Cannae Holdings, Inc. [CNNE] Filings

10-Q 1 cnne-20240630.htm 10-Q cnne-20240630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


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

Commission File Number 1-38300

CANNAE HOLDINGS, INC.

______________________________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Nevada

82-1273460

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

1701 Village Center Circle,

Las Vegas,

Nevada

89134

(Address of principal executive offices)

(Zip Code)

(702) 323-7330

___________________________________________________________________

(Registrant’s telephone number, including area code)

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

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Cannae Common Stock, $0.0001 par value

CNNE

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of July 31, 2024 there were 62,734,645 shares of the Registrant's common stock outstanding.

FORM 10-Q

QUARTERLY REPORT

QUARTER ENDED JUNE 30, 2024

TABLE OF CONTENTS



			Page
Part I: FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of June 30 , 2024 and December 31, 2023			1
B. Condensed Consolidated Statements of Operations for the three and six -month periods ended June 30 , 2024 and 2023			2
C. Condensed Consolidated Statements of Comprehensive (Loss) Earnings for the three and six -month periods e n d e d June 30 , 2024 and 2023			3
D. Condensed Consolidated Statements of Equity for the three and six -month periods ended June 30 , 2024 and 2023			4
E. Condensed Consolidated Statements of Cash Flows for the three and six -month periods ended June 30 , 2024 and 2023			6
F. Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosure About Market Risk			32
Item 4. Controls and Procedures			32
Part II: OTHER INFORMATION
Item 1. Legal Proceedings			32
Item 1A. Risk Factors			32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			32
Item 3. Defaults Upon Senior Securities			33
Item 4. Mine Safety Disclosures			33
Item 5. Other Information			33
Item 6. Exhibits			34

Table of Contents

Part I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	45.7	$	106.2
Short-term investments	8.9		15.6

Other current assets	20.8		29.5


Income taxes receivable	25.3		26.0


Total current assets	100.7		177.3
Investments in unconsolidated affiliates	1,519.6		1,718.8
Equity securities, at fair value	125.8		290.9
Lease assets	139.8		143.5
Property and equipment, net	64.3		58.7
Goodwill	53.4		53.4
Deferred tax asset	63.2		82.0
Other intangible assets, net	15.9		16.8

Other long-term investments and non-current assets	141.3		145.3

Total assets	$	2,224.0	$	2,686.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and other accrued liabilities, current	$	70.4	$	74.2
Lease liabilities, current	14.1		13.9
Deferred revenue	14.3		16.9
Notes payable, current	0.5		2.5


Total current liabilities	99.3		107.5
Lease liabilities, long-term	137.1		142.2
Notes payable, long-term	77.7		102.5



Accounts payable and other accrued liabilities, long-term	26.4		25.3

Total liabilities	340.5		377.5
Commitments and contingencies - see Note H
Equity:
Cannae common stock, 0.0001 par value; authorized 115,000,000 shares as of June 30, 2024 and December 31, 2023; issued of 94,246,958 and 92,844,329 shares as of June 30, 2024 and December 31, 2023, respectively, and outstanding of 62,470,771 and 70,367,088 shares as of June 30, 2024 and December 31, 2023, respectively	—		—
Preferred stock, 0.0001 par value; authorized 10,000,000 shares; issued and outstanding, none as of June 30, 2024 and December 31, 2023	—		—
Retained earnings	642.0		901.3
Additional paid-in capital	1,997.9		1,977.0
Less: Treasury stock, 31,776,187 and 22,477,241 shares as of June 30, 2024 and December 31, 2023, respectively, at cost	(721.6)		(533.9)

Accumulated other comprehensive loss	(17.6)		(19.9)
Total Cannae shareholders' equity	1,900.7		2,324.5
Noncontrolling interests	(17.2)		(15.3)
Total equity	1,883.5		2,309.2
Total liabilities and equity	$	2,224.0	$	2,686.7

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023

Revenues:
Restaurant revenue	$	107.6	$	145.2	$	214.1	$	293.7
Other operating revenue	10.4		7.6		14.6		13.4
Total operating revenues	118.0		152.8		228.7		307.1
Operating expenses:
Cost of restaurant revenue	92.1		128.3		186.3		259.9
Personnel costs	19.2		11.3		42.4		26.9
Depreciation and amortization	3.4		4.6		6.7		9.7
Other operating expenses	26.3		28.2		56.9		52.9

Total operating expenses	141.0		172.4		292.3		349.4
Operating loss	(23.0)		(19.6)		(63.6)		(42.3)
Other income (expense):
Interest, investment and other income	0.7		2.7		2.8		5.5
Interest expense	(2.0)		(4.0)		(4.6)		(8.4)
Recognized (losses) gains, net	(145.1)		(42.2)		(153.7)		9.9
Total other (expense) income	(146.4)		(43.5)		(155.5)		7.0
Loss before income taxes and equity in losses of unconsolidated affiliates	(169.4)		(63.1)		(219.1)		(35.3)
Income tax (benefit) expense	(33.7)		(21.8)		19.7		(19.2)
Loss before equity in losses of unconsolidated affiliates	(135.7)		(41.3)		(238.8)		(16.1)
Equity in losses of unconsolidated affiliates	(19.3)		(49.1)		(8.0)		(81.2)


Net loss	(155.0)		(90.4)		(246.8)		(97.3)
Less: Net loss attributable to noncontrolling interests	—		(3.2)		(1.9)		(6.0)
Net loss attributable to Cannae Holdings, Inc. common shareholders	$	(155.0)	$	(87.2)	$	(244.9)	$	(91.3)




Earnings per share
Basic


Net loss per share	$	(2.49)	$	(1.16)	$	(3.68)	$	(1.21)
Diluted


Net loss per share	$	(2.49)	$	(1.16)	$	(3.68)	$	(1.21)
Weighted Average Shares Outstanding
Weighted average shares outstanding Cannae Holdings common stock, basic basis	62.2		75.4		66.5		75.7
Weighted average shares outstanding Cannae Holdings common stock, diluted basis	62.2		75.4		66.5		75.7

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS

(In millions)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023

Net loss	$	(155.0)	$	(90.4)	$	(246.8)	$	(97.3)
Other comprehensive earnings (loss), net of tax:
Unrealized (loss) earnings of investments in unconsolidated affiliates (1)	(1.1)		3.0		(1.8)		4.2


Reclassification adjustments for unrealized gains and losses of unconsolidated affiliates, net of tax, included in net earnings (2)	—		—		4.1		—
Other comprehensive (loss) earnings	(1.1)		3.0		2.3		4.2
Comprehensive loss	(156.1)		(87.4)		(244.5)		(93.1)
Less: Comprehensive loss attributable to noncontrolling interests	—		(3.2)		(1.9)		(6.0)
Comprehensive loss attributable to Cannae Holdings, Inc. common shareholders	$	(156.1)	$	(84.2)	$	(242.6)	$	(87.1)

_________________________________

(1)Net of income tax (benefit) expense of $(0.3) million and $0.8 million for the three months ended June 30, 2024 and 2023, respectively, and $(0.5) million and $1.1 million for the six months ended June 30, 2024 and 2023, respectively.

(2)Net of income tax expense of $1.1 million for the six months ended June 30, 2024.

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(In millions)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comp (Loss) Earnings		Treasury Stock			Non-controlling Interests		Total Equity
	Shares	$								Shares	$

Balance, March 31, 2023	92.8	$	—	$	1,945.8	$	1,210.6	$	(16.9)	16.3	$	(414.1)	$	(6.8)	$	2,718.6



Other comprehensive earnings — unrealized earnings of investments in unconsolidated affiliates, net of tax	—	—		—		—		3.0		—	—		—		3.0





Treasury stock repurchases	—	—		—		—		—		3.1	(60.4)		—		(60.4)

Stock-based compensation, consolidated subsidiaries	—	—		0.9		—		—		—	—		—		0.9

Stock-based compensation, unconsolidated affiliates	—	—		10.3		—		—		—	—		—		10.3


Net loss	—	—		—		(87.2)		—		—	—		(3.2)		(90.4)
Balance, June 30, 2023	92.8	$	—	$	1,957.0	$	1,123.4	$	(13.9)	19.4	$	(474.5)	$	(10.0)	$	2,582.0

Balance, March 31, 2024	94.2	$	—	$	1,984.7	$	804.6	$	(16.5)	21.8	$	(490.5)	$	(17.2)	$	2,265.1


Other comprehensive earnings — unrealized losses of investments in unconsolidated affiliates, net of tax	—	—		—		—		(1.1)		—	—		—		(1.1)




Treasury stock repurchases	—	—		—		—		—		10.0	(231.1)		—		(231.1)

Stock-based compensation, consolidated subsidiaries	—	—		7.9		—		—		—	—		—		7.9

Stock-based compensation, unconsolidated affiliates	—	—		5.3		—		—		—	—		—		5.3


Dividends declared	—	—		—		(7.6)		—		—	—		—		(7.6)
Net loss	—	—		—		(155.0)		—		—	—		—		(155.0)
Balance, June 30, 2024	94.2	$	—	$	1,997.9	$	642.0	$	(17.6)	31.8	$	(721.6)	$	(17.2)	$	1,883.5

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - CONTINUED

(In millions)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comp (Loss) Earnings		Treasury Stock			Non-controlling Interests		Total Equity
	Shares	$								Shares	$

Balance, December 31, 2022	92.5	$	—	$	1,936.2	$	1,214.7	$	(18.1)	16.3	$	(414.0)	$	(3.9)	$	2,714.9



Other comprehensive earnings — unrealized losses of investments in unconsolidated affiliates, net of tax	—	—		—		—		4.2		—	—		—		4.2





Treasury stock repurchases	—	—		—		—		—		3.1	(60.4)		—		(60.4)
Issuance of restricted stock	0.3	—		—		—		—		—	—		—		—
Payment for shares withheld for taxes and in treasury	—	—		—		—		—		—	(0.1)		—		(0.1)
Stock-based compensation, consolidated subsidiaries	—	—		1.5		—		—		—	—		—		1.5
Stock-based compensation, unconsolidated affiliates	—	—		19.3		—		—		—	—		—		19.3
Subsidiary dividends paid to noncontrolling interests	—	—		—		—		—		—	—		(0.1)		(0.1)
Net loss	—	—		—		(91.3)		—		—	—		(6.0)		(97.3)
Balance, June 30, 2023	92.8	$	—	$	1,957.0	$	1,123.4	$	(13.9)	19.4	$	(474.5)	$	(10.0)	$	2,582.0

Balance, December 31, 2023	92.8	$	—	$	1,977.0	$	901.3	$	(19.9)	22.5	$	(533.9)	$	(15.3)	$	2,309.2


Other comprehensive earnings — unrealized earnings of investments in unconsolidated affiliates, net of tax	—	—		—		—		(1.8)		—	—		—		(1.8)

Reclassification adjustments for unrealized gains and losses on unconsolidated affiliates, net of tax, included in net loss	—	—		—		—		4.1		—	—		—		4.1


Treasury stock repurchases	—	—		—		—		—		10.0	(231.1)		—		(231.1)
Issuance of restricted stock and shares held in trust	1.4	—		—		—		—		1.2	—		—		—
Payment for shares withheld for taxes and in treasury	—	—		—		—		—		—	(0.6)		—		(0.6)
Stock-based compensation, consolidated subsidiaries	—	—		11.3		—		—		—	—		—		11.3

Stock-based compensation, unconsolidated affiliates	—	—		9.6		—		—		—	—		—		9.6

Treasury shares issued for investment in JANA	—	—		—		(6.8)		—		(1.9)	44.0		—		37.2
Dividends declared	—	—		—		(7.6)		—		—	—		—		(7.6)
Net loss	—	—		—		(244.9)		—		—	—		(1.9)		(246.8)
Balance, June 30, 2024	94.2	$	—	$	1,997.9	$	642.0	$	(17.6)	31.8	$	(721.6)	$	(17.2)	$	1,883.5

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)


	Six Months Ended June 30,
	2024		2023

Cash flows from operating activities:
Net loss	$	(246.8)	$	(97.3)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	6.7		9.7
Equity in losses of unconsolidated affiliates	8.0		81.2
Distributions from investments in unconsolidated affiliates	1.1		0.2
Recognized (gains) losses and asset impairments, net	154.4		(5.8)
Lease asset amortization	6.7		9.7
Stock-based compensation expense	11.3		1.5

Changes in assets and liabilities:

Other assets	5.9		4.3
Lease liabilities	(7.5)		(12.4)
Accounts payable, accrued liabilities, deferred revenue and other liabilities	(5.0)		(2.9)
Income taxes	19.0		(22.8)
Net cash used in operating activities	(46.2)		(34.6)
Cash flows from investing activities:

Proceeds from sales of Dayforce shares	208.0		78.0



Additions to property and equipment and other intangible assets	(2.9)		(4.7)


Proceeds from sales of property and equipment	3.4		—
Proceeds from sale of investments in unconsolidated affiliates and other long term investments	100.9		—






Additional investments in unconsolidated affiliates	(33.9)		(96.1)


Purchases of other long term investments	(38.1)		(17.4)

Distributions from investments in unconsolidated affiliates	8.4		7.9
Purchases of short-term investment securities	(64.6)		(130.1)
Proceeds from sale and maturity of short-term investment securities	71.3		111.4


Net cash provided by (used in) investing activities	252.5		(51.0)
Cash flows from financing activities:
Borrowings	0.4		7.8
Debt service payments	(27.7)		(2.0)


Payment for vested shares withheld for taxes and in treasury	(0.6)		(0.1)
Dividends paid	(7.5)		—
Treasury stock repurchases	(231.4)		(55.1)

Net cash used in financing activities	(266.8)		(49.4)
Net decrease in cash and cash equivalents	(60.5)		(135.0)

Cash and cash equivalents at beginning of period	106.2		247.7
Cash and cash equivalents at end of period	$	45.7	$	112.7

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note A — Basis of Financial Statements

The following describes the significant accounting policies of Cannae Holdings, Inc. and its subsidiaries (collectively, "we," "us," "our,” "Cannae," "CNNE," or the "Company"), which have been followed in preparing the accompanying Condensed Consolidated Financial Statements.

Description of the Business

We primarily acquire interests in operating companies and are engaged in actively managing and operating a core group of those companies, which we are committed to supporting for the long term. From time to time, we also seek to take meaningful equity ownership stakes where we have the ability to control or significantly influence quality companies, and we bring the strength of our operational expertise to each of our subsidiaries. We are a long-term owner that secures control and governance rights of other companies primarily to engage in their lines of business and we have no preset time constraints dictating when we sell or dispose of our businesses. We believe that our long-term ownership and active involvement in the management and operations of companies helps maximize the value of those businesses for our shareholders. Our primary assets as of June 30, 2024 include our ownership interests in Dun & Bradstreet Holdings, Inc. ("Dun & Bradstreet" or "D&B"); Dayforce, Inc., ("Dayforce", formerly known as Ceridian HCM Holding, Inc.); Alight, Inc. ("Alight"); Paysafe Limited ("Paysafe"); Sightline Payments Holdings, LLC ("Sightline"); System1, Inc. ("System1"); Black Knight Football Club US, LP ("Black Knight Football" or "BKFC", formerly known as Black Knight Football and Entertainment, LP); Computer Services, Inc. ("CSI"); JANA Partners Capital, LLC and JANA Partners Management, LP (together, "JANA"); High Sierra Distillery, LP ("Minden Mill"); AmeriLife Group, LLC ("AmeriLife"); O'Charley's Holdings, LLC ("O'Charley's"); 99 Restaurants Holdings, LLC ("99 Restaurants"); and various other controlled subsidiary companies and minority equity ownership interests.

See Note E - Segment Information for further discussion of the businesses comprising our reportable segments.

We conduct our business through our wholly-owned subsidiary Cannae Holdings, LLC ("Cannae LLC"), a Delaware limited liability company. Our board of directors ("Board") oversees the management of the Company, Cannae LLC and its businesses, and the performance of our external manager, Trasimene Capital Management, LLC ("Trasimene" or our "Manager").

Principles of Consolidation and Basis of Presentation

The accompanying Condensed Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and the instructions to Form 10-Q and Article 10 of Regulation S-X and include the historical accounts as well as wholly-owned and majority-owned subsidiaries of the Company. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All adjustments made were of a normal, recurring nature. This report should be read in conjunction with our Annual Report on Form 10-K (our "Annual Report") for the year ended December 31, 2023.

All intercompany profits, transactions and balances have been eliminated. Our ownership interests in non-majority-owned partnerships and affiliates are accounted for under the equity method of accounting or as equity securities. Earnings attributable to noncontrolling interests recorded on the Condensed Consolidated Statements of Operations represents the portion of our majority-owned subsidiaries' net earnings or loss that is owned by noncontrolling shareholders of such subsidiaries. Noncontrolling interest recorded on the Condensed Consolidated Balance Sheets represents the portion of equity owned by noncontrolling shareholders in our consolidated subsidiaries.

Management Estimates

The preparation of these Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates made by management include the fair value measurements (See Note B - Investments and Note C - Fair Value Measurements). Actual results could differ from estimates.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Recent Developments

Dayforce

In the six months ended June 30, 2024, we sold 3.0 million shares of common stock of Dayforce for gross proceeds of $208.0 million.

We owned 1.0 million shares of Dayforce common stock as of June 30, 2024, which represented approximately 0.6% of its outstanding stock as of June 30, 2024.

Refer to Note B - Investments and Note C - Fair Value Measurements for further discussion of our accounting for our ownership interest in Dayforce and other equity securities.

Subsequent to June 30, 2024 through the date of this Quarterly Report, we sold 500,000 shares of common stock of Dayforce for proceeds of $26.2 million.

Dun & Bradstreet

On February 8, 2024 and April 30, 2024, the board of directors of D&B declared quarterly cash dividends of $0.05 per share of D&B common stock. In the six months ended June 30, 2024, we received $7.4 million of cash dividends from D&B which are recorded as a reduction to the basis of our recorded asset for D&B.

In March 2024, we completed the sale of 10.0 million shares of common stock of D&B. In connection with the sale, we received proceeds of $100.9 million.

As of June 30, 2024, we owned 69.0 million shares of D&B, which represented approximately 15.6% of its outstanding common stock.

See Note B - Investments for further discussion of our accounting for our ownership interest in D&B and other equity method investments.

Paysafe

In January 2024, we purchased 1.6 million shares of Paysafe for $23.4 million. As of June 30, 2024, we hold a 5.5% ownership interest in Paysafe.

Other Developments

On February 21, 2024, we announced a tender offer to purchase up to $200 million of shares of our common stock at a purchase price of not less than $20.75 per share and not greater than $23.75 per share (the "Tender Offer"). We conducted the Tender Offer through a procedure commonly referred to as a "modified Dutch auction." This procedure allows shareholders to select the price within a price range specified by us at which the shareholders are willing to sell their shares.

On April 1, 2024, the Tender Offer expired and the Company accepted for purchase an aggregate of 9,672,540 shares of its common stock that were properly tendered and not properly withdrawn at or below a purchase price of $22.95 per share for an aggregate cost of $222.0 million, excluding fees and expenses. Included in the 9,672,540 shares of Cannae common stock we accepted for purchase in the Tender Offer are 957,943 shares that Cannae elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding common stock.

On February 21, 2024, we issued 1.85 million shares of common stock of the Company from the Company’s treasury and paid $18.3 million in cash, in the aggregate, to certain partners of JANA in exchange for a 19.99% equity interest in JANA. The transaction is valued at $55.5 million based on the closing price of the Company's common stock on February 21, 2024. Cannae also committed to invest $50 million into JANA funds (the "JANA Fund Commitment"). JANA is an investment manager founded in 2001. We account for our ownership interest in JANA as an unconsolidated affiliate using the equity method of accounting and record our ratable share of JANA's net income or loss on a three-month lag.

On February 26, 2024, the Company, Cannae LLC and Trasimene entered into a Third Amended and Restated Management Services Agreement (the "Third Amended MSA"). The Third Amended MSA amends the management services agreement primarily to (i) provide for a termination of the agreement by the Company effective June 30, 2027, (ii) reduce the management fee to a fixed amount of $7.6 million annually effective beginning July 2, 2024 and (iii) provide for payment of the termination fee under the agreement of $20 million to be paid by the Company to Trasimene in installments of $6.7 million annually over the three-year period ended July 1, 2026. The Third Amended MSA has a termination date of June 30, 2027 unless earlier terminated by the Company or Trasimene.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

The following dividends were declared by our Board in 2024:

Declaration Date

Record Date

Payment Date

Dividends Per Share

May 9, 2024

June 14, 2024

June 28, 2024

$0.12

July 30, 2024

September 16, 2024

September 30, 2024

$0.12

Related Party Transactions

During the three and six months ended June 30, 2024, we incurred management fee expenses with our Manager of $9.1 million and $18.2 million, respectively, and during the six months ended June 30, 2024 we incurred $6.6 million of termination fees with our Manager. During the three months and six ended June 30, 2023, we incurred management fee expenses with our Manager of $9.6 million and $18.9 million, respectively. These expenses are recorded in Other operating expenses on our Condensed Consolidated Statement of Operations.

Earnings Per Share

Basic earnings per share, as presented on the Condensed Consolidated Statement of Operations, is computed by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding during the period.

In periods when earnings are positive, diluted earnings per share is calculated by dividing net earnings available to common shareholders by the weighted average number of common shares outstanding plus the impact of assumed conversions of potentially dilutive securities. For periods when we recognize a net loss, diluted loss per share is equal to basic loss per share as the impact of assumed conversions of potentially dilutive securities is considered to be antidilutive. We have granted certain shares of restricted stock and restricted stock units that have been treated as common share equivalents for purposes of calculating diluted earnings per share for periods in which positive earnings have been reported.

Instruments that provide the ability to purchase shares of our common stock that are antidilutive are excluded from the computation of diluted earnings per share. For the three and six months ended June 30, 2024, there were 0.1 million, respectively, antidilutive shares of restricted stock outstanding that were excluded from the calculation of diluted earnings per share. For the three and six months ended June 30, 2023, there were no antidilutive shares of restricted stock outstanding that were excluded from the calculation of diluted earnings per share.

Income Taxes

Our effective tax rate was 19.9% and 34.5% in the three months ended June 30, 2024 and 2023, respectively, and (9.0)% and 54.4% in the six months ended June 30, 2024 and 2023, respectively. The change in the effective tax rate in the three-month period ended June 30, 2024 compared to the corresponding prior year period was primarily attributable to the varying impact of equity in losses of unconsolidated affiliates on income tax expense (benefit) and the impairment recorded to our investment in Sightline. The change in the effective tax rate in the six-month period ended June 30, 2024 compared to the corresponding prior year period was primarily attributable to recording of a valuation allowance in the current period of $58.8 million on our federal net operating loss carryforwards and certain deferred taxes related to our consolidated partnerships, the varying impact of equity in losses of unconsolidated affiliates on income tax expense (benefit), and the impairment recorded to our investment in Sightline.

We have a Deferred tax asset of $63.2 million and $82.0 million as of June 30, 2024 and December 31, 2023, respectively. The $18.8 million change in deferred taxes in the six months ended June 30, 2024 is primarily attributable to recording of a valuation allowance of $58.8 million primarily related to our federal net operating loss carryforwards and certain deferred taxes related to our consolidated partnerships, partially offset by the tax impact of sales of Dayforce and impairment of Sightline.

Stock-Based Compensation

On February 28, 2024, we issued 1.2 million restricted stock units ("RSUs") with a grant date fair value of $24.8 million as compensation to certain employees of the Company and issued 1.2 million shares of the Company's common stock to rabbi trusts that grant the holders of the RSUs pass-through voting rights. The RSUs vest in varying increments over a three-year period and, upon vesting, a number of shares of Company common stock equivalent to the number of vested RSUs will be released from the rabbi trusts to the employee. If the RSUs do not vest, the shares held in the rabbi trusts return to the Company. The Company is the primary beneficiary of the rabbi trusts prior to vesting of the RSUs and accordingly the shares of Company common stock held by the rabbi trusts are treated as treasury stock in the Company's condensed consolidated balance sheet and statement of equity for the period ended June 30, 2024. Compensation cost associated with the RSUs is

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

measured based on their grant-date fair value derived from quoted market prices and is recorded over the service period of the awards.

Recent Accounting Pronouncements

We have reviewed the recently issued accounting pronouncements and we did not identify any that are expected to, if currently adopted, have a material impact on our financial position or results of operations.

Note B — Investments

Investments in Unconsolidated Affiliates

Investments in unconsolidated affiliates recorded using the equity method of accounting as of June 30, 2024 and December 31, 2023 consisted of the following:


	Ownership at June 30, 2024		June 30, 2024		December 31, 2023
			(in millions)
Dun & Bradstreet	15.6	%	$	700.5	$	827.7
Alight	9.7	%	492.1		507.2
Sightline	33.0	%	13.7		158.3
Black Knight Football	45.5	%	104.6		112.3
CSI	6.4	%	88.2		47.1
Other	various		120.5		66.2
Total			$	1,519.6	$	1,718.8

The aggregate fair value of our direct ownership in the common stock of unconsolidated affiliates that have quoted market prices as of June 30, 2024 consisted of the following:


	June 30, 2024
	(in millions)
Dun & Bradstreet	$	639.4
Alight	387.3
System1	41.1

Equity in (losses) earnings of unconsolidated affiliates for the three and six months ended June 30, 2024 and 2023 consisted of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Dun & Bradstreet (1)	$	(4.7)	$	(5.6)	$	(11.0)	$	(13.9)
Alight	2.2		(7.0)		(9.1)		(14.1)
Sightline (2)	(0.2)		(5.0)		(3.7)		(9.1)
Black Knight Football	(17.9)		(15.6)		(25.3)		(16.9)
CSI	0.2		—		41.1		—
Other	1.1		(15.9)		—		(27.2)
Total	$	(19.3)	$	(49.1)	$	(8.0)	$	(81.2)

_____________________________________

(1) Equity in losses for D&B includes $2.1 million of loss for the three months ended June 30, 2024 and 2023, respectively, and $4.3 million of loss in the six months ended June 30, 2024 and 2023, respectively, related to amortization of Cannae's basis difference between the book value of its ownership interest and ratable portion of the underlying equity in net assets of D&B.

(2) Equity in losses for Sightline includes $1.5 million and $1.9 million of loss in the three months ended June 30, 2024 and 2023, respectively, and $2.9 million and $3.9 million of loss in the six months ended June 30, 2024 and 2023, respectively, related to amortization of Cannae's basis difference between the book value of its investment and ratable portion of the underlying equity in net assets of Sightline.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Dun & Bradstreet

Summarized statement of operations information for D&B for the relevant dates and time periods included in Equity in losses of unconsolidated affiliates in our Statements of Operations is presented below.


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(In millions)
Total revenues	$	576.2	$	554.7	$	1,140.7	$	1,095.1
Operating income	37.1		16.5		53.7		24.4
Loss before income taxes	(19.3)		(37.0)		(86.3)		(82.4)
Net loss	(15.7)		(18.8)		(37.6)		(51.6)
Net earnings attributable to noncontrolling interest	0.7		0.6		2.0		1.5
Net loss attributable to Dun & Bradstreet	(16.4)		(19.4)		(39.6)		(53.1)

Alight

Summarized statement of operations information for Alight for the relevant dates and time periods included in Equity in losses of unconsolidated affiliates in our Statements of Operations is presented below.


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
	(In millions)
Total revenues	$	538.0	$	561.0	$	1,097.0	$	1,147.0
Gross profit	167.0		187.0		349.0		374.0
Net loss from continuing operations	(4.0)		(72.0)		(125.0)		(156.0)
Net earnings from discontinued operations	27.0		—		32.0		10.0
Net loss attributable to noncontrolling interests	—		(5.0)		(2.0)		(11.0)
Net earnings (loss) attributable to Alight	23.0		(67.0)		(91.0)		(135.0)

Sightline

As of June 30, 2024, the book value of our investment in Sightline accounted for under the equity method of accounting prior to any impairment was $154.7 million. Based on a valuation using a hybrid discounted cash flow and market comparison approach and adjusted for the risk of a capital shortfall at the business, the aggregate fair market value of our ownership of Sightline equity was approximately $13.7 million as of June 30, 2024. The fair value measurement is considered a level 3 fair value measure. The primary inputs in the valuation were the forecasted results of operations of Sightline, the discount rate used in the discounted cash flow analysis and the adjustment for risk of capital shortfall. The primary significant unobservable input used was the 35% discount rate used in the discounted cash flow analysis and the 50% adjustment for the risk of capital shortfall.

Due to the quantum of the decrease in the fair market value of our ownership interest subsequent to our acquisition, declines in the forecasted results of operations and liquidity of Sightline, and the uncertainty of the ability of Sightline to raise new capital, management determined the decrease in value of our investment in Sightline was other-than-temporary as of June 30, 2024. Accordingly, we recorded an impairment of $141.0 million which is included in Recognized (losses) gains, net, on our Consolidated Statement of Operations for the year ended June 30, 2024.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Equity Securities

Recognized (losses) gains, net on the Condensed Consolidated Statements of Operations consisted of the following (losses) gains on equity securities for the three and six months ended June 30, 2024 and 2023:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(in millions)
Net (losses) gains recognized during the period on equity securities	$	(10.0)	$	(40.3)	$	5.5	$	18.9
Less: net (losses) gains recognized during the period on equity securities sold, transferred or disposed during the period	(2.2)		—		4.1		13.8
Unrealized (losses) gains recognized during the reporting period on equity securities held at the reporting date	$	(7.8)	$	(40.3)	$	1.4	$	5.1

Equity Security Investments Without Readily Determinable Fair Values

We account for our investments in AmeriLife and certain other ownership interests at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly market transactions. As of June 30, 2024 and December 31, 2023, we have $124.5 million and $121.9 million, respectively, recorded for such investments, which is included in Other long term investments and noncurrent assets on our Condensed Consolidated Balance Sheets.

During the three months ended June 30, 2024, we recorded a gain of $2.6 million to an investment without a readily determinable fair value. The amount of the gain was determined based on an observable third-party purchase of equity in the investee. During the three months ended June 30, 2023, we recorded an impairment of $9.0 million to an investment without a readily determinable fair value. The amount of the impairment was determined based on the valuation of the investee implied by a contemplated sale of its assets to a third-party as of June 30, 2023.

Note C — Fair Value Measurements

The fair value hierarchy established by the accounting standards on fair value measurements includes three levels, which are based on the priority of the inputs to the valuation technique. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument. Financial assets and liabilities that are recorded in the Consolidated Balance Sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1. Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that we have the ability to access.

Level 2. Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability.

Level 3. Financial assets and liabilities whose values are based on model inputs that are unobservable.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Recurring Fair Value Measurements

The following table presents our fair value hierarchy for those assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, respectively:


	June 30, 2024
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Cash and cash equivalents	$	45.7	$	—	$	—	$	45.7
Short-term investments	8.9		—		—		8.9
Equity securities:
Dayforce	49.6		—		—		49.6
Paysafe	59.8		—		—		59.8
Other	16.4		—		—		16.4
Total equity securities	125.8		—		—		125.8
Total assets	$	180.4	$	—	$	—	$	180.4


	December 31, 2023
	Level 1		Level 2		Level 3		Total
	(In millions)
Assets:
Cash and cash equivalents	$	106.2	$	—	$	—	106.2
Short-term investments	15.6		—		—		15.6
Equity securities:
Dayforce	268.5		—		—		268.5
Paysafe	22.4		—		—		22.4
Total equity securities	290.9		—		—		290.9
Total assets	$	412.7	$	—	$	—	$	412.7

We had no material assets or liabilities valued on a recurring basis using Level 3 inputs as of June 30, 2024 and December 31, 2023.

Additional information regarding the fair value of our investment portfolio is included in Note B - Investments.

Note D — Variable Interest Entities

The Company, in the normal course of business, engages in certain activities that involve variable interest entities ("VIEs"), which are legal entities in which a group of equity investors individually lack any of the characteristics of a controlling interest. The primary beneficiary of a VIE is generally the enterprise that has both the power to direct the activities most significant to the economic performance of the VIE and the obligation to absorb losses or receive benefits that could potentially be significant to the VIE. The Company evaluates its interest in certain entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and should consolidate the entity based on the variable interests it holds both at inception and when there is a change in circumstances that requires a reconsideration. If the Company is determined to be the primary beneficiary of a VIE, it must account for the VIE as a consolidated subsidiary. If the Company is determined not to be the primary beneficiary of a VIE but holds a variable interest in the entity, such variable interests are accounted for under accounting standards as deemed appropriate. As of and for the periods ended June 30, 2024 and December 31, 2023, we are not the primary beneficiary of any VIEs.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Unconsolidated VIEs

The table below summarizes select information related to variable interests held by the Company as of June 30, 2024 and December 31, 2023, of which we are not the primary beneficiary:


		June 30, 2024				December 31, 2023
		Total Assets		Maximum Exposure			Total Assets		Maximum Exposure
	(in millions)
Investments in unconsolidated affiliates		$	243.3	$	243.3		$	210.9	$	210.9

Investments in Unconsolidated Affiliates

As of June 30, 2024 and December 31, 2023, we held variable interests in certain unconsolidated affiliates, which are primarily comprised of our ownership interests in BKFC, CSI and Minden Mill. Cannae does not have the power to direct the activities that most significantly impact the economic performance of these unconsolidated affiliates; therefore, we are not the primary beneficiary.

The principal risk to which these investments and funds are exposed is the credit risk of the underlying investees. Cannae has guaranteed certain payment obligations of BKFC related to investment commitments associated with its acquisitions of interests in football clubs. These BKFC obligations total an estimated amount between $41.6 million and $75.7 million as of June 30, 2024. These obligations are potentially payable at various increments over the next four years and vary based on certain performance criteria. The underlying obligation of BKFC to fund these amounts is contingent on the exercise of certain investment options by BKFC or other parties. Cannae is required to fund such payments solely to the extent BKFC is unable to meet these obligations. We do not provide any other implicit or explicit liquidity guarantees or principal value guarantees to these VIEs.

The assets are included in Investments in unconsolidated affiliates on the Condensed Consolidated Balance Sheets and accounted for under the equity method of accounting. See Note B - Investments for further discussion of our accounting for investments in unconsolidated affiliates.

Table of Contents

CANNAE HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — continued

Note E — Segment Information

On March 20, 2024, Alight entered into a definitive agreement to sell its professional services segment and its payroll and human capital management outsourcing businesses (the "Payroll & Professional Services Business"). The transaction closed on July 12, 2024. Beginning with the quarter ended March 31, 2024, Alight began accounting for the assets and liabilities of the disposed businesses as held for sale and its operating results as discontinued operations. Accordingly, Alight's results presented for the periods ended June 30, 2023 have been retrospectively revised to reflect the Payroll & Professional Services Business as held for sale and discontinued operations.

Summarized financial information concerning our reportable segments is shown in the following tables.

As of and for the three months ended June 30, 2024:


	Restaurant Group		Dun & Bradstreet		Alight		BKFC		Corporate and Other		Affiliate Elimination		Total
	(in millions)
Restaurant revenues	$	107.6	$	—	$	—	$	—	$	—	$	—	$	107.6
Other operating revenues	—		576.2		538.0		49.4		10.4		(1,163.6)		10.4
Revenues from external customers	107.6		576.2		538.0		49.4		10.4		(1,163.6)		118.0
Interest, investment and other income (expense), including recognized gains (losses), net	1.0		2.6		83.0		0.5		(145.4)		(86.1)		(144.4)
Total revenues, other income (expense) and realized gains (losses), net	108.6		578.8		621.0		49.9		(135.0)		(1,249.7)		(26.4)
Depreciation and amortization	2.7		141.3		99.0		28.0		0.7		(268.3)		3.4
Interest expense	(1.3)		(59.0)		(33.0)		(3.3)		(0.7)		95.3		(2.0)
Earnings (loss) before income taxes and equity in earnings (losses) of unconsolidated affiliates	1.8		(19.3)		(2.0)		(34.0)		(171.2)		55.3		(169.4)
Income tax (benefit) expense	—		(2.9)		2.0		—		(33.7)		0.9		(33.7)
Earnings (loss) before equity in earnings (losses) of unconsolidated affiliates	1.8		(16.4)		(4.0)		(34.0)		(137.5)		54.4		(135.7)
Equity in earnings (losses) of unconsolidated affiliates	—		0.7		—		(3.7)		1.1		(17.4)		(19.3)
Net earnings (loss)	$	1.8	$	(15.7)	$	(4.0)	$	(37.7)	$	(136.4)	$	37.0	$	(155.0)
Assets	$	279.0	$	8,956.8	$	10,473.0	$	496.8	$	1,945.0	$	(19,926.6)	$	2,224.0
Goodwill	53.4		3,426.6		3,212.0		15.3		—		(6,653.9)		53.4

As of and for the three months ended June 30, 2023:


	Restaurant Group		Dun & Bradstreet		Alight		BKFC		Corporate and Other		Affiliate Elimination		Total
	(in millions)
Restaurant revenues	$	145.2	$	—	$	—	$	—	$	—	$	—	$	145.2
Other operating revenues	—		554.7		561.0		39.1		7.6		(1,154.8)		7.6
Revenues from external customers	145.2		554.7		561.0		39.1		7.6		(1,154.8)		152.8
Interest investment and other income (expense), including recognized gains (losses), net	(0.2)		2.6		(11.0)		0.7		(39.3)		7.7		(39.5)
Total revenues, other income (expense) and recognized gains (losses), net	145.0		557.3		550.0		39.8		(31.7)		(1,147.1)		113.3
Depreciation and amortization	4.3		145.0		92.0		32.2		0.3		(269.2)		4.6
Interest expense	(1.3)		(56.1)		(33.0)		(1.9)		(2.7)		91.0		(4.0)
Loss before income taxes and equity in earnings (losses) of unconsolidated affiliates	(6.6)		(37.0)		(80.0)		(32.9)		(56.5)		149.9		(63.1)
Income tax benefit	—		(17.5)		(8.0)		—		(21.8)		25.5		(21.8)
Loss before equity in earnings (losses) of unconsolidated affiliates	(6.6)		(19.5)		(72.0)		(32.9)		(34.7)		124.4		(41.3)
Equity in earnings (losses) of unconsolidated affiliates	—		0.7		—		—		(20.9)		(28.9)		(49.1)
Net loss	$	(6.6)