QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||
, | , | |||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered |
☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | |||||
Emerging growth company |
Page | |
Item 1. | Condensed Consolidated Financial Statements (Unaudited) |
June 30, 2020 | December 31, 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Trade receivables, net | |||||||
Prepaid expenses and other current assets | |||||||
Receivables from related parties | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Computer software, net | |||||||
Other intangible assets, net | |||||||
Goodwill | |||||||
Investments in unconsolidated affiliates | |||||||
Deferred contract costs, net | |||||||
Other non-current assets | |||||||
Total assets | $ | $ | |||||
LIABILITIES AND EQUITY | |||||||
Current liabilities: | |||||||
Trade accounts payable and other accrued liabilities | $ | $ | |||||
Accrued compensation and benefits | |||||||
Current portion of debt | |||||||
Deferred revenues | |||||||
Total current liabilities | |||||||
Deferred revenues | |||||||
Deferred income taxes | |||||||
Long-term debt, net of current portion | |||||||
Other non-current liabilities | |||||||
Total liabilities | |||||||
Commitments and contingencies (Note 13) | |||||||
Equity: | |||||||
Common stock; $0.0001 par value; 550,000,000 shares authorized; 160,085,741 shares issued and 157,046,894 shares outstanding as of June 30, 2020, and 153,062,920 shares issued and 149,697,754 shares outstanding as of December 31, 2019 | |||||||
Preferred stock; $0.0001 par value; 25,000,000 shares authorized; issued and outstanding, none as of June 30, 2020 and December 31, 2019 | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Treasury stock, at cost, 3,038,847 shares as of June 30, 2020 and 3,365,166 shares as of December 31, 2019 | ( | ) | ( | ) | |||
Total equity | |||||||
Total liabilities and equity | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Expenses: | |||||||||||||||
Operating expenses | |||||||||||||||
Depreciation and amortization | |||||||||||||||
Transition and integration costs | |||||||||||||||
Total expenses | |||||||||||||||
Operating income | |||||||||||||||
Other income and expense: | |||||||||||||||
Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other income (expense), net | ( | ) | ( | ) | |||||||||||
Total other income (expense), net | ( | ) | ( | ) | ( | ) | |||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | |||||||||||||||
Income tax expense | |||||||||||||||
Earnings before equity in losses of unconsolidated affiliates | |||||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net earnings | $ | $ | $ | $ | |||||||||||
Other comprehensive (loss) earnings: | |||||||||||||||
Unrealized holding losses, net of tax(1) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Reclassification adjustments for losses (gains) included in net earnings, net of tax(2) | ( | ) | ( | ) | |||||||||||
Total unrealized gains (losses) on interest rate swaps, net of tax | ( | ) | ( | ) | ( | ) | |||||||||
Foreign currency translation adjustment(3) | ( | ) | |||||||||||||
Unrealized losses on investments in unconsolidated affiliates(4) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Other comprehensive losses | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Comprehensive earnings | $ | $ | $ | $ | |||||||||||
Net earnings per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Weighted average shares of common stock outstanding (Note 4): | |||||||||||||||
Basic | |||||||||||||||
Diluted |
(1) | Net of income tax benefit of $ |
(2) | Amounts reclassified to net earnings relate to losses (gains) on interest rate swaps and are included in Interest expense, net above. Amounts are net of income tax benefit of $ |
(3) |
Three months ended June 30, 2020 | |||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | |||||||||||||||||||||||||
Shares | $ | Shares | $ | Total equity | |||||||||||||||||||||||||
Balance, March 31, 2020 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
Issuance of common stock, net of underwriters' discount and issuance costs | — | — | — | — | — | ||||||||||||||||||||||||
Grant of restricted shares of common stock | — | — | ( | ) | — | — | — | ||||||||||||||||||||||
Forfeitures of restricted shares of common stock | — | — | — | — | — | ( | ) | — | |||||||||||||||||||||
Tax withholding payments for restricted share vesting | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||
Vesting of restricted shares granted from treasury stock | — | — | — | — | ( | ) | — | ||||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||
Equity-based compensation expense of unconsolidated affiliates | — | — | — | — | — | — | |||||||||||||||||||||||
Unrealized gains on interest rate swaps, net | — | — | — | — | — | — | |||||||||||||||||||||||
Other comprehensive loss on investments in unconsolidated affiliates | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance, June 30, 2020 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Three months ended June 30, 2019 | |||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | |||||||||||||||||||||||||
Shares | $ | Shares | $ | Total equity | |||||||||||||||||||||||||
Balance March 31, 2019 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
Grant of restricted shares of common stock | — | — | ( | ) | — | — | — | ||||||||||||||||||||||
Forfeitures of restricted shares of common stock | — | — | — | — | — | ( | ) | — | |||||||||||||||||||||
Tax withholding payments for restricted share vesting | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||||
Vesting of restricted shares granted from treasury stock | — | — | — | — | ( | ) | — | ||||||||||||||||||||||
Purchases of treasury stock | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||
Equity-based compensation expense of unconsolidated affiliates | — | — | — | — | — | — | |||||||||||||||||||||||
Unrealized losses on interest rate swaps, net | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Other comprehensive loss on investments in unconsolidated affiliates | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance, June 30, 2019 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Six months ended June 30, 2020 | |||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Treasury stock | |||||||||||||||||||||||||
Shares | $ | Shares | $ | Total equity | |||||||||||||||||||||||||
Balance, December 31, 2019 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||
Effect of CECL adoption (Note 1) | — | — | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||||
Adjusted balance at January 1, 2020 | — | ( | ) | ( | ) | ||||||||||||||||||||||||
Issuance of common stock, net of underwriters' discount and issuance costs | — | — | — | — | — | ||||||||||||||||||||||||
Grant of restricted shares of common stock | — | — | ( | ) | — | — | ( | ) | — | ||||||||||||||||||||
Forfeitures of restricted shares of common stock | — | — | — | — | — | ( | ) | — | |||||||||||||||||||||
Tax withholding payments for restricted share vesting | ( | ) | — | ( | ) | — | — | — | ( | ) | |||||||||||||||||||
Vesting of restricted shares granted from treasury stock | — | — | — | — | — | ( | ) | — | |||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||
Equity-based compensation expense of unconsolidated affiliates | — | — | — | — | — | — | |||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Unrealized losses on interest rate swaps, net | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Other comprehensive loss on investments in unconsolidated affiliates | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance, June 30, 2020 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Six months ended June 30, 2019 | |||||||||||||||||||||||||||||
Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive earnings | Treasury stock | |||||||||||||||||||||||||
Shares | $ | Shares | $ | Total equity | |||||||||||||||||||||||||
Balance December 31, 2018 | $ | — | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||
Effect of ASU 2018-02 adoption | — | — | — | ( | ) | — | — | — | |||||||||||||||||||||
Adjusted balance at January 1, 2019 | — | ( | ) | ||||||||||||||||||||||||||
Grant of restricted shares of common stock | — | — | ( | ) | — | — | ( | ) | — | ||||||||||||||||||||
Forfeitures of restricted shares of common stock | — | — | — | — | — | ( | ) | — | |||||||||||||||||||||
Tax withholding payments for restricted share vesting | ( | ) | — | ( | ) | — | — | — | — | ( | ) | ||||||||||||||||||
Vesting of restricted shares granted from treasury stock | — | — | — | — | ( | ) | — | ||||||||||||||||||||||
Purchases of treasury stock | — | — | — | — | — | ( | ) | ( | ) | ||||||||||||||||||||
Equity-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||
Equity-based compensation expense of unconsolidated affiliates | — | — | — | — | — | — | |||||||||||||||||||||||
Unrealized losses on interest rate swaps, net | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Other comprehensive loss on investments in unconsolidated affiliates | — | — | — | — | ( | ) | — | — | ( | ) | |||||||||||||||||||
Balance, June 30, 2019 | $ | — | $ | $ | $ | ( | ) | $ | ( | ) | $ |
Six months ended June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net earnings | $ | $ | |||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||
Depreciation and amortization | |||||||
Amortization of debt issuance costs and original issue discount | |||||||
Deferred income taxes, net | |||||||
Equity in losses of unconsolidated affiliates, net of tax | |||||||
Equity-based compensation | |||||||
Changes in assets and liabilities, net of acquired assets and liabilities: | |||||||
Trade and other receivables, including receivables from related parties | |||||||
Prepaid expenses and other assets | ( | ) | ( | ) | |||
Deferred contract costs | ( | ) | ( | ) | |||
Deferred revenues | ( | ) | ( | ) | |||
Trade accounts payable and other liabilities | ( | ) | ( | ) | |||
Net cash provided by operating activities | |||||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | ( | ) | ( | ) | |||
Additions to computer software | ( | ) | ( | ) | |||
Business acquisition, net of cash acquired | ( | ) | |||||
Investments in unconsolidated affiliate | ( | ) | |||||
Proceeds from sale of investment in unconsolidated affiliate | |||||||
Asset acquisition | ( | ) | |||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Cash flows from financing activities: | |||||||
Net proceeds from issuance of common stock, before offering expenses | |||||||
Costs directly associated with issuance of common stock | ( | ) | |||||
Revolver borrowings | |||||||
Revolver payments | ( | ) | ( | ) | |||
Term loan payments | ( | ) | ( | ) | |||
Purchases of treasury stock | ( | ) | |||||
Finance lease payments | ( | ) | |||||
Tax withholding payments for restricted share vesting | ( | ) | ( | ) | |||
Net cash provided by financing activities | |||||||
Net increase (decrease) in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents, beginning of period | |||||||
Cash and cash equivalents, end of period | $ | $ | |||||
Supplemental cash flow information: | |||||||
Interest paid, net | $ | ( | ) | $ | ( | ) | |
Income taxes paid, net | $ | ( | ) | $ | ( | ) |
(1) | Basis of Presentation |
June 30, 2020 | December 31, 2019 | ||||||
Cash | $ | $ | |||||
Cash equivalents | |||||||
Cash and cash equivalents | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Trade receivables — billed | $ | $ | |||||
Trade receivables — unbilled | |||||||
Trade receivables | |||||||
Allowance for credit losses | ( | ) | ( | ) | |||
Trade receivables, net | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Prepaid expenses | $ | $ | |||||
Contract assets, net | |||||||
Other current assets | |||||||
Prepaid expenses and other current assets | $ | $ |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Computer software | $ | $ | $ | $ | |||||||||||
Other intangible assets | |||||||||||||||
Deferred contract costs | |||||||||||||||
Property and equipment | |||||||||||||||
Total | $ | $ | $ | $ |
Cash paid | $ | ||
Contingent consideration | |||
Less: cash acquired | ( | ) | |
Total consideration, net | $ |
Total purchase price consideration | $ | ||
Computer software | $ | ||
Other intangible assets | |||
Goodwill | |||
Other current and non-current assets | |||
Total assets acquired | |||
Total liabilities assumed | |||
Net assets acquired | $ |
Gross carrying value | Weighted average estimated life (in years) | ||||
Computer software | $ | ||||
Other intangible assets: | |||||
Client relationships | |||||
Trade names | |||||
Non-compete agreements | |||||
Other intangible assets | |||||
Total gross carrying value | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||
Total assets | Maximum exposure(1) | Total assets | Maximum exposure | ||||||||||||
Investment in Star Parent | $ | $ | $ | $ |
(1) | As of June 30, 2020, our maximum exposure includes the $ |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||||||||||
As reported | Adjusted | As reported | Adjusted | ||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net earnings | $ | $ | $ | $ | |||||||||||
Other comprehensive loss: | |||||||||||||||
Unrealized losses on investments in unconsolidated affiliates | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
Net earnings per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Current assets | $ | $ | |||||
Non-current assets | |||||||
Total assets | $ | $ | |||||
Current liabilities, including short-term debt | $ | $ | |||||
Non-current liabilities | |||||||
Total liabilities | |||||||
Cumulative preferred series A stock | |||||||
Total capital | |||||||
Total liabilities and partners' capital | $ | $ |
Three months ended June 30, | Six months ended June 30, 2020 | For the period February 8 to June 30, 2019 | |||||||||||||
2020 | 2019 | ||||||||||||||
Revenues | $ | $ | $ | $ | |||||||||||
Loss before provision for income taxes and equity in net income of affiliates | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Net loss attributable to Star Parent | ( | ) | ( | ) | ( | ) | ( | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Basic: | |||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||
Shares used for basic net earnings per share: | |||||||||||||||
Weighted average shares of common stock outstanding | |||||||||||||||
Basic net earnings per share | $ | $ | $ | $ | |||||||||||
Diluted: | |||||||||||||||
Net earnings | $ | $ | $ | $ | |||||||||||
Shares used for diluted net earnings per share: | |||||||||||||||
Weighted average shares of common stock outstanding | |||||||||||||||
Dilutive effect of unvested restricted shares of common stock | |||||||||||||||
Weighted average shares of common stock, diluted | |||||||||||||||
Diluted net earnings per share | $ | $ | $ | $ |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||
Revenues | $ | $ | |||||
Operating expenses |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||
Software services | $ | $ | |||||
Data and analytics services | |||||||
Total related party revenues | $ | $ |
Three months ended June 30, 2019 | Six months ended June 30, 2019 | ||||||
Data entry, indexing services and other operating expenses | $ | $ | |||||
Corporate services | |||||||
Total related party expenses, net | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Internally developed software | $ | $ | |||||
Purchased software | |||||||
Computer software | |||||||
Accumulated amortization | ( | ) | ( | ) | |||
Computer software, net | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||
Gross carrying amount | Accumulated amortization | Net carrying amount | Gross carrying amount | Accumulated amortization | Net carrying amount | ||||||||||||||||||
Client relationships | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | |||||||||||||
Other | ( | ) | ( | ) | |||||||||||||||||||
Total other intangible assets | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ |
Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||
Balance, December 31, 2019 | $ | $ | $ | $ | |||||||||||
Collateral Analytics acquisition (Note 2) | |||||||||||||||
Compass Analytics acquisition adjustment | ( | ) | ( | ) | |||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Property records database | $ | $ | |||||
Contract assets, net | |||||||
Right-of-use assets(1) | |||||||
Deferred compensation plan related assets | |||||||
Prepaid expenses | |||||||
Unbilled receivables, net | |||||||
Other | |||||||
Other non-current assets | $ | $ |
June 30, 2020 | December 31, 2019 | ||||||
Term A Loan | $ | $ | |||||
Revolving Credit Facility | |||||||
Other | |||||||
Total long-term debt principal | |||||||
Less: current portion of long-term debt | ( | ) | ( | ) | |||
Long-term debt before debt issuance costs and discount | |||||||
Less: debt issuance costs and discount | ( | ) | ( | ) | |||
Long-term debt, net of current portion | $ | $ |
2020 (remaining) | $ | ||
2021 | |||
2022 | |||
2023 | |||
Total | $ |
Effective dates | Notional amount | Fixed rates | ||||
March 31, 2017 through March 31, 2022 | $ | |||||
September 29, 2017 through September 30, 2021 | $ | |||||
April 30, 2018 through April 30, 2023 | $ | |||||
January 31, 2019 through January 31, 2023 | $ |
Balance sheet accounts | June 30, 2020 | December 31, 2019 | ||||||
Other non-current liabilities | $ | $ |
Three months ended June 30, | |||||||||||||||
2020 | 2019 | ||||||||||||||
Amount of loss recognized in OCE | Amount of loss reclassified from Accumulated OCE into Net earnings | Amount of loss recognized in OCE | Amount of gain reclassified from Accumulated OCE into Net earnings | ||||||||||||
Swap agreements | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) |
Six months ended June 30, | |||||||||||||||
2020 | 2019 | ||||||||||||||
Amount of loss recognized in OCE | Amount of loss reclassified from Accumulated OCE into Net earnings | Amount of loss recognized in OCE | Amount of gain reclassified from Accumulated OCE into Net earnings | ||||||||||||
Swap agreements | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) |
(11) | Fair Value Measurements |
• | Level 1 inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access. |
• | Level 2 inputs to the valuation methodology include: |
◦ | quoted prices for similar assets or liabilities in active markets; |
◦ | quoted prices for identical or similar assets or liabilities in inactive markets; |
◦ | inputs other than quoted prices that are observable for the asset or liability; and |
◦ | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
• | Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
June 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||
Carrying amount | Fair value | Carrying amount | Fair value | ||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||
Cash and cash equivalents (Note 1) | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||
Interest rate swaps (Note 10) | |||||||||||||||||||||||||||||||
Contingent consideration |
Beginning balance, December 31, 2019 | $ | ||
Collateral Analytics acquisition (Note 2) | |||
Ending balance, June 30, 2020 | $ |
Three months ended June 30, 2020 | |||||||||||||||||||||||
Servicing Software | Origination Software | Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||||||||
Software and hosting solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Professional services | ( | ) | (1) | ||||||||||||||||||||
Data solutions | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | ) | $ |
Three months ended June 30, 2019 | |||||||||||||||||||||||
Servicing Software | Origination Software | Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||||||||
Software and hosting solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Professional services | ( | ) | (1) | ||||||||||||||||||||
Data solutions | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | ) | $ |
Six months ended June 30, 2020 | |||||||||||||||||||||||
Servicing Software | Origination Software | Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||||||||
Software and hosting solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Professional services | ( | ) | (1) | ||||||||||||||||||||
Data solutions | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | ) | $ |
Six months ended June 30, 2019 | |||||||||||||||||||||||
Servicing Software | Origination Software | Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||||||||
Software and hosting solutions | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Professional services | ( | ) | (1) | ||||||||||||||||||||
Data solutions | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | ( | ) | $ |
(1) | Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. |
• | Volume-based fees in excess of contractual minimums and other usage-based fees to the extent they are part of a single performance obligation and meet certain variable allocation criteria; |
• | Performance obligations that are part of a contract with an original expected duration of one year or less; and |
• | Transactional fees based on a fixed fee per transaction when we have the right to invoice once we have completed the performance obligation. |
Date | Number of shares granted | Grant date fair value per share | Vesting period (in years) | Vesting criteria | |||||||
February 18, 2020 | $ | Service | |||||||||
February 18, 2020(1) | $ | Service and Performance | |||||||||
March 11, 2020 | $ | Service | |||||||||
March 18, 2020 | $ | Service | |||||||||
May 6, 2020(1) | $ | Service and Performance |
(1) | This award is subject to an independent performance target for each of |
Shares | Weighted average grant date fair value | |||||
Balance, December 31, 2019 | $ | |||||
Granted | $ | |||||
Forfeited | ( | ) | $ | |||
Vested | ( | ) | $ | |||
Balance, June 30, 2020 | $ |
Three months ended June 30, 2020 | |||||||||||||||
Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | $ | $ | ( | ) | (1) | $ | ||||||||
Expenses: | |||||||||||||||
Operating expenses | (2) | ||||||||||||||
Transition and integration costs | (3) | ||||||||||||||
EBITDA | ( | ) | |||||||||||||
Depreciation and amortization | (4) | ||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||
Interest expense, net | ( | ) | |||||||||||||
Other income, net | |||||||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | |||||||||||||||
Income tax expense | |||||||||||||||
Earnings before equity in losses of unconsolidated affiliates | |||||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | ( | ) | |||||||||||||
Net earnings | $ |
Three months ended June 30, 2019 | |||||||||||||||
Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | $ | $ | ( | ) | (1) | $ | ||||||||
Expenses: | |||||||||||||||
Operating expenses | (2) | ||||||||||||||
Transition and integration costs | (3) | ||||||||||||||
EBITDA | ( | ) | |||||||||||||
Depreciation and amortization | (4) | ||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||
Interest expense, net | ( | ) | |||||||||||||
Other expense, net | ( | ) | |||||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | |||||||||||||||
Income tax expense | |||||||||||||||
Earnings before equity in losses of unconsolidated affiliates | |||||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | ( | ) | |||||||||||||
Net earnings | $ |
Six months ended June 30, 2020 | |||||||||||||||
Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | $ | $ | ( | ) | (1) | $ | ||||||||
Expenses: | |||||||||||||||
Operating expenses | (2) | ||||||||||||||
Transition and integration costs | (5) | ||||||||||||||
EBITDA | ( | ) | |||||||||||||
Depreciation and amortization | (4) | ||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||
Interest expense, net | ( | ) | |||||||||||||
Other income, net | |||||||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | |||||||||||||||
Income tax expense | |||||||||||||||
Earnings before equity in losses of unconsolidated affiliates | |||||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | ( | ) | |||||||||||||
Net earnings | $ |
Six months ended June 30, 2019 | |||||||||||||||
Software Solutions | Data and Analytics | Corporate and Other | Total | ||||||||||||
Revenues | $ | $ | $ | ( | ) | (1) | $ | ||||||||
Expenses: | |||||||||||||||
Operating expenses | (2) | ||||||||||||||
Transition and integration costs | (3) | ||||||||||||||
EBITDA | ( | ) | |||||||||||||
Depreciation and amortization | (4) | ||||||||||||||
Operating income (loss) | ( | ) | |||||||||||||
Interest expense, net | ( | ) | |||||||||||||
Other expense, net | ( | ) | |||||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | |||||||||||||||
Income tax expense | |||||||||||||||
Earnings before equity in losses of unconsolidated affiliates | |||||||||||||||
Equity in losses of unconsolidated affiliates, net of tax | ( | ) | |||||||||||||
Net earnings | $ |
(1) | Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. |
(2) | Operating expenses for Corporate and Other includes equity-based compensation, including certain related payroll taxes, of $ |
(4) | Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP. |
(5) | Transition and integration costs primarily consisted of costs associated with acquisitions and expense reduction initiatives. |
• | satisfaction of the conditions to closing the acquisition of Optimal Blue, LLC ("Optimal Blue") and consummate the transaction, including the receipt of regulatory approvals; |
• | our ability to obtain debt financing to finance the acquisition of Optimal Blue on reasonable terms; |
• | changes in general economic, business, regulatory and political conditions, including those resulting from pandemics such as COVID-19, particularly as they affect foreclosures and the mortgage industry; |
• | the outbreak of COVID-19 and measures to reduce its spread, including the effect of governmental or voluntary actions such as business shutdowns and stay-at-home orders; |
• | security breaches against our information systems; |
• | our ability to maintain and grow our relationships with our clients; |
• | changes to the laws, rules and regulations that affect our and our clients' businesses; |
• | our ability to adapt our services to changes in technology or the marketplace or to achieve our growth strategies; |
• | our ability to protect our proprietary software and information rights; |
• | the effect of any potential defects, development delays, installation difficulties or system failures on our business and reputation; |
• | risks associated with the availability of data; |
• | the effects of our existing leverage on our ability to make acquisitions and invest in our business; |
• | our ability to successfully integrate strategic acquisitions; |
• | risks associated with our investment in Dun & Bradstreet Holdings, Inc. ("DNB"); and |
• | other risks and uncertainties detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of our Annual Report on Form 10-K for the year ended December 31, 2019 and other filings with the Securities and Exchange Commission ("SEC"). |
First lien | Second lien | Total first and second lien | |||||||||||||||
as of June 30, | as of June 30, | as of June 30, | |||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||
Active loans | 30.7 | 33.0 | 2.5 | 2.6 | 33.2 | 35.6 | |||||||||||
Market size | 53.2 | (1 | ) | 52.3 | (1 | ) | 13.0 | (2 | ) | 13.5 | (2 | ) | 66.2 | 65.8 | |||
Market share | 58% | 63% | 19% | 19% | 50% | 54% |
(1) | According to the Black Knight Mortgage Monitor Report as of June 30, 2020 and 2019 for U.S. first lien mortgage loans. |
(2) | According to the July 2020 Equifax National Consumer Credit Trends Report as of June 30, 2020 and 2019 for U.S. second lien mortgage loans. |
Three months ended June 30, | % of segment revenues | Six months ended June 30, | % of segment revenues | ||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
Servicing software solutions | $ | 184.3 | $ | 210.7 | 75% | 82% | $ | 380.0 | $ | 412.5 | 78% | 83% | |||||||||||
Origination software solutions | 60.8 | 44.7 | 25% | 18% | 109.8 | 86.4 | 22% | 17% | |||||||||||||||
Software Solutions | $ | 245.1 | $ | 255.4 | 100% | 100% | $ | 489.8 | $ | 498.9 | 100% | 100% |
Consolidated Results of Operations | |||||||||||||||
The following table presents certain financial data for the periods indicated (in millions, except per share data): | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenues | $ | 293.1 | $ | 294.9 | $ | 583.8 | $ | 578.0 | |||||||
Expenses: | |||||||||||||||
Operating expenses | 155.5 | 159.4 | 317.9 | 319.4 | |||||||||||
Depreciation and amortization | 58.6 | 57.5 | 116.3 | 114.4 | |||||||||||
Transition and integration costs | 2.5 | 1.0 | 4.9 | 1.9 | |||||||||||
Total expenses | 216.6 | 217.9 | 439.1 | 435.7 | |||||||||||
Operating income | 76.5 | 77.0 | 144.7 | 142.3 | |||||||||||
Operating margin | 26.1 | % | 26.1 | % | 24.8 | % | 24.6 | % | |||||||
Interest expense, net | (13.0 | ) | (16.7 | ) | (27.7 | ) | (31.7 | ) | |||||||
Other income (expense), net | 18.8 | (0.5 | ) | 18.0 | (0.8 | ) | |||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 82.3 | 59.8 | 135.0 | 109.8 | |||||||||||
Income tax expense | 17.2 | 14.5 | 25.4 | 25.2 | |||||||||||
Earnings before equity in losses of unconsolidated affiliates | 65.1 | 45.3 | 109.6 | 84.6 | |||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (26.0 | ) | (12.7 | ) | (20.4 | ) | (26.0 | ) | |||||||
Net earnings | $ | 39.1 | $ | 32.6 | $ | 89.2 | $ | 58.6 | |||||||
Net earnings per share: | |||||||||||||||
Diluted | $ | 0.26 | $ | 0.22 | $ | 0.60 | $ | 0.39 | |||||||
Weighted average shares of common stock outstanding: | |||||||||||||||
Diluted | 150.0 | 148.5 | 149.3 | 148.4 |
Three months ended June 30, | Variance | Six months ended June 30, | Variance | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
Software Solutions | $ | 245.1 | $ | 255.4 | $ | (10.3 | ) | (4 | )% | $ | 489.8 | $ | 498.9 | $ | (9.1 | ) | (2 | )% | |||||||||||
Data and Analytics | 48.2 | 39.7 | 8.5 | 21 | % | 94.3 | 79.4 | 14.9 | 19 | % | |||||||||||||||||||
Corporate and Other(1) | (0.2 | ) | (0.2 | ) | — | NM | (0.3 | ) | (0.3 | ) | — | NM | |||||||||||||||||
Total | $ | 293.1 | $ | 294.9 | $ | (1.8 | ) | (1 | )% | $ | 583.8 | $ | 578.0 | $ | 5.8 | 1 | % |
(1) | Revenues for Corporate and Other represent deferred revenue purchase accounting adjustments recorded in accordance with GAAP. |
Three months ended June 30, | Variance | Six months ended June 30, | Variance | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
Software Solutions | $ | 146.2 | $ | 153.9 | $ | (7.7 | ) | (5 | )% | $ | 285.6 | $ | 294.6 | $ | (9.0 | ) | (3 | )% | |||||||||||
Data and Analytics | 16.1 | 9.4 | 6.7 | 71 | % | 30.7 | 19.3 | 11.4 | 59 | % |
Three months ended June 30, | Variance | Six months ended June 30, | Variance | ||||||||||||||
2020 | 2019 | Basis points | 2020 | 2019 | Basis points | ||||||||||||
Software Solutions | 59.6 | % | 60.3 | % | (70 | ) | 58.3 | % | 59.0 | % | (70 | ) | |||||
Data and Analytics | 33.4 | % | 23.7 | % | 970 | 32.6 | % | 24.3 | % | 830 |
Three months ended June 30, | Variance | Six months ended June 30, | Variance | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
Software Solutions | $ | 98.9 | $ | 101.5 | $ | (2.6 | ) | (3 | )% | $ | 204.2 | $ | 204.3 | $ | (0.1 | ) | — | % | |||||||||||
Data and Analytics | 32.1 | 30.3 | 1.8 | 6 | % | 63.6 | 60.1 | 3.5 | 6 | % | |||||||||||||||||||
Corporate and Other(1) | 24.5 | 27.6 | (3.1 | ) | (11 | )% | 50.1 | 55.0 | (4.9 | ) | (9 | )% | |||||||||||||||||
Total | $ | 155.5 | $ | 159.4 | $ | (3.9 | ) | (2 | )% | $ | 317.9 | $ | 319.4 | $ | (1.5 | ) | — | % |
(1) | Operating expenses for Corporate and Other include equity-based compensation, including certain related payroll taxes, of $9.5 million and $12.2 million for the three months ended June 30, 2020 and 2019, respectively, and $21.2 million and $26.1 million for the six months ended June 30, 2020 and 2019, respectively. |
Three months ended June 30, | Variance | Six months ended June 30, | Variance | ||||||||||||||||||||||||||
2020 | 2019 | $ | % | 2020 | 2019 | $ | % | ||||||||||||||||||||||
Software Solutions | $ | 30.2 | $ | 30.1 | $ | 0.1 | — | % | $ | 60.5 | $ | 60.0 | $ | 0.5 | 1 | % | |||||||||||||
Data and Analytics | 3.8 | 3.9 | (0.1 | ) | (3 | )% | 7.8 | 7.7 | 0.1 | 1 | % | ||||||||||||||||||
Corporate and Other(1) | 24.6 | 23.5 | 1.1 | 5 | % | 48.0 | 46.7 | 1.3 | 3 | % | |||||||||||||||||||
Total | $ | 58.6 | $ | 57.5 | $ | 1.1 | 2 | % | $ | 116.3 | $ | 114.4 | $ | 1.9 | 2 | % |
(1) | Depreciation and amortization for Corporate and Other primarily represents net incremental depreciation and amortization adjustments associated with the application of purchase accounting recorded in accordance with GAAP. |
Six months ended June 30, | ||||||||||||
2020 | 2019 | Variance | ||||||||||
Cash flows provided by operating activities | $ | 195.3 | $ | 128.1 | $ | 67.2 | ||||||
Cash flows used in investing activities | (107.8 | ) | (420.4 | ) | 312.6 | |||||||
Cash flows provided by financing activities | 125.3 | 281.3 | (156.0 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | $ | 212.8 | $ | (11.0 | ) | $ | 223.8 |
Effective dates | Notional amount | Fixed rates | ||||
March 31, 2017 through March 31, 2022 | $ | 200.0 | 2.08% | |||
September 29, 2017 through September 30, 2021 | $ | 200.0 | 1.69% | |||
April 30, 2018 through April 30, 2023 | $ | 250.0 | 2.61% | |||
January 31, 2019 through January 31, 2023 | $ | 300.0 | 2.65% |
• | lower foreclosure-related transactional revenues due to the mortgage loan foreclosure moratorium and mortgage loan forbearance plans offered as part of the CARES Act, which may have a negative effect on revenue growth; |
• | clients' slow-down of implementations, which may have a negative effect on revenue growth; |
• | increased risk of not meeting service level commitments under our client contracts due to government lock-down or other orders where it is not possible to provide certain client facing services from home or promptly transfer them to other locations, causing potential loss of revenues or increase in contractual penalties; |
• | challenges to the availability and reliability of our data, solutions and services due to changes to normal operations, including the possibility of COVID-19 cases affecting our employees who may become sick and unable to work or affecting the employees of our clients or other third parties on which we depend; |
• | an increased volume of unanticipated client, regulatory and other third party requests for information and support, or additional regulatory requirements, which could require additional resources and costs to address; and |
• | increased risk of data corruption, cyber-based attacks or network security breaches as opportunistic threat actors continue to identify innovative methods of stealing sensitive information by relying on the urgency associated with a COVID-19 pandemic scenario. |
Exhibit | ||
No. | Description | |
2.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | Inline XBRL Instance Document** | |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
104 | Cover Page Interactive Data File formatted in Inline XBRL and contained in Exhibit 101 |
BLACK KNIGHT, INC. (registrant) | ||||
Date: | August 10, 2020 | By: | /s/ Kirk T. Larsen | |
Kirk T. Larsen | ||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||
Date: | August 10, 2020 | By: | /s/ Michele M. Meyers | |
Michele M. Meyers | ||||
Chief Accounting Officer and Treasurer (Principal Accounting Officer) |
PURCHASERS: | ||||
THOMAS H. LEE EQUITY FUND VIII, L.P. | ||||
By: | THL Equity Advisors VIII, LLC, its general partner | |||
By: | Thomas H. Lee Partners, L.P., its sole member | |||
By: | Thomas H. Lee Advisors, LLC, its general partner | |||
By: | THL Holdco, LLC, its managing member | |||
By: | /s/ Ganesh B. Rao | |||
Name: | Ganesh B. Rao | |||
Title: | Managing Director |
THOMAS H. LEE PARALLEL FUND VIII, L.P. | ||||
By: | THL Equity Advisors VIII, LLC, its general partner | |||
By: | Thomas H. Lee Partners, L.P., its sole member | |||
By: | Thomas H. Lee Advisors, LLC, its general partner | |||
By: | THL Holdco, LLC, its managing member | |||
By: | /s/ Ganesh B. Rao | |||
Name: | Ganesh B. Rao | |||
Title: | Managing Director |
THL EXECUTIVE FUND VIII, L.P. | ||||
By: | THL Equity Advisors VIII, LLC, its general partner | |||
By: | Thomas H. Lee Partners, L.P., its sole member | |||
By: | Thomas H. Lee Advisors, LLC, its general partner | |||
By: | THL Holdco, LLC, its managing member | |||
By: | /s/ Ganesh B. Rao | |||
Name: | Ganesh B. Rao | |||
Title: | Managing Director |
THL FUND VIII COINVESTMENT PARTNERS, L.P. | ||||
By: | Thomas H. Lee Partners, L.P., its general partner | |||
By: | Thomas H. Lee Advisors, LLC, its general partner | |||
By: | THL Holdco, LLC, its managing member | |||
By: | /s/ Ganesh B. Rao | |||
Name: | Ganesh B. Rao | |||
Title: | Managing Director |
Address for Notices: | ||
c/o Thomas H. Lee Partners, L.P. | ||
100 Federal Street | ||
Boston, MA 02110 | ||
Attention: Ganesh Rao and Shari Wolkon | ||
E-mail: GRao@THL.com; SWolkon@THL.com |
BLACK KNIGHT, INC. | ||||
By: | /s/ Kirk T. Larsen | |||
Name: | Kirk T. Larsen | |||
Title: | Executive Vice President, Chief Financial Officer |
Purchaser | Commitment Percentage |
Thomas H. Lee Equity Fund VIII, L.P | 33.15584% |
Thomas H. Lee Parallel Fund VIII, L.P. | 60.37248% |
THL Executive Fund VIII, L.P. | 2.53134% |
THL Fund VIII Coinvestment Partners, L.P. | 3.94034% |
Total | 100.00000% |
PURCHASER: | ||||
CANNAE HOLDINGS, LLC. | ||||
By: | /s/ David W. Ducommun | |||
Name: | David W. Ducommun | |||
Title: | Managing Director, Corporate Finance |
BLACK KNIGHT, INC. | ||||
By: | /s/ Kirk T. Larsen | |||
Name: | Kirk T. Larsen | |||
Title: | Executive Vice President, Chief Financial Officer |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Anthony M. Jabbour | |
Anthony M. Jabbour Chief Executive Officer |
(a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
By: | /s/ Kirk T. Larsen | |
Kirk T. Larsen Executive Vice President and Chief Financial Officer |
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Anthony M. Jabbour | |
Anthony M. Jabbour | ||
Chief Executive Officer |
1. | The periodic report containing financial statements to which this certificate is an exhibit fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934. |
2. | The information contained in the periodic report to which this certificate is an exhibit fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Kirk T. Larsen | |
Kirk T. Larsen | ||
Executive Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 550,000,000 | 550,000,000 |
Common stock, share issued | 160,085,741 | 153,062,920 |
Common stock, shares outstanding | 157,046,894 | 149,697,754 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Treasury stock | 3,038,847 | 3,365,166 |
Condensed Consolidated Statements of Earnings and Comprehensive Earnings - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||||||||
Income Statement [Abstract] | ||||||||||||||
Revenues | $ 293.1 | $ 294.9 | $ 583.8 | $ 578.0 | ||||||||||
Expenses: | ||||||||||||||
Operating expenses | 155.5 | 159.4 | 317.9 | 319.4 | ||||||||||
Depreciation and amortization | 58.6 | 57.5 | 116.3 | 114.4 | ||||||||||
Transition and integration costs | 2.5 | 1.0 | 4.9 | 1.9 | ||||||||||
Total expenses | 216.6 | 217.9 | 439.1 | 435.7 | ||||||||||
Operating income (loss) | 76.5 | 77.0 | 144.7 | 142.3 | ||||||||||
Other income and expense: | ||||||||||||||
Interest expense | (13.0) | (16.7) | (27.7) | (31.7) | ||||||||||
Other income (expense), net | 18.8 | (0.5) | 18.0 | (0.8) | ||||||||||
Total other income (expense), net | 5.8 | (17.2) | (9.7) | (32.5) | ||||||||||
Earnings before income taxes and equity in losses of unconsolidated affiliates | 82.3 | 59.8 | 135.0 | 109.8 | ||||||||||
Income tax expense | 17.2 | 14.5 | 25.4 | 25.2 | ||||||||||
Earnings before equity in losses of unconsolidated affiliates | 65.1 | 45.3 | 109.6 | 84.6 | ||||||||||
Equity in losses of unconsolidated affiliates, net of tax | (26.0) | (12.7) | (20.4) | (26.0) | ||||||||||
Net earnings | 39.1 | 32.6 | 89.2 | 58.6 | ||||||||||
Unrealized holding losses, net of tax(1) | [1] | (2.6) | (11.8) | (24.2) | (18.0) | |||||||||
Reclassification adjustments for losses (gains) included in net earnings, net of tax(2) | [2] | (3.2) | 0.3 | (4.4) | 1.0 | |||||||||
Reclassification adjustments for losses (gains) included in net earnings, net of tax(2) | 0.6 | (12.1) | (19.8) | (19.0) | ||||||||||
Foreign currency translation adjustment | [3] | 0.0 | 0.0 | (0.2) | 0.0 | |||||||||
Unrealized loss on investments in unconsolidated affiliates | [4] | (1.5) | (2.2) | (1.7) | (2.4) | |||||||||
Other comprehensive losses | (0.9) | (14.3) | (21.7) | (21.4) | ||||||||||
Comprehensive earnings | $ 38.2 | $ 18.3 | $ 67.5 | $ 37.2 | ||||||||||
Net earnings per share: | ||||||||||||||
Basic (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.40 | ||||||||||
Diluted (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.39 | ||||||||||
Weighted average shares of common stock outstanding (Note 4): | ||||||||||||||
Basic (in shares) | 149.2 | [4] | 147.7 | [4] | 148.6 | 147.6 | ||||||||
Diluted (in shares) | 150.0 | [4] | 148.5 | [4] | 149.3 | 148.4 | ||||||||
Derivatives qualifying as hedges, tax | $ (0.9) | $ (4.1) | $ (8.2) | $ (6.3) | ||||||||||
Reclassification adjustment from AOCI on derivatives, tax | (1.1) | 0.1 | (1.5) | 0.4 | ||||||||||
Foreign currency translation adjustment, tax benefit | 0.1 | |||||||||||||
Unrealized loss on investments in unconsolidated affiliates, tax benefit | $ (0.5) | $ (0.8) | $ (0.6) | $ (0.9) | ||||||||||
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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Millions |
6 Months Ended | |
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Jun. 30, 2020 |
Jun. 30, 2019 |
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Cash flows from operating activities: | ||
Net earnings | $ 89.2 | $ 58.6 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||
Depreciation and amortization | 116.3 | 114.4 |
Amortization of debt issuance costs and original issue discount | 1.4 | 1.4 |
Deferred income taxes, net | 0.9 | 1.0 |
Equity in losses of unconsolidated affiliates, net of tax | 20.4 | 26.0 |
Equity-based compensation | 20.2 | 25.4 |
Changes in assets and liabilities, net of acquired assets and liabilities: | ||
Trade and other receivables, including receivables from related parties | 6.6 | 0.7 |
Prepaid expenses and other assets | (14.0) | (10.5) |
Deferred contract costs | (26.0) | (20.9) |
Deferred revenues | (10.2) | (11.3) |
Trade accounts payable and other liabilities | (9.5) | (56.7) |
Net cash provided by operating activities | 195.3 | 128.1 |
Cash flows from investing activities: | ||
Additions to property and equipment | (12.6) | (4.8) |
Additions to computer software | (38.2) | (40.6) |
Business acquisition, net of cash acquired | (50.4) | 0.0 |
Investments in unconsolidated affiliate | 0.0 | (375.0) |
Proceeds from sale of investment in unconsolidated affiliate | 8.4 | 0.0 |
Asset acquisition | 15.0 | 0.0 |
Net cash used in investing activities | (107.8) | (420.4) |
Proceeds from Issuance of Common Stock | 484.6 | 0.0 |
Payments of Stock Issuance Costs | (0.4) | 0.0 |
Cash flows from financing activities: | ||
Revolver borrowings | 266.6 | 611.8 |
Revolver payments | (576.6) | (290.8) |
Term loan payments | (23.4) | (15.6) |
Purchases of treasury stock | 0.0 | (11.9) |
Finance lease payments | (5.8) | 0.0 |
Tax withholding payments for restricted share vesting | (19.7) | (12.2) |
Net cash provided by financing activities | 125.3 | 281.3 |
Net increase (decrease) in cash and cash equivalents | 212.8 | (11.0) |
Cash and cash equivalents, beginning of period | 15.4 | 20.3 |
Cash and cash equivalents, end of period | 228.2 | 9.3 |
Supplemental cash flow information: | ||
Interest paid, net | (26.1) | (29.4) |
Income taxes paid, net | $ (5.4) | $ (27.7) |
Basis of Presentation |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements (Unaudited) of Black Knight, Inc. and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our") were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. All significant intercompany accounts and transactions have been eliminated. The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission ("SEC") on February 28, 2020 and other filings with the SEC. Description of Business We are a leading provider of integrated software, data and analytics solutions to the mortgage and consumer loan, real estate and capital markets verticals. Our solutions facilitate and automate many of the mission-critical business processes across the homeownership lifecycle. We are committed to being a premier business partner that clients rely on to achieve their strategic goals, realize greater success and better serve their customers by delivering best-in-class software, services and insights with a relentless commitment to excellence, innovation, integrity and leadership. Reporting Segments We conduct our operations through two reporting segments: (1) Software Solutions and (2) Data and Analytics. See further discussion in Note 16 — Segment Information. Share Repurchase Program On February 12, 2020, our Board of Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our outstanding common stock through February 12, 2023, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. This share repurchase program replaces our previous share repurchase program that expired on February 2, 2020. There were no share repurchases during the six months ended June 30, 2020. During the six months ended June 30, 2019, we repurchased 0.2 million shares of our common stock for $11.9 million, or an average of $57.94 per share. Common Stock Offering On June 19, 2020, we issued and sold 7,130,000 shares of our common stock in an underwritten public offering pursuant to a registration statement filed with the SEC. We received net proceeds of approximately $484.6 million after deducting the underwriters' discount of $16.3 million. We also incurred costs directly related to the offering of $0.4 million. A portion of the net proceeds received from this offering was used to fully repay amounts outstanding under our revolving credit facility. Refer to Note 10 — Long-term Debt. Cash and Cash Equivalents Highly liquid instruments purchased with original maturities of three months or less are considered cash equivalents. Cash equivalents are invested with high credit quality financial institutions and consist of short-term investments, such as demand deposit accounts, money market accounts, money market funds and time deposits. The carrying amounts of these instruments reported in the Condensed Consolidated Balance Sheets (Unaudited) approximate their fair value because of their immediate or short-term maturities. Cash and cash equivalents are unrestricted and include the following (in millions):
Trade Receivables, Net The carrying amounts reported in the Condensed Consolidated Balance Sheets (Unaudited) for Trade receivables, net approximate their fair value because of their short-term nature. A summary of Trade receivables, net of allowance for credit losses is as follows (in millions):
In addition to the amounts above, we have unbilled receivables that we do not expect to collect within the next year included in Other non-current assets in our Condensed Consolidated Balance Sheets (Unaudited). Billings for these receivables are based on contractual terms. Refer to Note 9 — Other Non-Current Assets. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following (in millions):
Contract Assets Our short-term contract assets are included in Prepaid expenses and other current assets in our Condensed Consolidated Balance Sheets (Unaudited). Our long-term contract assets are included in Other non-current assets in our Condensed Consolidated Balance Sheets (Unaudited). Refer to Note 9 — Other Non-Current Assets. Allowance for Credit Losses We record our billed and unbilled trade receivables and contract assets at their amortized cost less an allowance for expected credit losses that are not expected to be recovered. We recognize an allowance for the remaining lifetime expected credit losses based on management’s expectation of collectability. We base our estimate on multiple factors including historical experience with bad debts, our relationship with our clients and their credit quality, the aging of respective asset balances, current macroeconomic conditions and management’s expectations of conditions in the future. Our allowance for expected credit losses is based on management’s assessment of the collectability of assets with similar risk characteristics. We pool our respective asset balances based on risk characteristics primarily related to financial asset type, extent of client relationship, product/solution, business division and delinquency status. Subsequent changes are recorded as an adjustment in Operating expenses. We write off trade receivables in the period when the likelihood of collection of a trade receivable balance is considered remote. Investments in Unconsolidated Affiliates We account for our investments in unconsolidated affiliates using the equity method of accounting when we determine we have significant influence over our investee. We record our share of equity-based compensation expense from equity method investments as an adjustment to our investment with a related adjustment to our equity. Deferred Revenues Deferred revenues represent our obligations to transfer solutions or services to our clients for which we have received consideration, or an amount of consideration is due, from the client. During the three months ended June 30, 2020 and 2019, revenues recognized related to the amount included in the Deferred revenues balance at the beginning of each year were $12.7 million and $13.3 million, respectively. During the six months ended June 30, 2020 and 2019, revenues recognized related to the amount included in the Deferred revenues balance at the beginning of each year were $28.3 million and $32.6 million, respectively. Equity-Based Compensation We expense employee equity-based payments in accordance with Accounting Standards Codification ("ASC") Topic 718, Compensation—Stock Compensation, which requires compensation cost measured using the grant date fair value of equity-based payments to be recognized over the requisite service period, which generally equals the vesting period. For awards with a performance condition, we recognize compensation cost under the graded vesting method over the requisite service period of the award, which at times results in accelerated recognition of the cost. We do not recognize compensation cost if the performance condition is not considered probable of achievement. If at any point we determine that the performance condition is improbable of achievement, we reverse any previously recognized compensation cost for that award. The fair value of our restricted stock awards is measured based on the closing market price of our stock on the grant date. Income tax effects of awards are recorded in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) when the awards vest or are settled. We account for forfeitures as they occur. Depreciation and Amortization Depreciation and amortization includes the following (in millions):
Deferred contract costs amortization for the three and six months ended June 30, 2019 includes accelerated amortization of $1.9 million and $3.6 million, respectively. We did not recognize any accelerated amortization during the 2020 periods. Transition and Integration Costs Transition and integration costs for the three and six months ended June 30, 2020 and 2019 primarily consisted of costs associated with acquisitions as well as costs associated with expense reduction initiatives for the six months ended June 30, 2020. Recent Accounting Pronouncements Current Expected Credit Losses ("CECL") (ASC Topic 326, Financial Instruments - Credit Losses ("ASC 326")) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, as well as several other related updates, which were codified as ASC 326. This update changes how companies measure and recognize credit losses for many financial assets. The new standard requires companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets included in the scope of this standard. Our financial assets that are included in the scope of ASC 326 are primarily receivables and contract assets. We applied an integrated approach to analyzing the effects of adopting ASC 326, including developing accounting policies and positions, evaluating differences from applying the requirements of the new standard to our previous business practices and assessing the need for any changes in our processes and design of internal controls. The primary effect of adopting the new standard relates to the changes in our estimated credit losses and providing additional disclosures about our financial assets that are included in the scope of this new standard. Based on our assessment, we did not identify a material change in our financial condition, results of operation or business practices. We adopted ASC 326 on January 1, 2020 using a modified retrospective approach. The effect of adoption was an adjustment of $1.1 million, net of tax to opening Retained earnings on our Condensed Consolidated Statements of Equity (Unaudited). Other Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides for optional financial reporting alternatives to reduce the cost and complexity associated with the accounting for contracts and hedging relationships affected by reference rate reform. The accommodations are effective for all entities through December 31, 2022. They may be applied from the beginning of the interim period that includes the issuance of this update. We do not expect the adoption of this update to have a material effect on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. This update also clarifies certain interactions between the guidance to account for certain equity securities, equity method investments and the guidance in Topic 815, including measuring certain purchased options and forward contracts to acquire investments. This update is effective prospectively for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the effect the adoption of this update will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.
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Business Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition | Business Acquisitions We include the results of operations of acquired businesses beginning on the respective acquisition dates. The purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values, with the excess recorded as goodwill. Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed on the acquisition date. Acquisition-related costs are expensed as incurred. Collateral Analytics Acquisition On March 3, 2020, we completed the acquisition of Collateral Analytics, LLC ("Collateral Analytics"), a provider of real estate products and tools to support appraisers, appraisal management companies, lenders, investors and government agencies. Collateral Analytics is reported within our Data and Analytics segment because it enhances our real estate solutions and automated valuation model offerings. This acquisition does not meet the definition of "significant" pursuant to Article 3 of Regulation S-X (§210.3-05). The results of operations of Collateral Analytics are not material to our Condensed Consolidated Financial Statements (Unaudited) and related disclosures. Allocation of purchase price The purchase price of the Collateral Analytics acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair value at the acquisition date. The fair value of the acquired Computer software and Other intangible assets was primarily determined using a third-party valuation based on significant estimates and assumptions, including Level 3 inputs, which are judgmental in nature. These estimates and assumptions include the projected timing and amount of future cash flows, discount rates reflecting the risk inherent in the future cash flows and future market prices. These estimates are preliminary and subject to adjustments as we complete our valuation process with respect to Computer software, Other intangible assets, Goodwill and contingent consideration. Total consideration, net of cash received, was $51.0 million for 100% of the equity interests in Collateral Analytics. The total consideration was as follows (in millions):
The following table summarizes the total purchase price consideration and the fair value amounts recognized for the assets acquired and liabilities assumed, and includes measurement period adjustments recorded during the three months ended June 30, 2020 (in millions):
The purchase agreement requires us to pay additional cash consideration based on EBITDA over a three-year period beginning April 1, 2020. In accordance with ASC Topic 805, Business Combinations, we will recognize the majority of this consideration as compensation cost over the three-year period due to an ongoing employment requirement. Estimated Useful Lives of Computer Software and Other Intangible Assets Acquired As of the acquisition date, the gross carrying value and weighted average estimated useful lives of Computer software and Other intangible assets acquired consisted of the following (dollars in millions):
Optimal Blue Pending Acquisition On July 26, 2020, we entered into a definitive equity purchase agreement with affiliates of private equity firm GTCR, LLC, to purchase Optimal Blue, LLC ("Optimal Blue"), a leading provider of secondary market solutions and actionable data services, for an enterprise value of $1.8 billion, subject to customary purchase price adjustments. In connection with this acquisition, we will combine our Compass Analytics business with Optimal Blue in a newly formed entity with minority co-investors Cannae Holdings, Inc. (“Cannae”) and affiliates of Thomas H. Lee Partners, L.P. (“THL”). On July 26, 2020, we also entered into forward purchase agreements with an affiliate of Cannae and affiliates of THL (collectively, the "FPAs") pursuant to which each of Cannae and THL committed to purchase approximately 20% of the equity interests (approximately 40% in the aggregate) in the to-be-formed new subsidiary of Black Knight for a purchase price of $290 million ($580 million in the aggregate). We expect to fund the acquisition with cash on hand, including the proceeds from the FPAs, and debt financing. The acquisition is expected to close in the third quarter of 2020. We will own approximately 60% of the new entity. Three years after the closing of this pending acquisition, we will have call rights on THL's and Cannae’s interests in the newly formed entity. In addition, THL and Cannae will have the right to put their respective interests in the newly formed entity to (i) the newly formed entity if there is a change of control of Black Knight or (ii) the newly formed entity or Black Knight three years after the closing of this pending acquisition. We will have the option to satisfy the purchase price in connection with the exercise of any put or call right either in cash or Black Knight common stock other than a put in connection with a change of control of Black Knight, in which case the purchase price is payable only in cash.
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Investments In Unconsolidated Affiliates (Notes) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates D&B Investment In 2019, we invested an aggregate of $392.6 million in Star Parent, L.P., a Delaware limited partnership ("Star Parent"), related to its acquisition of The Dun & Bradstreet Corporation, a Delaware corporation ("D&B") and D&B's acquisition of Lattice Engines, Inc. D&B is a global leader in commercial data and analytics that provides various services helping companies improve their operational performance. In connection with this investment, we were issued certain limited partner interests in Star Parent, representing approximately 18.1% of the outstanding common equity of Star Parent. For the periods presented, our investment in Star Parent was an equity method investment. The table below summarizes the carrying amount of our investment and our maximum exposure related to our variable interests in Star Parent (in millions):
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During the third quarter of 2019, we had a change in accounting principle to eliminate the one-quarter lag related to our investment in Star Parent. We determined eliminating the one-quarter lag was preferable as it enables us to provide investors, lenders and other users of our consolidated financial statements with the most recently available financial information related to our investment in Star Parent. We applied the effects of this change in accounting principle retrospectively. There was no change to Operating income, Earnings before equity in losses of unconsolidated affiliates or Cash flows from operating activities for any of the prior periods as a result of this change in accounting principle. The following tables summarize the effect of this change in accounting principle on the primary financial statement line items on our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and six months ended June 30, 2019:
Our Net earnings for the three months ended June 30, 2020 and 2019 and six months ended June 30, 2020 in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include our equity in losses of Star Parent for the three months ended June 30, 2020 and 2019 and six months ended June 30, 2020, respectively. Our Net earnings for the six months ended June 30, 2019 include our equity in losses of Star Parent for the period from February 8, 2019 to June 30, 2019. Summarized consolidated financial information for Star Parent is presented below (in millions):
The summarized consolidated financial information as of December 31, 2019 for Star Parent was obtained from the audited consolidated financial statements of Star Parent as of December 31, 2019 that were filed with the SEC on March 25, 2020 as Exhibit 99.1 to our Form 10-K/A. The summarized consolidated financial information for Star Parent as of June 30, 2020, for the three and six months ended June 30, 2020 and for the period from February 8, 2019 to June 30, 2019 was derived from the most recently available unaudited consolidated financial information of Star Parent for each respective period. During the three months ended June 30, 2020 and 2019, we recorded equity in losses related to our investment in Star Parent of $31.0 million, net of income tax benefit of $10.5 million, and equity in losses of $12.7 million, net of income tax benefit of $4.4 million, respectively. During the six months ended June 30, 2020 and 2019, we recorded equity in losses related to our investment in Star Parent of $25.4 million, net of income tax benefit of $8.6 million, and equity in losses of $26.0 million, net of income tax benefit of $9.1 million, respectively. DNB IPO and Private Placement On July 6, 2020, DNB closed its previously announced initial public offering of 90.0 million shares of common stock, which included 11.7 million shares of common stock issued pursuant to the exercise by the underwriters of their option to purchase additional shares in full (the "DNB IPO"). The DNB IPO was priced at $22.00 per share, resulting in gross proceeds to DNB of $2.4 billion when combined with $400.0 million of aggregate proceeds from a concurrent private placement offering (the "DNB Private Placement") and before deducting underwriting discounts and commissions and other offering expenses payable by DNB. Shares of DNB common stock began trading on the New York Stock Exchange ("NYSE") under the ticker symbol "DNB" on July 1, 2020. DNB used a portion of the net proceeds from the DNB IPO to redeem all of its outstanding Series A Preferred Stock and repay a portion of its 10.250% Senior Unsecured Notes outstanding due 2027. On July 6, 2020, we invested $100.0 million in the DNB Private Placement. In connection with the closing of the DNB IPO and the DNB Private Placement, our limited partner interests in Star Parent were exchanged for 54.8 million shares of DNB common stock (the "DNB Investment"), which represents ownership of 13.0% of DNB. Other investment On May 15, 2020, we sold our interest in an equity method investment and recognized a gain of $5.0 million, net of tax, which is included in Equity in losses of unconsolidated affiliates, net of tax in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and six months ended June 30, 2020. In connection with the sale, we received $8.4 million in cash at closing and recorded a long-term receivable of $1.8 million, which is included in Other non-current assets in our Condensed Consolidated Balance Sheets (Unaudited). The original investment was not material to Black Knight.
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share Diluted net earnings per share includes the effect of unvested restricted stock awards. The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share amounts):
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Related Party Transactions |
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Related Party Transactions | Related Party Transactions D&B As of February 8, 2019, along with its predecessor entities, DNB is considered to be a related party primarily due to the combination of our DNB Investment, our shared Chief Executive Officer and certain shared board members. On July 6, 2020, we invested an additional $100.0 million in connection with the DNB Private Placement. Refer to Note 3 — Investments in Unconsolidated Affiliates for additional details. As of June 30, 2020 and December 31, 2019, we had a related party receivable of $0.3 million and $0.2 million, respectively, from DNB and its predecessors. FNF We are party to certain agreements with Fidelity National Financial, Inc. ("FNF"), including agreements that were entered into when we were related parties, to provide software, data and analytics services, as well as corporate shared services and information technology. We are also a party to certain other agreements under which we incur other expenses or receive revenues from FNF. As a result of our spin-off from FNF and its subsidiaries, FNF and Black Knight are separate independent companies. FNF no longer has an ownership interest in us, but was still considered a related party until December 1, 2019 due to the combination of certain shared board members, members of senior management and various agreements. As of December 1, 2019, the Chairman of our Board of Directors, who also serves as Chairman of FNF's Board of Directors, no longer serves as one of our executive officers, and FNF is no longer considered a related party. A summary of the revenues and expenses, net from FNF for the periods we were related parties is as follows (in millions):
A summary of related party items included in Revenues is as follows (in millions):
A summary of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
We believe the amounts earned from or charged by us under each of the foregoing arrangements are fair and reasonable. We believe our service arrangements are priced within the range of prices we offer to third parties, except for certain corporate services provided to FNF and certain corporate services provided by FNF, which are at cost. However, the amounts we earned or that were charged under certain arrangements were not negotiated at arm's length, and may not represent the terms that we might have obtained from an unrelated third party.
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Computer Software |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computer Software | Computer Software Computer software, net consists of the following (in millions):
In the fourth quarter of 2019, we entered into agreements to acquire software in exchange for a combination of cash consideration and certain of our products and services. The software was acquired for $32.0 million, of which software valued at $25.5 million was received in the first quarter of 2020 and resulted in non-cash investing activity of $10.5 million for the six months ended June 30, 2020. Internally developed software and purchased software include assets acquired through business acquisitions, including our Collateral Analytics acquisition. Refer to Note 2 — Business Acquisitions for further discussion.
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Other Intangible Assets |
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Other Intangible Assets | Other Intangible Assets Other intangible assets consist of the following (in millions):
Client relationships and other intangible assets include assets acquired through our acquisition of Collateral Analytics. Refer to Note 2 — Business Acquisitions for further discussion.
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Goodwill |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill Goodwill consists of the following (in millions):
The increase in Goodwill related to our Collateral Analytics acquisition is deductible for tax purposes. During the three months ended June 30, 2020, we recorded a measurement period adjustment of $0.2 million. On September 13, 2019, we completed the acquisition of Compass Analytics, LLC, a financial technology provider of advanced pricing and valuation solutions to support loan officers and capital market professionals. During the three months ended June 30, 2020, we recorded a measurement period adjustment of $0.9 million to reduce our estimated liabilities for pre-acquisition tax exposure.
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Other Non-Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-Current Assets | Other Non-Current Assets Other non-current assets consist of the following (in millions):
_______________________________________________________ (1) Includes non-cash additions for right-of-use assets obtained in exchange for lease liabilities of $4.5 million and $1.8 million for the six months ended June 30, 2020 and 2019, respectively.
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Long-Term Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in millions):
As of June 30, 2020, principal maturities, including payments related to our finance leases, are as follows (in millions):
Credit Agreement On April 30, 2018, our indirect subsidiary, Black Knight InfoServ, LLC ("BKIS") entered into an amended and restated credit and guaranty agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. as administrative agent, the guarantors party thereto, the other agents party thereto and the lenders party thereto. The Credit Agreement provides for (i) a $1,250.0 million term loan A facility (the “Term A Loan”) and (ii) a $750.0 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term A Loan, collectively, the “Facilities”), the proceeds of which were used to repay in full the previous term loan A facility, term loan B facility and revolving credit facility. On June 19, 2020, we completed an underwritten offering of shares of our common stock pursuant to a registration statement we filed with the SEC. Refer to Note 1 — Basis of Presentation. A portion of the net proceeds received from this offering was used to fully repay amounts outstanding under our Revolving Credit Facility. As of June 30, 2020, the interest rates on the Term A Loan and Revolving Credit Facility were based on the Eurodollar rate plus a margin of 150 basis points, and the interest rate on the Term A Loan was approximately 1.66%. As of June 30, 2020, we had $750.0 million capacity on the Revolving Credit Facility and paid an unused commitment fee of 20 basis points. The Facilities are guaranteed by all of BKIS’s wholly-owned domestic restricted subsidiaries and Black Knight Financial Services, LLC, a Delaware limited liability company and the direct parent company of BKIS, and are secured by associated collateral agreements that pledge a lien on substantially all of BKIS’s assets, including fixed assets and intangibles, and the assets of the guarantors, in each case, subject to customary exceptions. Other Debt On April 1, 2018, we entered into a financing agreement for $32.9 million, with a stated interest rate of 0% and an imputed interest rate of 3.4%, primarily related to certain data processing and maintenance services. On December 31, 2019, we entered into an amendment to the financing agreement for an additional $16.3 million, with a stated interest rate of 0% and an imputed interest rate of 3.3%. Under the terms of the amendment, quarterly payments are due beginning January 2, 2020 through January 2, 2023. As of June 30, 2020, $9.4 million is included in the Current portion of debt and $6.3 million is included in Long-term debt, net of current portion in our Condensed Consolidated Balance Sheets (Unaudited). Finance Leases On December 31, 2019, we entered into one-year finance lease agreements, with a stated interest rate of 0%, an imputed interest rate of 3.3% and bargain purchase options for certain computer equipment. The leased equipment has a useful life of five years and is depreciated on a straight-line basis. The finance lease liabilities of $8.3 million as of June 30, 2020 are included in the Current portion of debt on our Condensed Consolidated Balance Sheets (Unaudited). For the six months ended June 30, 2020, non-cash investing and financing activity was $8.4 million related to the unpaid portion of our finance lease agreements. Fair Value of Long-Term Debt The fair value of our Facilities approximates their carrying value at June 30, 2020. The fair value of our Facilities is based upon established market prices for the securities using Level 2 inputs. Interest Rate Swaps We enter into interest rate swap agreements to hedge forecasted monthly interest rate payments on our floating rate debt. As of June 30, 2020, we had the following interest rate swap agreements (collectively, the "Swap Agreements") (in millions):
Under the terms of the Swap Agreements, we receive payments based on the 1-month London Interbank Offered Rate ("LIBOR") (approximately 0.18% as of June 30, 2020). We entered into the Swap Agreements to convert a portion of the interest rate exposure on our floating rate debt from variable to fixed. We designated these Swap Agreements as cash flow hedges. A portion of the amount included in Accumulated other comprehensive loss is reclassified into Interest expense, net as a yield adjustment as interest is either paid or received on the hedged debt. The fair value of our Swap Agreements is based upon Level 2 inputs. We have considered our own credit risk and the credit risk of the counterparties when determining the fair value of our Swap Agreements. It is our policy to execute such instruments with creditworthy banks and not to enter into derivative financial instruments for speculative purposes. We believe our interest rate swap counterparties will be able to fulfill their obligations under our agreements, and we believe we will have debt outstanding through the various expiration dates of the swaps such that the occurrence of future cash flow hedges remains probable. The estimated fair values of our Swap Agreements are as follows (in millions):
A cumulative loss of $48.4 million ($36.2 million net of tax) and cumulative loss of $21.9 million ($16.4 million net of tax) is reflected in Accumulated other comprehensive loss as of June 30, 2020 and December 31, 2019, respectively. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive (loss) earnings ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) (in millions):
Approximately $20.9 million ($15.6 million net of tax) of the balance in Accumulated other comprehensive loss as of June 30, 2020 is expected to be reclassified into Interest expense, net over the next 12 months.
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair Value of Financial Assets and Liabilities Fair value represents the amount that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of financial assets and liabilities are determined using the following fair value hierarchy:
Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in millions):
The fair value of contingent consideration was primarily determined using a third-party valuation based on significant estimates and assumptions, including Level 3 inputs. The estimates and assumptions include the projected timing and amount of future cash flows and discount rates reflecting the rate inherent in the future cash flows. The following table presents a summary of the change in fair value of our contingent consideration (in millions):
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Income Taxes |
6 Months Ended |
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Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our effective tax rate for the three months ended June 30, 2020 and 2019 was 20.9% and 24.2%, respectively, and 18.8% and 23.0% for the six months ended June 30, 2020 and 2019, respectively. Our effective tax rate for the three and six months ended June 30, 2020 and June 30, 2019 differs from our statutory rate primarily due to the effect of excess tax benefits related to the vesting of restricted shares of our common stock and higher than expected research and experimentation tax credits.
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Commitments and Contingencies |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal and Regulatory Matters In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters related to our operations, some of which include claims for punitive or exemplary damages. Our ordinary course litigation may include class action lawsuits, which make allegations related to various aspects of our business. From time to time, we also receive requests for information from various state and federal regulatory authorities, some of which take the form of civil investigative demands or subpoenas. Some of these regulatory inquiries may result in the assessment of fines for violations of regulations or settlements with such authorities requiring a variety of remedies. We believe that none of these actions depart from customary litigation or regulatory inquiries incidental to our business. We review lawsuits and other legal and regulatory matters (collectively "legal proceedings") on an ongoing basis when making accrual and disclosure decisions. When assessing reasonably possible and probable outcomes, management bases its decision on its assessment of the ultimate outcome assuming all appeals have been exhausted. For legal proceedings where it has been determined that a loss is both probable and reasonably estimable, a liability based on known facts and which represents our best estimate has been recorded. Actual losses may materially differ from the amounts recorded and the ultimate outcome of our pending cases is generally not yet determinable. While some of these matters could be material to our operating results or cash flows for any particular period if an unfavorable outcome results, at present we do not believe the ultimate resolution of currently pending legal proceedings, either individually or in the aggregate, will have a material adverse effect on our financial condition. PennyMac Litigation On November 5, 2019, Black Knight Servicing Technologies, LLC (“BKST”), a wholly-owned indirect subsidiary of Black Knight, filed a Complaint and Demand for Jury Trial (the “Black Knight Complaint”) against PennyMac Loan Services, LLC (“PennyMac”) in the Circuit Court for the Fourth Judicial Circuit in and for Duval County, Florida. The Black Knight Complaint includes causes of action for breach of contract and misappropriation of MSP® System trade secrets in order to develop an imitation mortgage processing system intended to replace the MSP® System. The Black Knight Complaint seeks damages for breach of contract and misappropriation of trade secrets, injunctive relief under the Florida Uniform Trade Secrets Act and declaratory judgment that BKST owns all intellectual property and software developed by or on behalf of PennyMac as a result of its wrongful use of and access to the MSP® System and related trade secret and confidential information. PennyMac filed a motion to compel arbitration of the action and the Court granted the motion on April 6, 2020. After the Court denied BKST's Motion for Reconsideration of the Court’s order compelling arbitration, BKST filed a Notice of Appeal on May 6, 2020 and filed its initial appellate brief on June 19, 2020. Shortly after the filing of the Black Knight Complaint, on November 6, 2019, PennyMac filed an Antitrust Complaint (the “PennyMac Complaint”) against Black Knight in the United States District Court for the Central District of California. The PennyMac Complaint included causes of action for alleged monopolization and attempted monopolization under Section 2 of the Sherman Antitrust Act, violation of California’s Cartwright Act, violation of California’s Unfair Competition Law and common law unfair competition under California law. The PennyMac Complaint sought equitable remedies, damages and other monetary relief, including treble and punitive damages. Generally, PennyMac alleged that Black Knight relies on various anticompetitive, unfair, and discriminatory practices to maintain and to enhance its dominance in the mortgage servicing platform market and in an attempt to monopolize the platform software applications market. Black Knight moved to dismiss the PennyMac Complaint or have the action transferred to Florida based upon a forum selection clause in the agreement with BKST. On February 13, 2020, the judge granted Black Knight's motion to transfer the case to Florida and denied as moot the motion to dismiss. On April 17, 2020, PennyMac filed a Notice of Dismissal of this action without prejudice and indicated that they intended to bring the claims raised in the dismissed PennyMac Complaint as defenses, third party claims and/or counterclaims in arbitration. On April 23, 2020, the Court entered an order dismissing the action without prejudice and directing that the clerk close the case. On April 28, 2020, PennyMac submitted this matter to the American Arbitration Association ("AAA") for arbitration. On May 27, 2020, Black Knight filed its Answering Statement with the AAA. The arbitrator was confirmed by the AAA on July 21, 2020. Black Knight and BKST have moved to stay the PennyMac arbitration pending resolution of BKST’s appeal, and have taken the position that PennyMac waived the right to arbitrate its claims against Black Knight by first filing them in a court of law. On June 26, 2020, Black Knight filed a Complaint against PennyMac in the United States District Court for the Middle District of Florida seeking a declaratory judgment that PennyMac waived its right to arbitrate federal antitrust and related state law claims against Black Knight because PennyMac previously filed and litigated those claims in a court of law (the “BKI Declaratory Action”). On July 22, 2020, PennyMac moved to dismiss the complaint in the BKI Declaratory Action, which Black Knight opposed. The arbitrator has ordered that the arbitration be stayed pending the Court’s ruling on a PennyMac motion to disqualify Black Knight’s counsel. As these cases continue to evolve, it is not possible to reasonably estimate the probability that we will ultimately prevail on our lawsuit or be held liable for the violations alleged in the PennyMac Complaint, nor is it possible to reasonably estimate the ultimate gain or loss, if any, or range of gain or loss that could result from these cases. Other Legal Matter During the three months ended June 30, 2020, we recognized a one-time gain of $18.5 million related to the resolution of a legacy legal matter of Lender Processing Services, Inc. ("LPS") in Other income (expense), net in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). Indemnifications and Warranties We often agree to indemnify our clients against damages and costs resulting from claims of patent, copyright, trademark infringement or breaches of confidentiality associated with use of our software through software licensing agreements. Historically, we have not made any payments under such indemnifications, but continue to monitor the conditions that are subject to the indemnifications to identify whether a loss has occurred that is both probable and estimable that would require recognition. In addition, we warrant to clients that our software operates substantially in accordance with the software specifications. Historically, no costs have been incurred related to software warranties and none are expected in the future, and as such, no accruals for warranty costs have been made. Indemnification Agreement We are party to a cross-indemnity agreement dated December 22, 2014 with ServiceLink Holdings, LLC ("ServiceLink"). Pursuant to this agreement, ServiceLink indemnifies us from liabilities relating to, arising out of or resulting from the conduct of ServiceLink's business or any action, suit or proceeding in which we or any of our subsidiaries are named by reason of being a successor to the business of LPS and the cause of such action, suit or proceeding relates to the business of ServiceLink. In return, we indemnify ServiceLink for liabilities relating to, arising out of, or resulting from the conduct of our business.
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Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Disaggregation of Revenues The following tables summarize revenues from contracts with clients (in millions):
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Our Software Solutions segment offers leading software and hosting solutions that facilitate and automate many of the mission-critical business processes across the homeownership lifecycle. These solutions primarily consist of processing and workflow management software applications. Our servicing software solutions primarily include our core servicing software solution that automates loan servicing, including loan setup and ongoing processing, customer service, accounting, reporting to the secondary mortgage market and investors and web-based workflow information systems. Our origination software solutions primarily include our solutions that automate and facilitate the origination of mortgage loans and provide an interconnected network allowing the various parties and systems associated with lending transactions to exchange data quickly and efficiently. Professional services consists of pre-implementation and post-implementation support and services and are primarily billed on a time and materials basis. Professional services may also include dedicated teams provided as part of agreements with software and hosting solutions clients. Our Data and Analytics segment offers data and analytics solutions to the mortgage, real estate and capital markets verticals. These solutions include property ownership data, lien data, servicing data, automated valuation models, collateral risk scores, behavioral models, a multiple listing service software solution and other data solutions. Transaction Price Allocated to Future Performance Obligation Our disclosure of transaction price allocated to future performance obligations excludes the following:
As of June 30, 2020, the aggregate amount of the transaction price that is allocated to our future performance obligations was approximately $2.4 billion and is expected to be recognized as follows: 12% by December 31, 2020, 54% by December 31, 2022, 85% by December 31, 2024 and the rest thereafter.
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Equity-Based Compensation |
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Equity-Based Compensation | Equity-Based Compensation A summary of restricted shares granted in 2020 is as follows:
Restricted stock transactions in 2020 are as follows:
Equity-based compensation expense was $9.5 million and $12.1 million for the three months ended June 30, 2020 and 2019, respectively, and $20.2 million and $25.4 million for the six months ended June 30, 2020 and 2019, respectively. Equity-based compensation includes accelerated recognition of $0.2 million and $1.9 million for the six months ended June 30, 2020 and 2019, respectively. These expenses are included in Operating expenses in the Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited). As of June 30, 2020, total unrecognized compensation cost was $54.5 million and is expected to be recognized over a weighted average period of approximately 2.1 years.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information ASC Topic 280, Segment Reporting ("ASC 280") establishes standards for reporting information about segments and requires that a public business enterprise reports financial and descriptive information about its segments. Segments are components of an enterprise for which separate financial information is available and are evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our chief executive officer is identified as the CODM as defined by ASC 280. To align with the internal management of our business operations based on service offerings, our business is organized into two segments. Refer to Note 14 — Revenues for a description of our Software Solutions and Data and Analytics segments. Separate discrete financial information is available for these two segments, and the operating results of each segment are regularly evaluated by the CODM in order to assess performance and allocate resources. We use EBITDA as the primary profitability measure for making decisions regarding ongoing operations. EBITDA is earnings before Interest expense, net, Income tax expense and Depreciation and amortization. It also excludes Equity in earnings (losses) of unconsolidated affiliates. We do not allocate Interest expense, net, Other expense, net, Income tax expense, equity-based compensation and certain other items, such as purchase accounting adjustments and acquisition-related costs to the segments, since these items are not considered in evaluating the segments' overall operating performance. Segment asset information is not included below because we do not use it to evaluate performance or allocate resources. Summarized financial information concerning our segments is shown in the tables below (in millions):
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(3) Transition and integration costs primarily consisted of costs associated with acquisitions.
(5) Transition and integration costs primarily consisted of costs associated with acquisitions and expense reduction initiatives.
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Basis of Presentation (Policies) |
6 Months Ended |
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Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting | The accompanying Condensed Consolidated Financial Statements (Unaudited) of Black Knight, Inc. and its subsidiaries ("Black Knight," the "Company," "we," "us" or "our") were prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), and all adjustments considered necessary for a fair presentation have been included. |
Consolidation | All significant intercompany accounts and transactions have been eliminated. |
Use of Estimates | The preparation of these Condensed Consolidated Financial Statements (Unaudited) in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements (Unaudited), as well as the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Reportable Segments | Reporting Segments We conduct our operations through two reporting segments: (1) Software Solutions and (2) Data and Analytics. See further discussion in Note 16 — Segment Information.
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Trade Receivables, Net | Trade Receivables, Net The carrying amounts reported in the Condensed Consolidated Balance Sheets (Unaudited) for Trade receivables, net approximate their fair value because of their short-term nature.
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Stock Repurchase Program | Share Repurchase Program On February 12, 2020, our Board of Directors approved a three-year share repurchase program authorizing us to repurchase up to 10.0 million shares of our outstanding common stock through February 12, 2023, through open market purchases, negotiated transactions or other means, in accordance with applicable securities laws and other restrictions. This share repurchase program replaces our previous share repurchase program that expired on February 2, 2020. There were no share repurchases during the six months ended June 30, 2020.
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Cash and Cash Equivalents | Cash and Cash Equivalents Highly liquid instruments purchased with original maturities of three months or less are considered cash equivalents. Cash equivalents are invested with high credit quality financial institutions and consist of short-term investments, such as demand deposit accounts, money market accounts, money market funds and time deposits. The carrying amounts of these instruments reported in the Condensed Consolidated Balance Sheets (Unaudited) approximate their fair value because of their immediate or short-term maturities.
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Allowance for Credit Losses | Allowance for Credit Losses We record our billed and unbilled trade receivables and contract assets at their amortized cost less an allowance for expected credit losses that are not expected to be recovered. We recognize an allowance for the remaining lifetime expected credit losses based on management’s expectation of collectability. We base our estimate on multiple factors including historical experience with bad debts, our relationship with our clients and their credit quality, the aging of respective asset balances, current macroeconomic conditions and management’s expectations of conditions in the future. Our allowance for expected credit losses is based on management’s assessment of the collectability of assets with similar risk characteristics. We pool our respective asset balances based on risk characteristics primarily related to financial asset type, extent of client relationship, product/solution, business division and delinquency status. Subsequent changes are recorded as an adjustment in Operating expenses. We write off trade receivables in the period when the likelihood of collection of a trade receivable balance is considered remote.
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Investments in Unconsolidated Affiliates | Investments in Unconsolidated Affiliates We account for our investments in unconsolidated affiliates using the equity method of accounting when we determine we have significant influence over our investee. We record our share of equity-based compensation expense from equity method investments as an adjustment to our investment with a related adjustment to our equity.
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Equity-based Compensation | Equity-Based Compensation We expense employee equity-based payments in accordance with Accounting Standards Codification ("ASC") Topic 718, Compensation—Stock Compensation, which requires compensation cost measured using the grant date fair value of equity-based payments to be recognized over the requisite service period, which generally equals the vesting period. For awards with a performance condition, we recognize compensation cost under the graded vesting method over the requisite service period of the award, which at times results in accelerated recognition of the cost. We do not recognize compensation cost if the performance condition is not considered probable of achievement. If at any point we determine that the performance condition is improbable of achievement, we reverse any previously recognized compensation cost for that award. The fair value of our restricted stock awards is measured based on the closing market price of our stock on the grant date. Income tax effects of awards are recorded in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) when the awards vest or are settled. We account for forfeitures as they occur.
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Transition and Integration Costs | Transition and Integration Costs Transition and integration costs for the three and six months ended June 30, 2020 and 2019 primarily consisted of costs associated with acquisitions as well as costs associated with expense reduction initiatives for the six months ended June 30, 2020
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Recent Accounting Pronouncements | Recent Accounting Pronouncements Current Expected Credit Losses ("CECL") (ASC Topic 326, Financial Instruments - Credit Losses ("ASC 326")) In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses, as well as several other related updates, which were codified as ASC 326. This update changes how companies measure and recognize credit losses for many financial assets. The new standard requires companies to immediately recognize an estimate of credit losses expected to occur over the remaining life of the financial assets included in the scope of this standard. Our financial assets that are included in the scope of ASC 326 are primarily receivables and contract assets. We applied an integrated approach to analyzing the effects of adopting ASC 326, including developing accounting policies and positions, evaluating differences from applying the requirements of the new standard to our previous business practices and assessing the need for any changes in our processes and design of internal controls. The primary effect of adopting the new standard relates to the changes in our estimated credit losses and providing additional disclosures about our financial assets that are included in the scope of this new standard. Based on our assessment, we did not identify a material change in our financial condition, results of operation or business practices. We adopted ASC 326 on January 1, 2020 using a modified retrospective approach. The effect of adoption was an adjustment of $1.1 million, net of tax to opening Retained earnings on our Condensed Consolidated Statements of Equity (Unaudited). Other Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This update provides for optional financial reporting alternatives to reduce the cost and complexity associated with the accounting for contracts and hedging relationships affected by reference rate reform. The accommodations are effective for all entities through December 31, 2022. They may be applied from the beginning of the interim period that includes the issuance of this update. We do not expect the adoption of this update to have a material effect on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815). The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. This update also clarifies certain interactions between the guidance to account for certain equity securities, equity method investments and the guidance in Topic 815, including measuring certain purchased options and forward contracts to acquire investments. This update is effective prospectively for fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the effect the adoption of this update will have on our Condensed Consolidated Financial Statements (Unaudited) and related disclosures.
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Basis of Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | Cash and cash equivalents are unrestricted and include the following (in millions):
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Trade Receivables, Net | A summary of Trade receivables, net of allowance for credit losses is as follows (in millions):
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Schedule of Depreciation and Amortization | Depreciation and amortization includes the following (in millions):
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Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in millions):
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Business Acquisition (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | Total consideration, net of cash received, was $51.0 million for 100% of the equity interests in Collateral Analytics. The total consideration was as follows (in millions):
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the total purchase price consideration and the fair value amounts recognized for the assets acquired and liabilities assumed, and includes measurement period adjustments recorded during the three months ended June 30, 2020 (in millions):
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | As of the acquisition date, the gross carrying value and weighted average estimated useful lives of Computer software and Other intangible assets acquired consisted of the following (dollars in millions):
Optimal Blue Pending Acquisition On July 26, 2020, we entered into a definitive equity purchase agreement with affiliates of private equity firm GTCR, LLC, to purchase Optimal Blue, LLC ("Optimal Blue"), a leading provider of secondary market solutions and actionable data services, for an enterprise value of $1.8 billion, subject to customary purchase price adjustments. In connection with this acquisition, we will combine our Compass Analytics business with Optimal Blue in a newly formed entity with minority co-investors Cannae Holdings, Inc. (“Cannae”) and affiliates of Thomas H. Lee Partners, L.P. (“THL”). On July 26, 2020, we also entered into forward purchase agreements with an affiliate of Cannae and affiliates of THL (collectively, the "FPAs") pursuant to which each of Cannae and THL committed to purchase approximately 20% of the equity interests (approximately 40% in the aggregate) in the to-be-formed new subsidiary of Black Knight for a purchase price of $290 million ($580 million in the aggregate). We expect to fund the acquisition with cash on hand, including the proceeds from the FPAs, and debt financing. The acquisition is expected to close in the third quarter of 2020. We will own approximately 60% of the new entity. Three years after the closing of this pending acquisition, we will have call rights on THL's and Cannae’s interests in the newly formed entity. In addition, THL and Cannae will have the right to put their respective interests in the newly formed entity to (i) the newly formed entity if there is a change of control of Black Knight or (ii) the newly formed entity or Black Knight three years after the closing of this pending acquisition. We will have the option to satisfy the purchase price in connection with the exercise of any put or call right either in cash or Black Knight common stock other than a put in connection with a change of control of Black Knight, in which case the purchase price is payable only in cash.
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Investments In Unconsolidated Affiliates (Tables) |
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Equity Method Investments and Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Carrying Amount of Investment | The table below summarizes the carrying amount of our investment and our maximum exposure related to our variable interests in Star Parent (in millions):
_______________________________________________________ (1) As of June 30, 2020, our maximum exposure includes the $100.0 million of shares of Dun & Bradstreet Holdings, Inc. ("DNB") common stock we agreed to purchase from DNB, a wholly-owned subsidiary of Star Parent prior to the DNB initial public offering, pursuant to an agreement dated June 23, 2020 related to a private placement. Refer to the "DNB IPO and Private Placement" section below for additional information.
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Schedule of VIEs | The table below summarizes the carrying amount of our investment and our maximum exposure related to our variable interests in Star Parent (in millions):
_______________________________________________________
During the third quarter of 2019, we had a change in accounting principle to eliminate the one-quarter lag related to our investment in Star Parent. We determined eliminating the one-quarter lag was preferable as it enables us to provide investors, lenders and other users of our consolidated financial statements with the most recently available financial information related to our investment in Star Parent. We applied the effects of this change in accounting principle retrospectively. There was no change to Operating income, Earnings before equity in losses of unconsolidated affiliates or Cash flows from operating activities for any of the prior periods as a result of this change in accounting principle. The following tables summarize the effect of this change in accounting principle on the primary financial statement line items on our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) for the three and six months ended June 30, 2019:
Our Net earnings for the three months ended June 30, 2020 and 2019 and six months ended June 30, 2020 in our Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) include our equity in losses of Star Parent for the three months ended June 30, 2020 and 2019 and six months ended June 30, 2020, respectively. Our Net earnings for the six months ended June 30, 2019 include our equity in losses of Star Parent for the period from February 8, 2019 to June 30, 2019. Summarized consolidated financial information for Star Parent is presented below (in millions):
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted net earnings per share (in millions, except per share amounts):
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Related Party Transactions (Tables) |
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Schedule of related party items | A summary of the revenues and expenses, net from FNF for the periods we were related parties is as follows (in millions):
A summary of related party items included in Revenues is as follows (in millions):
A summary of related party items included in Operating expenses (net of expense reimbursements) is as follows (in millions):
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Computer Software (Tables) |
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Research and Development [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Capitalized Software | Computer software, net consists of the following (in millions):
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Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets | Other intangible assets consist of the following (in millions):
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Goodwill (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill consists of the following (in millions):
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Other Non-Current Assets (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Non-Current Assets | Other non-current assets consist of the following (in millions):
_______________________________________________________ (1) Includes non-cash additions for right-of-use assets obtained in exchange for lease liabilities of $4.5 million and $1.8 million for the six months ended June 30, 2020 and 2019, respectively.
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Long-Term Debt Long-Term Debt (Tables) |
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Jun. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt | Long-term debt consists of the following (in millions):
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Schedule of Maturities of Long-term Debt | As of June 30, 2020, principal maturities, including payments related to our finance leases, are as follows (in millions):
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Schedule of Derivative Instruments | As of June 30, 2020, we had the following interest rate swap agreements (collectively, the "Swap Agreements") (in millions):
Under the terms of the Swap Agreements, we receive payments based on the 1-month London Interbank Offered Rate ("LIBOR") (approximately 0.18% as of June 30, 2020). The estimated fair values of our Swap Agreements are as follows (in millions):
A cumulative loss of $48.4 million ($36.2 million net of tax) and cumulative loss of $21.9 million ($16.4 million net of tax) is reflected in Accumulated other comprehensive loss as of June 30, 2020 and December 31, 2019, respectively. Below is a summary of the effect of derivative instruments on amounts recognized in Other comprehensive (loss) earnings ("OCE") on the accompanying Condensed Consolidated Statements of Earnings and Comprehensive Earnings (Unaudited) (in millions):
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Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets Measured on Recurring and Nonrecurring Basis | The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis (in millions):
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Change in Fair Value of Contingent Consideration | The following table presents a summary of the change in fair value of our contingent consideration (in millions):
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Revenues (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following tables summarize revenues from contracts with clients (in millions):
______________________________________________________
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Equity-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of restricted shares granted in 2020 is as follows:
Restricted stock transactions in 2020 are as follows:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Summarized Segment Financial Information | Summarized financial information concerning our segments is shown in the tables below (in millions):
_______________________________________________________
(3) Transition and integration costs primarily consisted of costs associated with acquisitions.
(5) Transition and integration costs primarily consisted of costs associated with acquisitions and expense reduction initiatives.
|
Basis of Presentation - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 19, 2020
USD ($)
shares
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2020
shares
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
segment
shares
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jan. 01, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Right-of-use assets(1) | $ 24.8 | $ 24.8 | $ 26.4 | ||||||
Lease liabilities | $ 28.9 | ||||||||
Schedule of Depreciation and Amortization Expense [Line Items] | |||||||||
Revenue recognized | 12.7 | $ 13.3 | $ 28.3 | $ 32.6 | |||||
Cumulative effect of new accounting principle | (1.1) | ||||||||
Number of reporting segments | segment | 2 | ||||||||
Cash | 102.8 | $ 102.8 | 8.2 | ||||||
Cash equivalents | 125.4 | 125.4 | 7.2 | ||||||
Cash and cash equivalents | 228.2 | 9.3 | 228.2 | 9.3 | 15.4 | $ 20.3 | |||
Allowance for Doubtful Accounts | |||||||||
Allowance for doubtful accounts | 2.0 | 2.0 | 1.3 | ||||||
Depreciation and Amortization | |||||||||
Deferred contract costs | 8.7 | 10.5 | 17.6 | 20.7 | |||||
Total | 58.6 | 57.5 | 116.3 | 114.4 | |||||
Accelerated amortization of deferred contract costs | 1.9 | 3.6 | |||||||
Proceeds from Issuance of Common Stock | 484.6 | 0.0 | |||||||
Public stock offering, underwriters discount | $ 16.3 | ||||||||
Public stock offering, direct costs | $ 0.4 | ||||||||
Property and equipment | |||||||||
Depreciation and Amortization | |||||||||
Total | 10.1 | 9.0 | 20.1 | 17.5 | |||||
Computer software | |||||||||
Depreciation and Amortization | |||||||||
Total | 26.4 | 23.4 | 52.2 | 47.1 | |||||
Other | |||||||||
Depreciation and Amortization | |||||||||
Total | $ 13.4 | $ 14.6 | $ 26.4 | $ 29.1 | |||||
Common Stock [Member] | |||||||||
Depreciation and Amortization | |||||||||
Issuance of common stock, net of underwriters' discount and issuance costs (shares) | shares | 7,130,000 | 7,100,000 | 7,100,000 | ||||||
Accumulated Deficit/Retained Earnings [Member] | Accounting Standards Update 2016-13 [Member] | |||||||||
Schedule of Depreciation and Amortization Expense [Line Items] | |||||||||
Cumulative effect of new accounting principle | $ (1.1) | ||||||||
Accumulated Deficit/Retained Earnings [Member] | Accounting Standards Update 2018-02 [Member] | |||||||||
Schedule of Depreciation and Amortization Expense [Line Items] | |||||||||
Cumulative effect of new accounting principle | (1.0) | ||||||||
AOCI Attributable to Parent [Member] | Accounting Standards Update 2018-02 [Member] | |||||||||
Schedule of Depreciation and Amortization Expense [Line Items] | |||||||||
Cumulative effect of new accounting principle | $ 1.0 |
Basis of Presentation - Share Repurchase Agreements (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Feb. 12, 2020 |
|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Stock repurchase program, number of shares authorized to be repurchased (shares) | 10,000,000.0 | |||
Total number of shares repurchased (in shares) | 200,000 | 0 | 200,000 | |
Payments for Repurchase of Common Stock | $ 0.0 | $ 11.9 | ||
Shares repurchased, average price per share (in USD per share) | $ 57.94 |
Basis of Presentation - Trade Receivable, Net (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 174.7 | $ 176.4 |
Allowance for credit losses | (2.0) | (1.3) |
Trade receivables, net | 172.7 | 175.1 |
Trade receivables — billed | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | 131.5 | 136.6 |
Trade receivables — unbilled | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Trade receivables | $ 43.2 | $ 39.8 |
Basis of Presentation - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 50.0 | $ 37.1 |
Contract assets, net | 21.4 | 19.5 |
Other current assets | 8.1 | 8.2 |
Prepaid expenses and other current assets | $ 79.5 | $ 64.8 |
Business Acquisition - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jul. 26, 2020 |
Mar. 03, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Business Acquisition [Line Items] | ||||||
Equity interests acquired | 18.10% | |||||
Proceeds from sale of interest in to-be-formed subsidiary | $ 8.4 | $ 0.0 | ||||
Collateral Analytics | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price consideration | $ 51.0 | |||||
Equity interests acquired | 100.00% | |||||
Subsequent Event | Optimal Blue, LLC | ||||||
Business Acquisition [Line Items] | ||||||
Total purchase price consideration | $ 1,800.0 | |||||
Forecast | ||||||
Business Acquisition [Line Items] | ||||||
Ownership Interest in to-be-formed subsidiary (percent) | 60.00% | |||||
Period after which the company will have call rights on ownership interests in the newly formed subsidiary | 3 years | |||||
Period after which co-Investors will have put rights for ownership interests in newly formed entity | 3 years | |||||
Cannae Holdings, Inc. [Member] | Co-venturer | Forecast | ||||||
Business Acquisition [Line Items] | ||||||
Equity ownership commitment in to-be-formed new subsidiary (percent) | 20.00% | |||||
Proceeds from sale of interest in to-be-formed subsidiary | $ 290.0 | |||||
Minority Co-Investors [Member] | Forecast | ||||||
Business Acquisition [Line Items] | ||||||
Equity ownership commitment in to-be-formed new subsidiary (percent) | 40.00% | |||||
Proceeds from sale of interest in to-be-formed subsidiary | $ 580.0 | |||||
Thomas H. Lee Partners, LP [Member] | Co-venturer | Forecast | ||||||
Business Acquisition [Line Items] | ||||||
Equity ownership commitment in to-be-formed new subsidiary (percent) | 20.00% | |||||
Proceeds from sale of interest in to-be-formed subsidiary | $ 290.0 |
Business Acquisition - Consideration Transferred (Details) - Collateral Analytics $ in Millions |
Mar. 03, 2020
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Cash paid | $ 54.1 |
Contingent consideration | 0.6 |
Less: cash acquired | (3.7) |
Total consideration, net | $ 51.0 |
Business Acquisition - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Mar. 03, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,385.8 | $ 2,361.4 | |
Collateral Analytics | |||
Business Acquisition [Line Items] | |||
Total purchase price consideration | $ 51.0 | ||
Computer software | 6.4 | ||
Other intangible assets | 17.9 | ||
Goodwill | 25.3 | ||
Other current and non-current assets | 4.1 | ||
Total assets acquired | 53.7 | ||
Total liabilities assumed | (2.7) | ||
Net assets acquired | $ 51.0 |
Business Acquisition - Estimated Useful Lives of Assets Acquired (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
Mar. 03, 2020 |
|
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Estimated Life (in Years) | 5 years | ||
Collateral Analytics | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Computer software | $ 6.4 | ||
Other intangible assets | 17.9 | ||
Total gross carrying value | 24.3 | ||
Collateral Analytics | Client relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets | 16.7 | ||
Weighted Average Estimated Life (in Years) | 10 years | ||
Collateral Analytics | Trade names | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets | 0.3 | ||
Weighted Average Estimated Life (in Years) | 3 years | ||
Collateral Analytics | Non-compete agreements | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Other intangible assets | $ 0.9 | ||
Weighted Average Estimated Life (in Years) | 3 years | ||
Collateral Analytics | Computer software | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Weighted Average Estimated Life (in Years) | 5 years |
Investments In Unconsolidated Affiliates - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Schedule of Equity Method Investments [Line Items] | |||||
Investment amount | $ 0.0 | $ 375.0 | $ 392.6 | ||
Equity interests acquired | 18.10% | ||||
Equity in losses of unconsolidated affiliates, net of tax | $ (26.0) | $ (12.7) | (20.4) | (26.0) | |
Gain on sale of equity investments | 5.0 | 5.0 | |||
Proceeds from sale of equity method investment | 8.4 | 0.0 | |||
Receivable from sale of equity investment, noncurrent | 1.8 | 1.8 | |||
DNB Investment | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Equity in losses of unconsolidated affiliates, net of tax | (31.0) | (12.7) | (25.4) | (26.0) | |
Tax benefit | $ (10.5) | $ (4.4) | $ (8.6) | $ (9.1) |
Investments In Unconsolidated Affiliates - Unconsolidated VIE (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Total assets | $ 259.9 | $ 291.3 |
Maximum exposure | 359.9 | $ 291.3 |
DNB Investment | ||
Variable Interest Entity [Line Items] | ||
Maximum exposure | $ 100.0 |
Investments In Unconsolidated Affiliates - Changes In Accounting Principle (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Equity in losses of unconsolidated affiliates, net of tax | $ (26.0) | $ (12.7) | $ (20.4) | $ (26.0) | ||
Net earnings | 39.1 | 32.6 | 89.2 | 58.6 | ||
Unrealized loss on investments in unconsolidated affiliates | [1] | $ (1.5) | $ (2.2) | $ (1.7) | $ (2.4) | |
Basic (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.40 | ||
Diluted (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.39 | ||
Elimination of One-Quarter Lag | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Equity in losses of unconsolidated affiliates, net of tax | $ (12.7) | $ (26.0) | ||||
Net earnings | 32.6 | 58.6 | ||||
Unrealized loss on investments in unconsolidated affiliates | $ (2.2) | $ (2.4) | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.40 | ||||
Diluted (in dollars per share) | $ 0.22 | $ 0.39 | ||||
Elimination of One-Quarter Lag | As reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Equity in losses of unconsolidated affiliates, net of tax | $ (13.4) | $ (13.4) | ||||
Net earnings | 31.9 | 71.2 | ||||
Unrealized loss on investments in unconsolidated affiliates | $ (0.2) | $ (0.2) | ||||
Basic (in dollars per share) | $ 0.22 | $ 0.48 | ||||
Diluted (in dollars per share) | $ 0.21 | $ 0.48 | ||||
|
Investments In Unconsolidated Affiliates - Summarized Financial Information (Details) - USD ($) $ in Millions |
3 Months Ended | 5 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Variable Interest Entity [Line Items] | ||||||
Total assets | $ 259.9 | $ 259.9 | $ 291.3 | |||
Revenues | 293.1 | $ 294.9 | 583.8 | $ 578.0 | ||
Loss before provision for income taxes and equity in net income of affiliates | 82.3 | 59.8 | 135.0 | 109.8 | ||
Net earnings | 39.1 | 32.6 | 89.2 | 58.6 | ||
Net earnings | 39.1 | 32.6 | 89.2 | $ 58.6 | ||
Variable Interest Entity, Not Primary Beneficiary [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Current assets | 489.0 | 489.0 | 417.9 | |||
Non-current assets | 8,496.1 | 8,496.1 | 8,694.9 | |||
Total assets | 8,985.1 | 8,985.1 | 9,112.8 | |||
Current liabilities, including short-term debt | 2,453.6 | 2,453.6 | 1,090.4 | |||
Non-current liabilities | 5,142.5 | 5,142.5 | 5,412.9 | |||
Cumulative preferred series A stock | 7,596.1 | 7,596.1 | 6,503.3 | |||
Cumulative preferred series A stock | 0.0 | 0.0 | 1,030.6 | |||
Total capital | 1,389.0 | 1,389.0 | 1,578.9 | |||
Total liabilities and partners' capital | 8,985.1 | 8,985.1 | $ 9,112.8 | |||
Revenues | 420.6 | 398.9 | $ 573.0 | 815.9 | ||
Loss before provision for income taxes and equity in net income of affiliates | (201.9) | (86.4) | (198.3) | (202.9) | ||
Net earnings | (173.8) | (60.5) | (141.9) | (99.9) | ||
Net earnings | $ (207.1) | $ (94.0) | $ (193.7) | $ (165.6) |
Investments In Unconsolidated Affiliates - D&B IPO and Private Placement (Details) - Subsequent Event $ / shares in Units, shares in Millions, $ in Millions |
Jul. 06, 2020
USD ($)
$ / shares
shares
|
---|---|
DNB Investment | |
Schedule of Equity Method Investments [Line Items] | |
Payments to acquire interest in affiliate | $ | $ 100.0 |
Investment acquired (shares) | shares | 54.8 |
Ownership interest (percent) | 13.00% |
IPO [Member] | DNB Investment | |
Schedule of Equity Method Investments [Line Items] | |
Issuance of common stock, net of underwriters' discount and issuance costs (shares) | shares | 90.0 |
Price per share (in USD per share) | $ / shares | $ 22.00 |
Proceeds from issuance of initial public offering | $ | $ 2,400.0 |
Underwriters' Option [Member] | DNB Investment | |
Schedule of Equity Method Investments [Line Items] | |
Issuance of common stock, net of underwriters' discount and issuance costs (shares) | shares | 11.7 |
Private Placement [Member] | DNB Investment | |
Schedule of Equity Method Investments [Line Items] | |
Proceeds from issuance of initial public offering | $ | $ 400.0 |
Senior Unsecured Notes Outstanding due 2027 [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Stated rate | 10.25% |
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | 6 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|||||
Basic: | ||||||||
Net earnings | $ 39.1 | $ 32.6 | $ 89.2 | $ 58.6 | ||||
Weighted average shares of common stock outstanding (in shares) | 149.2 | [1] | 147.7 | [1] | 148.6 | 147.6 | ||
Basic net earnings per share (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.40 | ||||
Shares used for diluted net earnings per share: | ||||||||
Weighted average shares of common stock outstanding (in shares) | 149.2 | [1] | 147.7 | [1] | 148.6 | 147.6 | ||
Weighted average shares of common stock, diluted (in shares) | 150.0 | [1] | 148.5 | [1] | 149.3 | 148.4 | ||
Diluted net earnings per share (in dollars per share) | $ 0.26 | $ 0.22 | $ 0.60 | $ 0.39 | ||||
Common Class A | ||||||||
Basic: | ||||||||
Weighted average shares of common stock outstanding (in shares) | 149.2 | 147.7 | 148.6 | 147.6 | ||||
Shares used for diluted net earnings per share: | ||||||||
Weighted average shares of common stock outstanding (in shares) | 149.2 | 147.7 | 148.6 | 147.6 | ||||
Dilutive effect of unvested restricted shares of Class A common stock (in share) | 0.8 | 0.8 | 0.7 | 0.8 | ||||
|
Related Party Transactions - Narrative (Details) - DNB Investment - USD ($) $ in Millions |
Jul. 06, 2020 |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Related Party Transaction [Line Items] | |||
Related party receivables | $ 0.3 | $ 0.2 | |
Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Payments to acquire interest in affiliate | $ 100.0 |
Related Party Transactions - FNF (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Related Party Transaction [Line Items] | ||
Revenues | $ 16.2 | $ 30.2 |
Operating expenses | 3.1 | 5.9 |
FNF [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues | 16.2 | 30.2 |
FNF [Member] | Operating Expenses [Member] | ||
Related Party Transaction [Line Items] | ||
Operating expenses | $ 3.1 | $ 5.9 |
Related Party Transactions - Related Party Revenues (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Related Party Transaction [Line Items] | ||
Revenues | $ 16.2 | $ 30.2 |
Software Services | ||
Related Party Transaction [Line Items] | ||
Revenues | 10.8 | 19.5 |
Data and Analytics Services [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues | $ 5.4 | $ 10.7 |
Related Party Transactions - Related Party Expenses (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Related Party Transaction [Line Items] | ||
Operating expenses | $ 3.1 | $ 5.9 |
Data entry, indexing services and other operating expenses | ||
Related Party Transaction [Line Items] | ||
Operating expenses | 2.2 | 4.0 |
Corporate services | ||
Related Party Transaction [Line Items] | ||
Operating expenses | $ 0.9 | $ 1.9 |
Computer Software (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | $ 956.9 | $ 887.1 |
Accumulated amortization | (532.6) | (481.1) |
Computer software, net | 424.3 | 406.0 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | 871.0 | 808.2 |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Computer software | 85.9 | 78.9 |
Software acquisition agreement | $ 32.0 | |
Computer software received | 25.5 | |
Noncash investing addition | $ 10.5 |
Other Intangible Assets (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 614.1 | $ 596.2 |
Accumulated amortization | (472.6) | (446.2) |
Net carrying amount | 141.5 | 150.0 |
Client relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 603.8 | 587.1 |
Accumulated amortization | (467.1) | (441.4) |
Net carrying amount | 136.7 | 145.7 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 10.3 | 9.1 |
Accumulated amortization | (5.5) | (4.8) |
Net carrying amount | $ 4.8 | $ 4.3 |
Goodwill (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2020 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 2,361.4 | |
Goodwill acquired | 25.3 | |
Compass Analytics acquisition adjustment | $ 0.2 | (0.9) |
Ending balance | 2,385.8 | 2,385.8 |
Operating Segments | Software Solutions | ||
Goodwill [Roll Forward] | ||
Beginning balance | 2,189.3 | |
Goodwill acquired | 0.0 | |
Compass Analytics acquisition adjustment | (0.9) | |
Ending balance | 2,188.4 | 2,188.4 |
Operating Segments | Data and Analytics | ||
Goodwill [Roll Forward] | ||
Beginning balance | 172.1 | |
Goodwill acquired | 25.3 | |
Compass Analytics acquisition adjustment | 0.0 | |
Ending balance | 197.4 | 197.4 |
Corporate and Other | ||
Goodwill [Roll Forward] | ||
Beginning balance | 0.0 | |
Goodwill acquired | 0.0 | |
Compass Analytics acquisition adjustment | 0.0 | |
Ending balance | $ 0.0 | $ 0.0 |
Other Non-Current Assets (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Property records database | $ 60.2 | $ 60.1 | |
Contract assets, net | 47.3 | 37.8 | |
Right-of-use assets(1) | 24.8 | 26.4 | |
Deferred compensation plan related assets | 16.4 | 15.2 | |
Prepaid expenses | 3.6 | 8.1 | |
Unbilled receivables, net | 2.1 | 3.5 | |
Other | 8.4 | 7.7 | |
Other non-current assets | 162.8 | $ 158.8 | |
Non-cash additions for right-of-use assets, net of modifications | $ 4.5 | $ 1.8 |
Long-Term Debt - Long-term Debt Components (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Instrument [Line Items] | ||
Total long-term debt | $ 1,204.4 | $ 1,554.8 |
Less: current portion of long-term debt | (80.0) | (79.1) |
Long-term debt before debt issuance costs and discount | 1,124.4 | 1,475.7 |
Less: debt issuance costs and discount | (8.6) | (10.6) |
Long-term debt, net of current portion | 1,115.8 | 1,465.1 |
Other Debt [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 24.7 | 41.7 |
Medium-term Notes [Member] | Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 1,179.7 | 1,203.1 |
Line of Credit [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 0.0 | $ 310.0 |
Long-Term Debt - Schedule of Maturities (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Debt Disclosure [Abstract] | ||
2020 (remaining) | $ 39.7 | |
2021 | 72.3 | |
2022 | 111.7 | |
2023 | 980.7 | |
Total long-term debt | $ 1,204.4 | $ 1,554.8 |
Long-Term Debt - Credit Agreement (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Apr. 30, 2018 |
|
Amended And Restated Credit Agreement [Member] | Eurodollar [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 1.50% | |
Medium-term Notes [Member] | Term Loan A [Member] | ||
Debt Instrument [Line Items] | ||
Interest rate at period end | 1.66% | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Amount unused on the Revolving Credit Facility | $ 750.0 | |
Revolving Credit Facility [Member] | Amended And Restated Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 750.0 | |
Revolving Credit Facility [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Unused commitment fee | 0.20% | |
Term Loan A [Member] | Amended And Restated Credit Agreement [Member] | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | $ 1,250.0 |
Long-Term Debt - Other Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Apr. 01, 2018 |
Jun. 30, 2020 |
---|---|---|---|
Debt Instrument [Line Items] | |||
Other debt borrowings | $ 32.9 | ||
Other Debt, Current | $ 9.4 | ||
Other Debt, Noncurrent | $ 6.3 | ||
Other Debt [Member] | |||
Debt Instrument [Line Items] | |||
Other debt borrowings | $ 16.3 | ||
Stated rate | 0.00% | ||
Imputed rate | 3.30% | 3.40% |
Long-Term Debt - Interest Rate Swaps Additional Information (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
Jan. 31, 2019 |
Apr. 30, 2018 |
Sep. 29, 2017 |
Mar. 31, 2017 |
|
Derivative [Line Items] | ||||||
Reclassification in next 12 months, gross | $ 20.9 | |||||
Reclassification in next 12 months, net | 15.6 | |||||
Interest Rate Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Fixed rate | 2.65% | 2.61% | 1.69% | |||
Gain (loss) on derivative | (48.4) | $ 21.9 | ||||
Gain recognized in other comprehensive income (loss) | $ (36.2) | $ 16.4 | ||||
London Interbank Offered Rate (LIBOR) [Member] | Interest Rate Swap [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount per derivative instrument | $ 300.0 | $ 250.0 | $ 200.0 | $ 200.0 | ||
Fixed rate | 2.08% | |||||
Basis spread on derivative | 0.18% |
Long-Term Debt - Swap Agreements in the Balance Sheets (Unaudited) (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative Liability, Fair Value, Gross Liability | $ 48.4 | $ 21.9 |
Long-Term Debt - Derivative Instruments Recognized in AOCI (Details) - Attributable to Black Knight Financial Services, Inc. [Member] - Interest Rate Swap [Member] - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain Recognized in OCE | $ (2.6) | $ (11.8) | $ (24.2) | $ (18.0) |
Amount of loss reclassified from Accumulated OCE into Net earnings | $ 3.2 | $ (0.3) | $ 4.4 | $ (1.0) |
Long-Term Debt - Debt Refinancing (Details) |
6 Months Ended |
---|---|
Jun. 30, 2020 | |
Amended And Restated Credit Agreement [Member] | Eurodollar [Member] | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.50% |
Revolving Credit Facility [Member] | Line of Credit [Member] | |
Debt Instrument [Line Items] | |
Unused commitment fee | 0.20% |
Long-Term Debt - Finance Leases (Details) - USD ($) $ in Millions |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2019 |
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Debt Disclosure [Abstract] | |||
Imputed interest rate (percent) | 3.30% | ||
Weighted Average Estimated Life (in Years) | 5 years | ||
Finance lease liabilities | $ 8.3 | ||
Noncash investing and financing activity, unpaid portion, finance lease arrangements | $ 8.4 |
Fair Value Measurements (Details) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Cash and cash equivalents | $ 228.2 | $ 15.4 |
Liabilities: | ||
Interest rate swaps | 48.4 | 21.9 |
Contingent consideration | 9.6 | 9.0 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 228.2 | 15.4 |
Liabilities: | ||
Interest rate swaps | 0.0 | 0.0 |
Contingent consideration | 0.0 | 0.0 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Liabilities: | ||
Interest rate swaps | 48.4 | 21.9 |
Contingent consideration | 0.0 | 0.0 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0.0 | 0.0 |
Liabilities: | ||
Interest rate swaps | 0.0 | 0.0 |
Contingent consideration | $ 9.6 | $ 9.0 |
Fair Value Measurements - Change in Fair Value of Contingent Consideration (Details) $ in Millions |
6 Months Ended |
---|---|
Jun. 30, 2020
USD ($)
| |
Contingent Consideration Liability [Roll Forward] | |
Beginning balance, December 31, 2019 | $ 9.0 |
Collateral Analytics acquisition | 0.6 |
Ending balance, June 30, 2020 | $ 9.6 |
Income Taxes (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Effective tax rate (as a percent) | 20.90% | 24.20% | 18.80% | 23.00% |
Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 293.1 | $ 294.9 | $ 583.8 | $ 578.0 |
Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 219.6 | 224.5 | 441.3 | 440.3 |
Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 30.8 | 32.0 | 59.2 | 64.8 |
Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 38.9 | 30.8 | 75.7 | 61.6 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3.8 | 7.6 | 7.6 | 11.3 |
Reportable Legal Entities | Software Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 184.3 | 210.7 | 380.0 | 412.5 |
Reportable Legal Entities | Software Services | Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 166.5 | 184.8 | 343.5 | 364.5 |
Reportable Legal Entities | Software Services | Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17.8 | 21.1 | 36.5 | 42.9 |
Reportable Legal Entities | Software Services | Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 0.0 | 0.0 | 0.0 |
Reportable Legal Entities | Software Services | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 4.8 | 0.0 | 5.1 |
Reportable Legal Entities | Origination Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 60.8 | 44.7 | 109.8 | 86.4 |
Reportable Legal Entities | Origination Software | Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44.6 | 31.9 | 80.9 | 60.1 |
Reportable Legal Entities | Origination Software | Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13.0 | 10.7 | 22.5 | 21.4 |
Reportable Legal Entities | Origination Software | Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 0.0 | 0.0 | 0.0 |
Reportable Legal Entities | Origination Software | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3.2 | 2.1 | 6.4 | 4.9 |
Operating Segments | Software Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 245.1 | 255.4 | 489.8 | 498.9 |
Operating Segments | Software Solutions | Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 211.1 | 216.7 | 424.4 | 424.6 |
Operating Segments | Software Solutions | Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 30.8 | 31.8 | 59.0 | 64.3 |
Operating Segments | Software Solutions | Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 0.0 | 0.0 | 0.0 |
Operating Segments | Software Solutions | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 3.2 | 6.9 | 6.4 | 10.0 |
Operating Segments | Data and Analytics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 48.2 | 39.7 | 94.3 | 79.4 |
Operating Segments | Data and Analytics | Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 8.5 | 7.8 | 16.9 | 15.7 |
Operating Segments | Data and Analytics | Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.2 | 0.4 | 0.5 | 0.8 |
Operating Segments | Data and Analytics | Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 38.9 | 30.8 | 75.7 | 61.6 |
Operating Segments | Data and Analytics | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.6 | 0.7 | 1.2 | 1.3 |
Corporate and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (0.2) | (0.2) | (0.3) | (0.3) |
Corporate and Other | Software and hosting solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 0.0 | 0.0 | 0.0 |
Corporate and Other | Professional services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | (0.2) | (0.2) | (0.3) | (0.3) |
Corporate and Other | Data solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0.0 | 0.0 | 0.0 | 0.0 |
Corporate and Other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0.0 | $ 0.0 | $ 0.0 | $ 0.0 |
Revenues - Narrative (Details) $ in Billions |
Jun. 30, 2020
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 2.4 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation, percent | 12.00% |
Expected timing of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation, percent | 54.00% |
Expected timing of satisfaction | 2 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation, percent | 85.00% |
Expected timing of satisfaction | 2 years |
Equity-Based Compensation - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Payment Arrangement [Abstract] | ||||
Share-based compensation expense | $ 9.5 | $ 12.1 | $ 20.2 | $ 25.4 |
Accelerated cost recognized | 0.2 | $ 1.9 | ||
Compensation costs not yet recognized | $ 54.5 | $ 54.5 | ||
Recognition period | 2 years 1 month 6 days |
Equity-Based Compensation - Restricted Stock Grant (Details) |
May 06, 2020
$ / shares
shares
|
Mar. 18, 2020
$ / shares
shares
|
Mar. 11, 2020
$ / shares
shares
|
Feb. 18, 2020
performance_period
$ / shares
shares
|
---|---|---|---|---|
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares granted | shares | 3,366 | 11,865 | 16,689 | |
Weighted Averaged Grant Date Fair Value (in dollars per share) | $ / shares | $ 59.45 | $ 63.26 | $ 74.91 | |
Vesting period | 2 years | 3 years | 1 year | |
Performance-based Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of Target Performance Periods | performance_period | 3 | |||
Number of shares granted | shares | 3,101 | 487,096 | ||
Weighted Averaged Grant Date Fair Value (in dollars per share) | $ / shares | $ 72.57 | $ 74.91 | ||
Vesting period | 3 years | 3 years |
Equity-Based Compensation - Restricted Stock Transactions (Details) - Restricted Stock - $ / shares |
6 Months Ended | |||
---|---|---|---|---|
Mar. 18, 2020 |
Mar. 11, 2020 |
Feb. 18, 2020 |
Jun. 30, 2020 |
|
Shares | ||||
Granted (in shares) | 3,366 | 11,865 | 16,689 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Averaged Grant Date Fair Value (in dollars per share) | $ 59.45 | $ 63.26 | $ 74.91 | |
Common Class A | ||||
Shares | ||||
Beginning balance (in shares) | 2,014,983 | |||
Granted (in shares) | 522,117 | |||
Forfeited (in shares) | (7,349) | |||
Vested (in shares) | (889,933) | |||
Ending balance (in shares) | 1,639,818 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||
Weighted Average Grant Date Fair Value, Beginning (in dollars per share) | $ 46.99 | |||
Weighted Averaged Grant Date Fair Value (in dollars per share) | 74.53 | |||
Weighted Averaged Grant Date Fair Value (in dollars per share) | 62.95 | |||
Weighted Average Grant Date Fair Value, Vested (in dollars per share) | 43.39 | |||
Weighted Average Grant Date Fair Value, Ending (in dollars per share) | $ 57.65 |
Segment Information - Summarized Financial Information (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020
USD ($)
|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
segment
|
Jun. 30, 2019
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of reporting segments | segment | 2 | |||
Revenues | $ 293.1 | $ 294.9 | $ 583.8 | $ 578.0 |
Expenses: | ||||
Operating expenses | 155.5 | 159.4 | 317.9 | 319.4 |
Transition and integration costs | 2.5 | 1.0 | 4.9 | 1.9 |
EBITDA | 135.1 | 134.5 | 261.0 | 256.7 |
Depreciation and amortization | 58.6 | 57.5 | 116.3 | 114.4 |
Operating income (loss) | 76.5 | 77.0 | 144.7 | 142.3 |
Interest expense | (13.0) | (16.7) | (27.7) | (31.7) |
Other income (expense), net | 18.8 | (0.5) | 18.0 | (0.8) |
Earnings before income taxes and equity in losses of unconsolidated affiliates | 82.3 | 59.8 | 135.0 | 109.8 |
Income tax expense | 17.2 | 14.5 | 25.4 | 25.2 |
Earnings before equity in losses of unconsolidated affiliates | 65.1 | 45.3 | 109.6 | 84.6 |
Equity in losses of unconsolidated affiliates, net of tax | (26.0) | (12.7) | (20.4) | (26.0) |
Net earnings | 39.1 | 32.6 | 89.2 | 58.6 |
Share-based compensation expense | 9.5 | 12.1 | 20.2 | 25.4 |
Operating Segments | Software Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 245.1 | 255.4 | 489.8 | 498.9 |
Expenses: | ||||
Operating expenses | 98.9 | 101.5 | 204.2 | 204.3 |
Transition and integration costs | 0.0 | 0.0 | 0.0 | |
EBITDA | 146.2 | 153.9 | 285.6 | 294.6 |
Depreciation and amortization | 30.2 | 30.1 | 60.5 | 60.0 |
Operating income (loss) | 116.0 | 123.8 | 225.1 | 234.6 |
Operating Segments | Data and Analytics | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 48.2 | 39.7 | 94.3 | 79.4 |
Expenses: | ||||
Operating expenses | 32.1 | 30.3 | 63.6 | 60.1 |
Transition and integration costs | 0.0 | 0.0 | 0.0 | |
EBITDA | 16.1 | 9.4 | 30.7 | 19.3 |
Depreciation and amortization | 3.8 | 3.9 | 7.8 | 7.7 |
Operating income (loss) | 12.3 | 5.5 | 22.9 | 11.6 |
Corporate and Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (0.2) | (0.2) | (0.3) | (0.3) |
Expenses: | ||||
Operating expenses | 24.5 | 27.6 | 50.1 | 55.0 |
Transition and integration costs | 2.5 | 1.0 | 4.9 | 1.9 |
EBITDA | (27.2) | (28.8) | (55.3) | (57.2) |
Depreciation and amortization | 24.6 | 23.5 | 48.0 | 46.7 |
Operating income (loss) | (51.8) | (52.3) | (103.3) | (103.9) |
Share-based compensation expense | $ 9.5 | $ 12.2 | $ 21.2 | $ 26.1 |
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