and $32 million for the years ended December 31, 2018 and 2017, respectively, as a result of the repayment of a portion of the senior secured credit facilities, as described in “Use of Proceeds,” as if such repayment occurred on January 1, 2017.

(n)

Reflects the issuance of options to purchase up to 2,200,000 shares of Class A common stock to be granted to non-executive officer employees of Alight Inc. in connection with the offering, under the Omnibus Incentive Plan. Such options are expected to vest in three equal annual installments over three years. Equity compensation up to $6 million per year would be recognized as recurring compensation expense over the three year vesting term.

(o)

The basic and diluted pro forma net income per share of Class A common stock represents net income attributable to Alight divided by the combination of the shares owned by existing owners and the Class A common shares sold in this offering. The noncontrolling interest owners own shares of Class B common stock. These shares of Class B common stock are not considered participating securities because they have no right to receive dividends or a distribution on liquidation or winding up of the Company, they do not share in the earnings of the Company, and no earnings are allocable to such class. Accordingly, basic and diluted net income per share of Class B common stock have not been presented. The noncontrolling interest owners have exchange rights which enable the noncontrolling interest owners to redeem LLC Units for shares of Class A common stock on a one for one basis. The noncontrolling interest owners exchange rights cause the LLC Units to be considered potentially dilutive shares for purposes of dilutive earnings per share calculations. The table below presents the computation of pro forma basic and dilutive earnings per share for Alight.


(in millions, except share-related amounts)	Year Ended December 31, 2018
Basic net income per share:
Numerator
Net income	$	8
Less: Net income attributable to non-controlling interests	$	3

Net income attributable to Class A common stockholders - basic	$	5

Denominator
Shares of Class A common stock held by Pre-IPO Shareholders		102,962,387
Incremental shares of Class A common stock sold in this offering		32,000,000

Weighted-average shares of Class A common stock outstanding - basic		134,962,387

Basic net income per share:	$	0.04

Diluted net income per share:
Numerator
Net income attributable to Class A common stockholders	$	5
Reallocation of net income assuming conversion of LLC Units	$	3
Incremental tax effect of net income assuming conversion of LLC Units	$	(1	)

Net income attributable to Class A common stockholders - diluted	$	7

Denominator
Weighted-average shares of Class A common stock outstanding - basic		134,962,387
Weighted-average effect of dilutive securities:
Assumed conversion of LLC Units to shares of Class A common stock (1)		69,583,887
Options issued at IPO (2)		—

Weighted-average shares of Class A common stock outstanding - diluted		204,546,274

Diluted net income per share:	$	0.04

(1)

The noncontrolling interest owners have exchange rights which enable the noncontrolling interest owners to exchange LLC Units for shares of Class A common stock on a one for one basis. During the year ended December 31, 2018, the LLC Units are dilutive and consequently the effect of their exchange into shares of Class A common stock has been included in the calculation of diluted net income per share attributable to Alight Inc. common shareholders under the if-converted method. In computing this adjustment, the Company assumes that all LLC Units are exchanged for Class A common stock.

(2)

We expect to grant options to purchase up to 2,200,000 shares of Class A common stock to our non-executive officer employees in connection with this offering, at an exercise price equal to the initial public offering price, under the Omnibus Incentive Plan. Under the treasury stock method, assuming the stock options were granted at the beginning of the period at an exercise price equal to $23.50 per share (the assumed initial public offering price), the effect of these stock options is not dilutive and therefore has been excluded from the computations of pro forma diluted net income per share.

SELECTED HISTORICAL CONDENSED AND CONSOLIDATED FINANCIAL DATA

The following tables present the selected historical condensed and consolidated financial data for Alight OpCo and its subsidiaries for the periods and the dates indicated. Periods prior to May 1, 2017 reflect our financial position, results of operations and changes in financial position prior to the Separation and periods on or after May 1, 2017 reflect our financial position, results of operations and changes in financial position after the Separation. Accordingly, the selected historical condensed and consolidated financial data presented below is presented for periods prior to the Separation labeled “Predecessor” and periods subsequent to the Separation labeled “Successor”. The selected condensed and consolidated statements of operations data for the year ended December 31, 2018 (Successor), the eight months ended December 31, 2017 (Successor), the four months ended April 30, 2017 (Predecessor) and the year ended December 31, 2016 (Predecessor), and the selected condensed and consolidated balance sheet data as of December 31, 2018 and December 31, 2017 are derived from the audited consolidated financial statements of Alight OpCo, included elsewhere in this prospectus. The selected historical balance sheet data as of December 31, 2016 is derived from the audited consolidated financial statements of Alight OpCo not included in this prospectus. The selected historical statements of operations data for the years ended December 31, 2015 and 2014 and the selected balance sheet data as of December 31, 2015 and 2014 are derived from the unaudited carve-out financial statements of Alight OpCo not included in this prospectus.

Historical results are not necessarily indicative of the results expected for any future period. You should read the selected historical condensed and consolidated financial data below, together with the consolidated financial statements and related notes thereto appearing elsewhere in this prospectus, as well as “Summary—Summary Historical and Pro Forma Financial and Other Data,” “Organizational Structure,” “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Description of Certain Indebtedness” and the other financial information included elsewhere in this prospectus.


	Successor						Predecessor
(in millions, except per unit data)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four Months Ended April 30, 2017			Year Ended December 31,
(in millions, except per unit data)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four Months Ended April 30, 2017			2016			2015 (Unaudited)			2014 (Unaudited)
Operations Data:
Revenue	$	2,378		$	1,588		$	713		$	2,260		$	2,242		$	2,191
Total expenses		2,174			1,425			686			2,057			2,058			2,064

Operating Income		204			163			27			203			184			127
Interest expense (income), net and other		208			115			—			(1	)		—			(2	)

(Loss) Income Before Income Taxes		(4	)		48			27			204			184			129
Income taxes		17			24			10			78			73			53

Net (Loss) Income	$	(21	)	$	24		$	17		$	126		$	111		$	76

Net (Loss) Income per Class A unit: basic	$	(168.52	)	$	193.11			N/A			N/A			N/A			N/A
Net (Loss) Income per Class A unit: diluted	$	(168.52	)	$	192.86			N/A			N/A			N/A			N/A

Cash Flow Data
Cash provided by operating activities	$	196		$	224		$	79		$	388		$	357		$	340
Cash used for investing activities		(130	)		(4,290	)		(13	)		(75	)		(97	)		(89	)
Cash (used for) provided by financing activities		(36	)		4,263			(69	)		(311	)		(256	)		(250	)


	Successor				Predecessor
	As of December 31, 2018		As of December 31, 2017		As of December 31, 2016 (Unaudited)		As of December 31, 2015 (Unaudited)		As of December 31, 2014 (Unaudited)
Balance Sheet Data:
Total assets	$	5,682	$	6,257	$	3,458	$	3,576	$	3,902
Long-term debt (including current portion)		3,427		3,439		—		—		—
Capital lease obligations		51		25		—		—		—

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the “Selected Historical Condensed and Consolidated Financial Data,” “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information” and the financial statements and related notes thereto included elsewhere in this prospectus. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause actual results to differ materially from management’s expectations. Factors that could cause such differences are discussed in “Forward-Looking Statements” and “Risk Factors.”

Overview

We are a leading provider of integrated, cloud-based human capital solutions that empower our clients and their employees to manage their health, wealth and HR needs. We offer our clients innovative, consumer-focused solutions that engage and enable their employees to make better choices while controlling cost, managing risk, and driving better business results. Our technology-based solutions across health, wealth and Human Capital Management (“HCM”) address both the simple and complex needs of our clients. Powered by our proprietary, cloud-based core benefits platform, our health and wealth solutions serve both large enterprises and small and mid-market clients. We also provide a proprietary, front-end consumer portal called UPoint that serves as the critical integration point for users, clients, and partners, enabling a seamless consumer experience. We provide cloud advisory and deployment, application management services, and HR and payroll services with our HCM solutions for cloud platforms, such as Workday, Cornerstone OnDemand, Oracle and SAP SuccessFactors.

We provide solutions to nearly 3,000 employers, including 70 of the Fortune 100 and 243 of the Fortune 500, and serve more than 23 million of their current and former employees and their over 11 million family members. We augment our solution set by bringing best-in-class consumer focused solutions from our network of partners to help broaden an employer’s offerings and solve the complex health, wealth and career needs of employees in an integrated manner.

Our clients’ demand for our services ultimately drives our revenues. We generate primarily all of our revenue from fees for services provided under outsourcing contracts across all Solutions, which is primarily based on a contracted fee charged per benefit plan participant per period (e.g., monthly or annually, as applicable). Our outsourcing contracts typically have three to five-year terms. Revenues from time-and-materials or cost-plus arrangements are recognized as services are performed. Revenues from fixed-fee contracts are recognized as services are provided using a proportional-performance model or at the completion of a project based on facts and circumstances. Payment terms are consistent with industry practice.

Cost of services are the direct costs we incur in delivering our services to customer. Substantially all cost of services relates to compensation-related and vendor costs directly attributable to client-related services, costs related to application development and client-related infrastructure, costs related to our hardware and software applications, and depreciation and amortization related to hardware, software and application development.

Our Separation from Aon

Alight OpCo is a holding company, formed in March 2017, whose primary asset is its 100% ownership of Tempo Acquisition, LLC.

Tempo Acquisition, LLC was formed under the laws of the State of Delaware on February 6, 2017. On February 9, 2017, Tempo Acquisition, LLC entered into a purchase agreement with Aon whereby Tempo Acquisition, LLC agreed to purchase all of the outstanding equity interest in the technology-enabled HR solutions of Aon, plus certain related assets, for a purchase price of $4.3 billion in cash payable at closing, subject to customary adjustments set forth in the purchase agreement plus the assumption of certain liabilities. The Separation was completed on May 1, 2017.

Reorganization Transactions

Alight Inc. was incorporated in September 2018 and, pursuant to a reorganization into a holding corporation structure, will become a holding corporation the principal asset of which will be a controlling interest in Alight OpCo. As the sole managing member of Alight OpCo, Alight Inc. will operate and control the business and affairs of Alight OpCo and its subsidiaries. Alight Inc. will consolidate Alight OpCo in its consolidated financial statements and will report a non-controlling interest related to the LLC Units held by the Pre-IPO Unitholders in our consolidated financial statements.

Prior to the consummation of this offering, we will execute several reorganization transactions described under “Organizational Structure—Reclassification and Amendment and Restatement of Limited Liability Company Agreement of Alight OpCo,” as a result of which the limited liability company agreement of Alight OpCo will be amended and restated to, among other things, reclassify its outstanding limited liability company units into a single new class of units that we refer to as “LLC Units.” Pursuant to the amended and restated limited liability company agreement of Alight OpCo, Alight Inc. will be the sole managing member of Alight OpCo.

We and the Pre-IPO Unitholders will also enter into an exchange agreement under which they (or certain permitted transferees) will have the right (subject to the terms of the exchange agreement) to exchange their LLC Units for shares of our Class A common stock on a one-for-one basis, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. See “Organizational Structure” and “Certain Relationships and Related Person Transactions.”

Following this offering, the Pre-IPO Unitholders that held voting units before the Offering Transactions and that continue to hold LLC Units will hold all of the issued and outstanding shares of our Class B common stock. The shares of Class B common stock will have no economic rights but will entitle each holder, without regard to the number of shares of Class B common stock held by such holder, to a number of votes that is equal to the aggregate number of LLC Units of Alight OpCo held by such holder on all matters on which stockholders of Alight Inc. are entitled to vote generally. Holders of shares of our Class B common stock will vote together with holders of our Class A common stock as a single class on all matters on which stockholders are entitled to vote generally, except as otherwise required by law.

Our Segments

We report our results of operations in two segments: Solutions and Hosted Business. Solutions and Hosted Business accounted for approximately 91% and 9% of consolidated revenue for the year ended December 31, 2018, respectively. We evaluate segment performance based upon segment profit, which is Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that we do not consider in the evaluation of ongoing operational performance attributable to that segment.

Solutions

We use proprietary, cloud-based technology and strong channel partnerships to deliver the following solutions:

•

Health Solutions: Our Health Solutions provide value to clients by greatly reducing administrative burden while enabling flexibility and choice in plan design, insurance carriers and partners. Further, clients can expect significant value via automation, efficiency and scale, and a capability set that can accommodate and enable compliance with rapidly evolving regulatory requirements. Employees benefit from a consumer-centric, digital and seamless experience that helps them navigate an increasingly complex healthcare environment, with additional support from trained professionals who offer personalized, high-touch care. Our solutions help employees more cost-effectively manage their

health, thereby enabling employees and employers to better manage their healthcare spend and make better decisions regarding the quality, effectiveness and cost of healthcare. Our Health Solutions generated 54% and 55% of our Solutions revenue during the years ended December 31, 2018 and 2017, respectively.

•

Wealth Solutions: Our Wealth Solutions help clients navigate the growing complexity and risk of delivering defined contribution and defined benefit plans, while empowering employees and retirees to make smart decisions to plan for retirement and grow their wealth. Our solutions are agnostic to individual asset managers, which enables us to focus on the needs of employees and their families. Our Wealth Solutions generated 26% and 28% of our Solutions revenue during the years ended December 31, 2018 and 2017, respectively.

•

HCM Solutions: Our HCM Solutions help clients take advantage of the growing trend of cloud-based solutions for corporate applications. We leverage data across all interactions and activities to improve the consumer experience, reduce operational costs and better inform management processes and decision-making. In addition, employees benefit from an integrated portal and user experience, coupled with a full-service customer care center, helping them manage the full life cycle of their health, wealth and careers. Our HCM Solutions generated 19% and 15% of our Solutions revenue during the years ended December 31, 2018 and 2017, respectively.

Hosted Business

Our Hosted Business delivers core HR and payroll services on hosted Human Capital Management platforms, including SAP and Oracle. These services include ongoing application hosting and management of on-premise HCM software. Our Hosted client contracts typically have five to seven year terms that include a recurring revenue model primarily based on a contracted fee charged per participant per period (e.g., monthly or annually, as applicable).

Business Trends and Conditions

There are a number of key factors and trends affecting our results of operations. A summary of key factors impacting our revenue include:

•

employers continuing to shift responsibility for health and wealth decisions to their employees, including moving away from defined benefit plans in favor of defined contribution plans and providing added decision support tools and resources, such as participant advisory solutions;

•

the continued growth rate in an under penetrated middle market, leading to a greater opportunity to serve companies in this market;

•

the macro trend of organizations transitioning their HR and broader technology environments to the cloud; and

•

the opportunity for acquisitions and strategic partnerships to continue to augment our capabilities across the ecosystem.

Other factors that may affect our cost base include an increasing inflationary environment and additional competition for talent across our domains coupled with the impact of greater automation in the delivery of our services.

Factors Affecting the Comparability of Our Results of Operations

As a result of a number of factors, our historical results of operations are not comparable from period to period and may not be comparable to our financial results of operations in future periods. Set forth below is a brief discussion of the key factors impacting the comparability of our results of operations.

Basis of Presentation

Prior to the Separation, our business operated as a business unit of Aon. The period ended April 30, 2017 is referred to as the Predecessor period and all periods after such date are referred to as the Successor period. Our financial statements for the Predecessor period were “carved-out” from Aon’s consolidated financial statements. Our financial statements for the Successor period are presented on a stand-alone basis. Accordingly, the financial statements for the Predecessor period may not be comparable to those of the Successor period. In addition, we identify in the discussion where applicable the impact of the purchase accounting related to the Separation and the financing of the Separation. Significant differences in the Predecessor and Successor results of operations have been highlighted where appropriate.

Impact of the Separation from Aon

Prior to the Separation, costs associated with functions, services and facilities used by our business and performed or provided by Aon, including finance, legal, insurance, information technology, compliance and human resource activities, were charged to us by Aon and are reflected as allocated expenses in our results of operations. Subsequent to the Separation, certain operating expenses incurred as a stand-alone company may be higher than the allocated expenses.

In connection with the Separation, we agreed to enter into certain related transaction agreements (“TSAs”) with Aon at closing, including two commercial agreements, a transition services agreement, certain intellectual property license agreements, sub-leases and other customary agreements. Aon will continue to be a significant client of ours, and we have agreed to use Aon for its brokerage and other services. The monthly expenses under the TSAs (which totaled approximately $600,000 in December 2018) have decreased by over 90% since May 2017, the first month following the Separation, although some TSAs will continue through 2019. The remaining TSAs relate primarily to certain financial systems and information technology and real estate matters, that we do not believe are material to our business.

The Separation was accounted for as a business combination under ASC 805, Business Combinations. As such, the assets acquired and liabilities assumed were measured and reported in our financial statements at fair value. We recorded (i) customer related and contract based intangible assets of $1,870 million and (ii) technology related intangible assets of $280 million in connection with the Separation. As a result of the acquired customer related and contract based intangible assets and technology related intangible assets, as well as our increased capital expenditures, actual depreciation and intangible amortization expense increased significantly in the Successor periods.

In connection with the Separation, we entered into certain financing arrangements under the senior secured credit facilities and the senior notes. As a result of these incremental borrowings, actual interest expense increased significantly in the Successor periods.

Impact of the Reorganization Transactions

Alight Inc. is a corporation for U.S. federal and state income tax purposes. Our accounting predecessor, Alight OpCo, was and is treated as a flow-through entity for U.S. federal income tax purposes, and as such, has generally not been subject to U.S. federal income tax at the entity level. Accordingly, unless otherwise specified, the historical results of operations and other financial information set forth in this prospectus do not include any provision for U.S. federal income tax. Following this offering, Alight Inc. will pay U.S. federal and state income taxes as a corporation on its share of our taxable income.

In addition, in connection with the Reorganization Transactions and this offering we will enter into the Tax Receivable Agreement as described under “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Impact of the Exit from our Hosted Business

In recent years, employers have been shifting from hosted to cloud platforms to reduce operating costs and streamline HR processes. In 2014, we stopped actively pursuing new clients in our Hosted Business and instead chose to focus our strategic efforts and resources on enhancing our suite of HCM solutions to help clients realize the benefits of cloud-based solutions.

While we have successfully migrated a significant number of our Hosted clients to cloud-based solutions, we continue to support a number of active Hosted clients under agreements that are scheduled to expire by 2023. As of December 31, 2018, we supported 12 active Hosted clients. Five of these clients have agreements scheduled to expire by the end of 2019. The remaining agreements are scheduled to expire by 2023. Many of these Hosted clients have contractual rights for limited extensions. We expect several of these clients to transition to a cloud-based platform supported by our HCM Solutions business prior to their contract expiration or extension date.

Components of Our Results of Operations

Revenue

Our clients’ demand for our services ultimately drives our revenues. We generate primarily all of our revenue, which is highly recurring, from fees on services provided from contracts across all solutions, which is primarily based on a contracted fee charged per benefit plan participant per period (e.g., monthly or annually, as applicable). Our outsourcing contracts typically have three to five-year terms. Substantially all of the Company’s revenue is recognized over time when control of the promised services is transferred and the customers simultaneously receives and consumes the benefits of our services. Payment terms are consistent with industry practice. Two of the measures that we use to manage our business, specifically our Solutions segment, are annual revenue retention rates and revenue growth rates. We calculate annual revenue retention by identifying the clients from whom we generate revenue in the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year. We calculate growth rates for each of our solutions in relation to recurring revenues and revenues from project work. One of the components of our growth in recurring revenues is the increase in net commercial activity which reflects items such as client wins and losses (“Net Commercial Activity”). We define client wins as sales to new clients and sales of new solutions to existing clients. We define client losses as instances where clients do not renew or terminate their arrangements in relation to individual solutions or all of the solutions that we provide.

Costs and Operating Expenses

Cost of services

Cost of services are the direct costs we incur in delivering our services to customers. Substantially all cost of services relate to compensation-related and vendor costs directly attributable to client-related services, costs related to application development and client-related infrastructure, costs related to our hardware and software applications, and depreciation and amortization related to hardware, software and application development.

Selling, general and administrative

Selling, general and administrative expenses include compensation-related costs for administrative and management employees, system and facilities expenses, and costs for external professional and consulting services.

Depreciation and intangible amortization

Depreciation and intangible amortization expenses consist of charges relating to the depreciation of the property and equipment used in our business and the amortization of acquired customer related and contract based intangible assets and technology related intangible assets, particularly those resulting from the Separation. Depreciation and intangible amortization may increase or decrease in absolute dollars in future periods depending on the future level of capital investments in hardware and other equipment as well as amortization expense associated with future acquisitions.

Interest expense, net

Interest expense, net includes interest expense related to our outstanding debt obligations.

Other expense (income), net

Other expense (income), net includes non-operating expenses and income including realized currency translation.

Income Taxes

Alight OpCo is currently treated as a pass-through entity for U.S. federal income tax purposes as well as in most states. As a result, entity level taxes at Alight OpCo are not significant. Provision for income taxes consists of tax expense primarily related to certain local taxes as well as foreign taxes. See Note 2 “Accounting Policies and Practices” within the consolidated financial statements appearing elsewhere in this prospectus for additional information.

After consummation of this offering, except for the non-U.S. subsidiaries that file separate non-U.S. jurisdiction tax returns, we will become subject to U.S. federal income taxes with respect to our allocable share of any taxable income of Alight OpCo and we will be taxed at the prevailing corporate tax rates. We will be treated as a U.S. corporation for U.S. federal, state and local income tax purposes. Accordingly, a provision for income taxes will be recorded for the anticipated tax consequences of our reported results of operations for federal income taxes. In addition to tax expenses, we also will incur expenses related to our operations, as well as payments under the tax receivable agreement, which we expect to be significant. We intend to cause Alight OpCo to make distributions in an amount sufficient to allow us to pay our tax obligations and operating expenses, including distributions to fund any ordinary course payments due under the tax receivable agreement. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.” However, our ability to make such distributions may be limited due to, among other things, restrictive covenants in our senior secured credit facilities and senior notes. Alight Inc. is a holding company and its only material asset immediately after completion of this offering will be its interest in Alight OpCo, and it is accordingly dependent upon distributions from Alight OpCo to pay taxes, make payments under the tax receivable agreement and pay dividends. See “Risk Factors—Risks Related to Our Organizational Structure.”

Results of Operations

The following table sets forth our historical results of operations for the periods indicated below:


	Successor					Predecessor
(in millions)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017		Four Months Ended April 30, 2017		Year Ended December 31, 2016

Revenue	$	2,378		$	1,588	$	713	$	2,260
Cost of services		1,527			981		517		1,524

Gross Profit		851			607		196		736

Operating Expenses
Selling, general and administrative		452			325		130		396
Depreciation and intangible amortization		195			119		39		137

Total operating expenses		647			444		169		533
Operating Income		204			163		27		203
Interest expense, net		208			114		—		—
Other expense (income), net		—			1		—		(1	)

(Loss) Income Before Income Tax Expense		(4	)		48		27		204
Income tax expense		17			24		10		78

Net (Loss) Income	$	(21	)	$	24	$	17	$	126

Supplemental Pro Forma

To facilitate comparability, the following table below sets forth our unaudited pro forma condensed, combined and consolidated statements of operations for the year ended December 31, 2017. The pro forma financial information As Adjusted Before Reorganization and Offering Transactions gives pro forma effect to the Blackstone Transactions in accordance with Article 11 of Regulation S-X as if they had occurred on January 1, 2017 (“Pro Forma Basis”). The Pro Forma Basis includes adjustments for non-recurring transaction costs, amortization, depreciation, interest, and taxes. Please refer to “Unaudited Pro Forma Condensed, Combined and Consolidated Financial Information” including the accompanying notes for further details.


	Pro Forma
(in millions)	Year Ended December 31, 2017 (Unaudited)
Revenue	$	2,301
Cost of services		1,487

Gross Profit		814

Operating Expenses
Selling, general and administrative		419
Depreciation and intangible amortization		181

Total operating expenses		600
Operating Income		214
Interest expense, net		163
Other expense, net		1

Income Before Income Tax Expense		50
Income tax expense		24

Net Income	$	26

Consolidated Results of Operations for the Year Ended December 31, 2018 (Successor), the Eight Months Ended December 31, 2017 (Successor) and the Four Months Ended April 30, 2017 (Predecessor)

Revenue

Revenues were $2,378 million for the year ended December 31, 2018, $1,588 million for the eight months ended December 31, 2017 and $713 million for the four months ended April 30, 2017. Revenues were $2,378 million for the year ended December 31, 2018 as compared to $2,301 million for the year ended December 31, 2017 on a Pro Forma Basis. The increase of $77 million from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018 reflects growth of 6% in our Solutions segment offset by a decline of 17% in our Hosted segment. The main drivers of the overall increase were increases from $386 million to $417 million, or 8%, from project revenues, all of which related to Solutions, and from $1,895 million to $1,944 million, or 3%, from recurring revenues, of which a 5% increase related to Solutions was offset by a 2% decrease related to the Hosted Business, partially offset by a decrease from $20 million to $17 million from other revenues, all of which related to Solutions.

Cost of services

Cost of services were $1,527 million for the year ended December 31, 2018, $981 million for the eight months ended December 31, 2017 and $517 million for the four months ended April 30, 2017. Cost of services were $1,527 million for the year ended December 31, 2018 as compared to $1,487 million for the year ended December 31, 2017 on a Pro Forma Basis. Costs of services increased $40 million from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018 due to $18 million of data center stand-up expenses and additional costs associated with the growth in revenues being offset by $4 million of lower compensation expense mainly due to an overall net reduction in headcount in the Solutions business after including the impact of increases related to recent acquisitions and growth in the HCM business and lower costs in the Hosted business as clients transition to cloud-based services.

Selling, general and administrative

Selling, general and administrative expenses were $452 million for the year ended December 31, 2018, $325 million for the eight months ended December 31, 2017 and $130 million for the four months ended April 30, 2017. Selling, general and administrative expenses were $452 million for the year ended December 31, 2018 as compared to $419 million for the year ended December 31, 2017 on a Pro Forma Basis. The overall increase of $33 million from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018 was primarily driven by an additional $33 million of expenses related to the separation from Aon and an additional $25 million of expenses incurred in relation to a number of transformation initiatives undertaken in 2018 including the strategic transaction with Wipro and enhancements to our data center, partially offset by $21 million in trade name royalty expenses, which we no longer incurred following the Separation.

Depreciation and intangible amortization

Depreciation and intangible amortization expenses were $195 million for the year ended December 31, 2018, $119 million for the eight months ended December 31, 2017 and $39 million for the four months ended April 30, 2017. Depreciation and intangible amortization expenses were $195 million for the year ended December 31, 2018 as compared to $181 million for the year ended December 31, 2017 on a Pro Forma Basis. The increase of $14 million from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018 is driven by a $6 million increase in expense related to the finalization of the fair value of intangible assets acquired with the Separation, which occurred in the first quarter of 2018, and $8 million related to capital assets and intangible assets additions.

Interest expense, net

Interest expense, net was $208 million for the year ended December 31, 2018 and $114 million for the eight months ended December 31, 2017. No interest expense was incurred during the four months ended April 30, 2017. Interest expense, net was $208 million for the year ended December 31, 2018 as compared to $163 million for the year ended December 31, 2017 on a Pro Forma Basis. The interest expense increase of $45 million from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018 is primarily driven by $20 million of incremental interest and issuance cost amortization expenses associated with the $205 million incremental term loans that were entered into and $180 million of additional senior notes that were issued, both of which occurred in November 2017, coupled with an increase of $25 million due to higher LIBOR rates in 2018.

(Loss) Income before income taxes

(Loss) income before income taxes was a loss of $4 million for the year ended December 31, 2018, income of $48 million for the eight months ended December 31, 2017 and income of $27 million for the four months ended April 30, 2017. (Loss) income before income taxes was a loss of $4 million for the year ended December 31, 2018 as compared to income of $50 million for the year ended December 31, 2017 on a Pro Forma Basis. This is due to the increases in operating expenses and interest expenses from the year ended December 31, 2017 on a Pro Forma Basis to the year ended December 31, 2018, which more than offset the increase in revenues.

Income taxes

For the year ended December 31, 2018, we reported a loss before income tax expense. The effective tax rate for this period was (464.9)%, which was lower than the U.S. statutory corporate income tax rate of 21% due to the Company’s filing status as a partnership that reports no provision for federal income taxes and is liable for various foreign income taxes. See Note 8 “Income Taxes” within the consolidated financial statements appearing elsewhere in this prospectus for additional information.

Consolidated Results of Operations for the Eight Months Ended December 31, 2017 (Successor), the Four Months Ended April 30, 2017 (Predecessor) and the Year Ended December 31, 2016 (Predecessor)

Revenue

Revenues were $1,588 million for the eight months ended December 31, 2017 and $713 million for the four months ended April 30, 2017 and $2,260 million for the year ended December 31, 2016. Revenues were $2,301 million for the year ended December 31, 2017 on a Pro Forma Basis as compared to $2,260 for the year ended December 31, 2016. The increase of $41 million from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis reflected growth of 7% in our Solutions segment offset by a decline of 29% in our Hosted segment. The main drivers of the overall increase were increases from $362 million to $386 million, or 7%, from project revenues, all of which related to Solutions, from $0 million to $20 million from other revenues, all of which related to Solutions, partially offset by a decrease from $1,898 million to $1,895 million, or less than 1%, from recurring revenues, of which a 5% increase related to Solutions was offset by a 5% decrease related to the Hosted Business.

Cost of services

Cost of services were $981 million for the eight months ended December 31, 2017, $517 million for the four months ended April 30, 2017 and $1,524 million for the year ended December 31, 2016. Cost of services were $1,487 million for the year ended December 31, 2017 on a Pro Forma Basis as compared to $1,524 million for the year ended December 31, 2016. The decrease of $37 million from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis was primarily driven by lower depreciation expense of $20 million related to internally developed software, which has been reclassified as amortization for the

technology related intangible assets, based on the Separation date preliminary fair value and lower compensation related expenses due to an overall reduction in headcount.

Selling, general and administrative

Selling, general and administrative expenses were $325 million for the eight months ended December 31, 2017, $130 million for the four months ended April 30, 2017 and $396 million for the year ended December 31, 2016. Selling, general and administrative expenses were $419 million for the year ended December 31, 2017 on a Pro Forma Basis as compared to $396 million for the year ended December 31, 2016. The increase of $23 million from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis was primarily driven by $43 million of expenses which were directly attributable to the Separation and transformation initiatives, $22 million of higher incentive expenses as a result of new incentive programs being established following the Separation and $21 million of higher compensation related costs due to an expansion of the HCM business. The increase was partially offset by $47 million in trade name royalty expenses, which we no longer incurred following the Separation and a $10 million reduction related to stock-based compensation and long-term incentive programs as new programs were established following the Separation.

Depreciation and intangible amortization

Depreciation and intangible amortization expenses were $119 million for the eight months ended December 31, 2017, $39 million for the four months ended April 30, 2017 and $137 million for the year ended December 31, 2016. Depreciation and intangible amortization expenses were $181 million for the year ended December 31, 2017 on a Pro Forma Basis as compared to $137 million the year ended December 31, 2016. The increase of $44 million from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis was primarily driven by higher intangible amortization associated with the preliminary fair value of the identifiable intangible assets acquired with the Separation, including customer related and contract based intangible assets and technology related intangible assets.

Interest expense, net

Interest expense, net was $114 million for the eight months ended December 31, 2017 and no interest expense was incurred during the four months ended April 30, 2017 or for the year ended December 31, 2016. Interest expense, net was $163 million for the year ended December 31, 2017 on a Pro Forma Basis. The interest expense increase from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis is due to the new term loans that were entered into in May 2017 and the new senior notes that were issued in May 2017 as part of the financing for the Separation. Interest expense, net also includes the amortization of issuance costs associated with the new debt.

Income before income taxes

Income before income taxes was $48 million for the eight months ended December 31, 2017, $27 million for the four months ended April 30, 2017 and $204 million for the year ended December 31, 2016. Income before taxes was $50 million for the year ended December 31, 2017 on a Pro Forma Basis as compared to $204 million the year ended December 31, 2016. The decrease from the year ended December 31, 2016 to the year ended December 31, 2017 on a Pro Forma Basis was due to the increases in operating expenses and other expenses following the Separation discussed above.

Income taxes

For the eight months ended December 31, 2017, we reported income before income tax expense. The effective tax rate for this period was 49.9%, primarily driven by the change in status of one of our U.S. subsidiaries to a disregarded entity. See Note 8 “Income Taxes” within the consolidated financial statements appearing elsewhere in this prospectus for additional information.

Solutions Results


	Successor						Predecessor
($ in millions)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four Months Ended April 30, 2017			Year Ended December 31, 2016

Solutions Revenue
Health	$	1,176		$	791		$	344		$	1,073
Wealth		570			390			192			610
HCM		408			220			96			228
Other		17			20			—			—

Total Solutions Revenue	$	2,171		$	1,421		$	632		$	1,911
Solutions Adjusted EBITDA(1)	$	540		$	345		$	78		$	319
*Solutions Adjusted EBITDA%*		25	%		24	%		12	%		17	%

(1)

We evaluate the performance of the Company based on segment profit, which is Adjusted EBITDA, as defined below under “—Non-GAAP Financial Measures.” The segment profit for the Solutions segment is referred to as “Solutions Adjusted EBITDA.” See Note 12 “Segment Reporting” within the consolidated financial statements of Alight OpCo appearing elsewhere in this prospectus.

Solutions Segment Results of Operations for the Year Ended December 31, 2018 (Successor), the Eight Months Ended December 31, 2017 (Successor) and the Four Months Ended April 30, 2017 (Predecessor)

Solutions Revenue

Total Solutions revenues were $2,171 million for the year ended December 31, 2018, $1,421 million for the eight months ended December 31, 2017 and $632 million for the four months ended April 30, 2017. We experienced annual retention rates of 98% and 97% in 2018 and 2017, respectively, for Solutions. The overall increase of $118 million was due to an increase in project revenues of $31 million, or 8%, from $386 million to $417 million, and an increase in recurring revenues of $90 million, or 5%, from $1,647 million to $1,737 million, partially offset by a decrease in other revenues of $3 million, from $20 million to $17 million. Additional information regarding the revenue by solution is as follows:

Health Solutions revenues were $1,176 million for the year ended December 31, 2018, $791 million for the eight months ended December 31, 2017 and $344 million for the four months ended April 30, 2017. The overall increase in Health Solutions revenue of $41 million was due to an increase in recurring revenues of $53 million, or 6%, from $925 million to $978 million as a result of increases in Net Commercial Activity and revenue related to acquisition, partially offset by a decline in project revenues of $12 million, or 6%, from $210 million to $198 million as clients continue to navigate changes in healthcare requirements.

Wealth Solutions revenues were $570 million for the year ended December 31, 2018, $390 million for the eight months ended December 31, 2017 and $192 million for the four months ended April 30, 2017. The overall decrease in Wealth Solutions of $12 million was due to a decrease in recurring revenues of $9 million, or 2%, from $525 million to $516 million and a decrease in project revenues of $3 million, or 5%, from $57 million to $54 million. The decrease in recurring revenues was due to the $15 million, or 6%, decline in our Defined Benefit business as employers move away from traditional pension plans which more than offset the $6 million, or 2%, increase in our Defined Contribution business as a result of increases in Net Commercial Activity. The decrease in project revenues is wholly attributable to our Defined Benefit business.

HCM Solutions revenues were $408 million for the year ended December 31, 2018, $220 million for the eight months ended December 31, 2017 and $96 million for the four months ended April 30, 2017. The overall increase in HCM Solutions revenue of $92 million was due to an increase in recurring revenues of $46 million, or 23%, from $197 million to $243 million and an increase in project revenues of $46 million, or 39% from $119 million to $165 million. $34 million of the increase in recurring revenues was related to the increase in Net

Commercial Activity and $12 million was related to clients that transitioned from our Hosted business. The increase in project revenues was related to the deployment of cloud based solutions in the U.S., the U.K. and Europe.

Other revenues were $17 million for the year ended December 31, 2018, $20 million for the eight months ended December 31, 2017 and $0 for the four months ended April 30, 2017. Other revenues were due to the various transition services arrangements with Aon following the Separation.

Solutions Adjusted EBITDA

Solutions Adjusted EBITDA was $540 million for the year ended December 31, 2018, $345 million for the eight months ended December 31, 2017 and $78 million for the four months ended April 30, 2017. The increase of $117 million was primarily due to the revenue growth offset by increases in incentive and compensation expenses as discussed above. In addition, there was an increase of $44 million in the adjustments recorded to arrive at Solutions Adjusted EBITDA. This increase was primarily related to an increase of $33 million in expenses incurred subsequent to the Transaction related to the Separation, $25 million related to transformation initiatives subsequent to the Transaction and an increase of $16 million primarily related to new long-term incentive and stock-based compensation programs offset by a $36 million reduction related to Transaction expenses that were incurred in 2017.

Solutions Segment Results of Operations for the Eight Months Ended December 31, 2017 (Successor), the Four Months Ended April 30, 2017 (Predecessor) and the Year Ended December 31, 2016 (Predecessor)

Solutions Revenue

Total Solutions revenues were $1,421 million for the eight months ended December 31, 2017, $632 million for the four months ended April 30, 2017 and $1,911 for the year ended December 31, 2016. We experienced annual revenue retention rates of 97% and 99% in 2017 and 2016, respectively for Solutions. The overall increase of $142 million was due to an increase in recurring revenues of $98 million, or 6%, from $1,549 million to $1,647 million, an increase in project revenues of $24 million, or 7%, from $362 million to $386 million, and an increase in other revenues of $20 million from $0 million to $20 million. Additional information regarding the revenue by Solution is as follows:

Health Solutions revenues were $791 million for the eight months ended December 31, 2017, $344 million for the four months ended April 30, 2017 and $1,073 million for the year ended December 31, 2016. The overall increase in Health Solutions revenue of $62 million was due to an increase in recurring revenues of $65 million, or 8%, from $860 million to $925 million as a result of increases in Net Commercial Activity partially offset by a decline in project revenues of $3 million, or 2%, from $213 million to $210 million.

Wealth Solutions revenues were $390 million for the eight months ended December 31, 2017, $192 million for the four months ended April 30, 2017 and $610 million for the year ended December 31, 2016. The overall decrease in Wealth Solutions revenue of $28 million was due to a decline in recurring revenues of $18 million, or 3%, from $543 million to $525 million and a decline in project revenues of $10 million, or 15%, from $67 million to $57 million. The decrease in recurring revenues is due to the $24 million, or 9%, decline in our Defined Benefit business as employers move away from traditional pension plans which more than offset the $6 million, or 2%, increase in our Defined Contribution business as a result of increases in Net Commercial Activity. The decrease in project revenues predominately related to our Defined Benefit business and is dependent on when employers decide to undertake activities such as lump-sum windows.

HCM Solutions revenues were $220 million for the eight months ended December 31, 2017, $96 million for the four months ended April 30, 2017 and $228 million for the year ended December 31, 2016. The overall increase in HCM Solutions revenue of $88 million was due to an increase in recurring revenues of $51 million, or 35%, from $146 million to $197 million and an increase in project revenues of $37 million, or 46%, from $82 million to $119 million. $35 million of the increase in recurring revenues is related to clients that

transitioned from our Hosted business and $16 million is related to the increase in Net Commercial Activity. The increase in project revenues is related to the deployment of cloud based solutions in the U.S., the U.K. and Europe.

Other revenues were $20 million for the eight months ended December 31, 2017, which was due to the various transition services arrangements with Aon following the Separation and $0 for the four months ended April 30, 2017 and the year ended December 31, 2016.

Solutions Adjusted EBITDA

Solutions Adjusted EBITDA was $345 million for the eight months ended December 31, 2017, $78 million for the four months ended April 30, 2017 and $319 million for the year ended December 31, 2016. The increase of $104 million was primarily due to the revenue growth offset by increases in incentive and compensation expenses as discussed above. In addition, there was an increase of $69 million in the adjustments recorded to arrive at Solutions Adjusted EBITDA. This increase was primarily related to $36 million of Transaction related expenses, $27 million incurred subsequent to the Separation related to transformation initiatives, $16 million of expenses related to the Separation and $11 million related to new long-term incentive plans, partially offset by a reduction in the adjustment for stock based compensation of $21 million.

Hosted Business Results


	Successor						Predecessor
($ in millions)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four Months Ended April 30, 2017			Year Ended December 31, 2016

Hosted Business Revenue	$	207		$	167		$	81		$	349
Hosted Business Adjusted EBITDA(1)	$	36		$	43		$	13		$	104
*Hosted Business Adjusted EBITDA%*		17	%		26	%		16	%		30	%

(1)

We evaluate the performance of the Company based on segment profit, which is Adjusted EBITDA, as defined below under “—Non-GAAP Financial Measures.” The segment profit for the Hosted Business segment is referred to as “Hosted Business Adjusted EBITDA.” See Note 12 “Segment Reporting” within the consolidated financial statements of Alight OpCo appearing elsewhere in this prospectus.

Hosted Business Segment Results of Operations for the Year Ended December 31, 2018 (Successor), the Eight Months Ended December 31, 2017 (Successor) and the Four Months Ended April 30, 2017 (Predecessor)

Hosted Business Revenue

Hosted Business revenues were $207 million for the year ended December 31, 2018, $167 million for the eight months ended December 31, 2017 and $81 million for the four months ended April 30, 2017. The decrease of $41 million was due to client losses and transitions from our Hosted Business to cloud-based services.

Hosted Business Adjusted EBITDA

Hosted Business Adjusted EBITDA was $36 million for the year ended December 31, 2018, $43 million for the eight months ended December 31, 2017 and $13 million for the four months ended April 30, 2017. The decrease of $20 million was driven by lost clients and transitions from our Hosted Business to cloud-based services, which lead to decreased revenues that were not offset by a proportionate decrease in costs.

Hosted Business Segment Results of Operations for the Eight Months Ended December 31, 2017 (Successor), the Four Months Ended April 30, 2017 (Predecessor) and the Year Ended December 31, 2016 (Predecessor)

Hosted Business Revenue

Hosted Business revenues were $167 million for the eight months ended December 31, 2017, $81 million for the four months ended April 30, 2017 and $349 million for the year ended December 31, 2016. The decrease of $101 million was due to client losses and transitions from our Hosted Business to cloud-based services.

Hosted Business Adjusted EBITDA

Hosted Business Adjusted EBITDA was $43 million for the eight months ended December 31, 2017, $13 million for the four months ended April 30, 2017 and $104 million for the year ended December 31, 2016. The decrease of $48 million was driven by lost clients and transitions from our Hosted Business to cloud-based services, which led to decreased revenues that were not offset by a proportionate decrease in cost.

Non-GAAP Financial Measures

The presentation of non-GAAP financial measures is used to enhance the investors’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with U.S. GAAP. Management also uses supplemental non-GAAP financial measures to manage and evaluate the business, make planning decisions, allocate resources and as performance measures for Company-wide bonus plans and executive compensation plans. These key financial measures provide an additional view of our operational performance over the long-term and provide useful information that we use in order to maintain and grow our business.

Adjusted EBITDA

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs or contractual commitments;

•

Adjusted EBITDA does not reflect our interest expense or the cash requirements to service interest or principal payments on our indebtedness;

•

Adjusted EBITDA does not reflect our tax expense or the cash requirements to pay our taxes;

•

Adjusted EBITDA does not reflect the impact on earnings or changes resulting from matters that we consider not to be indicative of our future operations;

•

other companies may calculate Adjusted EBITDA differently, limiting its usefulness as a comparative measure.

A reconciliation of Adjusted EBITDA to Net (Loss) Income is as follows:


	Successor					Predecessor
(in millions)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017		Four Months Ended April 30, 2017		Year Ended December 31, 2016

Net (Loss) Income	$	(21	)	$	24	$	17	$	126
Interest expense, net		208			114		—		—
Income taxes		17			24		10		78
Depreciation		49			27		23		71
Intangible amortization		180			108		34		119

EBITDA		433			297		84		394
Share-based compensation		14			4		6		31
Transaction-related expenses (1)		1			36		—		—
Separation from Aon expenses(2)		49			16		—		—
Transformation initiatives (3)		53			27		1		2
Other (4)		26			8		—		(4	)

Adjusted EBITDA	$	576		$	388	$	91	$	423

(1)	Transaction-related expenses include investment banker fees, legal fees, due diligence costs, and other external advisor costs associated with the Separation.

(2)	Separation from Aon expenses relate to costs incurred establishing Alight as a stand-alone company following the Separation from Aon. These costs include external advisor costs, costs related to certain properties, costs to implement stand-alone tax processes and branding costs.

(3)

Transformation initiatives include expenses incurred, primarily subsequentto the Separation, related to cost savings activities, our strategic transaction with Wipro, enhancing our data center, severance, restructuring of certain property leases and outsourcing certain IT and print and fulfillment functions.

(4)	Other includes long-term incentive expenses, expenses related to acquisitions, income related to the early termination of customer contracts in fiscal year 2016, and purchase accounting adjustments recorded in respect of the Separation.

Liquidity and Capital Resources

During the Predecessor periods, Aon used a centralized approach for cash management and financing its operations. The majority of Alight OpCo’s cash was transferred to Aon daily, and Aon funded Alight OpCo’s operating and investing activities as needed. That arrangement is not reflective of the manner in which Alight OpCo would have been able to finance its operations had it been a stand-alone company separate from Aon during the Predecessor periods.

During the Successor period, we believe that our balance sheet and cash flow provide us with adequate liquidity. Our primary sources of liquidity are cash flows from operations, available cash reserves, and debt capacity available under our credit facility. Our primary uses of liquidity are operating expenses, funding of our debt requirements and capital expenditures. We believe that cash flows from operations and available credit facilities will be sufficient to meet our liquidity needs, including principal and interest payments on debt obligations, capital expenditures, and anticipated working capital requirements for the next 12 months.We intend to retain sufficient liquidity throughout the capital expenditure cycle to maintain our financial flexibility. We do not anticipate any material long-term deterioration in our overall liquidity position in the foreseeable future. Management believes that the current level of working capital is sufficient for our present requirements.

Cash on our balance sheet includes funds available for general corporate purposes. Funds held on behalf of clients in a fiduciary capacity are segregated and shown in Fiduciary assets on the Consolidated Balance Sheets, with a corresponding amount in Fiduciary liabilities. Fiduciary funds generally cannot be used for general corporate purposes and are not a source of liquidity for us.

After completion of this offering, Alight Inc. will be a holding company and will have no material assets other than its ownership of LLC Units. Alight Inc. has no independent means of generating revenue. Alight Inc. intends to cause Alight OpCo to make distributions to its holders of LLC Units, including Alight Inc. and our pre-IPO owners, in an amount sufficient to cover all applicable taxes at assumed tax rates, payments under the tax receivable agreement and dividends, if any, declared by it. Deterioration in the financial condition, earnings or cash flow of Alight OpCo and its subsidiaries for any reason could limit or impair their ability to pay such distributions. Additionally, the terms of our financing arrangements, including the term loan facility, revolving credit facility and senior notes (in each case, as defined below), contain covenants that may restrict Alight OpCo and its subsidiaries from paying such distributions, subject to certain exceptions. In addition, one of our subsidiaries, Alight Financial Solutions, LLC, is a broker dealer subject to certain net capital requirements, which could limit its ability to pay dividends to us. See “Business—Licensing and Regulation—Investment Advisers and Broker Dealers.” Further, Alight OpCo is generally prohibited under Delaware law from making a distribution to a member to the extent that, at the time of the distribution, after giving effect to the distribution, liabilities of Alight OpCo (with certain exceptions) exceed the fair value of its assets. Subsidiaries of Alight OpCo are generally subject to similar legal limitations on their ability to make distributions to Alight OpCo. See “Dividend Policy” and “Risk Factors—Risks Related to Our Organizational Structure—Alight Inc. is a holding company and its only material asset after completion of this offering will be its interest in Alight OpCo, and it is accordingly dependent upon distributions from Alight OpCo to pay taxes, make payments under the tax receivable agreement and pay dividends.”

Our cash flows from operations, borrowing availability and overall liquidity are subject to risks and uncertainties. We may not be able to obtain additional liquidity on reasonable terms, or at all. Additionally, our liquidity and our ability to meet our obligations and to fund our capital requirements are dependent on our future financial performance, which is subject to general economic, financial, and other factors that are beyond our control. Accordingly, our business may not generate sufficient cash flow from operations and future borrowings may not be available from additional indebtedness or otherwise to meet our liquidity needs. Although we have no specific current plans to do so, if we decide to pursue one or more significant acquisitions, we may incur additional debt or sell additional equity to finance such acquisitions, which would result in additional expenses or dilution. See “Risk Factors.”

Historical Cash Flows

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


	Successor						Predecessor
(in millions)	Year Ended December 31, 2018			Eight Months Ended December 31, 2017			Four months Ended April 30, 2017			Year Ended December 31, 2016

Cash provided by operating activities	$	196		$	224		$	79		$	388
Cash used for investing activities		(130	)		(4,290	)		(13	)		(75	)
Cash (used for) provided by financing activities		(36	)		4,263			(69	)		(311	)
Effect of exchange rate changes on cash and cash equivalents		(6	)		(1	)		—			—

Net increase (decrease) in cash and cash equivalents		24			196			(3	)		2
Cash and cash equivalents at end of period	$	220		$	196		$	7		$	10

Cash Flows from Operating Activities

Net cash provided by operating activities for the year ended December 31, 2018 was $196 million compared to $224 million for the eight months ended December 31, 2017 and $79 million for the four months ended April 30, 2017. Net cash provided by operating activities decreased $107 million, which was driven by a $62 million increase in net loss for the period and a $82 million increase in working capital requirements, partially offset by a $37 million increase in non-cash items.

Net cash provided by operating activities was $224 million for the eight months ended December 31, 2017 and $79 million for the four months ended April 30, 2017 as compared to $388 million for the year ended December 31, 2016. Net cash provided by operating activities decreased $85 million, which was driven by a $129 million decrease in net income and non-cash items, partially offset by a $44 million decrease in working capital requirements.

Cash Flows from Investing Activities

Cash used for investing activities for the year ended December 31, 2018 was $130 million. The primary drivers of the cash flow used for investing activities was $75 million used to acquire three businesses and $77 million of capital expenditures, partially offset by $25 million of net proceeds from the disposition of assets.

Cash used for investing activities was $4.3 billion for the eight months ended December 31, 2017 and $13 million for the four months ended April 30, 2017. The driver of the cash flow used for investing activities was the separation from Aon coupled with $57 million of capital expenditures.

Cash flow used for investing activities was $75 million for the year ended December 31, 2016. The primary driver of the cash flow used for investing activities was $77 million of capital expenditures.

For the periods presented, Capital Expenditures related to the Hosted Business were not material.

Cash Flows from Financing Activities

Cash used for financing activities for the year ended December 31, 2018 was $36 million. The primary drivers of the cash flow used for financing activities was $29 million of loan repayments and $10 million of capital lease principal payments.

Cash provided by financing activities was $4.3 billion for the eight months ended December 31, 2017 and cash used for financing activities was $69 million for the four months ended April 30, 2017. The primary drivers of the cash flow provided by financing activities were bank borrowings of $3.6 billion and members’ equity contributions of $1.2 billion, partially offset by members’ equity distributions of $399 million, $119 million of financing fees related to the borrowings, $69 million of distributions to Aon in the Predecessor period, and $14 million of loan repayments.

Cash used for financing activities for the year ended December 31, 2016 was $311 million, almost entirely driven by distributions to Aon.

Cash and Cash Equivalents

At December 31, 2018, our cash and cash equivalents were $220 million, an increase of $24 million from December 31, 2017. Of the total balance of cash and cash equivalents as of December 31, 2018 and December 31, 2017, none of the balance was restricted as to its use.

Fiduciary Assets and Liabilities

Some of our outsourcing agreements require us to hold funds on behalf of clients to pay obligations on their behalf. The levels of fiduciary assets and liabilities can fluctuate significantly, depending on when we collect the amounts and make payments on their behalf. Such funds are not available to service our debt or for other corporate purposes. Fiduciary assets, because of their nature, are generally invested in very liquid securities with highly-rated, credit-worthy financial institutions. We are entitled to retain investment income earned on fiduciary funds in accordance with industry custom and practice. In our Consolidated Balance Sheets, the amount we report for Fiduciary assets and Fiduciary liabilities are equal. Our Fiduciary assets included cash of $680 million at December 31, 2018.

Indebtedness

Total debt outstanding consisted of the following (in millions):


	December 31, 2018			December 31, 2017
7-yr Term Loan	$	2,832		$	2,861
8-yr Senior Notes		680			680
5-yr $250m Revolving Credit Facility		—			—

Total		3,512			3,541
Less: term loan and senior note financing fees, net		(85	)		(102	)

Total debt, net		3,427			3,439
Less: current portion of long term debt, net		(29	)		(29	)

Total long term debt, net	$	3,398		$	3,410

At December 31, 2018, our material mandatory debt repayments over the next twelve months consist of scheduled repayments of $29 million on our term loan maturing in 2024.

Term Loan

In connection with the Separation, in May 2017, we entered into a 7-year senior secured term loan facility (the “initial term loan”). In November 2017, we entered into an incremental term loan facility providing for additional principal under identical terms as the initial term loan (collectively, the “term loan facility”). Interest rates on the borrowings are based on LIBOR, unless we elect to use an alternate base rate, plus 300 bps. For the Successor period, we used the 1-month LIBOR rate. We are required to make principal payments of 0.25% of the principal balance at the end of each quarter, beginning with the quarter ended September 30, 2017 with the remaining principal balance due May 1, 2024. During the year ended December 31, 2018, we made total principal payments of $29 million.

Revolving Credit Facility

In connection with the Separation, in May 2017, we entered into a 5-year $250 million revolving credit facility with a multi-bank syndicate with a maturity date of May 1, 2022. At December 31, 2018, $2 million of unused letters of credit related to various insurance policies were issued under our revolving credit facility (the “Revolver”) and there have been no additional borrowings. We are required to make interest payments of 0.125% of the unutilized balance at the end of each quarter, beginning May 2017.

Senior Notes

In connection with the Separation, during May 2017, we issued $500 million of senior notes due 2025 (the “initial senior notes”). During November 2017, we issued an additional $180 million of senior notes under

identical terms as the initial senior notes with an initial effective date of May 1, 2017 (collectively, the “senior notes”). The senior notes have a maturity date of June 1, 2025 and accrue interest at a fixed rate of 6.750% per annum, payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2017.

At December 31, 2018, we were in compliance with all financial covenants.

Tax Receivable Agreement

Prior to the completion of this offering, we will enter into a tax receivable agreement with our pre-IPO owners that provides for the payment by Alight Inc. to such pre-IPO owners of 85% of the benefits, if any, that Alight Inc. is deemed to realize (calculated using certain assumptions) as a result of (i) Alight Inc.’s allocable share of existing tax basis acquired in this offering, (ii) increases in Alight Inc.’s allocable share of existing tax basis and tax basis adjustments that will increase the tax basis of the tangible and intangible assets of Alight Inc. as a result of sales or exchanges of LLC Units for shares of Class A common stock after this offering and (iii) Alight Inc.’s utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis) and certain other tax benefits related to entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. These increases in existing tax basis and tax basis adjustments generated over time may increase (for tax purposes) Alight Inc.’s depreciation and amortization deductions and, therefore, may reduce the amount of tax that Alight Inc. would otherwise be required to pay in the future, although the IRS may challenge all or part of the validity of that tax basis, and a court could sustain such a challenge. Alight Inc.’s allocable share of existing tax basis acquired in this offering and the increase in Alight Inc.’s allocable share of existing tax basis and the anticipated tax basis adjustments upon exchanges of LLC Units for shares of Class A common stock may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. Actual tax benefits realized by Alight Inc. may differ from tax benefits calculated under the tax receivable agreement as a result of the use of certain assumptions in the tax receivable agreement, including the use of an assumed weighted-average state and local income tax rate to calculate tax benefits. The payment obligation under the tax receivable agreement is an obligation of Alight Inc. and not of Alight OpCo. Alight Inc. expects to benefit from the remaining 15% of cash tax benefits, if any, it realizes from such tax benefits. For purposes of the tax receivable agreement, the cash tax benefits will be computed by comparing the actual income tax liability of Alight Inc. (calculated using certain assumptions) to the amount of such taxes that Alight Inc. would have been required to pay had there been no existing tax basis, no anticipated tax basis adjustments of the assets of Alight Inc. as a result of exchanges and no utilization of certain tax attributes of the Blocker Companies (including the Blocker Companies’ allocable share of existing tax basis), and had Alight Inc. not entered into the tax receivable agreement. The term of the tax receivable agreement will continue until all such tax benefits have been utilized or expired, unless Alight Inc. exercises its right to terminate the tax receivable agreement for an amount based on the agreed payments remaining to be made under the agreement or Alight Inc. breaches any of its material obligations under the tax receivable agreement in which case all obligations generally will be accelerated and due as if Alight Inc. had exercised its right to terminate the tax receivable agreement. Estimating the amount of payments that may be made under the tax receivable agreement is by its nature imprecise, insofar as the calculation of amounts payable depends on a variety of factors. The amount of existing tax basis and the anticipated tax basis adjustments, as well as the amount and timing of any payments under the tax receivable agreement, will vary depending upon a number of factors, including the timing of exchanges, the price of shares of our Class A common stock at the time of the exchange, the extent to which such exchanges are taxable, the amount of tax attributes and the amount and timing of our income.

We expect that as a result of the size of Alight Inc.’s allocable share of existing tax basis acquired in this offering (including such existing tax basis acquired from the Blocker Companies pursuant to the Blocker Mergers), the increase in Alight Inc.’s allocable share of existing tax basis and the anticipated tax basis adjustment of the tangible and intangible assets of Alight Inc. upon the exchange of LLC Units for shares of Class A common stock and our possible utilization of certain tax attributes, the payments that Alight Inc. may make under the tax receivable agreement will be substantial. We estimate the amount of existing tax basis with respect to which our pre-IPO owners will be entitled to receive payments under the tax receivable agreement

(assuming all Pre-IPO Unitholders exchange their LLC Units for shares of Class A common stock on the date of this offering) is approximately $3,579 million. The payments under the tax receivable agreement are not conditioned upon continued ownership of us by the holders of LLC Units. See “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Contractual Obligations and Commitments

The following table provides a summary of obligations and commitments outstanding as of December 31, 2018. The information below does not give effect to this offering or the use of proceeds therefrom.


(in millions)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Contractual cash obligations:
Debt (1) (2)	$	3,512	$	29	$	58	$	58	$	3,367
Operating leases		231		45		63		58		65
Capital leases		57		14		27		16		—
Purchase obligations (3)		106		34		51		7		14
Service obligations (4)		1,490		122		262		288		818

Total	$	5,396	$	244	$	461	$	427	$	4,264

(1)

Interest incurred on amounts we borrow is based on relative borrowing levels, fluctuations in the variable interest rates and the spread we pay over those interest rates. As such, we are unable to quantify our future obligations relating to interest and therefore no amounts have been included in the above table.

(2)	Financing fees have been excluded from the debt obligation as these amounts do not represent the future cash obligation for the related debt.

(3)

Purchase obligations consist primarily of purchases of information technology assets and services that is enforceable and legally binding on us and that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

(4)

Service obligations include non-cancellable service obligations related to our strategic partnership with Wipro. We may terminate our arrangement with Wipro for cause or for our convenience, in which case we would be required to pay a termination fee. If we had terminated the Wipro arrangement on December 31, 2018, we estimate that the termination charges would have been at least $426 million.

The payments that we may be required to make under the tax receivable agreement that we will enter into prior to the completion of this offering may be significant and are not reflected in the contractual obligations tables set forth above.

Assuming no material changes in the relevant tax law, and that we earn sufficient taxable income to realize all tax benefits that are subject to the tax receivable agreement, we expect future payments under the tax receivable agreement relating to the purchase by Alight Inc. of LLC Units as part of the Offering Transactions to aggregate $581 million (or $589 million if the underwriters exercise in full their option to purchase additional shares of Class A common stock) and to range over the next 15 years from approximately $6 million to $45 million per year (or approximately $6 million to $46 million per year if the underwriters exercise in full their option to purchase additional shares) and decline thereafter. Future payments to our pre-IPO owners in respect of subsequent exchanges of LLC Units for shares of Class A common stock would be in addition to these amounts and are expected to be substantial as well. The foregoing numbers are merely estimates, and the actual payments could differ materially. See “—Tax Receivable Agreement” and “Certain Relationships and Related Person Transactions—Tax Receivable Agreement.”

Off-Balance Sheet Arrangements

As of December 31, 2018, we did not have any relationships with any entities or financial partnerships, such as structured finance or special purpose entities, that would have been established for the purpose of facilitating off-balance sheet arrangements.

Critical Accounting Policies

The preparation of the accompanying Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of reserves and expenses.

These estimates and assumptions are based on management’s best estimates and judgments. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management believes its estimates to be reasonable given the current facts available. Management adjusts such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets, volatile equity markets, and foreign currency exchange rate movements increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be predicted with certainty, actual results could differ significantly from these estimates. Changes in estimates resulting from continuing changes in the economic environment would, if applicable, be reflected in the financial statements in future periods.

Revenue Recognition

Year ended December 31, 2018

Revenues are recognized when control of the promised services is transferred to the customer in the amount that best reflects the consideration to which the Company expects to be entitled in exchange for those services. Substantially all of the Company’s revenue is recognized over time as the customer simultaneously receives and consumes the benefits of our services. On occasion, we may be entitled to a fee based on achieving certain performance criteria or contract milestones. To the extent that we cannot estimate with reasonable assurance the likelihood that we will achieve the performance target, we will constrain this portion of the transaction price and recognize it when or as the uncertainty is resolved. Any taxes assessed on revenues relating to services provided to our clients are recorded on a net basis.

The Company capitalizes incremental costs to obtain and fulfill contracts with a customer that are expected to be recovered. Assets recognized for the costs to fulfill a contract are amortized on a systematic basis over the expected life of the underlying customer relationships.

For further discussion, see Note 3 “Revenue from Contracts with Customers” within the consolidated financial statements appearing elsewhere in this prospectus.

Eight months ended December 31, 2017, four months ended April 30, 2017, and year ended December 31, 2016

Revenues are recognized when they are earned and realized or realizable. We consider revenues to be earned and realized or realizable when all of the following four conditions are met: (1) persuasive evidence of an arrangement exists, (2) the arrangement fee is fixed or determinable, (3) delivery or performance has occurred, and (4) collectibility is reasonably assured.

Revenues consist primarily of fees paid by clients for outsourcing contracts. Revenues from time-and-materials or cost-plus arrangements are recognized as services are performed, assuming all four criteria to recognize revenue have been met. Revenues from fixed-fee contracts are recognized as services are provided

using a proportional-performance model or at the completion of a project based on facts and circumstances. Our outsourcing contracts typically have three to five year terms for benefits and HR services. We may also receive implementation fees from clients either up-front or over the ongoing services period as a component of the fee per participant. Lump sum implementation fees received from a client are typically deferred and recognized ratably over the ongoing contract services period. If a client terminates an outsourcing services arrangement prior to the end of the contract, a loss on the contract may be recorded, if necessary, and any remaining deferred implementation revenues would typically be recognized over the remaining service period through the termination date. Any taxes assessed on revenues relating to services provided to our clients are recorded on a net basis.

In connection with our long-term outsourcing service agreements, highly customized implementation efforts are often necessary to set up clients and their human resource or benefit programs on our systems and operating processes. Alight’s customized implementation services include building and managing data interfaces with employers and other third parties, configuring either third-party or proprietary processing platforms to implement the rules of employer plans, and building out digital self-service and an assisted service contact center. Qualifying costs of implementation incurred prior to the services commencing are generally deferred and amortized over the period that the related ongoing services revenue is recognized. Deferred costs are assessed for recoverability on a periodic basis to the extent the deferred cost exceeds related deferred revenue.

Goodwill and Intangible Assets, Net

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed (see Note 4 “Acquisitions” within the consolidated financial statements appearing elsewhere in this prospectus). Goodwill is not amortized, but rather will be tested for impairment on an annual basis during the fourth quarter.

Our intangible assets consist primarily of assets acquired through business combinations, including customer related, contract based intangibles and technology related intangibles and trademarks. Amortization of the finite-lived intangible assets is computed on a straight-line basis using the estimated useful life of the assets ranging from 6 to 15 years respective of asset category (see Note 4 “Acquisitions” and Note 7 “Goodwill and Intangible assets, net” within the consolidated financial statements appearing elsewhere in this prospectus). The Company reviews intangible assets that are being amortized for impairment whenever events or changes in circumstances indicate that their carrying value amount may not be recoverable. One of the trademark intangible assets is indefinite-lived and is not amortized.

Share-Based Compensation Costs

Share-based payments to employees, including grants of restricted share units (“RSUs”) and performance-based restricted share units (“PRSUs”), are measured based on their estimated grant date fair value. We recognize compensation expense on a straight-line basis over the requisite service period for awards expected to ultimately vest. One-third of the PRSUs issued have time-based vesting conditions and vest ratably over five years from the date of grant, while the remaining two-thirds of the PRSUs have vesting conditions that are contingent upon the occurrence of certain liquidity events and the achievement of defined internal rates of return. The grant date fair value of our RSUs is based on the value of the shares issued to Initial Investors at the time of the Separation. The PRSUs are valued based on a Monte Carlo simulation methodology.

The Monte Carlo simulation methodology requires management to make assumptions and apply judgment in determining the fair value of the PRSUs issued. The most significant assumptions and judgments include estimating the fair value of our underlying equity, expected volatility of the underlying equity, risk-free interest rates, expected term, and the expected dividend yield of our underlying equity. The assumptions used represent management’s best estimates. If factors change and different assumptions are used, our share-based compensation expense could be materially different in the future.

In addition to the above assumptions, a forfeiture rate is estimated on the date of grant and revised if actual or expected forfeiture activity differs materially from original estimates. Our forfeiture rate is based on an analysis of our historical forfeitures. We will continue to evaluate the appropriateness of the forfeiture rate based on our actual forfeiture experience, analysis of employee turnover and other factors.

Fair Value of Underlying Equity

The fair value of our underlying equity has been determined based upon information available at the time of each PRSU grant. Given the absence of a public trading market for our units and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, management has exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our underlying equity at each PRSU grant date. These factors include:

our operating and financial performance;

current business conditions and projections;

the likelihood of achieving a liquidity event for the PRSUs, such as an initial public offering or sale of our company, given prevailing market conditions;

the lack of marketability of our units; and

the market performance of comparable publicly traded companies.

We determined the equity value of our business by using a weighted blend of the income and market approaches.

The income approach estimates fair value of a company based on the present value of such company’s future estimated cash flows and the residual value of such company beyond the forecast period. These future cash flows are discounted to their present values using a discount rate derived from an analysis of the cost of capital of comparable publicly-traded companies in our industry or similar lines of business as of each valuation date. This weighted-average cost of capital discount rate, or “WACC”, is adjusted to reflect the risks inherent in the business. The WACC used for these valuations was determined to be reasonable and appropriate given our debt and equity capitalization structure at the time of the valuation. The income approach also assesses the residual value beyond the forecast period and is determined by dividing the projected residual cash flow by the WACC less the long-term growth rate. This amount is then discounted to present value using the WACC.

The market comparable approach estimates value based on a comparison of the subject company to comparable public companies in a similar line of business. From the comparable companies, a representative market multiple is determined which is applied to our financial metrics to estimate the value of our company. To determine our peer group of companies, we selected those most similar to us based on various factors, including, but not limited to, nature of business, company size, financial risk, profitability, growth characteristics and stage of life cycle.

Following the closing of our initial public offering, the fair value of our underlying equity for purposes of determining stock-based compensation will be based on the closing price of our shares as reported on the applicable grant date.

Income Taxes

For U.S. income tax purposes, the Separation consisted of a series of transactions treated as asset acquisitions of U.S. disregarded limited liability companies, acquisitions of non-U.S. assets, and acquisitions of the stock of regarded entities. Alight OpCo is currently treated as a U.S. partnership and files a U.S. partnership income tax return. For the Predecessor and Successor periods, taxable income or losses are reported in separate

tax returns. For the Predecessor periods, Alight OpCo’s operating results, except for the business entities that filed separate stand-alone income tax returns or non-U.S. jurisdiction tax returns, are included in Aon’s consolidated U.S. federal and state corporate income tax returns. For the Successor period, our operating results, except for the business entities that file separate stand-alone income tax returns or non-U.S. jurisdiction tax returns, were included in our U.S. federal and state partnership income tax returns. Accordingly, no provision, except for the business entities that filed separate U.S. stand-alone income tax returns, has been made for U.S. federal income taxes for our Successor period. We, however, are liable for various state income taxes, fees and foreign taxes which are shown in Note 8 “Income Taxes” within the consolidated financial statements appearing elsewhere in this prospectus.

We recognize the benefits of tax return positions in the financial statements if it is “more-likely-than-not” they will be sustained by a taxing authority. The measurement of a tax position meeting the more-likely-than-not criteria is based on the largest benefit that is more than 50 percent likely to be realized. Only information that is available at the reporting date is considered in our recognition and measurement analysis and events or changes in facts and circumstances are accounted for in the period in which the event or change in circumstance occurs.

During the Predecessor periods, Alight OpCo’s operating results were included in Aon’s consolidated U.S. federal and state corporate income tax returns or non-U.S. jurisdiction tax returns. As a result, for the Predecessor periods, income tax expense has been recorded as if Alight OpCo filed tax returns on a stand-alone basis separate from Aon. This Separate Return Methodology applies the accounting guidance for income taxes to the stand-alone financial statements as if Alight OpCo was a stand-alone enterprise for the periods presented. The calculation of Alight OpCo’s income taxes involves considerable judgment and the use of both estimates and allocations. Therefore, the current liabilities and items of current and deferred taxes reflected on Alight OpCo’s financial statements may not be reflective of Alight OpCo’s settlement of actual tax balances that were included in Aon’s consolidated filings prior to the Separation.

After consummation of this offering, except for the subsidiaries that file separate non-U.S. jurisdiction income tax returns, we will become subject to U.S. federal income taxes with respect to our allocable share of any taxable income of Alight OpCo and will be taxed at the prevailing U.S. corporate tax rates. We will be treated as a U.S. corporation and a regarded entity for U.S. federal, state and local income taxes. Accordingly, a provision will be recorded for the anticipated tax consequences of our reported results of operations for U.S. federal, state and foreign income taxes.

New Accounting Pronouncements

Recently-issued accounting pronouncements that may be relevant to our operations but have not yet been adopted are outlined in Note 2 “Accounting Policies and Practices” within the consolidated financial statements appearing elsewhere in this prospectus.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to potential fluctuations in earnings, cash flows, and the fair values of certain of our assets and liabilities due to changes in interest rates. To manage the risk from this exposure, we enter into a variety of hedging arrangements. We do not enter into derivatives or financial instruments for trading or speculative purposes. We are not subject to significant foreign exchange rate risk.

A discussion of our accounting policies for hedging activities is outlined in Note 2 “Accounting Policies and Practices” within the consolidated financial statements appearing elsewhere in this prospectus.

Interest Rate Risk

We have long-term debt outstanding at December 31, 2018 with a fair value that was less than the carrying value by $152 million. A hypothetical 1% increase or decrease in interest rates would increase or decrease the fair market value of our debt by 1.1% at December 31, 2018.

In addition, borrowings under our incremental term loans and credit facility bear interest at a variable market rate. As of December 31, 2018, we had outstanding borrowing balance of $2,832 million of incremental term loans and outstanding letters of credit totaling $2 million. See Note 9 “Debt” within the consolidated financial statements appearing elsewhere in this prospectus.

BUSINESS

•

We deliver our solutions through proprietary technology platforms, a strong network of strategic partnerships and a structured approach to instill and sustain enterprise-wide practices of excellence, which we refer to as the “Alight Operating Model.” The Alight Operating Model helps us make better decisions with facts and data, pursue the root cause of performance issues and work to prevent problems before they occur. Our proprietary technologies include our core benefits processing platforms and consumer engagement tools, which power our solutions across health, wealth and HCM. Our strategic partnerships with providers, such as Alegeus, Personal Capital and Workday, enhance our solutions across our core areas of health, wealth and HCM. The tools, capabilities and culture that comprise the Alight Operating Model enable us to deliver these technologies and partner offerings to our clients with consistency and quality.

platforms differentiate us in the market and provide us with a significant competitive advantage. Additionally, our intense focus on solving the complex needs of our clients has enabled us to establish long-term, deeply-embedded client relationships with high levels of retention. For example, our top 25 Solutions clients, ranked by revenue, have been with us for an average of 13 years as of December 31, 2018. We have also achieved Solutions revenue retention of 97% or greater in each of the last eight years. We calculate revenue retention for a year by identifying the clients from whom we generated Solutions revenue the prior year and determining what percentage of that revenue is generated from those same clients for the same solutions in the subsequent year.

Market Opportunity

We believe there are several important market dynamics that are transforming the way companies engage, manage and retain their employees with respect to health and wealth benefits and other HR decisions. We believe these trends impact organizations regardless of size, industry, and geography, and represent a significant incremental global opportunity for Alight. According to IDC, the global market for HR Management Services was approximately $151 billion in 2018 and is predicted to grow at a nearly 7% compound annual growth rate and will reach approximately $198 billion by 2022. Key trends driving our market opportunity are as follows:

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strategic partners that can help them migrate and run solutions in a cloud-based environment. For example, according to a May 2018 Gartner forecast report, the global market for Cloud Consulting and Implementation Services was approximately $72 billion in 2017 and is predicted to grow at an approximately 21% compound annual growth rate and reach approximately $183 billion in 2022.

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Innovative technologies and the automation of core processes provide opportunities to further enhance client offerings: Providers of innovative solutions are increasingly leveraging advancements in technology, such as RPA, to automate the processing of repetitive tasks and allow clients to focus on their core businesses. Such technologies can effectively streamline processes, facilitate digital delivery of services and improve user experience to enhance overall value proposition to clients.

Our Competitive Strengths

Leading Scaled Provider of Human Capital Solutions with a Successful 25+ Year Operating History

Deep Domain Expertise and Operational Excellence

Highly Embedded, Long-Term Relationships with a Broad Base of Clients

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Comprehensive Suite of Integrated Health, Wealth and HCM Solutions

Proprietary, Cloud-based Technology Platforms

Our Growth Strategies

Expand Relationships with Existing Clients

Develop Relationships with New Clients

We intend to continue to acquire new clients across a variety of sizes and geographies. Key areas of focus for expanding our client base include the following opportunities:

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Mid-Market: We are actively pursuing clients in the middle market, which we define as employers with between 1,000 and 10,000 employees. We are executing a focused sales strategy utilizing a direct salesforce, strategic broker channel partnerships and HRMS platform partnerships, while adapting our existing solution portfolio to the needs of mid-market clients. We also provide solutions to clients, whom we have primarily inherited through acquisitions, with smaller employee counts. As of December 31, 2018, we had nearly 2,500 mid-market or smaller Solutions clients.

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Continue to Innovate to Expand Our Capabilities and Expertise

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Health Solutions: The complexity of the healthcare system requires additional advocacy tools and point solutions to provide individuals with personalized healthcare recommendations based on data and analytics. We seek to enhance our capabilities with innovative solutions, both organically-developed and through acquisitions. For example, Compass, which we acquired in 2018, is a clinical advocacy business that enables our clients’ employees to compare treatment options and pricing, analyze healthcare bills and receive high-touch care and outreach from trained professionals. We help employees more cost-effectively manage their health, thereby enabling employees and employers to better manage their healthcare spend and make better decisions regarding the quality, effectiveness and cost of healthcare.

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We also continue to invest in innovative technologies such as AI and RPA to streamline processes across our health, wealth and HCM solutions. These tools allow us to deliver our solutions more effectively by reducing time and expense for both Alight and for our clients, while simultaneously seeking to enhance service quality. For example, these technologies are instrumental in helping us to engage with and respond to employees and reduce average claim processing time.

Continue to Pursue Acquisitions and Strategic Partnerships

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practices have a presence across 11 countries including India, Australia, Europe and the Nordics, and are leaders in designing and building Workday and Cornerstone OnDemand solutions for clients of all sizes and across industries. We also completed our acquisition of Carlson Management Consulting, a leading Adaptive Insights implementation partner that provides system implementation, optimizations and integrations to transform financial processes and operations to the cloud. Both of these acquisitions add deep technology capabilities and are expected to further fuel the growth of our cloud business.

Our Solutions

LOGO

Health Solutions Health administration healthcare navigation Consumer-directed healthcare (CDH) Wealth solutions Defined contribution administration defined benifit administration financial wellbeing HCM solutions cloud advisory & deployment application management services cloud hr and payroll services

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Health Solutions

Alight’s Health Solutions provide value to clients by greatly reducing administrative burden while enabling flexibility and choice in plan design, insurance carriers and partners. Further, clients can expect significant value via automation, efficiency and scale, and a capability set that can accommodate and enable compliance with rapidly evolving regulatory requirements. Employees benefit from a consumer-centric, digital and seamless experience that helps them navigate an increasingly complex healthcare environment, with additional support from trained professionals who offer personalized, high-touch care.

Our suite of Health Solutions includes:

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Health Administration: Enrollment, eligibility, and recordkeeping for medical, dental, life and other elective benefits through a comprehensive service model that involves a balance of both high-tech and high-touch approaches

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Healthcare Navigation: Enhanced advocacy solution, providing individuals with personalized healthcare recommendations based on data and analytics, enabling employees to compare treatment options and pricing, analyze healthcare bills and receive high-touch care and outreach from trained professionals

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Consumer-Directed Healthcare (CDH): Enrollment and management of consumer-directed benefits, including tax-advantaged accounts such as health savings, flexible spending, commuter, and dependent care

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Consumer Engagement: Digital employee engagement solutions (e.g., UPoint) and communications consulting services that help clients interact effectively with their employees and retirees

Wealth Solutions

Alight’s Wealth Solutions help clients navigate the growing complexity and risk of delivering defined contribution and defined benefit plans, while empowering employees and retirees to make smart decisions to plan for retirement and grow their wealth. Our solutions are agnostic to individual asset managers, which enables us to focus on the needs of employees and their families.

Our suite of Wealth Solutions includes:

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Defined Contribution Administration: 401(k) and savings plan administration for employers, including qualified and nonqualified plan strategy and design, delivered through an open architecture platform

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Defined Benefit Administration: Pension plan administration for employers, including qualified and nonqualified plan strategy and design

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Financial Well-being: Wealth navigation tools and participant advisory services

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Consumer Engagement: Digital employee engagement solutions (e.g., UPoint) and communications consulting services that help clients interact effectively with their employees and retirees

HCM Solutions

Alight’s HCM Solutions help clients take advantage of the growing trend of cloud-based solutions for enterprise applications. We leverage data across all interactions and activities to improve the consumer experience, reduce operational costs and better inform management processes and decision-making. In addition, employees benefit from an integrated portal and user experience, coupled with a full-service client care center, helping them manage the full life cycle of their health, wealth and careers.

Our suite of HCM Solutions includes:

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Cloud Advisory & Deployment: Assessment of client readiness for cloud platforms as well as solution implementation services

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Application Management Services: Production support, maintenance and enhancement

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Cloud HR and Payroll Services: Operation of core HCM services, including payroll, recruiting, talent and learning, for cloud platforms such as Workday, Cornerstone OnDemand, Oracle and SAP SuccessFactors

Our Technologies

We have developed highly scalable and configurable proprietary technologies, which, combined with our strategic partnerships, allow us to enhance delivery of our benefits and HR solutions.

Our proprietary technologies include:

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Cloud-based Benefits Platforms: Core transaction engines that support integrated health and wealth solutions through our proprietary, cloud-based Total Benefits Administration (“TBA”) and Core Benefits Administration (“CBA”) platforms, which are designed to manage the end-to-end enrollment processes and ongoing administration of benefits plans for clients of varying sizes and complexity. These transaction engines allow Alight to centrally manage critical capabilities such as transaction execution, business rule configuration and data management. Our platforms utilize next-generation digital architecture that improves the scalability, performance and reliability of our solutions. Our platforms are delivered to clients through web-based channels.

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UPoint: Proprietary front-end user interface that serves as the integration point for employees, clients, and partners, and aggregates underlying applications, cloud-based providers, and third-party sites into a single location. The UPoint portal offers customized branding, self-authoring and publishing, as well as public and private content areas that personalize employee interactions and improve engagement in a highly intuitive, easy-to-use manner. We also recently launched UPoint Mobile, which allows employees to access their benefit and HR details from their mobile devices.

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Artificial Intelligence: “Lisa,” our online intelligent virtual assistant, uses natural language processing and machine learning to allow users to access complex benefits information in a self-service manner. Lisa engages with users consistently and conversationally 24/7. Since inception in April 2017, and through December 31, 2018, Lisa has chatted with 1.44 million people, answered nearly 4 million questions and answered most questions on the first attempt.

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RPA Solutions: RPA is a sophisticated software that automates rules-based processes without constant supervision by humans, which we use to perform repetitive operational tasks, such as spending account claims approval processes. Although this is an emerging capability, through the twelve-month period ended December 31, 2018, we have automated more than 200 processes, contributing to reduced people hours and improved accuracy.

Our strategic partnerships include:

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Health and Wealth Benefits Partners: We connect our clients and their employees with select health and wealth technology and services partners to provide the tools, education, and resources to make smarter, more proactive benefits decisions. Through our strategic partnerships, we provide greater choice and enhanced navigation tools to facilitate data access and more-informed decision-making. For example, we have entered into partnerships with providers such as Alegeus for their industry-leading spending account platform, Financial Engines to offer personalized investment advice and Personal Capital to offer comprehensive wealth management tools for our clients and their employees.

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Cloud HCM Partners: We partner with leading cloud HCM platform providers on behalf of our clients to deploy and operate comprehensive HR management solutions. Today, our largest cloud HCM partner is Workday. We provide clients with advisory, deployment and application management services, as well as ongoing delivery of payroll and other services on the Workday platform. As of

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December 31, 2018, we operate and administer Workday for more than 60 clients and have deployed Workday for nearly 350 clients for employees in 187 countries across seven continents. We also partner with other cloud HCM providers, including Cornerstone OnDemand, Oracle and SAP SuccessFactors.

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The Alight Partner Network: Through an ecosystem of leading, next-generation technology and solution providers, we easily integrate partner solutions into our UPoint portal. The Alight Partner Network, which today includes Evive, Lark, Kashable, LEAF, Ovia Health, Personal Capital and PTO Exchange, provides enhanced capabilities to our clients and their employees to empower more informed decisions across their health, wealth and career. To meet the needs of our clients and their employees, we will continue to add new partners to the network and are currently exploring potential partners that provide value-added solutions around workplace flexibility, debt management, disease management, career development and learning.

We actively review potential acquisitions and partnerships with complementary technology providers, which we believe can drive incremental growth by expanding and leveraging our existing technology capabilities.

The Alight Operating Model

The Alight Operating Model defines and aligns our organization’s goals with our clients’ priorities and objectives. The model is our systemic and structured approach to service quality that provides the framework through which we leverage our deep domain expertise to deliver our solutions and technology in a consistent, high-quality and operationally efficient manner. Key components include the standardization, automation and simplification of processes, thereby driving consistency and sustainable improvements over time. The Alight Operating Model also entails relentless focus on maintaining a culture of excellence and client service.

Hosted Business Services

While we have successfully migrated a significant number of our Hosted clients to cloud-based solutions, we continue to support a number of active Hosted clients under agreements that are scheduled to expire by 2023. As of December 31, 2018, we supported 12 active Hosted clients. Five of these clients have agreements scheduled to expire by the end of 2019. The remaining agreements are scheduled to expire by 2023. Many of these Hosted clients have contractual rights for limited extensions. We expect several of these clients to transition to a cloud-based platform supported by our HCM solutions prior to their contract expiration or extension date. Accordingly, while we will continue to perform our existing Hosted Business agreements, we do not intend to renew such agreements or enter into any new Hosted Business agreements.

Our Clients

We provide solutions that empower our clients and their employees to manage their health, wealth and HR needs. We provide solutions to nearly 3,000 clients, from the largest, most complex organizations, to mid-market

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businesses, including 70 of the Fortune 100 and 243 of the Fortune 500, and serve more than 23 million of their current and former employees and their over 11 million family members.

We have a long history of delivering high-quality solutions and services. We maintained a client satisfaction rate of approximately 80% (based on a survey of over 1,000 contacts across more than 450 clients in 2017) and achieved Solutions revenue retention of 97% or greater in each of the last eight years.

Furthermore, we seek to establish high-quality, strong, long-term relationships with our clients. We proactively solicit client feedback through ongoing surveys and client councils held throughout the year, and we use this critical feedback to enhance our client services and correct course when necessary. Through these surveys, we have learned that clients value the strength and depth of our relationships, scale and breadth of our solutions and our commitment to innovation and continuous improvement. As a result, our top 25 Solutions clients have an average tenure of 13 years as of December 31, 2018.

Client contracts for ongoing administrative services provide a stable and transparent recurring revenue base. The revenue base is highly diversified across solutions, verticals and size, with no client accounting for more than 4% of our revenue from our Solutions segment for the years ended December 31, 2018 and 2017. Revenues are principally derived from fees paid by clients for services. Payment terms are consistent with current industry practice.

Even though we have significant client assets with high penetration in the Fortune 500, we believe there is a significant opportunity to go down market and expand further into servicing mid-market businesses. The mid-market opportunity is largely driven by heightened interest from employers looking to more effectively manage their costs and regulatory compliance risk.

As we pursue this mid-market opportunity, we are refining our products to create lower-cost options that are priced according to the complexity of the solution (health), partnering with technology firms to bring sophisticated digital tools to enable self-service (wealth) and refining employer tooling to make implementation quicker and less expensive.

Employees and Culture

As of December 31, 2018, we employed more than 11,000 people in our Solutions segment and approximately 500 people in our Hosted Business segment. In our Solutions segment, approximately 50% of employees have been with us for five or more years. We believe we are a leader in our industry due in part to the deep domain expertise across health, wealth and HCM solutions our employees bring to our clients. We believe we are a pioneer in the health administration market, with nearly 40% of our health-aligned colleagues having ten or more years’ experience and we have specialized pension expertise that we believe is difficult to find in the market. We have over eight years of Workday deployment experience, with over 1,000 certified professionals and deep expertise that spans Workday Human Capital Management, Payroll and Financial Management. We were one of the earliest entrants in HR application management services, and our extensive experience has enabled us to develop strong relationships with clients who have complex and sophisticated needs.

As a key tenet of the Alight Operating Model, we continually focus on building and strengthening our talent. We further enhance our breadth of expertise through an intentional focus on hiring, developing and retaining top talent and fostering a culture of excellent client delivery, supported by a values-based culture. We believe our talent management and development framework provides the tools and resources to increase intellectual curiosity, promote employee collaboration and deliver client results through a variety of online and classroom learning opportunities. Alight Academy is the integrated learning portal for employees to learn new skills, explore and grow their careers, and improve their performance. We believe that we maintain good relations with our employees, and in August 2018, the company received certification as a Great Place to Work in the U.S. by the Great Place to Work Institute. None of our employees are represented by labor unions.

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Sales and Marketing

We sell our technology-enabled solutions primarily through a direct sales force and a number of key partners. We market our solutions to large-market as well as mid-market enterprises, primarily in North America. While we have significant client assets with high penetration in the Fortune 500, we have identified a significant opportunity to increase penetration in U.S. employers with between 1,000 and 10,000 employees, which we define as mid-market businesses. We also plan to expand our client base globally through our HCM solutions, and have already had success with more than 85 Workday implementations for companies across Europe and Asia. In addition, we believe that we have significant room to grow with Workday, as we believe Workday’s current customers constitute less than 10% of its addressable market.

We continue to transform many aspects of our business, including further alignment of our leadership team to critical functional responsibilities to accelerate performance and drive increased innovation and growth. In addition, we continue to move towards a more cohesive, organizational structure focused on the sale of bundled solutions and cross-selling to existing clients.

We continue to reshape our go-to-market model in the mid-market to capture more clients and share of client spend across health, wealth and HCM. Our direct sales and channel strategies have evolved into a larger salesforce with deep local market knowledge and coverage. Our sales executives are trained and conversant across solutions, use an omni-channel approach to optimize sales processes and mix efficiently across direct, inside/tele-sales and digital. Additionally, we have established an increased focus on partnerships with mid-market brokers and platform providers to unlock additional growth opportunities.

Our sales team is focused on five key pillars:

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proactively renewing existing clients;

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expanding relationships with existing clients;

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developing relationships with new large-market clients;

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actively pursuing mid-market clients; and

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expanding our global client base.

Our sales team consists of sales executives focused on new logo acquisitions and account executives focused on client revenue retention, existing client expansion, margin preservation and portfolio expansion. Sales executive teams are managed nationally and deployed into regional territories, while account executive teams are organized by region and assigned to accounts based on breadth and expertise, proximity, industry experience and portfolio capacity. Additionally, a small, specialized team of seasoned sales executives and contract negotiators are aligned to large, complex client renewals.

We generate client leads and build brand awareness through our marketing programs, enabling growth via comprehensive thought leadership distribution and sales campaign management. We facilitate client logo acquisitions and satisfaction through robust program management, strategic partnerships and active third-party evaluator management. We believe that much of our sales success is attributable to our distinctive portfolio of clients (including 70 of the Fortune 100 and 243 of the Fortune 500), our ability to handle complexity, the strength of our client relationships, and strong client orientation and professionalism. We believe that as we increasingly target the mid-market and international customers for our solutions, these critical factors help us win clients in those markets as well.

Outsourcing Relationships

As we continue to focus on reducing the expense necessary to support our operations, we have increasingly used outsourcing strategies for a significant portion of our information technology and business functions. In particular, in September 2018 we entered into a strategic transaction with Wipro, a leading information technology, consulting and business process services company, to transition our operations in India to Wipro. We

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believe our arrangement with Wipro will enhance our client experience by drawing on Wipro’s capabilities in automation and innovation, while allowing us to invest in our solutions to meet the needs of our clients. As part of the Wipro transaction, approximately 9,000 of our colleagues transferred to Wipro where they continue to serve the same Alight clients they served previously, and we agreed to purchase a minimum of $1.53 billion in services from Wipro (“Minimum Revenue Commitment”) over the course of 10 years. We may terminate our arrangement with Wipro for cause or for our convenience, in which case we would be required to pay a termination fee, including certain of Wipro’s unamortized costs, plus 25% of any remaining Minimum Revenue Commitment. If we had terminated the Wipro arrangement on December 31, 2018, we estimate that the termination charges would have been at least $426 million (representing (i) 25% of the remaining Minimum Revenue Commitment, (ii) our payment of certain unamortized costs remaining on Wipro’s balance sheet, and (iii) reimbursement of certain multi-year pricing discounts, in each case as of such date), plus certain additional wind-down fees and expenses incurred by Wipro. Over the course of the 10-year term of the arrangement, the termination charges will be reduced in the aggregate, primarily due to actual spending by Alight, which will ratably decrease the portion of the termination charges relating to the remaining Minimum Revenue Commitment. See “Risk Factors—Risks Related to Our Business and Industry—We rely on third parties to perform key functions of our business operations and to provide services to our clients. These third parties may act in ways that could harm our business.”

Competition

The markets for health, wealth and HCM solutions are competitive, rapidly evolving and fragmented. Our business faces competition from other global and national companies. The market for our solutions is subject to change as a result of economic, regulatory and legislative changes, technological developments, shifting client needs and increased competition from established and new competitors.

We do not believe there is any single competitor with the breadth of our solutions, and thus our competitors vary for each of our solutions. Our traditional competitors include:

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Health: Accolade, Benefitfocus, bswift, Castlight Health, HealthEquity, Quantum Health, Wageworks

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Wealth: Betterment, Empower, Fidelity, Vanguard, Voya

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Cloud HCM Services: Accenture, Deloitte, IBM, OneSource Virtual

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Integrated, multi-service administration: ADP, Conduent, Mercer, Willis Towers Watson

We also face competition from new, technology-forward competitors as we continue to grow our client base in the middle-market and as new entrants disrupt the value chain.

We compete primarily on the basis of product and service quality, breadth of offerings, ease of use and accessibility of technology, price, reputation and client service.

Research and Development

Our technology platforms are at the core of our solutions and are based on a services-oriented architecture that support a complex set of business services we deliver at scale. Our ability to compete depends on our commitment to innovation and we continually invest in our platforms and our people to upgrade, enhance and expand our solutions and services. Our technologies are configurable and able to meet changes in client needs, regulatory requirements, and market dynamics. Our innovation and development process is consumer-driven, and we believe our ability to quickly and effectively introduce new technologies, features, applications and functionality underscores our competitive advantage.

During the year ended December 31, 2018, the eight months ended December 31, 2017, four months ended April 30, 2017 and year ended December 31, 2016, we or our predecessor, as applicable, invested approximately $49 million, $27 million, $13 million and $34 million, respectively, in the development of services and solutions.

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Intellectual Property

Our intellectual property portfolio is comprised of various copyrights (including copyrights in software) and trademarks, as well as certain trade secrets or proprietary know-how of our business. Our success has resulted in part from our proprietary methodologies, process and other intellectual property, such as our TBA and CBA platforms, as well as UPoint. However, any of our proprietary rights could be challenged, invalidated or circumvented, or may not provide significant competitive advantages.

Our business relies on software provided by both internal development and external sourcing to deliver our services. With respect to internally developed software, we claim copyright on all such software, registering works where appropriate. We require all employees and contractors to assign to us the rights to works developed on our behalf. In addition, we rely on maintaining source code confidentiality to maintain our market competitiveness. With respect to externally sourced software, we rely on contracts to allow for continued access for our business usage.

In the United States, trademark registrations may have a perpetual life, subject to continuous use and renewal every ten years, and may be subject to cancellation or invalidation based on certain use requirements and third-party challenges, or on other grounds. We vigorously enforce and protect our trademarks.

Seasonality

Due to buying patterns and delivery of certain products in the markets we serve, particularly given the timing of annual benefits enrollment, our revenues tend to be higher in the third and fourth quarters of each year.

Licensing and Regulation

Our business activities are subject to licensing requirements and extensive regulation under the laws of countries in which we operate, including U.S. federal and state laws.

ERISA Considerations

The Employee Retirement Income Security Act of 1974, as amended (“ERISA”) is a comprehensive federal statute that applies to U.S. employee benefit plans sponsored by private employers and labor unions. Plans subject to ERISA include pension and profit sharing plans and welfare plans, including health, life and disability plans. Among other things, ERISA imposes reporting and disclosure obligations, prescribes standards of conduct that apply to plan fiduciaries and prohibits transactions known as “prohibited transactions,” such as conflict-of-interest transactions, self-dealing and certain transactions between a benefit plan and a party in interest. ERISA also provides for a scheme of civil and criminal penalties and enforcement. Certain of our businesses provide services to clients subject to ERISA, including limited services under specific contracts where we may act as an ERISA fiduciary. We are also subject to ERISA’s prohibited transaction rules for transactions with ERISA plans, which may affect our ability to, or the terms upon which we may, enter into transactions with those plans, even in businesses unrelated to those giving rise to party in interest status. The applicable provisions of ERISA and the U.S. Internal Revenue Code of 1986, as amended (the “Code”), are subject to enforcement by the Department of Labor, the IRS and the U.S. Pension Benefit Guaranty Corporation.

Investment Advisers and Broker Dealers

One of our wholly owned subsidiaries, Alight Financial Advisors, LLC (“AFA”), is an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). AFA and its advisory affiliates, including directors, officers, employees and certain other persons associated with AFA are subject to the Advisers Act and other federal securities laws, including the rules and regulations promulgated by the SEC (collectively, “Adviser Regulations”). AFA and its advisory affiliates are subject to regulation and

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examination by the SEC. The SEC has the power to pursue administrative proceedings, enforcement actions and other actions against AFA and/or its advisory affiliates that can result in fines, cease-and-desist orders or suspension, termination or limitation of the activities of AFA and/or its advisory affiliates.

Registered investment advisers are subject to Adviser Regulations that cover many aspects of their investment advisory business, including, among other things, the disclosure of their business practices, their advisory business and programs, fees and compensation and actual and potential conflicts of interest. In addition, investment advisers are subject to a fiduciary duty and, as fiduciaries, are required to act in the best interest of their clients and not to place their own interests ahead of their clients.

AFA primarily offers advisory and related services to participants in employee-sponsored, defined contribution plans for their plan accounts and for retirement accounts outside the plans. In providing its advisory services, AFA engages registered investment advisory firms, which are unaffiliated with AFA or any of our affiliated companies, to provide sub-advisory services to AFA’s advisory services. The Advisers Act generally requires that advisory clients consent to the continuance of the advisory contract upon a change in control of the adviser.

As required by the Advisers Act, the investment advisory agreements entered into by AFA provide that an “assignment” of the agreement may not be made without the client’s consent. Under the Advisers Act, a change of ownership of AFA may constitute such an “assignment” if it is a change of control. For example, under certain circumstances, an assignment may be deemed to occur if a controlling block of voting securities is transferred, if any party acquires control, or, in certain circumstances, if a controlling party gives up control. An assignment or a change of control could be deemed to occur in the future if we or AFA were to gain or lose a controlling person, or in other situations that may depend significantly on facts and circumstances. In any such case we would seek to obtain the consent of AFA’s advisory clients to the assignment. To the extent of any failure to obtain these consents, our results of operations, financial condition or business could be adversely affected.

Another of our wholly owned subsidiaries, Alight Financial Solutions, LLC (“AFS”), is a broker-dealer registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the fifty states, District of Columbia and Puerto Rico (collectively, the “States”), and a member in good standing with the Financial Industry Regulatory Authority (“FINRA”) (the SEC, the States and FINRA are collectively referred to as the “Securities Regulatory Agencies”). AFS and its associated persons, including directors, officers, employees and persons registered with AFS are subject to the laws, rules, bylaws and regulations of the Securities Regulatory Agencies and other federal and state securities laws (collectively, the “Regulations”). AFS and its associated persons are also subject to regulation and examination by the Securities Regulatory Agencies and such Securities Regulatory Agencies have the power to pursue administrative and disciplinary proceedings, enforcement actions and other actions against AFS and/or its associated persons that can result in censure, fines, cease-and-desist orders or suspension, or termination or limitation of the activities of AFS and/or its associated persons.

Broker-dealers are subject to regulations that cover many aspects of the securities business, including, among other things, sales practices, form and amount of compensation, the suitability of investments for individual customers, capital adequacy, recordkeeping, financial reporting and the conduct of its associated persons. In addition, broker-dealers are required to make certain monthly and annual filings of financial information primarily with FINRA and/or the SEC, including monthly Financial and Operational Combined Uniform Single (FOCUS) reports (which include, among other things, financial results and net capital calculations) and annual audited financial statements prepared in accordance with GAAP.

As a registered broker-dealer, AFS is subject to the SEC’s Uniform Net Capital Rule, which specifies the minimum level of net capital a broker-dealer is required to maintain and requires a minimum portion of its assets to be kept in relatively liquid form. These net capital requirements are designed to measure the financial soundness and liquidity of broker-dealers. The Uniform Net Capital Rule imposes certain requirements that may

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have the effect of preventing a broker-dealer from distributing or withdrawing capital and may require that prior notice to Securities Regulatory Agencies be provided prior to making capital distributions or withdrawals. Compliance with net capital requirements could limit the ability of AFS to pay dividends to us.

In addition, a third party attempting to acquire us or a substantial position in our Class A common stock may be delayed or ultimately prevented from doing so by change in ownership or control regulations to which AFS is subject. FINRA’s NASD Rule 1017 generally provides that FINRA approval must be obtained in connection with any transaction resulting in a single person or entity owning, directly or indirectly, 25% or more of a member firm’s equity and would include a change in control of a parent company.

Other Laws and Regulations

In addition, many of our businesses offer solutions that assist our clients in complying with certain U.S. and foreign laws and regulations that apply to them. Although these laws and regulations apply to our clients and not to us, changes in such laws or regulations may affect our operations, products and services. For example, certain offerings in our Health solutions help clients manage their compliance with certain requirements of the ACA in the United States.

As one of the world’s largest providers of human capital services, our systems contain a significant amount of sensitive data related to clients, employees of our clients, vendors and our employees. We are, therefore, subject to compliance obligations under federal, state and foreign privacy and data security-related laws, including federal, state and foreign security breach notification laws with respect to both our own employee data and client employee data. The changing nature of privacy laws in the United States, Europe and elsewhere, including the adoption by the European Union of the GDPR, have impacted our processing of personal information of our employees and on behalf of our clients. The GDPR is a new, comprehensive regime that significantly increases our responsibilities when handling personal data, including, without limitation, requiring us to conduct privacy impact assessments, restricting the transmission of data and requiring public disclosure of significant data breaches. In addition, in the United States, HIPAA applies to certain aspects of our Health solutions.

The foregoing description does not include an exhaustive list of the laws and regulations governing or impacting our business. See the discussion contained in the “Risk Factors” section of this prospectus for information regarding how actions by regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have an adverse effect on our business.

Properties

Our corporate headquarters is located in leased office space in Lincolnshire, Illinois, and consists of approximately 819,000 square feet of office space. The lease expires on December 31, 2024. We have offices in various locations throughout the world, including Texas, Florida, North Carolina, Puerto Rico, Canada, Poland and India. All of our offices are located in leased premises.

We currently host our applications and serve our clients and their employees from two data centers operated in Lincolnshire, Illinois. We expect to move to a geographically distributed model, transitioning the smaller of the two data centers to a multi-tenant facility located outside of Dallas, Texas.

We believe that the facilities we currently occupy are adequate for the purposes for which they are being used and are well maintained. In general, no difficulty is anticipated in negotiating renewals as leases expire or in finding other satisfactory space if the premises become unavailable. See the accompanying notes to our financial statements included elsewhere in this prospectus for more information with respect to our lease commitments as of December 31, 2018.

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Legal Proceedings

We are subject to various legal proceedings, claims, and governmental inspections, audits or investigations arising out of our business which cover matters such as general commercial, governmental regulations, professional liability, environmental, occupational health and safety, intellectual property, employment and other actions that are incidental to our business. Although the outcomes of these claims cannot be predicted with certainty, in the opinion of management, the ultimate resolution of these matters would not be expected to have a material adverse effect on our financial position or results of operations.

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MANAGEMENT

Directors and Executive Officers

The following table sets forth the names, ages and positions of the directors, director nominees and executive officers of Alight Inc.:


Name	Age		Position
Christopher A. Michalak		53	Chief Executive Officer and Director

Katie J. Rooney		40	Chief Financial Officer

Michael J. Sigmund		58	President

Kelly L. Clark		56	Chief Information & Digital Officer

Maria T. Yao		49	Chief Operations Officer

Paulette R. Dodson		55	General Counsel & Corporate Secretary

Daniel S. Henson		57	Non-Executive Chairman of the Board of Directors

Andrew M. Appel		54	Director

Dina Dublon		65	Director Nominee

Bradley M. Fluegel		57	Director

Kathryn J. Hayley		60	Director

David N. Kestnbaum		37	Director

Mathew J. Lori		55	Director

Dinesh D. Moorjani		43	Director

John R. Murphy		68	Director Nominee

Vikram Suresh		35	Director

Peter F. Wallace		43	Director

Christopher A. Michalak has served as our Chief Executive Officer since May 2017. Mr. Michalak has more than 28 years of experience in the industry. Prior to assuming leadership of Alight, Mr. Michalak was the Global Chief Commercial Officer with Aon Hewitt from April 2012 to May 2017. Prior to joining Aon, Mr. Michalak served as Chief Executive Officer of Buck Consultants, a global HR consulting firm. Mr. Michalak holds a B.S. in Marketing from Michigan State University and an M.B.A. from the Kellogg School of Management at Northwestern University.

Katie J. Rooney has served as our Chief Financial Officer since May 2017. Ms. Rooney has more than 18 years of experience in the industry. Prior to joining the Company, Ms. Rooney served as the Chief Financial Officer for Aon Hewitt from January 2016 to May 2017. Prior to that, she served across various financial roles within Aon Hewitt and Aon from January 2009 to December 2015, including Chief Financial Officer of the Outsourcing business, the Finance Chief Operating Officer and Assistant Treasurer for Aon. Before joining Aon, Ms. Rooney worked in Investment Banking at Morgan Stanley. Ms. Rooney holds a B.B.A. in Finance from the University of Michigan.

Michael J. Sigmund has served as our President, with full responsibility for our health, defined contribution, defined benefits and consumer experience capabilities, since September 2017. Prior to joining the Company, Mr. Sigmund was with Conduent Inc. and its predecessor companies for 14 years, most recently leading its global HR outsourcing services business, including benefit administration, HR business process outsourcing services and exchange solutions. He has more than 25 years of experience across financial institutions and HR outsourcing and consulting organizations. Mr. Sigmund holds a B.A. in Communications from Rowan University and an M.B.A. from Farleigh Dickinson University.

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Kelly L. Clark has served as our Chief Information & Digital Officer since September 2018. Mr. Clark has more than 20 years of experience in the healthcare industry. Prior to joining the Company, Mr. Clark served as the Chief Information Officer for Maximus Inc. from 2014 to 2018. Prior to that, he served as Senior Vice President of Data Operations for Optum, part of United Health Group, from 2013 to 2014. Prior to that, Mr. Clark served as Chief Information Officer for OptumHealth from 2010 until 2013. Mr. Clark holds a Master’s Degree in City Planning from the University of Manitoba.

Maria T. Yao has served as our Chief Operating Officer since November 2018. Prior to that, Ms. Yao served as our Executive Vice President, HR & Financial Solutions from December 2017 to November 2018 and as our Senior Vice President, HR Outsourcing Delivery from May 2017 to December 2017. Ms. Yao has over 25 years of experience in the industry. Prior to joining the Company, Ms. Yao served as Executive Vice President and Business Unit Leader at Aon Hewitt from July 2008 to June 2017. Prior to that, she served in various operational and leadership roles at Hewitt Associates from July 1993 to July 2008, including Implementation Manager, Delivery Group Manager, and Operations Leader. Ms. Yao holds a B.A. in Politics and Government from Ripon College.

Paulette R. Dodson has served as our General Counsel and Corporate Secretary since May 2018. Prior to joining the Company, Ms. Dodson served as Senior Vice President, General Counsel and Secretary of PetSmart, Inc. from July 2012 to May 2018. Prior to joining PetSmart, Inc., Ms. Dodson served in various roles at Sara Lee Corporation, including as General Counsel and Corporate Secretary, and Chief Counsel for North America. Prior to that, she spent 14 years at Tribune Company where she served as Assistant General Counsel. Ms. Dodson holds a B.A. in Urban Legal Studies from City College of New York and a J.D. from Cornell Law School.

Daniel S. Henson has served as the Non-Executive Chairman of our board of directors since July 2017. Prior to his retirement in 2016, Mr. Henson worked for the General Electric Company, or GE, for over 25 years in various leadership capacities, including most recently as Executive Vice President of GE Capital, having had responsibility for all commercial lending and leasing businesses in North America. Mr. Henson served as Chief Executive Officer of GE Capital Americas from 2008 until 2015 and as the Chief Marketing Officer of GE from 2006 to 2008. Mr. Henson currently serves as an advisor to Blackstone. Since 2016, Mr. Henson has served on the board of directors of Healthcare Trust of America, Inc. and OnDeck Capital, Inc. and as the Non-Executive Chairman of Exeter Finance. Mr. Henson holds a B.A. in Marketing from the George Washington University School of Government and Business.

Andrew M. Appel has served as a member of our board of directors since May 2017. Mr. Appel has served as the President and Chief Executive Officer of Information Resources, Inc. (“IRI”), a provider of integrated market intelligence, big data and predictive analytics solutions, since June 2012. Prior to joining IRI, Mr. Appel held a number of senior leadership positions, including Senior Vice President of Revenue Operations for Accretive Health from March 2011 to May 2012 and various executive positions at Aon, most recently as Chief Operating Officer from July 2005 to December 2010. Earlier in his career, Mr. Appel was a senior partner at McKinsey and Company, where for 15 years he advised leading global financial institutions on a wide array of operational, strategic and organizational issues. Mr. Appel holds a B.S. in Economics from the University of California, Los Angeles and an M.B.A. from the University of Chicago.

Dina Dublon is expected to join our board of directors prior to the completion of this offering. Ms. Dublon has served on the board of directors at PepsiCo since 2005. Previously, she served on the supervisory board of Deutsche Bank AG from 2013 until 2018 and on the board of directors of Accenture plc from 2001 until 2017 and Microsoft Corporation from 2005 until 2014. Ms. Dublon served as Executive Vice President and Chief Financial Officer at JPMorgan Chase & Co. from 1998 until 2004. Earlier in her career, Ms. Dublon held various positions at JPMorgan Chase & Co. and its predecessor companies, including Corporate Treasurer, Managing Director of the Financial Institutions Division and Head of Asset Liability Management. Ms. Dublon has also served on the faculty of Harvard Business School and on the boards of several non-profit organizations, including the Women’s Refugee Commission, the Global Fund for Women, the Columbia University Mailman School of Public Health and as the co-chair of the Advisory Council of Columbia University Cancer Research Center.

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Ms. Dublon holds a B.A. in Economics and Mathematics from the Hebrew University in Jerusalem and a M.S. from the Business School at Carnegie Mellon University.

Bradley M. Fluegel has served as a member of our board of directors since March 2018. Mr. Fluegel served from August 2015 until his retirement in January 2018 as Senior Vice President and Chief Healthcare Commercial Market Development Officer for Walgreens Boots Alliance, or Walgreens, and before that as Walgreens’ Senior Vice President and Chief Strategy and Business Development Officer from October 2012 until August 2015. Prior to joining Walgreens, Mr. Fluegel served in various senior and executive capabilities in the commercial healthcare industry. Since 2015, Mr. Fluegel has served as Senior Advisor and Consultant to a private equity firm, Amulet Capital. Mr. Fluegel has also served on the board of directors of Performant Financial Corporation since 2014 and the board of directors of Fitbit, Inc. since 2018. Mr. Fluegel holds a B.A. in Business Administration from the University of Washington, a Master’s in Public Policy from Harvard University’s John F. Kennedy School of Government and is a Certified Public Accountant (inactive).

Kathryn J. Hayley has served as a member of our board of directors since May 2018. Ms. Hayley is the Chief Executive Officer of Rosewood Advisory Services, LLC, a business advisory services firm. Previously, she served as an Executive Vice President of UnitedHealthcare (a subsidiary of UnitedHealth Group, Inc.), a position in which she served from 2012 to 2015. From 2006 to 2012, she served as an executive of Aon, including as Co-Chief Executive Officer of Aon Consulting Worldwide and Chief Executive Officer of Aon Hewitt Consulting Americas. Prior to her service at Aon, Ms. Hayley was an information technology partner at Deloitte Consulting and led the U.S. financial services practice. She also served on the board of directors of Deloitte & Touche LLP U.S. Ms. Hayley has been a member of the board of directors of First Midwest Bancorp since 2016, where she serves on the Audit Committee and Compensation Committee. Ms. Hayley holds a B.S. in Applied Computer Science from Illinois State University and an M.B.A. in Finance and Marketing from the Kellogg School of Management at Northwestern University.

David N. Kestnbaum has served as a member of our board of directors since May 2017. Mr. Kestnbaum is a Managing Director in the Private Equity Group at Blackstone. Since joining Blackstone in 2013, Mr. Kestnbaum has been involved in the execution of Blackstone’s investments in PSAV, Packers Sanitation Services Inc., Cloverleaf Cold Storage, Alight, SESAC, Tradesmen, Outerstuff, AlliedBarton Security Services, DJO Global, and AVINTIV, and in evaluating investment opportunities across multiple sectors, including Business Services, Transportation & Logistics, Travel & Leisure, Apparel, and various other industries. Before joining Blackstone, Mr. Kestnbaum was a Vice President of Vestar Capital Partners, where he analyzed and executed private equity investments in multiple different sectors. Prior to Vestar, Mr. Kestnbaum worked in investment banking as a member of JPMorgan’s Financial Sponsor Group, where he executed a variety of private equity-related M&A and financing transactions. He currently serves as a Director of PSAV, Packers Sanitation Services Inc., Cloverleaf Cold Storage, SESAC, Tradesmen and Outerstuff, and was previously a Director of AlliedBarton Security Services and DJO Global. Mr. Kestnbaum holds a B.A. in Political Science from The University of North Carolina at Chapel Hill.

Mathew J. Lori has served as a member of our board of directors since May 2017. Mr. Lori has served as a Managing Director of New Mountain Capital since 2007. Before joining New Mountain Capital, he was a Managing Director of CCMP Capital Advisors and its predecessor firm, JP Morgan Partners, LLC. Mr. Lori has led transactions across a select group of sectors including business services, software, consumer products, industrial and healthcare. He is the Lead Director and/or Chairman of IRI Worldwide, ABB Optical Group, Diversified Foodservice Supply LLC, Strategic Partners, Inc. and Beeline Inc. He previously served on the board of directors of SNL Financial and as Lead Director and Chairman of Alexander Mann Solutions. Mr. Lori received his B.S. from the University of Windsor and his M.B.A. from the JL Kellogg Graduate School of Management at Northwestern University.

Dinesh D. Moorjani has served as a member of our board of directors since March 2018. Mr. Moorjani has served as Managing Director at Comcast Ventures since October 2016, where he oversees Venture Capital

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investments across various sectors including social, commerce marketplaces, data & information businesses, transportation mobility and autonomous vehicles, and pioneer technologies. Prior to Comcast, he served as an Executive-in-Residence at Warburg Pincus from 2014 to 2016, where he continues to serve as an advisor. In that capacity, he identified and conducted diligence on growth equity investments and counseled existing portfolio companies. Earlier in his career, Mr. Moorjani co-founded Tinder in 2012, and founded and served as Chief Executive Officer of Hatch Labs from 2010 until 2013. Mr. Moorjani has served in numerous leadership roles at technology companies, including Samsung Electronics and IAC. He presently serves as a board director at OfferUp, Seven Rooms, Monet Networks, and Saffronart. Mr. Moorjani holds a B.S. in Chemical Engineering from Northwestern University and an M.B.A. from Harvard Business School.

John R. Murphy is expected to join our board of directors prior to the completion of this offering. Mr. Murphy has served on the board of directors of O’Reilly Automotive, Inc. since 2003 and of Summit Materials, Inc. since 2012. Previously, he served as Summit Materials’ Interim Chief Financial Officer in 2013. Mr. Murphy also served on the board of directors of DJO Global, Inc. from 2012 until the sale of the company in 2019 and of Graham Packaging, Inc. from February 2011 until it was sold in September 2011. Earlier in his career, he was the Senior Vice President and Chief Financial Officer of Smurfit-Stone Container Corporation from 2009 to 2010, where he led the financial restructuring of the company during its Chapter 11 reorganization. Mr. Murphy held various leadership roles at Accuride Corporation, Inc. from 1998 until 2008, including as President and Chief Executive Officer and as a member of the board of directors. Accuride Corporation filed for Chapter 11 bankruptcy protection in October 2009 and emerged in 2010. Mr. Murphy holds a B.S. in Accounting from Pennsylvania State University and an M.B.A. from the University of Colorado and is a Certified Public Accountant.

Vikram Suresh has served as a member of our board of directors since May 2017. Mr. Suresh is a Principal in the Private Equity Group at Blackstone. Mr. Suresh evaluates investment opportunities across the Business Services, Technology, Media & Telecom (“TMT”) and Logistics industries. He has been involved in the execution of Blackstone’s investments in Alight, Cloverleaf Cold Storage and PSSI, and serves on the board of directors of each company. Mr. Suresh previously worked within Blackstone Advisory Partners. Prior to joining Blackstone in 2009, Mr. Suresh worked at Morgan Stanley, where he focused on M&A transactions within the TMT industry. Mr. Suresh received a B.A. in Applied Mathematics from the University of California at Berkeley.

Peter F. Wallace has served as member of our board of directors since May 2017. Mr. Wallace is a Senior Managing Director in the Private Equity Group at Blackstone. Since joining Blackstone in 1997, Mr. Wallace has led or been involved in Blackstone’s investments in Alight, AlliedBarton Security Services, Allied Waste, American Axle & Manufacturing, Centennial Communications, Centerplate (formerly Volume Services America), CommNet Cellular, GCA Services, LocusPoint Networks, Michaels Stores, New Skies Satellites, Outerstuff, Ltd., Packers Sanitation Services Inc., Pinnacle Foods/Birds Eye Foods, PSAV, SeaWorld Parks & Entertainment (formerly Busch Entertainment Corporation), Service King, Sirius Satellite Radio, Tradesmen International, Universal Orlando, Vivint, Vivint Solar, and The Weather Channel Companies. Mr. Wallace serves on the board of directors of Michaels Stores, Outerstuff, Ltd., Service King, Tradesmen International, Vivint and Vivint Solar. Mr. Wallace received a B.A. from Harvard College, where he graduated magna cum laude.

Composition of the Board of Directors After this Offering

Our business and affairs are managed under the direction of our board of directors. In connection with this offering, we will amend and restate our certificate of incorporation to provide for a classified board of directors, with four directors in Class I (expected to be Mr. Michalak, Mr. Henson, Mr. Lori and Mr. Wallace, with their terms expiring of the annual meeting of stockholders to be held in 2020), four directors in Class II (expected to be Mr. Appel, Mr. Fluegel, Mr. Kestnbaum and Mr. Moorjani, with their terms expiring of the annual meeting of stockholders to be held in 2021) and four directors in Class III (expected to be Ms. Dublon, Ms. Hayley, Mr. Murphy and Mr. Suresh, with their terms expiring of the annual meeting of stockholders to be held in 2022). See “Description of Capital Stock—Anti-Takeover Effects of Our Amended and Restated Certificate of

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Incorporation and Amended and Restated Bylaws and Certain Provisions of Delaware Law—Classified Board of Directors.” In addition, we intend to enter into a stockholders agreement with certain affiliates of our Sponsor and the Co-Investors in connection with this offering. We will agree to nominate to our board of directors individuals designated by our Sponsor and each of our Co-Investors in accordance with the stockholders agreement. See “Certain Relationships and Related Person Transactions—Stockholders Agreement.”

Background and Experience of Directors

When considering whether directors and director nominees have the experience, qualifications, attributes or skills, taken as a whole, to enable our board of directors to satisfy its oversight responsibilities effectively in light of our business and structure, the board of directors focuses primarily on each person’s background and experience as reflected in the information discussed in each of the directors’ and director nominees’ individual biographies set forth above. We believe that our directors and director nominees provide an appropriate mix of experience and skills relevant to the size and nature of our business. In particular, the members of our board of directors considered the following important characteristics, among others:

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Mr. Henson – our board of directors considered Mr. Henson’s extensive leadership and business experience gained from his service in various senior and executive roles at GE, as well as service on the boards of a diverse group of companies.

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Mr. Michalak – our board of directors considered Mr. Michalak’s extensive business and industry experience as well as his experience leading Alight since the completion of the Separation and his prior experience as an executive of Aon Hewitt.

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Mr. Appel – our board of directors considered Mr. Appel’s thorough knowledge of and experience leading companies in our industry.

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Ms. Dublon – our board of directors considered Ms. Dublon’s expertise in financial, accounting, strategic, global markets, risk management and banking matters gained from her distinguished career in the financial services industry, including through her role as Executive Vice President and Chief Financial Officer of JPMorgan Chase & Co.

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Mr. Fluegel – our board of directors considered Mr. Fluegel’s experience leading companies in the commercial healthcare industry and expertise in corporate strategy and business development.

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Ms. Hayley – our board of directors considered Ms. Hayley’s financial expertise, extensive board and management experience and thorough knowledge of our industry.

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Mr. Kestnbaum – our board of directors considered Mr. Kestnbaum’s extensive knowledge of a variety of different industries and his significant financial and investment experience from his involvement in Blackstone, including as Managing Director.

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Mr. Lori – our board of directors considered Mr. Lori’s service on the boards of a diverse group of companies, as well as his significant financial and investment experience relating to his position as a Managing Director of New Mountain Capital.

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Mr. Moorjani – our board of directors considered Mr. Moorjani’s entrepreneurial and corporate development expertise, having founded or co-founded, led and invested in various companies.

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Mr. Murphy – our board of directors considered Mr. Murphy’s extensive financial knowledge, including from his service as Chief Financial Officer of Smurfit-Stone Container Corporation and Accuride Corporation.

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Mr. Suresh – our board of directors considered Mr. Suresh’s significant financial and investment experience from his involvement in Blackstone, including as Principal.

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Mr. Wallace – our board of directors considered Mr. Wallace’s service on the boards of a diverse group of companies, as well as his significant financial and investment experience relating to his position as a Senior Managing Director at Blackstone.

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Controlled Company Exception

After the completion of this offering, our Sponsor and Co-Investors will be parties to a Stockholders Agreement, described in “Certain Relationships and Related Person Transactions—Stockholders Agreement” and will beneficially own approximately 65% of the combined voting power of our Class A and Class B common stock (or 64% if the underwriters exercise in full their option to purchase additional shares of Class A common stock). As a result, we will be a “controlled company” within the meaning of the Nasdaq corporate governance standards. Under these corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance standards, including the requirements (1) that a majority of our board of directors consist of independent directors, (2) that our board of directors have a compensation committee that consists entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities and (3) that our director nominations be made, or recommended to our full board of directors, by our independent directors or by a nominations committee that consists entirely of independent directors and that we adopt a written charter or board resolution addressing the nominations process. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to these corporate governance requirements. In the event that we cease to be a “controlled company” and our shares continue to be listed on Nasdaq, we will be required to comply with these provisions within the applicable transition periods.

Board Committees

We anticipate that, prior to the completion of this offering, our board of directors will establish the following committees: an audit committee; a compensation committee; and a nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Our board of directors may also establish from time to time any other committees that it deems necessary or desirable. Members serve on these committees until their resignation or until otherwise determined by our board of directors.

Audit Committee

Upon completion of this offering, we expect our audit committee will consist of Mr. Murphy, Ms. Dublon, Mr. Fluegel and Mr. Henson, with Mr. Murphy serving as chair. Our audit committee will be responsible for, among other things:

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selecting and hiring our independent auditors, and approving the audit and non-audit services to be performed by our independent auditors;

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assisting the board of directors in evaluating the qualifications, performance and independence of our independent auditors;

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assisting the board of directors in monitoring the quality and integrity of our financial statements and our accounting and financial reporting;

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assisting the board of directors in monitoring our compliance with legal and regulatory requirements;

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reviewing the adequacy and effectiveness of our internal control over financial reporting processes;

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assisting the board of directors in monitoring the performance of our internal audit function;

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monitoring the performance of our internal audit function;

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reviewing with management and our independent auditors our annual and quarterly financial statements;

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establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; and

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preparing the audit committee report that the rules and regulations of the SEC require to be included in our annual proxy statement.

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Compensation Committee

Upon completion of this offering, we expect our compensation committee will consist of Mr. Henson, Mr. Moorjani and Mr. Wallace, with Mr. Henson serving as chair. Our compensation committee will be responsible for, among other things:

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reviewing and approving corporate goals and objectives relevant to the compensation of our CEO, evaluating our CEO’s performance in light of those goals and objectives, and, either as a committee or together with the other independent directors (as directed by the board of directors), determining and approving, or making recommendations to the board of directors with respect to, our CEO’s compensation level based on such evaluation;

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reviewing and approving, or making recommendations to the board of directors with respect to, the compensation of our other executive officers, including annual base salary, bonus and equity-based incentives and other benefits;

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reviewing and recommending the compensation of our directors;

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reviewing and discussing annually with management our “Compensation Discussion and Analysis” disclosure required by SEC rules;

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preparing the compensation committee report required by the SEC to be included in our annual proxy statement; and

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reviewing and making recommendations with respect to our equity compensation plans.

Nominating and Corporate Governance Committee

Upon completion of this offering, we expect our nominating and corporate governance committee will consist of Ms. Hayley, Mr. Appel and Mr. Fluegel, with Ms. Hayley serving as chair. The nominating and corporate governance committee is responsible for, among other things:

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assisting our board of directors in identifying prospective director nominees and recommending nominees to the board of directors;

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overseeing the evaluation of the board of directors and management;

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reviewing developments in corporate governance practices and developing and recommending a set of corporate governance guidelines; and

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recommending members for each committee of our board of directors.

Compensation Committee Interlocks and Insider Participation

We do not presently have, nor did we have during the last completed fiscal year, a compensation committee. Decisions regarding the compensation of our executive officers have historically been made by the board of directors of Alight OpCo. Mr. Michalak, who is our Chief Executive Officer and director, generally participates in discussions and deliberations of the board regarding executive compensation, including during the last completed fiscal year. Other than Mr. Michalak, no member of our board of directors was at any time during the last completed fiscal year, or at any other time, one of our officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year as a member of the board of directors or compensation committee (or other committee performing equivalent functions) of any entity that has one or more of its executive officers serving on our board of directors or compensation committee. We are party to certain transactions with affiliates of our Sponsor described in “Certain Relationships and Related Person Transactions.”

Code of Ethics

We will adopt a new Code of Business Conduct and Ethics that applies to all of our officers, directors and employees, including our principal executive officer, principal financial officer, principal accounting officer and

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controller, or persons performing similar functions, which will be posted on our website. Our Code of Business Conduct and Ethics is a “code of ethics,” as defined in Item 406(b) of Regulation S-K. We will make any legally required disclosures regarding amendments to, or waivers of, provisions of our code of ethics on our website. The information contained on, or accessible from, our website is not part of this prospectus by reference or otherwise.

Director Compensation

Employee directors and directors who are employed by the Sponsor and the Co-Investors receive no additional compensation for serving on the Board of Directors. However, all directors are reimbursed for their reasonable out-of-pocket expenses related to their service as a member of the Board of Directors. Accordingly, none of our directors, other than Messrs. Appel, Fluegel, Henson and Moorjani and Ms. Hayley, received compensation for the year ended December 31, 2018. Except where the context requires otherwise, the terms “Board” or “Board of Directors” as used in this “Director Compensation” section refer to the Board of Directors of Alight OpCo.

Director Compensation for 2018. The following table provides summary information concerning the compensation of our directors, other than our employee directors, for the year ended December 31, 2018.


Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(1)(2)		All Other Compensation ($)(3)		Total ($)
Andrew M. Appel	$	100,000		—	$	800,000	$	900,000
Bradley M. Fluegel	$	83,333	$	98,545		—	$	181,878
Kathryn J. Hayley	$	66,667	$	98,545		—	$	165,212
Daniel S. Henson	$	300,000		—		—	$	300,000
David N. Kestnbaum		—		—		—		—
Colm Lanigan		—		—		—		—
Mathew J. Lori		—		—		—		—
Dinesh Moorjani(4)	$	150,000	$	98,545		—	$	248,545
Vikram Suresh		—		—		—		—
Peter F. Wallace		—		—		—		—

(1)

Amounts included in this column reflect the aggregate grant date fair value of Class B Units granted in 2018, calculated in accordance with FASB ASC Topic 718 (“Topic 718”), utilizing the assumptions discussed in Note 10, Members’ Equity, to our consolidated financial statements included elsewhere in this prospectus. The 2.0x Exit-Vesting Class B Units (as defined below) and the 2.5x Exit-Vesting Class B Units (as defined below) are subject to market conditions and an implied performance condition as defined under applicable accounting standards. The grant date fair value of the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units was computed based upon the probable outcome of the performance conditions as of the grant date in accordance with Topic 718. The implied performance condition for the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units granted in 2018 was deemed achieved on the grant date and, accordingly, these awards are subject only to market conditions and therefore have no maximum grant date fair values that differ from the grant date fair values presented in the table.

(2)	As of December 31, 2018, Messrs. Appel, Fluegel, Henson and Moorjani each held 23.33, 18.75, 1,007 and 18.75 unvested Class B Units, respectively, and Ms. Hayley held 18.75 unvested Class B Units.

(3)	With respect to Mr. Appel, amount reported reflects a one-time cash payment by the Company in May 2018 in the amount of $800,000 in consideration of consulting services Mr. Appel previously rendered in connection with the Separation.

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(4)	Effective March 2018, Mr. Moorjani’s annual cash retainer was increased to $180,000 in consideration of the additional duties and responsibilities that Mr. Moorjani has undertaken as a member of the Board of Directors.

Description of Director Compensation. With respect to 2018, each of our non-employee directors (other than the directors employed by our Sponsor or the Co-Investors) was entitled to receive an annual cash retainer of $100,000, payable monthly, which was pro-rated for the portion of calendar year 2018 during which he or she served on the Board of Directors. In connection with his service as Non-Executive Chairman of our Board of Directors, Mr. Henson was entitled to receive an annual cash retainer of $300,000. In August 2018, Mr. Moorjani’s annual cash retainer was increased to $180,000, effective March 2018, in consideration of the additional duties and responsibilities that Mr. Moorjani has undertaken as a member of the Board of Directors. Additionally, in consideration of consulting services which Mr. Appel previously rendered in connection with the Separation, the Company made a cash payment to Mr. Appel in the amount of $800,000 in May 2018.

Class B Units and Purchased Class A-1 Units. In connection with Messrs. Appel’s and Henson’s appointment to our Board of Directors in 2017, Messrs. Appel and Henson each received a grant of 25 and 1,079 Class B Units, respectively, consisting of a time-vesting portion (one-third of the Class B Units granted) (the “Time-Vesting Class B Units”), a 2.0x exit-vesting portion (one-third of the Class B Units granted) (the “2.0x Exit-Vesting Class B Units”) and a 2.5x exit-vesting portion (one-third of the Class B Units granted) (the “2.5x Exit-Vesting Class B Units”). In addition, in connection with joining the Board of Directors in 2018, Messrs. Fluegel and Moorjani and Ms. Hayley each received a grant of 18.75 Class B Units, respectively, consisting of one-third Time-Vesting Class B Units, one-third 2.0x Exit-Vesting Class B Units and one-third 2.5x Exit-Vesting Class B Units. For a description of the vesting terms of the Class B Units granted to our directors, see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards—Class B Units.”

Moreover, as a key component of the long-term equity incentive program put in place following the Separation, certain directors and key executives were provided with the opportunity to invest in Class A-1 Units, which encouraged equity ownership and aligned these individuals’ financial interests with those of our equity-owners. As of the date of this prospectus, Mr. Henson had invested in 25 units; Mr. Appel invested in 100 units; Mr. Fluegel invested in 11.25 units; Mr. Moorjani invested in 15 units; and Ms. Hayley invested in 75 units.

As a condition to receiving their Class B Units, each of the directors was required to enter into a profits interest award agreement with Tempo Management LLC and Alight OpCo and become a party to the amended and restated limited liability company agreement of Tempo Management LLC. Additionally, as a condition of receiving their Class B Units, the directors agreed to certain restrictive covenants, including confidentiality of information, non-disparagement, non-solicitation and non-competition covenants. The confidentiality covenant has an indefinite term, the non-disparagement covenant has an indefinite term and the non-solicitation and non-competition covenants each have a term effective both during the term of the director’s term of service and for 24 months following a termination of his or her service (and for certain directors, the non-competition covenant has an additional term of 12 months in the event of a termination of services following a change in control).

In connection with this offering and with assistance from the Consultant (as defined below), we have developed a market-based director compensation program for our non-employee directors (other than the directors employed by our Sponsor or the Co-Investors). The program will provide eligible directors with annual compensation of $245,000, consisting of $100,000 as an annual cash retainer (payable in quarterly installments in arrears) and $145,000 in the form of restricted stock units, which will generally vest in full on the first anniversary of the grant date. The chairperson of the Board will receive an additional $200,000, and the respective chairpersons of the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee will receive an additional $25,000, $20,000 and $15,000, respectively.

In connection with this offering we also expect to adopt equity interest ownership guidelines for our non-employee directors in order to better align our eligible directors’ financial interests with those of our shareholders

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by requiring such directors to own a minimum level of our equity interests. We expect that each of our non-employee directors who receives compensation for their service as directors and is not employed by stockholders or affiliates of stockholders of the Company that meet the ownership requirements for a non-employee director will be required to own equity interests in an amount equal to five times his or her annual cash retainer within five years of the later of (a) when the Company makes its first broad-based equity incentive grants following this offering or (b) when the individual joins the Board.

Conversion of Class A-1 Units and Class B Units. In connection with this offering, we expect that all Class A-1 and vested and unvested Class B Units held by our directors will be converted into vested and unvested LLC Units pursuant to the Reorganization Transactions, as described in “Organizational Structure—Reclassification and Amendment and Restatement of Limited Liability Company Agreement of Alight OpCo.” The LLC Units issued in exchange for unvested Class B Units will generally be subject to the same vesting conditions as were applicable to the corresponding Class B Units. See “Actions Taken In Connection with This Offering—Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units” for additional details.

The precise number of LLC Units to be delivered in respect of the Class A-1 Units and Class B Units will be based on the initial public offering price. The following table sets forth the assumed number and value of LLC Units that each of Messrs. Appel, Fluegel, Henson and Moorjani and Ms. Hayley will receive in exchange for their Class A-1 Units and vested and unvested Class B Units, in each case based on an assumed initial public offering price of $23.50 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus).


	Vested LLC Units Received in Exchange for Class A-1 Units				Vested LLC Units Received in Exchange for Vested Class B Units				Unvested LLC Units Received in Exchange for Unvested Class B Units
	(#)		($)		(#)		($)		(#)		($)
Andrew M. Appel		129,921		3,053,153		3,368		79,139		21,891		514,443
Bradley M. Fluegel		17,749		417,101		938		22,032		13,126		308,451
Kathryn J. Hayley		118,327		2,780,675		—		—		14,063		330,483
Daniel S. Henson		32,480		763,288		72,679		1,707,951		1,017,503		23,911,315
Dinesh Moorjani		23,665		556,135		938		22,032		13,126		308,451

Executive Compensation

Compensation Discussion and Analysis.

This section contains a discussion of the material elements of compensation awarded to, earned by or paid to our Chief Executive Officer, Chief Financial Officer and each of our three other most highly compensated executive officers who served in such capacities at the end of our fiscal year on December 31, 2018, collectively known as the “named executive officers.”

Introduction. Executive compensation is designed to attract and retain top talent and to also motivate and engage executives to contribute to the achievement of our financial goals and ultimately create and grow our equity value. Our named executive officers for 2018 were:

•

Christopher A. Michalak, our Chief Executive Officer;

•

Katie J. Rooney, our Chief Financial Officer;

•

Paulette R. Dodson, our General Counsel and Corporate Secretary;

•

Kelly L. Clark, our Chief Information and Digital Officer; and

•

Maria T. Yao, our Chief Operations Officer.

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Executive Compensation Objectives and Philosophy. Our primary executive compensation objectives are to:

•

attract, retain and motivate individuals who can advance our financial goals and ultimately, creating and maintaining our long-term equity value;

•

reward executives in a manner aligned with our financial performance to drive pay for performance; and

•

provide total compensation opportunity that is competitive with our market and the industry within which we seek executive talent.

To achieve our objectives, we have delivered executive compensation through a combination of the following components:

•

base salary;

•

annual cash incentive compensation;

•

long-term incentive compensation;

•

broad-based employee benefits; and

•

severance benefits.

We provide competitive base salaries and other benefits, including severance benefits, to attract and retain executive talent. We have also used annual cash incentive compensation and long-term equity incentives to ensure a performance-based delivery of pay that aligns as closely as possible with the long-term interests of our equity-owners while enhancing executive retention.

Compensation Determination Process.

Role of Board and Management. Prior to this offering, executive compensation and related decisions were made by the Board of Directors of Alight OpCo. In connection with this offering, our Board of Directors will establish a compensation committee that will assume responsibility for the strategic oversight of our compensation and benefit programs. Except where the context requires otherwise, the terms “Board” or “Board of Directors” as used in this “Executive Compensation” section refer to the Board of Directors of Alight OpCo.

Prior to this offering, Mr. Michalak participated in discussions and deliberations with our Board of Directors regarding the determinations of annual cash incentive awards and any compensation adjustments for our executives other than for himself. Our Board of Directors considered Mr. Michalak’s recommendations and may have exercised discretion in modifying them. Our Board of Directors annually reviewed Mr. Michalak’s performance and approved any changes to his compensation package based on its review. Mr. Michalak did not participate in deliberations regarding his own compensation. Following this offering, the compensation committee will assume the Board’s role in reviewing and determining executive officer compensation and we expect that Mr. Michalak will continue to provide recommendations to the compensation committee regarding compensation for our executive officers other than for himself.

As our executive compensation program evolves as a public company, it will reflect the belief that the amount earned by our executives must significantly depend on achieving rigorous company and individual performance objectives designed to enhance shareholder value. We have made and intend to continue to make changes to our executive compensation programs with the goal of aligning our programs with our executive compensation philosophy as a public company. Accordingly, the compensation paid to our named executive officers for fiscal 2018, and the form and way it was paid, is not necessarily indicative of how we will compensate our named executive officers after this offering.

We anticipate that we will continue to review our executive compensation programs in connection with this offering and make such changes as are determined to be necessary or appropriate for our status as a public

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company. As we gain experience as a public company, we expect that the specific direction, emphasis and components of our executive compensation program will continue to evolve. For more information on changes to our executive compensation program that we expect to make in connection with this offering, see “Actions Taken in Connection with This Offering” below.

Role of the Independent Compensation Consultant. Our Board of Directors did not use compensation consultants in making its compensation determinations in 2018 and has not benchmarked compensation against a peer group. In connection with this offering, in 2018, the Board of Directors engaged Korn Ferry, Inc. (the “Consultant”) as an independent compensation consultant to assist in evaluating the competitiveness of the Company’s executive compensation program and reviewing the post-IPO annual cash incentive and long-term incentive award programs. In fiscal 2018, in connection with this offering, the Consultant performed a variety of work, including but not limited to: assisting in the development of a market-based director compensation program, conducting a review of the competitiveness of our executive compensation program, re-evaluating our annual cash incentive plan design and evaluating a post-IPO long-term equity incentive award program and strategy. See “Actions Taken in Connection with This Offering” below for additional details on the executive compensation adjustments made in connection with this offering. To assist the Board of Directors in its review and evaluation of each of these areas, the Consultant provided the Board with data from a peer group (the “Peer Group”) composed of the following 13 companies:


Peer Group
Black Knight, Inc.	Fiserve, Inc.	Paychex, Inc.
Broadridge Financial Solutions	Genpact Limited	Red Hat, Inc.
CDK Global, Inc.	Insperity, Inc.	TriNet Group Inc.
Citrix Systems, Inc.	LogMeln, Inc.	Workday, Inc.
Corelogic, Inc.

The Peer Group was developed with assistance from the Consultant to incorporate publicly-traded companies that reflect a mix of professional services and technology-focused companies that we compete with for executive talent with industry-specific knowledge and experience. The Peer Group includes companies in the data processing and outsourcing services, application software and human resources and employment services sectors, as well as management and Board recommendations. Additionally, the Peer Group companies were selected to represent professional services and technology-focused companies with median revenues of $2.95 billion, a median market capitalization multiple of revenue of 4.0x and median market capitalization of $6.77 billion.

Employment Agreements. None of our named executive officers have employment agreements relating to their employment with the Company. Each of Ms. Dodson, Mr. Clark and Ms. Yao has entered into an offer letter with us in connection with his or her employment, the material terms of which are described below under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Offer Letters.”

Compensation Elements

The following is a discussion and analysis of each component of our executive compensation program.

Base Salary. Base salary compensates executives for performing requirements of their positions and provides executives with a level of cash income predictability and stability with respect to a portion of their total compensation. In April 2018, the Board of Directors increased Mr. Michalak’s base salary by $100,000 to $850,000 in consideration of his performance and market competitiveness. Additionally, Ms. Yao’s base salary was increased by $54,000 to $360,000 in connection with her promotion to Chief Operations Officer in November 2018.

Sign-on and Discretionary Bonuses. From time to time, we may award sign-on bonuses and discretionary bonuses to attract or retain executive talent. Generally, sign-on bonuses are used to incentivize candidates to leave their current employers or may be used to offset the loss of unvested compensation they may forfeit as a result of

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leaving their current employers. In connection with the commencement of his employment in 2018, Mr. Clark was provided with a $100,000 sign-on bonus, which was payable within 30 days of his September 4, 2018 start date. The full amount of the sign-on bonus is subject to repayment if Mr. Clark voluntarily terminates his employment or Alight terminates his employment for cause during the first twelve months of his employment. Additionally, in connection with the commencement of her employment in 2018, Ms. Dodson was provided with a $65,000 sign-on bonus, which was payable within 30 days of her May 29, 2018 start date. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Offer Letters.”

Annual Incentive Plan.

2018 Annual Cash Incentive Compensation. Annual cash incentive awards are available to eligible employees, including the named executive officers, under our annual incentive program (“AIP’) to motivate our executive officers to achieve short-term performance goals.

The funding of the overall AIP pool is based on the achievement of Adjusted EBITDA (as described under “Summary Historical and Pro Forma Financial and Other Data”), which is then further adjusted to exclude the impact of certain other items determined by our Board of Directors to arrive at the measure used to determine the annual incentive awards (“Compensation EBITDA”).

The Board of Directors approves performance goals for our corporate performance after considering our financial results from the prior year and the annual operating budget for the coming year. It uses such performance goals to establish a target for the Company-wide AIP pool. After the completion of the relevant fiscal year, the Board of Directors evaluates the Company’s financial performance in relation to the Compensation EBITDA goal and evaluates the extent to which the AIP pool should be funded.

If the performance target approved by the Board of Directors is met, the AIP pool will be set at the target amount reflected in the annual operating budget. If our performance exceeds the target goal of Compensation EBITDA, the AIP pool is increased to share in 50% of every dollar over the Compensation EBITDA target. If we do not meet the Compensation EBITDA target, the AIP pool is reduced by 50% of every dollar below the target, and the AIP pool is zero if a threshold level of Compensation EBITDA performance (85%) is not achieved. This mechanism functions to ensure alignment of pay and performance in the event of a decrease in earnings or extreme financial market conditions.

In early 2019, the Board of Directors reviewed our performance with respect to Compensation EBITDA to determine funding for eligible employees under the AIP for fiscal year 2018. The following table outlines our actual Compensation EBITDA performance for 2018 against the target and our 2018 Compensation EBITDA achievement factor.


	Target ($ in millions)		Actual ($ in millions)		2018 Achievement Factor (%)
Compensation EBITDA	$	558	$	560		100	%

After determining the funding level of the AIP, the Board of Directors, with input from the CEO for all named executive officers participating in the AIP except for himself, determines each named executive officer’s individual performance attainment based on an assessment of the named executive officer’s achievement of previously communicated individual goals. For 2018, the individual goals included:

•

the achievement of performance objectives tied to the Company’s financial performance and overall business plan;

•

strategic positioning of the Company and the extent of accomplishment of strategic goals; and

•

qualitative leadership goals.

We do not use a formula or assign any relative weighting to any individual performance measure.

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Notwithstanding the establishment of the performance components and the formula for determining the AIP award payment amounts, the Board of Directors can exercise positive or negative discretion and award a greater or lesser amount to our named executive officers than the amount determined by the AIP award formula if, in the exercise of its business judgment, the Board of Directors determines that a greater or lesser amount is warranted under the circumstances. Our Board of Directors did not exercise this discretion with respect to the 2018 AIP awards.

The named executive officers’ 2018 target incentive opportunities under the AIP are expressed as a percentage of base salary as of December 31, 2018. For fiscal year 2018, the named executive officers’ target incentive opportunities were: $850,000 for Mr. Michalak, $450,000 for Ms. Rooney, $270,000 for Ms. Dodson, $320,000 for Mr. Clark and $225,000 for Ms. Yao. Ms. Dodson’s and Mr. Clark’s target incentive opportunities were pro-rated for fiscal year 2018 in consideration of her or his start date of May 29, 2018 and September 4, 2018, respectively. During fiscal 2018, Ms. Yao’s target incentive percentage was increased from 60% to 75% in connection with her promotion. Accordingly, Ms. Yao’s target incentive opportunity for fiscal 2018 will be calculated using a pro-rated target incentive percentage based on the time spent in each role.

Actual amounts paid under the AIP are calculated by multiplying each named executive officer’s 2018 target incentive opportunity by (i) the Compensation EBITDA performance achievement factor and (ii) individual performance attainment percentage. There is no maximum funding factor for the AIP.

Payments under the AIP, if earned, are contingent upon the named executive officer remaining in continuous employment through the payment date. The following table illustrates the calculation of the annual cash incentive awards payable to each of our named executive officers under the 2018 AIP based on 2018 financial performance and individual performance and the actual cash incentive awards awarded to each of our named executive officers.


	Base Salary at 12/31/2018 ($)		Target Bonus (% of Base Salary)			Target Bonus Opportunity ($)		Combined Performance Factor(1) (%)			Payout ($)
Christopher A. Michalak	$	850,000		100	%	$	850,000		85	%	$	726,113
Katie J. Rooney	$	450,000		100	%	$	450,000		95	%	$	429,638
Paulette R. Dodson(2)	$	450,000		60	%	$	160,521		95	%	$	153,257
Kelly L. Clark(2)	$	400,000		80	%	$	104,329		95	%	$	99,608
Maria T. Yao(3)	$	360,000		75	%	$	225,025		110	%	$	248,765

(1)	The final percentage after applying the Compensation EBITDA achievement factor and the individual performance assessment. Percentages have been rounded to the nearest whole number.

(2)

Since Ms. Dodson and Mr. Clark commenced employment with us on May 29, 2018 and September 4, 2018, respectively, each of their respective annual cash incentive award was calculated based on a target bonus opportunity ($270,000 and $320,000, respectively) which was pro-rated for the number of days each was employed during 2018.

(3)	Ms. Yao’s target incentive percentage was increased from 60% to 75% during fiscal 2018 in connection with her promotion. Accordingly, Ms. Yao’s target incentive opportunity for fiscal 2018 was calculated using a pro-rated target incentive percentage based on the time spent in each role.

The 2018 AIP incentive awards will be paid out in March 2019 and such amounts are set forth in the Summary Compensation Table below.

2019 Annual Cash Incentive Compensation. In connection with this offering and in consultation with the Consultant, we intend to implement changes to our annual cash incentive program to align our executive compensation program with similarly situated public companies. See “Actions Taken in Connection with This Offering—2019 AIP.”

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Long-Term Equity Incentive Compensation.

Class B Units. In 2017, following our acquisition by Blackstone, certain directors and key executives, including Mr. Michalak and Mses. Rooney and Yao, were granted long-term equity incentive awards designed to promote our interests and incentivize them to remain in our service. These long-term equity incentive awards were granted to our named executive officers in the form of Class B Units in Alight OpCo, which were immediately exchanged into corresponding Class B Units of Tempo Management LLC. Additionally, in connection with the commencement of her or his employment with us in 2018, each of Ms. Dodson and Mr. Clark were granted Class B Units in Alight OpCo, which were immediately exchanged into corresponding Class B Units of Tempo Management LLC.

The Class B Units are “profits interests” under U.S. federal income tax law having economic characteristics similar to stock appreciation rights (i.e., representing the right to share in any increase in the equity value of Alight OpCo that exceeds specified thresholds). The Class B Units are divided into Time-Vesting Class B Units (one-third of the Class B Units granted), 2.0x Exit-Vesting Class B Units (one-third of the Class B Units granted) and 2.5x Exit-Vesting Class B Units (one-third of the Class B Units granted). Unvested Class B Units are not entitled to distributions from Tempo Management LLC. In September 2017, Mr. Michalak and Mses. Rooney and Yao were granted the following number of Class B Units: Mr. Michalak, 2,155 Class B Units; Ms. Rooney, 1,050 Class B Units and Ms. Yao, 201 Class B Units. In May and September 2018, respectively, Ms. Dodson and Mr. Clark were granted the following number of Class B Units: Ms. Dodson, 225 Class B Units and Mr. Clark, 187.5 Class B Units. In connection with her promotion to the role of Chief Operations Officer in 2018, Ms. Yao was granted an additional 45.3 Class B Units in October 2018. The grant date fair values, calculated in accordance with Topic 718, for these awards are reported in the Summary Compensation Table below.

The specific sizes of the Class B Unit grants made to our named executive officers were determined in consideration of Blackstone’s practices with respect to management equity programs at other private companies in its portfolio and the executive officer’s position and level of responsibilities with us.

For a discussion of the vesting and other terms of the Class B Units, see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards—Class B Units.”

Purchased Units. Another key component of our long-term equity incentive program adopted upon the Separation was that certain directors and key executives were provided with the opportunity to invest in Class A-1 Units. This investment opportunity further aligns the individual’s financial interests with those of our equity-owners. As of the date of this offering, Mr. Michalak invested in 37.5 Class A-1 Units; Ms. Rooney invested in 3.75 Class A-1 Units and Ms. Dodson invested in 18.75 Class A-1 Units.

Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units. In connection with this offering, we expect that all Class A-1 Units, unvested Restricted Class A-1 Units and vested and unvested Class B Units held by our officers and employees will be converted into vested and unvested LLC Units pursuant to the Reorganization Transactions, as described in “Organizational Structure—Reclassification and Amendment and Restatement of Limited Liability Company Agreement of Alight OpCo.” The LLC Units issued in exchange for unvested Restricted Class A-1 Units and Class B Units will generally be subject to the same vesting conditions as were applicable to the corresponding units. See “Actions Taken In Connection with This Offering—Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units” for additional details.

Separation Related Compensation.

Cash Replacement Awards and Restricted Class A-1 Units. In connection with the Separation, employees were awarded cash replacement awards to compensate them for outstanding unvested Aon equity awards that were forfeited upon the closing of the Separation. In June 2017, Mr. Michalak and Ms. Rooney were paid cash amounts representing half of the value of the forfeited Aon equity that would have vested in May 2017 and elected to receive the remaining amounts owed under the cash replacement awards in the form of a grant of

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Restricted Class A-1 Units in Alight OpCo which were immediately exchanged into corresponding Restricted Class A-1 Units of Tempo Management LLC, which units were granted in September 2017. In September 2017, Ms. Yao was granted Restricted Class A-1 Units in Alight OpCo which were immediately exchanged into corresponding Restricted Class A-1 Units of Tempo Management LLC, which represented 60% of the value of her forfeited Aon equity under her cash replacement award. The remaining amounts owed under her cash replacement award in the amount of $167,227 will be paid to Ms. Yao in the form of annual cash payments ending in 2021, subject to continued employment through the applicable payment date. For more information regarding Ms. Yao’s cash replacement award, see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Maria Yao Cash Replacement Award.”

The Restricted Class A-1 Units have economic characteristics that are similar to those of restricted common stock in a corporation and are time-vesting. The vesting terms of the Restricted Class A-1 Units generally mirror the original time-vesting conditions of the executive’s Aon equity awards that were forfeited upon the closing of the Separation. For more information regarding the Restricted Class A-1 Units, see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards—Restricted Class A-1 Units.”

In connection with this offering, as described above under “Long-Term Equity Incentive Compensation—Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units,” we expect that all Class A-1 Units and unvested Restricted Class A-1 Units held by our officers and employees will be converted into vested and unvested LLC Units. See “Actions Take In Connection with This Offering—Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units” for additional details.

Executive and Broad-based Employee Benefits. We provide to all our full-time or regular part-time (i.e., employees that work at least twenty hours per week) U.S. employees, including our named executive officers, as well as employees paid on a U.S. payroll on international assignment for at least six months, broad-based benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security. Broad-based employee benefits include:

•

a 401(k) savings plan;

•

paid vacation (which is unlimited for executives);

•

medical, dental, vision, life and accident insurance and short-term disability coverage; and

•

employee assistance program benefits.

Eligible U.S. employees, including the named executive officers, participate in the Alight Solutions LLC 401(k) Plan (the “401(k) Plan”). Eligible employees may contribute up to 50% of eligible compensation to the 401(k) Plan, subject to limits for contributions imposed by the Code. We match a portion of the funds set aside by the employee under our 401(k) Plan, beginning with 100% of the first 1% of an employee’s eligible contributions and 50% of the next 6% of the employee’s eligible contributions. In addition, we make an annual non-elective contribution for each eligible employee equal to 2.5% of such employee’s eligible compensation, generally subject to employment on the last day of the plan year. All contributions by us to the 401(k) Plan become fully vested after two years of service.

We previously offered participation to certain of our highly compensated employees, including Mr. Michalak and Mses. Rooney and Yao, in nonqualified deferred compensation plans through the Alight Solutions LLC Legacy Deferred Compensation Plan (the “Deferred Compensation Plan”) and the Alight Solutions LLC Legacy Supplemental Savings Plan (the “Supplemental Savings Plan”, and collectively with the Deferred Compensation Plan, the “Plans”), both of which are legacy plans which were assumed by us in connection with the Separation and are now frozen. For additional details regarding the Deferred Compensation Plan and the Supplemental Savings Plan, see “Nonqualified Deferred Compensation for 2018.”

Employees meeting a pay threshold, including our named executive officers, are provided with enhanced life insurance benefits for which we pay the full cost of the applicable premiums. We also make available to

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these executives enhanced long-term disability benefits, the premiums of which are paid by the executive. We provide these additional benefits to further our goal of attracting and retaining management. Mr. Michalak is also eligible to participate in a voluntary executive physical program, which is intended to encourage him to receive regular comprehensive physical examinations, as his future health and well-being are important to our success.

For 2018, the Company made a payment to Ms. Dodson representing relocation benefits (and a related tax gross-up) in connection with her transition to the Chicago area. The amount of the relocation benefit is set forth in the Summary Compensation Table under the column entitled “All Other Compensation.”

Additionally, to ensure compliance with state tax laws, during 2018, we implemented a short-term business travel policy, under which we report and remit taxes to state tax authorities on behalf of executives who travel for business and incur a tax liability due to time worked in non-resident states. Pursuant to this policy we will also provide related state and federal tax return preparation to affected executives. The amount of the tax liabilities and related gross-ups paid to or on behalf of our named executive officers is set forth in the Summary Compensation Table under the column entitled “All Other Compensation.” We do not provide other perquisites or personal benefits to our named executive officers. The benefits we provide to our named executive officers are reflected in the “All Other Compensation” column of the Summary Compensation Table and the accompanying footnote in accordance with SEC rules.

Severance Arrangements. Our Board of Directors believes that severance arrangements are necessary to attract and retain the talent necessary for our long-term success. Our Board of Directors views our severance arrangements as recruitment and retention devices that help secure the continued employment and dedication of our named executive officers, including when we are considering strategic alternatives.

In 2018, each of our named executive officers entered into a severance letter agreement with us under which each of the named executive officers is entitled to severance benefits if he or she is terminated by us without “cause” (as defined in the severance letter agreements) or by him or her for “good reason” (as defined in the severance letter agreements), as applicable. See “—Potential Payments Upon Termination or Change-in-Control—Severance Arrangements” below for descriptions of severance payments and severance arrangements of our named executive officers.

Actions Taken in Connection with This Offering.

2019 AIP. In connection with this offering and with the recommendation of the Consultant, we intend to make changes to certain components of the AIP formula for fiscal year 2019. The recommendations as they relate to the executive officers are as follows: (1) payouts will be based 50% on formulaic financial performance attainment and 50% on individual performance; (2) incorporate revenue as a second financial performance metric in determining the aggregate funding level of the AIP, with Compensation EBITDA weighted 70% and revenue weighted 30% in order to more effectively align the AIP award with our strategic growth objectives; (3) establish a threshold funding factor of 65% of target for achievement of 90% of target Compensation EBITDA performance and 50% of target for achievement of 95% of target revenue performance; (4) establish a maximum funding factor of 150% of target for each financial performance metric for achievement of 115% and 105% of target Compensation EBITDA and revenue, respectively; and (5) in order to align Ms. Dodson’s incentive compensation with market data, her target bonus as a percentage of base salary for 2019 will increase from 60% to 75%. We intend to make these changes to more closely align incentive payouts with the creation of stockholder value and the achievement of business goals.

Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units. In connection with the Reorganization Transactions, all Class A-1 Units, unvested Restricted Class A-1 Units and vested and unvested Class B Units will be converted into vested and unvested LLC Units. The number of LLC Units to be delivered in respect of each Class A-1 Unit, Restricted Class A-1 Unit and Class B Unit, respectively, will be determined based on the amount of proceeds that would be distributed to such Class A-1 Unit, Restricted Class A-1 Unit or Class B Unit if Alight OpCo were to be sold at a value derived from the initial public offering price, and the

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intrinsic value of the LLC Units issued in respect of such Class A-1 Unit, Restricted Class A-1 Unit or Class B Unit will be equal to the hypothetical proceeds such Class A-1 Units, Restricted Class A-1 Units or Class B Units would have received. Class A-1 Units and vested Class B Units will be converted into fully vested LLC Units. Unvested Restricted Class A-1 Units and Class B Units will be converted into unvested LLC Units, which will be subject to vesting terms substantially similar to those applicable to the unvested Restricted Class A-1 Units and Class B Units immediately prior to the Reorganization Transactions, as described above.

The precise number of LLC Units to be delivered in respect of the Class A-1 Units, Restricted Class A-1 Units and Class B Units will be based on the initial public offering price. The following table sets forth the assumed number and value of LLC Units that each of our named executive officers will receive in exchange for their Class A-1 Units, unvested Restricted Class A-1 Units and vested and unvested Class B Units, in each case based on an assumed initial public offering price of $23.50 per share (the midpoint of the estimated price range set forth on the cover page of this prospectus).


	Vested LLC Units Received in Exchange for Class A-1 Units				Unvested LLC Units Received in Exchange for Unvested Restricted Class A-1 Units				Vested LLC Units Received in Exchange for Vested Class B Units				Unvested LLC Units Received in Exchange for Unvested Class B Units
	(#)		($)		(#)		($)		(#)		($)		(#)		($)
Christopher A. Michalak		138,056		3,244,310		25,285		594,206		145,155		3,411,153		2,032,176		47,756,147
Katie J. Rooney		53,282		1,252,128		16,289		382,795		70,725		1,662,047		990,156		23,268,656
Paulette R. Dodson		29,582		695,169		—		—		—		—		168,766		3,965,996
Kelly L. Clark		—		—		—		—		—		—		140,488		3,301,478
Maria T. Yao		23,634		555,407		5,890		138,425		13,539		318,163		207,780		4,882,819

Summary Compensation Table

The following table provides summary information concerning compensation to or on behalf of our named executive officers in 2018, and with respect to 2017, summary information for Mr. Michalak and Ms. Rooney concerning compensation for services rendered to Alight following the Separation. This table does not cover any compensation earned by our named executive officers for their services to Aon prior to the Separation.


Name and Principal Position	Year		Salary ($)(1)		Bonus ($)(2)		Stock Awards ($)(3)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)(4)		Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)(5)		Total ($)
Christopher A. Michalak,		2018		825,000		—		—		—		726,113		—		46,486		1,597,599
Chief Executive Officer		2017		500,000		—		3,163,473		—		713,353		—		323,867		4,700,693

Katie J. Rooney,		2018		450,000		—		—		—		429,638		—		11,262		890,900
Chief Financial Officer		2017		300,000		—		1,605,750		—		428,012		—		192,360		2,526,122

Paulette R. Dodson,		2018		267,188		65,000		1,182,600		—		153,257		—		68,319		1,736,364
General Counsel & Corporate Secretary

Kelly L. Clark,		2018		131,667		100,000		985,500		—		99,608		—		2,526		1,319,301
Chief Information & Digital Officer

Maria T. Yao,		2018		313,559		84,769		512,698		—		248,765		—		12,731		1,172,522
Chief Operations Officer

(1)

The amounts reported consist of base salary earned in fiscal 2018. The following base salary increases were provided during 2018: Mr. Michalak (from $750,000 to $850,000) and Ms. Yao (from $306,000 to $360,000). The amounts reported for Ms. Dodson and Mr. Clark represent salary earned from her or his May 29, 2018 and September 4, 2018

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start date, respectively. Amounts reported with respect to 2017 reflect the named executive officer’s annual base salary earned during the fiscal year following the Separation.

(2)

With respect to Ms. Dodson and Mr. Clark, amount reported reflects the sign-on bonus paid in 2018 in connection with her or his employment with the Company. With respect to Mr. Clark, the sign-on bonus is subject to repayment if Mr. Clark voluntarily terminates his employment or Alight terminates his employment for cause during the first twelve months of his employment. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Offer Letters.” Amount reported for Ms. Yao reflects the portion of her cash replacement award that was vested and became earned in May 2018. See “—Compensation Elements—Separation Related Compensation—Cash Replacement Awards and Restricted Class A-1 Units” and “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Maria Yao Cash Replacement Award.”

(3)

Amounts included in this column reflect the aggregate grant date fair value of Restricted Class A-1 Units and Class B Units granted during the years indicated, calculated in accordance with Topic 718, utilizing the assumptions discussed in Note 10, Members’ Equity, to our consolidated financial statements included elsewhere in this prospectus. The 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units are subject to market conditions and an implied performance condition as defined under applicable accounting standards. The grant date fair value of the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units was computed based upon the probable outcome of the performance conditions as of the grant date in accordance with Topic 718. Achievement of the performance conditions for the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units granted in 2017 was not deemed probable on the grant date and, accordingly, no value is included in the table for these awards pursuant to the SEC’s disclosure rules. Assuming achievement of the performance conditions, the grant date fair values of the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units that were granted in 2017 were: Mr. Michalak, $2,009,178 for the 2.0x Exit-Vesting Class B Units and $1,762,790 for the 2.5x Exit-Vesting Class B Units and Ms. Rooney, $978,950 for the 2.0x Exit-Vesting Class B Units and $858,900 for the 2.5x Exit-Vesting Class B Units. The implied performance condition for the 2.0x Exit-Vesting Class B Units and the 2.5x Exit-Vesting Class B Units granted in 2018 was deemed achieved on the grant date and, accordingly, these awards are subject only to market conditions and therefore have no maximum grant date fair values that differ from the grant date fair values presented in the table.

(4)

The amounts reported in the “Non-Equity Incentive Plan Compensation” column for 2018 reflect the 2018 AIP award payout for each of our named executive officers. For a description of the terms of the 2018 AIP, see “—Compensation Elements—Annual Incentive Plan—2018 Annual Cash Incentive Compensation.” With respect to 2017, amounts reported reflect the portion of the AIP award earned for services provided to Alight following the Separation.

(5)

Amounts reported reflect contributions to our 401(k) Plan on behalf of our named executive officers in the amount of $11,000 for Mr. Michalak, $10,625 for Ms. Rooney and $10,625 for Ms. Yao. Ms. Dodson and Mr. Clark did not receive contributions under our 401(k) Plan during 2018. Amounts reported also include life insurance premiums paid by us on behalf of our named executive officers as follows: Mr. Michalak, $3,276; Ms. Rooney, $637; Ms. Dodson, $1,591; Mr. Clark, $794; and Ms. Yao, $974. Amounts reported also reflect tax liabilities and a related tax gross-up paid by the Company to state tax authorities on the executive’s behalf in accordance with the Company’s short-term business travel policy in the amount of $26,965 for Mr. Michalak, $1,732 for Mr. Clark and $1,132 for Ms. Yao. Amount reported with respect to Mr. Michalak for 2018 also includes $5,245 for the cost of an executive physical. Amount reported for Ms. Dodson also includes $31,480 paid to Ms. Dodson for relocation benefits (which includes reimbursements for home rental tours, temporary lodging and related miscellaneous household expenses) in connection with her transition to the Chicago area, $7,219 for the reimbursement for legal fees and expenses in connection with the negotiation of her offer letter with the Company and a related tax gross-up of $28,029 with respect to the relocation benefits and reimbursement for legal fees. Amounts for Mr. Michalak and Ms. Rooney for 2017 include (i) a pro-rata portion of retention and transaction bonuses paid for services rendered to Alight following the Separation and (ii) cash payments of $7,198 and $4,607, respectively, made in June 2017 under their cash replacement awards. See “—Compensation Elements—Cash Replacement Awards and Restricted Class A-1 Units.”

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Grants of Plan-Based Awards

The following table provides supplemental information relating to grants of plan-based awards made to our named executive officers during 2018. Fractional units have been rounded to the nearest hundredth of a unit.


Name		Grant Date		Estimated Future Payouts Under Non-Equity Incentive Plan Awards						Estimated Future Payouts Under Equity Incentive Plan Awards				All Other Stock Awards: Number of Shares of Stock or Units (#)		Grant Date Fair Value of Stock and Option Awards ($)
Name		Grant Date		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)	Target (#)		Maximum (#)
C. Michalak
AIP	(1)				0		850,000		—

K. Rooney
AIP	(1)				0		450,000		—

P. Dodson
AIP	(1)				0		160,313		—
Time-Vesting Class B Units	(2)		5/29/2018												75.00		464,175
2.0x Exit-Vesting Class B Units	(2)		5/29/2018									75.00					385,425
2.5x Exit Vesting Class B Units	(2)		5/29/2018									75.00					333,000

K. Clark
AIP	(1)				0		105,333		—
Time-Vesting Class B Units	(2)		9/11/2018												62.50		386,813
2.0x Exit-Vesting Class B Units	(2)		9/11/2018									62.50					321,188
2.5x Exit Vesting Class B Units	(2)		9/11/2018									62.50					277,500

M. Yao
AIP	(1)				0		225,000		—
Time-Vesting Class B Units	(2)		10/26/2018												15.10		193,932
2.0x Exit-Vesting Class B Units	(2)		10/26/2018									15.10					169,971
2.5x Exit Vesting Class B Units	(2)		10/26/2018									15.10					148,796

(1)

The amounts reported in the first row for each named executive officer represent the annual cash incentive award opportunity range under the 2018 AIP, the terms of which are summarized under “—Compensation Elements—Annual Incentive Plan—2018 Annual Cash Incentive Compensation” above. Each of Ms. Dodson’s and Mr. Clark’s target incentive were pro-rated for fiscal year 2018 in consideration of her or his start date of May 29, 2018 and September 4, 2018, respectively. Ms. Yao’s target incentive was based on a pro-rated target incentive percentage which reflects the increase in her target incentive percentage during 2018 in connection with her promotion. For purposes of this table, the “Threshold” amount shown represents an assumption that the Company achieves the threshold level of Compensation EBITDA performance and individual performance attainment that is slightly greater than 0%, which would result in a de minimis AIP payout. The calculation uses each named executive officer’s base salary as of December 31, 2018.

(2)

The amounts reported in the second through fourth rows for Ms. Dodson, Mr. Clark and Ms. Yao represent the Time-Vesting Class B Units, 2.0x Exit-Vesting Class B Units and 2.5x Exit-Vesting Class B Units granted to these named executive officers in 2018. The grant date fair value of the 2.0x Exit-Vesting Class B Units and 2.5x Exit-Vesting Class B Units is based on the probable outcome of the performance conditions. See Footnote (3) to the Summary Compensation Table.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table

Offer Letters

Paulette Dodson Offer Letter. We entered into an offer letter, dated April 26, 2018, with Ms. Dodson pursuant to which Ms. Dodson serves as General Counsel and Corporate Secretary. Ms. Dodson’s employment with us is on an “at-will” basis. Ms. Dodson’s offer letter contains the terms summarized below:

Compensation Arrangements

•

base salary at the annual rate of $450,000;

•

target annual incentive award of 60% of base salary, which amount has been increased to 75% beginning in fiscal 2019;

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•

a sign-on bonus of $65,000 payable within 30 days of her May 29, 2018 start date;

•

eligibility for equity award grants;

•

paid vacation;

•

participation in our employee benefit plans;

•

relocation benefits in connection with her transition to the Chicago area; and

•

reimbursement of up to $10,000 in legal fees and expenses incurred in connection with the negotiation of her offer letter.

Kelly Clark Offer Letter. We entered into an offer letter, dated August 16, 2018, with Mr. Clark pursuant to which Mr. Clark serves as Chief Information and Digital Officer. Mr. Clark’s employment with us is on an “at-will” basis. Mr. Clark’s offer letter contains the terms summarized below:

Compensation Arrangements

•

base salary at the annual rate of $400,000;

•

target annual incentive award of 80% of base salary;

•

a sign-on bonus of $100,000 payable within 30 days of his September 4, 2018 start date. The full amount of the sign-on bonus is required to be repaid to Alight if Mr. Clark voluntarily terminates his employment or Alight terminates his employment for cause during the first twelve months of employment;

•

eligibility for equity award grants;

•

paid vacation; and

•

participation in our employee benefit plans.

Maria Yao Offer Letter. We entered into an offer letter, dated October 3, 2018, with Ms. Yao pursuant to which Ms. Yao serves as Chief Operations Officer. Ms. Yao’s employment with us is on an “at-will” basis. Ms. Yao’s offer letter contains the terms summarized below:

Compensation Arrangements

•

base salary at the annual rate of $360,000;

•

target annual incentive award of 75% of base salary;

•

eligibility for equity award grants;

•

paid vacation; and

•

participation in our employee benefit plans.

Terms of Equity Awards.

As a condition to receiving their Restricted Class A-1 Units and Class B Units, each of the named executive officers was required to enter into a restricted unit award agreement with respect to the Restricted Class A-1 Units and a profits interest award agreement with respect to the Class B Units, in each case with Tempo Management LLC and Alight OpCo, and become a party to the amended and restated limited liability company agreement of Tempo Management LLC. The Restricted Class A-1 Units and Class B Units of Alight OpCo held by Tempo Management LLC that correspond to the named executive officer’s Restricted Class A-1 Units and Class B Units in Tempo Management LLC are subject to the amended and restated limited liability company

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agreement of Alight OpCo. These agreements generally govern the executive’s rights with respect to the Restricted Class A-1 Units and Class B Units.

Restricted Class A-1 Units. The Restricted Class A-1 Units granted to Mr. Michalak and Mses. Rooney and Yao in 2017 are time-vesting and subject to the executive’s continued employment through the applicable vesting date. The vesting terms of the Restricted Class A-1 Units generally mirror the original time-vesting conditions of the executive’s Aon equity awards that were forfeited in connection with the Separation. The Restricted Class A-1 Units granted to Mr. Michalak and Mses. Rooney and Yao in September 2017 were scheduled to vest on a range of vesting dates from February 2018 to May 2021. In March 2018, the Board of Directors of Alight OpCo amended the vesting terms of the Restricted Class A-1 Units to consolidate the vesting dates such that any Restricted Class A-1 Units originally scheduled to vest on a date between January 1 and April 30 of any year will vest on January 1 of the applicable year and any Restricted Class A-1 Units originally scheduled to vest between May 1 and December 31 of any year will vest on May 1 of the applicable year. Mr. Michalak and Mses. Rooney and Yao will generally be fully vested in their Restricted Class A-1 Units on May 1, 2021.

In connection with a termination for “cause” (as defined in the amended and restated limited liability company agreement of Tempo Management LLC), all unvested Restricted Class A-1 Units will be immediately forfeited. In addition, other than the potential vesting that may occur in connection with certain termination or change in control events as described under “—Potential Payments Upon Termination or Change-in-Control—Equity Awards”, all unvested Restricted Class A-1 Units will be forfeited upon the named executive officer’s termination of employment.

Class B Units. The Class B Units granted to the named executive officers in 2017 and 2018 are divided into Time-Vesting Class B Units (one-third of the Class B Units granted), 2.0x Exit-Vesting Class B Units (one-third of the Class B Units granted) and 2.5x Exit-Vesting Class B Units (one-third of the Class B Units granted).

•

The Time-Vesting Class B Units vest over 5 years, with 20% vesting on the 12-month anniversary of the grant date and an additional 20% vesting every year thereafter until all of the Time-Vesting Class B Units are fully vested, subject to the executive’s continued employment through each vesting date.

•

The 2.0x Exit-Vesting Class B Units vest when and if Blackstone receives cash proceeds in respect of its Class A-1 Units of Alight OpCo equal to (x) a 15% annualized internal return rate on its investment and (y) a 2.0x multiple on its investment, subject to the executive’s continued employment through such vesting date.

•

The 2.5x Exit-Vesting Class B Units vest when and if Blackstone receives cash proceeds in respect of its Class A-1 Units of Alight OpCo equal to (x) a 20% annualized internal return rate on its investment and (y) a 2.5x multiple on its investment, subject to the executive’s continued employment through such vesting date.

In connection with a termination for cause or in the event of a “restrictive covenant violation” (as defined in the profits interest award agreements), all Class B Units, whether vested or unvested, will be immediately forfeited. In addition, other than the potential vesting that may occur in connection with certain termination or change in control events as described under “—Potential Payments Upon Termination or Change-in-Control—Equity Awards”, all unvested Class B Units will be forfeited upon the named executive officer’s termination of employment.

Restrictive Covenants. As a condition of receiving the Restricted Class A-1 Units and Class B Units, each of the named executive officers agreed to certain restrictive covenants, including confidentiality of information, noncompetition, non-solicitation and non-disparagement covenants. The confidentiality and non-disparagement covenants have an indefinite term, and the non-competition and non-solicitation covenants each have terms effective both during the term of the executive’s employment with the Company and for two years following any termination of employment.

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Conversion of Restricted Class A-1 Units and Class B Units. As described above, in connection with this offering, we expect that all unvested Restricted Class A-1 Units and vested and unvested Class B Units held by our officers and employees will be converted into vested and unvested LLC Units. See “Actions Taken In Connection with This Offering—Conversion of Class A-1 Units, Restricted Class A-1 Units and Class B Units” for additional details.

Maria Yao Cash Replacement Award. Cash payments under Ms. Yao’s cash replacement award are paid annually in May and subject to her continued employment through the applicable payment date. In addition, other than the potential vesting that may occur in connection with certain termination events as described under “—Potential Payments Upon Termination or Change-in- Control—Maria Yao Cash Replacement Award,” any payments not yet paid prior to her termination will be forfeited upon her termination of employment.

As a condition of receiving cash payments under her cash replacement award, Ms. Yao agreed to certain restrictive covenants, including confidentiality of information and non-solicitation covenants. The confidentiality covenant has an indefinite term and the non-solicitation covenant has a term effective both during the term of her employment with the Company and for two years following any termination of employment.

Outstanding Equity Awards at 2018 Fiscal-Year End

The following table provides information regarding outstanding equity awards made to our named executive officers as of December 31, 2018. Fractional units have been rounded to the nearest hundredth of a unit.


			Stock Awards
Name	Grant Date		Number of shares or units of stock that have not vested (#)			Market value of shares or units of stock that have not vested ($)(4)		Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)			Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)(5)
C. Michalak
		9/8/2017		43.47	(1)		959,320
		9/8/2017		574.66	(2)		8,756,771		1,436.67	(3)		21,891,927

K. Rooney
		9/8/2017		30.73	(1)		678,183
		9/8/2017		280.00	(2)		4,266,640		700.00	(3)		10,666,600

P. Dodson
		5/29/2018		75.00	(2)		655,275		150.00	(3)		1,310,550

K. Clark
		9/11/2018		62.50	(2)		546,033		124.99	(3)		1,092,067

M. Yao
		9/8/2017		10.17	(1)		224,524
		9/8/2017		53.60	(2)		816,757		134.00	(3)		2,041,892
		10/26/2018		15.10	(2)		—		30.21	(3)		—

(1)

Reflects Restricted Class A-1 Units which have vesting terms that generally mirror the original time-vesting conditions of the Aon equity awards that were forfeited in connection with the Separation. The vesting terms of these Restricted Class A-1 Units are described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards—Restricted Class A-1 Units.”

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The following provides information with respect to the vesting schedule of the Restricted Class A-1 Units that had not vested as of December 31, 2018:


	Restricted Class A-1 Unit Vesting
	1/1/2019		5/1/2019		5/1/2020		5/1/2021
C. Michalak		25.86		11.00		4.43		2.18
K. Rooney		19.38		7.97		3.37		—
M. Yao		6.07		1.37		1.37		1.36

(2)	Reflects Time-Vesting Class B Units that vest over 5 years, with 20% vesting on the 12-month anniversary of the grant date and an additional 20% vesting every year thereafter.

(3)

Reflects exit-vesting Class B Units (of which one half are 2.0x Exit-Vesting Class B Units and one half are 2.5x Exit-Vesting Class B Units). The vesting terms of these exit-vesting Class B Units are described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table—Terms of Equity Awards—Class B Units.”

(4)	Based on the appreciation in the value of our business from and after the date of grant through the date of our most recent valuation prior to December 31, 2018.

(5)

The equity value of Alight OpCo had appreciated to a level that would have created value in the 2.0x Exit-Vesting Class B Units and 2.5x Exit-Vesting Class B Units as of the date of our most recent valuation prior to December 31, 2018. Therefore, the market value of the 2.0x Exit-Vesting Class B Units and 2.5x Exit-Vesting Class B Units was based on the appreciation in the value of our business as of the date of our most recent valuation prior to December 31, 2018.

Option Exercises and Stock Vested in 2018

The following table provides information regarding our named executive officers’ Restricted Class A-1 Units and Time-Vesting

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Alight Inc. / DE S-1/A